WEBVTT - The Bahamas and the US War Over FTX's Bankruptcy 0:00:14.760 --> 0:00:17.320 I'm Caroline High and Blue Mugs Well headquarters in New York, 0:00:17.800 --> 0:00:21.040 and I'm made Lovelow in San Francisco. This is Bloomberg Technology. 0:00:21.160 --> 0:00:23.319 Coming up in the next hour on Capitol Hill is 0:00:23.440 --> 0:00:26.480 day two of hearings into the collapse of Sam maguin 0:00:26.520 --> 0:00:30.120 Fried's crypto Empire. All while SBF himself is attained in 0:00:30.200 --> 0:00:33.480 jail in the Bahamas. We have the latest plus. Airbnb 0:00:33.680 --> 0:00:37.040 is working to improve connection between guests and hosts to 0:00:37.120 --> 0:00:40.239 improve objective bookings. We talked to the company about the 0:00:40.280 --> 0:00:44.720 findings in its latest anti discrimination study. Meanwhile, Twitter suspends 0:00:44.800 --> 0:00:48.760 multiple accounts tracking the private jets of tech Titans world 0:00:48.880 --> 0:00:51.680 leaders any Lawn Musk himself. We speak to the man 0:00:51.720 --> 0:00:54.200 behind the accounts and get his reaction to being booted 0:00:54.440 --> 0:00:58.440 from the social media platform. The first finances found us CZ. 0:00:59.000 --> 0:01:01.560 He's saying it look that outflows from the crypto exchange 0:01:01.840 --> 0:01:05.200 have stabilized. Still, he's warning employees at the industry's recovery 0:01:05.200 --> 0:01:08.440 from ftx's own collapse, it's going to be bumpy. We 0:01:08.520 --> 0:01:10.039 want to turn our attention to a man who's been 0:01:10.080 --> 0:01:12.039 in this space a long time. He was in traditional finance. 0:01:12.080 --> 0:01:14.360 He made the move of course to crypto is John 0:01:14.360 --> 0:01:18.520 wu president of Ava Labs, for his take on contagion 0:01:18.600 --> 0:01:22.920 what the crypto community, I know, John calls fudd fear, uncertainty, doubt, 0:01:22.920 --> 0:01:25.039 there's a lot there of it, and just talk to 0:01:25.120 --> 0:01:27.560 us about whether or not the contagion that you came 0:01:27.600 --> 0:01:30.720 onto the show previously and warned about is it still there. 0:01:30.760 --> 0:01:34.119 Is it still worrying you, It's still worries me, it's 0:01:34.160 --> 0:01:37.240 still there. In this thing may or may not be over. 0:01:37.720 --> 0:01:40.040 But I think the hearing of the last two days 0:01:40.440 --> 0:01:42.520 and as well as there's some news related to the 0:01:42.600 --> 0:01:45.319 binets actually is encouraging or first of all on the 0:01:45.360 --> 0:01:50.760 hearings to me, the common threat between the congressman and 0:01:51.040 --> 0:01:54.960 John Ray was that most of the number one source 0:01:55.040 --> 0:01:59.240 of all of the wrongdoings really came from misappropriation by 0:01:59.320 --> 0:02:03.320 customer fun and John Ray actually, in his opening testimonies 0:02:03.320 --> 0:02:05.360 said are really the best in my opinion. He said, 0:02:05.560 --> 0:02:08.359 the reason why this is able to happen was simply 0:02:08.400 --> 0:02:11.440 because the power of the decision making, the governance and 0:02:11.440 --> 0:02:14.840 all the information was held by a small group of 0:02:14.960 --> 0:02:20.680 inexperienced hands with zero oversight. Um. What I was surprised 0:02:20.680 --> 0:02:24.720 to not here at all, frankly, was that in fact 0:02:24.960 --> 0:02:29.120 there was a lot of market participation of the participants 0:02:29.120 --> 0:02:32.000 and operas actually suspect it was mean to not only 0:02:32.160 --> 0:02:35.440 leverage the financial balance sheet of f t X, but 0:02:35.560 --> 0:02:41.280 also information flow and probably a front run customers themselves. John, 0:02:41.320 --> 0:02:45.280 what you were talking about essentially is commingling, right, the 0:02:45.280 --> 0:02:48.400 relationship between f t A, f t X ANALEMDA, the 0:02:48.440 --> 0:02:52.760 movement of customer funds, the placement of customer funds. Has 0:02:52.880 --> 0:02:55.520 anything that you've heard in the last fourt eight hours 0:02:55.919 --> 0:02:58.880 made you think that, whether it's regulatory or from a 0:02:58.960 --> 0:03:02.480 legislation point, will find a