WEBVTT - Tech CEOs on Israel's Front Lines, Navigating Turmoil in Israel 0:00:01.360 --> 0:00:05.040 From mahard of where Innovation, Money and Power Collie in 0:00:05.160 --> 0:00:10.080 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde 0:00:10.080 --> 0:00:11.000 and Ed lud Love. 0:00:24.760 --> 0:00:27.120 I'm Caroline Heine, Blomberg's world headquarters. 0:00:26.640 --> 0:00:29.320 In New York, and I met Ludlow in San Francisco. 0:00:29.440 --> 0:00:31.000 This is Bloomberg Technology. 0:00:31.160 --> 0:00:31.600 Coming up. 0:00:31.600 --> 0:00:34.319 We'll bring you the latest updates from the Israel Hamas war, 0:00:34.360 --> 0:00:36.080 as fighting continues for a third day. 0:00:36.440 --> 0:00:39.280 Everything we know ahead, and we'll. 0:00:39.200 --> 0:00:42.559 Speak with technology executives who own and operate businesses in 0:00:42.680 --> 0:00:44.040 Israel for thee. 0:00:43.720 --> 0:00:46.320 On the ground and what it means for Israel's tech. 0:00:46.200 --> 0:00:49.239 Sector, as we'll look at what heightened geopolitical tensions mean 0:00:49.280 --> 0:00:52.440 for investors as markets face fresh volatility. 0:00:53.159 --> 0:00:56.120 But first we will get you the latest updates. 0:00:55.720 --> 0:00:58.040 Coming out of the Israel Hamas War. We want to 0:00:58.080 --> 0:01:01.280 go to our water on the ground, remogs Gallett Alstein, 0:01:01.320 --> 0:01:02.920 and is wonderful to have some time with you, Gallet 0:01:02.960 --> 0:01:05.600 and just bring us up to speed with just where 0:01:05.640 --> 0:01:08.160 you are and how it's all occurring at the moment. 0:01:08.240 --> 0:01:09.040 What's the latest? 0:01:09.920 --> 0:01:14.919 Yeah, so actually we're seeing us some development here today. 0:01:14.959 --> 0:01:18.520 I would say basically on three or four arm fronts 0:01:18.920 --> 0:01:22.160 all slightly different than one another. So on the southern front, 0:01:22.200 --> 0:01:26.559 where the attacks have been taking place since Saturday, we're 0:01:26.520 --> 0:01:31.520 all seeing the area more contained. Quite surprisingly, there are 0:01:31.560 --> 0:01:36.520 still infiltrations of attackers from Hamas from the Gaza Strip 0:01:36.560 --> 0:01:39.880 into the Gaza vicinity inside Israel, but we're seeing a 0:01:39.920 --> 0:01:42.840 lot less of that, and basically I would say that 0:01:43.240 --> 0:01:47.440 the entire area over there is now under control in 0:01:47.480 --> 0:01:49.920 that sense, in the sense of the infiltrations that we've 0:01:49.920 --> 0:01:54.520 been seeing over the last two days, the communities and 0:01:54.600 --> 0:01:57.680 the settlements that are very close to the Gaza offense, 0:01:57.760 --> 0:02:02.200 about twenty four settlements or being evacuated at this time 0:02:02.360 --> 0:02:07.480 of the residents. Another development we're seeing today over the 0:02:07.520 --> 0:02:11.280 last few hours is on the northern front. It is 0:02:11.320 --> 0:02:14.720 not major at this time, but that is something that 0:02:14.880 --> 0:02:17.360 is definitely attracting a lot of attention because you know, 0:02:17.720 --> 0:02:22.400 of the big questions now is whether Bala, on account 0:02:22.480 --> 0:02:26.960 of Iran, will be joining in, you know, with with 0:02:27.080 --> 0:02:31.160 the Gaza attentions and what is coming up there. So yeah, 0:02:31.280 --> 0:02:34.080 so so so so that has been escalating, but but 0:02:34.160 --> 0:02:36.720 a little bit. It's it's very it's very contained at 0:02:36.720 --> 0:02:39.320 this time, and it's nothing major, but but but it is. 0:02:39.840 --> 0:02:42.560 Happening, Jalit. 0:02:42.600 --> 0:02:46.480 What has been the government response Prime Minister Nsna who 0:02:47.040 --> 0:02:50.880 over the weekend had talked with the political opposition about 0:02:50.919 --> 0:02:54.440 a wartime government across party wartime government. 