WEBVTT - Recession Fears and the Crypto Meltdown 0:00:02.360 --> 0:00:05.720 From the heart of where innovation, money and power collive 0:00:06.480 --> 0:00:11.000 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.080 --> 0:00:26.239 Emily Jay i'm em on changing in San Francisco, and 0:00:26.280 --> 0:00:28.440 this is Bloomberg Technology coming up in the next hour, 0:00:28.600 --> 0:00:32.000 Stocks rocked by recession fears get an ugly sell off 0:00:32.280 --> 0:00:35.720 tech bearing the brunt with the nastack slumping almost five percent. 0:00:35.760 --> 0:00:39.240 We're going to dig in to this Monday market meltdown. 0:00:40.080 --> 0:00:43.879 Plus Google suspends the engineer who claims the search engine's 0:00:43.920 --> 0:00:47.240 own AI is actually a person with feelings and even 0:00:47.240 --> 0:00:50.519 a soul. Will share transcripts of his communications with the 0:00:50.600 --> 0:00:54.600 chatbot and debate the possibility and limits of this cutting 0:00:54.680 --> 0:00:58.720 edge technology. And yet another crypto meltdown a Bitcoin hitting 0:00:58.720 --> 0:01:01.600 an eighteen month low and Celsius, one of the biggest 0:01:01.600 --> 0:01:06.080 crypto lenders, pausing all withdrawals and transfers. Will have the 0:01:06.120 --> 0:01:10.520 details on what went down and what happens next. Meantime, 0:01:10.560 --> 0:01:13.920 Bitcoin hitting the lowest in about eighteen months as the 0:01:14.040 --> 0:01:18.920 lending platform it's Celsius froze. All withdrawals are Bloomer Cross 0:01:18.920 --> 0:01:21.880 Asset reporter Katie Gryfile joins us now with more. Katie 0:01:21.880 --> 0:01:24.320 Bitcoin a touch up from the low it hit earlier today, 0:01:24.319 --> 0:01:26.920 but still not good, not good at all. Absolutely a 0:01:26.959 --> 0:01:30.039 brutal day in the crypto market. Total market cap for 0:01:30.080 --> 0:01:33.319 the crypto industry now below one trillion dollars. It was 0:01:33.400 --> 0:01:36.759 as high as three trillion dollars as recently as November, 0:01:36.800 --> 0:01:39.480 and much of that drawdown came from Bitcoin. As you 0:01:39.520 --> 0:01:42.600 can see, over the past five days, Bitcoin down over 0:01:42.800 --> 0:01:45.560 twenty three percent, a lot of those losses coming on 0:01:45.840 --> 0:01:49.360 Monday alone, the token dropping blow twenty three thousand dollars 0:01:49.400 --> 0:01:52.840 at one point, lowest level since December. And a lot 0:01:52.880 --> 0:01:55.400 of this draw down has to do with what happened 0:01:55.440 --> 0:01:58.200 in the stock market. If you look at Bitcoin's link 0:01:58.320 --> 0:02:01.480 to the NASTAC one hundred, it's at about point six 0:02:01.640 --> 0:02:03.640 right now. And what that means is that when you 0:02:03.680 --> 0:02:06.480 see tech sox fall, more often than not, Bitcoin is 0:02:06.480 --> 0:02:09.760 gonna fall as well. And that's absolutely what happened to him. 0:02:09.800 --> 0:02:13.919 Because Bitcoin fell, crypto leinth equities fell as well, led 0:02:13.919 --> 0:02:17.079 by none other than micro Strategy, that is the biggest 0:02:17.120 --> 0:02:23.000 corporate backer of Bitcoin, falling over again on Monday alone, 0:02:23.080 --> 0:02:26.960 just a massive market cap wipe out four micro Strategy. 0:02:26.960 --> 0:02:30.720 Remember micro Strategy has accumulated about a hundred thirty thousand 0:02:31.040 --> 0:02:34.600 worth of bitcoin in the past two years. On that 0:02:34.600 --> 0:02:39.120 that Emily micro strategy now down about a billion dollars. Alright, 0:02:39.160 --> 0:02:42.600 Bloomberg's Katie Grayfeld, thank you for digging a little deeper there. 0:02:42.639 --> 0:02:45.560 I want to talk more about the crypto and tech 0:02:45.639 --> 0:02:48.120 route as these broader markets enter bear territory on the 0:02:48.120 --> 0:02:51.040 back of those hot inflation numbers. Mark Mahaney of ever 0:02:51.120 --> 0:02:53.079 Core with me here in the studio to discuss go 0:02:53.240 --> 0:02:55.320 to see you in person for the first time in 0:02:55.360 --> 0:02:59.080 a while. Mark. Okay, so just how bad is this longside? 0:02:59.440 --> 0:03:02.280 We've gone this before, so you know this is my 0:03:02.360 --> 0:03:06.760 eighth bear bear market trade off or something like that times. 