Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg technology with
Speaker 1: Emily Jay. I'm emily check in San Francisco and this
Speaker 1: is Bloomberg Technology, coming up live in the next hour.
Speaker 1: It has been a tough year for tech titans everywhere,
Speaker 1: but there's one mega stand out and that is Mark Zuckerberg,
Speaker 1: his seventy one billion dollar wealth wipe out and how
Speaker 1: much the metaverse weighs on that loss. This hour plus
Speaker 1: how apple is quietly backing an association that brands itself
Speaker 1: is giving a voice to small business APP developers. They says.
Speaker 1: Big Tech comes under increasing scrutiny in Washington, and climate
Speaker 1: week is now underway in New York City. We're gonna
Speaker 1: take a look at one tech company helping other businesses
Speaker 1: fight climate change by taking a harder look at their
Speaker 1: own carbon footprint. I want to bring in Brent Thille
Speaker 1: of Jeffreys. Brent, we were just talking earlier about the
Speaker 1: big personal cost this has come when it comes to
Speaker 1: mark Zuckerberg's wealth. Um, you know what? Are you gonna realize?
Speaker 1: What are you going to decide if this pivot was
Speaker 1: really worth it? It's still years out. Emily, I think
Speaker 1: they've said the road to the men versus going to take,
Speaker 1: you know, multiple, multiple years. And it's not just facebook,
Speaker 1: it's the whole technico system that's gonna drive this forward.
Speaker 1: So this isn't going to be an overnight success. And
Speaker 1: then remember you have the the economy, which is pointing back.
Speaker 1: The first thing companies do when the macro economy gets
Speaker 1: tougher as they cut their AD dollars. So all social media, snap, twitter, facebook,
Speaker 1: you go across the board. Right they're all feeling the pain.
Speaker 1: As a global macro dims, you're going to see less
Speaker 1: ad dollar flow. So there's a double whammy right now.
Speaker 1: The metaverse investment combined with the headwind of of the
Speaker 1: macro and and I think for many in tech right
Speaker 1: now it's a it's it's a tough road ahead. Obviously
Speaker 1: a lot of the stocks already embedded a lot of
Speaker 1: the bad news, but what we're finding in this market
Speaker 1: is that the more bad news that keeps coming, these
Speaker 1: stocks really aren't embedding ahead of time. They continue the
Speaker 1: drift lower, and that's across tech. This isn't just a
Speaker 1: Meta issue. So that continues to be a big drag
Speaker 1: for tech in the in the short term. DO THE
Speaker 1: MEDICINE CONSIDER SPINNING OFF businesses like Instagram, for example, where
Speaker 1: there's just seemingly potentially a more reliable future profit engine?
Speaker 1: I don't think spinning is gonna change anything. I think,
Speaker 1: you know, many of asked on Amazon, why Dodn't they
Speaker 1: just spend any of the US off? And ultimately you
Speaker 1: don't want to. You know the analogy if you don't
Speaker 1: want to lose your star student in your household because
Speaker 1: it helps other other kids in the house right so
Speaker 1: if you think about either of us and Amazon or,
Speaker 1: for for facebook with with Instagram, it's their star right now.
Speaker 1: So I don't think they necessarily want to lose the
Speaker 1: star at this point. I don't think that's a a
Speaker 1: primary driver. At this point. It's a it's a possibility
Speaker 1: and certainly you can make the case, you know, for many,
Speaker 1: many tech comes that they could consider that at this point.
Speaker 1: But again, I think what we're dealing with is a
Speaker 1: global text storm that's impacting everyone and this isn't going
Speaker 1: to change, you know, anything in the short term. Investors
Speaker 1: Right now are out of the space. They want to
Speaker 1: see signs of recovery and and so I think this
Speaker 1: is a broader topic that goes beyond just just just facebook.
Speaker 1: But I don't I don't think in instagram split off
Speaker 1: is in the works right. But what is apple, Amazon, Microsoft, alphabet?
Speaker 1: What do they have that Meta doesn't have? Amazon's got
Speaker 1: a powerhouse and software. When you think about either of us,
Speaker 1: it's their profit engine, it's their get starts of growth
Speaker 1: and it's the most durable piece of the business. And
Speaker 1: and so why would you want to lose that business
Speaker 1: and spend it off? We can see it, we know
Speaker 1: the numbers. It's embedded in the business. We can see it.
Speaker 1: I think the challenge for for Instagram is we don't
Speaker 1: know all the exact numbers and so that's what's hard
Speaker 1: to ascribe the value forward and some of the parts.
Speaker 1: And so I think that that is the difference that
Speaker 1: Amazon for Microsoft, you know many of their clouds are intertwined,
Speaker 1: between the operating system and the cloud azure office. A
Speaker 1: lot of these clouds are intertwined. They're not going to
Speaker 1: spend many a talk when they spend the entertainment business off.
Speaker 1: I think they're pretty clear they're keeping it. So I
Speaker 1: don't think we're going to see a big shake up
Speaker 1: in terms of spinoffs because the market's gone down. This
Speaker 1: is a global macro pullback. The tech industry has to
Speaker 1: to to you know whether the storm, if you will,
Speaker 1: in the short term, and I think many of the
Speaker 1: multiples have already been been impaired Um. So perhaps we
Speaker 1: can see it at some point, but that's not really
Speaker 1: been a question we've been getting from investors at this point.
