Speaker 1: From Marhart where Innovation of Money and Power Collie in
Speaker 1: Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: I'm Caroline Heydet Bloomberg's World head quarters in New York,
Speaker 3: and I'm Met Ludlow in San Francisco.
Speaker 4: This is Bloomberg Technology coming up.
Speaker 3: Apple shares slide for a fifth day. That is, the
Speaker 3: iPhone maker sees a big drop in China sales to
Speaker 3: start off the week with a stock in correction. Will
Speaker 3: break down everything you need to know.
Speaker 5: Plus we stay with China as AMD faces a US
Speaker 5: roadblock in selling its artificial intelligence chips in the Chinese market.
Speaker 4: Bloomberg Exclusive ahead.
Speaker 3: And Bitcoin oh it hits a fresh record for the
Speaker 3: first time since its peak back in November twenty twenty one.
Speaker 3: We'll have full coverage of the digital currency market and
Speaker 3: those meancoin come up in the rush. There's so much
Speaker 3: more going on throughout this hour. Let's first check in
Speaker 3: on these markets because what bitcoins up. The rest of
Speaker 3: the market still trying to digest some of the run
Speaker 3: up that we've seen in particularly the AI related names,
Speaker 3: and we focus in on what is some mixed economic
Speaker 3: data today, the US showing some services weakness, and we
Speaker 3: look ahead to testimony coming from J. Powell on the Hill,
Speaker 3: his semi annual experience over in terms of the politicians,
Speaker 3: what will the grilling mean? How much will he be
Speaker 3: reticent to say that they're looking at those rate cuts
Speaker 3: anytime soon. We're looking at one point eight percent down
Speaker 3: on the Nasdaq now, so big tech feeling some of
Speaker 3: the big pain. As we talk China, ed, I want
Speaker 3: to focus a line on what's happening in China. These
Speaker 3: of course, these traded names here in the United States
Speaker 3: with the Golden Dragon index of five percentage point. As
Speaker 3: we see a five percent growth perspective coming from China
Speaker 3: that target, how will they get there and ultimately what
Speaker 3: is the debt that they're going to be issuing fueling
Speaker 3: in terms of the focus on AI on technology coming
Speaker 3: from China not en After buoying the stocks today in
Speaker 3: the Chinese names, I'm looking at the tenure yield off
Speaker 3: by seven basis points as we anticipate the FED and
Speaker 3: Jpowe's speech move on, have a look at what is
Speaker 3: happening in the asset class that we need to discuss
Speaker 3: a little bit today. Bitcuinn does manage to hit that
Speaker 3: all time high. We're above sixty nine thousand. Happened and
Speaker 3: just after about nine am, nine thirty ten am, but
Speaker 3: we're looking at a sixty six back to at the
Speaker 3: moments and profit taking is we hit that psychological level already.
Speaker 3: We've seen the market capitalization eclips that of twenty twenty
Speaker 3: one because of because there's more bitcoin in supply and
Speaker 3: they are worth up to one point sixty nine thousand.
Speaker 3: We're currently up nine point nine percent, as we'll see
Speaker 3: over the course of what has been a mega run
Speaker 3: throughout twenty twenty four, in particular twenty twenty three though
Speaker 3: they were in the doldrums, and twenty twenty two. But
Speaker 3: we are back at that level that we hit in
Speaker 3: November twenty twenty one. And what are you watching on
Speaker 3: the micro.
Speaker 5: There is a lot in the newsflow that is hitting
Speaker 5: technology shares. Tesla down almost five percent. A fire near
Speaker 5: its Berlin plant has halted production. Officials are investigating if
Speaker 5: arson was the cause of that fire.
Speaker 4: That's one news item.
Speaker 5: The other is data out a China that's a little softer,
Speaker 5: showing that maybe growth in China sales to Tesla not
Speaker 5: as strong that stock under pressure. Two other big stories
Speaker 5: we're watching. We're going to head to DC in just
Speaker 5: a minute. Bloomberg reporting that US officials are going to
Speaker 5: block AMD selling a made for China lower spec GPU
Speaker 5: or AI accelerator. It's something similar to what Nvidia did,
Speaker 5: and that seems to be weighing on shares two down
Speaker 5: one point eight percent, but in line with the broader market.
Speaker 5: Then you have Apple down two point eight percent, trading
Speaker 5: at its lowest level since October. We have data from
Speaker 5: Counterpoint Research, and that data shows that in the first
Speaker 5: six weeks of twenty twenty four, sales of the iPhone
Speaker 5: in China fell twenty four percent year on year compared
Speaker 5: to that same six week period a year ago. I
Speaker 5: want to bring in bloombergs Mark German and go through
Speaker 5: this data because the data also shows that other handset
Speaker 5: makers had a surge in sales, and so therefore the
Speaker 5: market ches picture in China, Mark is changing. With Apple
Speaker 5: dropping below sixteen percent and Huawei now back above sixteen percent.
Speaker 4: What's going on?
Speaker 6: You know?
Speaker 7: This is this is hugely significant. We've known for a
Speaker 7: couple quarters now that Apple has been running into roadblocks
Speaker 7: in China. Certainly that new Huawei phone has been very popular,
Speaker 7: that new made device with the locally designed processor we've known.
Speaker 7: For a while, there's been this sense of renewed nationalism
Speaker 7: in China where people are, you know, maybe putting Apple
Speaker 7: purchases a little bit on the back burner and focusing
Speaker 7: on purchases from state side companies. They also have been banned.
Speaker 7: There's been some bands and some organizations owned by governments,
Speaker 7: government entities where they don't want American made devices, they
Speaker 7: don't want Korean made devices like Samsung. So the impact
Speaker 7: has been there. But what's so interesting about this first
Speaker 7: six week's number is that it's actually a little bit
Speaker 7: worse than it seems on the surface. Right, let's do
Speaker 7: a comparison. So what happened last year? The iPhone fourteen
Speaker 7: Pro came out. Now, obviously that was not as a
Speaker 7: significant of an update as the iPhone fifteen Pro. So
Speaker 7: from that perspective, you'd think that a nicer phone, new design, titanium,
Speaker 7: that would sell better. But then we also remember that
Speaker 7: there were no supply chain issues this year and last
Speaker 7: year there were significant supply chain issues. There was a
Speaker 7: lot of pent up demand for the iPhone in the
Speaker 7: first six weeks of twenty twenty three, because you really
Speaker 7: couldn't find an iPhone fourteen Pro or Promax at the
Speaker 7: tail end of twenty twenty two. So not only is
Speaker 7: Apple down, they're down in comparison to a phone that
Speaker 7: was not as big of an.