0:02:55.680 --> 0:02:58.440 Yeah, so so that is still definitely on the tables. 0:02:58.480 --> 0:03:03.200 There have been some talks to day between a team 0:03:03.280 --> 0:03:07.040 on account of Prime Minister in Attaliao and teams that 0:03:07.080 --> 0:03:11.400 are negotiating on behalf of opposition parties, mainly the party 0:03:11.480 --> 0:03:17.560 led by opposition leader Benny Gantz. So so so they're 0:03:17.600 --> 0:03:19.200 still talking talking about that. 0:03:19.280 --> 0:03:20.960 We do not know where it's going. 0:03:21.560 --> 0:03:24.720 It does look like there is a fair chance of 0:03:24.760 --> 0:03:30.079 that happening, especially with with the complex situation in Israel 0:03:30.160 --> 0:03:33.160 that has been very divided over the past few months 0:03:33.160 --> 0:03:38.200 over a government proposed judicial overhaul. So now to form 0:03:38.240 --> 0:03:42.640 a government, uh like that would sort of mean also, 0:03:43.000 --> 0:03:46.160 you know, in the sense of public opinion that you 0:03:46.160 --> 0:03:49.400 know Israel is putting all the differences aside and uniting 0:03:50.520 --> 0:03:53.640 in the front against the Hamas. So so that is 0:03:53.640 --> 0:03:55.440 still on the table and we're still waiting to see 0:03:55.480 --> 0:03:56.320 developments on that. 0:03:57.760 --> 0:04:01.200 All right, bloombergs gallet Austein, thank you very much. Let's 0:04:01.240 --> 0:04:04.960 get right to it now with Target Global partner Shmiel Chafets, 0:04:05.640 --> 0:04:08.760 who's joining us live from Israel, and Schmil, I want 0:04:08.800 --> 0:04:11.920 to explain to our audience what they're they're looking at, 0:04:12.000 --> 0:04:15.200 what they're about to hear. You are a venture capitalist 0:04:15.400 --> 0:04:20.560 normally based in Tel Aviv, but overnight you've volunteered to 0:04:20.680 --> 0:04:25.440 be a reservist by virtue of you being too old 0:04:25.480 --> 0:04:27.960 to be conscripted. I think I'm right in saying, and 0:04:28.040 --> 0:04:30.800 you have already been deployed. As best you can, just 0:04:30.920 --> 0:04:32.359 explain what you're doing. 0:04:33.760 --> 0:04:35.560 I think, unfortunately a muted thank you. 0:04:36.360 --> 0:04:39.520 I'm sorry, sorry, sorry, Unfortunately I'm a bit too old 0:04:39.520 --> 0:04:41.520 to get called up to my usual unit. 0:04:41.600 --> 0:04:43.400 But I did find myself. 0:04:42.960 --> 0:04:47.520 Some something useful to do, and I've been doing it 0:04:47.560 --> 0:04:51.760 since this morning, with many many others. 0:04:52.880 --> 0:04:58.200 So Shmiel, you're avenge capitalist that invests in Israeli startups. 0:04:58.720 --> 0:05:01.440 But I guess that the question this stage is why 0:05:01.480 --> 0:05:03.920 have you done this? Why have you felt compelled to 0:05:05.000 --> 0:05:09.400 put aside your day job and take on a deployment. 0:05:11.320 --> 0:05:12.479 I think we're in a war. 0:05:13.080 --> 0:05:16.120 This is a different situation than anything we've seen for 0:05:16.279 --> 0:05:20.880 fifty potentially for seventy five years Saturday was the bloodiest 0:05:20.960 --> 0:05:24.560 day in probably in Israeli history, Bloodier than any day. 0:05:24.440 --> 0:05:27.520 In the Yom Kipoor War in the War of Independence. 0:05:28.160 --> 0:05:32.960 Hundreds if not more of soldiers, but women, children, elderly 0:05:33.000 --> 0:05:38.400 people were killed in their beds in what is undisputedly 0:05:38.480 --> 0:05:42.600 Israeli territory. And I think, as in Israeli, it is 0:05:43.320 --> 0:05:45.560 my duty to all of our duty to come and 0:05:45.640 --> 0:05:49.240 protect our country this. I'm doing this for my kids 0:05:49.680 --> 0:05:53.480 because this war will be a big part of determining 0:05:53.920 --> 0:05:55.120 the country that they will live in. 0:05:55.600 --> 0:05:57.360 And this will not be I don't think this is 0:05:57.400 --> 0:05:59.920 going to be another operation like we've been accustomed to. 0:06:00.240 --> 0:06:01.040 This is a war. 0:06:01.800 --> 0:06:04.040 It is a war of different magnitude than what any 0:06:04.040 --> 0:06:07.320 of us I think have seen in at least in 0:06:08.160 --> 0:06:08.720 my memory. 