Speaker 1: I think the number one question is when does this
Speaker 1: thing turn around? And I think many still believe we
Speaker 1: can be in for a wild ride for tech into
Speaker 1: early twenty three, before technology comes really acknowledge the weakness
Speaker 1: in the overall global environment. Many have have not. They
Speaker 1: have not taken down guidance, they have not lowered the bar,
Speaker 1: and until the bars lowered, no investor wants to jump
Speaker 1: in the pool until they know the pools say so, Brett,
Speaker 1: we've got our big Bloomberg Tech siment coming up in
Speaker 1: London and we're gathering some content for our markets live blog.
Speaker 1: I have a question for you for that. Do you
Speaker 1: believe in the metaverse and do you believe it will
Speaker 1: change how businesses and people interact with each other in
Speaker 1: two years that's the time frame? Yes or no? No,
Speaker 1: do you know? I think it's gonna be longer out.
Speaker 1: I think it's gonna take time for the rest of
Speaker 1: the year. Go ahead. Yeah, I think that that this
Speaker 1: is a multi year journey. And and remember it's, you know,
Speaker 1: this is the remaking the Internet. It's it's the remaking
Speaker 1: of these experiences. It's, you know, ways that we can
Speaker 1: engage are as in business. Is the way that doctors
Speaker 1: and patients can engage as the way that the contractors
Speaker 1: and their their clients getting engage on on on the site.
Speaker 1: I mean there there is elements of the menams today
Speaker 1: that that that makes sense, but I think it's so
Speaker 1: long ways out. Often, I think when the investors here
Speaker 1: a new a new wave is coming, they suddenly throwing
Speaker 1: on their model and think it's going to be immediate overnight.
Speaker 1: I'm I'm very bolish about the opportunity said, but I'm
Speaker 1: actually think the opportunity is gonna take longer to come
Speaker 1: into the fold. UH, and they'll take it'll take time.
Speaker 1: That that's it'll take longer than two years first to
Speaker 1: really see this in a big way. All right, Brett,
Speaker 1: Phil Jeffrey's Tech Sector Leader Brett, always going to have
Speaker 1: you with us. Thank you for stopping by. Thank you.
Speaker 1: Now the major cinching ever closer. You might be able
Speaker 1: to bet on them and make real money. It has
Speaker 1: been years in the making, and now the CFTC is
Speaker 1: weighing a plan that could let people place as much
Speaker 1: as twenty thousand dollars on which political party will control Congress.
Speaker 1: That's the proposal from the predictions market operator cal she,
Speaker 1: the first regulated exchange for trading on events. It's Co
Speaker 1: founder and CEO, Tarik Manstor, joins me now. So why
Speaker 1: do you want to get into election betting, CARC? It's
Speaker 1: a great question, emily, and thanks for having me today. Um, so,
Speaker 1: election markets, or elections more broadly, are the single, one
Speaker 1: of the single biggest sources of economic risk of the country.
Speaker 1: And going back to calcy's mission, our mission is democratizing
Speaker 1: access to hedging tools, basically tools and financial instruments that
Speaker 1: allow people in small businesses to hedge risks that relate
Speaker 1: to their day to day there's nothing that exposes people
Speaker 1: in individual businesses to risk like an election. So that's
Speaker 1: how we're going for it. You could place as much
Speaker 1: as twenty five Tho dollars on which party wins Congress.
Speaker 1: That's a lot of money. Talk to me about how
Speaker 1: you think this plays out. Say this gets approved ahead
Speaker 1: of the mid terms. It's actually a very interesting, uh point. Um.
Speaker 1: So I'll go back a little bit to the history
Speaker 1: and how how we started CALCI so Um. You know,
Speaker 1: one of the idea came from one of my time
Speaker 1: at Goldman in sen where we actually structured derivative or
Speaker 1: exotic products that allowed big institutions to hedge election risks.
Speaker 1: These products were trading and the hundreds of millions, sometimes
Speaker 1: billions of dollars. Right. So, when you compared to that
Speaker 1: is actually quite a small number, Um, when you compared
Speaker 1: to to sort of the big amounts are currently and
Speaker 1: at the time and currently being traded on elections. You know,
Speaker 1: the hedging needs of people and businesses are big. You know,
Speaker 1: right now we're starting with a smaller sub set of
Speaker 1: the population, which is individual and small businesses, with smaller
Speaker 1: hedging needs, and we felt like an appropriate limit to
Speaker 1: to basically go for ahead of the mid terms. There's
Speaker 1: a broader Philical, philosophical question at play here, which is
Speaker 1: do you think betting on elections is good for democracy
Speaker 1: and could it influence the democratic process at all in
Speaker 1: a negative way? It's a great question. So, you know,
Speaker 1: any financial innovation since you know, I would say, dawn
Speaker 1: of time had had ethical considerations. Right Insurance, when it
Speaker 1: came in, it was like, Oh, is this? This? Is
Speaker 1: it okreated to bet on human lives, as the insurance
Speaker 1: is very important today, it was the same thing with
Speaker 1: great futures at the time in dres let's talk about elections.
