WEBVTT - Alibaba's Trajectory and Apple's Card Debacle 0:00:01.880 --> 0:00:02.600 From Marhard. 0:00:02.759 --> 0:00:06.720 We're Innovation, Money and Power Collie in Silicon. 0:00:06.320 --> 0:00:07.200 Valley, NBN. 0:00:07.520 --> 0:00:11.560 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.640 --> 0:00:28.000 I'm Caroline Heider Bloomberg's World head quarters in New York, 0:00:28.400 --> 0:00:30.200 and I met Ludlow in San Francisco. 0:00:30.360 --> 0:00:32.160 This is Bloombay Technology. 0:00:31.720 --> 0:00:34.880 Coming up after staying out of public view for years. 0:00:35.159 --> 0:00:37.000 Ali Baba founder Jack mart. 0:00:36.680 --> 0:00:38.960 He speaks out to his own employees, urging them to 0:00:38.960 --> 0:00:41.440 correct the company's course. We'll have more on the e 0:00:41.479 --> 0:00:45.760 commerce giants' plans to compete with rivals like PDD, and. 0:00:45.720 --> 0:00:48.680 We'll hear from Amazon Web Services CEO Adam Zelipski off 0:00:48.720 --> 0:00:52.760 the back of the company's Reinvent conference discussing AI, Nvidia, 0:00:53.000 --> 0:00:53.680 and a lot more. 0:00:53.920 --> 0:00:56.800 Plus Apple offers Gommen Sachs an exit ramp for its 0:00:56.840 --> 0:01:00.520 troubled card partnership. We'll bring you those details so much 0:01:00.560 --> 0:01:02.880 more throughout the hour. Let's just go to what this 0:01:03.000 --> 0:01:05.280 macro picture looks like. We're just looking through the bond market. 0:01:05.280 --> 0:01:07.520 We're looking at the impact on the tech sector. More broadly, 0:01:07.640 --> 0:01:10.319 Let's launches is with us senior portfolio manager over at 0:01:10.360 --> 0:01:14.120 Invesco and Well and the amount of run up that 0:01:14.160 --> 0:01:16.679 we've seen in tech stocks has been phenomenal for November, 0:01:16.800 --> 0:01:18.600 and we know how much it's led the benchmarks. 0:01:18.680 --> 0:01:20.160 Is this going to continue? From your perspective? 0:01:21.200 --> 0:01:24.320 Thank you Karen and Ed for having me. We think 0:01:24.360 --> 0:01:29.880 actually the global yield backdrop that you just highlighted is 0:01:30.040 --> 0:01:34.520 likely to stimulate a cyclical rebound into your end and 0:01:34.720 --> 0:01:38.360 into next year. As you alluded to, tech has been 0:01:38.440 --> 0:01:45.160 driven primarily by obviously a thematic focused artificial intelligence narrative 0:01:45.200 --> 0:01:49.280 and also supported by the declining global bond yields as 0:01:49.320 --> 0:01:52.200 of late. But what we think is really happening is 0:01:52.240 --> 0:01:55.240 that this declining bond yield will lead a cyclical rebound 0:01:55.240 --> 0:01:58.640 because it's primarily driven by a fall in inflation expectations 0:01:58.680 --> 0:02:03.640 and actual inflation, which will in our mind create a 0:02:03.680 --> 0:02:06.640 more supporting narrative for a soft lending and therefore allow 0:02:07.000 --> 0:02:10.520 market participants to believe again in a cyclical rebound in 0:02:10.520 --> 0:02:13.280 the cyclical sector. So we do think at tech as 0:02:13.280 --> 0:02:17.200 are performed because if its quality characteristics is defensive characteristics, 0:02:17.240 --> 0:02:21.320 it's higher duration characteristics. But now we do expect a 0:02:21.440 --> 0:02:24.200 rotation more to the sectors and styles that have been 0:02:24.600 --> 0:02:29.639 neglected and unloved such as smaller capitalizations and value oriented sectors. 0:02:30.240 --> 0:02:31.840 Is banks one of those? We're just looking at a 0:02:31.840 --> 0:02:33.840 banner at the moment. The FDIC coming out with its 0:02:33.880 --> 0:02:36.959 annual report and actually talking about how profit profits bank 0:02:37.000 --> 0:02:41.160 profits are dipping as they say ultimately that loans are 0:02:41.200 --> 0:02:43.480 the next pain point at the moment they're seeing, and 0:02:44.120 --> 0:02:46.760 most notably they're saying, the banking industry on this quarterly 0:02:46.800 --> 0:02:50.200 focus has got some unrealized losses that are increasing in 0:02:50.240 --> 0:02:52.560 the third quarter. So is it now the time to 0:02:52.600 --> 0:02:53.480 be getting into banks? 