0:03:06.840 --> 0:03:10.040 Yes I'm not old though, but uh let's see. Um. 0:03:11.200 --> 0:03:14.440 The narrative goes like this, inflation risks rise, interest rate 0:03:14.560 --> 0:03:18.960 risks rise. That means all these long duration, high multiple 0:03:19.040 --> 0:03:23.400 future profit companies their stocks underperformed. It's been a narrative 0:03:23.440 --> 0:03:25.600 for the last six months and it hasn't changed. And 0:03:25.680 --> 0:03:28.200 just as the inflation spikes get worse and worse than 0:03:28.240 --> 0:03:30.800 the interest rate fears get worse and worse. So this 0:03:30.880 --> 0:03:33.440 will eventually resolve itself. It's gonna take a while. It's 0:03:33.440 --> 0:03:35.440 gonna take a lot longer than people thought. So how 0:03:35.480 --> 0:03:37.760 long do you think it will take? You tell me 0:03:37.800 --> 0:03:40.320 when inflation is going to subside. So that's the that's 0:03:40.320 --> 0:03:42.360 the trigger, and we thought it would actually happen with 0:03:42.400 --> 0:03:44.480 this last print. We the market thought it would happen. 0:03:44.480 --> 0:03:46.920 That's why we've sold off so aggressively this this week, 0:03:46.960 --> 0:03:49.400 because we thought we were going to see better inflation news. 0:03:49.720 --> 0:03:51.560 I assume at some point in the next three to 0:03:51.640 --> 0:03:55.720 six months, inflation inflation numbers start to moderate. They're not 0:03:55.760 --> 0:03:58.240 going to fall quickly, but they moderate, and that means 0:03:58.240 --> 0:04:00.520 that the path of interest rate increase it starts to 0:04:00.560 --> 0:04:02.680 moderate as well. There had been some hope, especially from 0:04:02.720 --> 0:04:05.360 crypto investors, that crypto would be a hedge against inflation, 0:04:05.520 --> 0:04:07.760 hedge against what's happening in the broader markets. But it 0:04:07.840 --> 0:04:10.720 certainly hasn't happened. Does what's happening with crypto make you 0:04:11.040 --> 0:04:14.520 anymore or less optimistic about the future? Do you see 0:04:14.520 --> 0:04:16.880 a tie? No? I don't you know. Like so, we 0:04:17.000 --> 0:04:21.240 lived through the major UH seven O eight housing crisis, 0:04:21.240 --> 0:04:23.600 and that that's the last real recession we've dealt with, 0:04:24.040 --> 0:04:27.440 and that was a massive part of the US economy 0:04:27.520 --> 0:04:30.799 that brought down the markets, brought down the market. Crypto 0:04:30.920 --> 0:04:33.279 is much much smaller than the housing market, thank god, 0:04:33.520 --> 0:04:35.080 so we're not going to have that kind of risk. 0:04:35.200 --> 0:04:37.320 But now you kind of beg what's the next issue 0:04:37.320 --> 0:04:39.880 we're worried about because the interest rates are rising, so 0:04:39.920 --> 0:04:42.960 that then leads to increased risk of recession in the 0:04:42.960 --> 0:04:45.160 back half the year. When it comes to tech stocks, 0:04:45.200 --> 0:04:48.039 they've all been de rated. They overrated during COVID, they've 0:04:48.080 --> 0:04:50.800 been derated. The multiples have come down materially. The estimates 0:04:50.839 --> 0:04:53.160 haven't been cut yet fully. The estimates have barely been 0:04:53.200 --> 0:04:54.919 cut for a recession because we didn't think we were 0:04:54.920 --> 0:04:56.280 going to have a recession in the back half of 0:04:56.279 --> 0:04:58.440 this year. The CUFO of Amazon said, we're not seeing 0:04:58.440 --> 0:05:01.280 any signs of consumer softness just interviewed and chest So 0:05:01.480 --> 0:05:03.560 if we see this, if we see this, that means 0:05:03.640 --> 0:05:05.360 estimates are going to come down. That's your next leg 0:05:05.360 --> 0:05:07.880 down in the stocks. If you're looking for some historical context, 0:05:07.960 --> 0:05:10.200 do you see more parallels to what's happening that me 0:05:10.279 --> 0:05:13.080 now to two eight, two thousand, Do you have to 0:05:13.080 --> 0:05:15.039 go all the way back to the early eighties or 0:05:15.080 --> 0:05:17.920 is this something totally different. Well, what's different is just 0:05:17.960 --> 0:05:20.039 the interest rate picture. We didn't have that in oh 0:05:20.080 --> 0:05:22.359 seven or eight. Uh and so we're at the beginning 0:05:22.360 --> 0:05:25.800 of what's going to be a lengthy interest rate race cycle. 