>> from the heart of where innovation, money, and power combine in silicon valley and beyond this is bloomberg technology with caroline hyde and ed ludlow. caroline: i am caroline hyde at bloomberg's world headquarters in new york. ed: i am ed ludlow, this is bloomberg technology in san francisco from the rsa conference, focus on cybersecurity. how are companies and governments around the world responding to the digital threat ? that's the conversation we will have here. caroline: there is so much

competition around earnings. we start with this market check because let's go to where we are seeing movement. the buying of the nasdaq today, big tech on top because earnings outperforming microsoft. we will get to that in a minute. this is not a global story. some of the chip-related companies are underwhelming in terms of their own performance and we see a dive, a pullback in european technology trading. crypto is getting a real buy. is this risk on in the correlation or is this because we are still worried about the banking crisis? , this is seeing further record blows for this particular lender. we know that we have concerns around the new share sale, we have alphabet shares on the outside as earnings come thick and fast. breaking news, we do have disney, we understand, suing florida governor ron desantis according to cnbc as it

currently stands. disney, we understand, suing florida' is governor ron desantis. there has been a lot of political issues between the governor of that state and the autonomy of disney around its municipal area where it works. let's get to that story in a moment. we will go back to some numbers, disney not really reacting on the news, up .1%. alphabet on the higher side, google managed to shake off those nerves around competitive threat coming from microsoft and ai. let's talk about microsoft, that it beat its own earnings, that the big nose coming from the u.k.. -- big news coming from the u.k. the takeover of activision by microsoft on hold. even though activision came early with its earnings. we are joined to really dive

into why the uk thang's that this is such a competitive threat. >> what they are concerned about are the innovations to come. the way the markets are moving. at first everyone was focusing on consoles and how this would affect gaming. with u.k.'s concern is is the cloud. it instead of downloading it it doesn't clog up their computers. they are concerned microsoft will dominate that area in the future because it has a strong position in cloud. if he gives this content and this must have content, a game like call of duty, it could exclude other cloud providers and that is the concern. caroline: they have european and u.s. regulators looking at it. jennifer: right now it is an

uphill climb. it's not going to be difficult to over turn this decision. deals can't stick together that decision would get appealed to the commission. the commissioners are the commissioners who voted to sue so they would likely reverse it and the appeal would go to the federal court. that timing is looking at another year and a half. outside of even the difficulty substantively of overturning a decision in the competition tribunal, appeal tribunal, you have timing and timing tends to kill deals. caroline: big tech can't do big deals? is that what we are left with? jennifer: not that big tech can't do big deals, it will be difficult for them to do big deals. they will get intensive scrutiny. if they do have a problem it has

to be thorough. it has to replace the competition lost by virtue of the deal. that will be difficult to do with these regulators. caroline: it is fantastic to have your analysis. let's get back to it. we have to go to san francisco. ed, we have an important conversation? ed: we are live at the rsa conference in sf. the focus is cybersecurity. kevin, it is good to see you. let's start by saying that 2022 is a relatively quiet year from a cybersecurity perspective. we -- kevin: to you it might have been quiet. ed: we know that you are always very busy. your peers around you, what is the topic of conversation? kevin: there are a lot of focuses. 2022 into the future. 2022 the focus is there are more

zero days than before. we have to get better at blocking and patch management. china innovated on offense when it comes to cyber espionage. ed: you went straight to china which is interesting because we recognize heightened geopolitical tensions between the u.s. and china. we see a ramp-up from china correlated to that? kevin: my view of ideological and geological conditions are in the cyber domain. i can opined that in the cyber domain i feel we saw more novation, vulnerability, and exploitation out of china that to me was innovative, creative, and advanced. we saw them doing better operational security. in that regard, offensive cyber espionage techniques out of china probably had its best one-year advancement in my 30-year career.

