Speaker 1: From Mahard where Innovation, Money and Power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Luve Love.
Speaker 3: I'm Caroline Hyde at work Bloomberg's World headquarters in New
Speaker 3: York and.
Speaker 4: I met love Loo in San Francisco. This is Bloomberg
Speaker 4: Technology coming.
Speaker 5: Up in the next hour.
Speaker 3: Alphabet slumps after a report that Samsung has considered replacing
Speaker 3: Google with Microsoft's being as the default search engine on
Speaker 3: its devices.
Speaker 5: We discussed the impact of the AI.
Speaker 4: Race, plus Apple's sales in India. Ramp Up will bring
Speaker 4: you the details and Bloomberg's exclusive reporting which is two
Speaker 4: months ago until WWDC and the.
Speaker 3: Hashtag Love is Blind Live turn to hashtag lover is
Speaker 3: late as Netflix was hindered by traffic issues around the
Speaker 3: popular reality shows Live reunion.
Speaker 4: But first, there's just really one story that's making big moves,
Speaker 4: and that is that New York Times report that Samsung
Speaker 4: is considering replacing Google Search on its installed devices for
Speaker 4: Microsoft's being searched. Microsoft moving three tenths percent up to
Speaker 4: the upside, but look at Alphabet down more than three
Speaker 4: and a half percent. That puts it on track for
Speaker 4: its biggest drop since early February. So clearly the market
Speaker 4: paying attention to what this potentially would mean. The New
Speaker 4: York Times article talking about a potential hit to revenue
Speaker 4: of around three billion dollars for Alphabet, the parent of Google.
Speaker 4: A lot of detail in that report, but clearly the
Speaker 4: market paying attention.
Speaker 3: Caroline, Yeah, and really we see the money move. We
Speaker 3: also want to get to the integrity of Mark Berg
Speaker 3: and whom a police to say is joining us covering
Speaker 3: all things technology, particularly the world of Alphabet out of
Speaker 3: London and Mark When you're trying to analyze how important
Speaker 3: these sorts of narratives are coming from the New York
Speaker 3: Times reporting and they're like, oh, is it realistic that
Speaker 3: this could all be down to artificial intelligence in some way?
Speaker 3: And the way in which they're wrapping them.
Speaker 6: I think this is realistic in the way that it
Speaker 6: comes down to competition. This is the Times report talked
Speaker 6: about how it's shocking to people inside Google. This is
Speaker 6: something they didn't expect for a long time. We have
Speaker 6: this lock on the mobile world right. Android phones are
Speaker 6: built on Google, they are packaged with Google Search. Samsung
Speaker 6: for years have been trying its own versions of artificial
Speaker 6: intelligence services, voice assistant services. They've all kind of failed miserably.
Speaker 6: Apple has has Siri, but is stuck with Google on search.
Speaker 6: And now for the first time, we have this credible
Speaker 6: idea where a company is saying we're actually going to
Speaker 6: go to BING, and everyone including the market, is taking
Speaker 6: it seriously.
Speaker 4: Mark As we look at search as a marketplace, I
Speaker 4: think Google has more than ninety percent of market share
Speaker 4: globally across platforms based on third party data. But I
Speaker 4: guess the question at this point is how real is
Speaker 4: it for Samsung and it's two hundred and sixty million
Speaker 4: devices shipped last year to just pivot to a completely
Speaker 4: new preferred search app.
Speaker 6: I mean, that would be unprecedented in some ways. You
Speaker 6: know that is you're certainly gonna have some adoption with consumer.
Speaker 6: I imagine Samsung listen is going to take this very carefully,
Speaker 6: right Like, they don't want they obviously want to sell
Speaker 6: more phones, and they don't want a world in which
Speaker 6: they ship a device with with BING and they're selling
Speaker 6: fewer phones. But this is a lot of leverage here
Speaker 6: with this deal with Google where they set across the
Speaker 6: table and Samsung is the biggest hardware partner in the
Speaker 6: Android world and something that they've been working closely with
Speaker 6: Google for a long time. The complication here is that
Speaker 6: you know, Google also provides Android for Free, which is
Speaker 6: not just search, but it's the play store, right, It's
Speaker 6: it's all the suite of apps that make.
Speaker 7: The Android phone work.
Speaker 6: And Google of course has their own Pixel Phone that
Speaker 6: has struggled to really become anything as serious contender along
Speaker 6: with Samsung and Apple. But we understand why Google for
Speaker 6: has been applowing billions of dollars into that for a
Speaker 6: scenario just precisely like this.
Speaker 3: The irony, of course all of this mark is that
Speaker 3: we all associated really the world of artificial intelligence with Google,
Speaker 3: the focus on deep mind from very early on the
Speaker 3: way and from which they've deployed large languid modules and
Speaker 3: AI vision into many of their use cases. What did
Speaker 3: you make of Snapitche in particular taking to the airwaves
Speaker 3: over the weekend and how he spoke perhaps people feeling
Speaker 3: that they're kind of behind on this race.
Speaker 6: Yeah, it was an interesting approach going in sixteen minutes.
Speaker 6: I mean they're talking at audience. I guess is Middle
Speaker 6: America is telling the world that we are the message
Speaker 6: they've been saying for years. So if you listen to
Speaker 6: any Google earnings call, this has been a consistent we
Speaker 6: are ahead on AI, and I think that was certainly true.
Speaker 6: What I do think what chat GIBD did, and I
Speaker 6: don't know necessarily there's gonna be a lot of comparisons
Speaker 6: about the technical prowess, but what they actually came out
Speaker 6: with a consumer application that people can interact with and
Speaker 6: companies can interact with. Right like, every startup in the
Speaker 6: world world is testing out the Church GBT API, something
Speaker 6: that really they locked into this kind of magic that Google,
Speaker 6: despite maybe a technical lead, hasn't really unlocked. That being said,
Speaker 6: you know, I think that you know, Google's been investing
Speaker 6: so much in this, it has so many, so many engineers,
Speaker 6: you can't count them out of this. But certainly, and
Speaker 6: sort of like the narrative and technology companies as everyone
Speaker 6: wants to try Chat GBT.