Speaker 4: Upgrade, and they're.
Speaker 7: Down when there was so much pent up demand for
Speaker 7: this device. So clearly not a terrific situation here, but
Speaker 7: I do see some momentum shifting. The iPhone sixteen Pro
Speaker 7: is going to launch later this year. There are some
Speaker 7: cool new camera features that could excite that market. The
Speaker 7: other thing to note is that the Apple Vision Pro
Speaker 7: mixed reality. That's a pretty popular technology in China and
Speaker 7: in Asia in general, and I expect China to be
Speaker 7: one of the first markets to get that headset.
Speaker 4: So it's not all.
Speaker 7: Bad for Apple and China. There is going to be
Speaker 7: a little bit of a shift here, I think later
Speaker 7: in the year.
Speaker 3: I mean, thus far as data coming from center point counterpoint,
Speaker 3: it's their narrative, it's not Apples. What are we hearing
Speaker 3: from Apple to try and regain that narrative? You, of
Speaker 3: course pushed out a story yesterday about how they've been
Speaker 3: updating some of their MacBook airs at the moment, so
Speaker 3: clearly bringing in faster chips. But we need to hear
Speaker 3: a little bit more about artificial intelligence as well. Your
Speaker 3: amazing scoop last week about the fact that they're putting
Speaker 3: back on the car, putting their technology experts to work
Speaker 3: in AGI more focused and generative AI. Does that mean
Speaker 3: that we could start to see a refresh and exuberance
Speaker 3: around purchasing.
Speaker 7: Yeah, I mean the big question is if a lot
Speaker 7: of these new AI features are going to be available globally, right,
Speaker 7: it could be sensible that Apple first roles now in
Speaker 7: English speaking countries, right, and then they have a long
Speaker 7: roadmap ahead to expand the artificial intelligence features to China
Speaker 7: and some of the international regions. I'm not sure that
Speaker 7: AI is going to give a significant boost to their
Speaker 7: product sales. I think the AI would be better served
Speaker 7: in terms of new revenue for future products. What kind
Speaker 7: of new devices can you enable thanks to AI? Right,
Speaker 7: things like more advanced headsets, augmented reality glasses, AirPods with cameras,
Speaker 7: tabletop robotics devices and before was canceled the car of course,
Speaker 7: so certainly that's something to watch. Apple's not saying much
Speaker 7: when they last spoke, they seemed pretty you know, excited
Speaker 7: about what's going on in China. They were referencing Counterpoints
Speaker 7: previous report that indicated the iPhone is doing extremely well,
Speaker 7: and everyone who talked negatively about Apple and China was
Speaker 7: completely wrong. So this is a complete narrative shift. Now
Speaker 7: again the first thing you said, I think was really important.
Speaker 7: This is Counterpoints narrative. This is Counterpoints numbers. Now, some
Speaker 7: times these numbers are correct, sometimes they're completely incorrect. I
Speaker 7: would say, on average, they give a fair idea of
Speaker 7: what's going on. So it's possible the real situation is
Speaker 7: not as bad as Counterpoint is indicating today. But certainly
Speaker 7: there is some indicator from them at least that things
Speaker 7: are not as great as one would hope. If you
Speaker 7: are an Apple.
Speaker 3: Shareholder, certainly it's taken a big hit to market capitalization
Speaker 3: over the course of this year. Mark German as always
Speaker 3: so fantastic to run through all Apple with you. Meanwhile,
Speaker 3: let's just stay with China as a narrative right now,
Speaker 3: because US officials actually told chip maker AMD is artificial
Speaker 3: intelligence chip designed for the Chinese market, it's too powerful.
Speaker 3: They can't sell it without a license. From the Commerce Department.
Speaker 3: For more on that particular scoop as Blue Megs Mackenzie
Speaker 3: Hawkins and well, what's interesting is AMD hadn't really been
Speaker 3: discussing what they were making for China, but you got
Speaker 3: the inside.
Speaker 6: Track, that's right.
Speaker 8: So we've actually seen this story play out before with
Speaker 8: AMD's main American rival and Video, which publicly said we
Speaker 8: are trying to design an a processor for the Chinese
Speaker 8: market to align with US export controls after those initial
Speaker 8: curbs were put in place in October twenty twenty two,
Speaker 8: and then the US moved to tighten those restrictions about
Speaker 8: a year later October twenty three, that captured in Video's chip.
Speaker 8: The US said, you can't sell that to Chinese customers.
Speaker 8: It allows them to develop AI models that pose a
Speaker 8: security risk. And since then we've seen in Video release
Speaker 8: new processors for China that they say align with even
Speaker 8: the stricter restrictions, and also am D trying to get
Speaker 8: into this market as well. AMD debuted a new suite
Speaker 8: of AI chips in December called the Mi I three
Speaker 8: hundred series, and this China specific chip is a less
Speaker 8: powerful version of that broader lineup of products.
Speaker 5: Right, the important thing here is there are two potential
Speaker 5: lines of rules that AMD has to follow. There is
Speaker 5: a technological restriction, a sort of blanket rule that says
Speaker 5: you cannot offer anything in China di spec, and then
Speaker 5: there's the end user specific rule, which says you cannot
Speaker 5: sell to this company. Do we know which one AMD
Speaker 5: is caught by.