fix to these issues that 0:03:02.520 --> 0:03:06.920 have been uncovered during the course of this saga. I 0:03:06.960 --> 0:03:13.000 suppose that's a great question, because, um, you know, the 0:03:13.320 --> 0:03:16.799 result of all of this is taking trust out of 0:03:16.840 --> 0:03:19.600 the system, so there's fewer players, taking leverage out system, 0:03:19.639 --> 0:03:22.880 there's less volume. Uh. In order to get the crypto 0:03:22.919 --> 0:03:26.400 capital markets back going, this I think is actually the 0:03:26.480 --> 0:03:30.520 first build rebuilding trust. You need new leaders, in my opinion, 0:03:30.639 --> 0:03:34.920 who have seasoned experience, opposite what John Ray said of 0:03:35.040 --> 0:03:38.720 the existing leaders of FTX. You need also regulation. We 0:03:38.760 --> 0:03:41.520 know three is coming be the year of many bills 0:03:41.600 --> 0:03:45.120 in crypto. And lastly, I think there are actually companies 0:03:45.160 --> 0:03:48.360 are already working to solve it from a technology perspective. 0:03:48.760 --> 0:03:53.520 In fact, I'm very excited about company called Enclave. Enclave 0:03:53.800 --> 0:04:00.240 is a fully UM encrypted exchange on Avalanche. What they 0:04:00.280 --> 0:04:04.560 had done is create a second layer of security using hardware. 0:04:04.840 --> 0:04:08.760 The using the as the Intel sens chip. It's not 0:04:08.840 --> 0:04:11.160 that different form what iPhone actually does. They create a 0:04:11.200 --> 0:04:16.320 segregated hardware layer of security, and in this case, customer information, 0:04:16.920 --> 0:04:22.320 trades data are all put into an enclave, a secure 0:04:22.520 --> 0:04:28.160 hardware enclave where no third party nor UM operating themselves 0:04:28.520 --> 0:04:32.719 can actually get access to it. So therefore the problem 0:04:32.800 --> 0:04:36.240 that John may talk about centralized control, decision making and 0:04:36.279 --> 0:04:41.159 misapprovalate gets taken away. John, That's kind of the systemic 0:04:41.279 --> 0:04:44.640 or structural issues that I guess, you know, market participants 0:04:44.680 --> 0:04:47.080 like you have been passing. You probably heard us at 0:04:47.080 --> 0:04:49.200 the top of the show talking about the market reaction 0:04:49.279 --> 0:04:51.600 to the FED, and all of this makes me feel 0:04:51.600 --> 0:04:54.200 about what's driving the market right now. If we take 0:04:54.200 --> 0:04:57.000 a look a bitcoin, for example, jumping above eighteen thousand 0:04:57.080 --> 0:05:00.560 dollars per token just before the FED, but clearly reacting 0:05:00.640 --> 0:05:02.880 to it, So what is it? Is it this sort 0:05:02.920 --> 0:05:05.640 of fixation on ft X and the fallout, or is 0:05:05.680 --> 0:05:08.720 the market now slowly returning to I don't want to 0:05:08.760 --> 0:05:11.120 use the word fundamentals. I've never found it easy to 0:05:11.120 --> 0:05:13.240 say when it comes to crypto, but let's just call 0:05:13.279 --> 0:05:16.520 it fundamentals. There are fundamentals. I think you're referring to 0:05:16.600 --> 0:05:20.680 valuations being more difficult to understand and justify. But what 0:05:20.720 --> 0:05:23.440 it highlights is, I think what you're pointing out very 0:05:23.480 --> 0:05:26.160 stuteley is that the asset classes and over the last 0:05:26.200 --> 0:05:29.320 two days performed relatively well and in line with the 0:05:29.440 --> 0:05:34.600 risk assets on NaSTA so speak. Where however, the equity 0:05:34.720 --> 0:05:39.800 related crypto companies maybe your coin base, completely underperformed. There 0:05:39.800 --> 0:05:41.520 are many reasons for that, obviously because of the fd 0:05:41.720 --> 0:05:45.119 X and regulation, but frankly, I think a big reason 0:05:45.240 --> 0:05:48.080 underlying reason for this is because there are different communities 0:05:48.320 --> 0:05:51.800 who owned the assets. The underlying assets are really part 0:05:51.839 --> 0:05:55.240 of the crypto native community. They are far more um, 0:05:55.640 --> 0:05:59.039 less distrusting right now of the space, and more enthusiastic. 