Speaker 4: Another part of the New York Times ARSCH call Caroline
Speaker 4: was the idea that Google is going to bring AI
Speaker 4: functionality to search. And actually Google did issue me a
Speaker 4: comment and a statement saying, by the way, we've been
Speaker 4: using AI in Google Search for years, and they'd believe
Speaker 4: they've done so in a safe and responsible way, you know,
Speaker 4: going back to the idea like we've been at this
Speaker 4: for a while. Anyway, I thought that was interesting.
Speaker 3: And Amazon said the same thing, didn't they in Adi
Speaker 3: Jasse's letter, We've been doing this for decades, by the way, team.
Speaker 4: Yeah, exactly, all right, blueblosmart Berg and out of London.
Speaker 4: Thank you so much with this topic and bringing Rowhit
Speaker 4: called Carne of Roth Capital Partners. The markets have given
Speaker 4: a clear response row Hit to this story. Alphabet shares
Speaker 4: down the most since early fed. What's your reaction to
Speaker 4: the threat of Microsoft being getting traction in the Samsung
Speaker 4: smartphone space?
Speaker 8: Yeah?
Speaker 9: Absolutely, I think thanks for having me. I think for
Speaker 9: the first time in fifteen years, there is a some
Speaker 9: serious competitor to Search, to Google. I think that's what
Speaker 9: the market is telling you. For the last fifteen years,
Speaker 9: we have never had a real competitor. You never remember,
Speaker 9: people had Aol, people had Yahoo, people had being Facebook,
Speaker 9: even troide search. Obviously, Apple tried Search. Every company has
Speaker 9: tried to be a dominating company in search and hasn't
Speaker 9: budged Google at all. Last ninety days, people are questioning that,
Speaker 9: and that's what we are trying to figure out whether
Speaker 9: is this a sentiment or perception issue or is this
Speaker 9: twelve months from now a real fundamental issue. Right now,
Speaker 9: it is just a sentiment issue.
Speaker 4: In my opinion, Caroline, we can go back to the
Speaker 4: third party data, right, he is always ninety percent of
Speaker 4: the search market, at least globally.
Speaker 3: Yeah, And I think to that point ed, where was
Speaker 3: accusations last week being made that actually, if Google wasn't
Speaker 3: so monopolistic in its power, perhaps we'd see further iteration
Speaker 3: in chatchipt and not being owned just by open Ai.
Speaker 3: But row hits speak to that speak to what perhaps
Speaker 3: the CEOs and the pitch I is trying to make
Speaker 3: an argument for, is that they've been a a trusted
Speaker 3: arbiter of this sort of reskilling, retooling, generational shift in technology,
Speaker 3: and maybe the pace is not being quite so controlled
Speaker 3: by other competitors.
Speaker 9: I think so as an in Google be trust In
Speaker 9: my opinion, they have the data, they have the consumer behavior,
Speaker 9: they have the consumer front end to Internet, and they're
Speaker 9: all that over the years, and they've gone through iterations
Speaker 9: through mobile, through desktop and various different ways. So, in
Speaker 9: my opinion, from a stock perspective, I feel Google will
Speaker 9: come out of this probably unharmed or maybe even stronger.
Speaker 9: In the interim. I think Chad GPD it proposes a real,
Speaker 9: real issue to how kind of search is going to
Speaker 9: evolve over the next six months. Whether Google is ahead
Speaker 9: of the curve, We're always going to be a follower,
Speaker 9: will dictate the stock price in the next six months.
Speaker 9: I feel Google is going to be following the narrative
Speaker 9: that chat GPD is setting out there. That that makes
Speaker 9: it a little bit harder for Google management to be aggressive,
Speaker 9: and I feel they need to step in front and
Speaker 9: come out with more aggressive product launches and open up
Speaker 9: their AI kimono, if you will, in a way that
Speaker 9: Chad GPT has done.
Speaker 8: Right.
Speaker 4: Hey, you've got a one hundred and eight dollars eighty
Speaker 4: seven cents target?
Speaker 8: Is that right on Google buy rating?
Speaker 4: How much of what you see in alphabet is the
Speaker 4: potential that BARD brings the legacy of work in artificial intelligence.
Speaker 9: By the way, just to clarify price target as one
Speaker 9: twenty six, you're.
Speaker 8: Right, I apologize one twenty six.
Speaker 9: Yeah, all good, I think again. In my opinion, Bard
Speaker 9: is just one of the several experiments that we will
Speaker 9: see from Google just to highlight that what you were
Speaker 9: discussing earlier that look, we have been doing AI AI
Speaker 9: research and everything that the industry is talking about for
Speaker 9: the last maybe a decade. CHAD GPT is based on
Speaker 9: the technology that was created by Google eight years ago.
Speaker 9: Chad GPD started maybe six years back. So again, Google
Speaker 9: has been the foundation of global AI research for many,
Speaker 9: many years. And I think that's where we'll see more
Speaker 9: experiments and more consumer use cases unlock over the next
Speaker 9: for three to six months. And I think Google needs
Speaker 9: to step their game up in the PR as far
Speaker 9: as PR is concerned.
Speaker 4: Right here called canne Rough Capital Partners than thank you
Speaker 4: for your quick reaction to that story, Caroline in.
Speaker 5: Google would trust quite the key line.
Speaker 3: Meanwhile, let's stick with AI ED because or the first
Speaker 3: wave of academic research applying chatchipt to our world of finance,
Speaker 3: it's arriving. Two new papers have been published this month
Speaker 3: alone that deployed chatchipt in market relevant tasks, One in
Speaker 3: deciphering whether the Federal Reserve statements are hawkish or dubbish,
Speaker 3: whether they pro interest rate cuts or against them, and
Speaker 3: the other in determining where the headlines are good or
Speaker 3: bad for stocks open AI. Get this said, aced both
Speaker 3: tests with chatchipt and I think, of course money managers,
Speaker 3: particularly the quants, have been using large AGORID models for
Speaker 3: a long time.
Speaker 5: But this is about democratization once again, in.
Speaker 4: My mind, goes back to that story we were telling
Speaker 4: last year as well about all of Wall Street hiring
Speaker 4: talent away from the technology sector, people that could use
Speaker 4: and interpret the data generated by these tools.
