Speaker 1: From the heart of where innovation, money and power Collie
Speaker 1: in Silicon Valley, NBN. This is Bloomberg Technology with Caroline
Speaker 1: Hide and Ed Ludlow.
Speaker 2: I'm Caroline Hide Bloomberg's melted quarters in New York. Ed Ludlow,
Speaker 2: He's an assignment in Sun Valley. This is Bloomberg Technology.
Speaker 3: Coming up. Microsoft wins us CORT approval to move.
Speaker 2: Forward with its sixty nine billion dollar deal for Activision Blizzard.
Speaker 3: We'll discuss the next steps of the.
Speaker 2: FTC face as a loss in blocking the biggest ever
Speaker 2: gaming deal plus Amazon Prime Day kicks off shop is
Speaker 2: expected to spend upwards of thirteen billion dollars or break
Speaker 2: down what to expect from the e commerce giants, and
Speaker 2: we go live to Ed.
Speaker 3: Ludlow in Sun Valley, Idaho.
Speaker 2: Billionaires also to send on the mountains for their annual
Speaker 2: gathering or break down what to expect as artificial intelligence,
Speaker 2: future streaming, and of course there's massive gaming deals dominate
Speaker 2: the conversation. Let's dig in on the Minushai to deal
Speaker 2: with Microsoft's court when here in the US we've got
Speaker 2: Bloomberg's Malati Nayak with us. Who's covering this trial day
Speaker 2: in day out for US and Malati. Before I start
Speaker 2: asking you about the UK, just dwell on what's happening
Speaker 2: in the United States right now, because it felt like
Speaker 2: you'd already called it that the judge seemed to be
Speaker 2: erring towards Microsoft and Activision.
Speaker 4: That's right. You know, we did see in the last
Speaker 4: round of questioning by the judge that she was really
Speaker 4: asking the FTC for a lot of evidence that they
Speaker 4: were unable to sort of come up with in court.
Speaker 4: So today we have a ruling with the judge has
Speaker 4: denied a preliminary injunction, which is basically a request by
Speaker 4: the agency to block the deal while the while it's
Speaker 4: longer in a challenge to the deal, is spending. But
Speaker 4: as we've seen, you know, something similar happened with Meta
Speaker 4: and Meta's acquisition within and that deal was also sort
Speaker 4: of a loss for the FTC at this stage, and
Speaker 4: the FTC backed out. So it's possible that you know,
Speaker 4: the FDC will back out because there is an administrative
Speaker 4: sort of a court case that the FDC still has
Speaker 4: spending against Microsoft, a sort of internal court case. That's
Speaker 4: that's you know, going to happen in the next couple
Speaker 4: of weeks.
Speaker 2: Okay, so it's not a full gone conclusion, but we
Speaker 2: anticipate and certainly the market anticipates that it's more likely
Speaker 2: to get done ultimately. How much of a knock is
Speaker 2: this to the FTC, as you say, they seem to
Speaker 2: be trying to take on really tough cases here.
Speaker 4: Yeah, you know, this has been a big test for
Speaker 4: the FTC's ability, especially when it comes to challenging big
Speaker 4: tech MNA deals. They really needed this win, you know,
Speaker 4: especially after what happened. This is coming, you know, just
Speaker 4: very close in the you know, on the heels of
Speaker 4: what happened with FTC and FTC challenge to Meta and within.
Speaker 4: So it just seems like even in speaking with a
Speaker 4: lot of folks who were in court the merger arb charges,
Speaker 4: they were very very closely watching this case because I
Speaker 4: think they were interested in seeing where the FTC might
Speaker 4: go moving forward. You know, is the FDC actually bringing
Speaker 4: some cases which are leading to this sort of losing streak.
Speaker 4: Do they have to sort of think perhaps carefully about
Speaker 4: battles that they want to sort of sort of enter
Speaker 4: and sort of win. So we'll have to see what
Speaker 4: happens next in terms of FTC moving forward with other deals,
Speaker 4: but we've seen already, you know, Chairman Lina Khan, She's
Speaker 4: just been one of the most aggressive tresbusters we've seen
Speaker 4: in the US in decades. So we'll have to see
Speaker 4: what the FTC decides to do next after this particular ruling.
Speaker 2: I'm sure Amazon is keeping a close eye as well.
Speaker 2: Alasin Naya, thank you so much for bringing us the expertise.
Speaker 2: Let's just get the Microsoft angle, an Andy, the International
Speaker 2: angle next to Bruemmegsdina Bass and Diana. I'm sure this
Speaker 2: is going to be joyous Forasati and Adela, and indeed
Speaker 2: Bobby Kotek, They're both going to be over there in
Speaker 2: Sun Valley. But there are still some stumbling blocks. What
Speaker 2: do you make of the headline around Microsoft and activision
Speaker 2: in the UKCMA, the Competition Markets Authority also perhaps pausing
Speaker 2: that litigation.
Speaker 3: Yeah, all eyes.
Speaker 5: Around the CMA right now. The minute that this ruling
Speaker 5: came out this morning, everybody's attention turned away from that
Speaker 5: courton in California and across the pond to the UK,
Speaker 5: which is the remaining stumbling block for this deal. Now
Speaker 5: the CMA has just in the last couple of minutes
Speaker 5: said that they are willing to consider any proposals for
Speaker 5: Microsoft to restructure the transaction in a manner that would
Speaker 5: address their concerns, and as a result, they and Microsoft
Speaker 5: and Activision have asked the court in the UK to
Speaker 5: pause the litigation so that they can focus on proposals.
Speaker 5: Microsoft has issued statement as well, saying that they still
Speaker 5: don't agree with the CMA's objections, but they are interested
Speaker 5: in trying to find a way to resolve them.
Speaker 2: Two the FTC's perspective, have they kind of won a
Speaker 2: little bit, or indeed, have competition authorities at least gleaned
Speaker 2: some sort of changes to the ultimate deal to ensure
Speaker 2: that that might be competition.
Speaker 6: Is this almost a win win on every side, Dina.