0:05:59.600 --> 0:06:03.120 But the equity the stocks that you see are really 0:06:03.200 --> 0:06:07.320 crossover traffi guys, and they really have very little trust 0:06:07.400 --> 0:06:10.120 in this space again for a crypto as an as 0:06:10.240 --> 0:06:13.200 a class and as the technology to grow in the 0:06:13.240 --> 0:06:17.719 participants need to rebuild that trust. John. Of course we 0:06:17.760 --> 0:06:19.640 excuse you for the fact that when you're behind the 0:06:19.760 --> 0:06:22.520 defy kind of protocol and focus, you're going to be 0:06:22.520 --> 0:06:25.200 talking up the possibilities and some of the security layers 0:06:25.240 --> 0:06:27.520 that you have apparently being built on there. But I'm 0:06:27.560 --> 0:06:30.600 interested to go back to sort of a centralization point 0:06:30.600 --> 0:06:32.320 of view. And you were so great on our show 0:06:32.320 --> 0:06:35.000 previously when you talked about the contagion concerns you had around, 0:06:35.000 --> 0:06:38.400 say Genesis, talk to us around finance at the moment, 0:06:38.440 --> 0:06:40.880 because there are a lot of concerns out there about 0:06:41.400 --> 0:06:44.560 really the amount of clarity we get from cz when 0:06:44.560 --> 0:06:47.560 we talk about the stabilization of outflows. He's been trying 0:06:47.600 --> 0:06:50.440 to dispel any concerns that he feels have been building 0:06:50.600 --> 0:06:54.560 around finance. And they've all course got vast quantities of 0:06:54.640 --> 0:06:58.000 money sitting and overall the market is huge for them 0:06:58.080 --> 0:07:00.200 and the outflows are pretty little compared to this EXTI 0:07:00.240 --> 0:07:02.680 billion at least they have in reserves. But are you 0:07:02.720 --> 0:07:06.599 worried about finance? I think everyone needs to be somewhat 0:07:06.600 --> 0:07:10.440 worried they are a massive, major player in the space UM, 0:07:10.560 --> 0:07:13.480 but you have to get c Z and Finance some credit. 0:07:13.920 --> 0:07:19.360 They self UM induced a proof of reserves and started 0:07:19.400 --> 0:07:24.160 creating some sort of transparency scale transparency. But obviously, given 0:07:24.200 --> 0:07:27.760 the FTX situation, the participants in the market probably want 0:07:27.760 --> 0:07:31.880 even more transparency, so hopefully we get there. That's one 0:07:31.880 --> 0:07:35.600 of the reasons why we saw I think UH company 0:07:35.600 --> 0:07:38.160 called Nansen reported that close to three billion dollars of 0:07:38.520 --> 0:07:42.240 withdraws in the last day or so from finance UM. 0:07:42.240 --> 0:07:45.160 But if you look at that, it's amazing how the 0:07:45.240 --> 0:07:49.040 asset class actually increase even with that massive withdrawal. So 0:07:49.080 --> 0:07:51.880 what that actually tells me is a lot of stuff 0:07:51.880 --> 0:07:55.920 moved away from finance into what I would consider a 0:07:55.960 --> 0:08:00.160 healthy operational risk management technique from counterparties, and into bit 0:08:00.200 --> 0:08:04.920 wallet's in cold storage as opposed to dumping on the market. Lastly, John, 0:08:05.440 --> 0:08:07.360 what's it like an ecosystem right now? What is it 0:08:07.400 --> 0:08:08.720 like when you're trying to build? What is it like 0:08:08.760 --> 0:08:11.200 in terms of having access to capital to continue to build? 0:08:12.080 --> 0:08:16.480 So it's definitely harder on the great momentum we had 0:08:16.520 --> 0:08:20.840 in terms of building and the business partnerships from traditional 0:08:20.840 --> 0:08:24.000 finance as well as new developers coming in space was 0:08:24.160 --> 0:08:28.000 definitely moving far faster and less resistance. Right now, there's 0:08:28.000 --> 0:08:31.320 clue some people who are hesitating a little bit. But 0:08:31.440 --> 0:08:34.959 with that said, um, I am still very positive on 0:08:35.120 --> 0:08:39.400 real utility into the space. I mean JP Morgan has 0:08:39.440 --> 0:08:43.599 actually transacted or settled three hundred billion dollars worth of 0:08:43.760 --> 0:08:47.400 repos in the last year or so in a real 0:08:47.520 --> 0:08:51.960 live environment through their Jaging Mountain Guardian on X project. 