Speaker 3: And the point being is to whether or not you
Speaker 3: can easily trade on these sorts of numbers, whether it
Speaker 3: means that it all has to be owned by certain
Speaker 3: well very wealthy hedge funds and quant teams that have
Speaker 3: the power the money to hire such expensive talent from
Speaker 3: the technology world, or whether in fact people can start
Speaker 3: turning to these plugins like a Chatchy Beuta to just
Speaker 3: well certainly cost saved to a large extent.
Speaker 4: And when you have Bank of America's Brian moynihan and
Speaker 4: JP Morgan's Jamie Diamond talking about AI tends to give
Speaker 4: it a bit of a momentum, which we will also
Speaker 4: stick with. On Bloomberg Technology, Let's get straight to Apple.
Speaker 8: Shares of the iPhone maker down half percent.
Speaker 4: Bloomberg reporting overnight that sales in India reached six billion
Speaker 4: dollars for the twelve month period through March, which represents
Speaker 4: a fifty percent sales growth for the same one year
Speaker 4: period a year earlier. We're learning more, Caroline, about this
Speaker 4: market India in terms of sales, and we know about
Speaker 4: the supply chain story. Let's bring up this chart and
Speaker 4: look at actually the breakdown of Apple sales globally, because
Speaker 4: India is not technically broken out this Bloomberg reporting. According
Speaker 4: to sources, it's lumped in with the rest of Asia Pacific,
Speaker 4: which is seven percent of sales for the full year
Speaker 4: twenty twenty two. But it seems like we're growing traction
Speaker 4: there a market where the high price points have been
Speaker 4: a difficult one for Apple to crack. But we know
Speaker 4: that Tim Cook is in that country right now, Caroline.
Speaker 3: Yeah, and it's all about this growing middle class willing
Speaker 3: to spend on those higher price points. It's just talk
Speaker 3: across the board on all things Apple right now. Bloomberg's
Speaker 3: alex Web clocking in late for us over in London,
Speaker 3: just discuss for the first and foremost We've got so
Speaker 3: much to go through with Apple, but the India focus
Speaker 3: the fact that they are able to only do supply
Speaker 3: there but also see the demand there.
Speaker 8: Yeah, there are two pieces of this.
Speaker 10: Clearly there's part of the de risking of its manufacturing
Speaker 10: by just trying to pull a little bit out of China,
Speaker 10: and we should highlight it is really just a little bit. Coincidentally,
Speaker 10: it's about seven billion dollars in sales. Just a billion,
Speaker 10: sorry in revenue they generate from products that have made
Speaker 10: their six billion is what they're doing in sales now.
Speaker 10: Quite often, when when people talk about India, they say
Speaker 10: it's ten years behind China. I mean ten years ago
Speaker 10: Apple was still doing in excess of twenty five billion
Speaker 10: dollars in sales in China. So it's got a long
Speaker 10: way to go to get up to what is now
Speaker 10: in excess of seventy billion dollars a year in China.
Speaker 10: But it is clearly making traction that price sensitivity that
Speaker 10: Ed talks about, clearly a massive deal lots of people
Speaker 10: encountering out there, is going to take a long time
Speaker 10: for them to be able to take a meaningful chunk
Speaker 10: out of the unit sales at least that Samsung does there.
Speaker 4: We know that Tim Cooks on the road has been
Speaker 4: tweeting pictures of himself in India. Bloomberg had reported that
Speaker 4: he himself will attend the opening of both the Mumbai
Speaker 4: and New Deli stores this week. We are waiting for
Speaker 4: June and WWDC. It's all good focusing on one market,
Speaker 4: but we're also interested in product and this is supposed
Speaker 4: to be the biggest WWDC ever.
Speaker 8: What are we expecting, Alex.
Speaker 10: Well, I don't know about the biggest ever, but it's
Speaker 10: only the biggest launch for a very long time. We're
Speaker 10: going to be seeing this new headset. According to you know,
Speaker 10: our colling Mark German's reporting, this is as we know,
Speaker 10: this is for developers. Therefore, there's going to be a
Speaker 10: big emphasis on what is likely to be called xroos
Speaker 10: that is going to be to their mixed reality headset,
Speaker 10: what iOS is to iPhones, what mac os is to
Speaker 10: Max and MacBooks. There's really going to be a huge
Speaker 10: effort there to show developers what they can do and
Speaker 10: so crucially why it's going to be worth their while
Speaker 10: developing for this platform. Developers are really Apple's edge when
Speaker 10: it comes to any new product. You know, Facebook, Meta
Speaker 10: have really struggled to get a good developer base into
Speaker 10: their product lineup. If Apple can convince it's developers to
Speaker 10: make good apps, then it will give the headset when
Speaker 10: it's released, perhaps later this year, a real leg up
Speaker 10: in competing with this very much nascent space.
Speaker 4: Yeah, Caroline, that's the two debates of the industry. Right
Speaker 4: much demand is there for high end augmented reality headset?
Speaker 4: And how much emphasis do they want to put on
Speaker 4: health when it comes to your smart watch?
Speaker 5: Yeah?
Speaker 3: And I think, actually, as that's a good point, isn't it.
Speaker 3: We're looking at this new, bright, shiny object. They're also
Speaker 3: updating the operating systems of some of their original products.
Speaker 3: I think are the watch is going to have a
Speaker 3: bit of a feature there. They've also got new Mac products.
Speaker 5: What else can we expect from them?
Speaker 10: I think that it does the actual new hardware. We're
Speaker 10: going to be seeing some new MacBooks. But you're quite right,
Speaker 10: they're going to be updating the full range of software,
Speaker 10: so xros, tvOS, mac os, iOS, watch os, all of
Speaker 10: these things coming with a few more bells and whistles.
Speaker 10: We're going to be seeing the Apple you know, self
Speaker 10: designed chips going into the MacBook Pro range, which will
Speaker 10: be something new and you know All in all, I
Speaker 10: think we're probably all those things are going to fade
Speaker 10: into insignificance given the attention that's going to be given
Speaker 10: to these new headsets. But there'll be lots of fun
Speaker 10: tools for developers to play with.
Speaker 8: All right.
Speaker 4: Thanks to Bloomberg, x Alix Web who line for a
Speaker 4: long time, is out here in San Francisco. He knows
Speaker 4: this company inside out just as well as Mark German.
Speaker 8: We're grateful to have him.
