WEBVTT - The Israel-Hamas Conflict and Cyber, Tech 0:00:01.400 --> 0:00:05.080 From Mahart where Innovation of Money and Power Collie in 0:00:05.200 --> 0:00:06.720 Silicon Vallet NBN. 0:00:07.040 --> 0:00:11.080 This is Bloomberg Technology with Caroline Hyde and Ed Ludlove. 0:00:24.440 --> 0:00:27.480 I'm Caroline Heindel Bloomberg's World headquarters in New York, and 0:00:27.520 --> 0:00:29.080 I'm Ed Ludlow in San Francisco. 0:00:29.280 --> 0:00:31.480 This is Bloomberg Technology coming out. 0:00:31.520 --> 0:00:34.440 We'll bring you the latest on the Israel Hamas conflict 0:00:34.560 --> 0:00:37.720 and explore the role of intelligence and cybersecurity amid the war. 0:00:38.720 --> 0:00:42.120 Plus we'll discuss the role social media plays in misinformation, 0:00:42.560 --> 0:00:46.239 is Elon Musk's ex faces backlash over changes to its 0:00:46.280 --> 0:00:47.800 content safety policies. 0:00:47.920 --> 0:00:50.080 And we'll return to the trial of Sam magmun Fried 0:00:50.120 --> 0:00:52.640 as it enters its second week, with a key witness 0:00:52.960 --> 0:00:56.520 taking a stand Israel Hamas the war fighting enters a 0:00:56.600 --> 0:01:01.240 fourth day. Joining us for the latest an updated bloom exactly, Alstein, 0:01:01.320 --> 0:01:03.120 and you're in Tel Aviv at the moment. 0:01:03.480 --> 0:01:05.480 Just bring us up to speed with what you're anticipating. 0:01:07.240 --> 0:01:10.400 Yes, so, I think, actually, good evening. I think actually 0:01:10.440 --> 0:01:14.160 the most interesting development that we're going to be seeing today, 0:01:14.280 --> 0:01:16.720 and this is not a short thing yet, will be 0:01:16.800 --> 0:01:20.640 that Israel is actually looking at a new government we've 0:01:20.760 --> 0:01:24.640 we've been getting messages this afternoon that Israel's ruling coalition 0:01:24.760 --> 0:01:28.280 said that it wants to form a rare emergency government 0:01:28.319 --> 0:01:33.440 with the opposition following Saturday's attacks by Hamas, and they're 0:01:33.480 --> 0:01:36.279 now finalizing the final details. So, you know, we cannot 0:01:36.319 --> 0:01:39.280 say that this is surely going to happen, but it 0:01:39.319 --> 0:01:41.920 does look like this is going to happen. And in essence, 0:01:41.959 --> 0:01:45.760 what this means is that the entire operation in Gaza 0:01:45.880 --> 0:01:49.480 that we're looking at and that Israeli officials are saying 0:01:50.040 --> 0:01:53.120 will be taking a long time, maybe several weeks or 0:01:53.120 --> 0:01:57.280 more than that ahead. Then that will be run by 0:01:57.920 --> 0:02:02.000 a very narrow small war cabinet that will be comprised 0:02:02.400 --> 0:02:06.400 of Prime Minister of Benjamin Kaniao's party and opposition leaders 0:02:06.440 --> 0:02:10.040 Benny Gunn's party, with the other parties that are parties 0:02:10.080 --> 0:02:13.160 that are were nationalists more far right out of the 0:02:13.240 --> 0:02:16.960 picture only for that only for the war operation, and 0:02:17.000 --> 0:02:20.480 then after the war we'll see what happens politically. But 0:02:20.560 --> 0:02:24.840 that's the most significant development that we're looking at today. 0:02:24.840 --> 0:02:27.959 Gali, you and your colleagues in our bureau, and actually 0:02:27.960 --> 0:02:30.680 on this program, we talked to some of those that 0:02:30.800 --> 0:02:34.600 have been part of the mobilization effort, three hundred thousand reservists, 0:02:34.800 --> 0:02:38.200 many of them technology industry workers. What is the latest 0:02:38.400 --> 0:02:43.120 sort of military response and action on the ground in Israel. 