Speaker 1: From mahard of where Innovation, Money and Power Collie in
Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde
Speaker 1: and Ed lud Love.
Speaker 2: I'm Caroline Heine, Blomberg's world headquarters.
Speaker 3: In New York, and I met Ludlow in San Francisco.
Speaker 3: This is Bloomberg Technology.
Speaker 2: Coming up.
Speaker 4: We'll bring you the latest updates from the Israel Hamas war,
Speaker 4: as fighting continues for a third day.
Speaker 2: Everything we know ahead, and we'll.
Speaker 3: Speak with technology executives who own and operate businesses in
Speaker 3: Israel for thee.
Speaker 5: On the ground and what it means for Israel's tech.
Speaker 4: Sector, as we'll look at what heightened geopolitical tensions mean
Speaker 4: for investors as markets face fresh volatility.
Speaker 2: But first we will get you the latest updates.
Speaker 4: Coming out of the Israel Hamas War. We want to
Speaker 4: go to our water on the ground, remogs Gallett Alstein,
Speaker 4: and is wonderful to have some time with you, Gallet
Speaker 4: and just bring us up to speed with just where
Speaker 4: you are and how it's all occurring at the moment.
Speaker 2: What's the latest?
Speaker 6: Yeah, so actually we're seeing us some development here today.
Speaker 6: I would say basically on three or four arm fronts
Speaker 6: all slightly different than one another. So on the southern front,
Speaker 6: where the attacks have been taking place since Saturday, we're
Speaker 6: all seeing the area more contained. Quite surprisingly, there are
Speaker 6: still infiltrations of attackers from Hamas from the Gaza Strip
Speaker 6: into the Gaza vicinity inside Israel, but we're seeing a
Speaker 6: lot less of that, and basically I would say that
Speaker 6: the entire area over there is now under control in
Speaker 6: that sense, in the sense of the infiltrations that we've
Speaker 6: been seeing over the last two days, the communities and
Speaker 6: the settlements that are very close to the Gaza offense,
Speaker 6: about twenty four settlements or being evacuated at this time
Speaker 6: of the residents. Another development we're seeing today over the
Speaker 6: last few hours is on the northern front. It is
Speaker 6: not major at this time, but that is something that
Speaker 6: is definitely attracting a lot of attention because you know,
Speaker 6: of the big questions now is whether Bala, on account
Speaker 6: of Iran, will be joining in, you know, with with
Speaker 6: the Gaza attentions and what is coming up there. So yeah,
Speaker 6: so so so so that has been escalating, but but
Speaker 6: a little bit. It's it's very it's very contained at
Speaker 6: this time, and it's nothing major, but but but it is.
Speaker 5: Happening, Jalit.
Speaker 3: What has been the government response Prime Minister Nsna who
Speaker 3: over the weekend had talked with the political opposition about
Speaker 3: a wartime government across party wartime government.
Speaker 6: Yeah, so so that is still definitely on the tables.
Speaker 6: There have been some talks to day between a team
Speaker 6: on account of Prime Minister in Attaliao and teams that
Speaker 6: are negotiating on behalf of opposition parties, mainly the party
Speaker 6: led by opposition leader Benny Gantz. So so so they're
Speaker 6: still talking talking about that.
Speaker 7: We do not know where it's going.
Speaker 6: It does look like there is a fair chance of
Speaker 6: that happening, especially with with the complex situation in Israel
Speaker 6: that has been very divided over the past few months
Speaker 6: over a government proposed judicial overhaul. So now to form
Speaker 6: a government, uh like that would sort of mean also,
Speaker 6: you know, in the sense of public opinion that you
Speaker 6: know Israel is putting all the differences aside and uniting
Speaker 6: in the front against the Hamas. So so that is
Speaker 6: still on the table and we're still waiting to see
Speaker 6: developments on that.
Speaker 3: All right, bloombergs gallet Austein, thank you very much. Let's
Speaker 3: get right to it now with Target Global partner Shmiel Chafets,
Speaker 3: who's joining us live from Israel, and Schmil, I want
Speaker 3: to explain to our audience what they're they're looking at,
Speaker 3: what they're about to hear. You are a venture capitalist
Speaker 3: normally based in Tel Aviv, but overnight you've volunteered to
Speaker 3: be a reservist by virtue of you being too old
Speaker 3: to be conscripted. I think I'm right in saying, and
Speaker 3: you have already been deployed. As best you can, just
Speaker 3: explain what you're doing.
Speaker 2: I think, unfortunately a muted thank you.
Speaker 8: I'm sorry, sorry, sorry, Unfortunately I'm a bit too old
Speaker 8: to get called up to my usual unit.
Speaker 7: But I did find myself.
Speaker 8: Some something useful to do, and I've been doing it
Speaker 8: since this morning, with many many others.
Speaker 3: So Shmiel, you're avenge capitalist that invests in Israeli startups.
Speaker 3: But I guess that the question this stage is why
Speaker 3: have you done this? Why have you felt compelled to
Speaker 3: put aside your day job and take on a deployment.
Speaker 7: I think we're in a war.
Speaker 8: This is a different situation than anything we've seen for
Speaker 8: fifty potentially for seventy five years Saturday was the bloodiest
Speaker 8: day in probably in Israeli history, Bloodier than any day.
Speaker 7: In the Yom Kipoor War in the War of Independence.