Speaker 4: All right, coming up the highly anticipated SpaceX starship. It's
Speaker 4: been put on hold. We'll tell you what happened next, Caroline.
Speaker 3: Yeah, and let's just for a moment take a beat
Speaker 3: as we look at some incredible shots of what could
Speaker 3: have been today as what actually.
Speaker 5: Is going on in the market right here, right now.
Speaker 3: We had some strongly economic data, particularly coming out in
Speaker 3: New York that hits sentiment.
Speaker 5: We see, of course good news being bad news for
Speaker 5: techtocs were up by four tenths of percent. This has Bloomberg. Oh,
Speaker 5: and also a comment on where.
Speaker 3: Only you should be putting your money to work from
Speaker 3: some experts as well.
Speaker 5: Cities Wealth Cio had this to say, So, companies.
Speaker 11: That have moted around them, you know, different technology companies
Speaker 11: and other industries where you can see both margin growth
Speaker 11: and revenue growth should be rewarded.
Speaker 5: It's time now for talking tech. Enil Musk.
Speaker 3: Well, he's incorporated a new entity called Xai.
Speaker 5: It's all calling to Nevada State documents. Now.
Speaker 3: While the documents don't list the company's purpose, Sarama speculating
Speaker 3: that these efforts could be.
Speaker 5: Part of a larger project to rival the.
Speaker 3: Likes of companies like open Ai, which, of course Musk,
Speaker 3: having initially helped found, is now frequently criticized and in
Speaker 3: other Musk news. Yes there's more, but SpaceX it's postponed
Speaker 3: the launch of its massive Starship rocket that was set
Speaker 3: to lift off earlier today. Now the company and CEO,
Speaker 3: of course, El Musk, confirmed there was a pressurization issue
Speaker 3: minutes before the launch.
Speaker 4: It all right, let's stick with the big story, and
Speaker 4: we're joined by Bloomberg News is Space reporter Lauren Grusse,
Speaker 4: who is out there on South Padre Island in Texas.
Speaker 4: We know why there was a pause, a delay, a scrub.
Speaker 4: Will we see starship launch this week?
Speaker 12: You know that is all variable and honestly, this is
Speaker 12: just the name of the game. When it comes to
Speaker 12: covering rockets, especially the first launch of a brand new
Speaker 12: rocket like Starship.
Speaker 1: You know there are going to be scrubs. In fact,
Speaker 1: if it.
Speaker 12: Had gone off today, I would have been shocked, because
Speaker 12: that is just how these things go when you're testing
Speaker 12: a brand new rocket.
Speaker 1: Will we see it go this week?
Speaker 12: I really hope so, because I'm staying in South Padre.
Speaker 1: But you know, if I'm going to be stuck in.
Speaker 12: Any place, there are worst places to be stuck, Lauren.
Speaker 3: I mean, already we have from Ilol Musk trying to
Speaker 3: put perhaps a positive spin on it, seeming pretty optimistic.
Speaker 3: But I mean it also might align with one of
Speaker 3: his favorite days.
Speaker 1: Right, Yes, so.
Speaker 12: There is a possibility that we could launch on April twentieth.
Speaker 12: You know, there are certain things associated with a date.
Speaker 12: I won't go into them, but yes, I think it
Speaker 12: would definitely please Elon Musk if we did launch on
Speaker 12: that date.
Speaker 4: Right, This is significant, Caroline, Right, Starship sixteen point seven
Speaker 4: million pounds of thrust. That's double what Satin five was
Speaker 4: capable of doing in the seventeenth This is a milestone,
Speaker 4: not just for the industry, Lauren, but for mankind.
Speaker 8: Why, though, is it a milestone.
Speaker 12: Well, if you think about it, I mean, the reason
Speaker 12: that Elon Musk founded SpaceX to begin with was to
Speaker 12: start a human settlement on Mars. And you know, I
Speaker 12: spoke with analysts, you know, leading up to this. It
Speaker 12: really has all come down to this. This is the
Speaker 12: vehicle that they will eventually use to send people to
Speaker 12: deep space.
Speaker 1: Like the Moon and Mars.
Speaker 12: And the only way that they can make that dream
Speaker 12: for reality is if they prove that Starship can actually
Speaker 12: launch to space. So there's still an extremely long road
Speaker 12: ahead for before anybody is taking any steps on any
Speaker 12: other worldly surfaces from Starship.
Speaker 1: But the point is they have to show.
Speaker 12: That it can reach space and it can reach near
Speaker 12: orbital speeds and actually get into orbit before we have
Speaker 12: any chance of seeing this dream become a reality.
Speaker 3: And if it does happen, Lauren, very briefly, what do
Speaker 3: we expect.
Speaker 5: To actually happen.
Speaker 1: You mean from this launch in general?
Speaker 12: Yeah, So this line, which is really just proving out
Speaker 12: the basics. They just want to show that super heavy,
Speaker 12: that giant booster that is used to actually send Starship
Speaker 12: into orbit, that it can actually fly, that the two
Speaker 12: pieces can separate what's called stage separation, and that starship
Speaker 12: can actually get to near orbital speeds. It won't be
Speaker 12: doing a full orbit, it'll actually be coming down off
Speaker 12: the coast of Hawaii, but it will be getting pretty
Speaker 12: close to orbit and orbital speeds, and it'll be getting
Speaker 12: into space. So those are the main things that they
Speaker 12: really want to test. Can it survive max Q, which
Speaker 12: is the point where all these pressures are on the
Speaker 12: rocket and it undergoes the amount of most intense forces.
Speaker 12: Can that stage separation happen, Can it reach space?
Speaker 1: And can it get to the orbit?
Speaker 5: Wow, well, we hope it happens.
Speaker 3: For you who's going to be stuck out there for
Speaker 3: a few days. You appreciate you bringing the times, Lauren Grush,
Speaker 3: all things space mean, while all things crypto coming uphead
Speaker 3: Bitcoin is the being below thirty thousand. We'll talk about
Speaker 3: why is it fundamentals more, the macro picture fractal co
Speaker 3: CEO is going to be joining us Aya Cantorovic. That's
Speaker 3: next and that's a Bloomberg Welcome back to you, Bluemog Technology.
Speaker 3: I'm Caroline Hide in New York and.
