WEBVTT - TikTok CEO on Capitol Hill and Hindenburg Shorts Block 0:00:01.480 --> 0:00:06.720 From hard of were Innovation, Money Empower Colne in Silicon Valley, NBR. 0:00:07.080 --> 0:00:11.119 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.040 --> 0:00:27.560 I'm Caroline Hyde of Bloomberg's World headquarters in New York. 0:00:27.640 --> 0:00:31.080 Ed Ludlow is off today. This is Bloomberg Technology. Coming up, 0:00:31.120 --> 0:00:33.479 we go live to Capitol Hill where the CEO of 0:00:33.520 --> 0:00:36.919 TikTok is defending his company against the US lawmakers who 0:00:36.920 --> 0:00:39.760 are calling for a band. We're bringing the details, and 0:00:39.880 --> 0:00:43.560 short seller Hendenberg Research targeting block with its latest report. 0:00:43.560 --> 0:00:47.000 We break down what's about cash app Unit in particular 0:00:47.240 --> 0:00:50.120 that it's concerned about as the payments company plunges in trading, 0:00:50.360 --> 0:00:54.800 Plus lights Camera, Apple, the iphonemaker spending billions to break 0:00:54.840 --> 0:00:57.480 into show business, more on the company's plans to raise 0:00:57.520 --> 0:01:00.840 its Hollywood profile, and a low subscribers to streaming service, 0:01:01.160 --> 0:01:04.320 all that so much more. Coming up meanwhile is Apple 0:01:04.400 --> 0:01:06.160 and some of the big techs seeming like some sort 0:01:06.200 --> 0:01:08.039 of haven on the day. We're currently seeing the naszack 0:01:08.080 --> 0:01:10.360 up more than two percentage points, even though we continue 0:01:10.400 --> 0:01:12.120 to worry about some of the solidity in the banks. 0:01:12.120 --> 0:01:14.680 Today the stock six hundred is actually down on the 0:01:14.760 --> 0:01:18.240 day largely dragged down by those banking stocks over in Europe, 0:01:18.319 --> 0:01:20.680 the Pound. Want to keep an eye on Europe still trading, 0:01:20.680 --> 0:01:22.679 of course, the pound up four tenths of percent as 0:01:22.720 --> 0:01:24.880 we do. Indeed, see the Bank of England light the 0:01:24.959 --> 0:01:28.000 United States Federal Reserve high grates by twenty five basis points. 0:01:28.120 --> 0:01:30.080 Moving on, that's the macro picture for all of your 0:01:30.080 --> 0:01:32.679 technology investors out there. I'm looking at what's happening in 0:01:32.720 --> 0:01:35.080 bitcoin though, because once again is this a haven of choices. 0:01:35.120 --> 0:01:36.920 It's a move that we see as we still worry 0:01:36.959 --> 0:01:39.160 and remain cynical around a banking industry. Here in the 0:01:39.240 --> 0:01:41.920 United States, we're up five percent over the course of 0:01:42.000 --> 0:01:43.800 just US trading day alone. But we want to dive 0:01:43.840 --> 0:01:45.920 into the micro moves that are so important on the day. 0:01:46.160 --> 0:01:48.880 Let's going over to bring most critic up to Yeah. Well, Carolin, 0:01:48.920 --> 0:01:50.440 you've covered the macro pretty well with getting to the 0:01:50.480 --> 0:01:52.480 micro some major movers to your point, and we are 0:01:52.480 --> 0:01:54.800 seeing a lot of that kind of green on the 0:01:54.800 --> 0:01:59.280 screen coming from a technology space. You're more biggest INDESK contributors, Apple, Amazon, 0:01:59.360 --> 0:02:02.920 and Bidea is really in kind of focus here, and 0:02:02.960 --> 0:02:04.600 I really want to talk about some of the downside 0:02:04.600 --> 0:02:07.080 movers here because to your point, Caroline, those crypto stocks 0:02:07.120 --> 0:02:10.399 are getting hit hard, but not necessarily for the fundamental reasons. Look, 0:02:10.600 --> 0:02:13.600 I mean the macro reasons. The Block story is fascinating. 0:02:13.639 --> 0:02:16.800 Hindenburg Research coming out with the short report saying, look, 0:02:16.960 --> 0:02:19.280 they are concerned about Block and the financing. They're the 0:02:19.280 --> 0:02:22.400 Block formerly known as Square, Jack Dorsey's baby, basically that 0:02:22.520 --> 0:02:24.919 sending the shares down about thirteen and a half percent. 0:02:25.280 --> 0:02:27.760 We are still, of course waiting for comment from Block 0:02:27.880 --> 0:02:29.880 as well. We want to talk about coin base getting 0:02:29.960 --> 0:02:32.880 quite the hit after the SEC yesterday after hours put 0:02:32.919 --> 0:02:35.760 it on notice when it comes to some of their offerings. 