Speaker 1: Elections are actually very broadly traded in democracies like the UK, Ireland,
Speaker 1: New Zealand and Australia, without any evidence at all of
Speaker 1: any sort of negative impacts. We've also had the platforms
Speaker 1: like predicted, which for eight years in the US, have
Speaker 1: a lot of people to trade on elections. Also no
Speaker 1: clear evidence of bad or negative impact. On the contrary,
Speaker 1: the things that we've seen, and you know this is why,
Speaker 1: you know, our proposal has been getting a lot of
Speaker 1: support and positive comments from organizations, economic economic professors and
Speaker 1: academics and others. What we've seen is that the markets
Speaker 1: are used because there is source of truth Um about
Speaker 1: what is actually happening with the mid terms and with polling.
Speaker 1: Average accuracy decreasing over the last ten years. This is
Speaker 1: a mechanism that allows us to actually get more informed,
Speaker 1: allow people to get more informed about what actually is
Speaker 1: about to happen and would allow to reduce polarization. Actually,
Speaker 1: one interesting comment that I want to mention is from
Speaker 1: Professor Jason Furman at Harvard, who under, who serve under
Speaker 1: the Obama Administration and talked in this comment letter about
Speaker 1: how the administration under Obama used these markets to inform
Speaker 1: public policy and forecast different outcomes based on the decisions
Speaker 1: they were making. Interesting. So you think this would be
Speaker 1: better than polls for democracy? I think. I definitely think
Speaker 1: this can be better than polls. And actually, you know,
Speaker 1: people don't need to believe me. They can see. The
Speaker 1: proof is in the putting Um. One example is our
Speaker 1: inflation markets over the last year have outperformed the economists
Speaker 1: survey well pretty much nine out of the last ten times,
Speaker 1: and so these markets are more accurate, accurate than polls,
Speaker 1: because in polls people can say anything and obviously the
Speaker 1: samples can be biased, etcetera, and we're seeing that with
Speaker 1: the elections. You know, the polls are contradicting each other
Speaker 1: and other things, whereas with the marketplace, like any financial marketplace,
Speaker 1: people have skin in the game and they're more incentivized
Speaker 1: to say the truth, which makes these markets essentially more
Speaker 1: accurate than any other alternatives. Now, one of your competitors, predicted,
Speaker 1: had an application for elections betting that, I believe, was
Speaker 1: rejected by the CFTC. What makes you think the CFTC
Speaker 1: is going to approve yours and what kind of questions
Speaker 1: have they been asking you? It's a great question. Actually,
Speaker 1: that company was innate X in two thousand and twelve
Speaker 1: Um and I think you know, over the last decade
Speaker 1: things have changed. A lot of the assumptions of the
Speaker 1: commission had made at the time have been sort of invalidated,
Speaker 1: but a lot of the activity that has been happening
Speaker 1: over the last ten years on the platform predicted, which
Speaker 1: has shown that actually none of the negative consequences that
Speaker 1: would come from these markets would happen and the contrary,
Speaker 1: these markets are in the public interest because of this
Speaker 1: forecast that they're bringing to the marketplace and because they're
Speaker 1: because they're allowing people and businesses to hedge risks that
Speaker 1: tie them to the elections and industries like energy, healthcare,
Speaker 1: climate and other types of industries. All right. So if
Speaker 1: this gets approved, when do you think that happens and
Speaker 1: and what are the odds? That's a great question. Um.
Speaker 1: So the CFC set to make a decision by October. Um,
Speaker 1: things are trending in the right direction. The common period
Speaker 1: and the comment letters have been overwhelmingly positive towards this proposal.
Speaker 1: Things have changed, you know. I'm going to quote a
Speaker 1: professor of Commonstrom that talks about this in an article
Speaker 1: where he says that investors are ready, the public is ready.
Speaker 1: It's really a question about whether regulators are ready. Um,
Speaker 1: I can all talk specifically about the odds. We're going
Speaker 1: through the regulatory, regulatory process, but I do hope that
Speaker 1: regulators already and we'll be ready to go, at least
Speaker 1: on the country side, once this get approved, and give
Speaker 1: us a sense of just how big the call sheet
Speaker 1: platform is today and how much bigger you think it
Speaker 1: can get, you know, by expanding into some of these
Speaker 1: additional areas. So, as you know, we've been launched for
Speaker 1: a little less than a year and I really feels
Speaker 1: like we're just getting started. We've listed over four thousand
Speaker 1: markets so far, so I would say we're probably the fastest,
Speaker 1: or definitely the fastest, derivers exchange in terms of listening markets. Uh,
Speaker 1: this last month we've reached ten million contracts traded on
Speaker 1: the exchange and we've been going really fast. Obviously, with
Speaker 1: the upcoming elections, these numbers are going to, you know,
Speaker 1: go up by fewers of magnitude. So really excited for
Speaker 1: what's ahead. All right, well, we'll be watching call sheet
Speaker 1: co founder and CEO, Tark Man stor. Thank you for
Speaker 1: joining us. While instacar reportedly plans to focus this I
Speaker 1: po on selling employee shares instead of raising capital for itself,
Speaker 1: according to The Wall Shereet Journal, Insta car executives have
Speaker 1: told perspective investor they don't plan an issue many new
Speaker 1: shares in the public offering. The company provides online grocery
Speaker 1: shopping services. And coming up, we're gonna take a deep
Speaker 1: dive into apple's influence over a trade group that represents
Speaker 1: APP developers and how it's lobbying agenda tracks very closely
Speaker 1: with that of Apple. What does it mean? That's next?