Speaker 4: I'm medal of Low in San Francisco. Caroline, we check
Speaker 4: the markets. Take a look at where we are, particularly inequities,
Speaker 4: and now's that one hundred softer by around seven tenths
Speaker 4: of one percent. This is a market that's on track
Speaker 4: for a decline in April. I'm conscious that we still
Speaker 4: have a few days left to go. The debate about
Speaker 4: what the FED is or is not going to do
Speaker 4: kind of weighing heavy outperformance in the US listed shares
Speaker 4: of Chinese technology companies. You see the Golden Dragon index
Speaker 4: up two point eight percent. A big part of that
Speaker 4: some of the even news out of that market, overnight
Speaker 4: ten year yield pushing higher eight basis points or so
Speaker 4: to three zero point five to nine percent. We're also,
Speaker 4: i think, as you put it, Caroline, seeing some of
Speaker 4: the wind out of the sales of crypto. I'm looking
Speaker 4: at Bitcoin and Ether as an example. In this session
Speaker 4: both softer, Bitcoin off by three percent, back below thirty
Speaker 4: thousand US dollars per token. Still mix debate out there,
Speaker 4: a lot of long term balls and still some momentum
Speaker 4: in the near term based on what we're seeing in
Speaker 4: macro conditions when it comes to rates, but also some
Speaker 4: feel good about the underlying technology.
Speaker 3: Yeah, and also what's happening in the banking sector, whether
Speaker 3: it was seen of some sort of stability amid or
Speaker 3: some concerns around the banking well overall financial conditions that
Speaker 3: we were seeing. Let's dig into all of these pushes
Speaker 3: and pulls. I'm pleased to say that Aya Kanderovich is
Speaker 3: with us. She is the co found and co CEO
Speaker 3: of Fractal. It's an infrastructure provider for institutional crypto trading
Speaker 3: on chain and also has just announced six million dollar
Speaker 3: seed rays with a financing round led by hack BC.
Speaker 5: So congrats, we've got some money in the bank. AIA.
Speaker 5: Just paint the picture right now.
Speaker 3: Yes, we're a little bit weaker on the day, but
Speaker 3: look at the run and Bitcoin up what eighty percent
Speaker 3: so far here to date? Eth as well, with a
Speaker 3: successful upgrade, are we seeing more not only retell, but
Speaker 3: maybe institutional investment confident.
Speaker 5: Is coming back?
Speaker 2: Sure, So I'll actually start with Ethereum. So to your point,
Speaker 2: you mentioned that we had the Chappella update happened on
Speaker 2: April twelfth of last week that allowed for two different things,
Speaker 2: both to finally move to proof of work from proof
Speaker 2: of steak and then also for Ethereum to be able
Speaker 2: to unstake itself and create liquidity in the markets. And
Speaker 2: so really what that does is three different pushes in
Speaker 2: momentum that we expect to continue as well across institutions
Speaker 2: and other users. So, for example, the first piece is
Speaker 2: actually very interesting. If you look at what happened with
Speaker 2: institutional investors in the last update six months ago, you
Speaker 2: actually saw that institutional investors were buying the rumor and
Speaker 2: then selling the news, and so you saw the price
Speaker 2: run up and then immediately drop afterwards. Differently, in this
Speaker 2: run up, what you saw was actually the opposite, So
Speaker 2: you had a lot of institutional investors who were shorting
Speaker 2: ethereum and then on April twelve they had to close
Speaker 2: their shores and therefore by the underlying asset, and that
Speaker 2: really led into the momentum of the price up. The
Speaker 2: second is also the latent demand that's just sitting on
Speaker 2: the sidelines, you know, that was looking to see whether
Speaker 2: or not there would be any glitches in ETH and
Speaker 2: the update in order to then pile into the asset class,
Speaker 2: which we then proceeded to see. I will agree with
Speaker 2: you that in terms of the users specifically, it's definitely
Speaker 2: more crypto natives. But then comes that last piece which
Speaker 2: is really interesting, which is there was a lot of
Speaker 2: negative sentiment with on chain data around this huge cell
Speaker 2: pressure once you could unstake the ethereum, and if you
Speaker 2: look at the data, it actually shows that less than
Speaker 2: ten percent of the eth that's been staked is looking
Speaker 2: is in the queue to unstake, and of that ten
Speaker 2: percent majority is actually just the rewards that have been
Speaker 2: earned since ethereum was staked. So it's very very positive.
Speaker 2: And on Friday you saw more eth that was staked
Speaker 2: than withdrawn.
Speaker 3: And many had thought a lot of these people were
Speaker 3: long term holders, perhaps were underwater anyway from when they
Speaker 3: first got a stake here or would stay way. But
Speaker 3: to your point of institutions or in general cryptoplayers native
Speaker 3: wanting to short, wanting to perhaps use derivatives to perhaps
Speaker 3: prepare themselves for this upgrade, What is liquidity like? What
Speaker 3: is the vacuum like for derivatives at the moment post FTX.
Speaker 5: Yeah, that's a great question.
Speaker 2: The honest answers is the liquidity is definitely much drier,
Speaker 2: which also leads to why you see these momentum driven
Speaker 2: events happen because there's less liquidity in the market and realistically,
Speaker 2: what's going to happen is two years ago we actually
Speaker 2: saw the pendulum swing where markets used to be driven
Speaker 2: by Asia based investors and that moved to US based investors.
Speaker 2: Now we're actually seeing the opposite, where a lot of
Speaker 2: the markets are being driven by you Asia based investors
Speaker 2: again and Asia based exchanges. And you'll likely see that
Speaker 2: happen until the pendulum swings back to.
Speaker 1: The US.
Speaker 4: Tracking them at price momentum, spot price, use of options.
Speaker 4: It is just one data set. What caught my eye,
Speaker 4: particularly in the back end of March, is the flows
Speaker 4: of money into various products tied to crypto. What do
Speaker 4: you take away from that? You know, what is leading
Speaker 4: the market to put money into these instruments at this time?
