Speaker 1: From hard where Innovation, Money and Power Collie in Silicon Valley, NBR.
Speaker 1: This is Bloomberg Technology with Caroline Hide and Ed Lovedlow
Speaker 1: in Caroline Hide every Bloomberg's World headquarters in New York,
Speaker 1: and I'm Ed Lovelow in San Francisco. This is Bloomberg
Speaker 1: Technology iming our Bitcoin tops thirty thousand dollars. We'll discuss
Speaker 1: what's driving the gains the assets getting a boost on
Speaker 1: those moves. Class will take a deep dive into one
Speaker 1: of the biggest US intelligence leaks in recent history. More
Speaker 1: details on the breach ahead, and we'll be all across
Speaker 1: the race for artificial intelligence dominance capital g Anous is
Speaker 1: one hundred million dollar funding round for an AI research platform,
Speaker 1: Alpha Sense. But first let's check in on these public markets,
Speaker 1: because actually tech is feeling little less love than the
Speaker 1: rest of the benchmarks. Today we're up by four ten
Speaker 1: percent on the NASAC all important data point. You heard
Speaker 1: it from Alex Guy just earlier. The CPI print tomorrow.
Speaker 1: A little bit of nervousness therefore around owning big tech.
Speaker 1: Some of the key tech names as will drill into
Speaker 1: a little bit later, But All Country World Index interesting
Speaker 1: me on the higher side. Europe came back after the
Speaker 1: Easter holiday, the extended break and managed to put a
Speaker 1: little bit of fuel under that fire. Two year yield though,
Speaker 1: just rises up some five basis points. As we all
Speaker 1: attention on CPI and what it means for the federals
Speaker 1: EVE move it on. What's happening in terms of crypto
Speaker 1: thirty thousand dollars well above Now we managed to break
Speaker 1: three of that trading range at the twenty eight thousand.
Speaker 1: We were generally languishing around for the past few weeks,
Speaker 1: and what does it mean some really psychological levels being hit? Now?
Speaker 1: Are we going back to eclipsing the prices where we
Speaker 1: saw the three hours capital disintegration where you saw Terra
Speaker 1: Luna de marcle. We're now up seven percent over the
Speaker 1: last two days. Yeah, the big question is still why.
Speaker 1: But the what is playing out in equity markets as well?
Speaker 1: You look at crypto related stocks, we're markedly higher in
Speaker 1: a number of actually want to go to micro Strategy
Speaker 1: because the four billion dollar bet that it made on bitcoin.
Speaker 1: That company is now back in the black because bitcoin
Speaker 1: is trading above the average transaction price. There's so much
Speaker 1: out there today about well, what happens if the FED
Speaker 1: brings rates back down? What does that mean for Bitcoin?
Speaker 1: What happens if we enter a recession? Then you look
Speaker 1: at the relative performance of Bitcoin to other I guess
Speaker 1: risk assets, you know, in terms of the best performance
Speaker 1: of the year. I still don't have a great sense
Speaker 1: on what is happening. Luckily, we've got a couple of guests,
Speaker 1: so go be perfectly placed to discuss it all as
Speaker 1: well as the upgrade as soon as tomorrow. But in begs,
Speaker 1: Katie Greifeld kicks us off, Katie, what are you seeing
Speaker 1: around the world of crypto at the moment? What don't
Speaker 1: you There are so many narratives as to what could
Speaker 1: be pushing bitcoin higher. In particular, there's a lot of narratives.
Speaker 1: There's no satisfying answer other than the one that this
Speaker 1: is a macro asset. It tends to follow sort of
Speaker 1: the macro narrative that's of the day and of the day.
Speaker 1: Of the past few weeks, the narrative has been that
Speaker 1: the FED is going to be forced to cut rates
Speaker 1: at some point this year. That would obviously be good
Speaker 1: news for the likes of tech, for the likes of crypto.
Speaker 1: When you think about that low interest rate environment that
Speaker 1: really pushed investors out the risk spectrum. What's been interesting
Speaker 1: over the past few days is that you've seen bitcoin
Speaker 1: sort of break apart from tech. Today is a great
Speaker 1: example of Bitcoin up what almost four percent. Then you
Speaker 1: look at the NAZAC one hundred down about half a
Speaker 1: percent or so, so maybe those correlations coming apart a
Speaker 1: bit to the benefit of bitcoin. I would say, though,
Speaker 1: that liquidity in this space is still very, very low
Speaker 1: despite this rebound. I think it's also a question of
Speaker 1: who is in this market, who is buying right where
Speaker 1: the thirty thousand US dollar potoken mark for the first
Speaker 1: time since June of last year, but still significantly far
Speaker 1: from the November twenty twenty one high. What are the
Speaker 1: big forces in terms of institutions names driving this market, Katie,
Speaker 1: None to speak of, really, and that's part of the
Speaker 1: reason why you have liquidity so low right now. According
Speaker 1: to some measures, bitcoin equidity hovering near a ten month low.
Speaker 1: You haven't really seen a big institutional push with this rebound,
Speaker 1: and if you look at some of the retail flows
Speaker 1: I like to track exchange traded products both in the
Speaker 1: US and Europe, you really haven't seen any meaningful influence
Speaker 1: to speak of. So the tourists are gone from this market,
Speaker 1: the institutions are gone from this market. You're left with
Speaker 1: sort of the crypto believers who are pushing the price
Speaker 1: higher again in very low liquidity, which has helped to
Speaker 1: the upside. But if we get some sort of upset,
Speaker 1: perhaps in the form of a more hawkish FED than expected,
Speaker 1: that low liquidity could exacerbate things to the downside as well.
Speaker 1: All right, bloom bows, Katie Greyfeld, thank you very much.