Speaker 1: This is Bloomberg. The APP Association brands itself as the
Speaker 1: leading voice for thousands of APP developers around the world.
Speaker 1: In fact, however, the vast majority of its funding comes
Speaker 1: from apple and the iphonemaker plays a eminent behind the
Speaker 1: scenes role in shaping the group's policy positions. BLOOMER's emily
Speaker 1: burr mom has been diving deep into this and joins
Speaker 1: us now for more so emily first of all talked
Speaker 1: to us why this APP Association and understanding its role
Speaker 1: in the broader Washington lobbying ecosystem matters. I think that Um,
Speaker 1: the APP Association and Apple's power over the group is
Speaker 1: representative of a larger trend in UH lobbying by the
Speaker 1: big tech companies. As they come under greater scrutiny from Washington,
Speaker 1: they're pouring more and more money into these you know, nonprofits,
Speaker 1: quote unquote grassroots groups. You know groups that represent more
Speaker 1: sympathetic Um characters than some of the largest and richest
Speaker 1: companies in the world. Um, and you know, apple's relationship
Speaker 1: with the AP Association is only a small Um sliver
Speaker 1: of it, but it is representative of how a lot
Speaker 1: of lobbying looks right now. So and talked to us
Speaker 1: about apple's role, how much funding they provide and how
Speaker 1: much influence they exert. So Um. I spoke with a
Speaker 1: lot of former employees and people who are familiar with
Speaker 1: the dynamics within the group and Um. They confirmed that Um,
Speaker 1: apple makes up more than half of their um annual contributions.
Speaker 1: Um and in that means that apple was giving at
Speaker 1: least Um, you know, four point five million dollars, and
Speaker 1: that is a pretty large price tag when it comes
Speaker 1: to Washington trade associations. Even the highest end are usually
Speaker 1: between one to two million dollars. Um and UH, former
Speaker 1: employees I spoke to said the percentage of their contributions
Speaker 1: probably much higher. Um and you know, in my conversations
Speaker 1: I learned that Um apple lobbyists and lawyers regularly weigh
Speaker 1: in on, you know, policy positions that the group should take,
Speaker 1: policy areas the group should focus on. If you look
Speaker 1: at Um, you know what the group advocates on. The
Speaker 1: most antitrust obviously the top priority for apple. Patents, you
Speaker 1: know certain kinds of patent reforms that apple has prioritized,
Speaker 1: such as something called Frand Um. Broadband also something apple's
Speaker 1: interested in. So Um there's pretty much a one to
Speaker 1: one relationship between their policy priorities and apples. Now, of course,
Speaker 1: all big tech companies have pretty immense lobbing operations. How
Speaker 1: does apple, in your experience, differ from, you know, an
Speaker 1: alphabet or a Meta or an Amazon? Apple, Um for
Speaker 1: years has distinguished itself from the other big tech companies
Speaker 1: by having a much more muted Washington presence. Um, you know,
Speaker 1: when Steve Jobs even was overseeing the first kind of
Speaker 1: entry into Washington, he said, I think our products will
Speaker 1: speak for themselves in the halls of Congress. You know,
Speaker 1: I don't think we have to play Um. Tim Cook
Speaker 1: has also carried this forward. I don't think we have
Speaker 1: to pay play the dirty Washington Game Games. You know,
Speaker 1: they don't have a pack, they don't give direct campaign contributions.
Speaker 1: But these last couple of years, in which apples come
Speaker 1: under the limelight, have really shown that they have to
Speaker 1: get engaged and they have to be, you know, uh,
Speaker 1: telling their story in Washington. They have to be spending
Speaker 1: money and now they're just kind of catching up with
Speaker 1: their peers. So what are you going to be following,
Speaker 1: especially as we get closer to mid terms? There's obviously legislation,
Speaker 1: important legislation, moving through Congress on big tech quickly. Yeah, Um,
Speaker 1: so it's becoming pretty clear that legislation is not coming
Speaker 1: to a vote before the mid terms. They're leaving open
Speaker 1: the possibility that it might come to a vote, Um,
Speaker 1: in the lame duck, you know, after the mid terms.
Speaker 1: That is incredibly unlikely. So Um, you know, if Republicans
Speaker 1: retake the house, as polls suggests they might, Um, probably
Speaker 1: antitrust will fall back, Um, you know, to back of
Speaker 1: the shelf and content moderation and censorship claims will come
Speaker 1: to the floor. So that's what I'm really looking at. Okay,
Speaker 1: I'm like and appreciate your perspective on all of us.
Speaker 1: As always. Thank you so much for joining us. Welcome
Speaker 1: back to bomore technology. I'm emily checking in San Francisco.