Speaker 8: Hundreds if not more of soldiers, but women, children, elderly
Speaker 8: people were killed in their beds in what is undisputedly
Speaker 8: Israeli territory. And I think, as in Israeli, it is
Speaker 8: my duty to all of our duty to come and
Speaker 8: protect our country this. I'm doing this for my kids
Speaker 8: because this war will be a big part of determining
Speaker 8: the country that they will live in.
Speaker 7: And this will not be I don't think this is
Speaker 7: going to be another operation like we've been accustomed to.
Speaker 7: This is a war.
Speaker 8: It is a war of different magnitude than what any
Speaker 8: of us I think have seen in at least in
Speaker 8: my memory.
Speaker 4: Well, this is a story of people, of family, of
Speaker 4: your children, as you cite.
Speaker 2: This is a story also.
Speaker 4: Of people trying to build economically, and indeed a time
Speaker 4: that you are someone that wants to see a thriving
Speaker 4: startup community, one which I think you have twenty four
Speaker 4: portfolio companies. It's hard to talk about business in a
Speaker 4: moment such as this, but how are you thinking about
Speaker 4: what this does to an economy, to the people who
Speaker 4: want to build.
Speaker 8: I think that what we're seeing today in Israel is
Speaker 8: the reason that Israel has been so successful as a
Speaker 8: startup nation.
Speaker 7: We're seeing hundreds of thousands of people.
Speaker 8: Getting out of their lives, getting into uniform in moments,
Speaker 8: and people have been just rushing into military service.
Speaker 7: They're actually in most of the phone calls that I'm
Speaker 7: getting there.
Speaker 8: About people being turned away trying to find a spot
Speaker 8: somewhere to go and fight.
Speaker 7: And a part of this, this is the social cohesion.
Speaker 8: This is the spirit of entrepreneurship that makes Israel successful
Speaker 8: as a startup nation, is what we're seeing today.
Speaker 7: I think this is an.
Speaker 8: Integral part of Israel actually, and I think one of
Speaker 8: the reasons that we will come out of this stronger
Speaker 8: and better the fact that this is really a civic
Speaker 8: society that knows how to how to also fight. And
Speaker 8: many of our portfolio companies, the CEOs developers are now
Speaker 8: fighting in different in different areas, and I think it's
Speaker 8: the way it's going to be.
Speaker 7: But when we get back to work, we'll get back
Speaker 7: full force.
Speaker 4: How are you using technology right now to inform yourself
Speaker 4: to stay connected.
Speaker 8: Well, luckily we have a good five G everywhere as
Speaker 8: real as a small country, so we have the luxury
Speaker 8: of being in a warzone.
Speaker 7: It has good, good enough coverage to do a video.
Speaker 5: Call as sure.
Speaker 3: And on that No, I just remind our audience that
Speaker 3: you're coming to us in military attire. You've volunteered for
Speaker 3: a deployment, but you are a bench capitalist. You know,
Speaker 3: you talked about some of the phone calls that you're getting,
Speaker 3: be it friends or industry partners.
Speaker 5: You have Israeli colleagues who.
Speaker 3: Are working at Target but deploying capital in Europe, in America.
Speaker 3: Do you think that any of your friends or partners,
Speaker 3: or indeed portfolio founders will come from overseas abroad back
Speaker 3: to Israel to join you in the initiative that you
Speaker 3: are taking.
Speaker 7: Yeah, I think many are.
Speaker 8: We've helped organize some planes for reserve soldiers who want
Speaker 8: to get back, and then many people are crowding the
Speaker 8: airport and the airport's trying to get back and help.
Speaker 8: And also we're getting a lot of support from our
Speaker 8: from Israeli, from our Jewish but also from our non
Speaker 8: Jewish friends and colleagues.
Speaker 7: In Europe, in the US in the Middle East.
Speaker 8: We're offering condolences, support and help them.
Speaker 7: So we're seeing a lot of outpart.
Speaker 8: I think people do understand that this is a very
Speaker 8: unique situation, probably once in a generation.
Speaker 3: Sorry to interrupt you, Caroline summarized it completely right that
Speaker 3: it's difficult to talk about business and operating right now.
Speaker 3: But what happens to your portfolio companies? Can you deploy capital?
Speaker 3: Is there a need to sort of deploy capital because
Speaker 3: of the situation in Israel and helping those companies continue
Speaker 3: to operate or are they able to continue with some normalcy.
Speaker 7: So I think Israel is very good.
Speaker 8: At continuing to operate normally in abnormal situations. And as
Speaker 8: far as the portfolio companies are concerned, you know, everybody
Speaker 8: have made arrangements to try to keep the businesses running,
Speaker 8: to have a business continuity. You know, CEOs have been
Speaker 8: called up, have been signing resolutions all morning, getting the
Speaker 8: new signatories set of CEOs that have joined, and I
Speaker 8: think we have definitely some people are now going to
Speaker 8: join up and will continue to work, and our colleagues
Speaker 8: abroad will come into work, so I think we will
Speaker 8: be able to operate close to normal as close to
Speaker 8: normal as possible.
Speaker 7: Even during the war.
Speaker 8: It's one of the things that happens in Israel because
Speaker 8: we are unfortunately useless. It happens not in this magnitude
Speaker 8: that has happened before. Our companies have plans for it,
Speaker 8: and they'll continue to operate.