Speaker 8: It's not yet clear which Chinese customer was trying to
Speaker 8: buy AMD's chips. So basically the process that they went
Speaker 8: through is there's a set of chips that are just
Speaker 8: deemed too powerful no matter what. If you have chips
Speaker 8: at those specs, you need to apply for a US
Speaker 8: government license. Then there's a lower tier of chips, for
Speaker 8: which you have to notify the US government of your
Speaker 8: intent to sell those chips to a Chinese customer, and
Speaker 8: they let you know whether you need a license. So
Speaker 8: that's what happened to AMD. They designed a chip that
Speaker 8: fell below the highest threshold, the most strict cutoff, but
Speaker 8: the US said, actually, you're not allowed to get an
Speaker 8: exemption from the overall licensing regime and you are going
Speaker 8: to have to go through this onerous process. And now
Speaker 8: it remains to be seen whether AMD is actually trying
Speaker 8: to do that, or whether they'll pivot away from this strategy.
Speaker 5: An AMD down one point eight percent, that the entire
Speaker 5: sox is and other chip names too, Bloombergs Mackenzie Hawkins
Speaker 5: terrific reporting.
Speaker 4: Thank you.
Speaker 5: Meanwhile, I has pledged to harness the entire nation's resources
Speaker 5: to speed homegrown scientific breakthroughs, reaffirming its priority to become
Speaker 5: self reliant in spheres from AI to chip making, to
Speaker 5: rest technological supremacy from the US.
Speaker 4: At Day one of the.
Speaker 5: National People's Congress, Premier Lee Chang laid out the nation's priorities,
Speaker 5: which are still technological innovation and upgrading its industries, including
Speaker 5: new energy vehicles.
Speaker 4: Caroline, Well, let's.
Speaker 3: Go over to what's happening in the world of politics
Speaker 3: right now because it affects the world of technology. On
Speaker 3: this Super Tuesday, we're going to be discussing the impact
Speaker 3: of AI misinformation and what local election offices can be
Speaker 3: doing to prepare for that conversation coming up next. Meanwhile,
Speaker 3: check out what's happening with meta shares. We're off by
Speaker 3: one point eight percent. Yes, the rest of technology is
Speaker 3: off in sympathy today, but more broadly, we're looking at
Speaker 3: reports that showing meta services are having issues now. Down
Speaker 3: Detector reporting plenty of problems, whether it be across Facebook, Instagram,
Speaker 3: and Messenger at the moment. Ironically, on x the Rifle
Speaker 3: platform is where we heard from meta communications director Andy
Speaker 3: Stone saying they are aware of people having issues accessing
Speaker 3: its services and they're working on a fix. This is
Speaker 3: the Bloomberg Technology. Now, let's get into the latest from
Speaker 3: today's Super Tuesday primaries and caucus is happening across the country.
Speaker 3: Bloomberg's Kaylee Lines has been very busy in anticipation of
Speaker 3: this day and throughout it. Kaylee, what are we bracing for?
Speaker 9: Well, we're bracing for what could, effectively, Caroline be the
Speaker 9: start of the general election tonight, because the front runner
Speaker 9: in the Republican primary, Donald Trump, could very well sweep
Speaker 9: all fifteen of these states, which would get him not
Speaker 9: exactly at the very close to the twelve hundred and
Speaker 9: fifteen delegates he needs to secure the nomination. Of course,
Speaker 9: Nikki Hayley still is in the race. He has committed
Speaker 9: to staying in through the contest today, but it is
Speaker 9: unclear if her campaign last beyond today, should she not
Speaker 9: actually come out as the victor in any of these states.
Speaker 9: The states to watch for her could be the likes
Speaker 9: of Vermont, maybe even of Virginia, but if she can't
Speaker 9: win in those states is highly unlikely she will be
Speaker 9: victorious in any others. It's worth keeping in mind that
Speaker 9: Heley does have financing theoretically to continue her campaign as
Speaker 9: she continually pulls in millions of dollars from donors twelve
Speaker 9: million in the month of February. Her campaign says another
Speaker 9: one million so far in March. But mathematically it just
Speaker 9: might not be possible for her to secure the nomination
Speaker 9: after tonight, which means we could be looking down the
Speaker 9: rematch tunnel here of Trump versus Joe Biden, who also
Speaker 9: is highly likely to come out on top on all
Speaker 9: of the Democratic primary states today.
Speaker 5: Kaylee, I'm looking forward to joining you in Bloomberg's Joe
Speaker 5: Matthew this evening with our special show and coverage.
Speaker 4: When you look at.
Speaker 5: California, right, Trump and Biden basically say, I just want
Speaker 5: to get it out the way, get it done, even
Speaker 5: though it's the most populous state. What's probably more interesting
Speaker 5: is some of the dollars that originate from the state
Speaker 5: and some of the initiatives that they're backing.
Speaker 9: Yeah, absolutely in the down ballot races. Specifically, if you
Speaker 9: look at the Senate primary, for example, this is to
Speaker 9: replace the late Senator Diane Feinstein. In California, you have
Speaker 9: three Democratic members of the House, Adam Schiff, Katie Porter,
Speaker 9: and Barbara Lee, who are competing against one Republican Steve Garvey,
Speaker 9: who you may know as a former Los Angeles Dodgers player.
Speaker 9: But California has a jungle primary, which means whichever to
Speaker 9: get the highest number of votes, be that Democratic or Republican,
Speaker 9: they are the ones that will advance to the general
Speaker 9: election in November. And crypto packs specifically have been throwing
Speaker 9: a lot of money at this race, specifically throwing money
Speaker 9: against Congressoman Katie Porter, spending about ten million dollars against her,
Speaker 9: which has actually helped Adam Schiff, who does have some
Speaker 9: more crypto friendly language on his campaign website. So that's
Speaker 9: one of the races to watch, and I would just
Speaker 9: note when you're thinking crypto, they're spending money in other
Speaker 9: states as well, like Alabama and North Carolina. So certainly
Speaker 9: the industry is trying to advance its objectives through dollars
Speaker 9: in some of these down ballot.
Speaker 4: Races this evening. All right, bloom As Klines, I'll see
Speaker 4: you in a few hours for off Super Tuesday coverage.
Speaker 4: Thank you very much. Let's keep a conversation going.