0:02:35.800 --> 0:02:37.760 This is really important in the crypto space because one 0:02:37.800 --> 0:02:41.120 of the big issues has simply been crypto ETFs and 0:02:41.160 --> 0:02:43.880 whether or not they can actually pass as a real 0:02:44.120 --> 0:02:47.280 moving vehicle. The upside their story is interesting, Caroline. At 0:02:47.280 --> 0:02:50.639 the top you mentioned that TikTok hearing over in Congress. 0:02:50.639 --> 0:02:53.240 You are seeing snapshares rally off that. Remember, Snap is 0:02:53.240 --> 0:02:55.840 one of the major benefactors. If TikTok isn't the band 0:02:55.840 --> 0:02:58.639 at least on government devices stay side and around the world. 0:02:58.639 --> 0:03:01.520 So snapshares highed by four point four percent and Netflix. Look, 0:03:01.560 --> 0:03:03.760 there's no fundamental reason here yet for Netflix, but you 0:03:03.840 --> 0:03:05.880 have to know a nine percent rally is nothing to 0:03:05.919 --> 0:03:09.280 scoff at one of the biggest heavy volume trades. Who 0:03:09.320 --> 0:03:12.440 are seeing today some rumors about kind of funding from Apple. 0:03:12.480 --> 0:03:14.519 But it's really something to keep an eye on. Caroline, 0:03:14.560 --> 0:03:16.920 pretty good to such a great wrap up. Thank you. 0:03:17.280 --> 0:03:19.680 Let's get back to the key story of a Day, 0:03:19.680 --> 0:03:22.440 which is called TikTok CEO show to testifying on Capitol 0:03:22.520 --> 0:03:25.720 Hill as lawmakers call for a band. Here's just some 0:03:25.760 --> 0:03:28.040 of what he's had to say earlier about Chinese access 0:03:28.080 --> 0:03:31.360 to its user data. I have seen no evidence that 0:03:31.480 --> 0:03:34.120 the Chinese government has access to that data. They have 0:03:34.200 --> 0:03:36.200 never asked us. We have not provided well in a 0:03:36.240 --> 0:03:39.760 way I've asked that I find that actually preposterous. I 0:03:39.880 --> 0:03:42.480 have looked in I have seen no evidence of this happening. 0:03:42.880 --> 0:03:45.920 And in order to assure everybody here and all our users, 0:03:46.400 --> 0:03:49.440 our commitment is to move day data into the United 0:03:49.480 --> 0:03:52.840 States to be stored on American soil by an American company, 0:03:52.840 --> 0:03:56.920 overseen by American personnel. May we go now to Capitol Hill, 0:03:57.040 --> 0:04:00.560 where not only a show to still being testified, over there. 0:04:00.560 --> 0:04:03.680 But Alex Sperenca is standing by to bring us anything 0:04:03.680 --> 0:04:07.040 that actually we've learned that is new, anything in the arguments, 0:04:07.080 --> 0:04:12.640 the nuances that we hadn't heard before. So show Chu 0:04:12.800 --> 0:04:14.680 is really coming in with a lot of what we've 0:04:14.680 --> 0:04:17.920 heard before, and that doesn't seem to be wooing what 0:04:17.960 --> 0:04:21.279 we knew to be some skeptical lawmakers. Lawmakers started this 0:04:21.320 --> 0:04:23.760 testimony which is still on going just behind me in 0:04:23.800 --> 0:04:27.560 front of a packed room, basically trying to establish the 0:04:27.680 --> 0:04:31.760 TikTok connection to China. Chu was queried on who prepped 0:04:31.839 --> 0:04:34.520 him for this testimony. Was it anyone from Mite Dance? 0:04:34.839 --> 0:04:38.159 How often does he talk to Chinese executives? Has he 0:04:38.279 --> 0:04:41.640 heard from anyone from in the Chinese Communist Party? It 0:04:41.720 --> 0:04:44.720 was basically an establishment from these skeptical lawmakers to try 0:04:44.720 --> 0:04:49.159 to connect TikTok to China. Now Chu has come back 0:04:49.320 --> 0:04:52.280 with a lot of the facts we've heard before that 0:04:52.360 --> 0:04:55.560 he is working on coordinating off user data here in 0:04:55.600 --> 0:04:58.279 the US, that he does not talk to the Chinese 0:04:58.279 --> 0:05:01.400 Communist Party. But I will tell you, Caroline, based on 0:05:01.680 --> 0:05:03.280 kind of him being cut off by a lot of 0:05:03.320 --> 0:05:07.120 these lawmakers, based on the times that the chairwoman has 0:05:07.160 --> 0:05:10.080 not allowed him to respond to questions. It doesn't seem 0:05:10.120 --> 0:05:12.240 like he's making any headway with this group in the room. 0:05:13.080 --> 0:05:15.200 It really is notable as we still go to the 0:05:15.279 --> 0:05:18.039 room and say, we've got a wonderful tea live blog 0:05:18.080 --> 0:05:19.880 going on the Bloomberg terminal, Alex that I know you're 0:05:19.880 --> 0:05:21.960 contributing to, as well as some of our other reporters. 