US Insists Talks Ongoing Even as Iran Rejects Trump Outreach

Summary

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Bloomberg Businessweek – March 25, 2026

Episode: US Insists Talks Ongoing Even as Iran Rejects Trump Outreach
Hosts: Carol Massar & Tim Stenovec
Notable Guests: Michelle Jamrisko (White House & National Security Editor, Bloomberg News), Dan Letter (CEO, Prologis), Rachel Metz (Bloomberg Reporter), June Grasso (Bloomberg Law Host)

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Overview

This episode explores three major themes shaping the global business and political landscape:

1. The ongoing negotiations and geopolitical tensions between the U.S. and Iran, and their broader diplomatic and economic consequences.
2. The resilience and strategic outlook of logistics and data center real estate giant Prologis, particularly in the context of global turmoil and rising energy prices.
3. The evolving role and business models of leading tech and AI firms (e.g., OpenAI), spotlighting the computational and financial realities of generative AI.
4. Legal developments in social media, focusing on a landmark jury verdict against Meta and Alphabet for mental health-related damages.

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Key Discussion Points and Insights

1. US-Iran Negotiations and Geopolitical Uncertainty

[02:04 - 07:49]

• Contradictory Communications:

  • The White House's statements on ongoing negotiations with Iran contrast sharply with Iran’s own public rejection of the latest U.S. outreach.
  • Michelle Jamrisko underscores the confusion:

    "What we heard from Caroline Levitt today is not consistent with what we heard from Iran earlier today, which should come as no surprise... It's hard to kind of parse who's saying what from the regime's angle of events." (Michelle Jamrisko, 02:50)

• The 15-Point Plan:

  • The proposed plan, reportedly from the Trump administration, remains unofficial and subject to presidential override—"nothing is official until Trump says it is."
  • Iran’s counter-demands include guarantees against attacks, war reparations, and—crucially—retaining sovereign control of the Strait of Hormuz.

• Face-Saving Dynamics:

  • Carol Massar raises whether these negotiation documents are mere "off ramps" to allow both sides to save face without concrete agreement:

    "Is it just some kind of off ramp, just getting something out there to kind of save face perhaps for both sides...and yet nothing's really signed officially and it just lets everybody to put down the weapons?" (Carol Massar, 04:37)

• Timeline Alignment with US-China Diplomacy:

  • President Trump's meeting with President Xi Jinping (May 14–15 in Beijing) is being closely watched as a potential bookend for resolving the Iran conflict, though the administration publicly tries to separate the two issues.

2. Macro Perspective: Prologis & Supply Chain Resilience

[10:22 - 20:14]

• Resilience Amid Global Shocks:

  • Dan Letter notes that customers have grown more adaptable over repeated global disruptions—the pandemic, rate hikes, and now geopolitical conflict:

    "I look at these customers and I realize they've built a lot of endurance...this turbulence is more of a feature of the environment that we're living in today." (Dan Letter, 11:20)

• Supply Chain Commitment:

  • Despite heightened oil prices and uncertainty, businesses are making long-term real estate decisions and not pulling back from leases or development.

• Data Center Demand and Expansion:

  • Prologis is at "full capacity" for new data center leases over the next three years, backed by 5.7 GW of power, with significant further expansion planned.

    "Every megawatt we can deliver over the next three years is in some sort of lease discussion right now." (Dan Letter, 13:45)

  • No plans yet for space-based data centers, despite media buzz about Elon Musk’s ambitions:

    "We're going to stick to these 20 countries that we're focused on and no." (Dan Letter, 16:21)

• Structural Drivers: E-Commerce and Warehousing:

  • The growth of e-commerce versus brick-and-mortar is a major tailwind, with online sales requiring three times as much warehouse space per retail dollar.

    "For every dollar retail sales, it needs 3x the warehouse space." (Dan Letter, 18:20)

• Gigantic Land Bank for Future Growth:

  • Prologis can build $43 billion in logistics space—18% growth—without purchasing additional land.

