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Speaker 1: Some pretty big earnings. We're talking about Meta Microsoft and Qualcom.

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Speaker 1: We're going to be all over them. We'd also love

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Speaker 1: to hear your questions, and it's easy to do so

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Speaker 1: you can submit them to us and you'll get answers

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Speaker 1: from our expert analysiss and analysts and experts. They will

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Speaker 1: answer them live on air. Just go to Bloomberg dot

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Speaker 1: point out this is exclusive to Bloomberg dot com subscribers

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Speaker 1: analysis and thoughts from some of the smartest minds. When

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Speaker 1: it comes to Meta Microsoft and Qualcom. We'll be breaking

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Speaker 1: them down going through them again. Just go to Bloomberg

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Speaker 1: dot com, slash Ask Radio, and then of course listen

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Speaker 1: Originals and YouTube. That's all coming your way at four

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Speaker 2: Bloomberg Audio Studios, podcasts, radio News. This is Bloomberg Business

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Speaker 2: weekdaily reporting from the magazine that helps global leaders stay

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Speaker 2: ahead with insight on the people, companies, and trends shaping

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Speaker 2: today's complex economy, plus global business, finance and tech news.

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Speaker 1: As it happens.

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Speaker 2: The Bloomberg Business Week Daily podcast with Carol Masser and

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Speaker 2: Tim Stenebek on Bloomberg Radio.

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Speaker 1: We mentioned at the top couple things certainly on our mind.

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Speaker 1: We've been watching the Nasdaq one hundred trading neuork correction

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Speaker 1: as a sellof in semi conductor stocks kind of turn

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Speaker 1: a little bit ugly, with investors once again questioning the

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Speaker 1: amount of money that big tech is spending when it

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Speaker 1: comes to AI and we want to go now to tech.

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Speaker 3: Yeah, I'm looking at shares of Micron right now. I'm

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Speaker 3: more than nine percent. Just in today's trade, SanDisk also

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Speaker 3: under pressure. I want to bring in man Deep Singh.

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Speaker 3: He's our third anchor of Business Week Daily.

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Speaker 1: My husband yesterday, I said, where's Man Deep?

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Speaker 4: He did?

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Speaker 1: He like talked to me last night.

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Speaker 4: It's like, where's Man Deep?

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Speaker 2: All right?

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Speaker 5: All right?

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Speaker 4: I get it.

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Speaker 3: The people there may they do. My dad says the

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Speaker 3: same thing. By the way, Ben Deep's global head of

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Speaker 3: technology research at Bloomberg Intelligence. The semiconductor trade got a

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Speaker 3: note from Tom Thornton earlier today. He says he closed

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Speaker 3: out What did he say? Just that I covered most

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Speaker 3: of my semi shorts today as well as Tesla. The

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Speaker 3: shorts are doing pretty well if they short at the

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Speaker 3: right time. When it comes to some of these memory names.

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Speaker 6: They are.

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Speaker 4: But when you look at the overall socks index, it's

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Speaker 4: up more than one hundred percent in the past three months.

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Speaker 4: So you know, when you have moves like this, there's

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Speaker 4: always you know, points where you will see some consolidation,

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Speaker 4: some sideways movement, and fundamentally when you look at the

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Speaker 4: earnings that have come so far, and we'll learn a

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Speaker 4: lot more this week, you know, Alphabet pointed to the

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Speaker 4: fact that they're raising the capex, so it's a positive

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Speaker 4: overall for the semiconductor complex and everyone's you know, has

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Speaker 4: talked about how they are supply constraints, so to me,

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Speaker 4: nothing has changed fundamentally. But you know, the mark it is.

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Speaker 6: Always looking ahead.

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Speaker 4: They are sniffing for what could go wrong down the line,

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Speaker 4: and that's what you see.

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Speaker 1: I have to say, Mandy, prepping for this, I think

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Speaker 1: we were like, oh, my, NY's gonna be like, guys,

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Speaker 1: I've answered this question a million times, so when do

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Speaker 1: you like what Maybe.

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Speaker 3: Tomorrow will answer it differently. Companies for Thursday too.

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Speaker 4: Yeah, if there is a capex cut yes, well.

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Speaker 1: That's what would possibly say to you. Okay, Now there

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Speaker 1: is a problem, is it?

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Speaker 4: Even if the companies that are reporting don't raise their capex,

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Speaker 4: to me, that's a negative because, as I've explained this

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Speaker 4: before that because of the memory price increases, every company

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Speaker 4: has to raise their capex targets just to account for

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Speaker 4: how much the memory prices have gone out. So they're

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Speaker 4: not raising their capex, that's a sign they're cutting somewhere else.

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Speaker 4: And to me, that in itself is a negative indicator that, oh,

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Speaker 4: they're holding themselves back. Why is that? Is it because

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Speaker 4: they're not able to train the latest model or there's

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Speaker 4: something more?

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Speaker 6: Or do it?

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Speaker 3: Which company do you think will be the first to

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Speaker 3: either hold or cut?

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Speaker 4: I mean Meta to me looks like the one where

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Speaker 4: they don't still have a cloud model, although the indications

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Speaker 4: are they are going that route. Yes, And so if

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Speaker 4: they come out and say they already have a customer

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Speaker 4: they're looking for Entropic to use their compute, that's a

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Speaker 4: positive sign. I expect them to raise the capex for

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Speaker 4: sure in that scenario. And also you know there'll be

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Speaker 4: more details around their own model, the Muse model, because

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Speaker 4: with all this open right news this week and Jensen Wang,

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Speaker 4: you know common x and supporting open weights. It feels

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Speaker 4: like there's a lot of momentum that suddenly there is

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Speaker 4: behind the Chinese open source models and what that would

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Speaker 4: mean for the overall ecosystem. I think we still have

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Speaker 4: to discern that overall impact.

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Speaker 1: So the AI circular fears are circular financing fears? Is

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Speaker 1: that legit? Should we be a little concerned about that

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Speaker 1: every time we spring up that diagram and see absolutely right.

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Speaker 4: I think, look, there is no denying the fact that Nvidia,

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Speaker 4: with their big balance sheet is backstopping a lot of

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Speaker 4: this build out. And look, open ai doesn't have a

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Speaker 4: balance sheet like Alphabet or Microsoft does. So if open

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Speaker 4: ai and Anthropic want to build their own data centers,

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Speaker 4: they need either the hyper scale support or they need

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Speaker 4: Nvidia support to say, okay, even though you are paying

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Speaker 4: buying chips from US, I'm backstopping the use. If nobody

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Speaker 4: is there to consume their LLLM capacity, I'm going to

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Speaker 4: backstop that.

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Speaker 1: Why don't they just tap credit markets for investors to

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Speaker 1: do that? Why do they have to have it?

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Speaker 4: I mean, the cost of capital for open ai would

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Speaker 4: be way more than what Google is paying, which is

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Speaker 4: more like ten percent, okay, and the return that Google

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Speaker 4: has to earn is more like twenty percent in order

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Speaker 4: to say it's a good investment for an open AI

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Speaker 4: if the bar will be much higher. And so that's

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Speaker 4: why the cost of capital matters here.

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Speaker 6: Okay.

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Speaker 3: Interesting, I'm just looking at shares a Micron down about

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Speaker 3: thirty percent going back to June twenty fifth. So much

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Speaker 3: is it up in a month over that time it's down?

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Speaker 1: How much is it up this.

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Speaker 3: Year over this year percent? But the thing is is

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Speaker 3: that it's starting to look like, you know, the same

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Speaker 3: shape that we saw pre COVID going into COVID and

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Speaker 3: then post COVID where things revert to normal.

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Speaker 4: I mean the big risk factor again, with all these investments,

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Speaker 4: there's always one big risk factor, and in the case

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Speaker 4: of memory names, I feel it's Apple because Apple has

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Speaker 4: so much weight when it comes to consumer devices, and

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Speaker 4: if they are able to qualify a CXMT or one

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Speaker 4: of the Chinese providers, then that's a big, you know,

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Speaker 4: threat to all these memory players because suddenly you've got

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Speaker 4: a fourth provider and then you've got the largest consumer

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Speaker 4: hardware company looking to use them.

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Speaker 3: Is that a real threat to the other, to the

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Speaker 3: Big three.

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Speaker 6: I think so.

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Speaker 4: But what we have learned so far is because there

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Speaker 4: is such a big supply demand mismatch that these companies

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Speaker 4: could allocate a lot more of their wayfirst towards HPM

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Speaker 4: than the conventional DRAM.

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Speaker 3: High performance computer, the high bandwidth memory.

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Speaker 4: That's yeah, but DRAM is where they are getting all

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Speaker 4: their pricing lifts.

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Speaker 3: So does that what does that mean for like the

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Speaker 3: consumer side of things, Apples, you know, saying a few

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Speaker 3: months ago that it's raising prices on this stuff. That's

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Speaker 3: that's here to stay.

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Speaker 4: That is here to say as long as they are

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Speaker 4: relying on a micron and skhienex for DRAM. Remember, Apple

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Speaker 4: doesn't need HPM at least right now. They're not building

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Speaker 4: data centers. They need memory chips for their smartphones, and

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Speaker 4: they just need the DRAM. So DRAM is what has

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Speaker 4: gone up in prices, partly because of all the wafers

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Speaker 4: that are needed for HBM. So there are a lot

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Speaker 4: of moving parts of there. But CXMT is a player

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Speaker 4: that sells d RAM the commoditized memory chips.

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Speaker 1: I was just going to say, we've only got twenty seconds,

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Speaker 1: but increasingly should we be watching what China's doing.

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Speaker 4: Very quickly, absolutely on the open right model side. Everyone

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Speaker 4: wrote them off and suddenly they've got the support of

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Speaker 4: one hundred plus companies here in the US saying we

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Speaker 4: want to support Chinese open rate models.

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Speaker 1: Wild Wild Wild, Thank you for coming back. I know

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Speaker 1: we asked the same questions, but we need you, We

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Speaker 1: need you.

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Speaker 3: Will see you tomorrow, We will, we will.

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Speaker 1: We hope Man deep Seeing, globalhead of Technology Research of

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Speaker 1: Bloomberg Intelligence.

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Speaker 3: Stay with us. More from Bloomberg Business Week Daily coming

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Speaker 3: up after this.

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Speaker 2: You're listening to the Bloomberg Business Week Daily Podcast. Catch

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Speaker 2: us live weekday afternoons from two to five e's During

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Speaker 2: this listen on Applecarplay and Android Auto with the Bloomberg

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Speaker 2: Business app, or watch us live on YouTube.