Speaker 4: Business continuity, something unfortunately that you've had to understand and
Speaker 4: prepare for. And to that note, we had, of course
Speaker 4: galet Elstein on Elstein just a moment ago talking about
Speaker 4: the divisions in internal politics of late within Israel. How
Speaker 4: much has that affected business? How much has that affected
Speaker 4: the flow of money coming into Israel of late, if
Speaker 4: at all.
Speaker 7: I think that.
Speaker 8: It has affected, of course affected the Israeli economy. But
Speaker 8: I think it's absolutely not the time to deal with
Speaker 8: it right now is time for national unity. Now is
Speaker 8: the time to put our divide behind us and just
Speaker 8: to go to a fight.
Speaker 3: Smill from a unity standpoint that there are many global
Speaker 3: technology companies. Intel, for example, has twelve thousand people in Israel.
Speaker 3: They've made commitments to expand their fab way for fab
Speaker 3: manufacturing footprint there. But do you worry about the sort
Speaker 3: of long term attitude that global tech players who do
Speaker 3: have a really heavy footprint in your country. Now, now
Speaker 3: take how they view Israel.
Speaker 8: First of all, I hope they're view their commitment is
Speaker 8: long term, and I hope they'll understand that Israel still
Speaker 8: has a lot of unique talent to offer unique capabilities
Speaker 8: in the tech space.
Speaker 7: And I'm sure that once, once this ends, and it
Speaker 7: may take some time, but it will end.
Speaker 8: And we will win, they'll be back for force operating here.
Speaker 7: As they have for many years. I mean, Intel's been here.
Speaker 8: Through a lot and they've still thought it was worthwhile
Speaker 8: to continue to invest and I'm sure they will continue
Speaker 8: to do so in the future, as.
Speaker 2: Will you have.
Speaker 4: Of course, just been talking about the ecosystem. What makes
Speaker 4: entrepreneurial spirit different in Israel? Do you worry about talent
Speaker 4: the flow of talent? Do you ever concern yourself that
Speaker 4: people aren't like you, that they don't return to deploy
Speaker 4: money to make their headquarters within an Israel based business.
Speaker 8: I want to tell you that I think when we
Speaker 8: spoke last I think we talked a little bit about
Speaker 8: the political issues in Israel, and I think there was
Speaker 8: a flow of talent out of Israel. But I think
Speaker 8: after this there'll be a flow of talent back, because
Speaker 8: I think in the Israelis feel committed to this country,
Speaker 8: and when it is in trouble, they return, and I
Speaker 8: think there'll be a flow of talent back, not out
Speaker 8: of this, not out of his room.
Speaker 7: After the stands.
Speaker 3: You're referring to the reaction to the judicial reforms and
Speaker 3: the debate that that causing the country. Just very quickly
Speaker 3: before we let you go, will you continue doing deals?
Speaker 5: Target Global?
Speaker 3: Will you continue with rounds that you had in the
Speaker 3: works prior to the weekend's attack.
Speaker 5: Will continue.
Speaker 8: We have a big international team and our team will
Speaker 8: continue to work as as normal. We have a great
Speaker 8: team and a strong partnership. Will continue to work in
Speaker 8: the well. Each do our well, each do our bit.
Speaker 8: But we will continue and we're going to continue to
Speaker 8: meet all of our commitments to every Israeli company and
Speaker 8: continue to support our purporting throughout and at the same time,
Speaker 8: we're going to give resources to support people who need
Speaker 8: our help.
Speaker 7: Yeah, there are.
Speaker 3: A lot of Smill chae Fetes, Schmill Chaffetes of Target Global.
Speaker 3: We're very grateful for your time. You know, to our audience,
Speaker 3: you're joining us on deployment. You volunteered as a result.
Speaker 3: But your your day job is as a VC and
Speaker 3: we thank you for bringing us that venture capital perspective
Speaker 3: on literally on the ground.
Speaker 5: Thank you very much, Caroline, thank you for having me
Speaker 5: across the macro and the micro.
Speaker 3: There's so much still to discuss, particularly on the market impact.
Speaker 3: We have Tom Slater, who's head of US Equities at
Speaker 3: Bailey Gifford joining us next on the program. This is
Speaker 3: Bloomberg Technology.
Speaker 4: It is a day of geopolitical tension, is a day
Speaker 4: of volatility that's heightened in the markets and the impact
Speaker 4: that that has on or tech globally and indeed appetite
Speaker 4: for risk.
Speaker 2: But we're going to move into.
Speaker 4: How the implications are testing investor appetite right now with
Speaker 4: one key investor, Tom Slater, as head of US Equities
Speaker 4: over at Bailey Gifford. And Tom, we want to go
Speaker 4: broad with you and the holdings that you have and
Speaker 4: the tactics that you deploy with Bailey Gifford. But on
Speaker 4: a moment where we do see more of course, between
Speaker 4: Israel at the moment and Hamas, how are you thinking
Speaker 4: about that implicating some of the companies with which do
Speaker 4: business in the area, and whether or not it does
Speaker 4: change your sentiment on technology, writ large.
Speaker 9: Well, I think it's obviously a dreadful situation, but actually
Speaker 9: understanding what the long term implications of what's happening will
Speaker 9: be is just going to take time. And so the
Speaker 9: starting point from my perspective is that you just take
Speaker 9: your time and ask the question what's really going on here?
Speaker 1: And actually reacting trying.
Speaker 9: To think you know better than the market and the
Speaker 9: short run is not the right way to generate returns
Speaker 9: for your clients.