0:02:54.800 --> 0:02:57.160 I think you're alluding to a very important point. We 0:02:57.320 --> 0:03:00.519 have now just dealt for over a year of yield 0:03:00.560 --> 0:03:05.639 creve inversion, which we know creates a particularly challenging environment 0:03:05.760 --> 0:03:09.280 for financials. The yell cre is beginning to rest deepen, 0:03:09.840 --> 0:03:14.799 and if we do see rake cuts into next year, 0:03:15.760 --> 0:03:19.399 a powerful resteeping of the Yil curve would improve materially 0:03:19.440 --> 0:03:22.480 the four perspective on bank profits. 0:03:22.520 --> 0:03:23.359 So we do. 0:03:23.560 --> 0:03:26.880 Place financials and banks as part of the cyclical sector 0:03:26.880 --> 0:03:31.600 that is likely to benefit together with others if our 0:03:31.720 --> 0:03:34.200 thesis of a cyclical rebound and resteeping of the yell 0:03:34.280 --> 0:03:35.240 curve does play out. 0:03:36.360 --> 0:03:39.200 Let's see you take this kind of worldview from a 0:03:39.200 --> 0:03:42.520 capital allocation standpoint, right, you are kind of more heavily 0:03:42.520 --> 0:03:46.640 weighted toward equities. But the world of technology is big. 0:03:46.680 --> 0:03:50.000 We just talked about China, We're increasingly talking about Europe. 0:03:50.320 --> 0:03:53.080 How do you guys feel about tech in the United 0:03:53.160 --> 0:03:55.480 States visa v Europe and parts of Asia. 0:03:57.520 --> 0:04:01.920 Well, tech the clearest the expression from a global standpoint 0:04:01.960 --> 0:04:05.200 of the tech theme or that quality theme that comes 0:04:05.280 --> 0:04:08.280 with a large profit margins, large return on assets. It's 0:04:08.360 --> 0:04:11.520 really a United States theme. When you go outside of 0:04:11.560 --> 0:04:17.680 the United States, there is more smaller capitalizations companies that 0:04:17.800 --> 0:04:21.560 are likely to benefit more from that cyclical rebound. But 0:04:22.000 --> 0:04:26.080 it's really there is a bit of a polarization happening 0:04:26.080 --> 0:04:28.320 in the structure of capital markets, as you allude to, 0:04:28.800 --> 0:04:31.880 where being overweigh the United States relative to the rest 0:04:31.920 --> 0:04:35.359 of the world basically means being overweight tech relative to 0:04:35.480 --> 0:04:39.440 value relative to CIICL. Course, they are two manifestations of 0:04:39.600 --> 0:04:42.200 the same risk and return profile. 0:04:43.640 --> 0:04:47.680 Sometimes looking a little deeper tells a slightly different story. Right, 0:04:47.720 --> 0:04:49.400 If you think about the S and P five hundred, 0:04:49.440 --> 0:04:53.840 communications or information technology both up fifty percent year today, 0:04:54.320 --> 0:04:57.120 but a lot of that attributable to the Magnificent seven. 0:04:57.440 --> 0:05:00.680 You know, think about Microsoft and Apple achieve giving record 0:05:00.760 --> 0:05:04.400 highs multiple times this year. How do you feel about that? 0:05:04.440 --> 0:05:07.080 What does that tell you about the dynamic of this market. 0:05:08.960 --> 0:05:13.159 It's reminiscent of many situations we've seen before where the 0:05:13.200 --> 0:05:16.440 tech sector in particular is very prone to boost them 0:05:16.520 --> 0:05:20.880 bus cycles by the very nature of where its return 0:05:20.960 --> 0:05:25.200 expectations coming from. Right, these are growth stocks with that 0:05:25.360 --> 0:05:32.200 tend to overreact to extrapolation of growth expectations. We have 0:05:32.360 --> 0:05:35.680 seen a meaningful run up in the last six months, 0:05:35.720 --> 0:05:38.960 and the decomposition of market returns that you just alluded 0:05:39.000 --> 0:05:42.680 to clearly does not reflect the performance of the US economy. 