0:06:09.839 --> 0:06:13.480 Well, this is a story of people, of family, of 0:06:13.520 --> 0:06:14.799 your children, as you cite. 0:06:15.400 --> 0:06:16.800 This is a story also. 0:06:16.600 --> 0:06:20.960 Of people trying to build economically, and indeed a time 0:06:21.000 --> 0:06:23.560 that you are someone that wants to see a thriving 0:06:23.600 --> 0:06:25.960 startup community, one which I think you have twenty four 0:06:26.000 --> 0:06:29.520 portfolio companies. It's hard to talk about business in a 0:06:29.560 --> 0:06:32.520 moment such as this, but how are you thinking about 0:06:32.560 --> 0:06:35.720 what this does to an economy, to the people who 0:06:35.720 --> 0:06:36.760 want to build. 0:06:37.760 --> 0:06:40.040 I think that what we're seeing today in Israel is 0:06:41.160 --> 0:06:43.279 the reason that Israel has been so successful as a 0:06:43.279 --> 0:06:43.880 startup nation. 0:06:44.760 --> 0:06:48.080 We're seeing hundreds of thousands of people. 0:06:48.360 --> 0:06:52.720 Getting out of their lives, getting into uniform in moments, 0:06:52.800 --> 0:06:56.680 and people have been just rushing into military service. 0:06:57.560 --> 0:06:59.280 They're actually in most of the phone calls that I'm 0:06:59.320 --> 0:06:59.720 getting there. 0:06:59.640 --> 0:07:02.520 About people being turned away trying to find a spot 0:07:02.640 --> 0:07:03.600 somewhere to go and fight. 0:07:04.960 --> 0:07:07.560 And a part of this, this is the social cohesion. 0:07:08.080 --> 0:07:13.280 This is the spirit of entrepreneurship that makes Israel successful 0:07:13.320 --> 0:07:15.080 as a startup nation, is what we're seeing today. 0:07:15.400 --> 0:07:16.760 I think this is an. 0:07:16.480 --> 0:07:19.800 Integral part of Israel actually, and I think one of 0:07:19.800 --> 0:07:23.440 the reasons that we will come out of this stronger 0:07:23.440 --> 0:07:27.920 and better the fact that this is really a civic 0:07:27.960 --> 0:07:31.240 society that knows how to how to also fight. And 0:07:31.960 --> 0:07:35.880 many of our portfolio companies, the CEOs developers are now 0:07:35.960 --> 0:07:39.680 fighting in different in different areas, and I think it's 0:07:39.720 --> 0:07:40.440 the way it's going to be. 0:07:40.560 --> 0:07:42.760 But when we get back to work, we'll get back 0:07:42.840 --> 0:07:43.280 full force. 0:07:43.880 --> 0:07:47.200 How are you using technology right now to inform yourself 0:07:47.320 --> 0:07:48.200 to stay connected. 0:07:49.720 --> 0:07:52.800 Well, luckily we have a good five G everywhere as 0:07:52.840 --> 0:07:55.480 real as a small country, so we have the luxury 0:07:55.480 --> 0:07:56.400 of being in a warzone. 0:07:56.400 --> 0:07:59.800 It has good, good enough coverage to do a video. 0:07:59.640 --> 0:08:02.160 Call as sure. 0:08:02.360 --> 0:08:04.560 And on that No, I just remind our audience that 0:08:05.400 --> 0:08:10.200 you're coming to us in military attire. You've volunteered for 0:08:10.240 --> 0:08:13.240 a deployment, but you are a bench capitalist. You know, 0:08:13.280 --> 0:08:15.600 you talked about some of the phone calls that you're getting, 0:08:16.480 --> 0:08:18.760 be it friends or industry partners. 0:08:18.800 --> 0:08:20.520 You have Israeli colleagues who. 0:08:20.360 --> 0:08:24.960 Are working at Target but deploying capital in Europe, in America. 