0:08:52.360 --> 0:08:55.719 You've also seen just this last week you had companies 0:08:55.760 --> 0:08:59.679 like Porsche announced an n f T plan. Now optically 0:08:59.720 --> 0:09:03.240 that's an n f T digital collectable, but you know, 0:09:03.280 --> 0:09:06.040 behind the scenes of course, really is doing is actually 0:09:06.080 --> 0:09:11.200 a very smart a way to build younger community aspirational 0:09:11.280 --> 0:09:14.559 buyers very cheaply with cool n f T s giving 0:09:14.559 --> 0:09:17.439 them loyalty engagement so that when they are ready financially 0:09:17.440 --> 0:09:20.920 they can go by the hundred change thousands um. So 0:09:21.160 --> 0:09:23.920 the lifetime value of that get is actually very good 0:09:23.920 --> 0:09:27.360 for the low cost that they are u creating the 0:09:27.400 --> 0:09:29.160 so called n f T s, But it's really more 0:09:29.280 --> 0:09:31.880 of a lead generating tool in a community bill, so 0:09:31.960 --> 0:09:36.920 there is actual functionality. John Wood, president of Our Labs, 0:09:36.960 --> 0:09:39.719 Caroline helping us kind of join the market, moves to 0:09:39.920 --> 0:09:43.040 kind of what's structurally happening in this industry. As a result, 0:09:43.120 --> 0:09:44.480 ft I, You've got so much more to ask you 0:09:44.480 --> 0:09:47.080 next time. We'll have you back soon coming up, though, 0:09:47.240 --> 0:09:50.600 over thirty Chinese companies could end up on a trade 0:09:50.600 --> 0:09:53.439 blacklist more than that, and what it means next this 0:09:53.640 --> 0:10:07.280 is Bloomberg. Let's go global for you. There's zero in 0:10:07.360 --> 0:10:10.319 on China in particular because the country's economy is key 0:10:10.360 --> 0:10:12.800 to so many tech companies around the world, either for 0:10:12.840 --> 0:10:15.720 supply chain or for reaching consumers. Of course, and Bloomberg 0:10:15.800 --> 0:10:18.360 has just reported overnight that the country's leaders they are 0:10:18.400 --> 0:10:21.120 proceeding with a key economic policy meeting this week in 0:10:21.160 --> 0:10:24.240 Beijing after considering actually delaying it due to a surgeon 0:10:24.280 --> 0:10:27.560 COVID infections so all according to sources. That's while we 0:10:27.640 --> 0:10:31.000 of course await more key economic data that could impact 0:10:31.040 --> 0:10:34.080 the shares of some pretty big names Ali Baba JD 0:10:34.200 --> 0:10:36.800 dot Com And I know you're on top of this. Yeah, 0:10:36.840 --> 0:10:38.800 you summarize it well, because we're looking both on the 0:10:38.800 --> 0:10:42.559 supply chain side, right, American companies that are impacted by 0:10:42.600 --> 0:10:44.720 their ability to do business in China but also the 0:10:44.800 --> 0:10:48.320 Chinese tech companies themselves. Very shortly, we'll get retail sales 0:10:48.400 --> 0:10:51.360 data for the month of November. A Bloomberg survey of 0:10:51.360 --> 0:10:54.160 economists expects a drop of around four percent year on 0:10:54.280 --> 0:10:57.640 year and even sharper contraction in retail sales than we 0:10:57.679 --> 0:10:59.400 saw in the month of November. And why is that 0:10:59.520 --> 0:11:02.280 key why we're talking about Chinese economic data, because e 0:11:02.360 --> 0:11:04.880 commerce is at the heart of that story. Right Singles 0:11:04.920 --> 0:11:07.200 day falls in the month of November. We've had some 0:11:07.280 --> 0:11:11.880 soft but leading indicators of certain markets. Eving cars, for example, 0:11:12.200 --> 0:11:14.920 fell sharply in the month of November. We saw Ali 0:11:15.000 --> 0:11:18.760 Barber pretty tight lipped about how singles they actually went, 0:11:18.800 --> 0:11:21.160 which is kind of an indication that it probably wasn't 0:11:21.200 --> 0:11:23.719 that good. But as they pull back on the restrictive 0:11:23.720 --> 0:11:26.560 policy for COVID and we see actually that the number 0:11:26.600 --> 0:11:29.480 of cases spread and rise through the country. There is 0:11:29.880 --> 0:11:33.240 eyes from American tech, eyes from European tech, eyes from 0:11:33.240 --> 0:11:36.640 the global supply chain towards China on their consumer, but 0:11:36.760 --> 