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Speaker 1: Folks, we've been watching shares of Rocket, Satellite and Spaceline companies.

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Speaker 1: They've been under pressure. Names including Intuitive Machines, Rocket Labs,

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Speaker 1: and Redwire among those losing some ground today. This is

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Speaker 1: happening as Elons, Masks, SpaceX shares have dropped as much

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Speaker 1: as twenty percent below their initial public offering price of

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Speaker 1: one hundred and thirty five dollars a year so racing

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Speaker 1: roughly one fifth of their value. For those who are

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Speaker 1: watching on YouTube and TV and Bloomberg originals, you can

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Speaker 1: see just after the first couple of days of trading

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Speaker 1: where the stock shot up, we have been essentially in

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Speaker 1: a downward move here SpaceX shares that I should mention

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Speaker 1: bouncing around today. They're now up a little bit more

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Speaker 1: than two percent, but they were down a lot earlier

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Speaker 1: in the session.

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Speaker 3: Joining us on said to talk about building out space infrastructure.

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Speaker 3: Teschbau Batya is back with CEO of Nebex. The company

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Speaker 3: describes itself as the market infrastructure platform for the global

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Speaker 3: space economy. Good to have you back on the program.

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Speaker 3: Last time you were with us, you were CEO of

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Speaker 3: Axiom Space. So a little bit of a job, not

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Speaker 3: a little bit a lot of a job switch, but

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Speaker 3: you're staying in the space space. Yeah, okay, all right,

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Speaker 3: making sure space space.

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Speaker 5: You got me thirty.

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Speaker 3: Million dollars seat investment around led by the company formully

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Speaker 3: known as Google Ventures GV. Other top tier venture funds

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Speaker 3: included a banking relationship with JP Morgan. What are you

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Speaker 3: setting out to do at Nabex that you weren't able

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Speaker 3: to do at axiom.

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Speaker 5: Yeah, well, thank you first both for having me back.

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Speaker 5: We met a few times. I always loved our conversations.

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Speaker 5: I feel like I remember vividly your story about your father. Yeah,

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Speaker 5: and kind of general connection we all have for space.

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Speaker 5: Really cool to be hearing you talk about various space

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Speaker 5: stocks and a speaking like it's a real economy. It's

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Speaker 5: not a real economy yet, and it's not a real

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Speaker 5: asset class yet.

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Speaker 6: Why not?

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Speaker 5: So SpaceX by far, this largest IPO, very exciting. It's

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Speaker 5: doing what public socks do and they've created a ton

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Speaker 5: of value. A question I would ask is why is

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Speaker 5: there no remotely close second place? Right every other sector?

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Speaker 5: I know the previous guest was talking about AI right

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Speaker 5: twenty years ago, it might have been search or cloud

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Speaker 5: or mobile. In every major revolution where there's huge value created,

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Speaker 5: there's multiple massive winners, right, you know, look at the

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Speaker 5: Big four, you know the Fang stocks we used to

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Speaker 5: talk about a while ago, there's always other ones.

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Speaker 3: Which is the most to launching a rocket and then

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Speaker 3: landing it on a barge, which you know seven years

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Speaker 3: ago was a big deal, but nowadays happened so frequently

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Speaker 3: we don't even necessarily show it. That's a pretty big moat.

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Speaker 5: Pretty big mot absolutely, But again Wyser only one that's

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Speaker 5: been doing it. I think this is where Nebex comes in.

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Speaker 5: We have a belief that this is a major transformation

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Speaker 5: for industry and civilization, and Nebex is building what we

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Speaker 5: call the commercial rails to go on the physical rails,

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Speaker 5: the physical rails being those rockets that go up and down.

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Speaker 5: And we've seen this over and over again. We've seen it,

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Speaker 5: particularly in New York quite a bit. When the railroads

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Speaker 5: were built New York, California. Ree gentlemen in Buffalo, New York, Butterfield,

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Speaker 5: Wells and Fargo created American Express to guarantee gold going

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Speaker 5: from New York to California. And when they realize that

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Speaker 5: they're guaranteeing it from robbers and gangs like Jesse James,

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Speaker 5: they realize they don't actually have to send the gold.

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Speaker 5: And that was American Express and travelers Checks. JP Morgan

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Speaker 5: eighteen seventy one standardizes the shipping container the first letters

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Speaker 5: of credit between global banks guaranteeing trade. So we've seen

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Speaker 5: this time and time again. But in space, everyone has

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Speaker 5: been focused on the hardware. Everyone has been focused on

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Speaker 5: the physical infrastructure, And when we talk about infrastructure, a

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Speaker 5: launch a day is infrastructure launching giant rockets and landing

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Speaker 5: on a barge exactly on their ex logo. That's incredible infrastructure.

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Speaker 5: Tens of thousands of satellites in orbit, that's infrastructure. Every

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Speaker 5: other company that was putting up demos. So we feel

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Speaker 5: there's this wide open space right now for a company

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Speaker 5: to bring the rest of the economy along. Once those

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Speaker 5: rails are set going up and down, what's the next

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Speaker 5: travelers check, what's the next shipping container, what's the next

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Speaker 5: trading platform that allows the economy to scale the way

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Speaker 5: every other industry has.

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Speaker 1: So how do we get there? Because the other thing

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Speaker 1: I would say with space is you want to make

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Speaker 1: sure there aren't problems. It's complicated, it's difficult. I always

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Speaker 1: think about it. You mentioned my dad, like he would

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Speaker 1: have been blown away by the idea that you could

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Speaker 1: actually bring a rocket back and make it land, because

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Speaker 1: that's not the case when he was doing it. So

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Speaker 1: I'm just like, there are regulations to make sure things

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Speaker 1: are safe and secure. Live certainly at stake in this

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Speaker 1: concept of kind of building out space as a place

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Speaker 1: for people to maybe live or data centers to exist.

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Speaker 1: What does it take in terms of international cooperation among entities,

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Speaker 1: companies and then the financial entities.

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Speaker 5: Yeah, and again we've seen this in other industries. Aviation,

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Speaker 5: right from the Right Brothers to Lindberg, going from New

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Speaker 5: York again to Paris. We saw within a few years

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Speaker 5: air shows everywhere, right, the wars having multiple air forces,

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Speaker 5: and then within one hundred years that industry completely transforming life.

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Speaker 5: We can't imagine life without airplanes.

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Speaker 2: Now.

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Speaker 5: The interesting thing about space and I discovered this, you know,

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Speaker 5: in my previous role. I'm new to the industry. I

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Speaker 5: worked at Google five years ago, and it's been my

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Speaker 5: childhood dream to send astronauts to space. I got my shot,

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Speaker 5: I took it. I was really good at it, sent

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Speaker 5: sixteen astronauts of space, twelve sovereign nations, billions of dollars

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Speaker 5: of revenue. Again, all is an outsider and as special

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Speaker 5: as I believe I am, as special my parents think

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Speaker 5: I am.

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Speaker 1: There's eight billions.

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Speaker 6: There are eight.

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Speaker 5: Billion special people in the world. Why is nobody else

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Speaker 5: cracking this code? And what I realized is I think

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Speaker 5: we uncovered right under our nose a gold mine, which

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Speaker 5: is literally the only industry left on the planet that

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Speaker 5: hasn't been touched by modern finance. And there's a geopolitical

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Speaker 5: history behind this. Back in your father's time, the space

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Speaker 5: race John F. Kennedy, we go to the Moon. We

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Speaker 5: do these things not because they're easy, but because they're hard.

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Speaker 5: I think we all get goosebumps when we think about it.

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Speaker 5: That's kind of our origin story space. In the United

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Speaker 5: States at that exact same time, students and schools were

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Speaker 5: being trained to get under their desks in case there

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Speaker 5: was a nuclear attack. It was an arms race, and

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Speaker 5: there was two superpowers, the United States and the Soviet Union,

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Speaker 5: and everything came out of that. And originally the first

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Speaker 5: collaboration between those two space superpowers was what eventually became

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Speaker 5: the International Space Station. And to remove complexity and politics

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Speaker 5: from it, they decided no money will exchange hands, and

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Speaker 5: it worked and it maintained peace and diplomacy even through

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Speaker 5: the current conflict. But now with a company like SpaceX

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Speaker 5: and Starlink and Starship, we need financial infrastructure to actually

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Speaker 5: modernize the industry.

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Speaker 1: I want to go back to you in test. We

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Speaker 1: only have about like four minutes or so left, so

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Speaker 1: I want to kind of get to some of what

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Speaker 1: you actually kind of plan to do in the deals

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Speaker 1: as this platform gets up and running. But I mean,

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Speaker 1: I always believe that if there's money to be made,

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Speaker 1: money will go there. And you started off saying, why

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Speaker 1: aren't there larger competitors to SpaceX? So if the money

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Speaker 1: hasn't gone there already, maybe it hasn't gone there, and

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Speaker 1: for good reason, maybe you need to have it concentrated

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Speaker 1: in one hands, or government still being very much controlling

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Speaker 1: a lot of stuff.

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Speaker 5: Yeah, and I think you've nailed it. I don't. I

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Speaker 5: don't think it is a cause and effect. If you

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Speaker 5: follow the dollars. It is a massive market today. I

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Speaker 5: know last time I was here, we're talking about orbital

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Speaker 5: data centers. We've spoken about pharmaceuticals in space manufacturing. We

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Speaker 5: saw in SpaceX's IPO the twenty eight trillion dollar ten awesome.

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Speaker 7: Awesome.

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Speaker 1: Let's totally addressable market.

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Speaker 3: Yeah, totally addressable market, totally realistic.

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Speaker 7: Yeah, why not? Okay, why not?

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Speaker 6: But that's vision.

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Speaker 5: We can look at exact numbers in twenty twenty six.

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Speaker 5: We can follow the dollars, which is what we all

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Speaker 5: should be doing, and every dollar goes back to a

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Speaker 5: government budget. The beauty of government budgets is they were

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Speaker 5: appropriated five years ago. The beauty of government budgets all

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Speaker 5: publicly available data. The exact dollar amount that's going to

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Speaker 5: be transacted in twenty twenty six is one hundred and

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Speaker 5: thirty eight billion dollars. It's actually one hundred and thirty

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Speaker 5: seven point four billion dollars for the weirdos who've checked

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Speaker 5: every single RFP and tender and know where every dollar

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Speaker 5: is going, so we know that that's a massive market now,

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Speaker 5: so there's no guesswork there. It's all coming from government budgets.