0:05:42.760 --> 0:05:45.640 Right The S and P five hundred, driven predominantly by 0:05:46.080 --> 0:05:50.920 the disproportionate tech relative to other sectors, is not representative 0:05:50.920 --> 0:05:54.640 of US economic performances represented of the tech sector, the 0:05:54.760 --> 0:05:58.760 dynamics for the market going forward, We believe that there 0:05:58.760 --> 0:06:02.000 needs to be a rebalance from those Magnificent seven and 0:06:02.080 --> 0:06:07.960 rebalancing where there's more participation, wider leadership rather than narrow 0:06:08.000 --> 0:06:12.680 leadership across sectors and industries that should be more reflective 0:06:12.839 --> 0:06:15.440 of the outperformance that we do see for the global 0:06:15.480 --> 0:06:18.160 economy and the recovery that we do see for the 0:06:18.279 --> 0:06:21.000 US economy. So the positive news is that despite a 0:06:21.560 --> 0:06:23.640 P five hundred being up twenty percent of the day, 0:06:24.120 --> 0:06:26.640 we believe that that is not reflective of a cyclical 0:06:26.720 --> 0:06:29.240 rebound that we see in the cards, and that cyclical 0:06:29.240 --> 0:06:32.520 rebounds still has plenty of room to be priced in 0:06:32.880 --> 0:06:37.120 through a rotation within smaller capitalizations, more cyclical sectors, and 0:06:37.240 --> 0:06:39.599 value oriented companies within the equity market. 0:06:40.760 --> 0:06:44.839 Talking about this real orientation, it's interesting, colleague John Author's 0:06:44.960 --> 0:06:47.400 was writing about if you still believe in a run 0:06:47.480 --> 0:06:51.359 up in overall technology but not the magnificent seven, the 0:06:51.400 --> 0:06:54.400 way to play that is equal weighted benchmarks rather than 0:06:54.480 --> 0:06:57.880 going for those ones that take into account the actual 0:06:58.279 --> 0:07:01.000 overall market capitalization these behemoths. 0:07:01.680 --> 0:07:03.760 Is that something that you're seeing plaid a little bit more. 0:07:03.880 --> 0:07:06.560 Is there other ways that you can still remain exposed 0:07:06.600 --> 0:07:09.440 to technology but tactically be more long some of the 0:07:09.480 --> 0:07:12.160 areas that have been beaten off of late No. 0:07:12.280 --> 0:07:14.040 I think that's very well said, and it hits the 0:07:14.120 --> 0:07:16.040 nail in the head if you if you look at 0:07:16.160 --> 0:07:21.320 equally weighted type of strategies within within tech relative to 0:07:21.440 --> 0:07:25.560 the market. What they will deliver is is a smaller 0:07:25.600 --> 0:07:29.200 capitalization bias and a more value orientation. So also when 0:07:29.240 --> 0:07:32.480 you look at the breakdown of large cup growth versus 0:07:32.520 --> 0:07:35.000 mid cup growth and small cup growth, you can clearly 0:07:35.080 --> 0:07:40.000 see that smaller capitalization effect. So I think it's it's 0:07:40.080 --> 0:07:44.160 for for a portfolio manager, for a portfolio strategy that 0:07:45.160 --> 0:07:47.400 want that needs to have, and wants to retain a 0:07:47.480 --> 0:07:53.040 dedicated technology exposure. Rebalancing within that strategy towards smaller capitalization 0:07:53.760 --> 0:07:57.400 and cheaper evaluations is the way to maintain that exposure 0:07:57.440 --> 0:08:01.120 and participate to that broadening of the seclical rebound. 0:08:02.240 --> 0:08:05.240 Alessia the longest of Investco just a deep, smart take 0:08:05.280 --> 0:08:06.400 on the technology sector. 0:08:06.520 --> 0:08:06.840 Thank you. 0:08:14.880 --> 0:08:18.280 Ali Baba founder Jack ma is actually speaking out two 0:08:18.320 --> 0:08:21.280 employees at the company and an internal message urging Ali 0:08:21.320 --> 0:08:23.720 Baba to quote correct its course. 0:08:24.240 --> 0:08:25.880 We wanted to get into what all of this means. 