Speaker 5: There's something to discuss around the intersection of artificial intelligence
Speaker 5: and misinformation in this election cycle. Here's what some of
Speaker 5: our recent guests on bloombag TV have had to say about.
Speaker 1: That misinformation with artificial intelligence.
Speaker 10: I think that could be another factor that impacts what's
Speaker 10: going on around the election.
Speaker 11: I don't think independent center right Republicans or Democrats really
Speaker 11: have any idea about how effective AI can be if
Speaker 11: it's in the hands those specific individuals that have no
Speaker 11: moral boundaries.
Speaker 4: So tho's sort of the big things.
Speaker 7: You know, if somebody does that deep fake, whether it's
Speaker 7: Joe Biden or Trump, and you know, we're going to
Speaker 7: be able to find that you may not even need
Speaker 7: an algorithm.
Speaker 11: So what we're seeing also is that the foreign disinformation
Speaker 11: campaigns could be very effective with AI. With deepfakes specifically.
Speaker 4: There's much more subtle manipulation that I think we need
Speaker 4: to watch for.
Speaker 5: Let's bring in Marcy Andino for her take. She's the
Speaker 5: senior director of the Election infrastruct Information Sharing an analysis
Speaker 5: center which supports state, local and territorial election offices. You
Speaker 5: heard that the diverse range of opinion. It is super Tuesday,
Speaker 5: social media is down. What do you think will happen
Speaker 5: tonight in the context of AI and misinformation?
Speaker 1: Thank you so much for that question, and it's a
Speaker 1: pleasure to be here with you this morning. AI is
Speaker 1: certainly a new topic that we're talking about. We're talking
Speaker 1: and tracking five cybersecurity Brett's as we move into the
Speaker 1: general election, and AI is the new kid on the block,
Speaker 1: if you will. We're not seeing a lot of AI
Speaker 1: activity right now, but it certainly has the potential to
Speaker 1: increase misinformation campaigns. It will amplify or magnify the risk
Speaker 1: that already exists out there.
Speaker 3: What your role does at the moment is you're offering tools,
Speaker 3: no cost tools, it might be said, training to those
Speaker 3: who are out there in the field trying to ensure
Speaker 3: that this isn't spreading and that their elections have been
Speaker 3: run fairly. But also you're providing sort of effective remediation
Speaker 3: if ever there are incidents, talk us through. What you'll
Speaker 3: go to is in a response to any sort of
Speaker 3: sudden sweeping of a misinformation out the break that might
Speaker 3: or might not occur as people had to polls.
Speaker 1: Well, we've been talking with election officials over the last
Speaker 1: year about the possibility of seeing generative AI used to
Speaker 1: disrupt elections, and we're reminding election officials that they need
Speaker 1: to collaborate with us and share information so we can
Speaker 1: pass that information on to other election officials so they
Speaker 1: might know what's coming in their states. We also remind
Speaker 1: them probably the most powerful thing they can do is
Speaker 1: to educate voters, citizens, candidates, and even their local media.
Speaker 1: So when people see something that they think might not
Speaker 1: be exactly right, they know where to go to get
Speaker 1: accurate information, and that is with the state or local
Speaker 1: election officials. So it's very important that they establish themselves
Speaker 1: as the trusted source of information, and that even goes
Speaker 1: for training their staff. In election offices, they work long hours,
Speaker 1: they get very tired, so they're more apt to click
Speaker 1: on something, and they bring in a lot of seasonal workers.
Speaker 1: So those seasonal workers may or may not have had
Speaker 1: any training, so it's important to make sure they're trained
Speaker 1: and ready to go as well, and of course, using
Speaker 1: good cyber hygiene passwords strong passwords, turning on multi factor
Speaker 1: authentication on every application. They can using our no cost
Speaker 1: tools to protect their network, their critical networks.
Speaker 4: MARSI.
Speaker 5: I think cyber hygiens a new one for us on
Speaker 5: this show. Is there any proof that we are better
Speaker 5: prepared for this year's election than we were in twenty twenty.
Speaker 1: Well, the EII sack just turned six years old, and
Speaker 1: for the last six years we've been working with election
Speaker 1: officials across the country and in the territories to raise
Speaker 1: their cybersecurity posture. We've deployed lots of solutions, cybersecurity solutions
Speaker 1: that would harden their defenses, and we've also provided a
Speaker 1: lot of training, and we're talking to election officials in
Speaker 1: terms they understand. We're former election officials in many cases,
Speaker 1: so we're breaking down those barriers and making sure that
Speaker 1: they understand that cybersecurity is everybody's responsibility and that they
Speaker 1: need to take action. So I believe, yes, we are
Speaker 1: better prepared. But cybersecurity is a long term game. It
Speaker 1: is not a one and done. It's constantly changing, and
Speaker 1: as you started the conversation with Generative AI, that's the
Speaker 1: new thing that we are trying to build defenses around
Speaker 1: and prepare elections, to deal with election officials, to deal
Speaker 1: with especially as we move into the general election.
Speaker 3: MASSI great to have some time with you on head
Speaker 3: of this super Tuesday Mussi Andina. It's a UNI director
Speaker 3: for the election of the Structure Information Sharing and Analysis Center.
Speaker 3: Great expertise coming there. I meanwhile, coming up for the
Speaker 3: first time in more than nine months, a mosque is
Speaker 3: no longer the world's richest person. Bezos, He's back.
Speaker 12: We'll have more for you. This is new by Technology.
Speaker 3: Time now for talking tech First. Sub Ali Baba spearheading
Speaker 3: its second major deal in AI this year, needing a
Speaker 3: financing round of at least six roundred million dollars for
Speaker 3: Chinese AI startup Minimax, as the e commerce pioneered actually
Speaker 3: deploying its own capital and pursuit of growth. Now the
Speaker 3: two year old firm that it's backed has secured from
Speaker 3: not only Alibarb but other investors that bring its now
Speaker 3: valuation to two and a half billion.
Speaker 12: Dollars, according to sources.