0:05:21.960 --> 0:05:25.039 Brodie Ford saying that at the moment a Georgia Republican 0:05:25.160 --> 0:05:29.000 Buddy Carter, once again talking about deadly TikTok challenges, that 0:05:29.080 --> 0:05:31.760 seems to be really the emotive subject, isn't it children 0:05:31.800 --> 0:05:37.120 in particular? There it was, and I will tell you 0:05:37.120 --> 0:05:39.920 the room got very quiet earlier in the day when 0:05:39.960 --> 0:05:43.479 a number of videos of users talking about suicide were 0:05:43.560 --> 0:05:46.520 played for the committee, and that seems to be kind 0:05:46.560 --> 0:05:49.320 of the emotional heartstrings that the lawmakers are pulling on. 0:05:49.600 --> 0:05:52.640 What is TikTok doing to protect our children? Now? Sho 0:05:52.680 --> 0:05:55.840 did come back and say we have strong content moderation policies. 0:05:56.040 --> 0:05:58.440 We are putting in time limits for users under the 0:05:58.480 --> 0:06:01.040 age of eighteen. But I will how you those answers 0:06:01.040 --> 0:06:04.880 as well were responded to by the lawmaker saying that's 0:06:04.920 --> 0:06:07.240 not enough. I hear what you're doing now, but I 0:06:07.279 --> 0:06:10.320 need you to commit to more brief recess has been cooled. 0:06:10.320 --> 0:06:12.320 It's going to get busy in that corridor with you. Alex. 0:06:12.440 --> 0:06:15.160 Just set the scene a little bit, because you did 0:06:15.160 --> 0:06:18.360 a wonderful piece of digging on really the Ventia community 0:06:18.400 --> 0:06:21.760 in and around the relationship, broader relationship between US and China. 0:06:21.800 --> 0:06:24.200 There was an important dinner last night with an old 0:06:24.240 --> 0:06:28.520 coastala there. We understand Peter tale as well, what are lawmakers? 0:06:28.560 --> 0:06:31.919 Who are lawmakers listening to aside from the leader TikTok? 0:06:34.400 --> 0:06:37.159 That's right, literally with an eye shot across the lawn 0:06:37.360 --> 0:06:39.960 from Capitol Hill, the Hill and Valley Foundation where Peter 0:06:40.040 --> 0:06:43.960 TiAl spoke last night was again this kind of line 0:06:44.200 --> 0:06:49.200 of anti China sentiment. Basically, Peter Teal compared TikTok to 0:06:49.240 --> 0:06:51.680 the US homeless problem, saying it's something that we just 0:06:51.800 --> 0:06:54.760 can't fix. So there are folks on both sides of 0:06:54.760 --> 0:06:57.240 the coast here in the US who are definitely not 0:06:57.320 --> 0:06:59.599 on TikTok side. And I will tell you in terms 0:06:59.640 --> 0:07:02.120 of lies here on the Hill, TikTok has had a 0:07:02.120 --> 0:07:05.040 few We heard Representative Jamal Bowman speak yesterday at a 0:07:05.080 --> 0:07:07.799 TikTok event on the lawn outside of the Capitol building. 0:07:07.920 --> 0:07:11.360 But there are not very many voices who are piping up. 0:07:11.400 --> 0:07:14.200 And we've heard during this hearing from the other House 0:07:14.280 --> 0:07:17.200 from senators who are also coming out with some strong 0:07:17.320 --> 0:07:21.120 calls to continue to try to be on TikTok. Alex Brinka, 0:07:21.280 --> 0:07:22.960 We'll let you get back to trying to speak to 0:07:22.960 --> 0:07:25.440 some of those lawmakers. We thank you so much. Meanwhile, 0:07:25.440 --> 0:07:28.000 we got another one for you right now, Representative Jim 0:07:28.120 --> 0:07:30.840 Himes of Connecticut, who is on the House Select Committee 0:07:30.880 --> 0:07:34.000 on Intelligence, so deep knowledge on perhaps some of the 0:07:34.080 --> 0:07:36.120 data issues at stake here with TikTok, as well as 0:07:36.120 --> 0:07:39.320 of course the financial services is another area that you oversee, Jim, 0:07:39.760 --> 0:07:42.280 and accomplishment is great to have some time with you. Please, 0:07:42.320 --> 0:07:43.920 can you just talk to us a little bit about 0:07:45.280 --> 0:07:48.880 in February you said you're not quite there yet about 0:07:48.880 --> 0:07:51.640 an idea of imposing an outright ban on TikTok. You 0:07:51.680 --> 0:07:53.600 needed to learn more. Do you feel you've learned more 0:07:53.640 --> 0:07:57.040 to make a decision yet? No, I haven't. And let's 0:07:57.040 --> 0:07:59.000 face it, we're not doing a lot of learning today today. 