0:02:44.000 --> 0:02:48.160 Yes, yes, so that is an interesting question. And today 0:02:48.760 --> 0:02:51.919 we've been actually hearing a lot of Idea for officials 0:02:52.320 --> 0:02:56.360 speak to us about the focus now being aerial attacks 0:02:56.400 --> 0:03:00.280 on Gaza, and the chief Idea of spokesperson tells some 0:03:00.520 --> 0:03:03.520 this morning that the attacks that have been taking place, 0:03:03.760 --> 0:03:07.919 especially last night but throughout the last thirty six hours 0:03:08.040 --> 0:03:12.120 or so have been unprecedented, precedented in the terms that 0:03:12.160 --> 0:03:15.160 there are very fierce. What the air force now is 0:03:15.160 --> 0:03:18.440 doing is Gaza that they're striking in rounds that are 0:03:18.480 --> 0:03:22.239 taking place every every four hours. They're just going back 0:03:22.280 --> 0:03:27.520 and forth. They're striking thousands of targets over there. They 0:03:27.639 --> 0:03:31.440 have also reported that they have managed them to kill 0:03:32.040 --> 0:03:36.160 from with these aerial attacks to senior figures in Hamans 0:03:36.200 --> 0:03:39.200 this afternoon. So that's what the focus is on now. 0:03:39.560 --> 0:03:42.240 And they're also describing that they've sort of built a 0:03:42.400 --> 0:03:45.080 steel wall, that's what they call it, along the Gaza 0:03:45.120 --> 0:03:49.160 fence in order to stop any more possible infiltrations. So 0:03:49.200 --> 0:03:51.480 they've actually placed a lot of tanks over there on 0:03:51.560 --> 0:03:55.080 some aerial vehicles that are shooting down at anyone. And 0:03:55.120 --> 0:03:58.240 that's what they stress anyone who's trying to shoot across 0:03:58.240 --> 0:04:00.480 the fence, no matter who they are, And that's main 0:04:00.920 --> 0:04:04.440 focal point of what the Israeli are force is doing. Now, 0:04:04.480 --> 0:04:07.440 just in oneer sentence, I will tell you that obviously 0:04:07.600 --> 0:04:11.160 they are preparing for a much larger ground operation, and 0:04:11.200 --> 0:04:14.040 they're doing that by mobilizing a lot of soldiers and 0:04:14.120 --> 0:04:18.160 reserve forces towards the southern border and the northern border 0:04:18.200 --> 0:04:18.560 as well. 0:04:19.600 --> 0:04:23.240 Bloomberg's Galley Olstein one of many colleagues in Israel and 0:04:23.279 --> 0:04:26.440 the Middle East, Caro who are doing minute by minute 0:04:26.480 --> 0:04:29.279 reporting of what's happening. We're very grateful to have you 0:04:29.360 --> 0:04:33.359 here on Bloomberg Technology. Let's turn to the intelligence side 0:04:33.360 --> 0:04:36.040 of this conversation. How did Hamas get around one of 0:04:36.040 --> 0:04:40.760 the most sophisticated surveillance states to stage its attack against Israel? 0:04:40.880 --> 0:04:43.520 Joining US now is Kissed and Todd, the former chief 0:04:43.520 --> 0:04:48.880 of staff for the Cybersecurity in Infrastructure Infrastructure Security Agency SISA. 0:04:51.160 --> 0:04:54.320 There's the hard war, hard tech component, and then there's 0:04:54.360 --> 0:04:57.719 the soft power soft tech component. What have you learned 0:04:58.000 --> 0:05:04.400 about hamas is cyberactivity in what has been forty eight 0:05:04.400 --> 0:05:06.480 hours already since the attack. 0:05:06.839 --> 0:05:09.280 Well, first of all, thanks so much, Ed. It's incredibly 0:05:09.320 --> 0:05:13.279 early in this crisis. We're seeing just the increased escalation 0:05:13.360 --> 0:05:16.120 over the last few days. We're now seeing deaths, over 0:05:16.160 --> 0:05:19.880 a thousand, potentially over sixteen hundred hostages being taken, and 0:05:19.960 --> 0:05:22.200 the concern that there's going to be a second front, 0:05:22.240 --> 0:05:26.040 certainly on the northern side with Hesbela. What American intelligence 0:05:26.040 --> 0:05:28.479 officials need to be asking right now, they are asking 0:05:28.800 --> 0:05:32.240 is what direct role, if any, did Iran have in 0:05:32.279 --> 0:05:36.279 the supplying, the preparation, the encouraging of this attack. We 0:05:36.440 --> 0:05:39.640 know that Iran views its alliance with Hamas as a 0:05:39.640 --> 0:05:43.280 point of leverage as it's looking to destabilize and derail 0:05:43.760 --> 0:05:47.760 the engagements with Israel and Saudi Arabia, and so certainly 0:05:47.800 --> 0:05:52.320 civilian casualties on both side both sides would obstruct any 0:05:52.480 --> 0:05:57.039 attempt toward a type of agreement between Israel and Saudi Arabia. 