Speaker 3: Tom A question posed on Bloomberg Television throughout the day
Speaker 3: has been defense stocks or defense technology stocks and how
Speaker 3: much I guess of a knee jerk reaction it would
Speaker 3: be to think about that as a sector.
Speaker 5: What is your attitude towards event?
Speaker 9: Well, I think we own no defense stocks as the
Speaker 9: starting point, but I think you can see that there
Speaker 9: is clear pressure for NATO countries to increase their spending
Speaker 9: on this area.
Speaker 1: You know that.
Speaker 9: They have clearly been shortages in a number of areas
Speaker 9: that is going to require a structurally higher level of spend.
Speaker 1: So there is an interesting argument there.
Speaker 9: But I think as you in the way you ask
Speaker 9: the question about technology, I think one of the things
Speaker 9: that we've learned in in Ukraine over the past eighteen
Speaker 9: months is that actually things.
Speaker 1: Have moved on a lot.
Speaker 9: Whether we're at drones as an example of that, in
Speaker 9: the way that wars have been fought. So actually, as
Speaker 9: in most other areas, thinking carefully about how technology kind
Speaker 9: of have transformational impacts is just as important in defense
Speaker 9: as it is elsewhere. It's not about sort of taking
Speaker 9: that top, top down view and making an allocation.
Speaker 2: Tom.
Speaker 4: Talking of allocation, we're looking at some of the key
Speaker 4: holdings that you have. Of course, a trade desk shop
Speaker 4: of I in Vidia, Amazon, I.
Speaker 2: Mean in Vidia, of course an extraordinary.
Speaker 4: Rocket ship to have been aligning yourself with of late
Speaker 4: when that comes to elements of AI, but also geopolitically encircled.
Speaker 4: When we think about it, it's exposure to China. How
Speaker 4: do you discern which companys the ones which you want
Speaker 4: to be seeing emboldening and indeed allocating money towards well.
Speaker 9: I think if you stick with that example of Nvidia,
Speaker 9: we bought the stock in twenty and sixteen and we've
Speaker 9: been holders of continuously since, and the investment thesis is
Speaker 9: around the application of their technology. And if you go
Speaker 9: back to twenty sixteen. Yes, there's this opportunity in AI,
Speaker 9: but it's also in the data center, in self driving vehicles,
Speaker 9: in ARVR, so a technology which has really broad application.
Speaker 9: And then where you find a company that addresses such
Speaker 9: a big opportunity, The question is really how do you
Speaker 9: hold onto it?
Speaker 1: Because yes, you take this.
Speaker 9: As an example of one we've done well, and that
Speaker 9: in that intervening seven years, it's actually been a really
Speaker 9: quite difficult stock to hold on to. I think the
Speaker 9: peak to trough decline from twenty one to twenty two
Speaker 9: was sixty six percent. So how do you endure losing
Speaker 9: two thirds of your money through that period of ownership?
Speaker 1: And that is.
Speaker 9: Really about hold discipline. You know, the market likes to
Speaker 9: talk about sell discipline. Why do you sell a stock
Speaker 9: that always seems back to front to me? I think
Speaker 9: the discipline is in being able to own it through
Speaker 9: those difficult periods where your investment thesis, where your assessment
Speaker 9: of the upside is unchanged. And so that's I think
Speaker 9: the crucial characteristic of the way that we invest on
Speaker 9: behalf of our.
Speaker 3: Clients, Tom and Caroline. A piece of news overnight by
Speaker 3: the way Nvidia canceled its AI summit which have been
Speaker 3: scheduled for October fifteenth and sixteenth in Tel Aviv, and
Speaker 3: Jensen Huang was due to give a keynote. So just
Speaker 3: sort of updating our audience on there makes you think
Speaker 3: about supply chain. Let's go back to Israel, Tom. You
Speaker 3: know Intel had talked about expanding way for fab operations there.
Speaker 3: There's talent there. On Autonomy mobilized its biggest company by market.
Speaker 5: Cap or US listed. Is there a supply chain story here?
Speaker 9: Well, I think that the big supply chain story in
Speaker 9: semiconductors has really been driven domestically in the US with
Speaker 9: the inflation reduction acts, and what I observe is a
Speaker 9: huge amount of investment now going in into this crucial
Speaker 9: and particularly sensitive area to drive a much more.
Speaker 1: Local supply chain. And I think that's it's much.
Speaker 9: More complex than just adding capacity because there's there's all
Speaker 9: the training and upskilling that you need to do to
Speaker 9: because of that. But I think this is what the
Speaker 9: of the events of the past few days are just
Speaker 9: another example of why that is so important.
Speaker 1: Strategically for the US.
Speaker 9: And then it's thinking through, well, who are there, who
Speaker 9: are the beneficiaries there, who are the ones that can
Speaker 9: actually enable that policy. Because when there is so much
Speaker 9: investment going in, it's always interesting to follow the money.
Speaker 9: Where are the opportunities being created? And I think domestically
Speaker 9: in America that's that's one of that's really interesting.
Speaker 3: Tom Slater, Belly Gifford. We follow the money here on
Speaker 3: Bloomberg Technology as well. Thank you for your time.
Speaker 4: Well, amid the start of Israel Hamas War, historic meeting
Speaker 4: occurred actually in China between President hy Jumping and Buy
Speaker 4: Batteris and group of US lawmakers that by Senate Majority
Speaker 4: Leader Chuck Schumer. Let's get more context, Kaylee Lines standing
Speaker 4: by in Washington, and Israel was discussed.