0:07:59.000 --> 0:08:01.080 As one of those moments the Congress where a witness 0:08:01.080 --> 0:08:03.040 gets beat up, the witness is not allowed to answer 0:08:03.040 --> 0:08:05.559 the questions. You know, this is a moment of people 0:08:05.600 --> 0:08:08.720 expressing emotion. And I think, look, I've said this before. 0:08:08.760 --> 0:08:10.960 I work a lot in national security. TikTok is not 0:08:11.040 --> 0:08:13.120 on my phone, It's not anywhere near my phone, and 0:08:13.160 --> 0:08:16.640 people in sensitive positions, because of course TikTok is probably 0:08:16.680 --> 0:08:19.600 more accessible to the Chinese government than most platforms. Shouldn't 0:08:19.600 --> 0:08:21.640 be on anybody who's a phone who does this stuff. 0:08:21.720 --> 0:08:24.840 But look, an outright ban. This is a deep breath moment, 0:08:24.920 --> 0:08:27.800 right because the American people need to reflect on the 0:08:27.880 --> 0:08:31.680 equities associated with saying sorry, the federal government is not 0:08:31.800 --> 0:08:35.480 going to let you use this media. And my question is, 0:08:35.480 --> 0:08:37.720 where's the limiting principle? What if, all of a sudden 0:08:37.720 --> 0:08:39.640 we get really angry at Belarost, does that mean that 0:08:39.679 --> 0:08:43.040 we ban access to Belarusian newspapers. All I'm saying here 0:08:43.240 --> 0:08:45.400 is that we need to think about what we really 0:08:45.440 --> 0:08:48.400 want to do about this. The CEO apparently this morning 0:08:48.440 --> 0:08:51.080 offered the idea of moving the servers to a non 0:08:51.200 --> 0:08:53.560 Chinese country, to the United States. I think he said 0:08:53.720 --> 0:08:56.760 they could contemplate an ownership change. But before we all 0:08:56.800 --> 0:08:59.560 get on the bandwagon of having the federal government ban 0:08:59.760 --> 0:09:03.280 Americans access to a particular media, we do need to 0:09:03.280 --> 0:09:06.080 reflect on what, you know, what's the limiting principle? What 0:09:06.160 --> 0:09:08.360 does that precedent establish with respect of the power of 0:09:08.440 --> 0:09:10.800 the federal government. It feels as though you're aligning yourself 0:09:10.840 --> 0:09:13.640 in some way with your consistent your constituents. Here one 0:09:13.720 --> 0:09:17.160 hundred and fifty million people use this app. But how 0:09:17.559 --> 0:09:20.000 what would you like to see other than moving servers? 0:09:20.200 --> 0:09:22.960 Is it would a nice balancing app for you be 0:09:23.520 --> 0:09:25.080 a sell off in some way? And what do you 0:09:25.080 --> 0:09:28.520 think to China's reaction earlier today the comment secretary, They're saying, well, 0:09:28.559 --> 0:09:31.439 that's not going on unless we approve it. Well, I 0:09:31.840 --> 0:09:34.120 think in this instance, I'm actually not aligning myself with 0:09:34.160 --> 0:09:36.679 my constituents. I'm drawing on what I know about Chinese 0:09:36.720 --> 0:09:39.520 capabilities and what I know about the Constitution of United 0:09:39.520 --> 0:09:41.560 States in the First Amendment. What I can tell you 0:09:41.640 --> 0:09:43.679 is that the Chinese are pretty darn good at breaking 0:09:43.760 --> 0:09:46.400 into anything they want to break into. They're not the 0:09:46.440 --> 0:09:48.240 only ones that are good at that. But you know, 0:09:48.320 --> 0:09:50.200 here we are, you know, calling for a ban on 0:09:50.240 --> 0:09:52.800 TikTok when we actually haven't as a Congress been able 0:09:52.800 --> 0:09:55.960 to put in place a federal privacy regulation. So, yes, 0:09:56.040 --> 0:09:58.240 the Chinese Communist Party, we really don't want