0:08:25.960 --> 0:08:28.600 Do you think that any of your friends or partners, 0:08:28.680 --> 0:08:33.240 or indeed portfolio founders will come from overseas abroad back 0:08:33.280 --> 0:08:36.760 to Israel to join you in the initiative that you 0:08:36.800 --> 0:08:37.320 are taking. 0:08:38.320 --> 0:08:39.280 Yeah, I think many are. 0:08:40.640 --> 0:08:44.880 We've helped organize some planes for reserve soldiers who want 0:08:44.920 --> 0:08:47.840 to get back, and then many people are crowding the 0:08:47.840 --> 0:08:51.240 airport and the airport's trying to get back and help. 0:08:51.600 --> 0:08:54.319 And also we're getting a lot of support from our 0:08:54.440 --> 0:08:56.559 from Israeli, from our Jewish but also from our non 0:08:56.600 --> 0:08:58.320 Jewish friends and colleagues. 0:08:58.280 --> 0:09:01.200 In Europe, in the US in the Middle East. 0:09:01.960 --> 0:09:05.920 We're offering condolences, support and help them. 0:09:06.360 --> 0:09:07.600 So we're seeing a lot of outpart. 0:09:07.640 --> 0:09:10.199 I think people do understand that this is a very 0:09:10.240 --> 0:09:14.000 unique situation, probably once in a generation. 0:09:14.720 --> 0:09:18.400 Sorry to interrupt you, Caroline summarized it completely right that 0:09:18.480 --> 0:09:22.960 it's difficult to talk about business and operating right now. 0:09:23.559 --> 0:09:28.319 But what happens to your portfolio companies? Can you deploy capital? 0:09:28.400 --> 0:09:30.680 Is there a need to sort of deploy capital because 0:09:30.720 --> 0:09:36.040 of the situation in Israel and helping those companies continue 0:09:36.080 --> 0:09:39.640 to operate or are they able to continue with some normalcy. 0:09:41.000 --> 0:09:42.440 So I think Israel is very good. 0:09:42.280 --> 0:09:46.640 At continuing to operate normally in abnormal situations. And as 0:09:46.640 --> 0:09:49.960 far as the portfolio companies are concerned, you know, everybody 0:09:49.960 --> 0:09:54.360 have made arrangements to try to keep the businesses running, 0:09:54.400 --> 0:09:57.800 to have a business continuity. You know, CEOs have been 0:09:57.800 --> 0:10:01.400 called up, have been signing resolutions all morning, getting the 0:10:01.520 --> 0:10:05.760 new signatories set of CEOs that have joined, and I 0:10:05.800 --> 0:10:08.599 think we have definitely some people are now going to 0:10:08.679 --> 0:10:11.559 join up and will continue to work, and our colleagues 0:10:11.559 --> 0:10:14.880 abroad will come into work, so I think we will 0:10:14.920 --> 0:10:17.400 be able to operate close to normal as close to 0:10:17.400 --> 0:10:18.559 normal as possible. 0:10:18.200 --> 0:10:18.880 Even during the war. 0:10:19.160 --> 0:10:21.320 It's one of the things that happens in Israel because 0:10:21.320 --> 0:10:25.320 we are unfortunately useless. It happens not in this magnitude 0:10:25.320 --> 0:10:27.959 that has happened before. Our companies have plans for it, 0:10:28.600 --> 0:10:30.160 and they'll continue to operate. 0:10:30.800 --> 0:10:34.920 Business continuity, something unfortunately that you've had to understand and 0:10:34.920 --> 0:10:37.040 prepare for. And to that note, we had, of course 0:10:37.360 --> 0:10:41.080 galet Elstein on Elstein just a moment ago talking about 0:10:41.120 --> 0:10:44.960 the divisions in internal politics of late within Israel. How 0:10:45.040 --> 0:10:48.480 much has that affected business? How much has that affected 0:10:48.520 --> 0:10:50.760 the flow of money coming into Israel of late, if 0:10:50.800 --> 0:10:51.120 at all. 0:10:52.920 --> 0:10:53.520 I think that. 0:10:55.080 --> 0:11:01.880 It has affected, of course affected the Israeli economy. But 0:11:02.000 --> 0:11:04.520 I think it's absolutely not the time to deal with 0:11:04.559 --> 0:11:07.280 it right now is time for national unity. Now is 0:11:07.320 --> 0:11:11.040 the time to put our divide behind us and just 0:11:11.080 --> 0:11:12.640 to go to a fight. 