Speaker 10: It was Chuck Schumer, the Senator Democratic Majority leader, pushed
Speaker 10: China to strengthen their language around what Hamas had done
Speaker 10: in Israel.
Speaker 2: He said.
Speaker 10: He pointedly asked them to do so, and they did
Speaker 10: indeed strengthen their segment statement.
Speaker 2: But that isn't all that this visit was about.
Speaker 10: It also was really about economics. Chuck Schumer in this
Speaker 10: meeting with shijhiin Ping, the first time Shiji Ping has
Speaker 10: met with US senator since twenty fifteen. Mind you said
Speaker 10: that this really was about ensuring economic reciprocity, and he
Speaker 10: said that they feel China must provide a level playing
Speaker 10: field for American companies and workers, echoing what we've heard
Speaker 10: from the Lakes of Commerce Secretary Gina Ramondo.
Speaker 11: All right, Bloombo's Katie lines out of DC, thank you,
Speaker 11: welcome back to BlueBag Technology.
Speaker 2: I'm Canninehid in New York and.
Speaker 5: I med love Low in San Francisco.
Speaker 4: And let's just get up to speed with some of
Speaker 4: those headlines at Israel. Hamas Woll we want to bring
Speaker 4: on a BlueBag national security report to Nick Wadams. Many
Speaker 4: shocked by the surprise with which this took Israel and
Speaker 4: the nation and the world.
Speaker 2: But what is the latest headlines that are capturing your attention?
Speaker 12: Well, the big ones really are so obviously you have
Speaker 12: Israel going on the offensive in Gaza, calling up three
Speaker 12: hundred thousand troops. I mean, we are looking at a
Speaker 12: full mobilization by Israel to neutralize the threat coming from
Speaker 12: Gaza amid new missile strikes and continued violence. But you know,
Speaker 12: there are already bigger questions being asked, chiefly among them,
Speaker 12: how did Israel not see this coming?
Speaker 5: I mean, when you have.
Speaker 12: Five thousand missiles or so being shot into Israel. Where
Speaker 12: were the intelligence services in terms of seeing these missiles
Speaker 12: being put into place? How did they not detect the incursion?
Speaker 1: That when?
Speaker 12: And there was that big massacre and then all the
Speaker 12: hostage taking, and then you're starting to see the issue
Speaker 12: of Okay, now Hamas has these hostages, So what happens
Speaker 12: next in terms of negotiations to try to secure their release.
Speaker 12: So we are very much still in the early days
Speaker 12: of this thing, trying to see where it will head.
Speaker 12: But obviously some of the big questions already being asked
Speaker 12: on how it happened in the first place.
Speaker 4: I'm going to have a former deputy National Security Advisor
Speaker 4: of Israel joining us a little age from the show, Nick,
Speaker 4: But I'm interested in the broader ramifications the other proxy
Speaker 4: wars that potentially have sparked. I don't want in any
Speaker 4: way theorize that that's what's occurring. But what are you
Speaker 4: thinking about what this ripple effect is?
Speaker 12: Well, the big question obviously is Iran. There's a lot
Speaker 12: of talk that Iran gave the green light to this operation,
Speaker 12: but there are bigger questions being asked to about the
Speaker 12: extent of their involvement, how detailed their involvement was, and
Speaker 12: then you know the broader issue of normalization. The US
Speaker 12: has been pushing the interests of normalization between Israel and
Speaker 12: Saudi Arabia. What's the future of that conversation. We are
Speaker 12: hearing that players in the regions such as UAE, Bahrain
Speaker 12: and others are determined to press ahead with the Abraham
Speaker 12: Accords that were signed under former President Trump, and there
Speaker 12: has been some momentum, but you know, one source telling me,
Speaker 12: you know, it's going to be messy, but we are
Speaker 12: determined to see that go ahead. So there is the
Speaker 12: question then of what is the backlash against Hamas if
Speaker 12: this is going to bring folks together in the region
Speaker 12: and say, okay, we want to continue with this, or
Speaker 12: is it going to cause that to splinter. And right now,
Speaker 12: at least it looks like there is some momentum to
Speaker 12: try to keep those conversations on track, but obviously again
Speaker 12: very early days.
Speaker 11: Nick.
Speaker 3: A technology story is the defense system that Israel deploys,
Speaker 3: which is iron Dome, and I think I'm rightly saying
Speaker 3: that Israel has made a request of the United States
Speaker 3: to help resupply them with munitions for Iron Dome. What
Speaker 3: is the latest there.
Speaker 12: Well, we know that Congress was briefed by the administration
Speaker 12: on this, and there is obviously broad bipartisan support to
Speaker 12: make sure that Israel gets all of the munitions that
Speaker 12: it needs to keep Iron Dome resupplied. But you know,
Speaker 12: there are other needs that Israel has, such as artillery
Speaker 12: munitions and precision guided weaponry. So the question then there is,
Speaker 12: well what does this mean for the Ukraine War.
Speaker 5: There's a lot of talk that stocks were.
Speaker 12: Running low for Ukraine and allies were scrambling to come
Speaker 12: up with supplies to keep the Ukrainian Army with the
Speaker 12: munitions that it needs. So it's not really a question
Speaker 12: of funding, but there is going to be a question
Speaker 12: of supplies, and obviously the Administration's focus in the immediate
Speaker 12: term is on Israel, and everybody's trying to sort out, Okay,
Speaker 12: well what does that mean for Ukraine, especially in the
Speaker 12: long run, So you know we're going to be pressing
Speaker 12: away and trying to figure out those questions. But certainly
Speaker 12: a tension there between the needs from both Israel and Ukraine.