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Speaker 5: So the reason it hasn't actually accelerated is because it's

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Speaker 5: been of sovereign to sovereign business and now with commercial

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Speaker 5: supply it's changing.

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Speaker 3: We're speaking with TOAs Paul Botya, the CEO of nebax so,

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Speaker 3: who are your first customers going to be at netax so.

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Speaker 5: Netwex is a financial exchange for cross border space transactions.

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Speaker 5: When governments need to buy commercial supply from another country,

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Speaker 5: it gets very complicated and basically that's every single space

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Speaker 5: transaction if you want to get off the ground.

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Speaker 1: And you want to what restricts it, And there's lots

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Speaker 1: of things that.

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Speaker 5: Exactly import export itar ear in the case of the

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Speaker 5: United States, taxes, tariffs, politics, policy, procurement rules, procurement rules.

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Speaker 5: For many European countries, money cannot actually leave their borders

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Speaker 5: and they invoke what they call the barter system. There's

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Speaker 5: no real barter system, but it's usually some sort of

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Speaker 5: value in kind bilateral trade that agencies will do. So

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Speaker 5: there's no trusted counter party. There's no neutral central clearing

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Speaker 5: settlement system for these deals, which forces every deal to

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Speaker 5: be bilateral and sequential. There's no parallel processing in this,

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Speaker 5: so when companies are going after government contracts, they win

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Speaker 5: the contract, they get their payment, they hit the next

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Speaker 5: mile sit How.

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Speaker 1: Do you take the politics out though? In a world

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Speaker 1: where geopolitics does determine who you sell what to, and

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Speaker 1: especially it's heightened in terms of the sensitivity, whether it's

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Speaker 1: natural resources, whether it's weapons, Like, how do you get

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Speaker 1: around that and forgive us we only have about forty

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Speaker 1: five I can answer.

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Speaker 5: In fifteen seconds. So five years ago, when I was

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Speaker 5: working at Google, i'd never spoken to a world Later,

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Speaker 5: before sending sixteen astaurants to space, you're dealing with presidents

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Speaker 5: and prime ministers. I don't even pretend to say, I

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Speaker 5: understand politics, but we have the most efficient vehicle as

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Speaker 5: humans to solve that, and that's the markets. So capital markets,

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Speaker 5: and you mentioned the relationship with JP Morgan. What's happened

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Speaker 5: is in this time warp that has become space. The

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Speaker 5: space business is stuck in nineteen sixty nine. This building

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Speaker 5: is a couple of billion dollars right to the bankers

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Speaker 5: who finance this get paid on transaction fees, assets under management.

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Speaker 5: The atomic unit for space is a launch, which is

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Speaker 5: about one hundred million dollars. You can't get the time

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Speaker 5: of day of any Wall Street banker to come finance

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Speaker 5: at even if it's a bankable deal. So doing it

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Speaker 5: at scale, bringing the capital markets in makes it a

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Speaker 5: money problem, not a politics problem.

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Speaker 1: We know this will continue this conversation. Glad to have

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Speaker 1: you back, Come back sooner. Let's not wait a year

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Speaker 1: or so. Tej Bobatia, he is CEO of Nevik, joining

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Speaker 1: us right here in studio.

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Speaker 3: Stay with us. More from Bloomberg Business Week Daily coming

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Speaker 3: up after this.

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Speaker 2: You're listening to the Bloomberg Business Week Daily Podcast. Catch

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Speaker 2: us live weekday afternoons from two to five e's during

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Speaker 2: Listen on Applecarplay and Android Auto with the Bloomberg Business app,

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00:20:23,640 --> 00:20:26,120
Speaker 2: or watch us live on YouTube.

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Speaker 3: Lots of news in the world of financial plumbing, the

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Speaker 3: infrastructure that makes markets work, the exchanges, the clearinghouses, the

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00:20:32,280 --> 00:20:36,239
Speaker 3: trading firms, prediction markets, fintech firms, and more. We're now

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Speaker 3: talking about this stuff every day.

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Speaker 1: We are, indeed, and this is Walt Luken's world. He

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Speaker 1: is CEO at the FIA. It's the trade organization that

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Speaker 1: represents markets and options, futures, prediction and more. Not just

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Speaker 1: here in the United States, but around the world. Everybody's

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Speaker 1: watching what's going on with kind of old markets and

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Speaker 1: new markets and how we trade.

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Speaker 3: Walt joins us here in the Bloomberg Interactive Brokers Studio.

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Speaker 3: I want to start with what you said in your

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Speaker 3: keynote in March at your annual conference in Boca. You

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Speaker 3: talked about how for years, even doing this since twenty twelve. Yeah,

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Speaker 3: you talked about for years, you'd go to Christmas parties

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Speaker 3: and stuff, and people would ask you what you did,

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Speaker 3: and you started explaining, and their eyes would just glaze

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Speaker 3: over because they would be so bored with what you're

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Speaker 3: talking about. Now you go to these same parties and

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Speaker 3: everybody wants to talk to you about this stuff. You're

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Speaker 3: like the bell of the ball.

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Speaker 4: Now.

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Speaker 8: Yeah, I have teenage and twenty year old kids right now,

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Speaker 8: and they love the fact that we're involved with Polymarket

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Speaker 8: and Kalshi, and they actually think Dad's job is pretty cool,

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Speaker 8: which is unique because it hasn't been that case in

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Speaker 8: the past.

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Speaker 6: So it's fun.

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Speaker 8: And I think part of it is the attractiveness of

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Speaker 8: our regulatory system. It is a strong regulatory system that's flexible,

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Speaker 8: principles based, gives exclusive jurisdiction, so other regulators, either in

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Speaker 8: states or the federal level, can't regulate at those markets.

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Speaker 8: So it brings regulatory predictability and clarity, which I think

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Speaker 8: is very attracted to these new markets.

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Speaker 1: Well, your kids say, this is pretty cool what dad does.

440
00:21:58,600 --> 00:22:00,720
Speaker 1: But what do your members like the Nasdaq, the New

441
00:22:00,760 --> 00:22:03,600
Speaker 1: York Stock is change too increasingly either getting involved in

442
00:22:03,720 --> 00:22:06,200
Speaker 1: prediction markets or at least look again them very closely.

443
00:22:06,359 --> 00:22:08,879
Speaker 1: What do they really think about the disruption that's going on.

444
00:22:09,160 --> 00:22:11,440
Speaker 8: Well, I think a lot of the prediction markets are

445
00:22:11,800 --> 00:22:15,199
Speaker 8: very innovative in many ways. This actually, when I was

446
00:22:15,560 --> 00:22:18,920
Speaker 8: a former regulator at the CFTC, we started to look

447
00:22:18,960 --> 00:22:22,080
Speaker 8: at these markets in the two thousands because they were

448
00:22:22,119 --> 00:22:26,879
Speaker 8: incredibly predictive at bringing disparate information together in a market

449
00:22:26,960 --> 00:22:31,119
Speaker 8: condition to break things, and that can happen in economic activity,

450
00:22:31,760 --> 00:22:35,399
Speaker 8: but also started to work for you know, politics, and

451
00:22:35,440 --> 00:22:38,560
Speaker 8: obviously sports betting is a big one now too. I

452
00:22:38,560 --> 00:22:42,240
Speaker 8: think everybody is an agreement that if we're going to

453
00:22:42,320 --> 00:22:45,160
Speaker 8: do this, let's do it responsibly. And so that's why

454
00:22:45,359 --> 00:22:47,959
Speaker 8: FI plays an important role of saying, if you're going

455
00:22:48,040 --> 00:22:50,520
Speaker 8: to be in the community, let's make sure it's at

456
00:22:50,560 --> 00:22:55,000
Speaker 8: the appropriate best practices, the highest levels of regulation, and

457
00:22:55,080 --> 00:22:57,680
Speaker 8: so we think that's a positive. Let's bring these things

458
00:22:57,680 --> 00:23:00,240
Speaker 8: on shore at the highest levels of regulation.

459
00:23:00,480 --> 00:23:04,000
Speaker 3: So on that the conversation around prediction markets that are

460
00:23:04,040 --> 00:23:06,280
Speaker 3: regulated here in the US by the CFTC, a lot

461
00:23:06,359 --> 00:23:08,760
Speaker 3: of questions have emerged about whether or not the CFTC

462
00:23:08,840 --> 00:23:12,840
Speaker 3: actually has the person power to regulate everything that's happening

463
00:23:13,119 --> 00:23:14,160
Speaker 3: on these platforms.

464
00:23:14,320 --> 00:23:14,960
Speaker 6: Do you think the.

465
00:23:14,920 --> 00:23:17,000
Speaker 3: CFTC is able to do this?

466
00:23:17,560 --> 00:23:18,879
Speaker 6: I do, of course.

467
00:23:19,000 --> 00:23:22,560
Speaker 8: If it is clarified that you know, the regulation of

468
00:23:22,600 --> 00:23:27,080
Speaker 8: crypto markets and clarity around prediction markets, the CFDC should

469
00:23:27,240 --> 00:23:30,360
Speaker 8: look at their budget and see if more people are necessary.

470
00:23:30,600 --> 00:23:33,440
Speaker 8: This year's budget, they asked for a twelve percent increase

471
00:23:34,040 --> 00:23:38,960
Speaker 8: fifteen FTEs more additional people to the marketplace. But they

472
00:23:39,000 --> 00:23:41,720
Speaker 8: are going to need that man power if indeed, prediction

473
00:23:41,840 --> 00:23:44,800
Speaker 8: markets and the crypto industry comes into their space, and

474
00:23:44,840 --> 00:23:49,000
Speaker 8: they should ask for that and FI supports appropriate appropriate

475
00:23:49,119 --> 00:23:50,400
Speaker 8: resources for the CFTC.

476
00:23:50,680 --> 00:23:53,199
Speaker 1: Do regulators totally get it? Do lawmakers totally get it?

477
00:23:53,200 --> 00:23:55,800
Speaker 1: As they probably are thinking about their own jurisdictions back

478
00:23:55,800 --> 00:23:57,720
Speaker 1: at home and people wondering what does this mean for

479
00:23:57,800 --> 00:24:00,000
Speaker 1: me if I'm investing or playing around on these markets?

480
00:24:00,520 --> 00:24:01,840
Speaker 6: The regulators do get it.

