Intelligence help hedge funds outperform . We will break down the results later this error. Let us check on the markets. The good news is bad news today, the job strength in jobs performs shows job openings were higherthanexpected enemies we are down on the nasdaq at the moment. We saw a little bit of buying yesterday maybe some profittaking. We are looking at the 10 year yield higher by 10 basis points. The 30 year at the highest since 2007, getting calls for a 5 level and we are looking at strength in the u. S. Dollar with maybe a fed having to remain hawkish. This is the strongest the dollar index has been in about 10 months. What does that mean for another key asset . We are up by 1. 1 for bitcoin. There was some buying yesterday so is it profittaking or it looking toward the trial to Sam Bankmanfried . We know he is facing charges that he swindled aliens of dollars from his crypto platform. He swindled billions of dollars from his crypto platform. Tell us exactly the state of play we anticipate today. Kailey today its all about jury selection. This is just one step in what could be a trail that plays out over the coast of the next six weeks. They are looking at potential jurors and vetting them. They have dismissed the number already and we understand the judges is hoping to finish today. If not, maybe tomorrow and once the jury is set, it will get into the argument phase of this case. He is facing a number of charges related to fraud and money laundering, seven in total and if convicted, he could spend the rest of his life in prison. We could be looking at a sentence of over 100 years. He has plead not guilty but over the course of this trial is when we will see a lot of the facts of the case both from the prosecution and the defense. Sam bankmanfried said it was never his intent to commit fraud on anyone. Caroline this has ramifications for those watching exposure with ftx. But more broadly, crypto as a whole which is playing out. What is the industry make of this . Kailey in many ways, the industry already has been grappling with the aftereffects of ftx and Alameda Research implosion and the allegations made against Sam Bankmanfried. This individual, this 31yearold, was not just the ceo of ftx but he was a leading voice for the crypto industry as a whole. He frequently appeared on capitol hill before lawmakers recognize the industry and he was seen as one of the most credible voices in the business of when all of that imploded, the credibility of the wider industry took a hit. This could be somewhat of a cathartic moment for the industry once this trial is wrapped up and they can put the issue to bed. In many ways, the industry is still dealing with the aftereffects and trying to recover and reestablish credibility. There is a lot of legislative effort underway in washington. The Sam Bankmanfried aftertaste may still be lingering and this trial could revive a lot of that dirty laundry. Caroline thank you, we appreciate the coverage throughout the day. We want to bring you some expertise in terms of what this means for the industry with regulation and central bank options. The Cornell University professor is with us and you work for the imf but also, you are the author of the future of money, how the digital revolution is transforming currencies and finance. What does this particular lawsuit, this particular moment in history mean for the adoption of crypto . The industry is hoping this will be a cathartic moment in the sense of cleaning out some of the charlatans and perhaps also providing some regulatory clarity and regulators will hopefully move forward. Sam bankmanfried was seen as a messiah in some of these circles and seen is delivering on some of the promises of decentralized finance. What the collapse really shows is how far bitcoin and decentralized fce which was supposed to turn away from traditional financial nitutions, how far it has strayed from tat promise. In effecat we are seeing is many of the problems of decentralized finance are being imported into the cryptocurrency world. In particular, centralization in the form of ftx which becomes single point of failure. And the notion that we can have this doesnt seem to be bearing out. People seem to want to hold their crypto assets. Centralized exchanges like ftx where they also have trading activities. We seem to be seeing more centralization rather than decentralization. Caroline where could we see an optimization of decentralized exchanges . They do exist. How are we seeing a Movement Toward that future of crypto if at all . I think we are beginning to see a bigger bifurcation. There are many people who view bitcoin and other cryptocurrencies as Financial Assets really. Those are the people, including many retail investors, who seem to be taking the speculative approach. They are holding onto these assets. At the same time, that is a rather wide market for decentralized finance which so far has not really delivered on its promise of democratizing finance. It has created financial engineerings and speculation but i think the promise there with block tech Blockchain Technology, we can move away from regular finance. It can make Financial Systems a lot more efficient caroline what is necessary to get there . Is it clear regulation globally . Regulation is certainly going to be needed. I think regulation that creates guardrails so that you have the basic elements of financial stability, institutional and systemic stability, investment participation is taken care of and guardrails to make sure we dont have a big concentration in the space or finance being used only for speculation