Speaker 7: So I don't know that the FTC will see it
Speaker 7: that way. We'd have to ask.
Speaker 8: The judge actually made that point in court at one point,
Speaker 8: saying that you know the fact that Microsoft had signed
Speaker 8: some of these agreements to put call of duty on
Speaker 8: other platforms and he was willing to sign on with
Speaker 8: Sony meant to the FTC on some level had already won.
Speaker 7: And you know, when you look.
Speaker 9: Through her ruling, it was one of the reasons that
Speaker 9: she found the FTC's case was not persuasive, you know,
Speaker 9: is that Microsoft had from the minute the deal was announced,
Speaker 9: it made it clear that they wanted to, you know,
Speaker 9: to put it on other platforms. She made similar arguments
Speaker 9: on some of the arguments the FTC was making on
Speaker 9: lack of you know, worse than the competitive picture and
Speaker 9: cloud gaming as well as gaming subscriptions, you know, in
Speaker 9: those areas. She seemed to find some of Microsoft's arguments
Speaker 9: more persuasive than the FTCs.
Speaker 2: How big a relief is this to Brasmith and Vestia now, well, again.
Speaker 9: They still to get through the CMA that you have
Speaker 9: to realize that if the judge ruled the opposite wave
Speaker 9: she had issued a preliminary injunction.
Speaker 3: The deal was on the dead.
Speaker 5: Bobby Kodik, while on the stand, said that, you know,
Speaker 5: if there was a preliminary injunction issued, his board was
Speaker 5: likely back away.
Speaker 7: From the deal.
Speaker 9: Microsoft made a similar point in their preliminary filings in
Speaker 9: the case there was really not a way forward for
Speaker 9: this deal if the judge had issued a preliminary injunction.
Speaker 5: They still have to get through the UK situation.
Speaker 2: As you say, all eyes on the UK now and
Speaker 2: the CMA Deana Bass, brilliant to have you on. Thank
Speaker 2: you so much for the latest on Microsoft's perspective to
Speaker 2: that ruling.
Speaker 3: Meanwhile, coming up, Amazon Prime.
Speaker 6: Day kicks off and Shop was prepared to spend millions.
Speaker 2: I'll get inside the head of Amazon W John Felton,
Speaker 2: I'm pleased to say, Amazon Senior vice president of worldwide Operations. Meanwhile, look,
Speaker 2: there are other deals that still are being assessed by
Speaker 2: certain authorities.
Speaker 3: And VMware is currently.
Speaker 2: Jumping more than five and a half percent as you
Speaker 2: can see session highs on an FT report that the
Speaker 2: EU is set to clear its own sixty nine billion
Speaker 2: dollar acquisition by Broadcom. So all eyes on these competition
Speaker 2: authorities at the moment.
Speaker 3: From New York, this is Bloomberg. I don't know if
Speaker 3: you noticed, but Amazon Prime Day is underweight.
Speaker 2: Shop is estimated to eclipse last year's spend of twelve
Speaker 2: billion dollars worldwide. For more on what we can expect,
Speaker 2: let's bring in Punum Goil from Bloomberg Intelligence right here
Speaker 2: in New York.
Speaker 3: So please to have you Punum here.
Speaker 2: I'm expecting consumers to be enticed as much as previous years.
Speaker 2: Is this going to be the biggest ever. It should
Speaker 2: be the biggest ever.
Speaker 3: It always is.
Speaker 10: Yeah, consumers are focused on value, right, so Prime Day
Speaker 10: just brings value back up front consumers. Mind, there are
Speaker 10: our deals, there have been deals all year, but I
Speaker 10: can tell you just from what I've been seeing all
Speaker 10: day is that the deals are bigger than they have
Speaker 10: been all year. They're rolling out lightning deals. Some things
Speaker 10: are already sold out, so I think consumers will just
Speaker 10: be watching and seeing a lot of consumers are saying
Speaker 10: that they have a list going into Prime Day, so
Speaker 10: clearly budget focused. And then there are many fifty percent
Speaker 10: according to our survey, that will just buy as they
Speaker 10: see deals.
Speaker 3: Okay, so looking for value.
Speaker 2: What about sort of the global perspective of this as well?
Speaker 2: How does the Prime Day offering vary? I'm looking at
Speaker 2: a US offering. What does it look like in the
Speaker 2: UK and Europe?
Speaker 10: Well, remember Prime Day? If you think about like just
Speaker 10: Prime members, right, one hundred and sixty million of the
Speaker 10: two hundred plus million members are in the US, so
Speaker 10: it is definitely largely a US event, but it is
Speaker 10: also international and everywhere across the world. I think everyone
Speaker 10: is crunched for cash right now. Infestrates are higher, there
Speaker 10: are macro economic tensions, your political tensions around the world,
Speaker 10: so the value proposition that Amazon offers on Prime Day
Speaker 10: will also be sought after abroad as well as here.
Speaker 2: And just remind us how important is to the overall
Speaker 2: company and indeed there for the investor, because what's interesting
Speaker 2: in the last few years, you've actually seen a bit
Speaker 2: of a sell off of sort of a fade into
Speaker 2: Prime Day from a stock perspective.
Speaker 10: I think it's important in it's eight percent of the
Speaker 10: quarter's sales and just two so clearly still very important
Speaker 10: for Amazon. But also it keeps Amazon top of mind,
Speaker 10: right so as you think about consumers shopping for the summer,
Speaker 10: for back to school and even the holidays. You know,
Speaker 10: we're hearing people are shopping for the holidays as early
Speaker 10: as right now. So it just keeps some relevant, It
Speaker 10: keeps some top of mind. It shows that we have
Speaker 10: everything here and you can buy it. But Amazon's not
Speaker 10: the only one offering deals today and tomorrow. If we've
Speaker 10: seen Target Circle Week, we've seen Walmart, you know, doing
Speaker 10: its Plus week, So there's a lot going on outside too.
Speaker 3: There's always a competition. Pun I'm Goyl.