Speaker 1: Let's get back to the markets and our own lad
Speaker 1: who has been keeping an eye on Netflix and yeah,
Speaker 1: it was a really volatile session for Netflix, really pushing
Speaker 1: higher at the open, then swinging back down to a
Speaker 1: loss in the middle of the session, ultimately closing up
Speaker 1: one and a half percent. Of Catalyst, at least in
Speaker 1: the early part of this session, was an upgrade from Oppenheimer,
Speaker 1: the third upgrade we've seen from analysts this month, and
Speaker 1: I don't think you'll be surprised to hear them that
Speaker 1: they're really focused in on the potential for an advertising
Speaker 1: based tier of subscription price target three dollars, raising Netflix
Speaker 1: to outperform and there is a bit of momentum behind
Speaker 1: the stock in that sense. So that you come means
Speaker 1: my bloombow terminal. I've started this pay a lot of
Speaker 1: tension this because, give some context, Netflix is a stock.
Speaker 1: There's down six you see that on the white line
Speaker 1: in my screen behind me, and it's trading very close
Speaker 1: to the average twelve twelve month analyst price target. In
Speaker 1: other words, if you're down and you're trading at where
Speaker 1: the street thinks you'll be on a twelve month basis,
Speaker 1: there isn't much room for upside. So I think it's
Speaker 1: gonna be really interesting to keep an eye on Netflix
Speaker 1: and how much momentum does get behind this stock as
Speaker 1: we move towards an ad based tier for Netflix. I
Speaker 1: don't know if I'm I don't know about ads. M Yes,
Speaker 1: it's certainly would change the netflix experience. I got to
Speaker 1: think about that one. Okay, ed. Thank you. Meantime, Climate
Speaker 1: Week has now kicked off in New York City. This summit,
Speaker 1: taking place alongside the UN General Assembly, brings together international
Speaker 1: leaders from business, government and civil society to showcase global
Speaker 1: climate action talk about how tech can help with that.
Speaker 1: Christian Anderson, Co founder of watershed, of software platform that
Speaker 1: helps businesses get to net zero carbon faster, is with
Speaker 1: us now. Christian, thank you so much for joining us.
Speaker 1: So you know, the bigger questions. Are these big companies,
Speaker 1: tech companies in particular, actually making these hard decisions, making
Speaker 1: compromise and compromises to get to net zero faster? So
Speaker 1: watershed works with these large companies across industries, across geographies.
Speaker 1: That's tech companies like AIRBNB and door Dash. That's also
Speaker 1: big companies in other industries like Walmart, world's largest retailer,
Speaker 1: like some of the largest asset firms by assets under management.
Speaker 1: And our focus with these companies is take a data
Speaker 1: driven approach to their own supply chains. So for a
Speaker 1: long time corporate climate was synonymous with low quality offsets
Speaker 1: and not with actual reduction work on the company's own footprint,
Speaker 1: and that's where our customers are focusing. So our companies
Speaker 1: making hard choices. Sometimes, when you gather that data, uh,
Speaker 1: you might not like what it looks like. It is
Speaker 1: definitely true that every company who's new to climate work
Speaker 1: is surprised by something they learned in the data. But actually,
Speaker 1: I'd say on the positive side, where for companies, both
Speaker 1: cost reduction and investment in long term lower risk and
Speaker 1: better quality technology tend to go hand in hand with
Speaker 1: their climate work. Now, I think it takes the data
Speaker 1: to see that. But these companies I was mentioning, like
Speaker 1: Walmart or large asset managers, these are these are sophisticated
Speaker 1: businesses who are known for making business first decisions and
Speaker 1: who have chosen to double down and triple down on
Speaker 1: their climate work because these are positive investments for the
Speaker 1: company over the three plus year time horizon. So you
Speaker 1: would say that these companies are making those tough calls
Speaker 1: when faced with the choice. I would say so. I
Speaker 1: think the climate action that most companies are gonna take
Speaker 1: is the climate action that is in the intersection of
Speaker 1: good for the business and the return on investment for
Speaker 1: the business on the one hand, and also good for
Speaker 1: the climate on the other handling companies the the good
Speaker 1: news on climate now versus ten years ago? Is it
Speaker 1: ten years ago there just was not enough climate action
Speaker 1: that was in the money for businesses. A company that
Speaker 1: was profit motivated was not going to get far on
Speaker 1: its climate reduction. That has changed over recent years and
Speaker 1: technology progress is putting climate action more and more into
Speaker 1: the money for companies, where now it's the case that,
Speaker 1: I'd say, every large company with the operational control and
Speaker 1: its supply chain has available to it ten emission reductions
Speaker 1: that go hand in hand with sound business investment decision,
Speaker 1: and that that's what can be ubiquitous. Some companies will
Speaker 1: go out of the money on their climate work. What
Speaker 1: will become ubiquitous is climate action that's good of the business.