Speaker 3: Meanwhile, four ex Twitter executives, including former CEO Paragagua Wall,
Speaker 3: they've sued Elon Musk for allegedly stivving them on more
Speaker 3: than one hundred and twenty eight million dollars in severance
Speaker 3: payments after they were ousted from the company. The former
Speaker 3: top officials said Musks showed quote special ayre towards him
Speaker 3: after he took over the company in twenty twenty two,
Speaker 3: publicly vowing to withhold their severance to recoup two hundred
Speaker 3: million dollars from the forty four billion deal and sat
Speaker 3: according to the lawsuit, Let's talk about Elon Musk a
Speaker 3: little bit more, because it's been dethroned by Jeff Bezos
Speaker 3: as the world's richest person. The Tesla founder lost his
Speaker 3: position at the top of the Bloomberg Billionaire Index to
Speaker 3: the Amazon founder after shares in Tesla. Of course, I've
Speaker 3: been under pressure to start this week this Mark Spazios
Speaker 3: his first return to the top of the Nexus twenty
Speaker 3: twenty one. First, I Musk hasn't topped the ranking more
Speaker 3: than nine months ed and this is of course, as
Speaker 3: we see significant issues with Tesla and over in China.
Speaker 5: For example, Musk has lost thirty one point three billion
Speaker 5: dollars of wealth so far this year. Bezos gain twenty
Speaker 5: three point four billion. They're separated by three billion. What's
Speaker 5: a few billion among friends.
Speaker 12: Are they friends?
Speaker 4: Peels out? They're not.
Speaker 3: Meanwhile, coming up, they are added in space, added all
Speaker 3: the bit on the billionaires index as well. Meanwhile, let's
Speaker 3: just return to the state of cybersecurity. Kato Networks is
Speaker 3: with our CEO Shlomo Kramer.
Speaker 12: This is a Blueberg.
Speaker 3: Welcome back to blue mert Technology and Caroline had in New.
Speaker 4: York and amed love Low in San Francisco. Let's get
Speaker 4: back to Bitcoin.
Speaker 5: We are now lower in the session below sixty six
Speaker 5: thousand US dollars. Earlier, about an hour ago, Bitcoin touched
Speaker 5: its first record high since November of twenty twenty one,
Speaker 5: just above sixty nine thousand US dollars. You see that
Speaker 5: all the time in different asset classes, right Carol, You
Speaker 5: hit a record, there's enthusiasm, there's sentiment, and then it
Speaker 5: very quickly falls away. But you can see over a
Speaker 5: five day basis the kind of near term momentum we've
Speaker 5: seen in bitcoin and its market cap also now globally
Speaker 5: near at that one point five trillion mark. There's a
Speaker 5: lot happening in equity markets. You were right to point
Speaker 5: out earlier that it's jpowweek. We'll hear from him on
Speaker 5: the hill. Later in the program, it is tech that
Speaker 5: is the drag on major indices, and as that one
Speaker 5: hundred down one point six percent. Apple is off session
Speaker 5: lows but down two point seven percent. Again that third
Speaker 5: party counterpoint research data showing weakness in China. Continuing to
Speaker 5: update your meta, we're getting reports from down Detector that Instagram,
Speaker 5: threads and Facebook are all down. The company has responded
Speaker 5: to a spokesperson ironically on x form formerly knows Twitter
Speaker 5: to say they're aware of it.
Speaker 4: Also, earnings continues. We're at the tail end.
Speaker 5: But CrowdStrike reports after market, and that brings cybersecurity back
Speaker 5: into focus. Right now, we've been thinking about cybersecurity in
Speaker 5: the context of Super Tuesday, the election cycle. Everyone is
Speaker 5: doing a lot to counter it, but the threats appear
Speaker 5: to be growing.
Speaker 4: Let's bring in somebody.
Speaker 5: We're excited to speak to a co founder and CEO
Speaker 5: of Cato Network, Shlomo Kramer, aka the Godfather of cybersecurity.
Speaker 5: Some people have called you that. To be fair, I
Speaker 5: want to start with the election and Super Tuesday.
Speaker 4: You know, earlier in.
Speaker 5: The program we attributed a ramp up in activity or
Speaker 5: risk to Generative AI.
Speaker 4: Do you see that across your desk at the moment.
Speaker 2: Probably generally, AI is the next phase in cybersecurity, both
Speaker 2: foremen influencing the opinions as well as industrializing the attacks.
Speaker 2: So absolutely, and that does you need AI for protection
Speaker 2: as well?
Speaker 4: We welcome you to San Francisco.
Speaker 5: How much of the conversation that you're having while you're
Speaker 5: in town is about the election or do you clients
Speaker 5: and your peers have other concerns.
Speaker 2: Well, it's mostly around cybersecurity in general, and the election
Speaker 2: is one big transaction that needs to be protected. But
Speaker 2: I would say that if you look at the new economy,
Speaker 2: the number one risk to it is cybersecurity.
Speaker 3: And yet, and yet, post this earning season, of companies
Speaker 3: that you wrote the first check into, Palo Alto Networks
Speaker 3: or other cybersecurity names, they're down because people aren't spending
Speaker 3: at quite the pace that the market had anticipated in
Speaker 3: their cyber defenses. Do you worry about that?
Speaker 2: Actually, I'm we are here in Cato. My company is
Speaker 2: here to solve that because the security industry for thirty
Speaker 2: years have focused on the what and created a huge
Speaker 2: number of point products that essentially are not consumable by
Speaker 2: most enterprises. So they security market is broken and the
Speaker 2: need to fix it is by finding new ways to
Speaker 2: consume it. And the platform that cater provides is the
Speaker 2: new how that will fix it.
Speaker 3: Let's talk about that secure access service EDGE says, as
Speaker 3: one might say, it for sure seems to be the
Speaker 3: new way in which you think you should be delivering
Speaker 3: cybersecurity across a platform workload, unlike you say, now one
Speaker 3: of your biggest competitors, which is Palo Alto networks. How
Speaker 3: much is that resonating, how much you're seeing enterprises adopt
Speaker 3: or indeed is it governments? Who are your end consumers
Speaker 3: for this at the moment?