0:11:39.000 also how they're going to react with policy to what 0:11:39.040 --> 0:11:41.560 we're seeing and what the health of the consumer in 0:11:41.559 --> 0:11:44.000 that market is. Because right now, pretty mixed picture car 0:11:44.480 --> 0:11:47.559 and of course, a continued pretty murky picture, and when 0:11:47.600 --> 0:11:50.160 it comes to geopolitics in particular, and we sort of 0:11:50.160 --> 0:11:53.000 build on your great further focus on the consumer to 0:11:53.440 --> 0:11:56.200 geo politics and the Biden administration because it is planning 0:11:56.240 --> 0:11:59.079 to put more than thirty Chinese companies on a trade 0:11:59.120 --> 0:12:02.719 blacklist again, which will prevent them from buying certain American components. 0:12:02.920 --> 0:12:06.120 Course that depens attentions between the world's two economic superpowers. 0:12:06.440 --> 0:12:09.360 We've got the perfect guest, as our own Tech executive editor, 0:12:09.440 --> 0:12:12.280 Tom Giles here for more. And Tom just talked to 0:12:12.360 --> 0:12:15.160 us about this entity list. Memory chips the focus it 0:12:15.200 --> 0:12:18.800 seems here. But what does that mean for these thirty companies. Well, 0:12:18.840 --> 0:12:21.080 as you said, this is going to put big limits 0:12:21.160 --> 0:12:24.920 on their ability to carry out business with US companies, 0:12:24.960 --> 0:12:29.080 in particular purchasing the components that they need to make 0:12:29.160 --> 0:12:34.200 those chips. The US is really intent on limiting, hamstringing 0:12:34.520 --> 0:12:38.959 China's ability to become a force in chip making. This 0:12:39.040 --> 0:12:41.480 is something that the Chinese government has stated over the 0:12:41.559 --> 0:12:44.720 last several years is a major goal. They're willing to 0:12:44.760 --> 0:12:49.840 spend hundreds of billions of dollars behind this effort, and 0:12:49.880 --> 0:12:52.960 the US wants to cut them off at the knees. 0:12:53.320 --> 0:12:56.640 In particular, they want to interfere with China's ability to 0:12:57.160 --> 0:13:01.000 make chips and use chips in the air war making 0:13:01.040 --> 0:13:04.800 capabilities in for the Chinese military. That's what the US 0:13:05.000 --> 0:13:08.520 stated goal is, and they are taking step after step 0:13:08.640 --> 0:13:11.560 after step in order to keep it from happening. What 0:13:11.679 --> 0:13:14.040 I loved about this reporting one source telling us that 0:13:14.160 --> 0:13:16.679 yank C Memory is kind of one of many on 0:13:16.720 --> 0:13:20.000 the list, but they're maker of nand flash memory. Lower 0:13:20.040 --> 0:13:21.679 down in the story, want to bring it back to 0:13:21.760 --> 0:13:24.480 Silicon Valley in the Bay Area. At one time they 0:13:24.480 --> 0:13:26.880 were talking to be a supplier to Apple, but it 0:13:26.880 --> 0:13:29.439 seems like the doors now closed. From the company perspective, 0:13:29.960 --> 0:13:32.280 this seems to be making life difficult for companies on 0:13:32.320 --> 0:13:36.920 both sides of this debate. That's right, Yanks Memory, huge 0:13:37.200 --> 0:13:41.000 company in China, biggest memory maker in chip maker in China, 0:13:41.520 --> 0:13:44.800 also a potential partner to Apple. Apple saw the writing 0:13:44.840 --> 0:13:48.760 on the wall. Apple recognized this isn't gonna happen. Also 0:13:48.840 --> 0:13:52.680 a major competitors to Samsung, one of the many companies 0:13:52.720 --> 0:13:55.840 that China had been pinning its hopes on and continues 0:13:55.880 --> 0:13:59.080 dependance hopes on for becoming a major force in hip making. 0:13:59.720 --> 0:14:02.439 An other thing to another thing to remember about this 0:14:02.600 --> 0:14:05.720 trade war between these two countries and how it's it's 0:14:05.720 --> 0:14:09.280 got ripple effects far beyond Silicon Valley, far beyond China. 