them to 0:09:58.280 --> 0:10:01.040 have our data. But guess what you know, Facebook, Instagram, 0:10:01.080 --> 0:10:03.600 all of these entities have our data. They sell it. 0:10:03.640 --> 0:10:05.360 I would suggest that the first thing we ought to 0:10:05.360 --> 0:10:08.559 do is actually pass some federal privacy legislation and then 0:10:08.600 --> 0:10:10.880 really get into the details of what a good solution 0:10:11.000 --> 0:10:13.720 might be with respect to TikTok. Maybe it is moving 0:10:13.760 --> 0:10:16.200 all of their operations outside of China, maybe it is 0:10:16.200 --> 0:10:18.640 an ownership change. But again, this is one of those moments. 0:10:18.679 --> 0:10:20.439 It's a little bit like when we think we've really 0:10:20.480 --> 0:10:23.240 accomplished something because we rename the French fries in the 0:10:23.320 --> 0:10:26.280 cafeteria freedom fries because we're angry at the French. Right. 0:10:26.360 --> 0:10:28.080 This is again a moment with a lot at stake 0:10:28.120 --> 0:10:30.000 in which we ought to be maybe a little bit 0:10:30.000 --> 0:10:33.240 more deliberate than we're being today. Congressman, how optimistic call 0:10:33.280 --> 0:10:35.880 you that such a deal can get done around privacy 0:10:36.120 --> 0:10:39.080 on a bipodism basis. Well, look, at the end of 0:10:39.080 --> 0:10:41.440 the day, this is well, let's let's let's focus on 0:10:41.440 --> 0:10:44.080 TikTok for a second. You know, TikTok is obviously absorbing 0:10:44.120 --> 0:10:46.360 sentiment right now. They might want to think about what 0:10:46.400 --> 0:10:49.080 they might do with respect to ownership, with respect to 0:10:49.120 --> 0:10:51.839 where their operations are located, to maybe take this issue 0:10:51.880 --> 0:10:54.559 off the table. Privacy, Frankly, this is an area where 0:10:54.600 --> 0:10:58.880 the Congress has been remiss to say the least right. 0:10:59.400 --> 0:11:01.400 You know, I have to daughters who live on social media, 0:11:01.440 --> 0:11:03.800 and it just appalls me to imagine that pretty much 0:11:03.800 --> 0:11:06.320 anybody out there can buy their data that they see 0:11:06.360 --> 0:11:10.880 there in some instances, most intimate interactions with commercial retailers 0:11:10.880 --> 0:11:13.480 and that sort of thing. It should happen, But sadly, 0:11:13.480 --> 0:11:14.520 and by the way, we had a little bit of 0:11:14.559 --> 0:11:17.400 progress in the last Congress, but it hasn't happened. So 0:11:17.760 --> 0:11:20.000 my advice would be, let's continue to study TikTok and 0:11:20.000 --> 0:11:21.400 think about the right way to handle it. But for 0:11:21.440 --> 0:11:24.760 God's sakes, let's get some federal privacy legislation done the 0:11:24.840 --> 0:11:27.120 way Europe has done, the way lots of countries have done. 0:11:27.240 --> 0:11:29.160 Until we do that, it's a little hard for us 0:11:29.160 --> 0:11:31.120 to step onto a soapbox and decide that we're going 0:11:31.200 --> 0:11:33.440 to take a massive moral high ground on issues of 0:11:33.480 --> 0:11:37.920 privacy at the moment, the evidence for you TikTok Ceo 0:11:38.000 --> 0:11:41.439 saying there isn't any evidence that China has had access 0:11:41.440 --> 0:11:44.920 to the data. Do you believe him? I don't have 0:11:44.960 --> 0:11:48.080 any information either way. I can tell you, though, as 0:11:48.120 --> 0:11:50.760 a member of the Intelligence Committee, that if the Chinese 0:11:50.880 --> 0:11:53.840 want access to that data, they will get it. They 0:11:53.880 --> 0:11:57.160 might not tell TikTok, but the Chinese are adept at 0:11:57.160 --> 0:11:59.720 breaking into pretty much anything they want to break into 0:12:00.000 --> 0:12:01.720 the way. That's something to think about. Even if all 0:12:01.760 --> 0:12:04.160 of a sudden the servers were located in the United States, 0:12:04.960 --> 0:12:06.840 I wouldn't tell you that. I'm one hundred percent confidence 0:12:06.840 --> 0:12:08.800 that the Chinese can't get it there too. I can't 0:12:08.800 --> 0:12:11.160 tell you that the Chinese can't get into Facebook servers. 