0:11:14.160 --> 0:11:20.000 Smill from a unity standpoint that there are many global 0:11:20.040 --> 0:11:24.319 technology companies. Intel, for example, has twelve thousand people in Israel. 0:11:24.880 --> 0:11:29.319 They've made commitments to expand their fab way for fab 0:11:29.559 --> 0:11:33.719 manufacturing footprint there. But do you worry about the sort 0:11:33.760 --> 0:11:37.600 of long term attitude that global tech players who do 0:11:37.679 --> 0:11:40.760 have a really heavy footprint in your country. Now, now 0:11:40.840 --> 0:11:42.240 take how they view Israel. 0:11:45.000 --> 0:11:47.520 First of all, I hope they're view their commitment is 0:11:47.559 --> 0:11:50.560 long term, and I hope they'll understand that Israel still 0:11:51.160 --> 0:11:56.400 has a lot of unique talent to offer unique capabilities 0:11:56.480 --> 0:11:57.280 in the tech space. 0:11:57.360 --> 0:12:00.440 And I'm sure that once, once this ends, and it 0:12:00.520 --> 0:12:02.040 may take some time, but it will end. 0:12:01.960 --> 0:12:07.560 And we will win, they'll be back for force operating here. 0:12:09.320 --> 0:12:11.720 As they have for many years. I mean, Intel's been here. 0:12:11.600 --> 0:12:15.600 Through a lot and they've still thought it was worthwhile 0:12:15.640 --> 0:12:18.559 to continue to invest and I'm sure they will continue 0:12:18.559 --> 0:12:20.200 to do so in the future, as. 0:12:20.080 --> 0:12:21.240 Will you have. 0:12:21.320 --> 0:12:25.000 Of course, just been talking about the ecosystem. What makes 0:12:25.240 --> 0:12:29.160 entrepreneurial spirit different in Israel? Do you worry about talent 0:12:29.280 --> 0:12:32.160 the flow of talent? Do you ever concern yourself that 0:12:32.280 --> 0:12:35.240 people aren't like you, that they don't return to deploy 0:12:35.320 --> 0:12:40.319 money to make their headquarters within an Israel based business. 0:12:41.000 --> 0:12:43.280 I want to tell you that I think when we 0:12:43.360 --> 0:12:45.080 spoke last I think we talked a little bit about 0:12:45.120 --> 0:12:47.719 the political issues in Israel, and I think there was 0:12:47.720 --> 0:12:49.480 a flow of talent out of Israel. But I think 0:12:49.520 --> 0:12:51.880 after this there'll be a flow of talent back, because 0:12:51.920 --> 0:12:54.079 I think in the Israelis feel committed to this country, 0:12:54.760 --> 0:12:58.199 and when it is in trouble, they return, and I 0:12:59.320 --> 0:13:02.040 think there'll be a flow of talent back, not out 0:13:02.080 --> 0:13:03.360 of this, not out of his room. 0:13:03.400 --> 0:13:04.120 After the stands. 0:13:04.960 --> 0:13:08.760 You're referring to the reaction to the judicial reforms and 0:13:08.800 --> 0:13:11.240 the debate that that causing the country. Just very quickly 0:13:11.280 --> 0:13:14.240 before we let you go, will you continue doing deals? 0:13:14.280 --> 0:13:15.040 Target Global? 0:13:15.440 --> 0:13:17.400 Will you continue with rounds that you had in the 0:13:17.440 --> 0:13:19.720 works prior to the weekend's attack. 0:13:21.920 --> 0:13:22.560 Will continue. 0:13:22.559 --> 0:13:24.720 We have a big international team and our team will 0:13:24.760 --> 0:13:28.640 continue to work as as normal. We have a great 0:13:28.679 --> 0:13:31.160 team and a strong partnership. Will continue to work in 0:13:31.200 --> 0:13:34.160 the well. Each do our well, each do our bit. 0:13:34.960 --> 0:13:37.080 But we will continue and we're going to continue to 0:13:37.080 --> 0:13:39.880 meet all of our commitments to every Israeli company and 0:13:39.880 --> 0:13:44.319 continue to support our purporting throughout and at the same time, 0:13:44.360 --> 0:13:46.880 we're going to give resources to support people who need 0:13:46.920 --> 0:13:47.240 our help. 0:13:48.040 --> 0:13:49.000 Yeah, there are. 0:13:48.920 --> 0:13:52.200 A lot of Smill chae Fetes, Schmill Chaffetes of Target Global. 