Speaker 1: Welcome now Spencive bog At Blockchain Capital or general partner
Speaker 1: here with me in San Francisco. You are essentially a
Speaker 1: fundamental investment analysts. You lead research. What did the fundamentals
Speaker 1: tell you about what on earth is happening with bitcoin
Speaker 1: right now? So most the fundamentals that we deal with
Speaker 1: are early stage, But which fundamentals are there any fundamentals point? So,
Speaker 1: most of the fundamentals we work with for early stage
Speaker 1: startups are related to all the things you'd see in
Speaker 1: any traditional software startup. Right We're looking at user growth,
Speaker 1: we're looking at transaction activity depending on the particular company.
Speaker 1: Now here for bitcoin, when we're trying to describe or
Speaker 1: explain the price action. We always want to come back
Speaker 1: to one reason, but the reality is that there's a
Speaker 1: wide variety of market participants in crypto, and so I
Speaker 1: think that there's myriad factors at play simultaneously. You already
Speaker 1: touched on a few of those, but one of them
Speaker 1: is the lingering inflation. Say, I want to channel my
Speaker 1: inner Katie Greifeld, Sure, because she lives bitcoin second by second. Yeah,
Speaker 1: and she basically points out no earnings, no cash flow,
Speaker 1: no underlying business for you to analyze. You actually just
Speaker 1: pointed out the opposite. Those are exactly the sort of
Speaker 1: criteria looking at when assessing bitcoins. Push higher. Sure, So
Speaker 1: I mean for a lot of people looking at this,
Speaker 1: I think they're seeing there's still some concerns about inflation.
Speaker 1: So the idea of a scarce asset with a fixed
Speaker 1: supply has appeal. There's still some lingering banking concerns, even
Speaker 1: though the peak of the concerns have died down. But
Speaker 1: that increases demand for an asset that people can securely
Speaker 1: self custody as owners. Right. So those are two of
Speaker 1: maybe the four reasons I'd say that are driving bitcoin higher. Hey, Caro,
Speaker 1: In the technology sector, whether it's equities, whether it's crypto.
Speaker 1: If in doubt go back to inflation in the FED.
Speaker 1: I mean that was always the argument. Was it an
Speaker 1: inflation hedge that didn't seem to bear out from the
Speaker 1: numbers when we saw inflation spencer. But we do see
Speaker 1: it more of a buffeted about by the Federal Reserve
Speaker 1: and risk tolerance. What about institutional players we're talking to
Speaker 1: Katie about that, are they starting to be tempted to
Speaker 1: come end back in when we see a thirty thousand level. Absolutely,
Speaker 1: I think for the institutional players, I mean, listen, we
Speaker 1: run a venture capital fund that invest in early stage companies.
Speaker 1: A lot of our limited partners in our fund are
Speaker 1: large institutional allocators, endowments and pension funds in an increasing
Speaker 1: number of them own cryptodirectly, primarily bitcoin and or ether,
Speaker 1: but then they also want additional exposure via venture capital funds.
Speaker 1: They're invested in the space, so there is absolutely an
Speaker 1: appetite from them, But overall, I would say that most
Speaker 1: of them allocated over the past couple of years and
Speaker 1: have not been adding more recently. Go to eighth for us,
Speaker 1: because we are looking towards what is the continuation of
Speaker 1: the upgrade to more of a proof of state concept.
Speaker 1: We're having the Shanghai upgrade tomorrow. In Layman's terms, what
Speaker 1: does that mean? Do you expect there to be more
Speaker 1: volatility around the space. I don't expect a lot of volatility,
Speaker 1: but in Layman's terms, what's going on here is that
Speaker 1: the way that the Ethereum network is secured is by
Speaker 1: people providing or staking their capital their ether into the
Speaker 1: protocol itself. They're rewarded for doing so financially. And what
Speaker 1: happens tomorrow is people are now able to withdraw the
Speaker 1: ether that they have stated. So this only started a
Speaker 1: little over a year ago when we had the merge,
Speaker 1: that of stake really came into into being, and now
Speaker 1: we're about to see is that people can withdraw the
Speaker 1: assets that they have staked. That said, from our conversations
Speaker 1: around the market, we're not seen a lot of demand
Speaker 1: for people to unstake their assets, so we mostly think
Speaker 1: that this will be a non event tomorrow. Yes, when
Speaker 1: so many have been saying it feels as though the
Speaker 1: players who stake there, if they're long term committed to
Speaker 1: the space, but ed whether or not vench capital remains
Speaker 1: long term committed to the space amid some of the
Speaker 1: debacles of last year. That's still the key question, particularly
Speaker 1: as they know much more nervous to write checks. Yeah,
Speaker 1: and that's where I would go to Spencer next. Because
Speaker 1: we've been distracted by artificial intelligence, we've looked at volatility.
Speaker 1: I mean, as an asset class, bitcoin still carries a
Speaker 1: lot of volatility. Spenser. The root of my question is
Speaker 1: have any of the sort of psychological drivers in this
Speaker 1: market change so far in twenty twenty three when you
Speaker 1: think about the SVB fallout, or has the cryptoc community
Speaker 1: kind of just got on with it. Mostly people have
Speaker 1: just gotten on with it, right, I mean, there are
Speaker 1: some new headwinds I think from FTX collapse that are
Speaker 1: presenting regulatory headwinds, but overall, the industry is just pushing forward.
Speaker 1: It is much more organized than it has been historically,
Speaker 1: at least in terms of tackling some of these regulatory
Speaker 1: and political issues. So overall, what we're seeing is for
Speaker 1: venture capital firms, they're following the talent and they're watching
Speaker 1: there continues to be a flow of high quality talent
Speaker 1: into cryptocompanies and crypto markets. Spencie, you just mentioned that
Speaker 1: though that got on with it amid the collapse of
Speaker 1: signature of Silva Silva Gate. I'm interested in the banking
Speaker 1: rails though, and how much that has impacted liquidity. It's
Speaker 1: certainly been an impact. I mean, several of the largest
Speaker 1: banks that were servicing crypto companies provided critical infrastructure for
Speaker 1: all of those companies to be able to exchange capital
Speaker 1: on a twenty four seven basis. That's particularly important for
Speaker 1: crypto markets that operate twenty four seven three sixty five.