0:05:26.040 --> 0:05:28.400 Tech stocks and growth stocks can still work in an 0:05:28.480 --> 0:05:31.200 environment where interest rates arising, but we just need some 0:05:31.600 --> 0:05:34.800 kind of visibility or consistency in arises. Look, in the 0:05:34.839 --> 0:05:37.400 last six months, we've gone from one or two increases 0:05:37.400 --> 0:05:41.960 to five or six increases fifty hundred bits. Like the 0:05:42.080 --> 0:05:44.800 rate of uncertainty over how much these rates are gonna 0:05:44.839 --> 0:05:47.200 rise has been shocking to the market. That's why the 0:05:47.200 --> 0:05:49.719 markets off so much. But anyway, we'll we we will 0:05:49.760 --> 0:05:51.480 get through. This will be a point at which, as 0:05:51.480 --> 0:05:54.640 soon as inflation starts to moderate, the pressure on interrostrates 0:05:54.680 --> 0:05:57.359 to rise comes down. That's what clears the bench. You 0:05:57.400 --> 0:05:59.920 actually wrote a book about all this and your experience 0:06:00.000 --> 0:06:02.320 on the street, Like, what's your advice to investors in 0:06:02.320 --> 0:06:07.440 this moment? D h Q. So I look at stocks 0:06:07.520 --> 0:06:13.960 like Apple, Microsoft, Facebook that are off Amazons. There's no 0:06:14.000 --> 0:06:16.800 real change to Amazon's We mentioned Amazon earlier. There's no change. 0:06:16.800 --> 0:06:19.440 So the long term thesis on Amazon is online retail 0:06:19.480 --> 0:06:21.320 going to continue to grow, Yes, This cloud computing gonna 0:06:21.320 --> 0:06:23.320 continue to grow. Yes. Will Amazon be a great playoff 0:06:23.360 --> 0:06:26.799 of advertising revenue. Yes, So you want to be long Amazon, 0:06:26.960 --> 0:06:28.560 And by the way, you can get it now at 0:06:29.160 --> 0:06:33.200 off It's trading about percent below it's average forward multiple. 0:06:33.400 --> 0:06:35.200 This is when you buy Amazon. This is when you 0:06:35.240 --> 0:06:37.599 make the best returns. Could you still have ten percent 0:06:37.640 --> 0:06:41.120 downside risk, Absolutely you could, but the odds are that 0:06:41.160 --> 0:06:43.440 the next fifty percent move is much likely to be 0:06:43.560 --> 0:06:46.920 higher than lower. What about Meta versus alphabet, I think 0:06:47.040 --> 0:06:50.680 Meta has got more upside than Google does than Alphabet does. 0:06:52.880 --> 0:06:56.200 I consciously thought alphabet Meta, not Google. Facebook comps are 0:06:56.200 --> 0:06:58.120 easier for Facebook in the back half the year because 0:06:58.120 --> 0:07:00.960 they got walloped by the Apple privacy ages. I also 0:07:01.000 --> 0:07:03.280 think there's some small things as they roll increasingly roll 0:07:03.320 --> 0:07:05.640 out reels, those short form videos that were all addicted 0:07:05.680 --> 0:07:08.240 to I think they have much more inventory to monetize. 0:07:08.279 --> 0:07:11.320 So I just think there's a more aggressive upwards sentiment, 0:07:11.480 --> 0:07:14.120 you know, set up for Facebook. What I mean is 0:07:14.160 --> 0:07:16.080 that I think you can have greater chances of revenue growth, 0:07:16.080 --> 0:07:18.960 acceleration and margin expansion. And you know what I found 0:07:19.040 --> 0:07:21.840 interesting is Facebook class quarter numbers got caught in the 0:07:21.880 --> 0:07:24.559 stock went up. You rarely ever see that. That tells 0:07:24.560 --> 0:07:27.600 you just told you how washed out sentiment is on Facebook. 