481
00:24:02,359 --> 00:24:07,200
Speaker 8: They certainly understand the importance of well functioning markets. This

482
00:24:07,240 --> 00:24:09,959
Speaker 8: is unique and it is a case of first impression.

483
00:24:10,440 --> 00:24:12,600
Speaker 8: I think people on Capitol Hill are trying to figure

484
00:24:12,600 --> 00:24:16,360
Speaker 8: out what activity should be under the jurisdiction of the CFTC.

485
00:24:16,760 --> 00:24:19,200
Speaker 8: I think there is a strong public policy debate going

486
00:24:19,240 --> 00:24:22,359
Speaker 8: on whether sports gaming and gambling should be within its

487
00:24:22,440 --> 00:24:26,520
Speaker 8: jurisdiction right now. My view is that the law does

488
00:24:26,680 --> 00:24:29,840
Speaker 8: capture that for the CFTC, but that's either going to

489
00:24:29,880 --> 00:24:33,359
Speaker 8: be decided by the CFTC or the Supreme Court I'm sorry,

490
00:24:33,440 --> 00:24:37,040
Speaker 8: by the Congress or Supreme Court ultimately.

491
00:24:36,600 --> 00:24:38,040
Speaker 6: And that's where it should be. It should be.

492
00:24:38,080 --> 00:24:41,320
Speaker 8: This is a public policy determination that really should be

493
00:24:41,359 --> 00:24:44,040
Speaker 8: at the highest levels of what does the public want

494
00:24:44,080 --> 00:24:45,160
Speaker 8: and what does Congress want?

495
00:24:45,480 --> 00:24:47,960
Speaker 3: You know, I want you to give us some historical context.

496
00:24:48,040 --> 00:24:51,159
Speaker 3: The FIA has been around since nineteen fifty five, and

497
00:24:51,200 --> 00:24:56,920
Speaker 3: I'm wondering, given that we're talking prediction markets, tokenization, stable coins,

498
00:24:56,960 --> 00:24:59,959
Speaker 3: twenty four to seven trading, that's taking a lot of

499
00:25:00,040 --> 00:25:02,320
Speaker 3: the oxygen right now. Would you say this is sort

500
00:25:02,359 --> 00:25:04,680
Speaker 3: of the biggest inflection point in the history of the industry.

501
00:25:05,320 --> 00:25:08,760
Speaker 8: I wouldn't say it's the biggest, but well, certainly when

502
00:25:08,800 --> 00:25:13,320
Speaker 8: they moved from agricultural to financial products in nineteen seventy four,

503
00:25:13,800 --> 00:25:16,720
Speaker 8: so the Commodity Exchange Act, the CFTC was created at

504
00:25:16,720 --> 00:25:20,080
Speaker 8: that time. But that opened up the definition of commodity

505
00:25:20,119 --> 00:25:23,520
Speaker 8: not just to agricultural products, but to energy, to financials,

506
00:25:23,520 --> 00:25:27,879
Speaker 8: to equities, and that broad definition of commodities also.

507
00:25:27,720 --> 00:25:29,160
Speaker 6: Captured a lot of things.

508
00:25:29,520 --> 00:25:32,399
Speaker 8: So in many ways, the CFTC has been trying to

509
00:25:32,520 --> 00:25:35,600
Speaker 8: clarify over time what is in its jurisdiction or out

510
00:25:35,640 --> 00:25:39,080
Speaker 8: of its jurisdiction since that moment. We had a big

511
00:25:39,119 --> 00:25:42,960
Speaker 8: inflection point in two thousand with the Commodity Futures Modernization

512
00:25:43,040 --> 00:25:47,440
Speaker 8: Act that brought principles based regulation. It brought self certification

513
00:25:47,560 --> 00:25:51,920
Speaker 8: for products, so exchanges can self certify products quickly to market,

514
00:25:52,160 --> 00:25:53,280
Speaker 8: which is a great.

515
00:25:53,400 --> 00:25:54,880
Speaker 3: That's what the finiction markets are doing.

516
00:25:55,000 --> 00:25:57,160
Speaker 8: They love it, and I think that is something while

517
00:25:57,400 --> 00:26:01,399
Speaker 8: everybody in our industry supports it. Station also comes with

518
00:26:01,680 --> 00:26:05,080
Speaker 8: the burden and the responsibility on the prediction markets to

519
00:26:05,240 --> 00:26:08,159
Speaker 8: show to show their homework. You know, they have to

520
00:26:08,200 --> 00:26:11,320
Speaker 8: show that you can't manipulate this product. You have to

521
00:26:11,359 --> 00:26:14,159
Speaker 8: meet the twenty three core principles of the Act. And

522
00:26:14,240 --> 00:26:17,359
Speaker 8: I think the CFTC put out guidance recently saying, hey,

523
00:26:17,520 --> 00:26:19,919
Speaker 8: do your homework. We need to see the proof. The

524
00:26:19,920 --> 00:26:22,479
Speaker 8: burden is on you, and here's some guidance around how

525
00:26:22,480 --> 00:26:24,080
Speaker 8: to do that. I think that's going to help clean

526
00:26:24,160 --> 00:26:26,200
Speaker 8: up some of the products that are being listed around

527
00:26:26,200 --> 00:26:27,080
Speaker 8: self certification.

528
00:26:27,200 --> 00:26:31,280
Speaker 1: Well, well, for the prediction market, so much is gambling

529
00:26:31,359 --> 00:26:35,800
Speaker 1: right in sports gambling? Does that have to be off

530
00:26:35,840 --> 00:26:41,080
Speaker 1: the platform ultimately for really to be embraced by traditional

531
00:26:41,560 --> 00:26:43,040
Speaker 1: finance and markets.

532
00:26:43,320 --> 00:26:46,520
Speaker 8: Well, Congress has told the CFTC and part of the

533
00:26:46,560 --> 00:26:49,760
Speaker 8: Dodd Frank legislation that there's certain activity that may be

534
00:26:50,040 --> 00:26:53,600
Speaker 8: outside the public interest of the CFTC regulating that said

535
00:26:53,840 --> 00:26:58,720
Speaker 8: terrorism assassination gaming was a keyword thrown in there, and

536
00:26:58,720 --> 00:27:01,320
Speaker 8: I think the CFTC has since a time been wrestling

537
00:27:01,359 --> 00:27:04,640
Speaker 8: with how how do we interpret that? What does that capture?

538
00:27:04,680 --> 00:27:08,440
Speaker 8: What that does it not capture? That is why it's uncertain,

539
00:27:08,560 --> 00:27:11,560
Speaker 8: That's why people are debating this. What Indian tribes, states

540
00:27:11,560 --> 00:27:14,760
Speaker 8: are concerned about this. That's why I think it's ultimately

541
00:27:14,840 --> 00:27:17,800
Speaker 8: up to Congress to clarify what did you mean, you know,

542
00:27:17,880 --> 00:27:18,439
Speaker 8: should it be in?

543
00:27:18,520 --> 00:27:19,240
Speaker 6: Should it be out?

544
00:27:19,359 --> 00:27:21,639
Speaker 8: And if they don't clarify, ultimately, I think it'll end

545
00:27:21,720 --> 00:27:22,720
Speaker 8: up with the Supreme Court.

546
00:27:23,600 --> 00:27:24,840
Speaker 3: We don't have a ton of time left. I want

547
00:27:24,840 --> 00:27:26,359
Speaker 3: to talk about some of the new products that are

548
00:27:26,600 --> 00:27:29,520
Speaker 3: being offered by members of your organization. We had Cat

549
00:27:29,520 --> 00:27:33,000
Speaker 3: Dougherty on our program yesterday who covers this space. She

550
00:27:33,080 --> 00:27:35,480
Speaker 3: said she wrote a story about how CMME is launching

551
00:27:35,520 --> 00:27:38,800
Speaker 3: single stock futures yep, this week. It's not the first

552
00:27:38,800 --> 00:27:40,959
Speaker 3: time they've done this. They did this, you know, twenty

553
00:27:41,040 --> 00:27:42,919
Speaker 3: six years ago and it didn't really catch on and

554
00:27:42,960 --> 00:27:47,440
Speaker 3: they ultimately ditched in twenty twenty. They think this time

555
00:27:47,520 --> 00:27:49,160
Speaker 3: is different and they'll succeed this time.

556
00:27:49,160 --> 00:27:52,239
Speaker 8: To you, I do, and I think partly because the

557
00:27:52,280 --> 00:27:55,480
Speaker 8: tone from the top at the SEC and CFTC is different.

558
00:27:55,720 --> 00:27:56,840
Speaker 6: I actually was involved.

559
00:27:56,960 --> 00:27:58,560
Speaker 3: Do you think it's about regulation this time?

560
00:27:58,680 --> 00:28:02,119
Speaker 8: It is duplicative regulation. I think there is the cost

561
00:28:02,160 --> 00:28:06,200
Speaker 8: of being in the markets. There's alternatives overseas, there's alternatives.

562
00:28:06,040 --> 00:28:09,040
Speaker 3: Over the liquid type of well not just hyper liquid,

563
00:28:09,080 --> 00:28:09,480
Speaker 3: but on.

564
00:28:09,440 --> 00:28:14,400
Speaker 8: Exchange regulated exchanges in Europe to offer single stock futures.

565
00:28:14,720 --> 00:28:16,880
Speaker 8: And so I think this is an opportunity to again

566
00:28:16,960 --> 00:28:19,439
Speaker 8: bring this back on shore. CMME is going to do

567
00:28:19,480 --> 00:28:21,800
Speaker 8: this and you know, a week a month or so.

568
00:28:22,720 --> 00:28:25,960
Speaker 8: But let's make sure the regulatory structure is rationalized. Because

569
00:28:26,320 --> 00:28:28,600
Speaker 8: you don't want to have both the full burden of

570
00:28:28,600 --> 00:28:32,560
Speaker 8: the SEC SEEFTC on these products. Let's at least recognize

571
00:28:32,680 --> 00:28:35,919
Speaker 8: each other's jurisdiction. You know, it's funny I always say that,

572
00:28:36,040 --> 00:28:39,480
Speaker 8: you know, both the SEC and SEFTC recognize foreign jurisdictions

573
00:28:39,800 --> 00:28:42,480
Speaker 8: that we don't need to regulate certain foreign products. Yet

574
00:28:42,480 --> 00:28:46,280
Speaker 8: we can't recognize the two agencies across town from each other.