ed: in the new cycles, focused on activity in north korea. we recognize that president biden hosts his south korean counterpart in the coming days. how much is that a threat at the moment? it seems somewhat random, the ransom that comes out of the north. kevin: when you look at ransomware in particular, we saw a decrease in the over 1100 cases where we were hired to investigate what happened and what to do. we saw a ransomware investigations go down. when we do threat research responding to north korea threat groups, we are seeing them hack to make money. those intrusions are usually more indiscriminate. let's hack where we can and do mining and things of that nature. ed: it has been a year since mandient joined google cloud. you are a founder ceo, do you remain entrepreneurial? how do you operate in a big beast like that?

kevin: i don't feel that much of a change. we had tremendous alignment of vision. when you have that alignment it is like two armies marching towards the same goal. i haven't felt change. we are responding to breaches that matter, advising customers how to transform security programs. back to your first question, what was 2022 and what are we looking forward to, we are coming up on a shift change in security. cloud was a shift change where people had to recognize that you could do security from the cloud or for the cloud. now we have ai coming out and it will be a shift change. ed: generative ai. how does it change defense? kevin: totally. the best analogy that i have, the ways that it can do it are probably too quick for soundbite .

i remember when tesla updated and my car could drive itself. i remember going, there's no way that it can drive itself. the first day on gripping the wheel. second day i am on the 280 and it worked. ai, you are going to see some of the most rapid advances where security challenges that were hard like identity security, suddenly we are great at it. you will see advancements coming at speeds -- ed: how are you integrating barred quickly because that is where google has shown its hand? kevin: for the security use case, it comes from the other side. bard is coming at you from generative ai. we need our own models and security so we can determine anomalies to logons, anomalies for processes. the security use cases will have different data and different models. i look at it from that standpoint, but i can feel the shift change coming. complex challenges will suddenly

get easier for us. ed: are you making money for google? kevin: am i making money? yes. ed: you be there in a years time part of the bigger company? kevin: yes. ed: part of google cloud, manidant, back to you in new york. caroline: we have so much more to come. your tech earnings, google, a push ahead to metas results. both rising off of alphabets numbers and the reader cross. let's have a look at what is happening in the here and now. we understand that disney is suing the florida governor, ron desantis. this is really upping the ante amid what has been a feud running between florida's biggest employer and its republican governor waging walt disney says a relentless campaign to weaponize government power. we will have more on this breaking news regarding disney

versus ron desantis. from new york and san francisco, this is bloomberg. ♪

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caroline: let's look at the parent company of google, alphabet, managing to post better than expected earnings for the fiscal first quarter showing resilient earnings in the face of ai search competition and breaking even when it comes to cloud. digging into alphabet, joining us now, what are you seeing at the moment in terms of alphabet's shares rising? this doesn't seem to be a worry

that microsoft being, chat gpt, open ai is eroding that power? >> it will be longer before we see the impact on search. we saw open ai chat gpt integrated into bing and that brought up a concern but where people land to search today is still google. we saw the interesting topic around samsung and if microsoft should invest big to put search on mobile device, because now the first place people search is still google, but microsoft is making this interesting again. caroline: microsoft really focusing on how they beef up the computer power in their earnings as well. it is alphabet managing to convince investors that it too is still an ai leader because it managed to underwhelm so far. daniel: i think that they were forced to come out with their hand earlier than they anticipated and wanted to and

that caused a little consternation when the first launch of bard didn't go as planned. i use all of these tools and am someone who has been following the innovation and investment. i think it would be really early to rule google or alphabet out. you see what they are doing with deepmind, no question microsoft got a first mover advantage putting companies on their heels. google had to follow, aws, and another of other companies have. most companies succeeding and investing will bring innovation to the consumer and enterprise, and that is good if there is no declarative winner this early. caroline: the real power behind profits, revenue for alphabet is the search. what about cloud? how much is this folding into the ai provision that we clearly see with microsoft and azure and other competitors? daniel: i think the inflection will be good that the company turned a profit for the first