Speaker 1: Can you give us an example of where your technology
Speaker 1: helped and lead to a business making a certain decision
Speaker 1: that was really consequential? Absolutely so. Where businesses often focused
Speaker 1: early and where watershed directs companies is clean energy purchasing
Speaker 1: for the company and, over time, for their suppliers as well,
Speaker 1: where there's public case studies of companies who, by investing
Speaker 1: in first clean energy for their own what's called in
Speaker 1: the industry scope, to carbon footprint, and then second investing
Speaker 1: in energy purchasing for their tier one suppliers, like maybe
Speaker 1: the manufacturers that they work with directly, they can both
Speaker 1: reduce the carbon footprint which for most companies is almost
Speaker 1: entirely from the supply chain. I think people can think
Speaker 1: of corporate climate is like the lightbulbs in the office,
Speaker 1: but no, it's so much about supply chain, manufacturing, heavy industry,
Speaker 1: heavy materials. So redirect companies is to that supply chain,
Speaker 1: to clean energy investment first and then looking for suppliers
Speaker 1: with alternate agricultural or industrial practices that the company can
Speaker 1: preferentially purchase from in a way that then brings emissions down.
Speaker 1: What impact do you think President Biden's climate bill will
Speaker 1: actually have? I think the impact will be fantastic because
Speaker 1: it brings more carbon reduction into the money. Like this
Speaker 1: was a very business focused bill in a way that
Speaker 1: I think watershed and our customers found quite exciting, where
Speaker 1: it was all about subsidy of industry, manufacturing, clean technology
Speaker 1: development and deployment. So it expands that set of tech
Speaker 1: that is good for climate on the one hand and
Speaker 1: also in the money for businesses. Now will take years
Speaker 1: in some case to expand the envelope, but part of
Speaker 1: why I think the data that watershed provides is important
Speaker 1: to our customers is the decisions that they're making are
Speaker 1: often about capital investments that will pay off or not
Speaker 1: for their company long term. That's why the data feels
Speaker 1: high stakes, like what will be the return on investment,
Speaker 1: both from a financial and climate perspective? So these decisions
Speaker 1: often take years to play out on the multi year horizon.
Speaker 1: The Inflation Production Act, Biden Bill, I think it's going
Speaker 1: to be great for bringing more clean to technology into
Speaker 1: the money for businesses. Were obviously facing a global energy crisis.
Speaker 1: How do you expect that to impact tech companies decision
Speaker 1: making and, you know, some of the investments that they're
Speaker 1: they've been hoping to make, but you know, maybe the
Speaker 1: the energy crisis will make them think twice. Watershed has
Speaker 1: a front row seat on this decision making because the
Speaker 1: data that we look at for our companies is there,
Speaker 1: spend data and investment data globally outside the climate context
Speaker 1: as well, and the the energy crisis is going to
Speaker 1: be severe for many businesses in many geographies. The tail
Speaker 1: winds on climate investment, at least over the past three
Speaker 1: to six months, have been much stronger than any headwinds
Speaker 1: and climate investment remains very high. And then, second on
Speaker 1: the energy crisis in particular, it's this two edged sword
Speaker 1: where in the immediate term, countries and companies will rightly
Speaker 1: turn to whatever fuel sources is available, particularly to get
Speaker 1: through the winter, particularly in Europe. And then at the
Speaker 1: same time it's pushing companies to assess what is my
Speaker 1: carbon exposure and fossil fuel exposure in the supply chain,
Speaker 1: and I think companies play a very important role as
Speaker 1: early adopters in new energy sources and new energy projects.
Speaker 1: Off take agreements there to get projects rolled out and
Speaker 1: reduce that dependence in the longer term. All right, Christian Anderson,
Speaker 1: Co founder of watershed, thank you. got a big week
Speaker 1: covering climate tech coming up. Meantime, Twitter Co founder Jack
Speaker 1: Dorsey will be questioned under oath Tuesday and that but
Speaker 1: he's lawsuit against his longtime friend Elon Musk. According to
Speaker 1: court filings, Dorsey will be questioned by attorneys from both
Speaker 1: sides via zoom to day morning. Dorsey was subpoena at
Speaker 1: last month by Musk. Coming up, cryptocurrency slides to their
Speaker 1: lowest in months. We're gonna talk about the post merge slump,
Speaker 1: CRYPTO trends to watch and more with Michael Anderson, Co
Speaker 1: founder of framework ventures. This is Bloomberg, a slide of
Speaker 1: cryptocurracy sent bitcoin to a three month low Monday as
Speaker 1: sentiment took a knock from a wave of monetary tightening
Speaker 1: that's set to stretch from Europe to the US this week.