Speaker 1: Now some of those banks have been put out of business,
Speaker 1: and there is an open opportunity for someone to recreate
Speaker 1: the infrastruct the previously existed. All Right, Spencer Boga blockchain
Speaker 1: capital with bitcoin and around thirty thousand, two hundred and
Speaker 1: fifty nine dollars per token. The US is facing tough
Speaker 1: questions from allies after a trove of classified documents were
Speaker 1: leaked online to the global public. Former US National security
Speaker 1: advisor that's John Bolton spoke about the league earlier on
Speaker 1: Bags of Valence Taken Listen. I would also caution at
Speaker 1: this point that we not draw too many conclusions that
Speaker 1: this could be an influence operation by somebody we don't
Speaker 1: know who And once you get into the world of
Speaker 1: counter intelligence, it makes being in a whole mirrors look easy.
Speaker 1: It's very complicated. Let's try and break down some of
Speaker 1: the complexities with our own. Nick Wadhams, he's Bloomberg News
Speaker 1: National Security editor, just how big a trove of information
Speaker 1: is this ening? Well, it's pretty darn and it really
Speaker 1: confirms in a lot of ways what we had known
Speaker 1: and what US officials had been telling us publicly about
Speaker 1: what their really biggest fears are. And the big one
Speaker 1: there is Ukraine and specifically the possibility that Ukraine will
Speaker 1: run out of ammunition in the fight against Russia, both
Speaker 1: artillery shells but also air defenses. So it seems to
Speaker 1: be we're really peeling back the veneer a bit and
Speaker 1: getting into the real nitty gritty of just how worried
Speaker 1: US officials are about how Ukraine's going to be able
Speaker 1: to defend itself against Russia. Nick, when we look over
Speaker 1: history at leaks of this kind, the questions quickly become
Speaker 1: where the documents originated from and they're authenticity? Right? What
Speaker 1: have officials I'd said on that? Well, this is really
Speaker 1: the big question that we're all trying to figure out,
Speaker 1: So how authentic are they and in what ways were
Speaker 1: these documents potentially manipulated. You had John Bolton on saying,
Speaker 1: you know, this could have been a counter intelligence operation itself,
Speaker 1: and you know, so there is a big question about
Speaker 1: how authentic these documents are and what the reason was
Speaker 1: for their leak. So if this is someone on the
Speaker 1: inside saying this has to get out to expose what's
Speaker 1: really going on behind the scenes, well that's one thing,
Speaker 1: sort of an Edward Snowden Chelsea Manning type of situation.
Speaker 1: Or if this is Russia that got those documents and
Speaker 1: then manipulated some of the numbers in there to create
Speaker 1: a false impression, you know, I mean this is again
Speaker 1: that hall of mirrors at John Bolton referenced Nick. So, actually,
Speaker 1: when we're sitting here as technology consumers of information, is
Speaker 1: this a cyber threatened hack or actually is when will
Speaker 1: we understand whether this is something that the US could
Speaker 1: have protected. Well, it's a great question because it's it's
Speaker 1: going to again run us up against what US officials
Speaker 1: tell us and what the truth may actually be. So
Speaker 1: we know there is an investigation going on right now.
Speaker 1: The big question will be Okay, it was this a leak?
Speaker 1: Was this some on the inside who got this? Else?
Speaker 1: Was this a hack? Was this some sort of counterintelligence operation?
Speaker 1: There's so much we don't know, and so much likely
Speaker 1: they're not going to tell us because to tell us
Speaker 1: what exactly happened here is in turn going to expose
Speaker 1: US sources and methods. So we're still trying to sift
Speaker 1: through all of that stuff. My suspicion is, given the
Speaker 1: gravity of this and what US officials have been willing
Speaker 1: to say about how grave this leak is, that it
Speaker 1: was in fact a leak or a hack and not
Speaker 1: some sort of influence operation. All right, our thanks to
Speaker 1: Bloomberg Nick quadens out of DC on Bloomberg Technology here
Speaker 1: now Over in the UK, m I five, which is
Speaker 1: Britain's domestic intelligence service, is appointing its first female head
Speaker 1: of its cyber spying agency GCHQ. Ankist Butler, the current
Speaker 1: Deputy Director General, will take up her new posts in May.
Speaker 1: The change in leadership comes at a pretty sensitive time
Speaker 1: is the US and its allies, as we've just discussed,
Speaker 1: continue to deal with the fallout of the series of
Speaker 1: intelligence leaks have emerged online in recent days. She will
Speaker 1: replace the outgoing director Sir Jeremy Fleming, who's held that
Speaker 1: position for the last six years. Caroline, stick with Cybersecurity
Speaker 1: for a moment, because we're going to look at shares
Speaker 1: of Acami right now after being upgraded by Papisanla to overweight,
Speaker 1: managing to tick up two and a half percent. The
Speaker 1: analyst sighting and recent Paul black and shares the offering
Speaker 1: an opportunity to get into the stock as the company
Speaker 1: is likely to refocus its profit strategy and speaking to
Speaker 1: some analyst calls, look at NASDAK the company Nazdac Inc.
Speaker 1: The shares of you know, the stock exchange operator is
Speaker 1: downgraded to equal weight from overweight over Morgan Stanley. The
Speaker 1: analyst sees risks to growth for the outlook of Nasdac Solutions.
Speaker 1: It's the business that makes up actually seventy percent of
Speaker 1: the company's revenue. Nevertheless, trading flat on the day coming up,
Speaker 1: and we'll wonder how banks stack up when it comes
Speaker 1: to well how they use artificial intelligence. We'll speak with
Speaker 1: Evidence CEO about all the firm's recent report analyzing AI
Speaker 1: in financial services. Even got a shout out from the
Speaker 1: one I know need, Jamie Diamond it's bring back. This
Speaker 1: is a incredibly disruptive new technology. I think we're seeing
Speaker 1: opportunity and potential platform shift that we haven't seen in
Speaker 1: a long time. Regulation can put us where we need
Speaker 1: to be if we have the strength to put it
Speaker 1: in place. I do think it's just impossible to regulate.