0:12:11.200 --> 0:12:13.559 So I don't know the answer to the question. But 0:12:14.240 --> 0:12:16.400 it's a little more complicated than just simply where their 0:12:16.440 --> 0:12:19.320 servers are located. Tell you what's also been complicated for 0:12:19.400 --> 0:12:22.440 technology investors, for technology builders has been the banking system 0:12:22.480 --> 0:12:24.480 of late Congressman Himes. And I know you've got some 0:12:24.480 --> 0:12:27.080 expertise their former banko government, of course, on the Select 0:12:27.080 --> 0:12:30.720 Committee for Economic Disparity and Fairness and growth. How concerned 0:12:30.720 --> 0:12:33.080 are you at the moment that companies that are building 0:12:33.320 --> 0:12:36.520 have access to funds that they need and have well 0:12:36.679 --> 0:12:39.840 security in the overall banking system here in the United States. 0:12:40.720 --> 0:12:42.960 I feel very good about the overall banking system. I 0:12:43.000 --> 0:12:45.000 was a freshman here in two thousand and nine when 0:12:45.000 --> 0:12:47.160 we really thought that JP Morgan and City Bank and 0:12:47.200 --> 0:12:49.120 other huge banks were going to fail, and there was 0:12:49.160 --> 0:12:52.200 a very real risk that they would. The sector itself 0:12:52.320 --> 0:12:55.280 is very strong right now. We obviously saw problems at 0:12:55.320 --> 0:12:57.319 three or four banks. I think that the regulators and 0:12:57.360 --> 0:12:59.600 the Federal Reserve stepped in in a very competent way 0:12:59.600 --> 0:13:01.520 to handle. I do think we've got a little bit 0:13:01.520 --> 0:13:03.400 of work to think about. A world in which you 0:13:03.559 --> 0:13:07.320 depositors only deposit the guaranteed amount at small and medium 0:13:07.320 --> 0:13:09.360 sized banks. That of course creates a lot of pressure 0:13:09.600 --> 0:13:12.439 for consolidation in the industry. But to answer your question, 0:13:12.520 --> 0:13:14.640 I think today we may see stock prices move up 0:13:14.640 --> 0:13:16.400 and down in the coming days and weeks or so, 0:13:16.720 --> 0:13:21.480 but my sense is that overall the banking system is very, 0:13:21.559 --> 0:13:23.880 very safe and depositors should not be worried about their 0:13:24.440 --> 0:13:27.440 about their deposits. Congressman Jim Himes. We thank you so 0:13:27.520 --> 0:13:30.640 much for your time your expertise across well all areas 0:13:30.640 --> 0:13:43.280 of technology. Today. Betting against Jack Dulsey, Hindenburgh Research strikes again. 0:13:43.480 --> 0:13:46.520 It is a forensic research outfit and a well known 0:13:46.559 --> 0:13:50.000 short seller. This time it's claiming that the company Block 0:13:50.160 --> 0:13:55.199 that Jack Dulsey runs was facilitating forsters who will fordulently 0:13:55.360 --> 0:13:59.319 used government stimulus programs during the pandemic. Block, which owns 0:13:59.360 --> 0:14:02.560 cash app Tidal, the music streaming companies set up by 0:14:02.640 --> 0:14:05.959 jay Z, is down twenty percent on the news. Hinnumburg 0:14:06.080 --> 0:14:09.800 Research claims that after a two year investigation, they've understood 0:14:09.800 --> 0:14:14.600 cash app was facilitating billions in government payment forward. Basically, 0:14:15.040 --> 0:14:18.040 multiple people would use the same bank account to claim 0:14:18.160 --> 0:14:22.160 government stimulus. Hindumburg says these were brazen red flags of 0:14:22.280 --> 0:14:27.000 forward and down to shortcomings in compliance now. Hinneburg also 0:14:27.080 --> 0:14:29.760 takes issue with other areas of block, saying that cash 0:14:29.800 --> 0:14:32.560 app is over inflating the amount of users it has, 0:14:32.880 --> 0:14:34.680 that it doesn't like the way in which it's charging 0:14:34.760 --> 0:14:37.920 merchants every time you swipe your card, and also it's 0:14:37.960 --> 0:14:40.760 critical of the twenty nine billion dollar deal that was 0:14:40.840 --> 0:14:44.600 made to buy Australian buy now, pay later company after Pay. 0:14:44.760 --> 0:14:48.479 So far, we're yet to hear from Block's own executives, 0:14:48.840 --> 0:14:51.720 but we do know that some analysts have weighed in 0:14:51.760 --> 0:14:55.320 already Bared for example, saying, look, they are worried if 0:14:55.360 --> 0:14:58.080 there's any criminal activity what that does to invest a sentiment, 0:14:58.280 --> 0:15:00.960 But from their perspective, the share as a good un 0:15:03.000 --> 0:15:05.920 Someone's got even more information than this, pretty most Jennys 0:15:05.960 --> 0:15:09.200 Terrain in London helping break down this story and so 0:15:09.240 --> 0:15:12.720 thoroughly Jenny. Thus far we've still not heard from Block. 