or for illicit transactions. The notion of the industry policing itself through technology is not going to work. We are going to need some guardrails. How best do we set up those guardrails without stifling the innovation . I think there are steps being taken in many jurisdictions including the u. S. But we are a long way away from the right sort of Regulatory Framework so we can get this ecosystem to foster and thrive without necessarily creating illegal and illicit activities. Caroline give us your global expertise here. Are there areas where you think crypto is leading the charge in a best fit Regulatory Environment . No, europe, the United Kingdom and japan are moving forward and trying to define various categories of cryptocurrencies and crypto assets. That certainly is helpful. I think there is a conceptual struggle going on in terms of deciding whether one can take existing Regulatory Frameworks and for these new products into them or decent new technologies that require completely different Regulatory Frameworks. These are not the traditional sorts of products. They have a spill over to traditional Financial Systems and they are going to need a coordinated approach at the global level rather than a fragmented approach. We are making progress but very slowly. Caroline what does the role of the Central Banks have here . Because of the digital revolution, how is it impacting currencies . I think the biggest legacy of cryptocurrency is really that they have shown a harsh light into the inefficiencies inefficiencies of traditional Financial Systems especially payments. They are fostering better and more efficient payments in many parts of the world. Payments are largely digital already. Central banks are moving toward central Digital Currencies that can be used for payments. In the u. S. , it is catalyzed by the fed to move toward a suite of wholesale and retail payments. A lot of nice changes are growing in Financial Systems including domestic and International Payments thanks to cryptocurrencies. Whether cryptocurrencies will play in Important Role in this remains to be seen. Caroline there is this sort of tension between a centralized version of what the utopia is of pure decentralization. Then theres the need for regulation. When you have written a book about this, when we see the highs and the lows of exuberance around crypto die off, how many people are still asking you for your guidance . How may years do you think this will take ultimately . That is a fundamental shift in terms of digitization of payments. Also, the ability for Financial Institutions to detect efficient forms of business but to foster more Competition AmongFinancial Systems. Certainly, as we see crossborder finance become more friction free thanks to these new technologies which have been adopted even by traditional finance institutions, i think we will see significant efficiency gains. The real concern is we end up seeing more concentration on traditional finance because incumbents could use these technologies to their advantage and i think this is where regulators will play an Important Role, to make sure regulations dont just make an entry for new Financial Firms but could make new guardrails for this innovation to try. Caroline really great to get your expertise as an author and a professor at Cornell University. We thank you. Coming up, we will talk about the future of regulations slightly differently. U. S. Senators want to visit withxi jin ping and talks about micron are on the agenda and what they hope to accomplish on their visit. We are looking at tsmc. This stock has a raised 77 billion of its market cap sink the june i. It is lost more value than any other asia traded stock. We are bracing for earnings after that and the prolonged weakness in the chip sector. S is bloomberg technology. Caroline time now for talking tech. Several taiwanbased tech firms are helping huawei build a secret network of chip plants across china. Its unclear whether this violence american sanctions. Huawei did not respond to requests for comment. Japan is approving as much as 1. 3 billion in subsidy for the micron factory. It will help micron in its lithography equipment. Its used to make advanced chips in it marks a win for micron. A Bipartisan Group of u. S. Senators hope to meet g jinping in china next week with discussions about micron. The delegation led by Chuck Schumer and republican mike crapo will raise the issue of mike rounds ability to do business in china. Micron faces an ongoing probe by the Chinese Government on cybersecurity. We want to get more on this. Ultimately, how likely is it the senators will meet with xi jin ping. Annmarie we know from an interview that that is one asked. At this moment, his easing thing is not guaranteed that meeting. There will be a flurry of meetings with these Bipartisan Group of senators. In 2015, xi jinping sat down with a number of congressional leaders on a state visit but normally what you would see is senators or any sort of lawmakers are cabinet ministers would meet with other ministers within the Chinese CommunistParty Government apparatus but not xi jinping himself. A xi meeting could be on the agenda and this could open up the door for that biden xi jinp ing meeting that could happen. Senator schumer said other things will be brought up like human rights and fentanyl but we know that micron is important for both for this Bipartisan Group. Not just where they are headquartered but potentially where they will build new factories. One will be put in new york. Micron said in the summer that half of their sales are linked to