0:14:09.880 --> 0:14:13.720 Is the effort by the US government to keep Chinese 0:14:14.120 --> 0:14:18.000 companies from buying the equipment that they need to make 0:14:18.240 --> 0:14:22.200 chips right, so that that affects the Netherlands, and it 0:14:22.240 --> 0:14:26.280 affects Japan as well. Tom, Ultimately, do we prepare for 0:14:26.320 --> 0:14:28.520 the tip tap to continue to be prepared to hear 0:14:28.520 --> 0:14:32.800 from China. China has already spoken out against this. They 0:14:32.840 --> 0:14:37.080 say that the US is weaponizing technology as part of 0:14:37.080 --> 0:14:40.320 this trade war. They're speaking out against it um and 0:14:40.360 --> 0:14:44.680 I think that their potential to retaliate it remains vast, 0:14:44.800 --> 0:14:49.560 absolutely all right, bloom by Tech Executive editor Tom Giles 0:14:49.680 --> 0:14:51.920 leading the charge here out of San Francisco, Thank you 0:14:52.040 --> 0:15:02.520 very much. Let's talk about the free language learning up 0:15:02.640 --> 0:15:04.680 to and Lingo finds herself perhaps sort a bit of 0:15:04.680 --> 0:15:07.080 a turning point. The company has made a name for itself, 0:15:07.120 --> 0:15:09.560 engaging one of fifty six million monthly subscriber as making 0:15:09.640 --> 0:15:12.240 learning a new language as addictive as canny crush. But 0:15:12.320 --> 0:15:14.960 now the newly public company is kind of facing the 0:15:15.040 --> 0:15:18.320 challenge of becoming maybe profitable while keeping its loyal fan 0:15:18.360 --> 0:15:20.280 based happy joining us now used to say, it's the 0:15:20.320 --> 0:15:23.760 CEO news fun. Now he's talk to us about your 0:15:23.960 --> 0:15:26.240 mission to develop the best education in the world and 0:15:26.280 --> 0:15:30.400 making universally available. How do you turn that into universally 0:15:30.440 --> 0:15:35.400 available and profitable. Yes, so we're a very mission driven company. UM. 0:15:35.680 --> 0:15:40.160 We started exactly because we wanted to give education to everybody. UM. 0:15:40.200 --> 0:15:43.320 But over the last you know, five years, we've been um, 0:15:43.360 --> 0:15:45.600 you know, trying to monetize it, and actually we're very 0:15:45.600 --> 0:15:49.440 successful at it. UM. And the way we did that is, UM, 0:15:49.520 --> 0:15:51.920 we whenever you finish our lesson under a linger, we 0:15:51.960 --> 0:15:53.960 put an ad at the end of a lesson. UM. 0:15:54.040 --> 0:15:55.840 So you can use the thing as much as you want, 0:15:55.920 --> 0:15:58.640 entirely for free, but you may have to see some ads. UM. 0:15:58.680 --> 0:16:00.840 But if you don't to see the ads, you can 0:16:00.880 --> 0:16:04.200 also pay us to subscribe. And UM. It turns out 0:16:04.200 --> 0:16:05.320 that we make quite a bit of money from the 0:16:05.320 --> 0:16:07.920 subscription and actually, um, it's about seven percent of our 0:16:08.360 --> 0:16:10.960 monthly activities are paying to subscribe. But they give us 0:16:10.960 --> 0:16:13.880 about our revenue. And this year we're going to be 0:16:14.000 --> 0:16:17.080 profitable at least on an adjusted ebita basis UM, and 0:16:17.080 --> 0:16:21.200 and that keeps going better and better. Luis Caroline set 0:16:21.200 --> 0:16:24.160 out here in Silicon Valley at least to tail as 0:16:24.200 --> 0:16:28.280 old as time, millions of users trying to find profit. 0:16:28.360 --> 0:16:32.920 You even just use the the ultimate buzzword adjusted ebit dar. 0:16:33.040 --> 0:16:36.440 I've heard that from Uber from Twitter. I mean, the 0:16:36.640 --> 0:16:39.800 user base fifty six million is a part of making 0:16:39.840 --> 0:16:42.080 more money just growing it. How do you get more 0:16:42.160 --> 0:16:45.840 people to jump onto this trend of wanting to learn 0:16:45.920 --> 0:16:48.920 languages but in a way that's kind of gamified. Yeah, 0:16:48.960 --> 0:16:50.520 I mean the main way we grow is we have 0:16:51.160 --> 0:16:53.760 a very engaging product. I mean most of our our 0:16:53.880 --> 0:16:56.000 users come throward of mouth. That in fact, of ast 0:16:56.040 --> 0:16:57.880 majority of users come from the word of mouth. And 0:16:57.880 --> 0:17:00.640 it's because the product is very gamified and very engaging. 