575
00:28:46,760 --> 00:28:49,760
Speaker 8: That has stopped with this administration. They're talking to each other,

576
00:28:49,800 --> 00:28:52,320
Speaker 8: they're finding out how do we rationalize this to allow

577
00:28:52,320 --> 00:28:54,240
Speaker 8: those products to launch and be successful.

578
00:28:54,240 --> 00:28:55,840
Speaker 1: There's so much more to ask you. Will you come

579
00:28:55,880 --> 00:28:56,280
Speaker 1: back soon?

580
00:28:56,520 --> 00:28:57,760
Speaker 6: Absolutely, anytime.

581
00:28:57,840 --> 00:28:59,960
Speaker 1: We would love to continue. So much of our converse

582
00:29:00,040 --> 00:29:02,400
Speaker 1: stations go into your world, so we'd love to continue

583
00:29:02,400 --> 00:29:05,800
Speaker 1: at Weal. Luken CEO at the FIA. As we mentioned earlier,

584
00:29:05,840 --> 00:29:09,320
Speaker 1: it's the trade organization that represents markets and options, futures,

585
00:29:09,320 --> 00:29:10,400
Speaker 1: prediction and more.

586
00:29:10,840 --> 00:29:14,720
Speaker 2: You're listening to the Bloomberg Business Week Daily Podcast. Catch

587
00:29:14,800 --> 00:29:17,440
Speaker 2: us live weekday afternoons from two to five eas during

588
00:29:17,680 --> 00:29:21,560
Speaker 2: Listen on Applecarplay and Android Auto with the Bloomberg Business app,

589
00:29:21,760 --> 00:29:23,880
Speaker 2: or watch us live on YouTube.

590
00:29:24,600 --> 00:29:26,680
Speaker 1: All right, we're going to switch game.

591
00:29:26,920 --> 00:29:28,760
Speaker 3: We are the futures industry getting a lot of attention

592
00:29:28,840 --> 00:29:31,360
Speaker 3: thanks to prediction, markets and the like. Also getting a

593
00:29:31,360 --> 00:29:34,440
Speaker 3: lot of attention right now is AI and that's where

594
00:29:34,520 --> 00:29:36,920
Speaker 3: Lexi Reese comes in. She's CEO of Lenai. It's a

595
00:29:36,960 --> 00:29:40,760
Speaker 3: tech company that helps monitor how and where and also crucially,

596
00:29:41,160 --> 00:29:44,320
Speaker 3: how well AI is being used across a big company.

597
00:29:44,400 --> 00:29:46,440
Speaker 3: She joins us from Palo Alto, California.

598
00:29:46,560 --> 00:29:48,600
Speaker 1: Hey, Lexi, great to have you here with Tim and me.

599
00:29:48,640 --> 00:29:52,720
Speaker 1: You've got a super interesting background. You're CEO at the

600
00:29:52,760 --> 00:29:56,160
Speaker 1: payroll services company Gusto, an executive at Google and Amex

601
00:29:56,280 --> 00:29:58,480
Speaker 1: you're a partner at a VC firm. You ran for

602
00:29:58,600 --> 00:30:01,720
Speaker 1: Senate in calif a few years ago. First of all,

603
00:30:01,760 --> 00:30:03,800
Speaker 1: how would you describe your vantage point as you look

604
00:30:03,840 --> 00:30:07,920
Speaker 1: at things like technology, AI, the labor market, our economy

605
00:30:07,920 --> 00:30:08,520
Speaker 1: more broadly?

606
00:30:09,600 --> 00:30:13,880
Speaker 9: Yeah, so thanks for having me. I have seen technology

607
00:30:13,880 --> 00:30:16,240
Speaker 9: from a lot of angles at big tech. At Google,

608
00:30:16,280 --> 00:30:18,760
Speaker 9: I worked on ADS and I saw how a big

609
00:30:18,800 --> 00:30:22,800
Speaker 9: idea becomes a huge business when you can connect what

610
00:30:22,840 --> 00:30:26,880
Speaker 9: a customer spends to what they actually earned back. And

611
00:30:27,200 --> 00:30:31,240
Speaker 9: at Gusto, I helped a small payroll company become a

612
00:30:31,440 --> 00:30:35,400
Speaker 9: large HR services company for hundreds of thousands of businesses.

613
00:30:36,360 --> 00:30:41,000
Speaker 9: And importantly, every big business, medium small. They don't buy

614
00:30:41,080 --> 00:30:44,920
Speaker 9: technology because it's cool. They buy technology because it helps

615
00:30:44,960 --> 00:30:49,480
Speaker 9: them to run a better business. And now I run LANNI,

616
00:30:49,640 --> 00:30:52,440
Speaker 9: which is an AI accountability company. Think of it as

617
00:30:52,440 --> 00:30:56,200
Speaker 9: like workday for your AI workforce. So we see all

618
00:30:56,240 --> 00:31:00,160
Speaker 9: of your AI workers, whether they're assistants or copilots and agents.

619
00:31:00,560 --> 00:31:03,800
Speaker 9: We measure the impact of what those workers are doing,

620
00:31:03,920 --> 00:31:06,120
Speaker 9: and we help you manage that impact.

621
00:31:06,560 --> 00:31:09,600
Speaker 3: So we let's see how how are we how are

622
00:31:09,640 --> 00:31:14,040
Speaker 3: we doing, like do companies these companies get do they

623
00:31:14,080 --> 00:31:14,440
Speaker 3: get it?

624
00:31:15,960 --> 00:31:16,440
Speaker 6: Yeah?

625
00:31:16,480 --> 00:31:18,440
Speaker 9: So so what I would say, and you know that

626
00:31:18,600 --> 00:31:22,040
Speaker 9: from companies going uh, I know my body language said it.

627
00:31:23,640 --> 00:31:23,760
Speaker 4: Uh.

628
00:31:24,240 --> 00:31:29,200
Speaker 9: The what what is impressive is there's lots of wow moments.

629
00:31:29,240 --> 00:31:32,240
Speaker 9: You know, your kids, yourself, your parents probably have used

630
00:31:32,240 --> 00:31:35,400
Speaker 9: AI and said, wow, this is really cool. We're really

631
00:31:35,680 --> 00:31:39,760
Speaker 9: in the in the third year of AI as consumers,

632
00:31:39,800 --> 00:31:42,880
Speaker 9: but we're in the first year of true enterprise AI

633
00:31:43,440 --> 00:31:47,640
Speaker 9: where companies are not right now able to say, for

634
00:31:47,840 --> 00:31:50,600
Speaker 9: all of this spend, and it's hundreds of millions of

635
00:31:50,640 --> 00:31:53,600
Speaker 9: dollars of spend, here is what I got back in

636
00:31:53,720 --> 00:31:55,680
Speaker 9: terms of revenue or profit.

637
00:31:57,720 --> 00:32:01,840
Speaker 1: So as you, you know, I think we're it's interesting

638
00:32:01,840 --> 00:32:06,080
Speaker 1: to see the AI conversation LEXI has really evolved and

639
00:32:06,120 --> 00:32:08,960
Speaker 1: we are talking a lot more about return on investment,

640
00:32:09,160 --> 00:32:12,040
Speaker 1: like rather than spend spend, spend, make sure you are

641
00:32:12,040 --> 00:32:16,680
Speaker 1: exposing your workforce to AI. There's still that too. What

642
00:32:16,760 --> 00:32:19,240
Speaker 1: are you hearing you guys did a labor report? Talk

643
00:32:19,280 --> 00:32:22,360
Speaker 1: to us a little bit about organization's executives how they

644
00:32:22,360 --> 00:32:23,320
Speaker 1: are looking at all of this.

645
00:32:24,720 --> 00:32:27,880
Speaker 9: Yeah, So we released an AI labor report in April

646
00:32:28,080 --> 00:32:32,880
Speaker 9: and that has results from talking to two hundred business

647
00:32:33,040 --> 00:32:36,640
Speaker 9: owners who own their technology budget. So these are businesses

648
00:32:36,640 --> 00:32:40,200
Speaker 9: one thousand employees or more, and ninety two percent of

649
00:32:40,240 --> 00:32:43,920
Speaker 9: them said, we track AI impact, But when you probe

650
00:32:44,000 --> 00:32:47,320
Speaker 9: what do they actually track? They're tracking usage, they're tracking

651
00:32:47,360 --> 00:32:48,920
Speaker 9: did people log into AI?

652
00:32:49,120 --> 00:32:50,240
Speaker 1: Did they use AI?

653
00:32:50,840 --> 00:32:53,920
Speaker 9: And they're getting vendor reports and they're cobbling together their

654
00:32:54,040 --> 00:32:57,440
Speaker 9: dashboards in order to say are people using the darn things?

655
00:32:57,960 --> 00:33:02,440
Speaker 9: What only two percent two percent worry able to say

656
00:33:03,040 --> 00:33:07,040
Speaker 9: is as a result of buying AI in this way,

657
00:33:07,480 --> 00:33:10,800
Speaker 9: my revenue went up or my profit went up. And

658
00:33:10,880 --> 00:33:15,440
Speaker 9: so that's why seventy nine percent of those folks are

659
00:33:15,480 --> 00:33:19,480
Speaker 9: worried their AI budgets will get cut next year, because

660
00:33:19,600 --> 00:33:23,280
Speaker 9: they have to show that the spend is returning something.

661
00:33:23,880 --> 00:33:27,040
Speaker 9: And now this is why and I exist. We help

662
00:33:27,160 --> 00:33:30,600
Speaker 9: delineate what you're spending on just activity that isn't going

663
00:33:30,640 --> 00:33:35,719
Speaker 9: anywhere versus activity that is helping you move a business metric.

664
00:33:36,160 --> 00:33:39,120
Speaker 3: So I guess the question that a lot of people

665
00:33:39,200 --> 00:33:41,800
Speaker 3: have right now is about their own jobs and whether

666
00:33:41,880 --> 00:33:43,840
Speaker 3: or not they will they will still have jobs in

667
00:33:43,840 --> 00:33:46,000
Speaker 3: the next few years. What, given what you know and

668
00:33:46,040 --> 00:33:47,600
Speaker 3: what you found in the survey, what is the right

669
00:33:47,600 --> 00:33:50,200
Speaker 3: thing for people, the right way for people to approach

670
00:33:50,240 --> 00:33:52,560
Speaker 3: this technology, so the future proof themselves.

671
00:33:53,480 --> 00:33:56,000
Speaker 9: Yeah, so I love this question. And let me just

672
00:33:56,160 --> 00:33:59,400
Speaker 9: say this is why we talk about AI not as software.