0:08:25.920 --> 0:08:27.880 Want to bring in blombergs, Henry Ren and Isabel Lee 0:08:27.880 --> 0:08:30.320 and Isabelle I start with you because is this a 0:08:30.480 --> 0:08:33.200 rallying cry? Is this sort of in any way a 0:08:33.320 --> 0:08:36.040 negative impact? I mean, what does this do to morale 0:08:36.120 --> 0:08:39.120 when he's bigging up competitors saying that there's an opportunity 0:08:39.160 --> 0:08:41.760 in AI. Is he meant to be sort of helping 0:08:42.080 --> 0:08:43.640 with morale or detracting from it. 0:08:43.920 --> 0:08:45.800 So this is really interesting and had shocked a lot 0:08:45.840 --> 0:08:48.880 of investors because remember in twenty twenty, jackmar largely stepped 0:08:48.880 --> 0:08:52.000 away from public eye when he criticized Chinese regulators, so 0:08:52.040 --> 0:08:55.040 many articles were like where is Jack ma? And today 0:08:55.040 --> 0:08:57.040 he makes a comment. And there are three things to 0:08:57.080 --> 0:08:59.600 look at this. I think first there is the fact 0:08:59.600 --> 0:09:02.160 that you can't because to your point, I think it 0:09:02.280 --> 0:09:04.800 meant was meant to encourage troops. But then we have 0:09:04.840 --> 0:09:07.920 analysts saying that it perhaps may have been the opposite 0:09:07.920 --> 0:09:10.600 and deflated them, because why are you commenting? And the 0:09:10.640 --> 0:09:13.120 second is where and he did it in a forum 0:09:13.720 --> 0:09:16.840 he and the message is also interesting because he praised PDD, 0:09:17.000 --> 0:09:19.760 his rival which has grown, which has gone to be 0:09:19.800 --> 0:09:23.000 a formidable competitor in recent years, and he said Ali 0:09:23.000 --> 0:09:24.280 Baba needs to course correct. 0:09:24.320 --> 0:09:27.439 So that's second. And the third is the timing because this. 0:09:27.480 --> 0:09:31.760 Comes shortly after PDD again reported blockbuster results, so I 0:09:31.800 --> 0:09:35.840 am not sure if it actually motivated folks, but it's 0:09:35.920 --> 0:09:38.400 really interesting the fact that he commented I would think. 0:09:39.080 --> 0:09:41.559 It is a surprise in and of itself that somebody 0:09:41.600 --> 0:09:44.480 who hasn't been operationally involved since twenty twenty comments at 0:09:44.520 --> 0:09:47.400 all and then calls out one of the biggest rivals 0:09:47.400 --> 0:09:50.600 saying the following about pinned wod Woe. 0:09:50.960 --> 0:09:52.640 But here's the story as I see it. 0:09:52.679 --> 0:09:54.679 Bring up the chart and show the performance on the 0:09:54.720 --> 0:09:57.640 ADRs at least of pinned wod Woe, the owner of 0:09:57.679 --> 0:10:02.040 Timu versus Ali Barba, And the chart speaks for itself, right, Henry, 0:10:02.120 --> 0:10:05.760 just explain to the audience, Henry the battleground between Ali 0:10:05.760 --> 0:10:08.400 Baba and Timu owned by Pindroid well on the e 0:10:08.440 --> 0:10:09.600 commerce side. 0:10:10.600 --> 0:10:13.280 Yeah, definitely, Just as Isabelle said, this come and come 0:10:13.320 --> 0:10:16.560 from a very interesting point of time. On one hand, you 0:10:16.600 --> 0:10:19.200 have the incumbent Ali Baba, which is struggling to gain 0:10:19.280 --> 0:10:23.360 ground in domestic market. It has its strategy change, it 0:10:23.400 --> 0:10:26.360 recently canceled the plan to spin off and list its 0:10:26.400 --> 0:10:29.840 cloud unit, but at the same time it's going through management. 0:10:29.400 --> 0:10:30.520 Reshuffle as well. 0:10:30.800 --> 0:10:34.240 And at the other side you have the challenger TEAMU 0:10:34.720 --> 0:10:38.000 and its owner pindor Door. So at the domestic market, 0:10:38.000 --> 0:10:41.400 pin doo Doo is gaining share rapidly aggressively by cost 0:10:41.400 --> 0:10:45.880 cutting and price cutting as well. And at the overseas playground, 0:10:46.000 --> 0:10:48.280 Pindo Door is winning share by its Team U super 0:10:48.320 --> 0:10:53.079 app and it's planning uh to roll out another ads 0:10:53.160 --> 0:10:56.240 during this Super Bowl mid time show as well. So 0:10:56.280 --> 0:10:59.320 which shows that the Pindodo is really gaining ground in 0:10:59.360 --> 0:11:01.360 the US mark in the UK and the other side 0:11:01.400 --> 0:11:03.760 of the market as well. So you see that from 0:11:03.760 --> 0:11:06.720 the two spectrum. You see on one hand Ali Baba 0:11:06.880 --> 0:11:09.280 is waning, but on the other hand, Pindo or the 0:11:09.320 --> 0:11:11.880 PDD is definitely gaining ground rapidly. 