Speaker 2: Sure so interestingly, on March tenth, when a SVB filed
Speaker 2: for bankruptcy, Bitcoin's price from that specific date is up
Speaker 2: over fifty percent. And I think it really really focused
Speaker 2: in on and reiterated the reason for bitcoin, also the
Speaker 2: narrative around bitcoin being a safe haven, but also when
Speaker 2: bitcoin was originally created in two thousand and nine following
Speaker 2: the two thousand and eight financial crisis, and so you'll
Speaker 2: likely see there's always a delayed reaction of money moving
Speaker 2: into investment products globally for digital assets following any instability
Speaker 2: in financial markets. But you'll likely continue to see that happen.
Speaker 5: Through your end.
Speaker 3: What's interesting as you come on having just done a
Speaker 3: seed round, having successfully put out an offering their infrastructure
Speaker 3: offering out that institutional clients, clearly seeing that people want
Speaker 3: a different kind of transparency post FDx. But well, you
Speaker 3: are based in Switzerland. You are now in between New
Speaker 3: York and Switzerland. What about the regulatory environment. You're just
Speaker 3: saying how more of the flows are coming or being
Speaker 3: done out of Asia and most of the companies being
Speaker 3: founded wanting to go to Asia because of the regulation
Speaker 3: here in the US.
Speaker 2: It's a good question, and I would say yes and no.
Speaker 2: I think specifically, especially for US as a startup, the
Speaker 2: jurisdictions were very excited about as you mentioned Switzerland as
Speaker 2: well as Singapore, Japan, Hong Kong, UK and other European jurisdictions.
Speaker 2: In the US, actually, specifically we're excited for US regulators
Speaker 2: to move from regulation through enforcement to regulation through collaboration.
Speaker 5: Even if you look.
Speaker 2: At last Friday with the Stable Coin Act that came out,
Speaker 2: you know, a lot of that that was a bipartisan
Speaker 2: agreement with heavy, heavy influence from Circle and so it's
Speaker 2: exciting to see those things come into play, and that's
Speaker 2: definitely something we're going to keep an eye out for,
Speaker 2: specifically to fractal though. What I would say is we
Speaker 2: don't fall under the DeFi or decentralized finance definition. We're
Speaker 2: very much focused on on chain finance. I'm really just
Speaker 2: using the blockchain to create lower costs and more efficient infrastructure.
Speaker 5: It's interesting, ed.
Speaker 3: That we've talked a lot about the bitcoin run ups,
Speaker 3: but many have pointed to some of the old coins
Speaker 3: not being caught up in that rally, and some saying
Speaker 3: even the decentralized exchanges that done phenomenally well in terms
Speaker 3: of volumes, maybe some of their tokens haven't done as
Speaker 3: well as might have been expected of late.
Speaker 4: Yeah, And the other conversation we've had ia is from
Speaker 4: Eightpril twelve, the momentum that either is or isn't there
Speaker 4: in backing the underlying technology. You know, you are a
Speaker 4: founder and running your own business. How do you view
Speaker 4: the health of your company right now, the ability to
Speaker 4: raise funds, that of your peers as well.
Speaker 2: Yeah, that's a great question, and I would really specify
Speaker 2: a lot of these tokens or utility tokens, so it's
Speaker 2: really reflective of the usage of the application. To Caroline's point,
Speaker 2: obviously you're not always seeing that one to one that said,
Speaker 2: Fractal doesn't have a token and we don't intend to
Speaker 2: anytime soon. And the investment ecosystem, I mean, we were
Speaker 2: able to close around three weeks with a term sheet
Speaker 2: given out the week after FTX collapsed, and so really
Speaker 2: strong momentum there, and I think you're continuing to see
Speaker 2: a lot of momentum for founders who have seen the ecosystem,
Speaker 2: have been in crypto for a while and continue to
Speaker 2: put their heads down and keep building.
Speaker 4: Fractal co founder and co CEO Ayakontorovich, thank you so much. Meanwhile,
Speaker 4: it's Earth Week here on Earth, and we're looking at
Speaker 4: the innovative ways that technology is taking charge to be
Speaker 4: more energy efficient. When it comes to electric cars, ev
Speaker 4: makers of finding new ways to build sleeker, more cost
Speaker 4: effective systems that utilize the power of the sun.
Speaker 8: Bloomberg Green has.
Speaker 13: The story, are solar cars the next ev evolution? Decades
Speaker 13: of work on a solar car Moonshot is slow in
Speaker 13: ceding to a more pragmatic approach, Smaller, lighter, cheaper systems
Speaker 13: built to subtly augment electric driving rather than power a
Speaker 13: road trip in full. The sun is hard to with
Speaker 13: as it never stops showing up, and with the market
Speaker 13: now rife with electric vehicles, there is an auto ecosystem
Speaker 13: increasingly wired for electrons, including a charging infrastructure that on
Speaker 13: car solar systems would no longer have to do all
Speaker 13: the heavy lifting. As far as cost, solar panels have
Speaker 13: steadily become both cheaper and more efficient. Over the past decade.
Speaker 13: The price of solar modules per WAT of power produced
Speaker 13: plunged by seventy eight percent to roughly twenty four cents
Speaker 13: per WAT, according to Bloomberg and E. E.
Speaker 8: App.
Speaker 13: At that rate, a panel array the size of a
Speaker 13: sedan has dropped from two hundred and twenty two dollars
Speaker 13: to just under fifty dollars. Currently, Toyota sells a solar
Speaker 13: roof as an option on its Preus Hybrid. At Hyundai. Meanwhile,
Speaker 13: a solar roof option is available for its Sonata Sedan,
Speaker 13: and the company is drawing up plans to add solar
Speaker 13: panels to the Ionic five, its breakout ev and what
Speaker 13: about Tesla. Elon Musk has stated he believed the car
Speaker 13: is one of the least efficient places to put solar.
Speaker 13: That's the Tesla is pursuing an option for its cyber
Speaker 13: truck owners to add solar integrated into the cover of
Speaker 13: the pickup bed and possibly as unfolding wings.
Speaker 8: The sun hard to ignore.
Speaker 3: Time now for our VC roundup and insect farming startup.
Speaker 3: Insect spelt with a Y just closed a one hundred
Speaker 3: and seventy five million dollar financing round as it expands
Speaker 3: globally and looks to shift away from animal feed like
Speaker 3: mealworms fed to fish to high margin pet food. Meanwhile,
Speaker 3: a Berlin based Razor Group has raised eighty eight million
Speaker 3: dollars in Series C funding round, bringing its valuation just
Speaker 3: as watch as one point two billion dollars. It's all
Speaker 3: according to tech Crunch, citing sources. It's also acquired its
Speaker 3: competitor Strives Group as part of a consolidation move.
