OpenAI Reports New AI Safety Incidents, Sets Disclosure Plan

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22:27So Congress is sending a Russia sanctions bill to President Trump's desk after the package cleared the House yesterday. It's intended to put pressure on the Russian economy and force President Putin to end his four-year war in Ukraine. The sanctions are targeting Russian officials, companies, financial institutions that are helping to fuel the war. Joining us now to break this down is Candy Wolf, head of global government affairs at Citi. And Candy, we want to get to a number of things with you, including one talk about the Clarity Act in a round. But let's first talk about these Russian sanctions.

23:01Legislation passed 262 to 159. It split lawmakers in both parties. We've sort of seen this story before, sanctions against Russia. Why should this time or will this time be different?

23:13Carol Massar:Well, I think one thing you got to distinguish is that unlike traditional sanctions bills, This one is actually tariffs. Okay. So recall, this is the Lindsey Graham legislation. That's right. And it was really his interest in pushing on further sanctions, which really led to the administration saying, we prefer to have tariffs and to apply more tariffs. So the authority is really along the lines of providing the administration the ability to apply tariffs to Russian entities, to other entities affiliated. you know, however the administration ultimately wants to apply the legislation. And it was really pushed after Senator Graham passed away, and then the House just took it up and passed it.

23:58Carol Massar:So it will give authority to the administration, to Treasury, to apply higher level of tariffs and see if that will, you know, continue to put pressure on Russia to kind of change the trajectory with respect to the war. How high are we talking about? How high as far as tariffs? Well, at one numbers. And I think part of the challenge that the House had and why you saw such a divided vote was really providing the administration with additional tariff authority. There's questions whether is this the right instance in which Congress should be providing the administration with additional tariff authority.

24:34Carol Massar:But I think because it was focused on Russia and on Russia, Ukraine, you know, they got more consensus to move forward. I want to talk about next week, because President Trump will be meeting with China's Xi Jinping. We heard today that he's actually going to meet him on the tarmac when he gets off the plane as opposed to at the White House, which is what Trump usually does with heads of state. What do you think we may see come out of this summit? Because a lot of the time it's pomp and circumstance. We don't really get anything real coming out of it. You know, I think the administration has wanted to continue the dialogue, particularly with respect to trade, and ensure that there's a detente, if you will, between the U.S.

25:21Carol Massar:and China around trade relations and trade tensions. So I think the administration wants to have reciprocity. They want the visit to go similar to President Trump seeing President Xi. They want to have very similar outcomes in President Trump meeting with President Xi. We're not expecting a lot from, you know, deliverables, if you will. It didn't happen when Trump went to China. There wasn't a lot of deliverables. We saw a lot of pomp and circumstance, though. I think a lot of it, though, from the business community aspect is, are things sort of staying on an even keel? You know, not an escalation.

25:57Carol Massar:Keep the relationship solid. So I think you're going to see more of that than you are in terms of deliverables. I want to go back to what Alexis was talking before. This is about the capacity tariffs. So the headline said, U.S. said to delay excess capacity tariffs until after the Xi summit. So take us back because there have been so many tariffs. It's very confusing. My head spins every time we talk about it. What are these capacity tariffs? Okay, you've got to go all the way back to Liberation Day. Wow. Okay. So the administration put forward IEPA tariffs, tariffs based off of IEPA, which is a national security statute.

26:34Carol Massar:The courts said you can't apply tariffs under IEPA. So the administration has said we still want to apply tariffs, so what is the legal authority by which we can apply the tariffs? And the legal authorities that they're using is Section 301 of the U.S. Trade Act. And under Section 301, you have to find a finding that there's unfair trade practices. In this case, excess capacity is viewed as an unfair trade practice. That allows the administration to legally say we will then increase tariffs on those countries that we find have excessive capacity. And it broadens the scope. And so it's not just one country.