3. Generative AI: Commercial Challenges & Future Directions

[20:28 - 27:32]

• OpenAI Product Rationalization:

  • OpenAI is scaling back on AI video-generation (Sora) due to compute constraints, pivoting toward more lucrative, sustainable models like coding assistants (Codex) and ChatGPT.

    "Generating video is extremely computationally intensive. And if there is one thing that OpenAI has not quite enough of, it's compute." (Rachel Metz, 21:00)

• Monetization Pressure:

  • Investors are pressuring AI giants to mature their business models, particularly as the landscape gets more competitive and resource-intensive.

    "You got to think about return on investment. What's, what's the long term viable business model?...as the landscape continues to evolve and get more competitive." (Carol Massar, 22:54)

• Uncertainty and Consumer Acceptance:

  • Rachel Metz comments on the uncertain future for AI-generated creative content and its market fit:

    "There are so many questions about how much information you should give over to any of these models or any, any sort of agentic AI that's going to carry out any actions on your behalf." (Rachel Metz, 27:32)

4. Social Media Liability: Legal Risk for Meta & Alphabet

[30:23 - 35:08]

• Landmark Jury Verdict:

  • Meta and Alphabet found liable for contributing to a woman’s mental health crisis via social media addiction, with $3M in compensatory damages; punitive phase pending.

    "There were $3 million for compensatory damages...But the jury decided that there could be punitive damages. So there's going to be another proceeding to determine punitive damages. And that's where the big money comes in." (June Grasso, 31:03)

• Bellwether Case:

  • This is just the first of potentially thousands of similar cases, with future trials likely to help set industry precedents and settlement terms.

• Importance of Internal Documents:

  • The verdict was swayed by internal documents revealing Meta’s knowledge or disregard of potential harms, highlighting the importance of corporate transparency.

• Appeal and Precedent:

  • Appeals are expected; the ultimate outcome could reshape the legal landscape for tech and mental health liability.

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Notable Quotes & Memorable Moments

• Negotiation Realities:

  "Nothing is official until Trump says it is...Caroline Levitt herself often jokes about, you know, she could be overturned in five minutes by a True Social post." (Michelle Jamrisko, 05:12)

• Global Business Resilience:

  "This turbulence is more of a feature of the environment that we're living in today." (Dan Letter, 11:20)

• On E-commerce vs. Warehouse Space:

  "For every dollar retail sales, it needs 3x the warehouse space." (Dan Letter, 18:20)

• AI Compute Limitations:

  "If there is one thing that OpenAI has not quite enough of it's compute." (Rachel Metz, 21:00)

• Legal Precedent in Tech:

  "This is only the compensatory damages...but the jury decided that there could be punitive damages. And that's where the big money comes in." (June Grasso, 31:03)

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Timestamps for Important Segments

• US-Iran Diplomatic Stalemate: 02:04–07:49
• Prologis and the Macro Supply Chain: 10:22–20:14
• Artificial Intelligence Business Model Shifts: 20:28–27:32
• Social Media Mental Health Trial Verdict: 30:23–35:08

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Episode Takeaways

• Geopolitics remains highly fluid, with public negotiation frameworks serving more political theatre than policy substance.
• Supply chain giants like Prologis are weathering global shocks by focusing on structural demand drivers (e-commerce, data centers) and long-term planning.
• Generative AI firms face an inflection point: balancing technological ambition with operational costs and market realities.
• Tech giants' legal risks over mental health issues tied to social media are growing; this first trial could shape the future legal and business environment for the industry.

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(For additional insights, tune in to live episodes on weekdays or access the Bloomberg Businessweek Daily Podcast archive.)

Transcript

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Bloomberg Audio Studios Podcasts Radio News this is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. Bloomberg businessweek Daily Podcast with Carol Massar and Tim Stanweck on Bloomberg Radio.