Speaker 3: Bloomberg's Nate Wadams all across the national security story around this,
Speaker 3: thank you very much. Let's go back to technology and
Speaker 3: what is happening on the ground in Israel. Joining us
Speaker 3: now is Papaya Global CEO one of the founders, Ana Goez,
Speaker 3: And just in the first instance, you run one of
Speaker 3: Israel's most valuable startups. You have a big footprint in
Speaker 3: the country. What is it that you're doing right now?
Speaker 3: Are your people safe and how have you responded to
Speaker 3: the events of the weekend.
Speaker 13: Yeah, thanks a lot for having me as well. I mean,
Speaker 13: honestly seece Saturday, which was a holiday for us as well.
Speaker 13: We are all full time serving the country first and
Speaker 13: assuring that we can support everything the country needs in
Speaker 13: terms of the efforts. It's important to understand that this
Speaker 13: is not a regular situation as we sometimes face in Israel.
Speaker 13: We are facing terror currently, it's our on nine eleven,
Speaker 13: we are eventually facing our own isis our.
Speaker 2: War against the Homas.
Speaker 13: Everything that we are doing on the tech sector, quite
Speaker 13: on the civilization kind of stage, is helping people that
Speaker 13: lost their houses, Helping people that eventually have family members'
Speaker 13: kids that has been taking hostages, helping soldiers to get
Speaker 13: to their base, helping everything that we can, raising funds,
Speaker 13: helping logistics. I mean, the civil efforts currently in the
Speaker 13: country are enormous, are amazing, and this is mainly.
Speaker 1: What we're doing.
Speaker 13: This is our day job, unfortunately since yesterday, and this
Speaker 13: will probably win our day job until things go back
Speaker 13: to track.
Speaker 4: And we had a benchure capitalist from Target Global joining
Speaker 4: the top of the show saying, unfortunately, you know, Israeli
Speaker 4: is often are able to be prepared for these sorts
Speaker 4: of situations. You say that this is an unpresent at
Speaker 4: the moment for you. But having been founding your business
Speaker 4: back in twenty sixteen, I understand you got seven workers globally,
Speaker 4: but how many of them are based in Israel and
Speaker 4: what sort of business continuity preparedness do you have when
Speaker 4: you are building businesses within Israel.
Speaker 13: So first, we have about one thousand employees in Papaya,
Speaker 13: about three hundred of them are currently based in Israel.
Speaker 13: I would say that about currently fifty or sixty of
Speaker 13: them have been called to military service, and quite a
Speaker 13: lot of them have family members, kids or spouses that
Speaker 13: has been called military service. Obviously, I mean, as any
Speaker 13: other company in Israel, we always have contingency plan. I
Speaker 13: think that the state of every Israelid founder is to
Speaker 13: assure that we always have plans for the following day,
Speaker 13: We always know how to operate, and honestly, I mean
Speaker 13: we get an amazing support currently from our workers around
Speaker 13: the globe, from our clients around the globe, in order
Speaker 13: to assure that the business operation is going as normal. Unfortunately,
Speaker 13: you know, especially in Papaya, we have also team in Ukraine,
Speaker 13: so we've been in a way kind of trained to
Speaker 13: take over their responsibilities about a year.
Speaker 2: And a half ago.
Speaker 7: Now they are the one.
Speaker 13: Feeling the needs for us and eventually kind of taking
Speaker 13: responsibilities from us. People in Israel are highly motivated, highly engaged.
Speaker 13: I see people are answering their emails during the day,
Speaker 13: during the night. But honestly, I mean our hearts currently
Speaker 13: in our mind is first taking care of the country,
Speaker 13: taking care of the people around us. Israel is a
Speaker 13: small country, is a small population. I have to say
Speaker 13: that I don't think that the death and the whrror
Speaker 13: will pass any single any single family in this country
Speaker 13: these days, and this is a heartbreaking, honestly days horrible
Speaker 13: days for Israel.
Speaker 3: And I'm sure that the audience share that with you.
Speaker 3: One of the reasons we asked you to come onto
Speaker 3: the program. Is that prior to the events of the weekend,
Speaker 3: you have been vocal about the judicial reforms in Israel
Speaker 3: and asking questions about what it meant for the technology
Speaker 3: sector long term. I believe you took some action moving
Speaker 3: company assets out of Israel in response to the judicial reforms.
Speaker 5: My question is what will you do next for.
Speaker 3: The operations of your business based on the weekends events?
Speaker 3: Do you intend to remain in Israel going forward?
Speaker 13: Yes, asy as our armies ray as our country. As
Speaker 13: we did in the last year, we always said that
Speaker 13: eventually we want to keep Israel a democratic country in
Speaker 13: order to assure that we can actually grow our business here,
Speaker 13: not to take it out of Israel. We are very
Speaker 13: proud of Israelis. We want to build Israeli companies. Obviously,
Speaker 13: we always build all companies. It's because Israeli is such
Speaker 13: a small market anyhow, and we always have global footprints.
Speaker 2: But nothing will change.
Speaker 7: In terms of our operation in Israel.
Speaker 13: We are here currently to do a very big efforts
Speaker 13: to fight for the freedom of this country, to bring
Speaker 13: things to normal. To obviously that leave the day after
Speaker 13: after those horror kinds of events and news and tons
Speaker 13: of death and people that have been lost in the
Speaker 13: last few days, but it does not affect us from
Speaker 13: being an Israeli eventually kind of a business and a company.