27:16Carol Massar:What the administration is trying to do is reimpose the original Liberation Day tariffs and further negotiations post-Liberation Day under Section 301s or other trade authorities that they feel have a stronger legal basis. So this investigation has been ongoing for the last few months, and we're really waiting for USTR to issue the recommendations. And I think what they're saying is they're deferring the recommendations because those excess capacity recommendations will apply to China. OK, so they wanted that to happen after this meeting. And I'm sure it'll be part of the dialogue on the trade side, which is, you know, what level are we going to end up at?

27:58I just want to attribute that to that was a South China Morning Post to that that came out with that. So I just wanted to put that out there as well. What can we expect from business leaders or CEOs who will be accompanying President Trump with this summit with Xi Jinping? Because we've seen him bring along people in the past to these kinds of things. Will we hear from Jensen Wang at NVIDIA and things like that? Companies that have a lot at stake when it comes to China.

28:23Carol Massar:So I think we're expecting and you should expect to see the companies that were invited to China will also be invited to the dinner at the White House. There does not appear to be a CEO-level forum. Perhaps there may be a Chinese CEO-level forum, but not necessarily a U.S. CEO-level forum. I think it's still in the works. We're still waiting to get further confirmation. But it looks like the primary interaction at the CEO level will be at the dinner. Okay. I want to switch to the EU considering Canada as an associate member because the president was not happy about this. How does this, I guess, would you say, complicate the trade picture?

29:07Carol Massar:On the EU? The EU, yes, and Canada. So, look, I think let's just step back and talk about the Canadian relationship. Canada is still the major trading partner to the United States. We've seen the escalation, but I think the good news is that there's been less of an escalation between Canada and the U.S. It's been a little more deliberate,$20 billion by the U.S. on tariffs,$20 billion by Canada. What Canada is trying to do is expand the relationships. They're looking for other trading partners. They're looking for less reliance ultimately on the U.S. But at the end of the day, the trade with the United States is still the primary trade relationship, and we're going to have to work through these differences.

29:53Carol Massar:You know, it's hopeful that there's been a bit of a de-escalation and I hope the dialogue will go forward and we'll get some resolution. We're speaking with Candy Wolf, head of global government affairs at Citi. And we have so many things we just want to we want to get to. I do want to talk about the Clarity Act for a moment because it officially failed to pass a crucial vote in the Senate yesterday. We saw crypto related stocks fall in sympathy with the legislative option, at least off the table for now. What comes next? Are we going to see more direct rules from places like the SEC? I think we already saw a little bit of that.

30:28They came out with an exemption, right, for tokenized stocks.

30:31Carol Massar:I think, you know, as has been signaled, that if the Clarity Act wasn't going to get the 60 votes needed in the Senate to proceed, then the regulatory process was going to start to take over. And, you know, you're going to see more rules coming out of the SEC. The CFTC put out a notice as well. today, I think. Less of a formal rule and more of a no action letter is my understanding. So I think you're going to, we know we're going to see the regulators start to figure out if they can create the contours in the regulatory structure without needing legislation. So they're going to have to work within their existing authority.

31:09And we'll expect them to, you know, sort of take more action given that Congress couldn't really reach consensus. Okay, we've touched upon so many issues with you and we have limited time. I'm like, where do we go next? I want to pivot to Iran. U.S. agencies, they said to be tracking cyber threats against nearly 20 vessels worldwide. So explain why this is such an issue when we're talking about Iran and U.S. relations.

31:37Carol Massar:Look, I think, you know, I'm less of an expert, if you will, on kind of the military and the actions that are happening there. But I think from the business perspective, right, everyone's looking at when will the war end and how does it end and what does that really mean for oil prices right and so you know i i think what you're seeing is the u.s strategy today has been a blockade combined with economic pressure to see if that creates enough of an avenue to have a an exit strategy and it sounds like the administration wants to engage in further discussions after the midterms, that there's more activity to, you know, actions to occur post midterm.

32:20Carol Massar:And, you know, and I think we'll see then if there's a strategy, a plan for, for how to exit. Yeah. Cause you keep hearing from president, he was just at a campaign event the other day and he said, the war is going to end very soon. And I think, is that becoming just for Americans? They just, Oh, it's, it's, it's another, it's going to end soon. We kind of keep hearing that over and over again. I've been here in New York because we had a conference and it was to talk a lot about the midterms. And one of the panel discussions was, you know, what are the issues that the American people are focused on?