0:13:52.760 --> 0:13:55.320 We're very grateful for your time. You know, to our audience, 0:13:55.320 --> 0:13:59.959 you're joining us on deployment. You volunteered as a result. 0:14:00.400 --> 0:14:02.720 But your your day job is as a VC and 0:14:02.760 --> 0:14:06.000 we thank you for bringing us that venture capital perspective 0:14:06.440 --> 0:14:07.880 on literally on the ground. 0:14:07.920 --> 0:14:10.440 Thank you very much, Caroline, thank you for having me 0:14:11.440 --> 0:14:12.720 across the macro and the micro. 0:14:12.760 --> 0:14:15.199 There's so much still to discuss, particularly on the market impact. 0:14:15.280 --> 0:14:18.200 We have Tom Slater, who's head of US Equities at 0:14:18.200 --> 0:14:21.280 Bailey Gifford joining us next on the program. This is 0:14:21.280 --> 0:14:27.240 Bloomberg Technology. 0:14:33.440 --> 0:14:36.800 It is a day of geopolitical tension, is a day 0:14:36.920 --> 0:14:39.280 of volatility that's heightened in the markets and the impact 0:14:39.320 --> 0:14:43.240 that that has on or tech globally and indeed appetite 0:14:43.240 --> 0:14:43.640 for risk. 0:14:43.960 --> 0:14:45.200 But we're going to move into. 0:14:45.040 --> 0:14:48.680 How the implications are testing investor appetite right now with 0:14:48.840 --> 0:14:51.000 one key investor, Tom Slater, as head of US Equities 0:14:51.000 --> 0:14:54.240 over at Bailey Gifford. And Tom, we want to go 0:14:54.400 --> 0:14:56.400 broad with you and the holdings that you have and 0:14:56.440 --> 0:14:58.360 the tactics that you deploy with Bailey Gifford. But on 0:14:58.440 --> 0:15:02.520 a moment where we do see more of course, between 0:15:03.000 --> 0:15:05.920 Israel at the moment and Hamas, how are you thinking 0:15:05.960 --> 0:15:09.440 about that implicating some of the companies with which do 0:15:09.480 --> 0:15:11.480 business in the area, and whether or not it does 0:15:11.560 --> 0:15:13.920 change your sentiment on technology, writ large. 0:15:15.520 --> 0:15:19.680 Well, I think it's obviously a dreadful situation, but actually 0:15:19.800 --> 0:15:23.480 understanding what the long term implications of what's happening will 0:15:23.520 --> 0:15:27.040 be is just going to take time. And so the 0:15:27.080 --> 0:15:31.840 starting point from my perspective is that you just take 0:15:31.880 --> 0:15:34.560 your time and ask the question what's really going on here? 0:15:35.880 --> 0:15:38.880 And actually reacting trying. 0:15:38.640 --> 0:15:40.360 To think you know better than the market and the 0:15:40.360 --> 0:15:43.960 short run is not the right way to generate returns 0:15:43.960 --> 0:15:44.640 for your clients. 0:15:45.800 --> 0:15:48.920 Tom A question posed on Bloomberg Television throughout the day 0:15:48.960 --> 0:15:53.240 has been defense stocks or defense technology stocks and how 0:15:53.360 --> 0:15:56.200 much I guess of a knee jerk reaction it would 0:15:56.200 --> 0:15:58.360 be to think about that as a sector. 0:15:58.400 --> 0:16:00.200 What is your attitude towards event? 0:16:02.400 --> 0:16:05.240 Well, I think we own no defense stocks as the 0:16:05.280 --> 0:16:09.160 starting point, but I think you can see that there 0:16:09.680 --> 0:16:15.040 is clear pressure for NATO countries to increase their spending 0:16:15.120 --> 0:16:15.760 on this area. 0:16:16.640 --> 0:16:17.280 You know that. 0:16:17.120 --> 0:16:20.440 They have clearly been shortages in a number of areas 0:16:20.440 --> 0:16:23.200 that is going to require a structurally higher level of spend. 0:16:24.440 --> 0:16:26.000 So there is an interesting argument there. 