Speaker 7: And moreover, I do.
Speaker 13: Hope that the day after this terror will go back
Speaker 13: and people will understand that the most important thing in
Speaker 13: is Well is for us to be unite, is for
Speaker 13: us to remain a democratic country and to stop the
Speaker 13: internal conflict that has been cheering this country for so
Speaker 13: many months internally, and it's time to just eventually put
Speaker 13: them aside and go back to normal. I mean, we
Speaker 13: are one nation and I think everybody understand that we need.
Speaker 2: To be unite.
Speaker 4: Thank you so much for sharing your story, for really
Speaker 4: making the human side marry with what it is your
Speaker 4: longtime vision abuilt within Israel.
Speaker 2: PAPAA glob We'll see you. We thank you in it.
Speaker 3: Go as, stay stay ed, A lot mores come here
Speaker 3: on Bloomberg Technology.
Speaker 5: We'll have more headlines.
Speaker 3: From the sector, a big interview as well coming up.
Speaker 5: This is Bloomberg.
Speaker 4: Technology another Amazon Prime Day, Big Deals Day. It's cool
Speaker 4: and the tech giant is planning to bring customers the
Speaker 4: right deals and faster.
Speaker 2: And that's no easy task. We took a look at
Speaker 2: just how they're doing that.
Speaker 14: This Prime Day is getting more personal, so expect to
Speaker 14: see more deals based on your shopping history. Amazon says
Speaker 14: these kind of personalized deals led to all times more
Speaker 14: cust engagement during the last Prime Day, so for this sale,
Speaker 14: Amazon is doubling down with the help of larger, more
Speaker 14: advanced AI algorithms, learning what customers are shopping for and
Speaker 14: predicting what they'll want next. Amazon is also trying to
Speaker 14: get your purchases to you faster. We visited a same
Speaker 14: day delivery site in Richmond, California, about thirty minutes east
Speaker 14: of San Francisco, to see how sites like these are
Speaker 14: smaller than Amazon's fulfillment centers and located closer to larger
Speaker 14: metro areas. This facility can pick an item and get
Speaker 14: it boxed up in about eleven minutes, about an hour
Speaker 14: faster than an traditional fulfillment center. That's thanks to the
Speaker 14: help of these yellow pods and blue switches. They run
Speaker 14: on items that are stored and cataloged electronically, making it
Speaker 14: easy for employees to find the item and pick it.
Speaker 14: That package gets sent on a conveyor belt to a
Speaker 14: delivery sorting area of the site in a regular for
Speaker 14: fillment center, that's an entirely different building. Here, there's just
Speaker 14: a few steps away, so you can get the deal
Speaker 14: the same day.
Speaker 2: You order it.
Speaker 5: The most popular.
Speaker 15: Items delivered for same day sites are every day essentials
Speaker 15: like batteries, air pods, and espresso coffee pods. Amazon plans
Speaker 15: to build more of these smaller same day facilities in
Speaker 15: the next few years to speed up delivery times.
Speaker 3: Behind the scenes, I think we've got some good insight
Speaker 3: into producer piles of various wish list for water bottles
Speaker 3: and thermos flasks. Let's get right to what's happening on
Speaker 3: the ground and bring in Jamil Ghani, Vice president of
Speaker 3: Amazon Prime. You, Andy Jesse, other executives have been talking
Speaker 3: a lot about regionalizing. Regionalizing fulfillment basically the idea that
Speaker 3: the package that lands in your doorstep has come from closer,
Speaker 3: traveled less.
Speaker 5: Is it working that strategy. Yeah. Absolutely.
Speaker 16: We've been very excited to see that it gets the
Speaker 16: right product to the right customer faster than ever before,
Speaker 16: and that package is traveling less distance, so we're able
Speaker 16: to reduce that time from click to deliver, which our
Speaker 16: customers love.
Speaker 4: What's in herculean effort does that take, Jamil, I'm sorry,
Speaker 4: what sort of effort, what sort of investment, what sort
Speaker 4: of focus has that taken to just whittle down that
Speaker 4: timeframe with which you can get your package to you?
Speaker 16: Yeah, what we've done is make sure we have the
Speaker 16: right inventory and the right build all around the country.
Speaker 16: That we then make sure our site highlights that selection
Speaker 16: that customers can get. We use recommendations and personalization, including
Speaker 16: what we're going to be doing on the tenth and
Speaker 16: eleven with prime big deal days, to make sure that
Speaker 16: that product is highlighted to customers. And then the processes
Speaker 16: in the fulfillment centers have been simplified. It's fewer over
Speaker 16: the road miles, and so that's what's really the difference
Speaker 16: of getting your packaged the same day.
Speaker 2: And how much is that the focus of a consumer.
Speaker 4: It's interesting that we're talking about rising competition, whether it's
Speaker 4: coming from Timu, whether it's coming from China more broadly,
Speaker 4: but some of those packages take time. Is that the
Speaker 4: sort of winning formula to ensure that these new entrants
Speaker 4: do take too much away from you in terms of
Speaker 4: market share?
Speaker 5: You know, I think it's a good question, but Our
Speaker 5: focus is really on customer needs.