[Tim Stannweck]

Let's go now to Washington D.C. to what we're hearing from the White House. As we've reported, the Trump administration has compiled a list of a dozen demand along demands along three points that Iran would get in return. We also know Iran has said thanks but no thanks. I want to bring in Michelle Jam Risko. She's White House and National Security Editor for Bloomberg News. She joins us from our Washington D.C. bureau. Michelle, I just want to bring everybody up to speed on what we heard from Caroline Levitt just now. Some some other headlines too soon to say if the US Is satisfied with Iran regime change, control of uranium is a point of conversation. Still, how did her statements that we that she just made to the press in the last hour or so gel with what we heard in that 15 point plan and what we've heard from the President?

[Michelle Jamrisko]

Well There's a lot of work here, Tim. And I think, you know, the first off, what we heard from Caroline Levitt today is not consistent with what we heard from Iran earlier today, which should come as no surprise. I mean, the two sides have been trying to jawbone each other definitely at odds. And especially because we don't know exactly who the US Is purporting to be negotiating with on the Iranian side. It's hard to kind of parse who's saying what from the regime's angle of events. And now on that 15 point plan that, you know, Bloomberg reported on earlier, you know, Caroline Levitt referred to that and cautioned against speculating via such a proposal. Of course she doesn't want to, you know, she uses the tried and true line of not wanting to negotiate through the press. She did acknowledge that there are some elements of truth, as she said, to that plan, but that, you know, no one should take that as sort of the final negotiating end piece that the US Is operating with now at the same time as we have that US Proposed proposal. Of course, we have Iran's own counter demands today, earlier, you know, demanding, and we've been through this before, especially with Dan just before me, but demanding that, you know, the US Issue, US And Israel issue a guarantee of no further attacks, that they issue war reparations, among other things. And then key, especially for our Bloomberg audiences is that, you know, Iran is stipulating that they want to retain sovereign control over the Strait of Hormuz. So there's a lot at play here. We haven't really moved forward seems in any way to end the conflict. And as we approach the fourth week, we're kind of nearing that timeframe where the US has said that they would like to be concluding and winding down this war.

[Carol Massar]

Hey, Michelle, you know, we've been talking in the newsroom before we went on air about this 20 point plan that President Trump and the White House has come up to end the war between Israel and Gaza, like going back to that that really is yet to be delivered on. And so we're thinking about this 15 point plan which we know Iran has already pushed back. I mean, what is it that? Is it just some kind of off ramp, just getting something out there to kind of save face perhaps for both sides and they can say we agree to this and yet nothing's really signed officially and it just lets everybody to put down the weapons. Is that kind of what we're expecting?

[Michelle Jamrisko]

Well, one thing I think is key to remember here, Carol, is that the White House hasn't publicly issued this 15 point plan. It's something that we've reported on that we heard through other sources. And they have since said, you know, like nothing is official until Trump says it is. So which, you know, you know, Caroline Levitt herself often jokes about, you know, she could be overturned in five minutes by a true social post. So, you know, we could hear differently from the president himself on what is sort of on the negotiating table at this point. But I think what that proposal and the reports of it do show is just kind of the breadth of the issues at hand and what the US Is trying to put forward as the negotiating points with Iran. Now Iran's counter demands again kind of offer another insight into how the regime is trying to handle this, at least the public relations campaign over the war, but also what they're trying to kind of work toward in a resolution to this conflict, which as we've been saying, are two very starkly different sides to this conflict.

[Tim Stannweck]

Well, as Carol, as mentioned, Caroline Levitt reiterated a four to six weeks timeline for the Iran operation. Also today we learned details on the president meeting with Chinese President Xi Jinping. He's just out on social media saying that it was originally postponed due to our military operation in Iran. It's been rescheduled. It will take place in Beijing on May 14th and 15th. And that the first lady and the president will also host President Xi and Madame Peng for a reciprocal visit in Washington, D.C. at a later date. Should we look at that May 14 to 15 date as maybe a bookend for this conflict?

[Michelle Jamrisko]

Well, that was precisely the question that our own Mario Parker put forward to Caroline in the briefing. And I think what we saw is Caroline herself and others in the administration continue to be at pains to kind of separate the two. They don't want the Iran war issue to be clouding the eventual Trump Xi summit, even as they publicly acknowledge that this was the reason for the delayed trip that was supposed to take place at the end of this month. So I think, you know, you know, that remains to be seen how it might how the Iran's Iran wars conflict timeline might play into the eventual trip and if it might be delayed further or if it will color it in some way or change location, that's still up for grabs. I mean, it's a long way till till May. But as for now, I think the White House is at least trying to keep those two issues separate.