0:05:57.120 --> 0:05:59.400 So the tools available to all. 0:05:59.240 --> 0:06:01.960 Sides are not just kinetic. It's not just the fierce 0:06:02.279 --> 0:06:05.279 fighting that Gleat just talked about. There are cyber weapons 0:06:05.320 --> 0:06:07.800 and cyber tools which we know everybody has access to. 0:06:08.520 --> 0:06:12.520 Let's talk about those cyber weapons cyber tools already being deployed. 0:06:12.560 --> 0:06:14.880 You say, it's very early days in the crisis. Already 0:06:14.920 --> 0:06:18.520 we've seen cyber attacks being aimed at both sides. Can 0:06:18.560 --> 0:06:20.760 you tell us sort of what these look like in 0:06:20.800 --> 0:06:24.080 the early iterations and whether they're going to be ram 0:06:24.160 --> 0:06:25.440 top as days go forward. 0:06:26.360 --> 0:06:28.600 It's hard to know where they will escalate to, but 0:06:28.640 --> 0:06:32.359 certainly right now we're seeing unofficial reports of DDoS attacks, 0:06:32.400 --> 0:06:36.839 the use of malware, defacement of websites we saw back 0:06:36.880 --> 0:06:39.960 in twenty eleven twenty twelve that are on use DDoS 0:06:39.960 --> 0:06:43.720 attacks against the United States financial sector. The capabilities of 0:06:43.880 --> 0:06:47.919 all nation states in cyber are enough. They're not necessarily 0:06:47.960 --> 0:06:50.840 as sophisticated as Russia or China, but we know that 0:06:50.839 --> 0:06:53.880 the capabilities exist, and that if there is a war 0:06:54.279 --> 0:06:57.599 that is going to access all tools that cyber could 0:06:57.680 --> 0:07:00.839 be used in lieu of kinetic weapons, but more likely 0:07:00.880 --> 0:07:03.120 in conjunction with kinetic weapons. 0:07:03.160 --> 0:07:06.640 I mean interested in real Joyce Director Cybercurity over than 0:07:06.800 --> 0:07:10.600 National Security Agency. He's saying, thus far, cyber component hasn't 0:07:10.600 --> 0:07:13.040 been that significant and it has been more of these 0:07:13.160 --> 0:07:16.200 denial of service elements, but they could ramp up. 0:07:16.440 --> 0:07:19.920 I'm interested as to how difficult it is to pass through. 0:07:20.000 --> 0:07:23.280 Who are activists, where are they coming from, and what 0:07:23.360 --> 0:07:25.320 really the end goal is here. 0:07:26.400 --> 0:07:29.120 Well, it's a great question because what we're looking at 0:07:29.200 --> 0:07:31.400 right now really is how can we be resilient? Rob 0:07:31.440 --> 0:07:33.640 is absolutely right. I mean, what we're seeing, we're not 0:07:33.640 --> 0:07:37.160 seeing any targeted attacks at this point, but what we 0:07:37.280 --> 0:07:40.000 want to be really aware of is how can we prepare, 0:07:40.200 --> 0:07:43.080 how can we be resilient against what could come. When 0:07:43.120 --> 0:07:46.720 we saw the imminence of Russia's invasion of Ukraine, SISA 0:07:46.800 --> 0:07:50.440 put out a shields Up advisory to critical infrastructure companies 0:07:50.480 --> 0:07:54.400 to say, heighten your awareness, heighten your vigilance, lower the 0:07:54.440 --> 0:07:55.480 threshold for reporting. 0:07:55.720 --> 0:07:57.000 What we're talking about. 0:07:56.720 --> 0:07:59.680 Now isn't necessarily what we know to becoming, but the 0:08:00.000 --> 0:08:03.280 importance of being prepared, being resilient, and being vigilant as 0:08:03.320 --> 0:08:05.880 we create a more resilient infrastructure for the United States. 0:08:06.360 --> 0:08:11.440 Kristin, you're talking about preparedness. Yesterday, Professor Chuck Freilich of Columbia, 0:08:11.600 --> 0:08:15.720 former Deputy National Security advisor in Israel, said that this 0:08:15.880 --> 0:08:18.840 wasn't a lack of intelligence. It was a lack of 0:08:18.920 --> 0:08:24.560 imagination that the security and intelligence forces just didn't think 0:08:24.760 --> 0:08:27.640 that something of that scale could happen because they could 0:08:27.760 --> 0:08:30.520 imagine it. Put that in the cyber context for us, 0:08:30.520 --> 0:08:32.840 you seem to be suggesting that a lot of that 0:08:32.960 --> 0:08:35.480 competence and know how would come from the Iran side 0:08:35.800 --> 0:08:39.599 or a third party actor, not necessarily Hamas itself. 