0:11:12.000 --> 0:11:14.360 Henry, I like that you dig into the restructuring and 0:11:14.640 --> 0:11:18.720 on again, off again sort of versions of it. BlueBag 0:11:18.800 --> 0:11:21.320 Intelligence put out a piece saying, actually, this cool out 0:11:21.360 --> 0:11:24.559 by Jack Mars seems to reaffirm that indeed the restructuring 0:11:24.600 --> 0:11:25.880 is still going to be upon us. 0:11:26.080 --> 0:11:27.840 What does it end up looking like, Henry? 0:11:29.280 --> 0:11:34.160 So remember Jack mauseeeded his control as CEO of Alibaba 0:11:34.200 --> 0:11:38.719 in twenty fourteen, and he barely entered the public appearance 0:11:39.000 --> 0:11:41.440 in the last two years due to the tech crackdown, 0:11:41.640 --> 0:11:45.120 and now he's re entering the public sphere. He's now 0:11:45.160 --> 0:11:49.680 commenting in the company's internal messaging board. There are lots 0:11:49.679 --> 0:11:52.719 of analysis about this, and mostly it's about it has 0:11:52.760 --> 0:11:57.280 been some time in this company's history that this company 0:11:57.559 --> 0:12:02.120 is run by some companies, some executives that doesn't have 0:12:02.240 --> 0:12:04.720 a close link with Jack Mal himself. 0:12:04.880 --> 0:12:05.800 But now Jack Mal. 0:12:05.800 --> 0:12:08.679 Re entering this public sphere might mean that Jack Mal 0:12:08.880 --> 0:12:12.680 might have more control of the company's strategy, more company's 0:12:12.800 --> 0:12:13.840 management as well. 0:12:14.000 --> 0:12:15.440 Just something that we will wait and see. 0:12:16.440 --> 0:12:19.199 There was a time where Ali Baba was going to 0:12:19.280 --> 0:12:22.800 be China's trillion dollar market cap company. It was going 0:12:22.880 --> 0:12:27.240 to be China's equivalent of the Silicon Valley darlings, Apple, 0:12:27.320 --> 0:12:30.559 et cetera. And a lot has happened this year. You know, 0:12:30.640 --> 0:12:33.959 there has been leadership shuffles. Isabelle I think it's worth 0:12:34.000 --> 0:12:38.320 reminding everyone who actually runs Ali Barba as it stands. 0:12:38.679 --> 0:12:39.559 It's exactly right. 0:12:39.600 --> 0:12:41.400 It's been a tough year for Ali Baba, a tough 0:12:41.400 --> 0:12:44.000 few years because Ali Baba's market cap is now around 0:12:44.000 --> 0:12:46.959 one ninety billion, and PDD has leap frog and it's 0:12:47.000 --> 0:12:49.760 now around one seventy billion, so that's not really a 0:12:49.800 --> 0:12:51.719 far cry anymore. And of course you still have ten 0:12:51.800 --> 0:12:54.440 cent leading. But the point is Ali Baba was going 0:12:54.440 --> 0:12:56.600 at a fast pace and now it's slowed, and I think, 0:12:56.800 --> 0:12:59.120 I don't want to put words into Jackma's mouth, of course, 0:12:59.160 --> 0:13:02.600 but shows that he's kind of really concerned about the 0:13:02.600 --> 0:13:04.880 direction of where Ali Baba is going, because it's one 0:13:04.920 --> 0:13:07.839 thing to slow, but another thing for all your arrivals 0:13:07.880 --> 0:13:08.680 to surpass you. 0:13:08.920 --> 0:13:10.800 So I think that's really key right now. 0:13:10.800 --> 0:13:13.320 And you know, Ma even this month hit the brakes 0:13:13.320 --> 0:13:15.680 on his plan to reduce his stick on Alibaba because 0:13:15.679 --> 0:13:18.520 the South price was not at a level that he's 0:13:18.559 --> 0:13:20.600 happy with. For now, Ali Baba is just a fraction 0:13:20.679 --> 0:13:22.640 of what it was in twenty twenty and is trading 0:13:22.679 --> 0:13:23.920 at the lowest level this year. 0:13:24.040 --> 0:13:27.880 Ed Yeah, and it's in negi ary year today, while 0:13:27.920 --> 0:13:32.240 Pindodo's up triple digits year today. Bloomberg's Henry Wren and 0:13:32.360 --> 0:13:36.480 Isabella Lee great team coverage on an important China story. Meanwhile, 0:13:36.480 --> 0:13:39.240 sticking with China, China's five Whye capital and early backer 0:13:39.400 --> 0:13:41.959 go Me is on track to surpass its target of 0:13:42.040 --> 0:13:45.439 raising seven hundred million dollars for a closely watched venture fund. 0:13:45.440 --> 0:13:47.160 It's a sign that investors. 