0:17:00.640 --> 0:17:02.720 We also grow by having um We have a really 0:17:02.720 --> 0:17:05.280 popular TikTok account if you haven't seen it, uh, and 0:17:05.520 --> 0:17:08.919 we're really good on social media. But it's it's the 0:17:08.920 --> 0:17:10.359 good news is that we don't have to pay to 0:17:10.400 --> 0:17:12.600 acquire users. Really, I mean it's it's it's pretty much 0:17:12.680 --> 0:17:15.520 organic growth, and we're growing. We're growing a lot over 0:17:15.560 --> 0:17:17.920 the last five quarters in a row, we've been accelerating 0:17:17.920 --> 0:17:21.040 our user growth. UM. So you know, we're pretty happy 0:17:21.080 --> 0:17:22.800 with the user growth and that you're right, that's one 0:17:22.840 --> 0:17:24.520 of the ways in which we make more money. We 0:17:24.640 --> 0:17:28.159 basically get more people to use to a lingal. You 0:17:28.240 --> 0:17:31.639 make a good point, which is social media. What do 0:17:31.680 --> 0:17:33.919 you consider duo lingo to be? I mean, is it 0:17:33.960 --> 0:17:37.239 your aspiration to be like a Facebook, to be like 0:17:37.320 --> 0:17:40.080 a TikTok that kind of scale and that kind of 0:17:40.160 --> 0:17:43.120 daily use, or is it the content that you want 0:17:43.160 --> 0:17:46.840 to use to differentiate yourself. We really do think we 0:17:46.840 --> 0:17:49.520 can get too much larger scale. UM language learning is 0:17:49.560 --> 0:17:51.560 pretty interesting. There's about two billion people in the world 0:17:51.640 --> 0:17:54.960 learning a foreign language. UM Dueling was the largest way 0:17:55.000 --> 0:17:56.800 to learn a foreign language. But we only have you know, 0:17:56.800 --> 0:17:59.560 close to sixty million monthly active users, so we have 0:17:59.640 --> 0:18:01.960 a lot room to grow, and we're growing pretty fast 0:18:02.000 --> 0:18:04.000 every month. So we think, you know, we think we 0:18:04.040 --> 0:18:06.320 can get two hundreds of millions of monthly active users. 0:18:07.040 --> 0:18:09.000 Talk to us about R and D and about the 0:18:09.000 --> 0:18:12.520 way use way in which use artificial intelligence. At the moment, 0:18:12.600 --> 0:18:15.280 we're all talking about it chat Gypt and the amazing 0:18:15.280 --> 0:18:17.240 things that it can do. What are the opportunities in 0:18:17.280 --> 0:18:20.479 AI for you? Um, there's a lot of opportunity. I mean, 0:18:20.520 --> 0:18:23.600 so do a lingal Um. We've been using AI us 0:18:23.720 --> 0:18:26.440 you know, for the last ten years, and we're really 0:18:26.440 --> 0:18:29.040 big believers in using AI to teach. At this point, 0:18:29.240 --> 0:18:32.080 dueling was about as good at teaching as a classroom, 0:18:32.119 --> 0:18:33.720 but we're not as good as a one on one 0:18:33.760 --> 0:18:36.359 human tutor. And our goal is to get to a 0:18:36.440 --> 0:18:38.199 lingo to be as good at teaching as a one 0:18:38.200 --> 0:18:40.800 on one human tutor, entirely through artificial intelligence. And and and 0:18:40.880 --> 0:18:43.320 the reason for using ourtificial intelligence is because it's a 0:18:43.320 --> 0:18:46.399 lot cheaper to deliver uh, you know, two literally millions 0:18:46.400 --> 0:18:48.800 of people. And we think we can get there. I think, 0:18:48.920 --> 0:18:50.200 I mean, I don't know how long it will take, 0:18:50.240 --> 0:18:51.840 but we think we can get to as good as 0:18:51.840 --> 0:18:55.119 a one one human tutor. Professor. Professor, I'll take your 0:18:55.119 --> 0:18:58.840 word from that. I'm interested in, therefore, your future and 0:18:59.040 --> 0:19:02.560 also the way in which you perhaps use your content. 0:19:02.560 --> 0:19:04.840 You're talking about social media and ed US. A smart 0:19:04.920 --> 0:19:07.880 question about who you see yourself is becoming what about 0:19:07.880 --> 0:19:11.359 the actual content you're you're producing, the people, the characters. 