time in this quarter. it was a small profit but they have been mounting significant losses, but had been continuing to invest in the infrastructure required to move into different regions and sounds. i think companies that have been on the fence about utilizing google cloud may feel more comfortable seeing that this company has turned a corner in terms of profitability. google, because of its reputation in data and ai and there is strength there, that should help them as companies turn to multi-cloud. google may not win all of the cloud business, for aws has been successful and azure as well, google will become part of the equation in these enterprise cloud deployments and that will be part of them staying on pace for growth. you saw 28% here versus 27% at azure. caroline: i really smart to read across the whole space. we appreciate the expertise. let's turn to another key tech giant, meta after the bell.

sarah frier joins us with what we are going to expect from meta. we know that it is tough in terms of sales. it is all about cost and efficiency? sarah: that was the narrative that mark zuckerberg pushed that this is a new era for the company. they are cutting costs, trying to be faster on their product and more efficient. i think that beyond that efficiency talk, we will see if it's good enough. they have announced a lot of cuts of their workforce. they have announced ways that they are slimming down their products line. are investors going to be satisfied considering the fact the main products are still slowing growth in the advertising market is still tough? if we see a resurgence in demand from advertisers investors will be happy about that. if we see continued growth of facebook and instagram investors will be happy about that.

but overall this company will be closely watched. what they are really thinking strategically. efficiency is not a strategic product plan, it is a commitment. are they about the metaverse, about ai? what is the real vision for the future of meta? i think people will see the success of that. caroline: it will be the fourth straight quarter of revenue declines. you could see daily active users of more than 2 billion and monthly active of more than 3 billion. it is still a juggernaut. how much do you think we are going to hit the pivot to artificial intelligence? will that be the lexicon or are they still willing to take losses on investment in the metaverse? sarah: zuckerbergsarah: cannot just cut out and say the ai is our new northstar, because they just went through a rebrand of facebook into meta and said that the metaverse was the future.

i think what they're going to have to do is -- we have seen it a little yesterday on bloomberg television -- saying that you cannot have the metaverse without ai, making ai part of the metaverse vision. it gets a little squishier. what we are hearing from employees is more of a focus on ai, but meta risks looking like they are following the competitive pressures from chat gpt and microsoft even though meta has been invested in this market for a long time. caroline: how many times they used the term llama, their own large language model. all things cyber for you? ed: we focus on the tablet needed to combat cyber security threats. that is coming up next. this is bloomberg.

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ed: we are live at the rsa conference in san francisco. the focus is cybersecurity. we turn to usa battle for talent to combat threats in cybersecurity, nsa cybersecurity san francisco collaboration chief. you have a target of 3000 staff by the end of next year. why do you need 3000 more people in your agency? >> we continue to have to grow talent and we need people from different backgrounds as we have attrition and people leave. we need to fill that pipeline. we need people who are ready to fulfill the mission. it is our biggest hiring year to

date. ed: when our global audience thinks about nsa they think about security threats. where is your focus when it comes to cybersecurity? morgan: the people's republic of china is the pacing threat. ed: straight to china. how does that look? ransomware? morgan: it is more so the persistent broad threat of cyber espionage, pre-positioning, looking for opportunities to gain information and steal intellectual property. it is the broadest most pervasive threat that we face every day. ed: the biden administration has set broad cybersecurity goals matching your efforts in hiring to competency in cybersecurity. what energy is that giving you and your agency? morgan: a lot of energy. we are excited because we have a lot of people coming out of college but people who also want to have midcareer changes to come into cybersecurity. it has invigorated us to recruit and talk about our mission

publicly and bring in as many people as possible. ed: how many times a day do you say generative and ai? morgan: a lot recently. ed: what does it matter to you right now, ai? morgan: generative ai has been for something we've focused on for a while and now it is at the forefront of everyone's mind. they want to talk about the benefits and the risk. we are having this conversation up front as we understand the technologies and how we can take advantage of it. ed: when we were earlier in the year we spoke to jenny who had a message that corporate america needs to do more. we need companies of all sizes detecting threats earlier and designing safeguards into whatever product they are working on. who leads this charge? you? the private sector? do you work together? morgan: it will take all of us to build secure by design products. it is a mindset. we have to think about how are we taking the necessary measures