673
00:33:59,560 --> 00:34:03,160
Speaker 9: It gets build and expense as software, but it is labor.

674
00:34:03,760 --> 00:34:06,640
Speaker 9: And so as a business owner, I'll talk about it first,

675
00:34:06,680 --> 00:34:08,839
Speaker 9: and then I'll talk about it as an employee. As

676
00:34:08,840 --> 00:34:12,440
Speaker 9: a business owner, you are buying a new workforce that

677
00:34:12,600 --> 00:34:15,279
Speaker 9: is doing jobs for you. You have to be able

678
00:34:15,320 --> 00:34:17,440
Speaker 9: to see what jobs they're doing. You have to be

679
00:34:17,520 --> 00:34:20,360
Speaker 9: able to cost what price you're paying for that work,

680
00:34:20,840 --> 00:34:23,680
Speaker 9: and you have to be able to make good decisions

681
00:34:23,840 --> 00:34:27,520
Speaker 9: about what should machines do and what should humans do.

682
00:34:28,000 --> 00:34:32,280
Speaker 9: In the same AI labor report, we had zero zero

683
00:34:32,360 --> 00:34:37,080
Speaker 9: of two hundred companies saying they actually have autonomous agents.

684
00:34:37,480 --> 00:34:41,640
Speaker 9: They had no autonomous agents. What they have is supervised

685
00:34:41,760 --> 00:34:45,240
Speaker 9: machine labor. Humans had to come in and fix the work,

686
00:34:45,400 --> 00:34:48,840
Speaker 9: oversee the work. None of that is being managed or

687
00:34:48,880 --> 00:34:52,840
Speaker 9: accounted for, but it's a huge part of AI costs.

688
00:34:52,920 --> 00:34:58,319
Speaker 9: So what business owners can do is ask better questions.

689
00:34:58,760 --> 00:35:01,040
Speaker 9: You should not be in testing as much as you

690
00:35:01,080 --> 00:35:03,640
Speaker 9: are if you can't say what did you get in return?

691
00:35:04,080 --> 00:35:06,200
Speaker 9: And obviously, LENI can help if you don't have that.

692
00:35:06,800 --> 00:35:11,359
Speaker 9: As an employee, push yourself to the limits to use AI,

693
00:35:11,600 --> 00:35:14,440
Speaker 9: but to use AI with an idea of if you're

694
00:35:14,480 --> 00:35:17,040
Speaker 9: a seller, you have to win deals. If you're in

695
00:35:17,120 --> 00:35:20,600
Speaker 9: customer experience, you have to serve customer as well. If

696
00:35:20,600 --> 00:35:24,040
Speaker 9: you're in development, you need to develop software that people

697
00:35:24,040 --> 00:35:27,560
Speaker 9: actually buy. So think about ways you can use your

698
00:35:27,600 --> 00:35:32,120
Speaker 9: AI colleagues to do that, and then how you redesign

699
00:35:32,239 --> 00:35:35,080
Speaker 9: your own work to do things you could never have

700
00:35:35,280 --> 00:35:36,040
Speaker 9: done before.

701
00:35:37,480 --> 00:35:40,640
Speaker 1: Yeah, you really now you've got to be kind of

702
00:35:40,680 --> 00:35:42,799
Speaker 1: smart about all of this, and I think this is

703
00:35:42,800 --> 00:35:44,920
Speaker 1: what we're trying to figure out. Lexi. Listen, We've got

704
00:35:44,920 --> 00:35:47,520
Speaker 1: to run, but thank you so much. Really appreciate getting

705
00:35:47,560 --> 00:35:50,359
Speaker 1: some time with you. Lexi Reich. She's the CEO of

706
00:35:50,400 --> 00:35:54,720
Speaker 1: an I, joining us from Palo Alto, California.

707
00:35:54,960 --> 00:35:57,759
Speaker 3: Stay with us. More from Bloomberg Business Week Daily coming

708
00:35:57,840 --> 00:35:58,719
Speaker 3: up after this.

709
00:36:04,400 --> 00:36:08,279
Speaker 2: You're listening to the Bloomberg Business Week Daily Podcast. Catch

710
00:36:08,320 --> 00:36:11,040
Speaker 2: us live weekday afternoons from two to five eas during

711
00:36:11,200 --> 00:36:14,400
Speaker 2: Listen on Apple Karpley and Android Otto with the Bloomberg

712
00:36:14,480 --> 00:36:17,440
Speaker 2: Business app, or watch us live on YouTube.

713
00:36:18,040 --> 00:36:19,719
Speaker 3: Charlie says it all the time. One cool thing about

714
00:36:19,719 --> 00:36:21,840
Speaker 3: working at Bloomberg is we work with the smartest people.

715
00:36:21,920 --> 00:36:25,440
Speaker 1: We work with amazing people, and I feel like I

716
00:36:25,480 --> 00:36:27,319
Speaker 1: don't feel like I know, we learn every day.

717
00:36:27,560 --> 00:36:30,080
Speaker 3: Dushan Charwatt is one of those people. He's crypto and

718
00:36:30,120 --> 00:36:33,799
Speaker 3: digital assets analysts for Bloomberg Intelligence senior analyst. I think

719
00:36:33,840 --> 00:36:35,800
Speaker 3: it's fair to say he joins us here in the

720
00:36:35,800 --> 00:36:39,120
Speaker 3: Bloomberg Interactive Brokers studio. He's usually based in Boston. I

721
00:36:39,200 --> 00:36:41,759
Speaker 3: know I've been eager to get him on our programs.

722
00:36:41,800 --> 00:36:43,479
Speaker 1: Well, You've been talking to him a lot, right because

723
00:36:43,560 --> 00:36:44,600
Speaker 1: the Crypto.

724
00:36:44,280 --> 00:36:46,399
Speaker 3: Show, and he's on our show every week. I talk

725
00:36:46,440 --> 00:36:48,800
Speaker 3: to him ahead of our Crypto Show every week because

726
00:36:49,120 --> 00:36:52,200
Speaker 3: he is He's got his hands in everything that we're

727
00:36:52,239 --> 00:36:54,200
Speaker 3: talking about. And one of the reasons I wanted him

728
00:36:54,200 --> 00:36:56,160
Speaker 3: to come on with you, Carol, is because you talk

729
00:36:56,200 --> 00:36:58,520
Speaker 3: about this all the time, about the difference between the

730
00:36:58,560 --> 00:37:02,640
Speaker 3: technology and the act cryptocurrencies. Yeah, and what is here

731
00:37:02,640 --> 00:37:04,719
Speaker 3: to stay Yeah, when it comes to the crypto part

732
00:37:04,760 --> 00:37:06,439
Speaker 3: of the conversation, that's where I want to start.

733
00:37:06,960 --> 00:37:07,040
Speaker 7: Uh.

734
00:37:07,520 --> 00:37:09,120
Speaker 3: Deean, it's good to have you on the program. Everybody

735
00:37:09,160 --> 00:37:12,560
Speaker 3: calls We're going to call you d I want to

736
00:37:12,560 --> 00:37:14,200
Speaker 3: start with what Carol brings up all the time, and

737
00:37:14,200 --> 00:37:17,040
Speaker 3: it's this idea of technology. And when we talk about

738
00:37:17,080 --> 00:37:19,680
Speaker 3: crypto on our program, a lot of time we're focused on,

739
00:37:19,760 --> 00:37:22,640
Speaker 3: like you know, price action, what goes up, what goes down,

740
00:37:22,680 --> 00:37:24,879
Speaker 3: how big the moves are. You and I have had

741
00:37:24,880 --> 00:37:29,200
Speaker 3: many conversations about the underlying technology and what this is

742
00:37:29,239 --> 00:37:33,359
Speaker 3: bringing to financial innovation in the financial ecosystem. You think

743
00:37:33,400 --> 00:37:37,600
Speaker 3: it's here to stay, what's the it? The it is

744
00:37:37,800 --> 00:37:44,640
Speaker 3: the underlying technology that cryptocurrency brought, like blockchain, tokenization, blockchain,

745
00:37:44,800 --> 00:37:45,640
Speaker 3: stable coins.

746
00:37:46,080 --> 00:37:48,960
Speaker 7: Absolutely, tim I mean twenty six years, most of my

747
00:37:49,040 --> 00:37:53,160
Speaker 7: career has been an intersection of technology and finance. And

748
00:37:53,200 --> 00:37:55,640
Speaker 7: if I can break it up and broad a context

749
00:37:55,680 --> 00:37:58,799
Speaker 7: to what's going on over decades, think about the late

750
00:37:58,880 --> 00:38:01,799
Speaker 7: nineties the Internet. What did that change in finance? It

751
00:38:01,960 --> 00:38:05,759
Speaker 7: changed the way the uiux. It put yellow pages online.

752
00:38:05,840 --> 00:38:08,879
Speaker 7: It brought the financial advisor, you pick up the phone

753
00:38:08,920 --> 00:38:11,640
Speaker 7: in place the trade. It brought it online. That was

754
00:38:11,680 --> 00:38:15,319
Speaker 7: the first wave. Second wave was mobile and cloud, which

755
00:38:15,360 --> 00:38:18,080
Speaker 7: was about fifteen years ago, which basically changed the way

756
00:38:18,080 --> 00:38:22,759
Speaker 7: we distributed financial products. This is different because this is

757
00:38:22,760 --> 00:38:25,440
Speaker 7: building on top of that. But even monumentally more important

758
00:38:25,480 --> 00:38:28,560
Speaker 7: because it promises has the potential to change the way

759
00:38:28,640 --> 00:38:33,640
Speaker 7: financial products are manufactured. That is the transformational change.

760
00:38:33,680 --> 00:38:34,440
Speaker 1: What does that mean?

761
00:38:34,600 --> 00:38:36,279
Speaker 7: What does that mean? Basically is that if you think

762
00:38:36,280 --> 00:38:38,400
Speaker 7: about the last one hundred years, last fifty years of

763
00:38:38,440 --> 00:38:42,120
Speaker 7: financial services, whether it's let's keep it simple, their four

764
00:38:42,120 --> 00:38:47,840
Speaker 7: major basic functions we have in finance payments, borrowing and lending, investing,

765
00:38:48,000 --> 00:38:50,960
Speaker 7: and insurance. Those are the four basic activities we do.