0:19:11.960 --> 0:19:13.800 Are there other ways in which you monetize that in 0:19:13.840 --> 0:19:16.159 the future. And well, the main way in which we're 0:19:16.160 --> 0:19:18.280 gonna try to monetize this by teaching. I mean, right 0:19:18.280 --> 0:19:21.200 now we're doing language learning. We are starting to expand 0:19:21.240 --> 0:19:23.440 to other things. We're gonna we just launched a math app. 0:19:24.000 --> 0:19:27.919 We have an app to teach early literacy. And the 0:19:28.000 --> 0:19:30.280 ideas we really want to have recognizable characters. I mean, 0:19:30.280 --> 0:19:32.760 the most recognizable is a green owl um, but we 0:19:32.800 --> 0:19:35.480 have another whole other cast of characters, and the idea 0:19:35.560 --> 0:19:37.240 is kind of to be like the app version of 0:19:37.280 --> 0:19:39.959 maybe Sesame Street or something like that, with with very 0:19:40.000 --> 0:19:43.920 recognizable characters that teach you different things. I'll tell you what, Louise, 0:19:43.960 --> 0:19:46.160 I'll make you a deal. I'll go on the app. 0:19:46.200 --> 0:19:48.760 I'll try and learn Welsh and the first generation not 0:19:48.800 --> 0:19:51.199 to speak Welsh and my family. So I make you 0:19:51.240 --> 0:19:52.800 a deal and we'll follow up in the year's time 0:19:52.840 --> 0:19:55.760 and see how I did. Luis Funan co founder and 0:19:55.840 --> 0:19:57.720 CEO doing a lot of people are gonna tweets me 0:19:57.760 --> 0:20:07.320 saying you better follow through on that. Now, welcome back 0:20:07.359 --> 0:20:09.440 to blow their technology and we've got to talk about 0:20:09.600 --> 0:20:12.840 what is a macro story that affects technology today? Ed 0:20:12.880 --> 0:20:15.480 and affects hiring within technology as well. We have the 0:20:15.480 --> 0:20:18.639 FED earlier, of course, Jerne pal saying, look, the labor 0:20:18.680 --> 0:20:22.160 market appears to still be very tight. It's so interesting 0:20:22.200 --> 0:20:23.879 that you and I talk about day in, day out 0:20:23.960 --> 0:20:26.920 the layoffs in technology, and yet the data doesn't seem 0:20:26.920 --> 0:20:30.120 to prove it. You know, there's a complete contrast right there, 0:20:30.119 --> 0:20:33.040 trying to get slack in this labor market, slow down 0:20:33.160 --> 0:20:36.560 growth until that job's data kind of reflects their goal, 0:20:36.680 --> 0:20:39.480 and you know they're still zeroed in on inflation. It's 0:20:39.520 --> 0:20:42.040 the same message every time with the same result. We 0:20:42.080 --> 0:20:45.399 will fight inflation. Here's our outlook and projection for rates. 0:20:45.720 --> 0:20:48.040 But at the same time, you know that it's just 0:20:48.160 --> 0:20:50.800 so incongruous the idea of all these jobs openings and 0:20:50.840 --> 0:20:54.480 every headline you and I talk about layoffs, cuts, pairing back. 0:20:55.080 --> 0:20:57.159 It's hard to pass it all. And the idea is 0:20:57.200 --> 0:20:59.879 that perhaps in the BLS data, what's not showing up 0:20:59.880 --> 0:21:01.480 of courses of the people who are losing their jobs 0:21:01.520 --> 0:21:03.920 are highly employable, they go onto new roles. They're being 0:21:03.920 --> 0:21:06.639 snapped up across the board, whether it be other tech companies, 0:21:06.680 --> 0:21:10.400 whether it's finance companies, whoever wants to be hiring engineers 0:21:10.400 --> 0:21:12.400 at the moment, there are still such a desire for them. 0:21:12.600 --> 0:21:15.440 But I think the market and perhaps evaluation story is 0:21:15.440 --> 0:21:17.200 also an interesting one for you and I the fact 0:21:17.200 --> 0:21:19.840 that these companies technology companies are going to be rolling 0:21:19.880 --> 0:21:22.159 over somewhat. If we think that terminal rates are going 0:21:22.200 --> 0:21:23.880 to be at five point one per cent, we've still 0:21:23.920 --> 0:21:27.000 got more interest rate hikes to come. It's just perhaps 0:21:27.000 --> 0:21:29.800 the pace is now going to be slightly slower. Yeah, 0:21:29.800 --> 0:21:32.160 there's also a psychological aspect to it as well. Very quickly, 0:21:32.240 --> 0:21:34.040 I've speak to a lot of VNCH capitalists who have 0:21:34.080 --> 0:21:36.680 different to the opinion. They say, well, don't hire people, 0:21:36.800 --> 0:21:39.800 keep your powder dry. But at the same time, when 0:21:39.800 --> 0:21:42.400 you do see layoffs, there are people that are talented. 0:21:42.440 --> 0:21:44.760 They start companies. Look at what happened in two thousand, 0:21:44.840 --> 0:21:47.399 two thousand and eight. They need access to capital to 0:21:47.440 --> 0:21:50.560