0:16:26.000 --> 0:16:27.960 But I think as you in the way you ask 0:16:28.040 --> 0:16:31.120 the question about technology, I think one of the things 0:16:31.160 --> 0:16:35.800 that we've learned in in Ukraine over the past eighteen 0:16:35.800 --> 0:16:38.680 months is that actually things. 0:16:38.480 --> 0:16:39.400 Have moved on a lot. 0:16:39.720 --> 0:16:43.360 Whether we're at drones as an example of that, in 0:16:43.400 --> 0:16:46.360 the way that wars have been fought. So actually, as 0:16:46.360 --> 0:16:51.000 in most other areas, thinking carefully about how technology kind 0:16:51.000 --> 0:16:54.280 of have transformational impacts is just as important in defense 0:16:54.360 --> 0:16:57.160 as it is elsewhere. It's not about sort of taking 0:16:57.200 --> 0:16:59.840 that top, top down view and making an allocation. 0:17:00.720 --> 0:17:00.960 Tom. 0:17:01.000 --> 0:17:02.960 Talking of allocation, we're looking at some of the key 0:17:02.960 --> 0:17:04.840 holdings that you have. Of course, a trade desk shop 0:17:04.880 --> 0:17:06.680 of I in Vidia, Amazon, I. 0:17:06.640 --> 0:17:09.800 Mean in Vidia, of course an extraordinary. 0:17:09.720 --> 0:17:12.359 Rocket ship to have been aligning yourself with of late 0:17:12.400 --> 0:17:17.360 when that comes to elements of AI, but also geopolitically encircled. 0:17:17.400 --> 0:17:20.000 When we think about it, it's exposure to China. How 0:17:20.040 --> 0:17:23.280 do you discern which companys the ones which you want 0:17:23.359 --> 0:17:29.200 to be seeing emboldening and indeed allocating money towards well. 0:17:29.400 --> 0:17:32.720 I think if you stick with that example of Nvidia, 0:17:33.240 --> 0:17:36.680 we bought the stock in twenty and sixteen and we've 0:17:36.720 --> 0:17:42.280 been holders of continuously since, and the investment thesis is 0:17:42.320 --> 0:17:46.119 around the application of their technology. And if you go 0:17:46.200 --> 0:17:49.800 back to twenty sixteen. Yes, there's this opportunity in AI, 0:17:50.160 --> 0:17:55.120 but it's also in the data center, in self driving vehicles, 0:17:55.160 --> 0:17:58.840 in ARVR, so a technology which has really broad application. 0:17:59.440 --> 0:18:02.160 And then where you find a company that addresses such 0:18:02.160 --> 0:18:05.080 a big opportunity, The question is really how do you 0:18:05.119 --> 0:18:05.800 hold onto it? 0:18:06.480 --> 0:18:07.640 Because yes, you take this. 0:18:07.560 --> 0:18:10.200 As an example of one we've done well, and that 0:18:10.480 --> 0:18:13.320 in that intervening seven years, it's actually been a really 0:18:13.359 --> 0:18:16.240 quite difficult stock to hold on to. I think the 0:18:16.240 --> 0:18:19.360 peak to trough decline from twenty one to twenty two 0:18:19.440 --> 0:18:22.560 was sixty six percent. So how do you endure losing 0:18:22.640 --> 0:18:25.720 two thirds of your money through that period of ownership? 0:18:26.640 --> 0:18:27.199 And that is. 0:18:27.560 --> 0:18:30.000 Really about hold discipline. You know, the market likes to 0:18:30.040 --> 0:18:32.520 talk about sell discipline. Why do you sell a stock 0:18:32.840 --> 0:18:35.239 that always seems back to front to me? I think 0:18:35.320 --> 0:18:38.359 the discipline is in being able to own it through 0:18:38.440 --> 0:18:42.160 those difficult periods where your investment thesis, where your assessment 0:18:42.160 --> 0:18:44.800 of the upside is unchanged. And so that's I think 0:18:44.920 --> 0:18:47.840 the crucial characteristic of the way that we invest on 0:18:47.960 --> 0:18:48.640 behalf of our. 0:18:48.560 --> 0:18:52.520 Clients, Tom and Caroline. A piece of news overnight by 0:18:52.560 --> 0:18:56.159 the way Nvidia canceled its AI summit which have been 0:18:56.200 --> 0:19:00.320 scheduled for October fifteenth and sixteenth in Tel Aviv, and 0:19:00.400 --> 0:19:02.639 Jensen Huang was due to give a keynote. So just 0:19:03.240 --> 0:19:05.280 sort of updating our audience on there makes you think 0:19:05.280 --> 0:19:08.359 about supply chain. Let's go back to Israel, Tom. You 0:19:08.400 --> 0:19:11.800 know Intel had talked about expanding way for fab operations there. 