766
00:38:51,400 --> 00:38:54,560
Speaker 7: Everything else is mumbo jumbo. On top of that, those

767
00:38:54,560 --> 00:38:56,799
Speaker 7: four activities, when you think about the structure of how

768
00:38:56,800 --> 00:39:03,160
Speaker 7: those activities are executed, are heavily intimidiary driven. Their intermediaries

769
00:39:03,200 --> 00:39:07,359
Speaker 7: a standing YOURK stock exchange for a securities trade, Bank

770
00:39:07,400 --> 00:39:11,600
Speaker 7: of America for a payments transaction. That intimidiary driven model

771
00:39:12,360 --> 00:39:15,080
Speaker 7: is potentially could be upended by this block.

772
00:39:14,960 --> 00:39:19,680
Speaker 3: Chat intermedia intermediaries provide a very important service for us. Absolutely,

773
00:39:19,760 --> 00:39:23,200
Speaker 3: and that is the thing to do with trust, Absolutely.

774
00:39:22,680 --> 00:39:24,239
Speaker 7: Tim Man, This is the crux of it that too

775
00:39:24,239 --> 00:39:26,840
Speaker 7: many we are we are in a phase in the

776
00:39:26,880 --> 00:39:31,759
Speaker 7: industry where we can have software eventually replacing some of

777
00:39:31,840 --> 00:39:35,680
Speaker 7: what trust was provided by intermediaries. Think about it like

778
00:39:35,800 --> 00:39:38,560
Speaker 7: you're getting into a way more car trusting your life

779
00:39:38,760 --> 00:39:42,520
Speaker 7: with software. There's driving you. There's no driver sitting in

780
00:39:42,520 --> 00:39:45,959
Speaker 7: the seat, thank god, totally. But it took a while

781
00:39:45,960 --> 00:39:47,160
Speaker 7: for us to get over that hump.

782
00:39:47,239 --> 00:39:48,680
Speaker 1: Took me thirty seconds.

783
00:39:49,239 --> 00:39:51,680
Speaker 7: That's crazy, Carol, You're you're ahead of the curve. But

784
00:39:51,760 --> 00:39:55,040
Speaker 7: that's what's happening in finance. That absolutely, Tim. I'm not

785
00:39:55,080 --> 00:39:57,560
Speaker 7: saying that bad things are not going to happen when

786
00:39:57,560 --> 00:40:00,640
Speaker 7: we hand over the driver's seat to sow software. It's

787
00:40:00,640 --> 00:40:02,799
Speaker 7: going to happen in finance too. Well, we are not

788
00:40:02,880 --> 00:40:03,480
Speaker 7: going back.

789
00:40:03,760 --> 00:40:07,600
Speaker 1: Well, bad things happen to with bodies that we trust

790
00:40:08,080 --> 00:40:11,480
Speaker 1: and pay fees to, and there's regulatory oversight, and bad

791
00:40:11,480 --> 00:40:12,000
Speaker 1: things happen.

792
00:40:12,000 --> 00:40:12,480
Speaker 6: Absolutely.

793
00:40:12,520 --> 00:40:14,160
Speaker 1: Dare I say the Great Financial Crisis?

794
00:40:14,200 --> 00:40:16,200
Speaker 7: Absolutely so.

795
00:40:16,680 --> 00:40:21,719
Speaker 1: Huh So how does it happen? Is it gradual? I

796
00:40:21,719 --> 00:40:24,080
Speaker 1: mean it has been gradual. Is it gradual?

797
00:40:24,600 --> 00:40:25,400
Speaker 6: It's not gradual?

798
00:40:25,480 --> 00:40:27,160
Speaker 7: Actually, if you think about and I just want to

799
00:40:27,160 --> 00:40:31,480
Speaker 7: be clear that you're not just talking about blockchain, because

800
00:40:31,600 --> 00:40:33,279
Speaker 7: I don't want to be yet another person coming on.

801
00:40:33,320 --> 00:40:37,880
Speaker 7: I think just you know, spousing blockchain b Bloch. Blockchain

802
00:40:38,000 --> 00:40:39,640
Speaker 7: is one part of it, but there's a whole lot

803
00:40:39,640 --> 00:40:42,760
Speaker 7: of other stuff that's happening is general technology is reached

804
00:40:42,800 --> 00:40:46,160
Speaker 7: a point where you know, waves of technology happen. This

805
00:40:46,280 --> 00:40:48,600
Speaker 7: is the next wave. Blockchain is a very important element

806
00:40:48,719 --> 00:40:51,799
Speaker 7: of it, and it's most relevant to us in financial services.

807
00:40:52,480 --> 00:40:57,040
Speaker 7: But it is when blockchain allows products to be structured

808
00:40:57,040 --> 00:40:59,440
Speaker 7: differently than they have in the past, and that basically

809
00:40:59,480 --> 00:41:01,960
Speaker 7: means I'll make rail for us. You know, when you

810
00:41:02,000 --> 00:41:05,320
Speaker 7: think about traditional financial products, they were stuck in boxes

811
00:41:05,360 --> 00:41:07,600
Speaker 7: with intimidiary so you could do only do so many

812
00:41:07,640 --> 00:41:09,600
Speaker 7: things with it. If you were to roll out a

813
00:41:09,640 --> 00:41:13,200
Speaker 7: new derivative contract, you had to go to a CME. Right,

814
00:41:13,719 --> 00:41:17,399
Speaker 7: we just had perpetual futures, this esoteric derivative instrument that's

815
00:41:17,400 --> 00:41:21,840
Speaker 7: finally come on shore. Eighty percent of world crypto activity

816
00:41:21,880 --> 00:41:25,600
Speaker 7: is happening in perpetual futures that were outlawed till about

817
00:41:25,600 --> 00:41:28,239
Speaker 7: six weeks ago. So we are the rest of the

818
00:41:28,239 --> 00:41:30,680
Speaker 7: world is not waiting for us to catch up, right,

819
00:41:30,760 --> 00:41:32,879
Speaker 7: So the rest of the world is moving on. Rest

820
00:41:32,880 --> 00:41:35,440
Speaker 7: of the world is using stable coins to transfer payments.

821
00:41:35,880 --> 00:41:37,520
Speaker 7: If you look at what stable coins has done, that's

822
00:41:37,560 --> 00:41:39,560
Speaker 7: something we can all relate to. Who can argue with

823
00:41:39,600 --> 00:41:41,640
Speaker 7: the fact that, you know, do you want to write

824
00:41:41,680 --> 00:41:44,680
Speaker 7: a check or send money through Venmo international cross border

825
00:41:44,719 --> 00:41:49,280
Speaker 7: transfers three days, fifty dollars, stable coins, instantaneous pennies.

826
00:41:49,360 --> 00:41:51,920
Speaker 3: So then who gets disrupted in this world that you envision?

827
00:41:52,080 --> 00:41:53,200
Speaker 3: Is it Western Union?

828
00:41:54,560 --> 00:41:56,640
Speaker 7: Ironically, if you look at what Western Union is doing,

829
00:41:56,719 --> 00:41:59,000
Speaker 7: they're rolling out their own stable coin and they're coming

830
00:41:59,040 --> 00:42:02,200
Speaker 7: out the bank. In fact, that's the story here, Tim

831
00:42:02,280 --> 00:42:04,320
Speaker 7: very importantly that the first wave two years ago, I

832
00:42:04,400 --> 00:42:06,759
Speaker 7: was sitting here, the discussion was about the insurgence.

833
00:42:06,960 --> 00:42:10,320
Speaker 3: Was his incumbents and the incomments have adopted the insurgent technology.

834
00:42:10,320 --> 00:42:12,719
Speaker 7: Absolutely, look at what's happening. I mean JP Morgan, Chase

835
00:42:12,800 --> 00:42:16,399
Speaker 7: Jamie Diamond ten years ago says bitcoin is a fraud. Right,

836
00:42:16,440 --> 00:42:19,600
Speaker 7: He's never attracted that statement. But as of last check,

837
00:42:19,719 --> 00:42:22,600
Speaker 7: connects Us, which is JP Morgan's digital asset platform, is

838
00:42:22,640 --> 00:42:26,239
Speaker 7: processing two billion in cross border payments every day.

839
00:42:26,400 --> 00:42:28,879
Speaker 1: What does it mean for our everyday life? The guy

840
00:42:28,880 --> 00:42:30,560
Speaker 1: I always joke in you know, when we just talked

841
00:42:30,560 --> 00:42:34,000
Speaker 1: about crypto, I have yet to pay my mortgage with cryptocurrencies.

842
00:42:34,040 --> 00:42:37,640
Speaker 1: I don't go buy eggs and milk with cryptocurrencies. So,

843
00:42:37,960 --> 00:42:41,480
Speaker 1: but how does it impact kind of our everyday life Carol.

844
00:42:41,480 --> 00:42:44,640
Speaker 7: Actually, it's not about cryptocurrencies. Cryptocurrency was simply the first

845
00:42:44,680 --> 00:42:49,920
Speaker 7: manifestation utilization of blockchain. Yeah, it's about basically using software

846
00:42:49,960 --> 00:42:53,640
Speaker 7: to intermediate between transactions. That's why I went keep it simple. Yeah,

847
00:42:53,760 --> 00:42:55,959
Speaker 7: I need to pay Tim. In the past, I would

848
00:42:55,960 --> 00:42:58,440
Speaker 7: not pay you directly because there was counterparty exposure, the

849
00:42:58,520 --> 00:43:01,120
Speaker 7: risk that either of us with renege on that payment.

850
00:43:01,680 --> 00:43:04,520
Speaker 7: So we did that through Swift for cross border, through

851
00:43:04,560 --> 00:43:08,239
Speaker 7: ACCH fedwire for domestic. The first wave of how that

852
00:43:08,360 --> 00:43:12,360
Speaker 7: moved was we went from that to paypalent Venmo ten fifteen,

853
00:43:12,400 --> 00:43:15,800
Speaker 7: twenty years ago. This is the next wave of that interaction.

854
00:43:16,719 --> 00:43:20,640
Speaker 7: This without any intimidated software intermediating between us would mean

855
00:43:20,719 --> 00:43:23,600
Speaker 7: we don't need to have even Venmo to send payments

856
00:43:23,600 --> 00:43:26,040
Speaker 7: to each other. I won't get it too the technical details,

857
00:43:26,040 --> 00:43:28,600
Speaker 7: but it's going to be your software agent interactive with

858
00:43:28,640 --> 00:43:31,239
Speaker 7: mine and neither of us can reneg on that. That

859
00:43:31,320 --> 00:43:32,800
Speaker 7: means technically we don't need an intimidation.