Speaker 16: Prime started with a very simple promise, you know, a
Speaker 16: million items available in two days, no limits guaranteed, and
Speaker 16: that those expectations have only increase over time. I've got
Speaker 16: two young kids at home, and I know when we
Speaker 16: find that we're out of something, where we need something,
Speaker 16: or we need to shop for that birthday happening tomorrow,
Speaker 16: you just want to get from you know, need to
Speaker 16: solution as quickly as possible. So that's what's really driving us,
Speaker 16: and the same day facilities are taking that to the
Speaker 16: next level.
Speaker 5: You know, customer needs.
Speaker 3: There is a question of whether one really does ever
Speaker 3: need something. And this is really an AI machine learning
Speaker 3: story because I assume that data is based on the user, right,
Speaker 3: their habits, their.
Speaker 5: Spend their history.
Speaker 3: That's right, So how does personalization result in them actually
Speaker 3: buying stuff that they haven't already bought before in the past.
Speaker 16: The way we think about it is we want to
Speaker 16: combine your purchase history, your browsing history, and then other
Speaker 16: engagement you have on the site, like engagement with lists.
Speaker 5: All of that information comes together.
Speaker 16: We add shopping trends, you know, what's really relevant in
Speaker 16: the season we're going into the holidays now, so Prime
Speaker 16: Big Deal Days is pulling all that information together and
Speaker 16: highlighting that selection. It's going to certainly highlight things that
Speaker 16: we know customers are going to like based in their
Speaker 16: past behavior, but we also intelligently want to surface up
Speaker 16: those things that they might discover, they might like, and
Speaker 16: might be inspired by. It's a combination of needs and wants,
Speaker 16: which I think makes for a great shopping experience. And
Speaker 16: that's what the event starting tomorrow is going to be
Speaker 16: all about.
Speaker 3: All things considered, the macro environment, the time of year,
Speaker 3: because timing with Prime Windows has changed. How big will
Speaker 3: this one be? Can you say with any confidence this
Speaker 3: will be the biggest.
Speaker 16: I can't ever predict how we'll go, but I know
Speaker 16: that everyone is looking to Carolina and I no one
Speaker 16: else is checking in. I think that we've got fantastic
Speaker 16: deals and it will be the most personalized experience we've
Speaker 16: ever had. Two or three years ago, we had one
Speaker 16: personalized deal feeds. Tomorrow, our customers will enjoy forty different
Speaker 16: personalized deal feeds. The homepage will be curated. Your homepage
Speaker 16: will be different than my homepage. Will also be recommending
Speaker 16: top brands. I mean might like four plus Star deal
Speaker 16: events that you might like, and so I think what
Speaker 16: you're going to find is that day felt really curated.
Speaker 16: This is going to feel even more so in the
Speaker 16: event starting tomorrow.
Speaker 4: Jamie Oldarnie, thanks for the time, Vice President of Amazon Prime.
Speaker 2: We thank you. We returned to our coverage of the
Speaker 2: Israel Hamas War. Professor Chuck Frelick is a former.
Speaker 4: Deputy National Security Advisor in Israel and wrote the book
Speaker 4: Israel and the Cyber Threat, How the startup nation became
Speaker 4: a global cyber power. And we are being asked time
Speaker 4: and time again, Professor, how Israel missed this?
Speaker 2: Was it a tech story?
Speaker 6: No?
Speaker 17: I don't think this was a tech story. I think
Speaker 17: this is a classic case of the colossal intelligence failure.
Speaker 17: It starts from, like all major intelligence intelligence failures, from
Speaker 17: a failure of imagination. You don't believe that your enemy
Speaker 17: has the capability to do something, and so you don't
Speaker 17: see the signs when it's happening.
Speaker 4: What could have been improved upon from your perspective, and indeed,
Speaker 4: what will be being used now to assess a threat level?
Speaker 17: Well, I think that there will be a deep investigation
Speaker 17: of the reasons for the failure, But most of that
Speaker 17: will have to remain after the war is over. What
Speaker 17: happened here is just something unprecedented in Israel's history, where
Speaker 17: Israeli territory was Israel itself, not the West Bank Settlement,
Speaker 17: Israel itself was occupied for a while a britief while
Speaker 17: and people take in hostage. This cannot be allowed to
Speaker 17: happen and will have to take measures to make sure
Speaker 17: it doesn't. It's going to be a protracted and unfortunately
Speaker 17: bloody war in Gaza, but it's one that Israel has
Speaker 17: to end this time, I think with a resounding victory.
Speaker 17: It can't be just a basis for some more time
Speaker 17: until the next round.
Speaker 2: Our time is too short with you.
Speaker 4: But if you go back to your time as Deputy
Speaker 4: National Security Advisor, advice right now to the leadership.
Speaker 17: That there has to be an absolutely conclusive victory this time,
Speaker 17: and that's probably going to mean occupying most of Gaza
Speaker 17: for a while, not long term.
Speaker 1: Usual doesn't want to be in charge of Gaza.
Speaker 17: Again, and it's going to mean trying to topple Ramas,
Speaker 17: and that also then begs the question, well, who takes
Speaker 17: over if Ramas isn't there, And that means Hopefully, maybe
Speaker 17: with international health American help sau the involvement, maybe we
Speaker 17: can see the Palestinian authority reinstated in Gaza.
Speaker 4: Professor, thank you so much for your time, your expertise.
Speaker 4: Professor Chuck Vilik, wish we had more time. We thank
Speaker 4: you for joining us from New York and San Francisco.
Speaker 4: This is Bloomberg Technology