Speaker 1: All the leading AI lebs know they're creating something dangerous,
Speaker 1: but none of them really want to stop it. The
Speaker 1: way that Chinese companies go about the AI space is different.
Speaker 1: They just don't have the same approach toward the morality
Speaker 1: around these technologies that we do in the US. The
Speaker 1: impact on jobs is real, but it doesn't have a
Speaker 1: super intelligence that will have mine of its own. It's
Speaker 1: on all of us and particularly investors to think about
Speaker 1: the questions and the potential falls, you know, as well
Speaker 1: as of the opportunity and value it creates. The debates
Speaker 1: are still clear our previous guests. They're weighing in on
Speaker 1: what are the risks, what are the opportunities that come
Speaker 1: when using particularly generative AI in various sectors? How will
Speaker 1: AI we shape the competitive landscape? In particular? Go focus
Speaker 1: in on banking right now is to help answer that question.
Speaker 1: Alexandra musa is Ada. She is a CEO and co
Speaker 1: founder of Evidence, which tracks AI integration in financial services. Alexandra,
Speaker 1: you've got a bit of a shout out and JP
Speaker 1: Morgan's annual letter Jamie Diamonds in particular, what is it
Speaker 1: that you're doing? How are you measuring what AI is
Speaker 1: being adopted by banks? So we are published about eight
Speaker 1: weeks ago the first public benchmark on AI adoption for
Speaker 1: banks and what we do it has not been done
Speaker 1: before in terms of taking outside in view by holding
Speaker 1: a mirror up to the banks and looking at the
Speaker 1: AI capabilities. So what we do is that we go
Speaker 1: and we measure the banks on the strength of their
Speaker 1: AI ecosystem and then we rank them according to the
Speaker 1: scores that they get against their strengths of this ecosystem,
Speaker 1: which we break down into four areas talent, innovation, leadership,
Speaker 1: and responsible AI. Okay, so talent bringing on the right
Speaker 1: people the right parts of the banks you need to
Speaker 1: build up. What about responsible AI? What are banks doing
Speaker 1: about that at the moment? Yeah, it is, I mean
Speaker 1: on the on the talent and the leadership and innovation side,
Speaker 1: that's sort of really in the engine room. You know,
Speaker 1: have you got the right talent AI? You know dev
Speaker 1: ops and mL ops, and you look at implementation talent
Speaker 1: and so on and on. The innovation is whether you're
Speaker 1: sort of following a build or buy approach, whether you're
Speaker 1: looking at research and patents or what sort of partnerships
Speaker 1: you have, also what you're investing in or acquiring. But
Speaker 1: on the doing all that is great way looking at
Speaker 1: the raw horsepower, but doing it in a responsible manner
Speaker 1: is really critical, and especially now given the release of
Speaker 1: chat GPT and a lot of banks and a lot
Speaker 1: of other sectors too, but banks looking at how to
Speaker 1: incorporate large language models. The responsible aid is really important
Speaker 1: in terms of making sure that your clients customers are
Speaker 1: comfortable with the handling of all of this data and
Speaker 1: with the use of AI tools on that data. And
Speaker 1: it's really important to show that you're following frameworks of
Speaker 1: responsible and ethical AI as you use it. Yeah, alexandre
Speaker 1: I appreciate the depth of the methodology. You know. In
Speaker 1: recent weeks, Caroline and I have name checked a number
Speaker 1: of banking ceo is. Brian moynihan first week of March
Speaker 1: was talking about how they're dabbling. There's work to do
Speaker 1: when it comes to modernizing banking technology with regards to AI. So,
Speaker 1: who are the winners and losers on your index? Who's
Speaker 1: scores highly, who scores poorly? Yeah, well we have as
Speaker 1: you know, we have JP Morgan top the index, came
Speaker 1: out number one in the index. Interestingly, a raw bank
Speaker 1: of Canada came second, a smaller bank, but predominantly we're
Speaker 1: seeing the North American banks in the top ten, with
Speaker 1: the European banks lagging somewhat and the UK banks lagging
Speaker 1: the European banks. That brings me my next question, which
Speaker 1: is we learned in the aftermath of Silicon Valley Bank
Speaker 1: or relearned how global the banking industry is. How close
Speaker 1: is the coordination that you see between different geographies and
Speaker 1: regions in the banking system on how to implement AI
Speaker 1: across borders. Well, there's there's no real coordination between the
Speaker 1: banks across. The way that implementation is happening in the
Speaker 1: European banks is quite different from the way that is
Speaker 1: being done in the northern North American banks. The North
Speaker 1: American banks take an approach much more looking at how
Speaker 1: big tech is organized, so having R and D centers
Speaker 1: and being much using AI across the banks, whereas the
Speaker 1: European banks take more of an engineering approach where they're
Speaker 1: going in silos and implementing AIM more in a siloed approach.
Speaker 1: So you do see differences in the approaches that the
Speaker 1: banks are taking whether you be in Europe or North
Speaker 1: America and Amaxandra, does any of that come down to
Speaker 1: how governments or cross institutional viewpoints are of how to
Speaker 1: regulate how to ethically build AI, because many would say, actually,
Speaker 1: when you think of the regulation being developed around it,
Speaker 1: actually Asia or indeed Europe really leaves the pack in
Speaker 1: this way. Yes, I mean the interesting aspect here is
Speaker 1: actually that the North American Canadian banks were very visible
Speaker 1: around the guard rails that they're putting in place. And
Speaker 1: now we have to remember that banks are heavily regulated
Speaker 1: to begin with, so a lot of this is happening internally.