0:13:46.880 --> 0:13:50.560 Are regaining confidence in the world's biggest Internet arena. The 0:13:50.600 --> 0:13:53.240 over subscribed US dollar fund has a hard cap of 0:13:53.280 --> 0:13:56.600 eight hundred million dollars and is sector close early next year. 0:13:56.760 --> 0:13:59.080 That's according to Bloomberg's sources CARC. 0:13:59.559 --> 0:14:02.240 Now let's just move our attention towards the world of 0:14:02.280 --> 0:14:04.959 crypto for a moment. And because Finance is appointed a 0:14:05.000 --> 0:14:07.520 new CEO after it's four point three billion dollars settlement 0:14:07.559 --> 0:14:09.520 with the US Department of Justice that force the co 0:14:09.600 --> 0:14:12.599 founder CZ to step down. Now bloemgs Funsten like I 0:14:12.720 --> 0:14:15.600 sat down with Richard Tang earlier to discuss his vision 0:14:15.640 --> 0:14:16.120 for the company. 0:14:16.160 --> 0:14:16.840 Is the new CEO. 0:14:17.800 --> 0:14:21.800 The US resolution with the US agencies are very important, 0:14:21.880 --> 0:14:27.200 right there are historical issues on compliance, registration and sanctions, 0:14:27.560 --> 0:14:30.680 and with the resolution, we move on to a new chapter, 0:14:31.240 --> 0:14:34.320 moving past a very challenging period of our corporate history. 0:14:35.080 --> 0:14:38.640 So going forward, we will continue to focus on things 0:14:38.680 --> 0:14:41.280 like user growth. On that front, I need to stress 0:14:41.360 --> 0:14:44.520 the user SX are back one to one. Users can 0:14:44.560 --> 0:14:46.760 withdraw one hundred percent of their SS at any point in time. 0:14:47.120 --> 0:14:49.680 We continue to force focus on user need. At the 0:14:49.720 --> 0:14:53.760 same time, we did make some mistakes along the way. 0:14:54.080 --> 0:14:57.840 We acknowledge those. It's important for us as a financial 0:14:57.840 --> 0:15:00.360 institution to do so, and we learn from the and 0:15:00.400 --> 0:15:03.600 we continue to build in the journey right on things 0:15:03.680 --> 0:15:05.800 like I think you're going to ask who as our 0:15:05.800 --> 0:15:09.440 working quarters. We'll make those disclosures and do class right 0:15:09.960 --> 0:15:12.040 as part of the resolution. There are certain things that 0:15:12.080 --> 0:15:14.240 we were put in place that we are complete to 0:15:14.240 --> 0:15:17.640 do so, including board of directors. But those announcements will 0:15:17.680 --> 0:15:19.400 be coming soon, so watch that space. 0:15:20.440 --> 0:15:22.080 Yeah, but Richard, can you already just give us a 0:15:22.120 --> 0:15:24.120 sense of what people want? So if they want a 0:15:24.200 --> 0:15:27.440 more normal structure with headquarters that was problematic in the 0:15:27.440 --> 0:15:30.720 past because there was no one single place, how fast 0:15:30.920 --> 0:15:32.000 do you think that will be done? 0:15:32.000 --> 0:15:32.840 And then I'll also ask you. 0:15:32.800 --> 0:15:35.080 About the board of directors because I guess that's what 0:15:35.120 --> 0:15:38.080 people are asking for. It's like, what kind of framework 0:15:38.120 --> 0:15:39.040 will Binance have. 0:15:41.200 --> 0:15:44.480 We com back to the past where the industry is 0:15:44.520 --> 0:15:47.520 ran naiscent. If you look at today, the direction of 0:15:47.560 --> 0:15:50.000 travel is very clear. There's going to be much more 0:15:50.040 --> 0:15:52.840 regulations for the crypto industry, even though only wanted of 0:15:52.880 --> 0:15:56.000 global regulators are regulating this space. But the direction of 0:15:56.040 --> 0:15:57.080 travel is very very clear. 0:15:57.200 --> 0:15:57.440 Right. 