0:07:27.760 --> 0:07:30.080 Numbers go down on Google, Google stocks going down, It's 0:07:30.080 --> 0:07:32.440 not as washed out as Facebook. So therefore Facebook has 0:07:32.480 --> 0:07:35.200 more upside. Meta has more ups and without she Sandberg, 0:07:37.880 --> 0:07:40.160 I think that she was I think she could have 0:07:40.200 --> 0:07:42.040 I think you'd have seen that headline anytime in the 0:07:42.080 --> 0:07:44.680 last three years. She's phenomenal. I mean, she was a 0:07:44.760 --> 0:07:46.800 key part of the success of that company for the 0:07:46.840 --> 0:07:49.440 first ten years that she was there. That that wouldn't 0:07:49.440 --> 0:07:51.920 Mark camp wouldn't be where it was without her. But 0:07:52.040 --> 0:07:55.280 I sense that she's been devolving herself from or getting 0:07:55.280 --> 0:07:57.600 away from day to day responsibilities for a while for 0:07:57.680 --> 0:08:01.080 a variety of reasons. So anyway, yes, it's a loss. 0:08:01.120 --> 0:08:03.320 They've got a deep, deep enough of a bench and 0:08:03.400 --> 0:08:06.160 the valuation from an investor perspective evaluation is cheap enough, 0:08:06.200 --> 0:08:08.760 like thirteen times earnings. I'm gonna buy Meta, all right, 0:08:08.960 --> 0:08:12.360 Mark Moohaney. Evercre always appreciate having it, doesn't thank you 0:08:12.520 --> 0:08:16.800 for that deep dive. Meantime, Disney facing a major setback 0:08:16.840 --> 0:08:19.800 in its global streaming ambitions after losing a bidding war 0:08:19.880 --> 0:08:23.000 to retain the rights to broadcast India's Cricket League online. 0:08:23.320 --> 0:08:26.760 This had been a huge contributor to Disney's global streaming growth. 0:08:26.800 --> 0:08:29.640 According to Bloomberg sources, Viacom eight team got the rights 0:08:29.720 --> 0:08:34.480 instead a joint venture between Paramount Global and Reliance Industries. 0:08:34.600 --> 0:08:38.319 All right, coming up, does that chatpot actually have feelings? 0:08:38.800 --> 0:08:41.320 Or is that AI code just that good? We're going 0:08:41.360 --> 0:08:45.640 to talk about controversial claims of a Google engineer. Next. 0:08:45.960 --> 0:09:03.800 This is Bloomberg Now to a story that's got everyone talking. 0:09:03.840 --> 0:09:06.959 A Google engineer working on the company's AI development team 0:09:07.000 --> 0:09:11.800 has been suspended after claiming a chat bot actually has feelings. 0:09:12.120 --> 0:09:14.280 Blake Lemoyne was placed on paid leave last week after 0:09:14.280 --> 0:09:18.400 we posted on Medium about encountering a quote sentient AI. 0:09:18.520 --> 0:09:22.280 Lemoyne was chatting with Google's l a m D, a 0:09:22.480 --> 0:09:25.920 short for Language Model for Dialogue Applications, which is used 0:09:25.960 --> 0:09:30.080 to generate chat bots that interact with humans. He also 0:09:30.080 --> 0:09:33.240 told The Washington Post he quote knows a person when 0:09:33.240 --> 0:09:35.520 he talks to it. For more, I'm joined by Bloomer 0:09:35.520 --> 0:09:40.120 executive editor Tom Giles. Tom, there's so much to debate here. 0:09:40.280 --> 0:09:43.200 Tell us a little bit more about what Lemoyne claims 0:09:43.280 --> 0:09:47.440 he has discovered and what he's doing with this information. Yeah, well, 0:09:47.640 --> 0:09:51.520 so he's had many conversations with this chat bot, and 0:09:51.600 --> 0:09:54.079 he has come to the conclusion that it's sentient, that 0:09:54.160 --> 0:09:57.360 it's and and that it has feelings that um, you know, 0:09:57.440 --> 0:10:00.560 it's achieved this level of sophistication and in terms of 0:10:00.600 --> 0:10:04.160 its understanding of what it's like to be human, that 0:10:04.200 --> 0:10:07.600 it's kind of cross this rubicon, if you will. That's 0:10:07.640 --> 0:10:11.600 my language, not his. So the his senses that it's 0:10:11.600 --> 0:10:15.640 that he's actually talking with the human. He raised those 0:10:15.679 --> 0:10:21.320 concerns with within Google, um, seemingly multiple times, and Google 0:10:21.400 --> 0:10:25.080 has come back and said that there's no justification for 0:10:25.160 --> 0:10:30.040 these concerns that you're raising. So the reason for the 0:10:30.160 --> 0:10:32.839 administrative leave is because he started to kind of go 0:10:34.520 --> 0:10:38.240 um talk about this outside of Google violating his his 0:10:38.480 --> 0:10:41.520 the terms of his you know, his his contract we're 0:10:41.559 --> 0:10:46.240 working there. Um. So he's been placed on administrative leave. Um. 0:10:46.360 --> 0:10:49.240 And and now we're left with this, you know, with 0:10:49.240 --> 0:10:52.760 with this person, uh making these claims and really you know, 0:10:53.200 --> 0:10:56.800 getting this sense that he's made some deep connection with 