0:15:12.880 --> 0:15:16.240 You've reached out many other people have. What do we 0:15:16.320 --> 0:15:20.280 know in terms of other implications to the business model here, 0:15:20.320 --> 0:15:25.360 because we know that there's been regulatory concerns shall we say, viruses, paypals, 0:15:25.440 --> 0:15:29.800 Venmo and the likes. Yeah, I think there's a few 0:15:29.800 --> 0:15:32.480 different pieces that I think folks are really keying in 0:15:32.560 --> 0:15:35.360 on with this. I mean, I think any implication that 0:15:35.680 --> 0:15:40.160 criminal actors are using blocks cash app to facilitate their 0:15:40.160 --> 0:15:44.200 transactions is you know, really bad news. I think that's 0:15:44.200 --> 0:15:47.520 when you get regulators looking at you. They could impose 0:15:47.560 --> 0:15:50.800 different kinds of penalties, whether that's monetary or you know, 0:15:50.840 --> 0:15:54.320 different remediation activities. So that's something that investors will really 0:15:54.360 --> 0:15:56.960 keen on and want to see further proof of and 0:15:57.040 --> 0:15:59.680 probably hear from the company on you know, I whether 0:15:59.760 --> 0:16:02.520 or not this is true obviously first, but if it is, 0:16:02.600 --> 0:16:04.520 you know, how are they what steps are they taking 0:16:04.560 --> 0:16:07.000 to try and stop that. So I think that's probably 0:16:07.000 --> 0:16:08.720 the number one thing folks are keying in on, and 0:16:08.800 --> 0:16:10.480 a lot of the other stuff that they laid out, 0:16:11.520 --> 0:16:13.560 it's stuff that was probably a little bit known by 0:16:13.600 --> 0:16:16.000 the investor community, but seeing it all laid out, and 0:16:16.400 --> 0:16:19.160 you know, this very lengthy report at the end of 0:16:19.160 --> 0:16:22.560 a two year investigation, it is sending kind of chills 0:16:22.600 --> 0:16:25.600 through through not just block stock, but really the entire 0:16:25.640 --> 0:16:29.760 payments industry. Well said, interestingly, this is a company that 0:16:29.800 --> 0:16:31.520 has full of from grace in terms of a market 0:16:31.560 --> 0:16:36.760 capitalization perspective since the Well area of twenty twenty one, 0:16:36.800 --> 0:16:40.120 when we were still very much caught up in COVID concerns. 0:16:41.240 --> 0:16:43.560 Was that to do with some of these warriors around 0:16:43.720 --> 0:16:50.160 the broader ecosystem and ultimately governance of it. No, So 0:16:50.200 --> 0:16:52.720 I think this is it's another example where you know, 0:16:52.880 --> 0:16:55.320 you've got a macro issue weighing on a stock which 0:16:55.360 --> 0:16:58.160 is during the pandemic, Block and all of the other 0:16:58.200 --> 0:17:01.880 big payment processors solve volumes really balloon because folks were 0:17:01.880 --> 0:17:05.760 trapped inside and suddenly spending a lot more money, you know, 0:17:05.840 --> 0:17:09.720 online and doing a lot more online shopping and doing 0:17:09.760 --> 0:17:12.320 a lot more mobile money transfers of cash app has 0:17:12.320 --> 0:17:15.480 really taken off in the past few years, but that's 0:17:15.480 --> 0:17:17.840 slowed down, you know, just it's hard to keep lapping 0:17:17.960 --> 0:17:20.639 such intense growth and so they've had to lean on 0:17:20.720 --> 0:17:23.679 new areas and so that has just been a broader 0:17:23.720 --> 0:17:25.919 overhang on the entire payment sector and it is not 0:17:26.000 --> 0:17:30.520 block specific. What is block block specific today is this accusation, 0:17:30.600 --> 0:17:34.120 you know from Hindenburg that we could be seeing widespread 0:17:34.200 --> 0:17:37.000 fraudulent use of cash app, and and that's something that 0:17:37.040 --> 0:17:39.000 you know, it would be very specific to this