Speaker 1: And now that the etherory e merge is done, the
Speaker 1: second largest token, ether is at a two month low,
Speaker 1: unwinding its short lived jump in June, sparred by the
Speaker 1: hype around block the blockchain's upgrade. Want to break it
Speaker 1: all down now with Michael Anderson, Co founder of the
Speaker 1: D five focus venture capital firm framework ventures. So, Michael,
Speaker 1: what do you think is going on here? Are Slump
Speaker 1: in ether and Bitcoin as well? Yeah, well, I think
Speaker 1: over the last call of three to six months we've
Speaker 1: had the build up of the merge. The merge was
Speaker 1: highly successful last week, Um, and now I think we're
Speaker 1: entering that period of time where we're searching for a
Speaker 1: new narrative. Um. But really what we advise at framework
Speaker 1: for all of our portfolio companies or entrepreneurs that we
Speaker 1: meet with is to really take a longer term horizon
Speaker 1: perspective of these markets. It's really difficult when you have
Speaker 1: early stage technology meeting public market liquidity, uh, to not
Speaker 1: pay attention to the to the prices, but it's really
Speaker 1: important for all of the builders out there to keep
Speaker 1: their blinders on and just keep building. If you could
Speaker 1: pinpoint one or two things, is there something you think
Speaker 1: is behind this, whether it's valid or not? Well, I
Speaker 1: think maybe one of the ideas that was floated is
Speaker 1: just that this is the unwinding of a number of
Speaker 1: different trades that were put on that led up to
Speaker 1: the merge Um, and these trades to be basis trades
Speaker 1: or or people that you know took out positions and
Speaker 1: options or futures that related up to the merge itself Um,
Speaker 1: and I think the unwinding process, in the backdrop of
Speaker 1: a macro negative sentiment market um is going to have
Speaker 1: more volatility than you would expect if it was a
Speaker 1: different market um from a macro perspective. So what is
Speaker 1: the Crypto community buzzing about now that the merge has
Speaker 1: happened and what are you excited to invest in? Well,
Speaker 1: the marriage was only last week, so it's been just
Speaker 1: a little bit of time. But really, when we launched
Speaker 1: this most recent fund at the end of March, one
Speaker 1: of the feces that we had that was really poor
Speaker 1: to this new fund was was gaming and web three gaming,
Speaker 1: game five being the real narrative that we thought would
Speaker 1: take over, leading to hundreds of millions of consumers in
Speaker 1: the space with with Wallets, Um and transacting using these games.
Speaker 1: Uh and we think that that narrative is actually now
Speaker 1: in in the crosshairs of what's next, what's to come
Speaker 1: over the next three to six months. We think there's
Speaker 1: gonna be twenty to twenty five games that launch that
Speaker 1: have a more sustainable model than maybe what we've seen
Speaker 1: so far with with the lights of vaccin infinity Um
Speaker 1: and these games are being built by by people who
Speaker 1: build games before that are for the first time building
Speaker 1: in the blockchain space Um. So we're really excited to
Speaker 1: see these entrepreneurs come in and it's only gonna be
Speaker 1: a couple more months until we see these games launch.
Speaker 1: N F T S have been in a bus cycle,
Speaker 1: but since the merge we've seen N F T S
Speaker 1: gaining momentum, prices rising. Is this the rebound of the
Speaker 1: N F T marketer? Is this going to be short lived? Well,
Speaker 1: one of the things that I think is really important
Speaker 1: to note about the merge Um, and, and this is
Speaker 1: one of the success points is just the fact that
Speaker 1: you have the shift of proof of work to proof
Speaker 1: of state, representing the amount of energy uh in the
Speaker 1: size of the country of Finland Um. So that reduction
Speaker 1: in the amount of global energy consumption that is required
Speaker 1: to proliferate this network is a major change and I
Speaker 1: think the art world in particular has been one of
Speaker 1: the most negative against the proof of work consensus model
Speaker 1: because that's what's been required to use and transact in
Speaker 1: these N F t marketplaces. Now that we see the
Speaker 1: shift and the energy reduction, therefore, I think we're going
Speaker 1: to start to see a lot more activity in the
Speaker 1: N F t market because the narrative, the negative sentiment,
Speaker 1: is just gone at this point. Most most N F
Speaker 1: T S are transacted on proof of state changed after
Speaker 1: last week. Now I'm curious, given you know your former
Speaker 1: life at snapchat, where you were a product manager, what
Speaker 1: you think about the future of monetizing the metaverse. We
Speaker 1: were just doing the story earlier about how facebook Meta
Speaker 1: stock has plunged. Mark Zuckerberg has personally lost seventy one
Speaker 1: billion dollars, in part because investors just aren't excited about
Speaker 1: the metaverse or a skeptical about the metaverse. What do
Speaker 1: you think the opportunities are to monetize in the metaverse?
Speaker 1: Are you excited about it? Absolutely, Um. I think the
Speaker 1: definition of the metaverse is a bit of an heabulous one, though. Um.
Speaker 1: This is exactly why we're excited about games. Games represents
Speaker 1: not only a new platform for game developers to build
Speaker 1: on top of, but really what that means is a
Speaker 1: new monetization model where free to play games, which have
Speaker 1: historically monetized at a one to three rate, are probably
Speaker 1: going to have a different monetization model, different business model altogether,
Speaker 1: just based on the fact that you're imbuing a value
Speaker 1: into an n F T which to be represented in
Speaker 1: the game, which means that there's a secondary marketplace for
Speaker 1: it and you're not just spending to be able to
Speaker 1: spend in the game and then the second that you
Speaker 1: leave that game, you lose that value. I think that
Speaker 1: the ability for deam developers to think creatively about how
Speaker 1: these monetization models can interact with a new type of game,
Speaker 1: new type of ecosystem, which we might want to call
Speaker 1: the metaverse. Uh. That, I think, is a fundamental change
Speaker 1: and a fundamental shift. Um. So when we say we're
Speaker 1: excited about gaming. What we really mean is we're excited
Speaker 1: about the new business models for gaming, because those have
Speaker 1: been changing rap over the last couple of years. All right,
Speaker 1: lots to continue to watch. Michael Anderson, Co founder of
Speaker 1: the defy focus venture capital firm framework ventures, thank you
Speaker 1: for stopping by. Meantime, Uber said the hacker responsible for
Speaker 1: last week's data breach is affiliated with a notorious extoration
Speaker 1: group named lapsis. The group has targeted other tech companies,
Speaker 1: including Microsoft, Cisco, OPTA and Samsung just this year. Uber
Speaker 1: says it doesn't believe the hacker got into its public
Speaker 1: facing systems, like user accounts or databases that store sensitive information.
