WEBVTT - More Big Tech Earnings, Walmart Ups Its Flipkart Stake 0:00:01.520 --> 0:00:02.400 We're from Mahard. 0:00:02.560 --> 0:00:06.960 We're Innovations, Money and Power Collie in Silicon Vallet NBN. 0:00:07.320 --> 0:00:24.240 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.760 --> 0:00:29.440 Ahmed Ludlow, Good morning from San Francisco. Caroline highs off today. 0:00:29.560 --> 0:00:32.720 This is Bloomberg Technology. Coming up on the program. Full 0:00:32.720 --> 0:00:35.879 coverage of tech earnings as Amazon and Apple prepare to 0:00:35.920 --> 0:00:39.000 report this week. We'll discuss with Denny Fish of Janis 0:00:39.040 --> 0:00:42.960 Henderson plus Walmart buying Tiger Global's flip cart. 0:00:42.720 --> 0:00:44.600 Steak for one point four billion dollars. 0:00:44.640 --> 0:00:47.400 We'll break down the company's big bet on the Indian 0:00:47.479 --> 0:00:50.960 retailer and shares of Sofi surging today as the online 0:00:50.960 --> 0:00:53.760 bank raises revenue guidance. We'll look at the results with 0:00:54.000 --> 0:00:58.400 CEO Anthony Nota. For this week's m Live Pole survey, 0:00:58.760 --> 0:01:02.040 we asked investors if they intend to increase or decrease 0:01:02.080 --> 0:01:05.320 their exposure to tech stocks over the next six months. 0:01:05.680 --> 0:01:06.479 That's the question. 0:01:06.600 --> 0:01:09.640 The data shows many betting that the great tech rally 0:01:09.680 --> 0:01:12.639 of twenty twenty three has saying power that some appear 0:01:12.680 --> 0:01:15.959 skeptical that the artificial intelligence era will live up to 0:01:16.000 --> 0:01:16.560 the hype. 0:01:17.040 --> 0:01:18.760 Interesting. This is the numbers. 0:01:18.760 --> 0:01:21.440 We're going to break those down very shortly into the 0:01:21.480 --> 0:01:22.320 AI theme. 0:01:22.400 --> 0:01:24.399 It's three to five years is the way you buy these. 0:01:24.480 --> 0:01:27.119 This is not going to be a short term story. 0:01:27.280 --> 0:01:30.720 Zach is super expensive relative to the rest of the market. 0:01:30.800 --> 0:01:33.480 This train is crowded. I think it's going to unraveled. 0:01:33.640 --> 0:01:36.360 I look at this as a nineteen ninety five moment, 0:01:36.400 --> 0:01:39.960 biggest transformation that we've seen in Tach in thirty years. 0:01:40.080 --> 0:01:44.119 There's a massive growth opportunity ahead of them. The AI 0:01:44.280 --> 0:01:48.600 creators and the beneficiaries seem to be centered in large 0:01:48.600 --> 0:01:50.200 cap tech and that's where you have to go to 0:01:50.280 --> 0:01:51.120 take advantage of it. 0:01:51.160 --> 0:01:54.240 But I think that's why this is just what's going 0:01:54.280 --> 0:01:57.480 to wed Obviously Spiede, fed and Marca. It's the star 0:01:57.520 --> 0:01:58.320 of a new tech bomb. 0:01:58.360 --> 0:02:03.360 Marking joining us now Denny Fish, he manages the four 0:02:03.400 --> 0:02:06.960 point three billion dollar Janie Hennis and Global Technology and 0:02:07.040 --> 0:02:10.480 Innovation Fund. Same question to you, Although your focus is 0:02:10.520 --> 0:02:14.040 pretty clear, do you increase your exposure to certain corners 0:02:14.040 --> 0:02:15.200 of the tech market right now? 0:02:15.480 --> 0:02:16.280 What do you pull back? 0:02:16.919 --> 0:02:19.840 Well? Definitely, I mean my job running in a sector 0:02:19.840 --> 0:02:24.920 fund is I'm always invested in technology. Yeah, so so 0:02:25.080 --> 0:02:28.160 clearly you know, we move capital around based on where 0:02:28.280 --> 0:02:32.120 we feel the best opportunities are, you know, and you know, 0:02:32.160 --> 0:02:35.160 if we just look over the last week and just 0:02:35.200 --> 0:02:37.360 you know, think about their earnings that we've seen, and 0:02:37.480 --> 0:02:39.799 you know, and some of the data points that are 0:02:39.840 --> 0:02:42.600 giving us some direction going forward. You know, the you know, 0:02:42.760 --> 0:02:45.239 large tech names, you know, things have been pretty good 0:02:45.280 --> 0:02:49.520 so far. The digital advertising names Meta and Alphabet, you know, 0:02:49.760 --> 0:02:53.440 things are starting to get better. The semiconductor complex, you know, 0:02:53.520 --> 0:02:55.760 for the most part, has actually been a little bit 0:02:55.760 --> 0:02:59.240 better than expectations as we get through sort of the 0:02:59.320 --> 0:03:02.919 trough of the cycle and a lot of the parts 0:03:02.919 --> 0:03:07.160 of that sector. And then you know, generally speaking, software 0:03:07.200 --> 0:03:10.200 has been pretty good too. So you know, all things considered, 0:03:10.600 --> 0:03:12.040 things things have been pretty good. 0:03:12.240 --> 0:03:13.600 Let's go back to last week. 0:03:13.800 --> 0:03:16.400 