Speaker 2: Thank you so much breaking it down from Blue Meg
Speaker 2: Intelligence and look, we can go straight to the horse's
Speaker 2: mouth right now. I'm very pleased to welcome John Felton,
Speaker 2: Amazon Senior vice president of worldwide Operations, who's.
Speaker 3: Probably having a pretty busy day.
Speaker 5: John.
Speaker 6: So we're appreciative if you're fitting us in.
Speaker 2: And I mean you have caused a sensation. Other companies
Speaker 2: do try to copy you on the same day at
Speaker 2: the same sort of a time. How do you set
Speaker 2: yourselves apart and keep people wanting to come back?
Speaker 11: Yeah, it's Christmas in July, and it's one of our
Speaker 11: favorite times a year. We're noppening into our ninth prime
Speaker 11: day and so really exciting about it. It has just become
Speaker 11: kind of its own events, which we love. This year,
Speaker 11: I do expect to be bigger than ever. We've got
Speaker 11: more deals than ever before. We've got millions and millions
Speaker 11: of deals. They're dropping every thirty minutes, and so we're
Speaker 11: really excited about what we're seeing so far and the
Speaker 11: things I'm thinking about. It's like, we got fifty percent
Speaker 11: off the top selling toys, percent off the top selling
Speaker 11: TVs was seventy five percent off amazonderleasss there really is
Speaker 11: a deal for.
Speaker 7: Everybody out there.
Speaker 11: I've even got friends who they use Prime Data kind
Speaker 11: of shop for their everyday essentials of kind of getting
Speaker 11: the tooth base, getting.
Speaker 7: The shampoo, and so it's a really big day.
Speaker 11: We're since society kind of thank Prime members for their loyalty,
Speaker 11: and the best way we know how to do that.
Speaker 7: Is give them value and give them savings.
Speaker 11: One stat that I still still think is amazing is
Speaker 11: last year Prime members saved one point seven billion dollars
Speaker 11: and we're hoping to explic the clips out this year
Speaker 11: and make.
Speaker 3: It more personal.
Speaker 2: How are you using technology in and of itself to
Speaker 2: try and make sure that I feel targeted in the
Speaker 2: right way.
Speaker 7: Yeah, that's a great question.
Speaker 11: A lot of our AI technology is really focused on
Speaker 11: the personalization. You'll even see it this year differently kind
Speaker 11: of when you look at the website for yourself, it's
Speaker 11: different than looking at it for your friends. We are
Speaker 11: working kind of day and night to keep improving a personalization,
Speaker 11: building kind of an AI technology to really help that.
Speaker 11: So we give you a really customized experience you can
Speaker 11: find the deals that work for you.
Speaker 2: And also using Alexa right not only you able to
Speaker 2: sort of buy the latest Alexa, but you can use
Speaker 2: it to shop too.
Speaker 11: Yeah, there's some great new Alextra features we have now.
Speaker 11: Is anything that's in your kind of your shopping cart
Speaker 11: right now? And and you're wishless? Anything unsaved for later
Speaker 11: if it goes on deal or Lexa will announce it
Speaker 11: to you and let you know, Hey, this just went
Speaker 11: on a great deal.
Speaker 7: Do you want to buy it?
Speaker 11: And so at Helping customers find the deal that's right
Speaker 11: for them, helping with their most excited core is really
Speaker 11: what's Fine Day.
Speaker 7: Is all about.
Speaker 2: Of course, we can see people behind you busily at work.
Speaker 2: How much of a logistical feat is that? How much
Speaker 2: work you have to put in? How ensuring are you
Speaker 2: that you're sort of as close to the customer as
Speaker 2: you can be.
Speaker 7: Yeah, let's see what we plan for months for Prime Day.
Speaker 11: And I've kind I'm here in Melville, New York, in
Speaker 11: a sub Same Day building, and they're just excited. The
Speaker 11: employees here are excited. They love Prime Day as much
Speaker 11: as Prime members do. And so you can feel the excitement.
Speaker 11: You can feel the buzz in here, and everyone's expended
Speaker 11: to go to deliver all the gifts we have.
Speaker 3: What about the robots.
Speaker 7: The robots are also behind me.
Speaker 11: There's now seven hundred and fifty thousand of them running around,
Speaker 11: so you can kind of see that the shelf kind
Speaker 11: of comes to the employee right now. And so that's
Speaker 11: what we felt kind of really good about kind of
Speaker 11: our robotic technology. It's how do we help our employees
Speaker 11: kind of do their jobs better, how do we help
Speaker 11: them do it safer, how do we help them do
Speaker 11: it more productively, and how do they kind of really
Speaker 11: enjoy the collaborative experience with the robots.
Speaker 2: Of course, with great success comes great responsibility, and there
Speaker 2: has been that focus on ensuring that the workforce labor.
Speaker 3: Is treated right.
Speaker 2: There's also it seems to be a focus on, well
Speaker 2: that you're supporting small business here. Just tell us, sister,
Speaker 2: why you're looking at that and why perhaps you don't
Speaker 2: want to seem like you're meeting everyone's lunch.
Speaker 11: Yeah, it's exactly right. Small business is incredibly for it.
Speaker 11: It's been powering Amazon for years. Sixty percent of everything
Speaker 11: we sell is from small businesses, and there's a lot
Speaker 11: of new features that we have on the website this year.
Speaker 11: We recently app launched the ability to kind of filter
Speaker 11: your surf results by small business results. I was actually
Speaker 11: playing around with this this morning, and we're doing hot sauce,
Speaker 11: and I was able to find kind of hot sauce
Speaker 11: than your small businesses that are supporting in logout where
Speaker 11: I'm at right now, and so really kind of helping
Speaker 11: small businesses be successful.
Speaker 7: Small businesses are kind of a lot of the drivers
Speaker 7: of the growth.
Speaker 11: They're getting more deals in ever of this Prime Day,
Speaker 11: and so we're really excited about how do we support them.
Speaker 2: Does the consumer ultimately not just talk the talk but
Speaker 2: walk the walk on that, Do they really care about
Speaker 2: small businesses? Do they really care about the fact that
Speaker 2: you're perhaps closer to them, so less of an environmental perspective.