0:15:57.800 --> 0:16:01.040 So along with that, along with the maturing of both 0:16:01.120 --> 0:16:04.160 industry as well as to copy it ourselves. All these 0:16:04.160 --> 0:16:06.440 things will be put in place. As I mentioned again, 0:16:07.160 --> 0:16:10.600 a bot of directors will be instituted. It's on very 0:16:10.680 --> 0:16:15.840 robuth timeline. Same for things like the questions did you asked? 0:16:16.000 --> 0:16:18.040 And we will make those annoscement coasts so you can 0:16:18.120 --> 0:16:19.120 disclose it at this point in. 0:16:19.160 --> 0:16:32.680 That it's today's big Take, and we're taking a look 0:16:32.720 --> 0:16:35.840 at an issue that's been rising along with AI generated 0:16:35.880 --> 0:16:39.160 content coming closer and closer to real images. We bring 0:16:39.200 --> 0:16:41.800 you exclusive reporting from Bluebog Business Week focusing on a 0:16:41.840 --> 0:16:45.200 group of deep fake pornography victims and how they actually 0:16:45.200 --> 0:16:48.520 banded together they fought back despite the absence of federal 0:16:48.600 --> 0:16:51.960 laws to protect them. Bloomberg's Olivia Carvill joins us now 0:16:52.040 --> 0:16:54.760 one of the key reporters on this, and it all 0:16:54.800 --> 0:16:58.000 goes back to New Year's Eve twenty twenty, when a 0:16:58.040 --> 0:17:00.240 text came through to one of these particular women in 0:17:00.280 --> 0:17:04.439 Long Island who've managed to now well find feel there 0:17:04.440 --> 0:17:06.959 were perhaps victims and fought back and the ending up 0:17:07.160 --> 0:17:08.040 sort of winning out here. 0:17:08.320 --> 0:17:09.160 Yeah, that's right. 0:17:09.200 --> 0:17:12.520 I mean, this is a story of female empowerment in 0:17:12.560 --> 0:17:15.320 this new era of generative AI that we all live in. 0:17:15.760 --> 0:17:19.800 This technology is both terrifying but also exciting, and I 0:17:19.840 --> 0:17:22.600 think we wanted with this story to highlight some of 0:17:22.600 --> 0:17:25.320 those potential harms and that's what led us to leave 0:17:25.320 --> 0:17:25.760 it Town. 0:17:25.800 --> 0:17:27.959 Long Island, Olivia. 0:17:28.040 --> 0:17:30.399 In allgad Big Takes, there is a case study or 0:17:30.440 --> 0:17:34.240 case studies and a narrative around the broader story. But 0:17:34.320 --> 0:17:39.040 what it highlights is a lack of legal protection, a 0:17:39.200 --> 0:17:40.240 deficit in the law. 0:17:40.400 --> 0:17:41.800 Just explain that side to us. 0:17:42.280 --> 0:17:44.439 When you look across the country, there is just a 0:17:44.520 --> 0:17:48.280 patchwork of laws focusing on deep fakes at the moment. 0:17:48.720 --> 0:17:51.119 The story is really symbolic of the fact that there 0:17:51.200 --> 0:17:54.720 are no very strong laws to target deep fake content 0:17:54.920 --> 0:17:57.440 right now in the US, there is no federal law 0:17:57.840 --> 0:18:01.760 against creating fake pornographic con tent online and with this 0:18:01.880 --> 0:18:04.720 rise of generative AI, that puts us in a very 0:18:04.760 --> 0:18:07.560 scary place. So what we did for this story is 0:18:07.600 --> 0:18:10.200 we analyzed some of the statutes that have been put 0:18:10.240 --> 0:18:13.480 in place across the country and found this patchwork of 0:18:13.760 --> 0:18:17.240 civil cases. Some of the statutes are criminal, some only 0:18:17.280 --> 0:18:20.879 target election related content, and some are just amendments to 0:18:20.920 --> 0:18:23.760 revenge porn laws. What this means is that there is 0:18:24.000 --> 0:18:28.600 very little recourse for victims of deep fake pornography today. 0:18:30.040 --> 0:18:33.600 It's an extremely graphic Internet address which was where they 0:18:33.640 --> 0:18:36.720 found the content that was faked for seeing me of 0:18:36.760 --> 0:18:41.280 themselves young girls in school, and I'm interested as also. 0:18:41.320 --> 0:18:43.919 You also go to New Zealand for the story and 0:18:44.000 --> 0:18:47.439 a legal entanglement that's happening over there. Is this an 0:18:47.480 --> 0:18:50.120 issue in the US alone or is this a global 0:18:50.119 --> 0:18:53.040 issue of regulation trying to keep up with now generative 0:18:53.040 --> 0:18:57.640 AI pushing out what are incredibly realistic photos that aren't photos. 