Speaker 1: What we're capturing is what is expressed externally in terms
Speaker 1: of you know, principles around explainability responsible AI in general
Speaker 1: and the people they're putting in place and the lines
Speaker 1: of defense across the banks that they're visible about. In Europe,
Speaker 1: you've got GDPR regulation right, and so there's a different
Speaker 1: that sits slightly differently in the banks, and they're expressing
Speaker 1: the guard rails that they're putting around it in slightly
Speaker 1: different ways. But you could say that there are advanced
Speaker 1: thinking at the European level with the AI Act in
Speaker 1: motion right now, but because of the GDPR regulation in place,
Speaker 1: there is there's a lot of thinking that has been
Speaker 1: done in the European banking system. Great house and time
Speaker 1: with you. We thank you, Alexandra, Thank you a CEO
Speaker 1: and co founder of Evidence. Welcome actively Meg Technology. I'm
Speaker 1: Karain Hide in New York, loved in San Francisco. It's
Speaker 1: just quickly checking on these markets because we had seen
Speaker 1: broadly technology stocks in the US under pressure. We still
Speaker 1: remain as that one hundred of the big benchmark that
Speaker 1: remembers up about ninety percent so far this year, down
Speaker 1: half percent six out of seven days trading. That is
Speaker 1: on the lower side the Fang index. This is about
Speaker 1: big tech getting sold off today, the Microsoft, the alphabets
Speaker 1: we see across the board just under pressures. Who worry
Speaker 1: about that CPI, that inflation print tomorrow? Bitcoin though, shogging
Speaker 1: off any of the risk asset concerns. Another three percent
Speaker 1: as we hit some key technical levels thirty thousand swift
Speaker 1: shot on let's go micro for a moment, individual movers.
Speaker 1: Microsoft getting a bit of a analyst concern coming from
Speaker 1: UBS saying that maybe Azure is going to be more
Speaker 1: under pressure amid these economic headwinds that we see. And
Speaker 1: actually you see a lot of these cloud companies on
Speaker 1: the downside today, Snowflake and Data Dog Ali Baba off
Speaker 1: by one point four percent. Keep a close eye eye
Speaker 1: on Barba because plenty of news to come out overnight
Speaker 1: in terms of its own AI cheap Jack GBT like
Speaker 1: service being integrated across this products. We're more on that
Speaker 1: in a moment. Virgin Orbit. Look, I mean at Penny
Speaker 1: stock now thirty one percent lower as it filed for
Speaker 1: bankruptcy and the NASDAK says, look, they're going to have
Speaker 1: to delist this stockhead Yeah, big driver in that market
Speaker 1: being AI as well, and the race in AI continues
Speaker 1: to heat up. Alphabet doubling down on its own generative
Speaker 1: AI ambitions, but this time by investing in the startup
Speaker 1: World Capital g which is Alphabet's venture ARM announced a
Speaker 1: one hundred million dollar funding round that it led into
Speaker 1: B to B research platform Alpha Sense that brings Alpha
Speaker 1: Senses valuation to one point eight billion dollars in the
Speaker 1: company's CEO co founder Jack Coco joins us. Now, Jack,
Speaker 1: this is interesting. It's an extension of around you did
Speaker 1: last summer. Why why did you need these additional funds? Well,
Speaker 1: great question and thanks for having me. We weren't actually
Speaker 1: looking for financing, but we had been talking to Capitology
Speaker 1: for sir role URIs would certainly viewed them as an
Speaker 1: amazing potential investor for us, and we just had a
Speaker 1: catch up conversation a few months ago and that led
Speaker 1: to a quick meeting of the minds. And while we
Speaker 1: didn't need the capital, we were looking for the capital.
Speaker 1: It was such an opportunity we didn't want to pass
Speaker 1: it up. Caroline, I find this incredibly interesting in this environment,
Speaker 1: essentially a flat round interesting some of the other investors,
Speaker 1: including Goldman Sexes asset management unit. Yeah, and I think
Speaker 1: a lot of this comes around a market that is
Speaker 1: deeply energized by all things AI, generative AI, in particular,
Speaker 1: what is Alpha cens actually doing? What are you currently providing?
Speaker 1: So our platform is really a market intelligence and search
Speaker 1: by a form for enterprise customers. It's basically helping this
Speaker 1: big company's financial firms and corporations find the right data
Speaker 1: points and insights to make the big decisions that really
Speaker 1: matter in the businesses. When if you think about it,
Speaker 1: for every company that enter enterprise value is a cumulative
Speaker 1: sumwhere the decisions that they make, and we help them
Speaker 1: make every one of those better by having the right
Speaker 1: access to data points and insights so they can make
Speaker 1: a little bit better decisions more quickly and confidently. And
Speaker 1: this was just really hard to do before people were
Speaker 1: control f searching and still are today out there in
Speaker 1: the market pdf documents or searching on the web for
Speaker 1: critical business insights that drive million dollars sometimes billion dollar decisions.
Speaker 1: So really, what we're bringing to them is thousands of
Speaker 1: high value sources in one place where you can search
Speaker 1: across them really powerfully and find the insights that you
Speaker 1: can rely on. And you know, that's that's we've found
Speaker 1: to be really a solution that resonates in the market.
Speaker 1: More than half of the Fortune five hundred companies are
Speaker 1: today using this, so yeah, you know that's Google using it, Merkshell,
Speaker 1: Bank of America, raytheon. There is a lot of debate
Speaker 1: though when you're thinking about the data trove that you're
Speaker 1: using to bring this sort of analysis and to speed
Speaker 1: up hip one's productivity. Is how reliable can the data
Speaker 1: be and how is it ethically being used? How much
Speaker 1: are you feeding into that sort of conversation right now,
Speaker 1: there's a really really important conversation. It's um. You know,
Speaker 1: in our case, we've always built our platform in a
Speaker 1: way that the we're sourcing information from really truly high
Speaker 1: value content from equity research companies, own disclosures, news media
Speaker 1: and expert interviews of people in the trenches in business,
Speaker 1: sharing insights with investment analysts on costs that we transcribe.