to make sure that when we build technology it is there for the future and secure. ed: the hiring target and skill set, are the 3000 people you are looking for out there? are you worried about a deficit in skill in this country? morgan: they are out there. they don't need degrees in cybersecurity or backgrounds in engineering. it is people who like to solve problems. we look for people from all walks of life when we talk about those 3000. ed: china, what keeps you up at night? morgan: the workforce. when you talk about threats it is, a multipronged threat that we focus on every day. ed: there is heightened geopolitical tensions between china and russia going back to the war in ukraine. does the ramp up in cyber threat mirror that ramp-up up in geopolitical tension? morgan: absolutely. we see a lot of cyber actors in china and russia but also

activists and learning from what is happening every day. they are learning techniques that they are employing broad scale. ed: nsa cybersecurity collaboration chief, thank you. this is an industry and public sector that is hiring right now. caroline: one of the bright spots in the world of technology that seems to be resilient. more from the rsa. crowd strike co-founder sitting down with and. let's get back to breaking news. an extraordinary step by walt disney company suing the florida governor, ron desantis, alleging that he is retaliating against the company for speaking out against his policy threatening billions of dollars in its business threatening disney's business operations and jeopardizes its economic future in the region and violates its constitutional rights. it isn't having much of an overall effect on the shares, but they say that it is a threat to avoid contracts.

75,000 people are employed at disney world. this is annexed collating -- this is an escalating feud over the five-member board ron desantis appointed to oversee disney. this is bloomberg. ♪ you got this. let's go. gobble gobble. i've seen bigger legs on a turkey! rude. who are you? i'm an investor in a fund that helps advance innovative sports tech like this smart fitness mirror. i'm also mr. leg day...1989! anyone can become an agent of innovation with invesco qqq, a fund that gives you access to nasdaq-100 innovations. i go through a lot of pants. before investing carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com.

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caroline: welcome back or technology. i am caroline hyde in new york. ed: i am ed ludlow at the conference in san francisco. cybersecurity is what we are talking about, industry arriving with generative ai top of mind and what threats look like right now. i will bring in the crowd strike ceo on site. this is what you have been talking about, the sophistication of what your industry faces, the public sector faces. what are the biggest threats to you and what have you found in the first four months of this year? >> we talk a lot about nationstate threats which are

prevalent and will always be prevalent. one thing that we did a keynote on, it was on e crime. we took a representative study of groups and talked about the sophistication level. while sophisticated it is easy to get in many organizations. you can buy access. one big focus for ecrimes groups is not even encrypting data but to steal it first and extort the company to make sure that they get paid before they leak the data. ed: what is the rationale? there is the idea that if you take ransomware as an example that the activity is indiscriminate. they just want money, so they go after whoever. george: they want money and go after where the money is at, bigger companies and source code and companies they know can pay from a public embarrassment perspective. you are right, there is a little indiscriminate access that if

they have it they will try it whether it is a hospital, a large company, a government organization. they want to get paid from everyone. ed: we talked to the nsa about trying to hire talent in the public sector in this country. you post strong earnings, strong topline growth. how seriously does corporate america take the threat, digital threat, cyber threat? are you just waking up to this now or do you see consistency? george: it has been consistent over the past five years from a boardroom perspective. it has moved from an annoyance of having a pc that is infected to a potential systemic risk when the entire business is ransomed and systems are rendered useless. it is the number one, in my opinion, threat talked about in the boardroom today. ed: you remember in january at ces thousands of people were there and not that many were saying generative ai. now everyone is saying