0:08:40.080 --> 0:08:40.680 It's hard to know. 0:08:40.760 --> 0:08:43.240 Certainly Iran has these capabilities, and as I said, we've 0:08:43.280 --> 0:08:46.760 seen Iran use cyber capabilities. I think your point about 0:08:46.800 --> 0:08:49.040 failure of imagination is obviously. 0:08:48.960 --> 0:08:50.600 Not my points. 0:08:51.320 --> 0:08:54.400 Yeah, brings us, unfortunately back to nine to eleven. In 0:08:54.440 --> 0:08:57.760 what we look at as human nature, we often prepare 0:08:57.800 --> 0:09:00.199 for that which we know we can respond to. Our 0:09:00.320 --> 0:09:03.400 challenge is the ability to prepare for that which is 0:09:03.600 --> 0:09:07.240 more frightening, more devastating, more destructive. And so when we're preparing, 0:09:07.480 --> 0:09:10.280 we have to be thinking about how can cyber player 0:09:10.400 --> 0:09:12.240 role in this and what do we need to be 0:09:12.320 --> 0:09:16.720 doing again to prevent, to prepare, and importantly to be resilient. 0:09:17.280 --> 0:09:20.400 You were with SISA through July of this year. I 0:09:20.400 --> 0:09:22.959 want to ask you about Palenteer and the private public 0:09:23.600 --> 0:09:27.000 relationship that there have been loads of questions posed about 0:09:27.080 --> 0:09:30.800 Palenteer over the weekend. Do you have any experience you 0:09:30.840 --> 0:09:33.800 can draw on or opinion on the role that the 0:09:33.800 --> 0:09:37.800 private sector could play in the intelligence and cyberspace data 0:09:38.240 --> 0:09:39.480 related going forward. 0:09:39.840 --> 0:09:41.760 One of the things that I was so pleased with 0:09:41.880 --> 0:09:43.480 and proud to be a part of a SISA and 0:09:43.520 --> 0:09:47.120 with the federal government is the improved relationship between industry 0:09:47.160 --> 0:09:50.880 and government in threat intelligence, in the ability to share information. 0:09:51.240 --> 0:09:53.680 The solar winds attack that happened back in twenty twenty 0:09:53.840 --> 0:09:57.559 was identified by the company FireEye, and the ability then 0:09:57.640 --> 0:10:00.720 for the private sector to share information with government, for 0:10:00.760 --> 0:10:03.280 government to do the same in real time, so that 0:10:03.320 --> 0:10:06.800 we can create not a complete thread intelligence picture, but 0:10:06.880 --> 0:10:10.880 certainly a more comprehensive one so that coming together industry 0:10:10.880 --> 0:10:13.360 and government can respond. We know that one entity can't 0:10:13.400 --> 0:10:15.880 respond and retaliate on its own, respond and react that 0:10:15.920 --> 0:10:17.520 we've got to be able to work together. 0:10:18.360 --> 0:10:20.960 So great to get your sister experience and of course 0:10:21.000 --> 0:10:23.560 now a CEO of Liberty Group Ventures Kist and Todd, 0:10:23.720 --> 0:10:25.960 thank you for your time today. I meanwhile, coming up, 0:10:26.120 --> 0:10:28.000 we're going to be turning back to the markets. Look 0:10:28.000 --> 0:10:31.520 at just how these geopolitical moments are impacting all the 0:10:31.600 --> 0:10:32.200 investment space. 0:10:32.240 --> 0:10:33.640 At last, do stick with us. 0:10:33.640 --> 0:11:03.680 This is blombog technology. 0:10:50.400 --> 0:10:53.520 Now amid the current heightened geopolitical tensions central banks, they 0:10:53.559 --> 0:10:55.880 seem to be the catalyst for today's treating action at 0:10:55.960 --> 0:10:58.280 least joining us now to break down the short term 0:10:58.280 --> 0:11:00.880 the long term in terms of your technology to Hillary 0:11:00.920 --> 0:11:02.800 Fresh with a very police are welcome for senior research 0:11:02.840 --> 0:11:05.600 analystic technology software at Clearbridge. 