Speaker 3: What do you see from the consumer?
Speaker 7: That's what we're seeing is consumers are having a great
Speaker 7: Prime day to day.
Speaker 11: One of the things I've been kind of happy with
Speaker 11: is I do think of the US consumer, even the
Speaker 11: global consumer. They've got high they're doing with high inflation,
Speaker 11: high interest rates, but they've been surprisingly resilient. They continue
Speaker 11: to kind of come back, but they are looking.
Speaker 7: For value, and that's what Prime Day is.
Speaker 11: How do we kind of bring them as much value,
Speaker 11: and this idea we can save them billions of dollars
Speaker 11: on Prime Day is just a tremendous dialareble to offer customers.
Speaker 2: And of course the reason they want value is because
Speaker 2: the economy is in a much tougher position, and Amazon
Speaker 2: itself has been having to ensure that it's focused much
Speaker 2: more on costs, having to make tough choices, laying off people.
Speaker 2: I'm interested as to really how optimistic you are going
Speaker 2: past Prime Day that the consumer is there to support
Speaker 2: your business.
Speaker 7: I'm optimistic.
Speaker 11: I still have a lot of optimism in the US
Speaker 11: economy and the US consumer.
Speaker 7: They continue to show up. I agree they are.
Speaker 11: They're they're looking for value, and we need to make
Speaker 11: sure we're able to kind of be best on price,
Speaker 11: best on speed. I'm in a sub same day building,
Speaker 11: so these items here are being able to delivered in four
Speaker 11: or five hours. So to be able to get your
Speaker 11: Prime Day order on the same day within four hours,
Speaker 11: it's an amazing feed. This business itself is subday same
Speaker 11: day business. We're over fifty percent in the first quarter,
Speaker 11: and so it's really resonating with consumers that they're looking
Speaker 11: for speed and convenience price.
Speaker 2: Jean Felton, busy day. We'll let you get back to it.
Speaker 2: Amazon the SVP for worldwide operations. We thank you for
Speaker 2: your time. Time now for talking tech. First Up, Tata
Speaker 2: is closing in on a deal to become the first
Speaker 2: Indian iPhone maker, and the company is set to buy
Speaker 2: an Apple Supplies factory as soon as August in an
Speaker 2: effort to increase the plant's employment and expand output, according
Speaker 2: to Bloomberg reporting. Meanwhile, Uber seeing its biggest ever executive
Speaker 2: departure since going public. Chief financial officer Neilson Chai is
Speaker 2: planning to leave the right hailing giant. Try informed CEO
Speaker 2: Dora Koslshahi of his intentions to move on, though a
Speaker 2: decision on timing hasn't yet been made. I was tapped
Speaker 2: by Koslshahi in twenty eighteen to lead the listing.
Speaker 6: Plus, an artificial intelligence researcher who co authored one of
Speaker 6: Google's most influential.
Speaker 3: Papers, is leaving the company to launch a startup.
Speaker 2: Employee who helped write the pioneering AI paper, Attention is
Speaker 2: All You Need confirm to Bloomberg that he will depart
Speaker 2: Google Japan later this month. Some of the biggest names.
Speaker 2: Meanwhile in technology, media and business, well guess where they
Speaker 2: are the Idahoo Mountains for the Allen and Coe Sun
Speaker 2: Valley Conference, also dubbed Look the Summer Camber Billionaires. The
Speaker 2: annual summit features a series of big picture panels, many
Speaker 2: of which will focus on the rise of art, traditional
Speaker 2: intelligence of course, also the future streaming and well m
Speaker 2: and a as it stands, a Red Ludlow, you're on site.
Speaker 6: You're in some valley, Idaho, and boy, they're all going to.
Speaker 2: Be talking about that sixty nine billion dollar deal.
Speaker 12: Right, yeah, yeah, we have news. It will be front
Speaker 12: and center. You know you were talking earlier in Bloombo
Speaker 12: Technology of Dina Bass. Imagine if the decision had gone
Speaker 12: the other way. But Bobby Kotik is here this week
Speaker 12: in some valley. I understand that Sacha and Adela will
Speaker 12: be here too, And what a blow this is to
Speaker 12: the FTC in CMA. When I touched down last night
Speaker 12: in between the mountains, the sun setting on the bluetiful landscape,
Speaker 12: I was thinking about Lee Na Kahan and the FTC
Speaker 12: because actually this year there's a real emphasis on the
Speaker 12: history of some value, which is Telecom's technology and media
Speaker 12: or TMT and deals, and last year there was only
Speaker 12: one story Elon Musk's purchase of Twitter. But all the
Speaker 12: breaking news of this morning puts the landscape for deals
Speaker 12: in this sector front and center for the attendees. We
Speaker 12: might see some more activity, now.
Speaker 3: Yeah, isn't it.
Speaker 2: It's not the only sixty nine billion dollar deal even.
Speaker 2: I mean the fact that Brawcom looks like it might
Speaker 2: get VMware according to the Fts, so some really big
Speaker 2: major chip steals. And indeed, as we've seen gaming deals,
Speaker 2: but talk to us about the world of streaming and indeed,
Speaker 2: well content really yeah, we're potentially seeing art mimic life
Speaker 2: a little bit with succession.
Speaker 12: I love that arc mimicking life. You know, the streaming
Speaker 12: story is also one of all of the names involved.
Speaker 12: You know, the top ranks of Netflix will be here,
Speaker 12: David'sarslove w Warner Brothers, Discovery, and I understand that in
Speaker 12: the last couple of minutes, Bob Iger has just walked
Speaker 12: through the front door of some valley. I think if
Speaker 12: there's a deal that we pick out, it might be
Speaker 12: Hulu because remember that Comcast retains a third of Hulu
Speaker 12: with an option to enforce Disney to buy out its stake.