[Tim Stannweck]

Stay with us. More from Bloomberg businessweek Daily Coming up after this.

[LifeMD Narrator]

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[IBM AI Representative]

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[Carol Massar]

Well, we'd like to remind everybody that Amazon, Home Depot, FedEx, UPS, also Giga Cloud Technology are just some of our next guest big customers. We're talking about the $125 billion market cap company. It is a warehouse logistical REIT. It is Prologis that is massive. And it owns, develops and manages logistical warehouses for the biggest companies like we just mentioned. And they've got more than 1.3 billion square feet in 20 countries. So what a great person to get a view in terms of the macro of what's going on around the world, considering Tim, our backdrop shares up about

[Tim Stannweck]

3% so far this year. We've got Dan Letter with CEO of Prologis. He joins us here in the studio. Dan, good to see you again. You just took over as CEO, though we've, we've spoken just a few months before that. I want to start with what Carol mentioned in the macro because we are just squarely focused on an increase in oil prices as a result of the war in Iran, what that means for consumers, what it means for business leaders. How are you looking at the macro environment?

[Dan Letter]

Yeah, well, first, thanks for having me. Great to be here with you too. I look at the macro environment right now and I think about all the chaos and turbulence our customers have been through going back to Covid. Mm six years ago, the world was shut down. Right. Over the course of these six years. Think of all the geopolitical events post Covid, the rate hikes and how that impacted our customers. And I actually look at these customers and I realize they've built a lot of endurance. They actually, this turbulence is more of a feature of the environment that we're living in today. And I, I look back to a conference where we were talking to investors a couple of weeks ago, actually right after the weekend of the original Iran bombing. And we were telling our customers, 2026 started really strong. 2025 was our second largest leasing year ever. And we were seeing that go into 2026.

[Carol Massar]

Does that continue? There's a lot that's happened. Like it's just, I think, kind of shocking. And we talk about this so much. No one expected some of the things that have come at us, Dan, in 2026. So since that, that was just a few weeks ago or a month ago or so, that update and that you were talking with, like, is that optimism still there and is your outlook on 2026 still the same?

[Dan Letter]

So what we see at this time is customers don't necessarily pull back. I look back to last year at this time we had expressed a little caution that led into what was Liberation Day. Right. And you see customers just look around and see what's going on and then lean in. They make long term decisions, 5, 7, 10 year decisions when they're working with us.

[Carol Massar]

Right.

[Dan Letter]

And so they're really kind of seeing through that noise. And when you look at these decisions they're making, it's really only 3 to 5% of the overall cost of the supply chain.

[Carol Massar]

So no people who were maybe going to sign a contract that backed out or anything like that?

[Dan Letter]

Well, we hadn't seen that. And it's really just a matter of they digest it and then they. It comes in different forms. Maybe you end up seeing some short term leasing or. But certainly no pullback.

[Tim Stannweck]

What about when it comes specifically to data centers? Because last time we talked with you about the data center activity you're seeing and in that time a lot has happened. We've heard from different companies. Microsoft is renting a Texas data center that was dropped by Oracle and OpenAI. Are you seeing any signs of weakness or slowdown or changing trends when it comes to the data center business?

[Dan Letter]

So our data center business was really born from our higher and better use business. When you have 6,000 buildings, 14,000 acres of land, close to 78% of the world GDP, that is where the next wave of the economy is. That's where data centers need to be. And we have deep relationships with these hyperscalers. We have a fortress of a balance sheet and every megawatt we can deliver over the next three years is in some sort of lease discussion right now. And we have 5.7 gigawatts of power that we control or are in its

[Tim Stannweck]

advanced, meaning you're at full capacity in

[Dan Letter]

terms of negotiations right now we're at full capacity.