company, 0:17:39.000 --> 0:17:41.959 and it's why their stock is down, you know, as 0:17:42.040 --> 0:17:44.720 much as it is today. And we such targets do 0:17:44.880 --> 0:17:47.919 tend to see sustained Prussia on their stocks. Jenny Soerine, 0:17:48.160 --> 0:17:50.119 we thank you so much, coming a love from London 0:17:50.160 --> 0:17:53.520 for us, coming out from Teshiba to AI to EVS. 0:17:53.520 --> 0:17:55.560 We will run you through all the rest that's going 0:17:55.560 --> 0:18:07.560 on in technology. We're talking Tech Next Discipline book. Nvidia 0:18:07.680 --> 0:18:10.680 Chief Technology of A Michael Kagan says a new revolution 0:18:10.720 --> 0:18:14.560 and technology will present multiple opportunities going forward for his 0:18:14.680 --> 0:18:18.960 own company, especially bring bags, Tom McKenzie. Every every new 0:18:19.000 --> 0:18:22.840 technology and every new revolutional technology, it's opportunity for doing 0:18:22.840 --> 0:18:25.680 good things and for opportunity for going bad things, and 0:18:25.720 --> 0:18:28.480 we definitely need to be aware of this and be 0:18:28.600 --> 0:18:32.880 ready to mitigate this. Wet Nvidia, you know, work very 0:18:32.880 --> 0:18:37.240 closely with the collaborating with the regulations we are making 0:18:37.760 --> 0:18:40.240 to what to extend that we can make sure that 0:18:40.320 --> 0:18:44.080 our technology and our products don't get to the beat hands. 0:18:44.400 --> 0:18:47.000 We can trace it down all the way to the 0:18:47.080 --> 0:18:50.040 to the end user. But we make sure that people 0:18:50.080 --> 0:18:53.200 that we sell our things for, our technology for, and 0:18:53.280 --> 0:18:56.120 our products for are not using them in the way 0:18:56.160 --> 0:19:00.440 that will damage the society. Okay, So your comfort that 0:19:00.560 --> 0:19:03.080 in terms of the framework and a focus on ethics 0:19:03.080 --> 0:19:06.120 of AI, the end video is doing enough. I think 0:19:06.760 --> 0:19:08.639 it is doing more than enough. We are on the 0:19:09.440 --> 0:19:13.560 very extreme case side of this. We are definitely not 0:19:14.040 --> 0:19:17.120 doing anything in the gray area. It's very black and white. 0:19:17.520 --> 0:19:20.320 We are we are we are not getting to the 0:19:20.320 --> 0:19:23.240 gray area. And we're also developing the technologies that will 0:19:23.359 --> 0:19:27.399 enable to mitigate cyber attacks in the data center. Actually, 0:19:27.400 --> 0:19:30.800 now there's people even more dependent on the data center infrastructure, 0:19:31.080 --> 0:19:35.399 and we are building the technology that will enable the 0:19:35.480 --> 0:19:41.080 provisioning and mitigating the cyber attack within milliseconds or seconds 0:19:41.520 --> 0:19:43.840 versus few months that it would it takes. Today, you 0:19:43.920 --> 0:19:46.480 have two customers, and Video has customers of course all 0:19:46.480 --> 0:19:48.880 over the world. You're a global company. Some of those 0:19:48.880 --> 0:19:51.560 customers include Chinese companies Ali, Baba, ten Cent, by To. 0:19:51.800 --> 0:19:55.720 How do you serve your Chinese clients and customers given 0:19:55.760 --> 0:19:58.879 the ban by the US on those high end chips, 0:19:58.920 --> 0:20:01.000 the A one hundreds, the one hundreds, how do you 0:20:01.000 --> 0:20:04.120 continue to serve those Chinese clients? Okay, so first of all, 0:20:04.119 --> 0:20:07.000 you know, if you look at the Chinese Chinese market, 0:20:07.080 --> 0:20:10.160 it's a big market and they better have the computing 0:20:10.200 --> 0:20:15.159 accelerating technology so they will use a reasonable amount of energy. 0:20:15.640 --> 0:20:18.200 There is a bend on the and the restrictions of 0:20:18.280 --> 0:20:23.359 sell some type of chips to the to the to 0:20:23.760 --> 0:20:27.879 chatter market, and we have chips that comply with the regulations. 0:20:27.880 --> 0:20:32.159 We're definitely not violating any regulations of the of the 0:20:32.240 --> 0:20:35.280 US government. We have products that we can serve China 0:20:35.400 --> 0:20:40.160 market within restrictions and within the rules that are imposed 0:20:40.200 --> 0:20:46.280