0:11:05.840 --> 0:11:08.640 Hillary, give us your sort of bird's. 0:11:08.360 --> 0:11:11.000 Eye perspective right now when we are in the throes 0:11:11.000 --> 0:11:14.560 of major reactions. When we do see selloffs become something 0:11:14.559 --> 0:11:18.000 that is the immediate response to a geopolitical threat and concern, 0:11:18.679 --> 0:11:20.480 is that the right way to be thinking about your 0:11:20.480 --> 0:11:21.840 technology investments right now. 0:11:22.200 --> 0:11:24.520 It's a very good question. Thanks for having me, Carolina 0:11:24.520 --> 0:11:27.600 and Ed. It's good to be here. It's you know, 0:11:27.760 --> 0:11:29.920 what's interesting is we haven't seen that user excel off 0:11:29.960 --> 0:11:33.600 this time so far. I think the market is interpreting 0:11:33.679 --> 0:11:37.319 a relatively isolated circumstance. We'll see if that proves to 0:11:37.400 --> 0:11:39.920 be the case. At Clearbridge, we tend to be long 0:11:39.960 --> 0:11:42.120 term investors. We take a long term horizon and we 0:11:42.280 --> 0:11:44.560 like to use periods of weakness to add to key 0:11:44.600 --> 0:11:49.760 portfolio positions in technology specifically, well, I don't see Q 0:11:49.880 --> 0:11:52.719 three in particular as any kind of barnburner quarter or 0:11:52.840 --> 0:11:57.800 major catalyst either way from the sector. I do see 0:11:57.840 --> 0:12:01.439 a period between now and mid late next year when 0:12:01.480 --> 0:12:04.959 we should actually see technologies start to decouple in terms 0:12:04.960 --> 0:12:07.840 of growth from the broader economy. That's partly due to 0:12:07.880 --> 0:12:10.960 AI and a variety of other factors. But I do 0:12:11.040 --> 0:12:13.760 see technology as a place where investors will want to 0:12:13.840 --> 0:12:15.360 continue to invest and. 0:12:15.440 --> 0:12:20.440 Which particular drivers, which forces have changed do you focus 0:12:20.480 --> 0:12:23.240 in on When you think of an Nvidia which has 0:12:23.360 --> 0:12:26.920 had parabolic growth in terms of its overall market valuation 0:12:27.040 --> 0:12:30.360 based on an AI fundamental viewpoint, but it also is 0:12:30.400 --> 0:12:32.880 exposed to geopolitical tensions when it comes to China US, 0:12:32.920 --> 0:12:34.800 when it has to maybe even some exposure in terms 0:12:34.800 --> 0:12:37.480 of supply chain with Israel. How do you dissect what 0:12:37.559 --> 0:12:39.520 really ultimately means to be a long term view? 0:12:39.800 --> 0:12:42.679 Sure, well, in video side, because there are certain factors 0:12:42.920 --> 0:12:47.760 driving their results versus others. Most tech companies have exposure 0:12:47.800 --> 0:12:51.880 somewhere in the exposure in Israel. In such places and 0:12:51.960 --> 0:12:55.880 the long term of political situation is a dynamic one, 0:12:56.280 --> 0:13:01.000 but I don't see associated disruption as the primary concern. 0:13:01.800 --> 0:13:03.920 As we've seen from the markets, the primary concern has 0:13:03.920 --> 0:13:05.800 been the rising dollar and interest rates. They've had a 0:13:05.840 --> 0:13:08.680 better quarter than anyone else out there, and that puts 0:13:08.760 --> 0:13:12.760 near term pressure on translated revenues and earnings and also 0:13:13.120 --> 0:13:18.440 on valuations. But to the extent that these types of 0:13:18.480 --> 0:13:23.520 conflicts don't grow out of control, they tend to present 0:13:23.600 --> 0:13:27.800 opportunities to invest in long term trends. It's interesting because 0:13:27.880 --> 0:13:30.400 yesterday we saw security companies rallying. I think they're rallying 0:13:30.400 --> 0:13:32.760 again today. And security companies are some of the ones 0:13:32.800 --> 0:13:35.880 with the largest exposure to Israel. Some of them are 0:13:35.880 --> 0:13:38.120 based in Israel, or we're based in Israel and have 0:13:38.240 --> 0:13:43.160 dual headquarters. But in periods of rising to a political tension, 0:13:43.679 --> 0:13:47.760 there tends to be heightened adoption of security security solutions. 0:13:47.800 --> 0:13:49.840 So it's a push and pull between what that disruption 0:13:49.960 --> 0:13:53.079 looks like and what the outcome looks like in terms 0:13:53.080 --> 0:13:56.760 of increased revenues. And we live in a remote world. 