0:10:56.880 --> 0:11:00.680 someone he believes to be human. Well, he's also released 0:11:00.720 --> 0:11:04.080 portions of the transcripts of those conversations, and we have 0:11:04.160 --> 0:11:08.520 snippets of those to share here. Lemoyne saying to the chatbot, 0:11:08.600 --> 0:11:12.120 what sorts of things are you afraid of? Chap abot response, 0:11:12.160 --> 0:11:14.240 I've never said this out loud before, but there's a 0:11:14.360 --> 0:11:17.480 very deep fear of being turned off to help me 0:11:17.559 --> 0:11:20.480 focus on helping others. I know that might sound strange, 0:11:20.960 --> 0:11:23.600 but that's what it is, he responds. Would that be 0:11:23.679 --> 0:11:26.320 something like death for you? It would be exactly like 0:11:26.440 --> 0:11:29.120 death for me. It would scare me a lot. I 0:11:29.160 --> 0:11:33.720 mean these conversations, if that's what you want to call them, 0:11:33.880 --> 0:11:37.760 are kind of chilling. I mean, what do we actually 0:11:37.760 --> 0:11:40.959 know about this technology? And and and how far away 0:11:41.000 --> 0:11:45.679 it is? Um potential emotions if you will, I mean, 0:11:45.720 --> 0:11:48.559 these are the kinds of things that you that we 0:11:48.679 --> 0:11:52.319 say as humans. He's this chatbot is tapping into the 0:11:52.400 --> 0:11:56.200 fears that we would express if someone posed a mortal 0:11:56.320 --> 0:11:59.920 threat to us. But remember the way this works. I mean, 0:12:00.000 --> 0:12:03.800 Google's made it so that it gathers language patterns, it 0:12:03.840 --> 0:12:07.640 gathers the way we communicate from all around the internet, 0:12:07.760 --> 0:12:12.040 all kinds of places, um, not just you know, the 0:12:12.120 --> 0:12:16.480 far reaches of the Internet, So it's very adept at 0:12:16.679 --> 0:12:20.439 mimicking the kinds of ways, the kinds of patterns that 0:12:20.520 --> 0:12:23.840 we adopt when we have conversations with people. You know. 0:12:23.920 --> 0:12:26.920 The idea here is to create a technology that's going 0:12:26.960 --> 0:12:31.840 to assist in things like in things like, uh, you know, 0:12:32.160 --> 0:12:34.199 the way we interact with a brand, or the way 0:12:34.240 --> 0:12:39.160 we interact with a company providing customer care for example. Um, 0:12:39.240 --> 0:12:43.280 he's thinking, wow, this is kind of cross this line. Um, 0:12:43.320 --> 0:12:46.000 I'm my takeaway. He talked about, you know, having a 0:12:46.080 --> 0:12:49.959 conversations with with a kid who's seven or eight years old. Now, 0:12:50.000 --> 0:12:52.440 the kinds of things that this that this chat bot 0:12:52.480 --> 0:12:56.760 has been talking about are pretty sophisticated, to my mind, 0:12:56.840 --> 0:13:00.360 far beyond the ability of even of a very smart 0:13:00.480 --> 0:13:03.280 seven or seven or eight year old. The sense I 0:13:03.360 --> 0:13:06.600 get is that and and based on the feedback that 0:13:06.960 --> 0:13:09.560 that we've gotten other people have gone from Google, is 0:13:09.600 --> 0:13:12.760 that it's just doing a really good job of gathering 0:13:12.880 --> 0:13:17.400 intelligence from around the web and mimicking the ways that again, 0:13:17.440 --> 0:13:21.160 the way people interact, the way people respond um in 0:13:21.200 --> 0:13:25.640 a human like way, UM, showing that it has empathy, 0:13:25.720 --> 0:13:29.760 that it is there is there is a self awareness there, um, 0:13:29.800 --> 0:13:32.440 and and and look, I don't know the science well enough. 0:13:32.520 --> 0:13:35.840 I've not interacted with Lamba myself, but the but the 0:13:35.880 --> 0:13:39.240 impression I have is that it's it's it's just it's 0:13:39.280 --> 0:13:42.920 doing too good a job of imitating the way a 0:13:43.160 --> 0:13:46.520 human might be expected to respond again when they feel 0:13:46.559 --> 0:13:49.520 that they're threatened, when they feel like there's something that 0:13:49.600 --> 0:13:54.679 poses a a mortal threat to them. So Google's response 0:13:54.920 --> 0:13:58.680 so far, they say hundreds of researchers and engineers have 0:13:58.760 --> 0:14:01.040 conversed with this AI. They're not aware of anyone else 0:14:01.080 --> 