companies headquartered in china. This cybersecurity view has been a huge deal in this company and whether they can do business in china but also on their revenue. Caroline they said about half of its china sales seem to be at risk. Youve got Chuck Schumer of new york but white coalesce around this particular company and this moment . What does it say about u. S. China tech relations . Annmarie it has disintegrated over time in the Chinese Government will say its because of the export controls and the other penalties and sanctions you are seeing from this administration. The Biden Administration has been clear they want to take a narrow approach but they want to make sure china is unable to get their hands on critical tech that potentially china could use to bolster their military. Many see that what china has been doing in terms of the cybersecurity administration, looking at whats going on at micron, they view that as a titfortat coming back to the united stats about knighted states about what they did when it comes to u. S. Technology companies who want to get there hands on china. It feels like its at an alltime low which is why if the senators were to meet with the chinese leader, it could thaw some of that especially my comes to micron. Caroline we thank you so much. Coming up, we talk about Artificial Intelligence and how we can help hedge funds outperform. We will break down the results. Watching shares of tesla. Its got a lot of focus on china but seeing its firstquarter delivery decline in more than a year over there. Its putting byd closer to becoming the biggest ev seller. This is bloomberg technology. That first time you take a step back. I made that. With your very own online store. I sold that. And you can manage it all in one place. I built this. And it was easy, with a partner that puts you first. Godaddy. What do you see on the horizon . With a partner uncertainty . Or opportunity. Whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined Risk Management are needed most. Drawing on deep expertise across the worlds public and private markets in pursuit of longterm returns. Pgim. Our investments shape tomorrow today. This is going to be a super huge impact. It can have an enormously beneficial productivity impact. Caroline talking about the impact of ai but sticking with Artificial Intelligence more broadly and how its affecting many industries. When it comes to hedge funds bridgewater associates, many Money Managers are not seeing the Technology Lead to outperformance. Thats the subject of error bloomberg big take. Fascinating deep dive that you do to show that at the moment, while all these stocks are going higher on the back of ai bets, deploying ai within the stockpicking industry is pretty hard to do . Exactly, it really is the irony of this years stock market. What a lot of investors are discovering is that Financial Data is very different from a lot of other kinds of data. Its like if you are training chatgpt in gibberish, if you look at whats moving the s p 500 every day, there is so much noise in their that if you are just pushing all that data through the machine, the machine is picking up a lot of noise. It might not be that helpful in helping you predict what happens to the s p 500 tomorrow. I think that is the problem that a lot of hedge funds are running into but thats not stopping a lot of quantitative investors to try to crack that puzzle. Caroline and theyve been trying to crack the puzzle long before chat gpt became part of our language. Talk to us about the people you spoke to in the industry. One was upended during the covid crisis because there is no data for that. I think the covid crisis is a great illustration of white ai is hard to finance. The english language is not that different 100 years ago from now. Our iphone can recognize animals as well but when it comes to Financial Data, there are a lot of regime changes. The hope for many people like the cofounder of Research Affiliates who was a convert to using Machine Learning in finance, hes hoping if you feed the data into the machine, you are picking up how the environment is changing and that will make his systems more adaptive. I think that is the dream of a lot of people that are trying to apply Machine Learning in finance. Caroline at the moment with ai and all the issues with the data, are we able to still see funds and ai driven ways of stockpicking is kind of ok compared to people . Are we already seeing jobs being lost . I think for now, not just yet. We look at the track record of ai hedge funds. There is a Hedge Fund Index and they are not doing much better than the Hedge Fund Industry overall. Its not obvious they are necessarily better than humans. One perspective ive heard is in a way, they dont need to be better than humans. If you can run a portfolio with far fewer humans, that might already be more efficient. It might look at the use of ai in terms of productivity. Everywhere on wall street, we see a lot of uses for using chatgpt to summarize research and there are efforts in using these machines to read the news we read or read tweets we post and try to turn those into trading signals. I think there are a lot of uses even if not everyone is using ai to beat the market. Caroline we thank you so much. Coming up, we will have more on the ftx trial. We are joined by matt hogan. Lets get back to some of the stocks on the move. Netflix, they plan to raise prices of its ad free service a few months after the hollywood actors strike ends. We are currently down and this shares are rallying on the back of that report. From new york, this is bloomber