Speaker 1: So it's it's really higher value business information. So grounding
Speaker 1: the information that our search engine finds in those high
Speaker 1: value sources is really important, and then we're able to
Speaker 1: deliver really the the value back to the content providers.
Speaker 1: When somebody's content is being used more, they also get
Speaker 1: paid more as a content provider. So it's really important
Speaker 1: debate around whether that's happening appropriately with large language models.
Speaker 1: As we add language model capabilities on top off this
Speaker 1: high valul content, we kind of built a system in
Speaker 1: a way that content owner is actually good paid as
Speaker 1: they should, and it really feels that this debate will
Speaker 1: run and run. But I like the way in which
Speaker 1: we're starting to really try and see the application. We
Speaker 1: keep questioning what layer of AI is going to be
Speaker 1: the most valuable? Is it or the infrastructure that sort
Speaker 1: of Jack is building. Is it The companies that own
Speaker 1: some of the data troths as well. And as Jack
Speaker 1: would point out, you know, the inputs for the large
Speaker 1: language model, the data set you're relying on is important.
Speaker 1: It leads me to Alphabet. Jack and Google. You know,
Speaker 1: Capital G would kind of point out they run independently
Speaker 1: as the growth venture arm. But I wonder how close
Speaker 1: this does bring you to Alphabet into Google, What partnerships
Speaker 1: you can explore, what advantage from access to data that
Speaker 1: might give you as you work on your own product. Well,
Speaker 1: certainly a big part of the motivation of partnering with
Speaker 1: Capital G is the opportunity partner with the broader Alphabet umbrella.
Speaker 1: They have a really large portion of the world's AI
Speaker 1: scientists and developers working for the business, and this certainly
Speaker 1: does give us opportunities to partner with them, have conversations
Speaker 1: with them, and also have conversations with people where we
Speaker 1: can just advance our business and go to market. So
Speaker 1: that was certainly a big part of the motivation of
Speaker 1: inviting them in as an investor. At a moment where
Speaker 1: we were looking for the capital, Jack, many might then think, oh,
Speaker 1: there might be a quite useful owner. What is your view,
Speaker 1: your direction to travel for the business? You want to
Speaker 1: remain independent on IPO. We really see this as a
Speaker 1: huge market opportunity and we're building this with the timescale
Speaker 1: of the next ten years, twenty years and to gain
Speaker 1: the resources to really build the kind of company that
Speaker 1: we're building. We see IPO as an inevitable step along
Speaker 1: the way. So that's the path that we're on. I'm
Speaker 1: sure the hundred million satisfies you for the time may
Speaker 1: make Jack's great to have some time with you, Jack
Speaker 1: coco In, CEO of Alpha sense there and you've got
Speaker 1: some more techniws. Yeah, time now for talking tech. Billionaire
Speaker 1: twins Tyler and Camera winkle Voss made a one hundred
Speaker 1: million dollar loan to support their crypto exchange Gemini. This
Speaker 1: comes after Gemini had sought funding from outside investors in
Speaker 1: recent months but didn't come to any agreement that According
Speaker 1: to sources, Elizabeth Holmes has to report to prison as
Speaker 1: scheduled later this month after a judge rejected her request
Speaker 1: to remain free on bail as she appeals a fraud conviction.
Speaker 1: And finally, Twitter has stopped being an independent company after
Speaker 1: merging with the newly formed shell firm called X Corp.
Speaker 1: It's unclear what the change means for Twitter, though Elon
Speaker 1: Musk has in the past suggested that Twitter could lead
Speaker 1: to X, which he dubbed as an everything app. Caroline,
Speaker 1: let's ta Coelo, Well, let's stick on things he owns,
Speaker 1: because for a moment, we also want to think about
Speaker 1: where he's taking his other company, Tesla. In fact, we
Speaker 1: saw shares of Tesla sort of in an interesting move today.
Speaker 1: We're up about a percentage point coming off of those
Speaker 1: highs and new proposal. We understand. Federal class action sued
Speaker 1: against the company says Tesla employees viewed and shared videos
Speaker 1: and images of car owners in violation with its privacy
Speaker 1: promises and of California state laws and the state constitution.