[Tim Stannweck]

So nobody else could come to you right now and say we're interested in the next few years and you have an option for them?

[Dan Letter]

No, that's not the case. Just the next three years of power that we can deliver. These hyperscalers, these major data center users, are heavily focused on near term power and we're focused on delivering power much longer beyond that. And so we're certainly in discussions beyond that first that next three years and that's where this 5.7 gigawatts of power will come in.

[Carol Massar]

So that's the power you've secured.

[Rachel Metz]

Right.

[Dan Letter]

So we've secured 1.8 gigawatts and then we have 3.9 gigawatts that we call in the advanced stages, which means it's a year or two behind.

[Bloomberg Businessweek Daily Host]

Okay.

[Dan Letter]

But again, think of the universe of opportunities we have behind that 5.7 you have, which is just the size of our platform.

[Carol Massar]

All right, so then I'm going to say, are you looking to secure even more power?

[Dan Letter]

Absolutely. Yeah, we are working. And remember, we're a global company, as you said, we're in 20 countries. And so we're working around the Tier 1, Tier 2 markets in the United States. We work around the flap D markets in Europe and we're starting to see it actually in Latin America and Japan as well.

[Carol Massar]

So has anything changed because of the war or is really everybody kind of looking through this? Because we talk about an energy environment, you know, we've talked a lot about LNG specifically because Qatar has lost about 30% of their capacity and that's going to take three to five years to build. There's going to be floor where energy prices are higher. And so I'm just curious, has any of that impacted you guys in terms of how you think about outlook build spend costs?

[Dan Letter]

Well, as it relates to logistics, real estate, again, it's 3 to 5% of the overall costs.

[Carol Massar]

Okay.

[Dan Letter]

And our customers need to make these decisions long term and they want to be close to those population centers. So can't necessarily sit back and wait, can we?

[Carol Massar]

Can I just throw one thing out there? This could be a little wacky, but it's, it's Elon. And so that's kind of wacky. But we've talked this week, right, about data centers in space. Is that something you are thinking about and how that might impact you guys? Because you obviously are doing this on mother Earth and I'm just wondering, is that just something that

[Dan Letter]

we're going to stick to these 20 countries that we're focused on and no.

[Carol Massar]

Mars, Pluto?

[Dan Letter]

I think Earth, I think there's plenty of opportunity for us for the foreseeable future, but maybe ask me in 10 years.

[June Grasso]

Okay, yeah.

[Tim Stannweck]

I mean, but to Carol's point, why, you know, with that getting so much discussion right now, why are you just focused on terrestrial? I mean, I know it would have sound crazy, sounded crazy a year ago to be talking about this, but this is something that, you know, a lot of people think is the future of these data centers.

[Dan Letter]

Well, we do this business 100% on a build to suit basis. So we have leases in place before we put a shovel in the ground. And we have so much opportunity in front of us, we don't need to be thinking about another vector to grow this data center business.

[Carol Massar]

Yeah, that's pretty fascinating. What would change your mind though, in terms, would it have to be an economic slowdown, which some have talked about Depending on when this war ends or even if we start, we see inflationary pressures continue and whether there's demand destruction that slows down. Essentially the global economy, a lot has to fall into place, as you know. Is that what would maybe change your outlook? Or again, because everything's locked in place. If the economy slows down, what kind of impact might that have on you guys? Or it doesn't matter because you've already kind of signed things and are moving ahead because it's longer term.

[Dan Letter]

When I think about our core business, if you think of the building blocks for our core business is 70% of the US GDP is consumption. Our buildings are close to the major population centers the United States. So on top of that, there's the E commerce secular demand driver. We've been talking about E commerce for a long time. Pre Covid, E Commerce penetration as a percentage retail sales was in the 17ish percent rate. Now it's like mid 20s. We see that growing another 75 to 100 basis points a year through the end of the decade. That alone is additional demand on top of that. So there's a big tailwind for our growth.

[Carol Massar]

But if there was an economic slowdown, that could be a problem or would that not even impact? That's what I'm trying to say.