Speaker 2: So I would say that the pain of point solutions
Speaker 2: is everywhere, but at least that the mid to large enterprises,
Speaker 2: the gap between resources and challenges is the most severe.
Speaker 2: So the need for SASSI and platforms such as Kato
Speaker 2: provides is the most acute, and we see the most
Speaker 2: direction in this type of organizations today. But eventually the
Speaker 2: concept of platforms and consumption food platforms is going to
Speaker 2: replace the entire cybersecurity market.
Speaker 4: Let's talk about the market and its players.
Speaker 5: We have a little David and Goliath story or hands
Speaker 5: you wrote the first c check for palab Alto Networks.
Speaker 5: Now you have Kto. It's a smaller player. But if
Speaker 5: we extrap lay out, you're basically saying, I don't think
Speaker 5: the legacy big guys have done very well. I'm going
Speaker 5: to try again to do something a bit different.
Speaker 2: You're absolutely right, And there was also a first generation
Speaker 2: checkpoint where I was the co founder and pal Alto
Speaker 2: came and simplified through convergence and through a platform a
Speaker 2: market that was software based by using an appliance. But
Speaker 2: guess what, Digital transformation came and created a very fluid
Speaker 2: way of doing Businesses work from anywhere, applications are anywhere,
Speaker 2: So there was a need for a new type of
Speaker 2: platform and that's essentially what CATO provides. And all the
Speaker 2: appliance vendors or the second generation vendors are trying to
Speaker 2: adjust and adapt, but they bring with them so much
Speaker 2: baggage that it is very difficult for them.
Speaker 5: We've talked about where technologically the threats are coming from.
Speaker 5: What the concerns of your industry are that geographically, where
Speaker 5: are the threats coming from? You know, we're kind of
Speaker 5: zeroed in on a domestic situation, but as we learned,
Speaker 5: foreign entities China, Russia are active in this space.
Speaker 2: Right absolutely, And we are talking about times of peace
Speaker 2: when you're seeing this massive international course border attack happens
Speaker 2: and organizations, especially the media enterprise are suffering, and imagine
Speaker 2: what will happen at times of war. You don't need
Speaker 2: to imagine much. You go to Ukraine in twenty seventeen
Speaker 2: with no Petia and you would see that eighty percent
Speaker 2: of the economy was down because of this type of attack.
Speaker 2: So really fixing this mass market problem of cybersecurity is
Speaker 2: critical as a defense against these.
Speaker 4: Times of wars.
Speaker 3: And it's notable, of course, which our hearts go out
Speaker 3: to the fact that, of course you're traveling to US
Speaker 3: from Israel at the moment, and I know that always
Speaker 3: something affects your businesses and those of course cross the
Speaker 3: border as well. I'm interested in Shomo in your business
Speaker 3: in particular at a time when the market was having
Speaker 3: real difficulties. We were thinking in the doldrums of twenty
Speaker 3: twenty three, VC had been pulled back and you were
Speaker 3: still able to raise funds and you're still putting in
Speaker 3: what two hundred and thirty eight million dollars was what
Speaker 3: you raised back in September of twenty twenty three, light
Speaker 3: speed ventures there. Once again, you've talked a lot about
Speaker 3: wanting to go public at the moment, are you thinking
Speaker 3: about that will be a twenty twenty four endeavor? How
Speaker 3: are you assessing the American markets not as also as
Speaker 3: well as the American cybersecurity markets that you sell into.
Speaker 2: Well, Cato is a leader in this next generation SASE
Speaker 2: market and being public companies in milestone, which we will
Speaker 2: get to when both company and markets are already but
Speaker 2: absolutely this is this is an opportunity to build a
Speaker 2: large public company that will lead this copyboard.
Speaker 3: Sliman Cromer, We really appreciate you coming in to visit
Speaker 3: our sort when you're over on the West Coast as well,
Speaker 3: Cato Networks will keep up to speed with the growth
Speaker 3: of the business.
Speaker 12: Meanwhile, coming up, I'm.
Speaker 3: Going to be discussing how organizations can ensure an ethical
Speaker 3: use of artificial intelligence within their workforce. In particular, we'll
Speaker 3: have the latest from the Deloitte survey on AI ethics.
Speaker 12: That's next, Ed, what.
Speaker 5: Were you watching, I'm looking at shares of Alphabet, parent
Speaker 5: of Google. In the first instance, because the Digital Markets
Speaker 5: Act kicks into effect this week, we've zeroed in on
Speaker 5: Apple because of their EU find and the need to compliance.
Speaker 5: But i'd also bring you a small update. The down
Speaker 5: detector is now also saying that YouTube is experiencing outages.
Speaker 5: Alongside are reporting that many of Meta's platforms are currently down.
Speaker 5: The stock down one and a half percent. We will
Speaker 5: keep an eye on all of it. This is blombog technology.
Speaker 3: Let's get back to artificial intelligence and its impact on
Speaker 3: the future. Because some Fisisco based benu fund s v
Speaker 3: angels well, it's just written an open letter making a
Speaker 3: pledge to help build quote AI the improves lives and
Speaker 3: unlocks a better future of humanity is he had another
Speaker 3: open letter that we've seen, and this time this one
Speaker 3: was signed by open AI, Google, Meta, Microsoft and many others.
Speaker 3: And look, maybe it is one way some would argue
Speaker 3: to think about how to implement AI ethics, and we're
Speaker 3: going to get into the more specific ways in which
Speaker 3: you can actually be there in a business.
Speaker 4: They're not alone in that.
Speaker 5: Deloitte released a new study today about just that how
Speaker 5: organizations can prepare their workforce for an ethical and responsible
Speaker 5: use of AI. Joining us now for more is Deloitte
Speaker 5: Technologies trust Ethics Practice Leader. So also the author of
Speaker 5: Zero Latency Leadership, a book that takes a look at
Speaker 5: the leadership of the age of AI. Being a amanap
Speaker 5: joins me on set in San Francisco. Clearly, there is
Speaker 5: a concern about how a even technologically savvy for one
Speaker 5: of a better expression workforce uses AI from an ethical perspective.