Speaker 12: My understanding is that Brian Roberts Comcast isn't here this week,
Speaker 12: but it's one that everyone's watching because the current valuations
Speaker 12: like twenty seven billion dollars. I know that Disney don't
Speaker 12: think it should be that much if they were to
Speaker 12: buy out the remaining Steak.
Speaker 7: And then Eiger, what's his future? I remember a.
Speaker 12: Year ago when I was here, he arrived with Bob Chaypeck.
Speaker 12: He just retired. Chapeck had taken the reins and how
Speaker 12: long did that last? Not long at all, and it
Speaker 12: was already awkward. Then he was already under pressure because
Speaker 12: Disney was not having a great time this time a
Speaker 12: year ago.
Speaker 2: Yeah, and now we're all lying as to who he's
Speaker 2: come with now, from those heading up the TV part
Speaker 2: of Disney, those heading up on the.
Speaker 3: Parks as well.
Speaker 2: And I'm interested in not only sort of some of
Speaker 2: the succession planning and some of the individuals, but individuals
Speaker 2: of old.
Speaker 3: What's so interesting you mentioned we were all.
Speaker 2: Talking Elon Musk this time last year, and that it's.
Speaker 3: Deal his deal for Twitter.
Speaker 6: Yes, now we're thinking about the competition.
Speaker 3: For Twitter.
Speaker 12: Mark Zuckerberg Yet, will he be the man of the moment.
Speaker 12: You know you and I have talked every day about Threads,
Speaker 12: every milestone, one hundred million on the show twenty four
Speaker 12: hours ago. I remember twenty twenty one, the New York
Speaker 12: Times published that big story about how Mark Zuckerberg's relationship
Speaker 12: Michelle Sandberg had deteriorated because of how she had handled Facebook.
Speaker 12: Now Meta's relationship with Washington, DC, and I remember being there.
Speaker 12: A guess who walks past smiling ear Mark Zuckerberg and
Speaker 12: Cheryl Samdberg very different vibe. Now he could be the
Speaker 12: main man everyone wants to talk to.
Speaker 3: I can imagine.
Speaker 2: And I'm sure you're going to be giving us live
Speaker 2: updates on threads and Twitter and whatever other social medium.
Speaker 3: Form you're going to be taking.
Speaker 2: Ed Ludlow live in some valley, Idaho.
Speaker 3: Welcome back to LUMO Technology. I'm Caroen Hide in New York.
Speaker 2: Let's get onto the individual intricacies of another asset type crypto. Now,
Speaker 2: we know that all regulators benign that particular space, particularly
Speaker 2: here in the United States, and well look at the
Speaker 2: SEC in particular, It's power over crypto just seems to
Speaker 2: be growing. SEC Chair Gary Gensler filling the crypto regulatory
Speaker 2: void at the moment, I want to dig into that,
Speaker 2: and some of the push from big institutions still want
Speaker 2: to get in on the space. Avalad's president John Woo
Speaker 2: joins us and place to say along with our very
Speaker 2: own Chinnali Basek crypto expert in residence, and let's start
Speaker 2: the journal a little bit as to how the mood
Speaker 2: feels right now, because last time we've come on, you know,
Speaker 2: peak bank crisis, peak worries and trials and tribulations to crypto,
Speaker 2: we can seem to be in a holding pattern right now.
Speaker 13: Well, I think the mood for practitioners like ourselves who
Speaker 13: are operating the space is obviously better ever since, ever
Speaker 13: since Frankly, Larry Fink, black Rock, Fidelity and all these
Speaker 13: big players aside to refile for their ETF. It's a
Speaker 13: big short of confidence that not only do they think
Speaker 13: they're in individual users, we're talking about nine trillion of
Speaker 13: assets at black Rock, five trillion of fidelities are interested
Speaker 13: in the space. But I have a deep succission that
Speaker 13: Larry Fink realizes now based on its comments, that there
Speaker 13: is real use case and it's useful to tokenize financial
Speaker 13: assets to streamline operations.
Speaker 3: He was so skeptical. He was so skeptical.
Speaker 13: We just quotes from seventeen eighteen versus twenty two to
Speaker 13: twenty three complete about face, and that's what makes me
Speaker 13: very excited. We need new leaders into the space.
Speaker 14: But if you have a crypto industry that was supposed
Speaker 14: to be separate from Wall Street, and you have a
Speaker 14: Wall Street giant stepping into the crypto industry, why embrace it?
Speaker 14: If you're kind of a crypto native here, if you
Speaker 14: believe that there should be another system, then what is
Speaker 14: the point of Blackrock getting in.
Speaker 13: I think there will be two worlds. There will be
Speaker 13: the white glove service that a black Rock provides low fees, custody, etc. Etc.
Speaker 13: And then there are the deeper intricacies where only a
Speaker 13: native crypto firm like Ava Labs really really understands all
Speaker 13: the stuff that Larry Fink is talking about. Of the
Speaker 13: Labs already provides in what we call a subnetwork, which
Speaker 13: is a blockchain that's a service with a software development
Speaker 13: kit that has all the features for compliance and use cases.
Speaker 13: In fact, we've already partnered with Wisdom Tree, with Wellington
Speaker 13: and t Road doing similar things. So I'm excited because
Speaker 13: it lends more credibility to space.
Speaker 14: What about Coinbase, Let's talk about it for a second,
Speaker 14: because Blackrock chose a crypto firm, Coinbase, to deal with
Speaker 14: its custody of bitcoin. On the same time, there's a
Speaker 14: lot of questions about feed compression when it comes to
Speaker 14: the bitcoin space. How do you kind of net out
Speaker 14: the effect here for a firm like Coinbase as more
Speaker 14: ETF get in.
Speaker 13: Yeah, absolutely, there's definitely going to be feed compression on
Speaker 13: the retail side. On the institutional side, Coinbase is making
Speaker 13: huge strides. In fact, I think five of the all
Speaker 13: five of the top ETF filers, Blackrock as well as
Speaker 13: CBOE are using Coinbase as a surveillance partner. Now, if
Speaker 13: these mega traditional financial institutions trust coinbas maybe the agencies
Speaker 13: will have to also reevaluate if they trust them as well.