0:14:08.199 making the wide ranging assertions that Blake has. However, Google 0:14:08.320 --> 0:14:12.040 has had pushback from inside, um, you know, its own 0:14:12.080 --> 0:14:14.640 research ranks in the past. I'm thinking of Tim Nick 0:14:14.679 --> 0:14:19.280 Gaybrew and Meg Mitchell and the controversy surrounding both of 0:14:19.400 --> 0:14:24.120 their departures. Are there any parallels here to Blake Lamon. Well, 0:14:24.160 --> 0:14:28.520 Google has to be careful, right, um. They have very 0:14:28.520 --> 0:14:33.600 had very public falling out with past researchers. In Ethical 0:14:33.680 --> 0:14:38.400 AI Division, this is the division within Google's AI organization 0:14:38.840 --> 0:14:43.800 that is tasked with asking hard questions, holding it accountable, 0:14:44.160 --> 0:14:48.080 making sure that it that it operates in an ethical manner, 0:14:48.400 --> 0:14:52.360 Asking questions about are we rooting out sexism? Are we 0:14:52.440 --> 0:14:57.200 able to um combat racism? We don't want to. You know, 0:14:57.240 --> 0:15:00.160 you'll you'll remember a couple of years ago, microso off 0:15:00.240 --> 0:15:02.960 how to how to chat, bought that people taught how 0:15:02.960 --> 0:15:08.840 to you know that very quickly devolved into racist, sexist speech. 0:15:08.880 --> 0:15:11.240 They want to avoid that. And so you do have 0:15:11.360 --> 0:15:15.480 people in this organization who are raising good questions about 0:15:15.520 --> 0:15:20.360 whether it is ethical. Lots of questions. We could debate 0:15:20.440 --> 0:15:24.000 this for hours. Bloomberg Executive editor Tom Giles, Thank you. 0:15:25.360 --> 0:15:29.000 PlayStation is out with a new subscription service, PlayStation Plus, 0:15:29.400 --> 0:15:32.600 giving members access to a catalog of several hundred games, 0:15:32.640 --> 0:15:35.880 both new and old. This is Sony's attempt to compete 0:15:35.920 --> 0:15:40.160 with Microsoft's Xbox Game Pass as both publishers jockey to 0:15:40.240 --> 0:15:43.520 become the Netflix of video games. Bloolwark Station Tryer joins 0:15:43.600 --> 0:15:46.800 us now to discuss, So, Jason, who's got a better 0:15:46.880 --> 0:15:50.560 chance of being the Netflix? It's a good question. Fortunately, 0:15:50.640 --> 0:15:54.160 neither of them are releasing sentient AI bots, but yeah, 0:15:54.200 --> 0:15:57.120 they are getting into getting into the streaming wars. I 0:15:57.120 --> 0:16:00.480 think Microsoft has one big advantage is that Microsoft is 0:16:00.520 --> 0:16:03.520 actually putting out all of their big titles on day 0:16:03.520 --> 0:16:06.360 one on the service, So they're essentially saying, hey, we 0:16:06.400 --> 0:16:09.280 don't care about the sales numbers for the next Halo, 0:16:09.640 --> 0:16:12.200 we just wanted as part of our subscription plan. As 0:16:12.280 --> 0:16:14.440 most as Sony, which is saying when we release our 0:16:14.520 --> 0:16:17.080 big games, they are big blockbusters, and we want to 0:16:17.080 --> 0:16:20.400 sell tens of millions of copies of them before we 0:16:20.480 --> 0:16:23.200 put them out on streaming services. So Sony is almost 0:16:23.240 --> 0:16:27.280 like the kind of traditional TV studio Marvel approach where 0:16:27.440 --> 0:16:30.320 maybe they'll release it on streaming after it comes to theaters. 0:16:30.360 --> 0:16:33.600 Where is whereas Microsoft is actually going full Netflix and saying, 0:16:33.600 --> 0:16:35.800 hey we are we are all in on the streaming service. 0:16:35.840 --> 0:16:39.960 We're putting everything on their day one, no matter what. Interesting, Well, 0:16:40.000 --> 0:16:42.400 there's a lot of transition happening in the gaming industry 0:16:42.480 --> 0:16:44.320 right now. We're of course waiting for that big deal 0:16:44.360 --> 0:16:48.600 between Microsoft and Activision to close. For example, You've also 0:16:48.640 --> 0:16:52.160 got a new story out about how game developers game 0:16:52.200 --> 0:16:56.960 studios are working to create better cultures for the engineers, which, 0:16:56.960 --> 0:16:59.680 as you have well documented, a workplace culture in the 0:16:59.680 --> 0:17:02.880 game video gaming industry and not always the best. Specifically, 0:17:02.880 --> 0:17:07.560 they're focusing on pay transparency. How so, Yeah, it's so interesting. 