Speaker 1: The ride sharing company says it will continue to work
Speaker 1: with the FBI and the Department of Justice to investigate.
Speaker 1: The N F T craze was sweeping Hollywood, with celebrities
Speaker 1: and studios jumping on the non fungible train, but with
Speaker 1: Crypto syncing, the enthusiasm seems to be dwindling. Joining us
Speaker 1: now Bloomberg's Gasha, so interestingly, Lucas Post etherory emerge. The
Speaker 1: prices of N F T S have ticked up a bit,
Speaker 1: triggering some people to talk about maybe rebound. How is
Speaker 1: Hollywood thinking about N F T s? Well, everything in
Speaker 1: Hollywood is gonna come a little bit after what's happening
Speaker 1: in the market, because first you need someone to have
Speaker 1: an idea, then they have to sell it, then they
Speaker 1: have to get someone to fund it, then they have
Speaker 1: actually make it. Uh. You know, Hollywood, like most industries,
Speaker 1: got very excited about the potential of of N F
Speaker 1: T S and Web three. UH, late last year and
Speaker 1: early this year there were a lot of different projects
Speaker 1: either using N F P S as sort of a
Speaker 1: fan engagement tool or as the origin intellectual property or
Speaker 1: character upon which a property could be based. Um, some
Speaker 1: of those are still going but, as one person told me,
Speaker 1: most of the projects kind of dried up overnight earlier
Speaker 1: this year. who were the biggest celebrities who were really
Speaker 1: in on this, and does it seem like they're not
Speaker 1: into it anymore? Yeah, I mean you have a mix right.
Speaker 1: So there are the celebrities who just bought N F
Speaker 1: T s. You know, Jimmy Fallon bought a board, APE,
Speaker 1: Stephan Curry bought a board. Abe Reese Witherspoon was someone
Speaker 1: who is very into it. I think it's a mix
Speaker 1: right there. There, as in the kind of the broader market.
Speaker 1: There's some celebrities who, uh, we're just kind of interested
Speaker 1: in trying it out because it seemed like a quick
Speaker 1: way to make a money make money or because everyone
Speaker 1: else was talking about it, and then there's some people
Speaker 1: who are kind of true believers in its potential. I
Speaker 1: think most people were probably in the former camp just,
Speaker 1: you know, looking to try something out. Ref Reese Weatherston
Speaker 1: strikes me as someone who maybe they're not gonna end
Speaker 1: up being able to sell this unscripted show that they had,
Speaker 1: but will keep exploring and mining that area to see
Speaker 1: if there's some potential there. Shawn Mendez will see you
Speaker 1: know he was. He was just on the screen in
Speaker 1: that graphic. He and his producing partner did option uh
Speaker 1: an N F T as a potential character. Will you know?
Speaker 1: I have yet to find out if you're actually gonna
Speaker 1: make anything from that character, though. So your sense is that,
Speaker 1: you know, some folks in the media and entertainment industry
Speaker 1: will continue to try to explore this, but as of
Speaker 1: now attention is being diverted to other projects. I mean
Speaker 1: most of these these big media companies have far more
Speaker 1: pressing issues right now when it comes to, you know,
Speaker 1: slowing growth on their streaming services, whether we're going to
Speaker 1: enter a recession. There's some of these macroeconomic issues that
Speaker 1: make kind of sorting out fun more emerging technologies less
Speaker 1: of a big issue or not on the front burner.
Speaker 1: But there are people like Dave Brown, who is a
Speaker 1: kind of creator, the biggest loser, produced a bunch of
Speaker 1: shows for Netflix, very close friends with Netflix, co CEO
Speaker 1: Ted Surrando's and he basically stopped making film and TV
Speaker 1: and he has devoted himself full time to an N
Speaker 1: F T company. All Right, Lukashaw, thank you for joining
Speaker 1: us to Awa and on that we'll keep monitoring how
Speaker 1: these celebrities and media and entertainment companies continue to weigh
Speaker 1: in on N F T s. That doesn't for this
Speaker 1: edition of Bloom brick technology. Tomorrow we've got a conversation
Speaker 1: with California is Attorney General Rob Bonta his thoughts on
Speaker 1: state the state's antitrust suit against Amazon. Why? That is
Speaker 1: a big deal. You don't want to miss it and
Speaker 1: don't forget to check out our podcast wherever you get
Speaker 1: your podcasts. I'm emily changing in San Francisco, this is Bloomberg,