[Dan Letter]

One thing I forgot to mention is E Commerce. For every dollar retail sales, it needs 3x the warehouse space. Because think of all the activities that happen in the brick and mortar and the returns happen there. There's the stock in the back. And then with E Commerce there's been that proliferation of SKUs. And all of us, we're looking for speed and we're looking for choice, right? And so that's been a big driver. And you may see flat retail sales, but you'll see E Commerce penetration. That's. That's commerce penetration is great news for logistics real estate.

[Tim Stannweck]

On that, I'm interested in the joint venture that you guys announced last week. $1.6 billion JV with GIC to build, to build to suit warehouse development. Why partner with gic? Why not do this solo?

[Dan Letter]

Well, we've long been developing on our balance sheet, but now look at our development business. We can build $43 billion more of logistics space in our land bank alone. Not buying any more land. On top of that we have this data center.

[Carol Massar]

Wait, say that one more time. That's tremendous.

[Dan Letter]

So 40, we have 230 billion worth of AUM today. At the end of last quarter, we can build another 43 billion of of logistics buildings on our 14,000 acres of land. That's 240 million square feet. We can grow the company 18% without buying another piece of land, then we have this data center business. Think about it from a megawatt perspective. If you build a powered shell that's on the continuum powershell over here, that's about two and a half to $3 million a megawatt. You go out this side of the continuum and that's a turnkey. That's everything. Soup to nuts built out, that's 15 million a megawatt. So think about how big that data center development could be. So we're looking at diversifying our capital stack there and our partners. Great to have a new partner with GIC here. They, they want a piece of this development business. And when we're, we're doing that to help build bigger relationships globally.

[Bloomberg Businessweek Daily Host]

You're listening to the Bloomberg Businessweek Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg business app or watch us live on YouTube.

[Tim Stannweck]

For more on Open Air and what they are up to ahead of a potential ipo, let's head to Bloomberg News, the San Francisco bureau, and the Bloomberg reporter, Rachel Metz. Rachel when SORA first came out, I mean, even before it came out, when we just saw the capabilities of it, when nobody could use it except for Open Air employees, we were all like, this is crazy that this type of video that looks so real can be generated by AI. When we tried it, people thought it was, you know, I think, really, really novel what ended up happening. Why did it not stick?

[Rachel Metz]

I mean, I think that an overarching theme here is OpenAI is trying to simplify what has become a pretty vast portfolio of different kinds of AI products. And I mean, the fact of the matter is that generating video is extremely computationally intensive. And if there is One thing that OpenAI has not quite enough of its compute, I mean, the company is very, very, very hungry for more compute. So this is an easy thing, I think, to say, hey, you know what? Like, this is interesting and it looks cool, but it is not our core product. And if we need compute, let's put it toward other things so that in my mind that may be part of it as the. And the company is trying to sort of like unify, slim down some of its product line a little bit, which has gone in a lot of different directions. Codex for coding is really important to them. ChatGPT is really important to them. And I think trying to figure out how people are going to pay and pay over time for these products and keep using them.

[Tim Stannweck]

Are they just trying to be like anthropic?

[Rachel Metz]

I Don't know if they're trying to be like anthropic, but I think they have realized that coding, using AI as a, as a coding assistant is a really good application for them and it's something that people may be willing to pay for over time. And also it seems like a number of these companies are realizing that once they make their models good at completing coding tasks, they're also able to expand that out into some other things, such as different kinds of office work. I mean, ultimately these companies have to make money. Right. And what they're doing is very expensive to build and to run. So they have to figure out ways that they can up the revenue.

[Carol Massar]

Yeah, that's what that's about.

[Bloomberg Businessweek Daily Host]

Right, right.

[Carol Massar]

We're how old now into kind of this process, Rachel?

[IBM AI Representative]

What?

[Carol Massar]

Three years and counting. And right now you've got to think about, okay, a lot of money's come in, a lot of investors excited, a lot of hype, a lot of activity and actions and then you got to think about return on investment. What's, what's the long term viable business model? Right. As the landscape continues to evolve and get more competitive?