32:50Carol Massar:It's affordability in the context of gas prices, but it's not the Iranian war or even Russia-Ukraine. You know, foreign policy tends not to be the primary topic. It's more your pocketbook issues, your kitchen table issues, food prices, et cetera. So Iran is more about what that means for gas prices than it does about sort of, you know, are we in a war? When are we getting out of the war? Before we let you go, any chance Jane Frazier, CEO of Citi, may join President Trump at next week's summit with Xi? Jane was honored to have received an invite to attend the dinner with President Xi at the White House.

33:32Carol Massar:And similarly, when she was in China, so she is expecting to go.

33:40Stay with us. More from Bloomberg Businessweek Daily coming up after this.

33:49Carol Massar:This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. AI is creating a new path for musical stardom. As Bloomberg's Lucas Shaw and Ashley Carmen Report, Suno, an AI-generated music company, lets users generate a song in any style based on a text prompt. People can upload their own lyrics or start from scratch, record their own voices, or rely on ones provided by Suno. While most of the songs generated on the service go unheard of by the masses, a few have taken off, including a recent TikTok trend that involves users uploading text messages to Suno and turning them into musical performances, like taking the text from a crazy night out and making it a gospel song.

34:33Carol Massar:Suno's pitch to investors is that it'll democratize music creation, leading to a more than$5 billion valuation for the company. The music industry, it's watching, as its biggest concern about AI is whether record labels, rights holders, and artists will be compensated for the work they claim built the training models for companies like Suno. Another question, will these AI bangers have any staying power or just be one-hit wonders? That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro plans.

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37:11in. us now is a U.S. CEO co-founder, Christine DeWendel. Christine, thank you for joining us here in the studio. Glad to have you. Thank you. Talk about the evolution of this QR code in restaurants and where it started and where you have taken it to next.

37:27Carol Massar:Absolutely. Well, thanks for having me. So what is Sunday? Sunday, we're the leading digital checkout solution in the U.S. now. And it started in my co-founder's restaurant group with a really simple idea. It was, let's address something that is difficult for everyone. No one likes to pay in restaurants, right? Nobody likes to raise their hand. Nobody likes to wait around for the check. Nobody likes to scribble and do the math on the tip. And so we put QR codes on tables. We linked them to the point of sale systems. And literally within three weeks, 70 % of guests were paying with the solution.

38:00Carol Massar:And so we said, wait a minute, this has legs. We're going to spin it off. We're going to start a company. So this is 2021 coming out of the pandemic. And since there's been an incredible appetite for a product like this. And so now, five years later, we operate in three countries, US, UK, France. Our headquarters is in Atlanta. We're doing about 6.5 billion in transaction volume. And we're now the leading digital checkout solution. So you can find us all around town. It's been an incredible ride. I have seen these in some of the restaurants I've been in. But what kinds of restaurants, I guess, are these fast casual chain type restaurants?

38:37Who's embracing the QR code at the table?

38:40Carol Massar:So it's actually a lot of upscale full service restaurants that we're working with. And so what we found is typically the first restaurants to work with us are usually the best operators in America. So in Chicago, it's Let Us Entertain You. In New York, we work with Takambi. We work with Lepicor Bianca. We work with Westville. So the restaurants that want to have a great guest experience, but who have guests who value speed and also who want to be in control of the payment experience. And so we'll go anywhere from fast casual to Michelin star restaurants. And the Michelin star restaurants are working with us because the truth is people who are willing to spend that kind of money on a meal don't want to wait around.

39:22Carol Massar:And so if they can have an elegant digital payment experience, they're delighted. And so that's gotten a lot of traction. Well, you've talked about the growth behind this sector. So what are some of the reasons behind it? Why is it becoming such a big thing right now? So if you think about the way pretty much anywhere we operate has been digitalized. And so the way we get concert tickets, we take airplanes. And the odd thing about the hospitality space is it's one of the last spaces to have seen some sort of digital revolution. And so what we're seeing is there's more and more appetite from the consumer to be in control of the moment.