Speaker 5: I know Deloitte, I know how to Luyte works. There
Speaker 5: must be a reason that you felt compelled to publish
Speaker 5: that study.
Speaker 4: Yeah.
Speaker 6: Absolutely.
Speaker 13: Look, you know, I'm a technologist by training and we've
Speaker 13: seen the rapid evolution of technology.
Speaker 6: But technology comes with its side effects.
Speaker 13: There are risks that come alongside it, and there's not
Speaker 13: as much focus put on the ethical risks or the
Speaker 13: trustworthy risks that come with technology.
Speaker 6: So we thought it was important to highlight.
Speaker 13: It, raise the awareness, and really get companies to address
Speaker 13: the ethical risks so that we can truly get the
Speaker 13: full potential of AI.
Speaker 3: You know, I'd say that the media, the discourse, the
Speaker 3: latest news has been doing a lot of the heavy
Speaker 3: lift thing for you. We were just talking about the
Speaker 3: latest open letter. There has been a lot of handwringing
Speaker 3: about ethics implementation of AI. We've also seen, of course,
Speaker 3: concerns about the latest image generation and whether or not
Speaker 3: by trying to correct one element of bias, that's overcorrecting
Speaker 3: in another direction and not getting historically accurate images out Pina.
Speaker 3: I'm interested as to ultimately what CEOs are asking you
Speaker 3: that they can do to implement right here, right now.
Speaker 3: Do they slam on the brakes of using the latest
Speaker 3: chatchipt or generative AI tool?
Speaker 6: Absolutely not.
Speaker 13: Look, there are relatively low risk ways to use the technology,
Speaker 13: and it's important to identify the right use case, right
Speaker 13: I think this is a very very powerful technology.
Speaker 6: We see a variety.
Speaker 13: Of users of it across different products, different functions. It's
Speaker 13: about finding that right opportunity where you can get the
Speaker 13: maximum value while minimizing the risk. And what CEOs are
Speaker 13: looking at is how do you implement the right ethical
Speaker 13: policies and guidelines to get that maximum benefit wile minimize.
Speaker 4: The risk, which is sure chart.
Speaker 5: Sorry, Oh I apologize, Caroline, I just was I couldn't
Speaker 5: believe what I just saw in that chart, Director Alice,
Speaker 5: So we can let's bring it back. Eighty four percent
Speaker 5: respondents said they are you currently using AI?
Speaker 4: Well four I mean think about all.
Speaker 5: Of the businesses that Deloitte works with, big and small. Yeah,
Speaker 5: what do you mean eighty four percent of them using AI?
Speaker 13: It's you know, and I don't think it's generative AI specifically,
Speaker 13: which is a current.
Speaker 6: Flavor since the last eighteen months.
Speaker 13: It's AI for predictive analytics, for maintaining your jet engine,
Speaker 13: for you know, from a finance perspective, from auto approving
Speaker 13: expense reports. Right, there are a lot of boring AI
Speaker 13: use cases that companies are focusing on and have been
Speaker 13: focusing on. Look I myself, I've been applying AI for
Speaker 13: over twelve thirteen years, right, So generative AI is a
Speaker 13: current flavor. But when you see that number, it's really
Speaker 13: talking about how companies have been using AI for a
Speaker 13: much longer time.
Speaker 3: And now companies try and get in place the guard rails.
Speaker 3: Do you think we need more government enforced guardrails found
Speaker 3: an executive order for example.
Speaker 13: Yeah, and I think you know, look, Caroline, there's absolutely
Speaker 13: a need for AI regulation and policies and best practices.
Speaker 6: You know, if you take a step back.
Speaker 13: And look at it, AI as a technology is still maturing, right,
Speaker 13: and there's a parallel stream, which is ethical risks or
Speaker 13: nuances that come with using this technology.
Speaker 6: Call it the side effects.
Speaker 13: It's the impact to the workforce, it's the impact to
Speaker 13: the organization itself. Right, and then the third stream is
Speaker 13: AI regulations and policies, and they each one of these
Speaker 13: move at a different pace, but it needs to happen,
Speaker 13: and we've seen it across different industries happening over time.
Speaker 5: I think there is an acceptance that a lot of
Speaker 5: the focus is automation, right, removing the role of a
Speaker 5: person that might have been mundane. What kind of people
Speaker 5: do to firms need to hire if they're going to
Speaker 5: think about AI.
Speaker 13: You know, our service shows and this was specifically focused
Speaker 13: on AI ethics and trust. Our service shows that companies
Speaker 13: are actually hiring more AI ethics researchers, compliance specialists, tech
Speaker 13: quality analysts for over fifty percent of organizations that are
Speaker 13: going for that ground level roles, and about thirty eight
Speaker 13: percent are going for chief trust officers or chief AI
Speaker 13: ethics officers. So there's really that need to focus on
Speaker 13: AI ethics research and bring it to an organizational and
Speaker 13: use case level.
Speaker 3: We thank you for bringing your expertise on it today.
Speaker 3: Deloitte Technology Trusts Ethics Practice Leader being a Amena f
Speaker 3: Thank you. Meanwhile, coming up, we'll get back to it.
Speaker 3: Bitcoins rally is sustainable, well clearly ahead of record high.
Speaker 3: It's just come back down from it. We're going to
Speaker 3: dig into it with jalak Job and Putra from beuch
Speaker 3: Perfect Ventures.
Speaker 12: This is bring my technology.
Speaker 3: Let's get back to Bitcoin hit a new record high,
Speaker 3: and of course it's actual record market capitalization had already
Speaker 3: been hit because there's more bitcoin and circulation sets November
Speaker 3: twenty twenty one, and so now we hit above the
Speaker 3: sixty nine thousand dollar mark and almost coming up to
Speaker 3: a one point twenty five that's called almost one and
Speaker 3: a half trillion dollar market capitalization. Let's get to more
Speaker 3: broadly how this affects the rest of the ecosystem investing
Speaker 3: in it, Jalacto. When Putcher is with us, founder and
Speaker 3: managing partner of Future Perfect Ventures, and you were in
Speaker 3: crypto before crypto as cool as some people have been
Speaker 3: able to say, Jalex, And I'm interested therefore on whether
Speaker 3: with Bitcoin ramping up higher, people worrying about leverage coming
Speaker 3: to the system once again. Are we just bracing ourselves
Speaker 3: for consolidation or are we on our march higher for
Speaker 3: sustainable reasons.