Speaker 1: Tesla has not responded immediately to request the comment. But
Speaker 1: we are coming off of those highs that we've got
Speaker 1: a little bit earlier coming up let's talk about investing
Speaker 1: even more in cybersecurity. What a hot topic on the day,
Speaker 1: and what kind of new risks are there to be
Speaker 1: considered at the moment, particularly with the raise and rise
Speaker 1: and rise of AI. More on that with Ballistic Ventures,
Speaker 1: Go mac Meftter, that's next. This is blue. Let's continued
Speaker 1: to talk about cybersecurity, the space of course booming the
Speaker 1: last few years. Just think about the focus that we
Speaker 1: had during the pandemic. Just think about today's newsflow as
Speaker 1: we worry that maybe the lead documents that pose a
Speaker 1: serious national security threat to the United States according to
Speaker 1: the Pentagon, is that in some way related to a
Speaker 1: hack or cyber attack. Let's talk about way you can
Speaker 1: invest as well. Is it the right time to be
Speaker 1: investing in all these sorts of companies. So we can
Speaker 1: turn to our next m a guest who perhaps has
Speaker 1: a bit of skin in the game. Palmac Mefter is
Speaker 1: with us insight on today's VC spotlight. He's co founder
Speaker 1: general partner of at Ballistic Ventures. And but Mac, you
Speaker 1: have a life dedication to cyber in particular working over
Speaker 1: an eight and T for years. What now you're seeing
Speaker 1: in smaller companies areas that you can invest in making
Speaker 1: sure that the cyber threats can be defeated. Yeah, thank
Speaker 1: you very much for having you guys. By the way,
Speaker 1: let's see, one of the great things about cybersecurity that
Speaker 1: we've enjoyed is it's very resilient to economic upturns and
Speaker 1: down turns. So, in fact, if you take a look
Speaker 1: at couple of the CIOs surveys that have come up,
Speaker 1: cybers one of the areas that is actually increasing in
Speaker 1: span during economic downturns because everybody's worried about risk. That's
Speaker 1: kind of one thread which is which always makes cyber
Speaker 1: very very exciting as an investment vehicle. The other thread
Speaker 1: is these threats are ever evolving, so the adversaries don't
Speaker 1: sit still. They're constantly inventing new threat vectors and as
Speaker 1: a result, some of the old security controls have to
Speaker 1: be reinvented on a constant basis. And of course with
Speaker 1: the emerging new threats, there has to be new innovative
Speaker 1: companies that are going to emerge to counteract those threats. So,
Speaker 1: as a result, from a startup perspective, invention perspective is
Speaker 1: a very interesting area to invest in. I would argue
Speaker 1: with the current economic downturn. If you look at some
Speaker 1: of the public equities today as well, and if you
Speaker 1: took a look at some of the multiples of revenues
Speaker 1: multiples of EVA, it'll make cyber very very exciting to
Speaker 1: invest in. So you know, we like the sector quite
Speaker 1: a bit. Of course, while MAC we're interested in where
Speaker 1: the dulta is in the energy is coming from. When
Speaker 1: I was at CS in January, which seems like a
Speaker 1: lifetime ago now, Jen easily the directory of its CISA
Speaker 1: basically made an appeal to Corporate America saying, do more
Speaker 1: invest earlier in cybersecurity into great cybersecurity tools. At the
Speaker 1: moment you design a new product or piece of software,
Speaker 1: is that where the energy is coming from in the
Speaker 1: form of your LPs. I'm just curious who's backing you
Speaker 1: to make these investments. Yeah, absolutely so. I think one
Speaker 1: of the things Jen pointed out your pointing out, which
Speaker 1: is probably the most important thing in cybers cyber has
Speaker 1: always been thought of as an afterthought. If you take
Speaker 1: a look at the applications, for instance, applications are developed
Speaker 1: without security in mind during the software development life cycle.
Speaker 1: And we're seeing a shift happening, especially with the last
Speaker 1: ten to fifteen years. There's an area course shift left
Speaker 1: you probably have heard, which is equipping software developers so
Speaker 1: they can build security into the fabric of the application
Speaker 1: during the assembly process of the application. It's one of
Speaker 1: the only areas that you can build a critical asset
Speaker 1: and think of security as an afterthought. It's incredibly inefficient.
Speaker 1: So to Jen's point, you know, software security, especially insecuting channel,
Speaker 1: has to be thought of during the assembly process of
Speaker 1: any artifact. It's certainly one theme or one area that
Speaker 1: we see, there are many other themes that we're investing in.
Speaker 1: When we look at our LP base, they kind of
Speaker 1: share the same excitement and enthusiasm. You know, they've used
Speaker 1: cybers very resilient to economic upturns and downturns. We're focused
Speaker 1: in the early stages of investing, and I would argue
Speaker 1: during economic downturn is a really good time to create
Speaker 1: companies and hope you can catch the upturns cycle when
Speaker 1: when the equity capital markets come back. And so the
Speaker 1: LPs share that enthusiasm. They think the stage of our
Speaker 1: investing is pretty exciting, right, It's pretty exciting. That's hey,
Speaker 1: by mac, we're looking at your portfolio companies here. Concentrics
Speaker 1: one name that jumps out. How is artificial intelligence impacting
Speaker 1: how you invest? Yeah, definitely. So I would argue a
Speaker 1: couple of areas. One, AI has made the business of
Speaker 1: threat detection incident response a lot more automated. In the
Speaker 1: case of Concentric, they focus on data security. So what
Speaker 1: they go after is they look at unstructured data that
Speaker 1: passes through your organization, either through your Slack Channels office
Speaker 1: through sixty five confluent, and there's an inadvertent risk exposure
Speaker 1: of that unstructured data to the outside world. Without artificial intelligence,
Speaker 1: identifying that unstructured data and the risk exposure is almost impossible.
Speaker 1: And so you can apply AI to areas of data accessing, governance,
Speaker 1: You can apply AI to automating threat detection, incident response
Speaker 1: and removing the scarce human capital resources that are available
Speaker 1: so they can focus on higher important things. Having said that,
Speaker 1: though you can't rely on AI to completely automate your business,
Speaker 1: there's a lot of business context that into understanding, whether
Speaker 1: your financial services company or an insurance company or healthcare company.
Speaker 1: So it can take you eighty percent or eighty five
Speaker 1: percent there the last ten to fifteen percent it still
Speaker 1: requires some human touch to sort of apply the business
Speaker 1: context to what you're trying to go after. You mentioned
Speaker 1: varied industries that deploy cyber needs. What about the company's
Speaker 1: building all of this by mac? Are you investing primarily
Speaker 1: in American built companies? Is this truly gloiville? You know,
Speaker 1: from a cyber perspective, I still argue the epicenter for
Speaker 1: a lot of innovations here in America. I would say
Speaker 1: Israel has has sort of come up over the last
Speaker 1: five to seven years, is a new epicenter where it's
Speaker 1: a lot of innovation that comes out of Israel, partly
Speaker 1: out of Unit eighty two hundred, which is part of
Speaker 1: the IDF. And so the vast majority you see between
Speaker 1: those two areas, Amida and EU specifically is obviously coming
Speaker 1: together in the last three to five years. My previous company,
Speaker 1: Alien Bolt, was a company that was started out of
Speaker 1: Space Spain and had moved their headquarters to the US.
Speaker 1: So but I would say in America and Israel are
Speaker 1: kind of the two main epi centers. All right, Barmacmefter,
Speaker 1: co founder, general partner of Ballistic Ventures. Thank you. You
Speaker 1: take two themes. Caroline Cybersecurity and then you match it
Speaker 1: with the other big theme, AI. So let's stick with AI.