Speaker 5: Now let's get to what else we're hearing from our.
Speaker 3: VC guest so late when they see opportunities on the horizon, Take.
Speaker 14: Listen, I recognize tricky environment right now, not one where
Speaker 14: I'd recommend folks go, you know, running out there to
Speaker 14: try to raise around.
Speaker 7: The reality is to technology reach the point right now
Speaker 7: that you actually don't need the same amount of capital
Speaker 7: you needed before, and.
Speaker 5: Optimism is coming back to see it. In early stage,
Speaker 5: we are hiring, So.
Speaker 7: What we're seeing is a new area of our opportunities
Speaker 7: for new founders to come and change the industries that matter.
Speaker 5: Everything was happening through cryptos web three.
Speaker 15: It was bock Chane, it was everything that has now
Speaker 15: shifted over to AI.
Speaker 4: AI has made the business of threat detection, incident response
Speaker 4: a lot more automated AI.
Speaker 15: That's definitely an area where we're seeing a lot of
Speaker 15: green shoots.
Speaker 4: Springing today's guests for his take on the future investing opportunities,
Speaker 4: private markets, everything VC so much. DASH is a general
Speaker 4: partner over IVP eight point seven billion dollars in committed capital.
Speaker 4: AI is quite clearly top of mind for your is
Speaker 4: is it tope of mind? Via Absolutely and thanks for
Speaker 4: having me.
Speaker 15: AI I believe will be the third largest compute revolution
Speaker 15: that we've seen in our generation. We're going to see
Speaker 15: from internet to mobile to now AI the kinds of
Speaker 15: transformational shifts that happen once in a generation.
Speaker 8: We're seeing a play out.
Speaker 15: Actually right now in real time. I heard your segment
Speaker 15: earlier today. If you think about the newsday from Samsung,
Speaker 15: think about the dollars at steak with the dominance of
Speaker 15: search as it relates to AI. Three billion dollars for Samsung.
Speaker 15: The big fish, of course is coming up in the
Speaker 15: next sixty days with Apple and Google. That's eighteen to
Speaker 15: twenty billion dollars a year to basically be able to
Speaker 15: get the search results. The question is if Apple and
Speaker 15: Microsoft start partnering together, that's a two point six trillion
Speaker 15: dollar company, a two point three trillion dollar company. This
Speaker 15: is really going to be the future of the next
Speaker 15: decade in technology.
Speaker 3: Tell me where also feels like it's the future. Samash
Speaker 3: is regulating it to interesting out of Europe at the moment.
Speaker 3: Many had thought that they would be looking at high
Speaker 3: risk AI applications when they were crafting their new regulation.
Speaker 3: Now people looking for it to go into general purpose
Speaker 3: AI as well. What are you thinking about the regulatory
Speaker 3: landscape and building into it.
Speaker 8: Well, I think it's a great question.
Speaker 15: I think it's really important to have a balance where
Speaker 15: we need regulations to make sure that the application layer
Speaker 15: of AI is used for societal good. I'm a huge
Speaker 15: fan of making sure that the government authorities work closely
Speaker 15: with the industry, whether it's large public companies or startups.
Speaker 15: I also think it's important for potentially thinking about new
Speaker 15: regulatory bodies that could actually enforce this in a way
Speaker 15: that's different from traditional internet software and mobile enforcement. I
Speaker 15: think the real question will be does this actually spur
Speaker 15: a new generation of mergers and acquisitions for startups and
Speaker 15: public companies or will it slow it down as we
Speaker 15: saw happen in the consumer sector over the last five
Speaker 15: to ten years.
Speaker 5: Ooh, bit oft MNA and how it'll drive that ed.
Speaker 3: But really, the amount of pitches we get just from
Speaker 3: founders and vcs wanting to come in and talk this
Speaker 3: ecosystem at the moment is phenomenal.
Speaker 4: Every single person works in AI now, so it begs
Speaker 4: the question, how do you play the field? I mean,
Speaker 4: am I right in saying you must get dozens of
Speaker 4: pitch decks across your desk every day?
Speaker 15: I'd say dozens are an understatement. If you look across
Speaker 15: the firm, we're getting more than that. I think the
Speaker 15: most important thing to remember is these are early innings,
Speaker 15: so what we're actually seeing is the first set of
Speaker 15: companies that are coming out. It reminds me of geocites
Speaker 15: and lycos in the early days of the web. We
Speaker 15: haven't seen the Google equivalents emerge yet. The difference, though,
Speaker 15: is the pace at which things are happening. Chat GPT
Speaker 15: got to.
Speaker 8: One hundred million users in two months.
Speaker 15: It took Facebook four years, Snapchat three years, Instagram two
Speaker 15: years to get to one hundred million users. GPT four
Speaker 15: feels like old news. It's less than a month out
Speaker 15: since its general release, and what we're going to see
Speaker 15: is some of these applications, there's a model on which
Speaker 15: chat gpt could keep to a billion users within twelve
Speaker 15: to twenty four months.
Speaker 4: The big headline that Caroline and I've been discussing of
Speaker 4: late is the Pentagon and leaks. Discord had a role
Speaker 4: to play in that, and I believe you were an
Speaker 4: investor in Discord.
Speaker 8: Absolutely we are. Yes, what do you make of that story?
Speaker 4: I think it's really interesting because I see you all
Speaker 4: across Silicon Valley, New York, London. VC's putting a lot
Speaker 4: of money into defense related startups, but in this case,
Speaker 4: this is a social media platform.
Speaker 8: Right, this call at the heart of this story. So,
Speaker 8: first of all, what happened was horrible.
Speaker 15: I mean the fact that now that there's been an arrest,
Speaker 15: it's been out in the public that this was a
Speaker 15: member of the US military who basically took classified documents
Speaker 15: and shared them on a private chat room, a private server.
Speaker 15: What ended up happening, of course, though, was they violated
Speaker 15: two things. They actually shared illegal classified documentations against the law.