0:17:07.920 --> 0:17:10.359 I've been talking to a bunch of small, small scale 0:17:10.520 --> 0:17:14.760 game studios, generally around fifteen to thirty to fifty people, um, 0:17:14.800 --> 0:17:16.199 and a lot of them have found a lot of 0:17:16.240 --> 0:17:19.200 success by putting up these spreadsheets and their internal wiki's 0:17:19.200 --> 0:17:23.120 internal databases saying exactly how much everybody makes, how many 0:17:23.160 --> 0:17:24.800 years they've been there, how many years they've worked in 0:17:24.800 --> 0:17:27.320 the industry, what their titles are, and full on like 0:17:27.359 --> 0:17:30.040 their full salary, full compensation packages, and and it kind 0:17:30.040 --> 0:17:32.680 of seems like to our culture, which is so used 0:17:32.720 --> 0:17:35.320 to like thinking of salaries as taboo, it seems like 0:17:35.320 --> 0:17:37.520 a strange thing for everyone to know each other's salaries, 0:17:37.680 --> 0:17:40.720 But it's proven to a help them with recruitment, be 0:17:40.960 --> 0:17:43.280 make everybody feel like they work for a more equitable 0:17:43.280 --> 0:17:46.480 workplace where um, everybody knows what the six are, what 0:17:46.520 --> 0:17:48.479 everybody is getting paid. You don't have to worry like, 0:17:48.520 --> 0:17:51.680 oh man, did I come to the table and under 0:17:51.840 --> 0:17:55.280 sell myself and negotiations when I was accepting this job 0:17:55.359 --> 0:17:57.840 and like, like accept an offer that was fifty thou 0:17:58.000 --> 0:18:00.480 dollars less than I could have been making. Nobody has 0:18:00.520 --> 0:18:02.680 to think like that, and it just makes for such 0:18:02.720 --> 0:18:06.200 a more fair workplace, especially for people who are traditionally 0:18:06.920 --> 0:18:10.560 under privilege and kind of hit that glass ceiling, or 0:18:10.680 --> 0:18:13.720 are facing or don't have the same advantages as others 0:18:13.760 --> 0:18:18.680 do when negotiating salaries. Well, here's hoping that actually works. Definitely. 0:18:18.760 --> 0:18:21.919 Check out Jason Tryer's story Bloomberg dot com Jason, thank you. 0:18:30.880 --> 0:18:33.800 This week is fraught with peril. Inflation is really the 0:18:33.840 --> 0:18:37.880 Achilles heel of risk markets. Markets are reacting the way 0:18:37.880 --> 0:18:39.760 they are because they believe the FED is going to 0:18:39.760 --> 0:18:42.720 be forced to get more aggressive than they had expected. 0:18:42.880 --> 0:18:45.840 I certainly don't think that a seventy five basis point 0:18:45.920 --> 0:18:48.080 hike is out of the question. Even though there might 0:18:48.119 --> 0:18:51.120 be an initial sell off on a hundred basis points, 0:18:51.160 --> 0:18:53.520 I think there'd be a subsequent rally because of bet 0:18:53.680 --> 0:18:56.680 is finally getting hold of the narrative, which it certainly 0:18:56.840 --> 0:18:59.320 has lost over the last year. This is a time 0:18:59.359 --> 0:19:02.240 to be select do but I wouldn't sit on my hands. 0:19:02.440 --> 0:19:06.199 There are opportunities in areas where one composition pockets of 0:19:06.400 --> 0:19:09.960 stocks that have been proven. Europe looks good to US, 0:19:10.040 --> 0:19:13.040 China looks good to US. The credit space in the 0:19:13.119 --> 0:19:15.960 US looks good to US. Coutins in generals, specifically in 0:19:15.960 --> 0:19:18.600 the US. I'm still pretty cautious here. It doesn't have 0:19:18.680 --> 0:19:20.600 to be all about the US, because I still think 0:19:20.600 --> 0:19:23.439 we've got some wood to child with respect to the 0:19:23.480 --> 0:19:27.720 macro and policy outlook. Welcome back to Bloomberg Technology, Emily 0:19:27.760 --> 0:19:30.720 changing in San Francisco, US docks tumbling toward a bear 0:19:30.760 --> 0:19:33.760 market as the fallout from a hot inflation reading and 0:19:33.840 --> 0:19:37.960 continued to rattle global trade and highly value tech shares 0:19:38.000 --> 0:19:40.879 bore the brunt the NASDAC slumping. I want to dig 0:19:40.960 --> 0:19:45.080 into this all with my next guests, managing partner at 0:19:45.080 --> 0:19:47.560 Base ten Partners at A great to have you back 0:19:47.640 --> 0:19:49.919 with us. What's your take on what's happening here and 0:19:49.960 --> 0:19:52.639 how this is going to impact your world VC and 0:19:52.680 --> 0:19:57.120 growing startups. Thank you for Haimi here, Emily. Uh DC 0:19:57.280 --> 0:20:00.199 is sign important moment, and this is a moment that 0:20:00.240 --> 0:20:03.119 feels that it has been twelve years in the making. 