0:13:57.240 --> 0:14:00.360 Technology pioneered remote work. They were doing it long before 0:14:00.400 --> 0:14:02.800 we were as a broader economy. With the pandemic so 0:14:03.640 --> 0:14:06.680 we've seen circumstances where companies can adapt fairly quickly, but 0:14:06.720 --> 0:14:08.240 it is a real they're deploying a lot of folks 0:14:08.240 --> 0:14:10.480 that are deploying a lot of reservists of working and age, 0:14:10.520 --> 0:14:12.760 so there could be some disruptions along the way. 0:14:13.920 --> 0:14:17.000 Hillary had ed in San Francisco. Do you like charts? 0:14:17.240 --> 0:14:19.560 You strike me as somebody that's a chart watcher that 0:14:19.720 --> 0:14:21.840 likes charts. I wonder what makes you say that? 0:14:21.880 --> 0:14:23.120 But I don't just like charts. 0:14:24.120 --> 0:14:26.120 Okay, let's bring up one chart. I want you to 0:14:26.120 --> 0:14:29.160 explain something to me. NASDAK one hundred against the S 0:14:29.200 --> 0:14:32.040 and P five hundred Software Index. Here today, the S 0:14:32.040 --> 0:14:34.680 and P five hundred Software Index is a very limited basket, 0:14:34.760 --> 0:14:38.280 but it has kind of enterprise SaaS Cyber and then 0:14:38.320 --> 0:14:40.480 Microsoft's in there as well. They're basically up the same 0:14:40.480 --> 0:14:44.240 amount year to date. What is it then that's driving 0:14:44.520 --> 0:14:48.040 those software names higher multiple or otherwise right now? If 0:14:48.040 --> 0:14:52.280 it isn't fed, if it isn't geopolitical risk, what is 0:14:52.320 --> 0:14:53.480 your outlook based on? 0:14:56.000 --> 0:15:02.080 Investors like to focus on higher technology multiples as though 0:15:02.240 --> 0:15:05.720 growth were equivalent between tech and the broader economy. But 0:15:05.800 --> 0:15:08.920 growth is not equivalent between tech and the broader economy. 0:15:09.120 --> 0:15:11.480 Technology is where nearly all of the growth has been 0:15:11.520 --> 0:15:15.240 coming from. So in this recent period where we had 0:15:15.320 --> 0:15:19.720 rising dollar and rising interest rates, tech actually outperformed the 0:15:19.760 --> 0:15:25.119 broader economy in SMP. With AI and the precursor investments 0:15:25.160 --> 0:15:28.880 to AI and a normalization of spending, an environment in 0:15:28.920 --> 0:15:31.320 tech which I believe has been in recession, a very 0:15:31.320 --> 0:15:33.880 mild recession over the course of better part of last year. 0:15:35.040 --> 0:15:37.680 That looks poised to be the case even more so 0:15:37.840 --> 0:15:41.960 going forward. Tech valuations with software as a proxy for 0:15:42.120 --> 0:15:48.440 enterprise tech are just at their five year pre pandemic average. 0:15:48.480 --> 0:15:51.840 They're just a hair above their tenure pre pandemic average, 0:15:51.880 --> 0:15:55.880 meaning excluding the pandemic period where evaluations really elevated. I 0:15:55.880 --> 0:16:01.000 think that's a decent backdrop for tech into twenty four. 0:16:01.120 --> 0:16:04.640 Were in second half, I expect AI to be much 0:16:04.680 --> 0:16:06.320 more of a catalyst. We could talk about that more 0:16:06.320 --> 0:16:06.640 if you. 0:16:06.680 --> 0:16:09.840 Like, Well, I think we're out of time. Unfortunately, Hilary 0:16:09.920 --> 0:16:12.200 Fish of Clearbridge, and that was a loaded question. I 0:16:12.240 --> 0:16:17.280 know you like charts. Who doesn't like charts exactly? But 0:16:17.320 --> 0:16:18.720 it is good to have you back on the program, 0:16:18.760 --> 0:16:29.520 will have you back very soon. It is time for 0:16:29.560 --> 0:16:32.560 Talking Tech and first off Ubersoft fell the most since May, 0:16:32.640 --> 0:16:35.640 after the French video game maker delayed the release of 0:16:35.640 --> 0:16:39.520 its new free to play game X Defiant, originally scheduled 0:16:39.520 --> 0:16:43.440 this summer. The company cited quote inconsistencies in the game 0:16:43.520 --> 0:16:47.240 experience as the cause of the delay, and worldwide personal 0:16:47.280 --> 0:16:51.440 computer shipments declined nine percent in the third quarter, hitting 0:16:51.440 --> 0:16:54.960 what Gartner analysts expected will be the low point in 0:16:55.000 --> 0:16:57.920 a two year market slump. Apple had the steepest drop 0:16:58.160 --> 0:17:01.840 among the major PC makers, with shipments falling twenty four 0:17:01.920 --> 0:17:05.199 percent from the same quarter a year earlier. Plus, the 0:17:05.200 --> 0:17:08.840 stock of China's biggest food delivery platform, Maitwe has almost 0:17:08.880 --> 0:17:11.920 halved since a peak in January, with global active fund 0:17:11.960 --> 0:17:15.960 managers offloading three point seven billion dollars of the company 0:17:16.080 --> 0:17:18.840 shares this year. This makes it the most sold Chinese 0:17:18.840 --> 0:17:23.399 tech firm during that period, according to Morgan Stanley Caroline. 