generative ai. what does that mean? are you using generative ai tools to increase crowdstrike's offering? are you using it personally? how does it impact your industry? george: it is a fascinating technology and a bit of an iphone moment for folks when they use it and get the results out. when you think about generative ai insecurity it can help with automation. there are a lot of repetitive tasks for a security operation center administrator. i think that will help to revolutionize that. we have been pioneering ai since i started the company in 2011. it is not a new buzzword to us as opposed to a lot of companies. when we think about generative ai, i think that it will compress the timeframe that companies have to patch. the ability to create exploits and take advantage of these vulnerabilities that exist -- patch tuesday that microsoft has, etc., it will compress that to a small level. ed: there is a debate in the

field whether generative ai makes tackling phishing more difficult or if it helps to resk ill the workforce to improve defense. is this a displacement of human activity or an upskiller? george: for me humans will always be in the loop. if you can automate level 1 repetitive tasks you can make level two or level three analysts more productive you will hire less of them and they are hard to keep and find and are expensive. why not automate repetitive tasks? ed: at the state actor level are you seeing more activity in china or russia? george: china is pretty active now, particularly when you look at what is happening with taiwan. they have a long plan. ed: does that ramp up as geopolitical tensions -- george: we have seen it ramp up

with geopolitical tensions, yeah. ed: how does it manifest? george: primarily in the technology industry. there are a lot of chips in taiwan. there is a lot of understanding what's happening, reconnaissance, understanding what's happening. even shipping lanes are of interest to the chinese government. they sucked it all in. it is a big data exercise. they build a puzzle and they are patient. ed: we are live at rsa, caroline, back to you. caroline: a quick check on the markets as we look at what is really tech galvanizing risk on sentiment. their best day since mid april. the earnings are coming in better than expected when you look at key names. the s&p 500 has been helped higher by tech names. this is not risk on across the market, particularly in europe. you think about how a software company, asm, a chipmaker, they

fell in trading after their earnings. tech really outperforming today. let's look in terms of individual movers. an absolute wealth of news coming today. microsoft is doing well after its earnings, but also the news that it will no longer according to the u.k. be able to by activision. $69 billion, one of the top already m&a deals ever and the u.k. things that it is anticompetitive. activision off more than 10% as we worry about that going through. an interesting fiscal on the upside today as we see that this has a route to getting some of its because into the european market, u.s. market. tesla one of the worst performers dragging it down. we have to think about what is happening in disney trying to sue ron desantis, the governor of california -- not california. the governor of what is happening in florida at the moment. more coming up in terms of cyber. ed: so much of the microsoft

stories about ai so that is where we take the conversation. the security chief over at microsoft. they have told us how they integrated those ai tools into the security offering. how is that driving the business and what she is talking about here next from rsa. this is bloomberg. ♪

ed: welcome back to bloomberg technology live at the rsa conference in san francisco, the focus is cybersecurity. honestly, everyone is talking

about generative ai which is fortunate because we are joined by the microsoft bp of security. you have told us how microsoft integrates gpt into security copilot. why? what is the benefit of using ai to boost security offering? > it is great to be here with you live, thank you for having us. we have to remember who we are up against as we think about why we need ai. the threat landscape is challenging. we have gone from 506 to seven attacks per second to 1287 per second translating to tens of billions of attacks. cybersecurity is complex. the average defender is dealing with more than 70 at any given time and it takes a long time for us to investigate all of this work and distribute it. that is where ai will be a game changer. let's not forget the talent shortage we are facing as an industry. that is where ai will augment that human essence. ed: investors bought the ai

story during earnings. security, flexibility. how important -- flex a little. how important is your unit? vasu: security is a $20 billion business in microsoft and we offer six product lines to form one security cloud and ai is at the heart of it. we talked about security for pilot on march 28, the first and only generative ai product which uses open ai technologies and a microsoft security specific model. we are having customers trust us on this journey. we have 860,000 customers and 8000 are using more than 4 microsoft security products emphasizing the end to end journey we have been on. ed: they trust you, since that march announcement they are getting out their checkbooks because of the integration of the open ai technology? vasu: they do trust us.