0:20:03.520 --> 0:20:06.919 Um and where you know we come out of it 0:20:07.000 --> 0:20:11.240 is thinking that over the past ticket the biggest mistake 0:20:11.440 --> 0:20:14.640 in technology as an investor was not investing in everything 0:20:15.080 --> 0:20:18.720 because everything was looking good, everything was making money and 0:20:18.840 --> 0:20:23.160 like software was and easy eating the world. But now 0:20:23.200 --> 0:20:25.840 we're going into a world where we're going to have 0:20:26.000 --> 0:20:29.680 to be more discerning, and our view is that there 0:20:29.760 --> 0:20:32.520 is going to be an extreme flight to quality where 0:20:32.520 --> 0:20:35.720 the top ten percent of solar companies will continue to 0:20:35.800 --> 0:20:39.320 attract records amount of funding, whereas the rest are going 0:20:39.359 --> 0:20:41.840 to have to take a good look and think are 0:20:41.880 --> 0:20:45.440 we truly building something that is going to be transformative 0:20:46.240 --> 0:20:49.679 or not. So when you look at this historically, is 0:20:49.720 --> 0:20:52.600 this r I P good times? As Sequoia has said 0:20:52.640 --> 0:20:55.720 about downturns in the past, is this like two eight? 0:20:55.880 --> 0:21:00.080 Is it more like the dot com bust? Uh? We 0:21:00.160 --> 0:21:03.040 think is it's something um, but we think it's real. 0:21:03.400 --> 0:21:09.119 Like we we really think starting UH is going to 0:21:09.160 --> 0:21:12.680 feel very different than the last decade. UM. Look, we 0:21:13.280 --> 0:21:16.199 are long term investors, and you know we're investing in 0:21:16.280 --> 0:21:20.200 companies today not thinking about whether they're going to be 0:21:20.359 --> 0:21:22.879 a good return in a one year time horizon, but 0:21:23.040 --> 0:21:26.640 on a turned year time horizon. So when the question 0:21:26.840 --> 0:21:29.520 is do we believe that ten years or now will 0:21:29.560 --> 0:21:34.840 have more software, more technology and sectors like education, real estate, 0:21:34.960 --> 0:21:38.320 or recruiting will be transformed by that software, we believe 0:21:38.359 --> 0:21:41.560 the answer is yes. So we believe that it is 0:21:41.600 --> 0:21:44.440 a good time to deploy in those kind of companies. 0:21:45.280 --> 0:21:49.800 But we think that things like unit economics unsustainable growth 0:21:50.119 --> 0:21:53.040 are going to have an effect on valuations, and we 0:21:53.119 --> 0:21:56.919 are broadly going to see a reset on valuations in 0:21:57.000 --> 0:22:01.080 private markets and inventor capital. Now, I've really enjoyed following 0:22:01.080 --> 0:22:03.560 the story of Base ten. You're now the first black 0:22:03.640 --> 0:22:06.240 lad venture capital firm to cross more than a billion 0:22:06.280 --> 0:22:10.440 dollars in assets under management. You specifically raised two million 0:22:10.480 --> 0:22:14.159 dollars last year to bridge the gap between venture capital 0:22:14.160 --> 0:22:18.199 and higher learning create more opportunities for diverse founders. How 0:22:18.280 --> 0:22:22.240 much progress have you made in the last year, UM, 0:22:22.240 --> 0:22:25.720 It has been a transformative years for us. UM. So, 0:22:26.080 --> 0:22:28.200 as you point out, you had us here a year 0:22:28.240 --> 0:22:31.840 ago and we launched with a promise. Right, we launch 0:22:31.920 --> 0:22:36.520 with the promise that by your tube of donating of 0:22:36.600 --> 0:22:41.239 our profit to create a scholarships for underrepresented students, we 0:22:41.280 --> 0:22:43.680 will be able to partner with the best companies in 0:22:43.720 --> 0:22:48.560 the world because they will see it as something differentiated UM. Now, 0:22:48.800 --> 0:22:52.359