Speaker 2: Chanani, I mean, with your expertise, the way you're following
Speaker 2: it at the moment, What about the regulatory overhang, because
Speaker 2: that's what we've been talking about for the first few months,
Speaker 2: and then now with black rol come with these big institutions,
Speaker 2: what about SEC what about CFTC.
Speaker 14: Yeah, I mean I think that there's been this big
Speaker 14: expectation that the SEC will come in and just approve
Speaker 14: these ETFs, but we've seen many years go by without
Speaker 14: that happening. At the same time here, I mean, I'm wondering,
Speaker 14: you know, how hesitant are Wall Street firms to get in.
Speaker 14: And the issue we've been talking about on the sidelines
Speaker 14: here is not just the ETF world, but also just
Speaker 14: the plan old liquidity you're seeing in boring all bitcoin markets.
Speaker 14: We have gone nowhere, guys.
Speaker 3: For three weeks.
Speaker 14: It's been up against thirty thousand who's trading.
Speaker 13: That's a great point. If you look at the volumes,
Speaker 13: whether be on coinbase or the overall averages in the indites,
Speaker 13: volume is still coming down even though prices are going up.
Speaker 13: And that's what I've been talking about for a long time.
Speaker 13: The market structure is still kind of broken. All the
Speaker 13: leverage players in the past, whether that be Celsius, Block five, Genesis,
Speaker 13: they're not in there to provide leverage so people can
Speaker 13: trade more. It's the same people trading creating price movement,
Speaker 13: but the volumes are still down and going down.
Speaker 2: It is a lack of leverage ultimately a better, more
Speaker 2: healthy thing. And to that point, does that then move
Speaker 2: us outside of the world of just talking about bitcoin
Speaker 2: into well some of the old coins and your own ecosystem.
Speaker 13: And yes and no, leverage has been part of every
Speaker 13: financial ecosystem, whether it's mortgaging for a house or whether
Speaker 13: it is in other financial markets. In fact, if you
Speaker 13: don't have leverage, you don't have velocity of money and
Speaker 13: you don't have growth. So leverage is healthy. Maintaining and
Speaker 13: maintaining healthy leverage is important for any ecosystem.
Speaker 2: And John, give us a sense of like globally where
Speaker 2: we sit right now, because the talk on this show
Speaker 2: has been a lot about well, we're losing our talent
Speaker 2: from the US.
Speaker 3: They're all going to.
Speaker 2: The Middle East for interesting news out of bid Oasis
Speaker 2: and the regulatory oversight there today. But people are looking
Speaker 2: at other places to build the companies, their startups.
Speaker 3: But where are.
Speaker 2: Volumes coming from internationally, because it all needs to be
Speaker 2: based on China rely.
Speaker 13: Great question. I mean from my seed as an operator,
Speaker 13: I see far more business development activity in Asia as
Speaker 13: well as in Europe. Although the US financial services firm
Speaker 13: have taken a step back waiting for the compliance and
Speaker 13: regulation to play out, the amount of deals we're working
Speaker 13: on at ov labs in Asia as well as in
Speaker 13: Europe have only increased, so they see the usefulness of
Speaker 13: the blockchain technology and they're engaged us. Hopefully with these
Speaker 13: new leaders will start that process as well.
Speaker 14: You know, it's interesting to see this international engagement, but
Speaker 14: at the same time, wouldn't you still see bitcoin prices
Speaker 14: move higher if there was that much more engagement at
Speaker 14: this point? Do you see more risks to the upside
Speaker 14: or the downside when it comes to bitcoin?
Speaker 13: No one could predict the short short term. It's a
Speaker 13: forty forty five percent volve products, so who knows. But
Speaker 13: I see in the medium and long term upsides where
Speaker 13: you want to be the haviening coming next year. Historically
Speaker 13: that means it goes higher into it. And also if
Speaker 13: you look at the curves in the financial markets for
Speaker 13: the futures contracts for bitcoin, no one's giving it price appreciation.
Speaker 13: So I think you can look at the options market,
Speaker 13: a twenty five delta call on bitcoin is priced almost
Speaker 13: the same as for three months. It's almost the same
Speaker 13: as a twenty five delta call six months out on bitcoin.
Speaker 13: And for a forty five to fifty voll product, that's
Speaker 13: really not much canentangle. It's kind of weird, so no
Speaker 13: one's giving you credit, and usually you take the opposite
Speaker 13: side of where people are standing.
Speaker 2: Oh, John, technical analysis music to our ears to a
Speaker 2: little bit about being anything other than basically speculative asset
Speaker 2: class Like even in the world of NFTs, we have
Speaker 2: still seen underlying work being done there, interesting moves with mischief,
Speaker 2: interesting moves with Movieton, interesting.
Speaker 3: Moves with collectibles.
Speaker 2: But the price points aren't shifting particularly, and I'm interested
Speaker 2: in ultimately whether people see this as anything other at
Speaker 2: the moment than a spective aske clas.
Speaker 13: We see it differently. The work we're doing with NFTs,
Speaker 13: we're working with like sk which is a large conglomerate
Speaker 13: in Korea. They have probably one of the largest loyalty
Speaker 13: programs in the world. Twenty four to twenty five million
Speaker 13: South Koreans are in this ninety thousand unique merchants. So
Speaker 13: basically they're going to put that loyalty program on a blockchain.
Speaker 13: When you have that many participants and you need to
Speaker 13: move information of value at the same time, you want
Speaker 13: to do it on a blockchain. That's how we're exploring
Speaker 13: with NFTs to loyalty programs. There are other companies even
Speaker 13: in the US work brand companies working with NFTs to
Speaker 13: create more engagement. There's a use case for NFTs not
Speaker 13: just pure digital collectibles.
Speaker 2: Great to have some time and you always have a
Speaker 2: labs president John will Blue Emotion Alibas and the house,
Speaker 2: so pleased to have it with me as well. And look,
Speaker 2: it's a crypto kind of a day stick with Bloomberg Crypto.