every customer that i've met since we announced to security copilot has asked us when security copilot will be available at scale. we have released a private preview because it's important for us to work with customers and partners. it is a learning system. we need to train the ai and learn from our customers but every customer and partner has asked us and we are helping them lay the foundations for ai now. ed: security has seen this emerging growth driver for microsoft. there is also a talent question happening on the ground at rsa. do you need to have people with a new skill set with a background in ai rather than traditional security software? vasu: that is the beauty of the generative ai. do you know what the most powerful coding language right now is in the world? english. that is going to help get a whole new generation of defenders in because it will reduce the barriers to entry for

cybersecurity. we have a talent shortage, $3.1 million. we have a diversity and training challenge. imagine someone who just gets into the workforce and can use ai as their ally to help them understand and get trained. imagine a tier two analyst in your operation center who can now have ai help them with automation and augmentation so that they can spend their time on strategic decision-making. ed: clearly cloud was a strength. the macro picture is still a bit concerning. when it comes to cybersecurity, do you see stability in the kind of commitment to invest into cybersecurity capabilities, capacity, even when economic times are hard? i wonder what the health of demand is. vasu: we made a big commitment to cybersecurity investing over five years. we continue to see security as the top priority for all

organizations and the top and most defensible spend. we will continue innovating and taking our customers on that journey. ed: there are things beyond ai. what are the core door conversations here? for you, where is your focus? vasu: our focus is end-to-end with ai. i will leave you with this, perhaps in our hands today is the most consequential technology we will see in our lifetimes. we all need to be included. that is the conversation in the hallways. it isn't what technology can do, but what humans can do when empowered by this incredible ai technology. ed: are you using chat gpt every single day? vasu: i am. microsoft vp of security, it is good to catch up on the ground. caroline: not just us using it every day. let's stick with microsoft because in its earnings call

yesterday the tech giant diverge from google as it doubled down on its artificial intelligence reshaping the search engine environment. it's partnership with open ai spread big interest in bing at last. we understand that the big four accounting firms, one of them is jumping in. pwc with a $1 billion investment with ai to make sexy things like tax, audit, and consulting services. microsoft shares are outperform ing. look at the deal that might be on ice because of the u.k. competition authority. activision falling the most since november of 2021 as it looks like microsoft will have to appeal the 69 billion dollar deal to buy activision. activision coming out with its own numbers early. 368 active users. the end of the quarter with net cash $8.9 billion.

net bookings 1.8 6 billion. from new york, san francisco, this is bloomberg. ♪

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ed: bloomberg technology live at

the rsa conference in san francisco. cybersecurity is the broader theme, generative ai is the focus. let's bring in -- gen ai is the topic. you are looking at advancing quantitive computing. why is that a concern? >> we don't tend to prioritize things that are important until they become urgent. ai is a perfect example. we have been looking at ai for a very long time. we saw the ai winter and all of a sudden with chat gpt we have renewed interest. it is similar to what we are experiencing with quantum. we have the beginning of the hype cycle, worried about a quantum winter, but i think we should be prepared for the quick accelerated speed up so we have our house in order when there is a quantum computer capable of decrypting rsa and making

available our secrets. we need to prepare and this is why i am concerned. ed: your industry colleagues are upbeat and cai being value added it for their businesses or are talking about how they have always been competent in ai. very few are saying that the problems we are dealing with could be made worse by ai.that is your concern ? jaya: there are a lot of people concerned about the growth of ai and what the downsides could be from ethical to the potential of what ai means for cybersecurity and the flipside. every technology can be good or bad use, fair enough, but i would like to have a roadmap for quantum readiness so that when there is a quantum computer capable of breaking our cryptography that we have a plan and we know where our crown jewels are and are able to protect them. ed: we were talking with the nsa and there's a lot of emphasis on what the biden administration is