[Rachel Metz]

Absolutely. And I'm not sure that anybody has really cracked the code for that with AI imagery, whether it's still images or videos. I mean, AI video is still very early days and it's, there's no getting around the fact that it takes a lot of computing power to build and to run these kinds of models. So, and you need people then to pay for that. And right now the companies are heavily, heavily subsidizing that stuff. And there's just, you know, you can only do that for so long and you need to find like a market fit at some point. And, and it's, you'll notice people have not been talking about it that much. You haven't seen anything really splashy that obviously uses Sora or other competing companies products either. It's just a very tricky market.

[Tim Stannweck]

But it's still really early days for that type of technology and it does seem really promising, especially when it comes to, and you know, we're going to talk with Chris Palmieri in a few minutes about the Disney side of things. But I mean that was a potential billion dollar investment in open AI. And to license the license IP from, from Disney to open AI to then create, you know, these characters for AI shorts. Does that is, I guess my question is, are consumers not interested in this? Do we know a difference at this point between what is AI generated and what isn't? Does that matter for Consumer tastes.

[Rachel Metz]

I mean, I'm not sure if it's really at this point in, like, the cycle of this technology, if it matters that much how the consumers feel about it. I mean, it does. Obviously, it does matter, and we are consumers. And I think people do care about knowing whether something is AI generated or not. I mean, ultimately, they probably care how it looks and how it. How. How it feels to watch something that's. That's either AI generated or animated. But really, I think there's a lot of mixed feelings at the studio level about whether or not they want to use this kind of software, how they want to use this kind of software, if it's just one more tool in the toolbox that they have to produce, like an animated movie or an action movie, or if it's going to be taking over large swaths of their production pipeline, in which case some people might have really big issues with that. And we know that in Hollywood in general, this is a very contentious issue, the idea of using AI either to augment or instead of people's work for certain things.

[Carol Massar]

So, you know, there's a couple of stories I just want to roll into this. I mean, we did a story about OpenAI set to raise 10 billion from MGX Coat 2 and Thrive. So we're talking about a major funding round. We also still have White. Microsoft. Microsoft, is it a 27% stake in OpenAI? And I wonder, too, Rachel, are investors people investing Microsoft saying, all right, guys, it's time to grow up a little bit and, like, figure this out. Is that part of this or. We don't know exactly.

[Rachel Metz]

I think at this point, we don't really know what's behind it. But this idea that you would spread your technology out into a bunch of different directions and then, like, rein it in somewhat, that seems to make sense to me as part of the process as you move toward an ipo.

[Carol Massar]

Did we talk about Spud? Can we talk about Spud? What is this new AI model? What do we need to know about this?

[Rachel Metz]

I mean, this is a forthcoming model that we have heard about, but it's still tbd. What exactly is going to be coming out about that one?

[Tim Stannweck]

Is it. Is it a. Is it a model for, like, that chat GPT uses? Like, what is it? What is the iteration of it?

[Rachel Metz]

I am not sure, to be honest.

[Tim Stannweck]

So, okay, okay. To be. To be determined when it comes to Spud. I like the name.

[Carol Massar]

I don't know. Just to wrap up here, Rachel. I mean, you cover this stuff. This seems logical. Like, you know, it's so funny. I feel like we're still so much in the exploratory process and but it does feel like the conversation has shifted more to agentic AI and some different things. I know at Bloomberg Invest, I had conversations about the importance of vertical AI data and, and how that's going to be important. It's still an evolution, right? Or is there anything that you think is a stronger narrative and just got about 30, 40 seconds.

[Rachel Metz]

Yeah, I mean, I think for all of this stuff, it's still very early days, still early stages. There are so many questions about how much information you should give over to any of these models or any, any sort of agentic AI that's going to carry out any actions on your behalf. I think there's still a lot of questions there. It's also not clear to me how people are actually using this stuff and then finding it really useful. So, yeah, there's a lot of, a lot of things that we still need to figure out.