0:17:23.000 --> 0:17:24.000 Great set of stories ed. 0:17:24.040 --> 0:17:26.639 Meanwhile, let's get up to speed of what's happening just 0:17:26.720 --> 0:17:29.680 over in another part of New York right now, someonemn 0:17:29.720 --> 0:17:32.080 Fried's trial. We want to get to be a MOTIONALI 0:17:32.080 --> 0:17:34.360 Bassack outside the US District Courthouse. 0:17:33.960 --> 0:17:37.280 In downtown Manhattan and Shanali. There's a pretty key witness 0:17:37.280 --> 0:17:38.199 that everyone's waiting for. 0:17:38.240 --> 0:17:44.000 With Beta breath, there are very many key witnesses hitting 0:17:44.040 --> 0:17:46.680 the stand right now. We were waiting on Caroline Allison 0:17:47.000 --> 0:17:49.359 to take the stand. Of course, she is the pivotal witness, 0:17:49.400 --> 0:17:52.320 both for the prosecution as well as the defense. We 0:17:52.359 --> 0:17:54.520 know that there may be some key evidence that also 0:17:54.600 --> 0:17:57.399 comes to light in the sake of this trial in 0:17:57.440 --> 0:18:00.560 the middle of her testimony. For example, diary entries that 0:18:00.600 --> 0:18:02.560 have been largely talked about the last couple of months 0:18:02.640 --> 0:18:05.640 leaked earlier to The New York Times. This idea here 0:18:05.800 --> 0:18:09.000 that she had a lot of discomfort in running Alameda, 0:18:09.080 --> 0:18:12.359 her own abilities to take a leadership role there, and 0:18:12.480 --> 0:18:15.840 conflicts with Sam himself. We know that Caroline and Sam 0:18:15.920 --> 0:18:18.800 had been on and on on and on again, off 0:18:18.840 --> 0:18:22.159 again dating. Remember she was his girlfriend, so knew a 0:18:22.160 --> 0:18:24.800 lot of the intimate workings of Sam at Alameda and 0:18:24.800 --> 0:18:28.000 in his personal life. Right now, the testimony of Gary Wan, 0:18:28.080 --> 0:18:31.000 who is also an FTX co founder, is also wrapping up, 0:18:31.200 --> 0:18:34.320 getting a lot of very interesting details about what happened 0:18:34.640 --> 0:18:37.960 in those dire days of November when FTX was about 0:18:38.040 --> 0:18:41.040 to fall, and then also even earlier when he was 0:18:41.240 --> 0:18:43.840 required to write the code that ultimately led to the 0:18:43.880 --> 0:18:46.800 back door that Alameda had used to take money out 0:18:46.800 --> 0:18:49.359 of FTX. You're also hearing about how he came to 0:18:49.440 --> 0:18:52.479 the agreement with prosecutors as well to which he had 0:18:52.480 --> 0:18:55.520 pled guilty and agreed to cooperate in this trial. So 0:18:55.600 --> 0:18:58.280 that is wrapping up inside as we speak. And to 0:18:58.359 --> 0:19:01.359 your point, Caroline Allison will take the stand just this. 0:19:01.320 --> 0:19:04.600 Afternoon, Shnalali, give me some of the drama and color 0:19:04.600 --> 0:19:06.960 of the core room I've stood where you're standing weeks 0:19:07.040 --> 0:19:10.080 and weeks in a trial like this. This is Caroline 0:19:10.080 --> 0:19:14.159 Ellison's first public appearance and it's important for prosecutors, right 0:19:14.200 --> 0:19:17.320 this is a big moment for them. 0:19:17.640 --> 0:19:19.919 This is the biggest moment. She is such a critical 0:19:19.920 --> 0:19:23.040 part of this trial. Remember, prosecutors themselves say only a 0:19:23.160 --> 0:19:26.440 very small number of people really knew what was going 0:19:26.480 --> 0:19:30.480 on inside of FTX and Alameda and the extent to 0:19:30.520 --> 0:19:34.280 which this alleged fraud was carried out. Now, remember when 0:19:34.320 --> 0:19:36.800 you think about Caroline and her role at Alameda, she 0:19:36.840 --> 0:19:39.360 was the CEO of the hedge fund in question here 0:19:39.680 --> 0:19:41.679 that has said to have been taking money out of 0:19:41.800 --> 0:19:44.600 FTX in two different ways, through the wallets and through 0:19:44.640 --> 0:19:47.840 FIAT itself. Now, remember you were talking about the star 0:19:47.880 --> 0:19:50.720 studed trial. Here Caroline speaking for the first time such 0:19:50.720 --> 0:19:52.040 a critical part of the defense. 