Speaker 15: They broke the law, and they actually violated Discords terms
Speaker 15: of service. So when Discord detected this, they work closely
Speaker 15: with the federal authorities with the Deal to be able
Speaker 15: to actually stop this. And now that arrest has been
Speaker 15: made and more evidence has come to light, it shows
Speaker 15: the importance of platforms to actually utilize larger trust and
Speaker 15: safety teams. To tie this back to the previous conversation though,
Speaker 15: this is where I think AI has an even bigger role.
Speaker 15: AI can actually replace human curation and actually enforce not
Speaker 15: just keywords and triggers, but also context. We're in the future,
Speaker 15: not just words, but images can also be flagged faster
Speaker 15: that could prevent this sort of abuse and legal activity
Speaker 15: from happening.
Speaker 14: In the future.
Speaker 3: Interestingly some aster course, when we think about Discord, it
Speaker 3: was really one of those companies we're expecting to soon
Speaker 3: enough exit along with a lot of other key companies.
Speaker 5: What do you think about these trajectories at the moment?
Speaker 3: These you've talked about M and A in certain areas
Speaker 3: of AI, but what about exit roots to something like
Speaker 3: a discord.
Speaker 15: Well, I think for a lot of private companies, now
Speaker 15: this is really a period about investing in the future.
Speaker 15: What's exciting is AI actually presents an opportunity to rethink
Speaker 15: your business. It can actually be a huge accelerant, as
Speaker 15: we're seeing with Discord.
Speaker 8: Discords work closely.
Speaker 15: If you think about the biggest AI communities right now,
Speaker 15: mid Journey and chat GPT open Ai both are actually
Speaker 15: on Discord. And if you think about some of the
Speaker 15: products the Discord itself has introduced, the most exciting for
Speaker 15: me was one recently that actually creates a summary tool
Speaker 15: that summarizes.
Speaker 8: All the servers the users, so lea.
Speaker 15: If you've left a forum and you want to come
Speaker 15: back and get a quick, fast summary what you missed,
Speaker 15: you have AI as a tool to be able to
Speaker 15: do that. My own sense though, is that many of
Speaker 15: these companies are getting stronger, not weaker, because they're investing
Speaker 15: in intellectual property R and D, and in the coming
Speaker 15: years these will actually be really big outcomes for Silicon Valley.
Speaker 4: IVP General Potter, So, Mush, Josh, thank you so much
Speaker 4: for joining us, Thank you for having me.
Speaker 3: Ca Yeah, coming up so much more to discuss and
Speaker 3: actually about platforms. About Netflix, how it failed to go
Speaker 3: live for a special episode of one of its most
Speaker 3: popular shows. What the streaming service is saying to the
Speaker 3: thousands of disappointed well Love watches stay tuned for that.
Speaker 5: Let's get a look at Netflix shares just.
Speaker 3: After Currently that disappointment used to be impact the share
Speaker 3: market capitalization.
Speaker 5: Two we're off by more than two percent.
Speaker 11: Listen, Bloomberg, don't turn the channel, don't stream something else,
Speaker 11: don't go to the bathroom.
Speaker 8: We're coming for you.
Speaker 11: We're coming for you.
Speaker 5: All right, guys, show what we got.
Speaker 3: Stick around, Nick and Vanessa Leche trying to reassure Netflix
Speaker 3: viewers as Love appeared to be late the live feed
Speaker 3: for its popular Love is Blind reunion.
Speaker 5: Well, the special was delayed by.
Speaker 3: Over an hourly a frenzy of complaints from fans on
Speaker 3: social media. It's Netflix's first streaming event, Mega One, that
Speaker 3: fans would be able to help pick questions as to.
Speaker 5: The show's cast.
Speaker 3: Wimburg's Felix Gillett joins us now and oh, I mean
Speaker 3: this was just a bit of a failure for Netflix's
Speaker 3: iteration into these live stream events.
Speaker 16: Yeah, huge disaster for Netflix. I mean, they, you know,
Speaker 16: made a big deal about we're going to do more
Speaker 16: live events. This is part of their big push into advertising.
Speaker 16: You need more live programming. They're kind of dipping their
Speaker 16: toes and they did the Chris Rock special last month.
Speaker 16: This is their second big live stream event. For it
Speaker 16: to fail not only signals of viewers, like you know,
Speaker 16: it's disappointing right now, but also all the media watchers,
Speaker 16: everyone that's thinking about buying advertising sports leagues. Do you
Speaker 16: trust Netflix to live stream games in the future? You know,
Speaker 16: this is not a great start.
Speaker 4: We'll we'll get a full opportunity carry for a post
Speaker 4: mortem because Netflix has earnings in twenty four hours time
Speaker 4: or so. One of the worst performers on the s
Speaker 4: and P five hundred. Felix, what if Netflix had to
Speaker 4: say I think they issued an apology, didn't they.
Speaker 16: They apologized, you know, they said, stick around, we're going
Speaker 16: to tape the show. There was a lot audience, so
Speaker 16: they said, okay, we'll do the reunion. We'll tape it
Speaker 16: and then we'll put it up tomorrow. So at some
Speaker 16: point today, presumably fans are going to get.
Speaker 8: To watch this.
Speaker 16: I think it's less of a problem with the fans
Speaker 16: and just a broader problem for Netflix when they've made
Speaker 16: such a big deal about Okay, we're doing this big
Speaker 16: advertising initiative and we're really going to start ramping up
Speaker 16: our live program in this is just not what you
Speaker 16: want to see getting out of the gate.
Speaker 3: Netflix with their tweets, AOC and other lawmakers weighing in
Speaker 3: to what was really a moment of culture but it
Speaker 3: kind of failed.
Speaker 5: Well, thank you so much, Felix Jellette.
Speaker 3: What a fascinating story apparently should get seamstress in.
Speaker 5: But that was all things Netflix.
Speaker 3: Now, that was all things Bloomberg technology done for this particular.
Speaker 4: Editionet Yeah, Frantic starts the week A lots of recaps,
Speaker 4: So don't forget to check out our podcast wherever you
Speaker 4: get your podcasts on the terminal on Bloomberg, but also
Speaker 4: on Apple, Spotify, and iHeart New York from San Francisco
Speaker 4: Monday Funday, Long way to go.
Speaker 8: This is Bloomberg.
Speaker 12: H