[Carol Massar]

Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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[Carol Massar]

Meta and Alphabet School found liable for a 20 year old woman who alleged that her addiction to the company's social media platforms caused her to suffer a mental health crisis. This is according to a jury. It was out on the West Coast. It's the beginning of a lot of litigation against these companies and about their responsibility. But we want to dig into kind of legally what does this mean for the two companies because it's not like the share prices have fallen apart.

[Tim Stannweck]

Yeah, that's certainly notable. And that's why we have June Grasso with us. She's the host of Bloomberg Law on Bloomberg Radio. She joins us here in the Bloomberg businessweek studio. A significant ruling. I'm pretty surprised by the investor reaction, which is math, but perhaps there's some, you know, overhang that's gone.

[June Grasso]

Well, it's significant and perhaps the reaction isn't so, you know, bad right now because this is only the compensatory damages. So there were $3 million for compensatory damages. You know, that's, that's for pain and suffering, to reimburse a person for what they went through. But the jury decided that there could be punitive damages. So there's going to be another proceeding to determine punitive damages. And that's where the big money comes in in a lot of these cases where they want to punish the company. So things might change if there's a big punitive damages award.

[Carol Massar]

When we talk punitive, like how much are we talking? And then my understanding, I was listening to you, I think on with the team over at Balance of Power that this is the first of many cases to come to trial against these companies.

[June Grasso]

Right. There's another case, I believe trial is scheduled for July in Los Angeles. But there are thousands, I think three thousands of these cases. There's also a case by state attorneys general against these companies. So what's really important is they call this a bellwether trial. So it's the first one to go to Trial. So. So that does make this verdict very important because down the road, that might mean that Meta might be more pliable as far as settlements. But also I think that it's hard to read into just the one verdict. Like, people are comparing it to the tobacco cases. Well, the tobacco cases, it took a while before a pattern was established. So here I think you have to go through more than one trial, a couple of trials before you see which way the juries are coming back. Also, you know, I was surprised by the verdict because there was a lot of evidence that this young woman had a lot of other mental health struggles, that she had problems at home, she had a learning disability, she had bullying problems, I believe, in school. So there was evidence that there were other sort of, you know, influences on her, not just Meta. And so another thing that strikes me, me as a parent is that, you know, she was on these social media platforms, like 16 hours a day or whatever. And, you know, where are her parents at that point? You know, I don't think, you know, I don't know what would happen if my hands let my daughter be on, you know, all those different hours.

[Tim Stannweck]

You know, you raise a lot of good points, June. And I'm wondering from a compensation standpoint, is there a chance, you know, not just from the perspective of, okay, punitive versus compensatory. Compensatory. Compensatory, compensatory. Thank you. But does it, does it create some sort of precedent, you know, that moving forward, this is how. And not necessarily a legal precedent, but this is how people are thinking about this technology.

[June Grasso]

Well, I mean, yeah, this is how people are thinking about this technology. And perhaps when they choose the next jury, they'll try to eliminate people who are thinking this way about this technology. But it is sort of. It is a trend. I mean, there are states that are passing laws, as I said, countries that

[Carol Massar]

are ahead of this compared to the United States. Right.

[June Grasso]

So. But, you know, I don't know about pushing the blame on, you know, one company, but, you know, the problem was that in this trial, there were a lot of internal documents that were showed to the jury that, you know, revealed a sort of ignorance on Meta's part or on the executives at Meta about what this was doing, or, you know, we don't care about it. So I think that, that, you know, those internal documents probably played a big part in the way the jury came back. But remember, they were out for nine days, 40 hours. So they didn't come to this conclusion right away. It wasn't like, oh, Wait, you know, here, we saw what happened, we heard it, and we're ready to, you know, rain down on Meta and Google.

[Carol Massar]

Just real quick, just real cookie. I'm a little hungry. Perhaps June, just real quickly, 30 seconds here. Can these two companies appeal or any pushback? They have to.

[June Grasso]

They'll wait until they get the punitive damages verdict in and then. Yes, they're already saying they're going to appeal. There's no doubt that there'll be appeals in this case.

[Bloomberg Businessweek Daily Host]

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