0:19:52.600 --> 0:19:53.920 This is the second week. 0:19:53.720 --> 0:19:57.280 Of what will be a six while to which many 0:19:57.680 --> 0:20:01.080 many journalists from early in the morning seven am, many 0:20:01.119 --> 0:20:04.919 spectators have been outside waiting around the courthouse here. Now 0:20:04.920 --> 0:20:06.600 they're all inside, so you don't see them as we 0:20:06.640 --> 0:20:09.720 stand out here now, But yes, it has certainly been 0:20:09.800 --> 0:20:12.000 very highly watched. There has been a lot of commotion 0:20:12.040 --> 0:20:15.320 outside the courthouse itself, and there will be many more 0:20:15.440 --> 0:20:18.159 people coming to try throughout a couple of weeks, including 0:20:18.160 --> 0:20:22.600 Anthony Scaramucci, whose Skybridge had taken money from FGX in 0:20:22.640 --> 0:20:24.000 the form of a thirty percent stake. 0:20:24.800 --> 0:20:27.879 Well battled the traffic noise, Shannani stood out there for 0:20:27.920 --> 0:20:28.520 hour after hour. 0:20:28.560 --> 0:20:29.680 We really appreciate it. 0:20:38.440 --> 0:20:41.800 Welcome back to Bloomberg Technology, Ed Loblow here in San Francisco. 0:20:41.880 --> 0:20:43.760 One of the top stories that we're tracking on Bloomberg 0:20:43.800 --> 0:20:47.280 and Bloomberg Technology is X, the company and platform formerly 0:20:47.320 --> 0:20:50.760 known as Twitter, facing criticism over changes made to its 0:20:50.760 --> 0:20:55.240 content safety policies that have led to confusion misinformation around 0:20:55.359 --> 0:20:59.320 the conflict between Israel and hamas X has responded to 0:20:59.440 --> 0:21:02.959 our reporting saying this is the first crisis as X, 0:21:02.960 --> 0:21:06.280 and this means we're all eyes, hands, hearts on across 0:21:06.320 --> 0:21:09.280 all divisions and have put into place our crisis protocol, 0:21:09.560 --> 0:21:13.600 all teams, policy, product operations, escalation, and much more. I 0:21:13.640 --> 0:21:16.240 want to bring in Bloomberg's Asha counts. What we're talking 0:21:16.240 --> 0:21:20.000 about here is largely video content circulating on X and 0:21:20.080 --> 0:21:24.240 other platforms that purports to be one thing, but based 0:21:24.280 --> 0:21:27.000 on the research groups we spoke to and community notes, 0:21:27.200 --> 0:21:30.280 users flagging it is actually something completely different. 0:21:30.880 --> 0:21:33.000 Yeah, it's a huge problem, right, So as you just 0:21:33.040 --> 0:21:36.000 mentioned that excess response. The challenges is that some of 0:21:36.040 --> 0:21:39.119 these posts, videos and images have received millions of views. 0:21:39.320 --> 0:21:40.080 They've ended up. 0:21:39.960 --> 0:21:43.199 On TikTok and Facebook Q and on forums for o 0:21:43.280 --> 0:21:46.480 white websites, and it's not verified. And researchers have found 0:21:46.480 --> 0:21:50.160 time and time again posts are showing videos of conflicts 0:21:50.160 --> 0:21:52.359 that are from video games, are from other conflicts that 0:21:52.400 --> 0:21:54.760 are not this conflict. Big statements from the White House. 0:21:54.800 --> 0:21:57.160 I mean, it's a huge problem, and researchers are saying 0:21:57.160 --> 0:21:58.359 this is something that they haven't seen. 0:21:58.400 --> 0:22:01.840 It's unprecedented to the point that it's unprecedented. 0:22:02.080 --> 0:22:07.240 Is this suddenly well more significant use of artificial intelligence 0:22:07.280 --> 0:22:09.800 by those that are putting some of the disinformation out there? 0:22:10.040 --> 0:22:13.720 Is it a lack of well technology as a way 0:22:13.760 --> 0:22:16.439