doing.you are the vice chair of the european technical standards institute. i wonder which jurisdiction is leading the way in combating cyber threats? jaya: that is a brilliant question -- ed: thank you. jaya: frankly, what is needed is we need to work closely together to find our friends in this area. ed: cooperation between the united states and europe? jaya: i think it could be better. i think that it needs to improve if we want to have any chance of doing well. the biden administration with the quantum preparedness act is telling federal government that they need to have an inventory of their cryptographic resources to make that transition. we need to see it through and it will hit the vendor landscape for everyone who serves the federal government, and i hope the trickle down effect will be meaningful across the cybersecurity industry. ed: the other topic is talent. this seems to be an industry where everyone is saying we need more people. we are hiring in the thousands.

for you, education is a big part. is there a talent or skills gap in the united states? jaya: i wish there weren't but there is. ed: why? jaya: two things. even though there is availability of certain types of cybersecurity education we don't see the uptick, we don't see the demographic diversity when we have applicants for different positions. i feel like the depth of technical skills is where we fall the most short. making it more accessible, having coding practices in high schools, starting early with a digital form of education is what we need. ed: when you say things like security network architecture or end encryption in the context of a corporate entity sometimes people's eyes glaze over, but the threat seems to be serious. do you recognize corporate america taking that threat seriously? is there interest and

willingness to invest to protect themselves? jaya: it goes back to your previous question about literacy in terms of cybersecurity. do we have enough knowledge and skill set to do this well? corporate america is a perfect example, especially at the board level, where that needs to improve. there is a fiduciary duty to know enough about cybersecurity to ask the right questions of enterprises. here as well we could be doing a better job. a great example is the u.k., the national cybersecurity center, it created advice for boards on which questions do you need to ask in order to know that you are capable of performing that fiduciary duty for cybersecurity skills. ed: back to generative ai quickly. what is your day-to-day engagement for generative ai tools? are you using them in your line of business? jaya: within the company we are asking people not to use chat gpt for any corporate resources unless it has been perfectly

vetted by us for a reason. i don't think we are at a place -- we are using it internally for our own products, but using a large language model external to our company isn't something we will do now unless it is for people using it in their free time. there is a market for it to improve product, but i'm not sure it is at the right place it needs to be from a security perspective to train the data set with our data. ed: so good to catch up at rsa conference in san francisco. it is a day where the subject matter is clear. it is generative ai and everyone is talking about that. caroline: in cyber or earnings that we start to see the hype become reality. the talk of additions microsoft is making in terms of customers interested in how it is a balding ai and its business model. you are a gamer, what did you make of the microsoft, activision news? ed: a lot of the merge are

specialists. this is a serious blow. there is a july deadline. the question is around innovation and consumer pricing and microsoft and activision is pushing back heavily. what else can they do to convince regulators? caroline: it comes back to cloud gaming and we were talking around the earnings of how much cloud is a driver in azure for microsoft, finally breaking even at alphabet and google. what are you looking forward to in terms of conversations? ed: where is the value? we heard microsoft say this is a driver for a lot of our businesses, demonstrating how ai works and how it improves our existing businesses. cloud, i think we have to do more. caroline: always more to do. thank you for being out there. you don't want to forget to check out our podcast on the terminal. listen back, there are amazing

interviews today as well as the conversation around the news from microsoft and it's deal of activision blizzard. this is bloomberg. ♪ re generations. ♪ welcome to a new era of flight.

kriti: big tech reading s&p 500 games -- gains, outperforms and the nasdaq. bloomberg market starts now. a quick check of the markets, do not let the surface fool you. s&p 500 higher by 2/10 of 1%, the outperformance is in the nasdaq, big tech leading all the way. is this a defensive trade or our earnings worthy of the gains? we will ask kristina hooper of invesco in a few moments. 3.45 on the 10 year yield, higher by five basis poin.