Speaker 1: In China, the government plans to require a security review
Speaker 1: of chat GPT like bots, providers of the generative artificial
Speaker 1: intelligence services must ensure content is accurate and neither discriminates
Speaker 1: nor in dangerous security. Chinese companies, from Ali Barber to
Speaker 1: Sense Time to Buy do all want to build the
Speaker 1: definitive next gen AI platform gaming bench capital funding has
Speaker 1: returned to pre twenty twenty one level. So that's according
Speaker 1: to Convoy Ventures latest gaming report for the first quarter
Speaker 1: of this year, out today. Co founder and managing partner
Speaker 1: Jason Chapman with us to go over the numbers. It's interesting,
Speaker 1: we're kind of back to this pre twenty twenty one level.
Speaker 1: But if you look at the court, are just gone
Speaker 1: a horse roun court to bump in in venture dollars deployed,
Speaker 1: but nothing like the court is that we did see
Speaker 1: in twenty twenty one. What's the main driver right now
Speaker 1: for backing startups in this industry? Yeah, I think I
Speaker 1: think generally and thick you for having me is largely
Speaker 1: the player data. You know, we look and see that
Speaker 1: thirty point two billion people across the world continue to
Speaker 1: play video games. That's nearly forty percent of the global population.
Speaker 1: And this quarter we saw about seven hundred and sixty
Speaker 1: one million dollars invested into gaming deals across venture that
Speaker 1: is up twenty nine percent. And so I think generally
Speaker 1: you see investors walk to areas that proved to be
Speaker 1: resilient during economic difficulties, which gaming has proven during the
Speaker 1: last two recessions to do so, and during this current
Speaker 1: phase we expect it will do the same. You, of course,
Speaker 1: often invest in the infrastructure around gaming. What about the building,
Speaker 1: the making of gaming and games themselves and how they're
Speaker 1: being offered because a lot of them are more streaming services. Now, yeah,
Speaker 1: so I mean there's a lot there. I mean actually
Speaker 1: talking about streaming. It's it's ironic given that Google Stadia
Speaker 1: just closed officially this this actually this quarter in January.
Speaker 1: You know, we are very excited to back the infrastructure
Speaker 1: of how you deliver games, how you distribute games, how
Speaker 1: you advertise games. Building a game is extremely expensive, you know,
Speaker 1: looking at Triple A content, it often is north of
Speaker 1: eighty million dollars to actually produce, and so for us,
Speaker 1: we think the upside is definitely in the content in
Speaker 1: the technologies versus the content interesting. So, given Stadia you
Speaker 1: just mentioned it, do we think there's less desire by
Speaker 1: some very well capitalized, big tech public companies to invest
Speaker 1: in content at this moment. We're seeing a lot of
Speaker 1: content funding today, a lot of excitement around content because
Speaker 1: you know, as as we are seeing Hogwarts legacy has
Speaker 1: has caught the world by storm, and hopefully you have
Speaker 1: some players. They're actually at Bloomberg. You know, with content,
Speaker 1: it's incredibly scalable and it can be delivered at ease
Speaker 1: to the massive And something that is very lurrying about
Speaker 1: this is that if you find a hit, you find
Speaker 1: a huge hit. For us, we are much more comfortable
Speaker 1: as a firm backing the things that make delivery content possible.
Speaker 1: So we're betting on a category versus one piece of content.
Speaker 1: We think it's a more prudent way to approach approach
Speaker 1: the industry. You're a completely set to focus VC fund.
Speaker 1: There is a big player in this industry right now,
Speaker 1: which is Saudi Arabia. You look at the savvy scope
Speaker 1: lea deal as one example, but also the fund, the
Speaker 1: war chest they've amassed. What's your take on Saudi coming
Speaker 1: in to sort of dominate this sector. Yeah, so you know,
Speaker 1: the thirty eight billion dollars that have been earmarked for
Speaker 1: gaming is a significant move. So historically speaking, they have
Speaker 1: not been very active entertainment, but the government of Saudi
Speaker 1: Arabia is determined that gaming will be a pillar of
Speaker 1: entertainment for them going forward. And the acquisition of Scopelely
Speaker 1: at four point nine billion dollar acquisitions a huge win
Speaker 1: to for the Scope Lee end Savvy team, So the
Speaker 1: whole Convoy team is extremely excited about this partnership. The
Speaker 1: Savvy group with that acquisition have brought in one hundred
Speaker 1: million monthly actives across their platform, which is a massive
Speaker 1: deal in the gaming industry and a massive deal for
Speaker 1: the Savvy platform. Hey, Jason, real quick, twenty twenty two
Speaker 1: is all about online a multiplayer. What's twenty twenty three
Speaker 1: you're going to be about? Twenty twenty three is going
Speaker 1: to be your user generated content and the wars between
Speaker 1: Roadblocks and Fortnite. Looking at the Creator platform just launched
Speaker 1: and announced by Tim Sweeney a couple of weeks ago,
Speaker 1: You're going to see a lot of creators be lured
Speaker 1: to that platform from roadblocks as well as others, and
Speaker 1: so we're very keen to watch this and it's a
Speaker 1: trend that Convoy is paying a lot of attention to
Speaker 1: and also to point a lot of money towards thanks
Speaker 1: to bringing your trends as you see them. Convoy Ventures
Speaker 1: co founder managing partner Jason Chapman, Well, that does it
Speaker 1: for this edition. And Bloombag Technology, Yeah, real emphasis on
Speaker 1: cybersecurity and AI in the market right now. Recap with
Speaker 1: the podcast. You can find it on the terminal, on Apple, Spotify, Hut,
Speaker 1: wherever you get your podcast. Caroline, I think I think
Speaker 1: about these markets as well. We're bracin for Wednesday, We're
Speaker 1: bracin for data and in the technology sector, we're always
Speaker 1: looking at the FED from SF in New York. This
Speaker 1: is Bloomberg