39:55Carol Massar:So imagine the three of us are out for drinks and we want to split the bill and get out of there quickly. Well, we're actually pretty delighted to take our phones out, pay, split it, leave a tip and go. And so it's actually driven by consumer demand and providing a delightful guest experience. On the flip side, restaurants are seeing it's a great way to get more information on their customers. They know who you are. They can send you an email afterwards. They can invite you for a happy hour. And so suddenly restaurants who traditionally had no idea who was coming into their restaurants are getting much smarter about who their guests are.

40:31Carol Massar:And I think you just, you hit it. It's about the data, right? So what about the customer who's turned off by that? Who says, look, this takes away the personal touch for me and I don't want you to have my data. I just want to come in and have a burger and go home. Yes, so the good news is with our product, and we're very mindful of this because we're coming from the restaurant space. If you don't want to pay for it, with it, well, you could just call your waiter and pay in a classic fashion. So it's an optional payment method. And so it pleases all the people who do want to get up there quickly, do like to be in control of the situation.

41:06Carol Massar:The other thing is a server typically doesn't have enough time to do a fantastic job because they have so much to get done in a given hour. And so by giving the server time back, you actually give them the opportunity to give more personal service. And so you're not going back of house to run the card. You can ask, do you want another drink? Like, how was your experience? Can I make a recommendation? And so we're giving time back to the server to provide a better experience. Well, that's interesting you mentioned that because I was wondering, you know, are servers concerned? Like, is this new thing going to take over part of their job?

41:41Dude, he's, and should they be worried?

41:44Carol Massar:So the first thing is we see servers typically get about 10 % higher tips with Sunday. So they usually love it. and they can do what they like to do, which is chat with their guests, make recommendations, as I was saying earlier, instead of running cards and making sure that guests who want to leave are able to leave quickly enough. With your interface, are you able to manually put in a custom tip or are they just, you know, hey, it's 20%, 18%, 20 % and up? It's absolutely customizable, very important. Just about every restaurant asks us that because people want to be in control of the situation.

42:18And I think it's also important to be able to do that without the server standing there watching you. You know, there are some service restaurants where like you're at the counter and they go, here you go. Can you, can you fill this out digitally? And they're waiting to see whether or not you're going to give them a tip. It's a little bit awkward.

42:32Carol Massar:They're hovering over you and you want to leave, leave a good tip. So here you're saying it's on your time. It's on your time. The guest is fully in control. And so it really is a more delightful experience. So what's next? How do you innovate off this? Okay. So you start with the payment experience, but there's so much more you can do. Suddenly you can have guests leave a review. You can personalize the guest experience. So I know if you love non-alcoholic beer or if you are a vegetarian, and so suddenly you're going to be able to make recommendations. You know what your friends have gotten. It's a great way to have a personal experience on your phone and in a much more delightful way.

43:12Carol Massar:And so we're seeing the whole what we call B2C play out where we're in a great position because the data, we have to give you a more customized, more personal experience, which is pretty exciting. Well, before you go, I just wanted to ask because you've been in business for about five years or so, you said? Yes, five and a half years. So looking at that forward, what kind of challenges are you seeing that kind of lie ahead for you in this sector? Is it the competition growing? Is it, what do you see? So we actually don't have a lot of competition, but what we do see is it's actually really hard to change behaviors in the hospitality space.

43:44Carol Massar:And so restaurant operators love us, but what's more challenging is how do you get the server on board and how do you get the server to be excited about change? And so the biggest challenge, frankly, we have is change management. If you think of how long it takes to introduce new technologies, it's working, but it's gonna take probably a couple more years before we change the industry completely. I got 10 seconds. Why the name Sunday? Sunday, because we save time for what matters. And my co-founder and I said, Sunday is the day we have time off. It's the day we're with our kids. And so that's why.

44:16Carol Massar:Better than Monday. This is the Bloomberg Business Week Daily Podcast. Available on Apple, Spotify, and anywhere else you get your podcasts. Listen live weekday afternoons from 2 to 5 p.m. Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.

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