Speaker 10: Well, we have a confluence of factors that make this
Speaker 10: rally different than rallies that we've had previously. I mean,
Speaker 10: first we had the ATF launchers, which we're off to
Speaker 10: a bit of a slow start, but now you know,
Speaker 10: black Frocks has been the most successful ETF launch in history,
Speaker 10: and we continue to see interest from institutions coming into
Speaker 10: the sector. Black Rock is also launching a Brazil ETF
Speaker 10: product for spot bitcoin, so we're going to see not
Speaker 10: only the US, but the rest of the world continue
Speaker 10: to have more access. So that shows that, you know,
Speaker 10: we are in a different situation than we were in
Speaker 10: previous rallies and consolidation. And then we also have the
Speaker 10: Bitcoin happening coming up or happening as some of us
Speaker 10: call it, which traditionally constricts the supply of bitcoin because
Speaker 10: it reduces the rewards that bitcoin minors get. So these
Speaker 10: two factors, along with more let's say, favorable regulatory movements
Speaker 10: around the world, point to us, you know, continuing to
Speaker 10: go higher. That doesn't mean we won't have pullbacks along
Speaker 10: the way, but the macro environment certainly supporting higher highs.
Speaker 3: The exuberance around the og of bitcoin has spilled into
Speaker 3: other areas. We've seen other protocols do well. Of course
Speaker 3: Ethos on the upsilona, but then like twenty twenty one,
Speaker 3: the meme coins come back. Dot quid Hat doing particularly
Speaker 3: well at the moment, Bonk for example, some ridiculous names,
Speaker 3: but some of them thinking that there'll be some practical
Speaker 3: use case. What are the spillover effects? Are you worried
Speaker 3: about too much exuberants? Are the more you know, dicey areas.
Speaker 4: In the market.
Speaker 10: Well, there's always going to be speculative activity. When we
Speaker 10: see you know, bitcoin and ethereum and some of the
Speaker 10: blue chips continue to go higher. People are looking for
Speaker 10: even higher returns with some of these lower liquidity long
Speaker 10: tail protocols, and some of them are these meme coins,
Speaker 10: and that's to be expected. I think investors just need
Speaker 10: to realize that they're dealing with more volatile assets as
Speaker 10: they get into these long tails. But we've certainly seen
Speaker 10: some outside returns and some of those names that you mentioned.
Speaker 4: There are more long term holders of bitcoin, you know,
Speaker 4: away from inflows outflows of ETF the price. What does
Speaker 4: that tell you that data point.
Speaker 10: Well, I think it shows that longevity of this asset class.
Speaker 10: That we've seen more and more people moving bitcoin off
Speaker 10: of exchanges, which means that they're not going to trade,
Speaker 10: that they're storing them in highly secure ways, which means
Speaker 10: that they're looking at this as an asset that could
Speaker 10: had against inflation. I mean, we've seen a lot of
Speaker 10: back and forth on you know, our interest rates going
Speaker 10: to because are they going to bold study? Are they
Speaker 10: going to increase? And bitcoin provides an asset that is
Speaker 10: independent of this government policy and more and more people
Speaker 10: worldwide want to hold this.
Speaker 5: Carol, I mentioned you investing in blockchain startups before it
Speaker 5: was cool. Has your approach changed over the years in
Speaker 5: the types of company you now want to back.
Speaker 10: Well, what exciting now versus two hundred twenty thirteen. When
Speaker 10: I first started investing in the sector, I mean, bitcoin
Speaker 10: was really the only crypto, publicly traded crypto that you
Speaker 10: could invest in, and then there were a number of
Speaker 10: exchanges that we invested in data analytics companies around crypto assets,
Speaker 10: but there really wasn't a lot of infrastructure there. And
Speaker 10: now we've seen ten years of build out, not only
Speaker 10: in bitcoin, but in ethereum and all these layer twos
Speaker 10: of scalability.
Speaker 1: So I also.
Speaker 10: Invested in the early Internet in the mid nineties and
Speaker 10: the late nineties, and you know, back then we couldn't watch,
Speaker 10: you know, videos online, and so in twenty thirteen, I say,
Speaker 10: you know, we couldn't easily access and trade bitcoin, and
Speaker 10: now ten years later we have ETFs and so it's
Speaker 10: very similar progression. I'd say even faster progression as we
Speaker 10: see the build out and so you know, just like
Speaker 10: you know, any assets need you know, custody, need market makers,
Speaker 10: we've seen all of that, and so the opportunity set
Speaker 10: for investing is even wider than ever before. I mean,
Speaker 10: we are investing out of our third fund, will be
Speaker 10: apt to market with a fourth fund shortly, and we've
Speaker 10: just seen more and more interesting growth.
Speaker 5: Jelakdevan Poochri, founder managing partner of Future poe Venger is
Speaker 5: great to catch up and we take your word in
Speaker 5: it before it was cool.
Speaker 4: A quick update Caroline.
Speaker 5: Google's issue to statement saying it's working on a loading.
Speaker 4: Issues fixed for YouTube.
Speaker 5: Curious timing that down detectasays YouTube is down along with
Speaker 5: those other platforms.
Speaker 3: Yeah, I mean across the board, we're seeing Facebook being
Speaker 3: impacted Instagram as well. We'll have to see, of course,
Speaker 3: at the moment, plenty of rather amusing means coming out
Speaker 3: of one, you know, musk of the moment as some
Speaker 3: of these communications achieves have to go to X to
Speaker 3: tell us about the acknowledgment of some of these down issues.
Speaker 3: But meanwhile, that does it for this edition of bloembd Technology.
Speaker 5: Please check out the podcast. That's where you can find
Speaker 5: it from New York and SF. This is Bloomberg