860
00:43:32,880 --> 00:43:36,279
Speaker 1: Then where is the security? Like, do we just have

861
00:43:36,320 --> 00:43:37,960
Speaker 1: to believe the system is secure?

862
00:43:38,160 --> 00:43:41,000
Speaker 7: It's it's software, Carol, I mean, where is the security

863
00:43:41,040 --> 00:43:43,320
Speaker 7: when you sit in a Vemo and expect a software

864
00:43:43,840 --> 00:43:46,440
Speaker 7: agent to drive you, your kids to some extent. You're

865
00:43:46,480 --> 00:43:49,200
Speaker 7: expecting software is going to work, and software oftentimes it's

866
00:43:49,239 --> 00:43:51,440
Speaker 7: not going to work. It's not infallible. Right, So we

867
00:43:51,480 --> 00:43:54,640
Speaker 7: have we have big structural problems that need to be addressed.

868
00:43:54,840 --> 00:43:57,640
Speaker 7: But what I'm saying is we're not a trajectory that

869
00:43:57,680 --> 00:44:02,080
Speaker 7: I've not seen very often, and it's accelerated. And you

870
00:44:02,120 --> 00:44:04,920
Speaker 7: can see that in payments, beginning to see that in

871
00:44:04,960 --> 00:44:08,480
Speaker 7: security is trading with tokenization. This has got a potential

872
00:44:08,480 --> 00:44:11,120
Speaker 7: to transform the way that industry is structured and who

873
00:44:11,200 --> 00:44:11,879
Speaker 7: competes with home.

874
00:44:11,920 --> 00:44:13,839
Speaker 3: I want to talk about totalization in one second, but

875
00:44:13,920 --> 00:44:15,839
Speaker 3: before that, I just want to ask you across your

876
00:44:15,920 --> 00:44:19,279
Speaker 3: universe of companies that you cover, who's who's making this

877
00:44:19,320 --> 00:44:22,040
Speaker 3: transformation the best and who's making it the worst?

878
00:44:22,680 --> 00:44:24,600
Speaker 7: So who's making it the best? Right now? I mean

879
00:44:24,640 --> 00:44:27,200
Speaker 7: I would say DTCC. I mean, who would have thought

880
00:44:27,239 --> 00:44:29,359
Speaker 7: two years ago DDCC for a lot of years may

881
00:44:29,400 --> 00:44:31,960
Speaker 7: not they may not be familiar with DTCC, but you

882
00:44:32,000 --> 00:44:35,200
Speaker 7: know every single the US equity trade goes through DTCC,

883
00:44:35,400 --> 00:44:37,920
Speaker 7: fifty year old entity trade. You know they cleared and

884
00:44:38,000 --> 00:44:40,640
Speaker 7: settle of one hundred and fourteen trillion dollars in assets.

885
00:44:40,680 --> 00:44:44,840
Speaker 7: That's more than World Global GDP. GDCC is on the ball.

886
00:44:45,239 --> 00:44:49,840
Speaker 7: They've actually taken So each time our Schwaba Fiderity account

887
00:44:49,880 --> 00:44:53,360
Speaker 7: executes a trade, the clearing and settlement happens to this DTCC.

888
00:44:53,840 --> 00:44:55,160
Speaker 6: GDCC has just put.

889
00:44:55,280 --> 00:45:00,680
Speaker 7: Entire infrastructure on a pilot project till October on chain.

890
00:45:01,680 --> 00:45:05,239
Speaker 7: That means we can potentially clear and settle trades, not

891
00:45:05,320 --> 00:45:06,960
Speaker 7: in one day, but instantaneously.

892
00:45:07,760 --> 00:45:10,560
Speaker 1: That's nuts. How can we not talk about this company?

893
00:45:11,960 --> 00:45:15,200
Speaker 6: It's the bombing. It's not exciting enough, Carol.

894
00:45:15,239 --> 00:45:17,480
Speaker 7: Everybody wants to talk about, you know, the front end,

895
00:45:17,560 --> 00:45:19,799
Speaker 7: consumer facing stuff. And here's the iron If you look

896
00:45:19,840 --> 00:45:21,759
Speaker 7: at the consumer facing stuff, why are we Why are

897
00:45:21,960 --> 00:45:26,319
Speaker 7: financial institutions catching up? Because consumers have woken up and said, look,

898
00:45:26,360 --> 00:45:29,120
Speaker 7: if I can send email at any point of time, right,

899
00:45:29,160 --> 00:45:31,359
Speaker 7: Imagine if I said you cannot send email after five

900
00:45:31,400 --> 00:45:33,600
Speaker 7: pmen of Friday because the email server is shut down,

901
00:45:33,760 --> 00:45:35,480
Speaker 7: right Like, that's that's unacceptable to.

902
00:45:35,440 --> 00:45:35,960
Speaker 5: You, right right?

903
00:45:36,560 --> 00:45:39,920
Speaker 7: Crypto has shown us no matter doesn't matter what we

904
00:45:39,960 --> 00:45:42,080
Speaker 7: think about Crypto, the point is it's shown us that

905
00:45:42,120 --> 00:45:46,160
Speaker 7: you can create an asset twenty four seven instantaneously around

906
00:45:46,160 --> 00:45:46,600
Speaker 7: the world.

907
00:45:46,800 --> 00:45:51,319
Speaker 1: So Crypto showed that as that that's value. But does

908
00:45:51,360 --> 00:45:52,920
Speaker 1: then crypto let's just go.

909
00:45:52,920 --> 00:45:55,400
Speaker 3: There, does that about the token?

910
00:45:55,520 --> 00:45:55,719
Speaker 5: Yeah?

911
00:45:55,719 --> 00:45:56,640
Speaker 1: Does it have a future.

912
00:45:58,320 --> 00:46:01,880
Speaker 7: Look, I'm not a cover crypto market structure. I'm not

913
00:46:01,920 --> 00:46:04,800
Speaker 7: a crypto analyst or a crypto zalot by any means.

914
00:46:04,960 --> 00:46:05,280
Speaker 3: Yeah.

915
00:46:05,560 --> 00:46:08,160
Speaker 7: So the way I if you might, you know, I'll

916
00:46:08,160 --> 00:46:10,200
Speaker 7: share the framework that I look at when I look

917
00:46:10,200 --> 00:46:13,440
Speaker 7: at the space. So we've got this underlying technology, blockchain

918
00:46:13,440 --> 00:46:16,399
Speaker 7: and related technology. The first manifestation of that was these

919
00:46:16,440 --> 00:46:19,040
Speaker 7: crypto tokens. That's what most of us woke up to

920
00:46:19,080 --> 00:46:24,080
Speaker 7: when we thought about in a blockchain. Any interaction directly

921
00:46:24,080 --> 00:46:27,439
Speaker 7: with the tokens is pillar one of that infrastructure, right

922
00:46:27,520 --> 00:46:30,400
Speaker 7: there's still a lot of activity there. Pillar two has

923
00:46:30,560 --> 00:46:32,880
Speaker 7: nothing to do with the tokens. It's doe with blockchain

924
00:46:32,880 --> 00:46:37,920
Speaker 7: technology taking traditional financial activities payments, lending, borrowing, investing, insurance,

925
00:46:38,400 --> 00:46:41,000
Speaker 7: just doing it on faster rails. That's pillar two. That's

926
00:46:41,000 --> 00:46:45,160
Speaker 7: where stable coins to organization fits in. Pillar three is

927
00:46:45,200 --> 00:46:48,440
Speaker 7: the wild West, which is what decentralized finance is about.

928
00:46:49,000 --> 00:46:51,400
Speaker 7: That is only in the fringes right now. That's a

929
00:46:51,680 --> 00:46:55,040
Speaker 7: utopian world. It might be realized at some point in time.

930
00:46:55,200 --> 00:46:57,160
Speaker 7: I don't think regulators in the public going to allow

931
00:46:57,200 --> 00:47:01,120
Speaker 7: that that is no intermediary everything into med curely by

932
00:47:01,160 --> 00:47:03,920
Speaker 7: software science fiction stuff. Some of that is beginning to

933
00:47:03,960 --> 00:47:06,400
Speaker 7: be real. There is a company called hyper Liquid that

934
00:47:06,520 --> 00:47:09,520
Speaker 7: plays directly in that third realm. Today most of the

935
00:47:09,560 --> 00:47:12,719
Speaker 7: activity is in column two. I completely get a lot

936
00:47:12,760 --> 00:47:14,759
Speaker 7: of people to think about all this stuff, say, but

937
00:47:14,880 --> 00:47:18,560
Speaker 7: what about bitcoin? Yeah, and the discussion is got, you know,

938
00:47:18,560 --> 00:47:19,120
Speaker 7: way beyond that.

939
00:47:19,239 --> 00:47:19,919
Speaker 6: I'm not a fan.

940
00:47:20,800 --> 00:47:24,520
Speaker 1: It's people who watch No. But I just wonder, then,

941
00:47:24,600 --> 00:47:26,719
Speaker 1: what is his place or is it just useful as

942
00:47:26,760 --> 00:47:29,040
Speaker 1: showing look what we can do and think about how

943
00:47:29,080 --> 00:47:30,000
Speaker 1: we can apply it elsewhere.

944
00:47:30,040 --> 00:47:32,480
Speaker 7: No, Like I said, I mean, who could argue in payments?

945
00:47:32,520 --> 00:47:32,640
Speaker 4: Right?

946
00:47:32,680 --> 00:47:35,000
Speaker 7: Do you want to go through swift and spend three

947
00:47:35,080 --> 00:47:37,080
Speaker 7: days and knowing that you cannot send a transfer over

948
00:47:37,160 --> 00:47:38,879
Speaker 7: the weekend and cost fifty bucks day?

949
00:47:39,000 --> 00:47:40,240
Speaker 1: Come back soon.

950
00:47:42,280 --> 00:47:47,719
Speaker 2: This is the Bloomberg Business Week Daily podcast, available on Apple, Spotify,

951
00:47:47,880 --> 00:47:51,960
Speaker 2: and anywhere else you get your podcasts. Listen live weekday

952
00:47:51,960 --> 00:47:56,160
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953
00:47:56,280 --> 00:48:00,000
Speaker 2: the iHeartRadio app, tune In, and the Bloomberg Business app.

954
00:48:00,280 --> 00:48:03,120
Speaker 2: You can also watch us live every weekday on YouTube

955
00:48:03,360 --> 00:48:05,560
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