Speaker 2: It's at one pm Eastern at ten am Pacific coming up.
Speaker 2: Oh guess what the other flavor of the month, of
Speaker 2: course is and the year State of AI. We're going
Speaker 2: to talk about that as well as cybersecurity. Venture Investing.
Speaker 3: K Solm is going to be the best partner of
Speaker 3: Bank Capital Ventures. That's next. This is Bloomberg.
Speaker 2: Now, it's today's VC Spotlight, and we're very pleased to
Speaker 2: welcome to the show Bane Capital Ventures partner Enrique Solam,
Speaker 2: who focuses on well all stages in investing, particularly in infrastructure,
Speaker 2: software and cybersecurity over at Bain. And let's also bring
Speaker 2: in Bloomberg Investing reporter Hemma Palmer, who's helped bring about
Speaker 2: this interview and we really appreciate it so Enrique Bank Capital.
Speaker 3: You've been there, what.
Speaker 2: Since twenty fourteen, you were leading Samantech, which eventually of
Speaker 2: course support by Broadcom and has changed its name. But
Speaker 2: as a leader and now as an investor, how much
Speaker 2: has the game sort of been reorientated towards artificial intelligence
Speaker 2: for twenty twenty three.
Speaker 15: Yeah, if you look at the opportunities right now, we're
Speaker 15: definitely seeing that generative AI specifically, which is really the
Speaker 15: thing that is driving a lot of meaningful change if
Speaker 15: you take a look at what it's going to disrupt.
Speaker 15: Think about how software is being written today. Software developers
Speaker 15: have to sit down and write each line of code.
Speaker 15: In the future and near term, we expect that probably
Speaker 15: you know, forty percent of what a developer has done
Speaker 15: can be handled through AI. And we think that's not
Speaker 15: a fad, that is a meaningful change. And that's just
Speaker 15: one example of what we think is going to be
Speaker 15: really meaningful as we take advantage of this new major trend.
Speaker 16: And speaking about you know, disruption and AI, talk to
Speaker 16: us a bit about what you think the disruption could
Speaker 16: mean when it comes to phishing and hacking in cybersecurity,
Speaker 16: What influence does what we're seeing in AI now mean
Speaker 16: for that universe.
Speaker 15: Well, the thing that has going on is using new
Speaker 15: gender AI technologies, what an attacker can do is be
Speaker 15: significantly more targeted. So what does that mean? They can
Speaker 15: quickly generate an email message, a phishing attack that will
Speaker 15: be very specific to you to what you do. Things
Speaker 15: they know about you that before they wudn't have been
Speaker 15: able to do as effectively.
Speaker 7: And so what does that mean.
Speaker 15: That means it's more likely that somebody we will respond
Speaker 15: and if they respond, now the attacker is inside the network,
Speaker 15: and so we just think that the sophistication from the
Speaker 15: attacker's perspective will significantly increase.
Speaker 16: And you spoke about the opportunity set with AI. How
Speaker 16: do you look at the risks.
Speaker 3: You just mentioned?
Speaker 16: One, are there certain areas of AI and venture or
Speaker 16: later stage investing that you're avoiding given some of the
Speaker 16: concerns that we're seeing right now.
Speaker 15: Well, you know, when you look at the total landscape,
Speaker 15: there's always things that you want to be careful and
Speaker 15: you know, one of the areas that a lot of
Speaker 15: us have thought about, and you just had a discussion
Speaker 15: on what's happening with what we'll call centralized finance We're
Speaker 15: big believers in decentralized finance and we think that that
Speaker 15: is going to be a big opportunity going forward. But
Speaker 15: I would say broadly, we're bullish on what's happening AI.
Speaker 15: We're bullish on what's happening in.
Speaker 3: Cyber decentralized finance.
Speaker 2: What airs, I mean, you're still running checks when it's
Speaker 2: related to crypto.
Speaker 15: Yeah, So we raised a fund last year, and so
Speaker 15: we continue to invest in the companies that are working
Speaker 15: on new blockchain technologies. And so we've got investments in
Speaker 15: companies like Scroll Celestia, and we think there's still real
Speaker 15: opportunity ahead. You know, the question really is there's cycles,
Speaker 15: and we saw some of the you know, excesses of
Speaker 15: twenty one. We think we're in a much healthier environment now,
Speaker 15: this is more normal, and we even.
Speaker 2: The AI startups even for valuations there.
Speaker 15: You know, I think you're seeing that the best founders
Speaker 15: have moved into what's happening in the generat AI space,
Speaker 15: and so what that begins to do is they can
Speaker 15: command premium valuations. And so definitely we're seeing some overheated prices,
Speaker 15: but we think that's driven by what the opportunity set
Speaker 15: is which we think is incredible. You know, we've made
Speaker 15: an investment, for example, in a company called Unstructured, and
Speaker 15: if you think about what they do is they're taking
Speaker 15: all your corporate data and allowing you to train a
Speaker 15: model on your own specific data. And so we think
Speaker 15: companies like Unstructured, companies like Contextual, which are solving real
Speaker 15: problems around hallucination because one of the problems with gener
Speaker 15: of AI that I think we've all experienced is that
Speaker 15: sometimes you'll ask a question or you'll ask for some
Speaker 15: information and it'll give you some amount of randomness. And
Speaker 15: what companies like Contextual that we've invested in are really
Speaker 15: trying to do is eliminate that hallucination.
Speaker 16: Speaking about valuations, how do you see the runway ahead
Speaker 16: when it comes to the number of downrounds that we
Speaker 16: might see over the next twelve months, whether an AI
Speaker 16: even more broadly looking at.
Speaker 15: Infrastructure, Yeah, so if you look at the current environment,
Speaker 15: you know, twenty twenty three is probably not an ideal
Speaker 15: time to fundraise. Most of the founders that we engage
Speaker 15: with are really focused on thinking about raising in twenty
Speaker 15: twenty four and twenty twenty five, where we expect that
Speaker 15: their revenues will have grown in to the valuations, but
Speaker 15: there will probably be some companies that will be in
Speaker 15: a position where they have to raise financing at a
Speaker 15: lower valuation than last time.