0:19:11.960 --> 0:19:16.200 There's talent there. On Autonomy mobilized its biggest company by market. 0:19:16.000 --> 0:19:19.160 Cap or US listed. Is there a supply chain story here? 0:19:21.000 --> 0:19:25.200 Well, I think that the big supply chain story in 0:19:25.840 --> 0:19:31.440 semiconductors has really been driven domestically in the US with 0:19:31.600 --> 0:19:35.119 the inflation reduction acts, and what I observe is a 0:19:35.200 --> 0:19:38.680 huge amount of investment now going in into this crucial 0:19:38.680 --> 0:19:43.640 and particularly sensitive area to drive a much more. 0:19:45.280 --> 0:19:48.480 Local supply chain. And I think that's it's much. 0:19:48.359 --> 0:19:52.800 More complex than just adding capacity because there's there's all 0:19:52.840 --> 0:19:55.960 the training and upskilling that you need to do to 0:19:56.680 --> 0:19:59.800 because of that. But I think this is what the 0:20:00.080 --> 0:20:02.679 of the events of the past few days are just 0:20:03.520 --> 0:20:07.359 another example of why that is so important. 0:20:07.440 --> 0:20:09.000 Strategically for the US. 0:20:09.280 --> 0:20:12.320 And then it's thinking through, well, who are there, who 0:20:12.359 --> 0:20:14.600 are the beneficiaries there, who are the ones that can 0:20:14.640 --> 0:20:19.200 actually enable that policy. Because when there is so much 0:20:19.240 --> 0:20:23.119 investment going in, it's always interesting to follow the money. 0:20:23.520 --> 0:20:26.560 Where are the opportunities being created? And I think domestically 0:20:26.600 --> 0:20:28.720 in America that's that's one of that's really interesting. 0:20:29.440 --> 0:20:31.639 Tom Slater, Belly Gifford. We follow the money here on 0:20:31.640 --> 0:20:33.840 Bloomberg Technology as well. Thank you for your time. 0:20:42.160 --> 0:20:45.440 Well, amid the start of Israel Hamas War, historic meeting 0:20:45.440 --> 0:20:47.800 occurred actually in China between President hy Jumping and Buy 0:20:47.840 --> 0:20:50.680 Batteris and group of US lawmakers that by Senate Majority 0:20:50.840 --> 0:20:53.760 Leader Chuck Schumer. Let's get more context, Kaylee Lines standing 0:20:53.800 --> 0:20:55.560 by in Washington, and Israel was discussed. 0:20:56.960 --> 0:21:00.320 It was Chuck Schumer, the Senator Democratic Majority leader, pushed 0:21:00.359 --> 0:21:03.480 China to strengthen their language around what Hamas had done 0:21:03.680 --> 0:21:04.280 in Israel. 0:21:04.320 --> 0:21:04.640 He said. 0:21:04.640 --> 0:21:06.520 He pointedly asked them to do so, and they did 0:21:06.560 --> 0:21:08.680 indeed strengthen their segment statement. 0:21:08.680 --> 0:21:10.320 But that isn't all that this visit was about. 0:21:10.320 --> 0:21:13.240 It also was really about economics. Chuck Schumer in this 0:21:13.320 --> 0:21:15.800 meeting with shijhiin Ping, the first time Shiji Ping has 0:21:15.840 --> 0:21:18.359 met with US senator since twenty fifteen. Mind you said 0:21:18.520 --> 0:21:21.960 that this really was about ensuring economic reciprocity, and he 0:21:22.040 --> 0:21:25.040 said that they feel China must provide a level playing 0:21:25.080 --> 0:21:28.119 field for American companies and workers, echoing what we've heard 0:21:28.160 --> 0:21:30.560 from the Lakes of Commerce Secretary Gina Ramondo. 0:21:31.560 --> 0:21:34.119 All right, Bloombo's Katie lines out of DC, thank you, 0:21:42.680 --> 0:21:43.960 welcome back to BlueBag Technology. 0:21:43.960 --> 0:21:45.680