0:18:58.040 --> 0:19:01.479 This is definitely a global issue. We're seeing cases across 0:19:01.520 --> 0:19:04.560 the country. As we were studying this particular website, we 0:19:04.640 --> 0:19:08.800 saw examples of deep fake pornography of women from countries 0:19:08.840 --> 0:19:09.760 all over the world. 0:19:09.920 --> 0:19:11.760 This isn't just a US problem. 0:19:12.000 --> 0:19:14.919 But this case in Levittown is the first real example 0:19:15.080 --> 0:19:18.720 of a deep fake related conviction where we could highlight 0:19:18.800 --> 0:19:22.320 in the story how prosecutors and the police really tried 0:19:22.359 --> 0:19:25.399 to file charges against the young man who was behind 0:19:25.400 --> 0:19:29.240 this content, but ultimately failed to do so because there 0:19:29.240 --> 0:19:33.320 are no laws to protect victims of deep fake pornography here. 0:19:33.720 --> 0:19:36.679 So I feel as though this story this narrative, and 0:19:36.720 --> 0:19:39.480 you're right, it crosses from Levittown all the way to 0:19:39.560 --> 0:19:42.640 New Zealand is symbolic of a much broader problem. 0:19:43.480 --> 0:19:47.119 Bloomberg's Olivia carvill with the big take, terrific reporting, Thank you. 0:19:47.359 --> 0:19:50.240 Another big story coming out of Apple reportedly taking steps 0:19:50.280 --> 0:19:52.560 to pull the plug on a credit card partnership with 0:19:52.560 --> 0:20:07.600 Goldman the details. Next, this is Bloomberg Technology. Welcome back 0:20:07.640 --> 0:20:10.119 to Bloomberg Technology, Ed love O here in San Francisco. 0:20:10.280 --> 0:20:12.120 I'm Caroline hired in New York. Let's get a check 0:20:12.119 --> 0:20:13.959 in on these markets. But I'm looking at what's happening 0:20:14.119 --> 0:20:16.000 in the world of Golden Dragon and China Index. 0:20:16.000 --> 0:20:16.960 Then now's that Golden Dragon. 0:20:17.000 --> 0:20:19.159 This is what, of course is the Chinese names traded 0:20:19.200 --> 0:20:22.000 here over the United States ADRs and actually under pressure 0:20:22.000 --> 0:20:25.560 after we saw mayit one's numbers showing a lack of resiliency. 0:20:25.640 --> 0:20:27.880 Was so worried about a Chinese consumer and Andy Dali 0:20:27.920 --> 0:20:30.160 Barber Jack mar coming back to speak out and say 0:20:30.200 --> 0:20:32.720 you need to take on PDD, which actually did incredibly 0:20:32.720 --> 0:20:34.560 well in its numbers. We're looking at what's happening in 0:20:34.720 --> 0:20:37.120 HPE as well. It came out with its numbers yesterday 0:20:37.119 --> 0:20:40.199 after the bell We're seeing a rebound up seven percent. 0:20:40.280 --> 0:20:42.600 Why, well, it's not at server business, that's the sure. 0:20:42.640 --> 0:20:46.040 It's all about its resiliency in artificial intelligence that manages 0:20:46.080 --> 0:20:48.359 to buoy this stock. And I'm interested in the AI 0:20:48.600 --> 0:20:50.680 read across when it comes to Amazon as well. Ed 0:20:50.680 --> 0:20:52.400 we're looking at just off by about four tens percent 0:20:52.480 --> 0:20:54.280 on Amazon, but they had been doing well earlier on 0:20:54.320 --> 0:20:57.199 the day as we saw reinvent. Of course, that annual 0:20:57.240 --> 0:20:59.919 gathering of its customers really managing to paint a position 0:21:00.119 --> 0:21:04.080 of well combative and competitive nature that Amazon's coming at 0:21:04.119 --> 0:21:05.840 this when it comes with its chips, of course, that 0:21:05.840 --> 0:21:07.760 it is making and managing to make general to AI 0:21:08.000 --> 0:21:09.600 part of the corporate lexicon. 0:21:09.680 --> 0:21:10.440 Two. 0:21:11.040 --> 0:21:15.080 I think combative is correct. Competitive is what they'd say. 0:21:15.119 --> 0:21:18.000