Speaker 2: Always a bit of pill, but a reality for many.
Speaker 2: Ban Capital Ventures partner and Rique Salem, great to have
Speaker 2: some time with you. Thank you so much, Bloomberg's HMMA Palmer,
Speaker 2: We thank you so much for bringing the conversation. We've
Speaker 2: got to get back to our top story. Microsoft's court
Speaker 2: win in the US to of course proceed without sixty
Speaker 2: nine billion dollar deal for Activision Blizzard.
Speaker 3: Let's get the FTC perspective. William Kavass with us.
Speaker 2: He is a former acting chair of the Federal Trade Commission,
Speaker 2: former member of the FDC, and currently professor of law
Speaker 2: at George Washington University. Professor is wonderful to have some
Speaker 2: time with you. What does this mean for the FTC.
Speaker 2: They are taking big swings, but they seem to be missing.
Speaker 17: When they've taken swings based on theories that are a
Speaker 17: bit edgy, that involved using theories about vertical acquisitions such
Speaker 17: as Microsoft Activision. They're having a hard time in court.
Speaker 17: In short, they're having a difficult time expanding the frontier
Speaker 17: of enforcement to include theories that have been deemphasized in
Speaker 17: the past. And this is going to give the tech
Speaker 17: community confidence with certain types of transactions, especially if they're
Speaker 17: willing to offer concessions which the parties did hear that
Speaker 17: they have a fighting chance of prevailing when they get
Speaker 17: to court.
Speaker 2: And to that end, I mean, should the FDC sort
Speaker 2: of in a way be a little bit buoyed by
Speaker 2: the fact that they fall such changes, or indeed the
Speaker 2: worldwide competition authorities out there.
Speaker 17: If I were the FTC, I'd be claiming credit for
Speaker 17: the changes. I would say that if I hadn't been watching,
Speaker 17: if I hadn't intervened, the concessions would not have been
Speaker 17: given so directly and clearly. The judge in the case,
Speaker 17: in our opinion today emphasize the clarity with which the
Speaker 17: commitments have been made, so I certainly do claim some
Speaker 17: credit for that. Without my intervention, those would not have
Speaker 17: been presented so clearly and so directly.
Speaker 2: What's so interesting is almost sort of five minutes apart
Speaker 2: of the headline that we understood that the US cord
Speaker 2: is sort of giving this blessing to Microsoft, we heard
Speaker 2: that the EU it's reporting from the Financial Times, But
Speaker 2: the EU might well allow the VMware Broadcom deal to
Speaker 2: go through. What about some of the these are the
Speaker 2: deals coming down the pike. It feels as though you
Speaker 2: think these could start to get through if they.
Speaker 3: Make these concessions.
Speaker 2: I'm thinking of Broadcon, VMware, Kroger Albertson's and the like.
Speaker 17: If parties think very clearly and honestly at the beginning
Speaker 17: of the process about what the vulnerabilities will be, where
Speaker 17: the regulators are most likely to intervene and proceed to
Speaker 17: come up with solutions to address those, their prospects of
Speaker 17: success improved dramatically. The European Union, the European Competition Directorate
Speaker 17: has been quite willing to accept concessions. The courts in
Speaker 17: these US cases are willing to look at the suggested fix.
Speaker 17: This is the case in today in Microsoft activision. It
Speaker 17: was the case for the Administrative Law judge and Aluminu Grail.
Speaker 17: It's been the case in a couple of the couple
Speaker 17: of the challenges that the Department of Justice has brought.
Speaker 17: In short, what parties are having success with is coming
Speaker 17: to the court and saying we concede that there might
Speaker 17: be competitive problems, but we have a solution, and just
Speaker 17: because the authorities are not willing to embrace them doesn't
Speaker 17: mean that you judge should not endorse them. That strategy
Speaker 17: has been effected.
Speaker 2: What then, When Lena Khan first came in, much was made,
Speaker 2: of course, of the work she'd done and the study
Speaker 2: of the law around Amazon in particular. Many are waiting
Speaker 2: for what the FTC is going to do and bring
Speaker 2: in in terms of the big one for Amazon, in
Speaker 2: some way, shape or form, does any of this perhaps
Speaker 2: arbiter an easier time for the big company, which of
Speaker 2: course we understand has been hiring a lot of XFTC people.
Speaker 17: I think the company is almost certain to be the
Speaker 17: subject of a complaint. The FTC has made so many
Speaker 17: commitments over the past couple of years that to not
Speaker 17: bring a monopolization case against Amazon would be seen as
Speaker 17: a fairly dramatic repeat retreat, and indeed, for the chair
Speaker 17: this has been held out as one of the main
Speaker 17: reasons she's at the agency. I think it does mean
Speaker 17: that the FTC is going to think perhaps a bit
Speaker 17: harder about how it assembles the proof that will make
Speaker 17: the case successful, because in these merger defeats what the
Speaker 17: courts have been saying is your evidence isn't good enough.
Speaker 17: And the last thing I think it does is that
Speaker 17: it probably gives the Amazon more confidence that when the
Speaker 17: litigation process unfolds, that they're going to be able to
Speaker 17: meet the challenge. Ultimately, as an enforcer, you gain credibility
Speaker 17: by winning. You don't have to win them all, but
Speaker 17: you have to win a critical massive cases, and in Amazon,
Speaker 17: I think it suggests that if you're willing to mass
Speaker 17: all the resources that you need to take on the case,
Speaker 17: your prospects of success are going to be respectable. So
Speaker 17: I think that these defeats in a sense give them
Speaker 17: some confidence that they can prevail later on.
Speaker 2: Professor, great to get your expertise on this. Thank you
Speaker 2: so much for joining us today, George Washington University law
Speaker 2: professor and former FDC member Bill Kommersick.
Speaker 3: We thank him now.
Speaker 2: That does it for this edition of Bloomberg Technology looks
Speaker 2: so much more throughout the day regarding tech, look, Bloomberg
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