Is there a common thread between all of the names 0:03:16.400 --> 0:03:18.680 that reported They give you a kind of macro view 0:03:18.720 --> 0:03:19.840 of the tech sector right now? 0:03:20.000 --> 0:03:22.320 Yeah, yeah, it really does. So, as I mentioned, there 0:03:22.320 --> 0:03:25.080 are certain parts that are getting better, like digital advertising, 0:03:25.080 --> 0:03:28.799 which is good. And then you know, in semis it's 0:03:28.840 --> 0:03:31.680 really been all about the areas that are really really good. 0:03:31.720 --> 0:03:35.160 You talked about on semiconductor today they reported this morning, Uh, 0:03:35.440 --> 0:03:38.800 you know, exposure to auto has been great. Silicon carbide 0:03:38.840 --> 0:03:41.120 is one of the most you know, significant themes within 0:03:41.160 --> 0:03:45.440 semis right now, you know, and then clearly accelerated computing. 0:03:45.720 --> 0:03:49.000 If you just listen to the transcripts and the earnings 0:03:49.040 --> 0:03:54.880 calls from Microsoft, from Meta, from Alphabet, from others within 0:03:54.920 --> 0:03:58.760 the semi ecosystem, it's just accelerated computing i e. You know, 0:03:59.000 --> 0:04:02.640 GPUs and FPGAs, they're just sucking all the air out 0:04:02.680 --> 0:04:05.480 of the room right now. And so that's a really 0:04:05.520 --> 0:04:09.080 important theme. And then you know something that maybe isn't 0:04:09.120 --> 0:04:12.080 as well noticed by the average investor within the silicon 0:04:12.600 --> 0:04:17.599 or the semiconductor supply chain because of this growth in 0:04:17.839 --> 0:04:21.320 accelerated computing, it's creating the need for different types of 0:04:21.400 --> 0:04:23.880 packaging as well. So there are a lot of you know, 0:04:23.960 --> 0:04:26.920 interesting ways to actually play that. And then also, you know, 0:04:27.040 --> 0:04:30.320 talking about silicon carbide for example, material science is having 0:04:30.320 --> 0:04:33.680 a bigger and bigger impact within the semiconductor supply chain 0:04:33.720 --> 0:04:36.720 as well. So those are really really interesting areas because 0:04:36.720 --> 0:04:40.520 that's what enables evs the grid like anything that's you know, 0:04:41.040 --> 0:04:41.920 power enabled. 0:04:42.320 --> 0:04:44.359 Go back to that idea on packaging really quick. We 0:04:44.360 --> 0:04:47.120 have the Intel CEO Packed now singer on with us Friday. 0:04:47.320 --> 0:04:49.640 It's kind of an area of their business that they 0:04:49.680 --> 0:04:52.080 don't talk about as much, or perhaps we didn't ask, 0:04:52.480 --> 0:04:55.360 but we are trying to find out what happens when 0:04:55.360 --> 0:04:57.560 we get past the hype of Nvidia and the H 0:04:57.600 --> 0:05:01.120 one hundreds, right, what's left for the rest to come in? 0:05:01.160 --> 0:05:03.800 And you seem to suggest there are other opportunities. 0:05:04.320 --> 0:05:06.919 Yeah, absolutely, I mean we could go down to the 0:05:06.960 --> 0:05:09.359 most basic level. So if you even think about Intel, 0:05:09.520 --> 0:05:12.440 you know they're now, you know, ramping up a foundry business. 0:05:12.480 --> 0:05:13.640 Okay, the foundry. 0:05:13.680 --> 0:05:18.040 You can't produce GPUs without foundry okay. And at the 0:05:18.080 --> 0:05:21.000 same time, uh, the foundry can't exist without sem of 0:05:21.080 --> 0:05:25.320 conductor capital equipment. So so that's really really important. And 0:05:25.360 --> 0:05:29.520 these are all derivative plays. And then you can't actually 0:05:29.640 --> 0:05:34.880 design GPUs without electronic design automation software. And so these 0:05:34.920 --> 0:05:39.120 are all like really really good sub industries within you know, 0:05:39.200 --> 0:05:42.120 this bigger broader theme in ways that you can that 0:05:42.440 --> 0:05:45.760 should have multi year tailwinds associated with the question always 0:05:45.760 --> 0:05:48.479 comes back to, Okay, what you know, what percentage of 0:05:48.480 --> 0:05:51.720 the business is actually being driven by AI or or 0:05:51.800 --> 0:05:54.000 you know, other things, and really, you know, they're the 0:05:54.080 --> 0:05:56.520 real direct plays like the Anvitias of the world, but 0:05:56.560 --> 0:05:59.239 then they are all these other different, you know, players 0:05:59.279 --> 0:06:01.960 within the eCos that also benefit as well. 0:06:02.040 --> 0:06:05.080 We had Jonathan Curtis of Franklin Templeton on the show 0:06:05.120 --> 0:06:07.960 last week, director of Portfolio Management, and he explained the 0:06:08.000 --> 0:06:12.320 reason he counts references to AI or artificial intelligence in 0:06:12.360 --> 0:06:16.839 the earnings transcripts is because it shows intention. It's evidence 0:06:16.839 --> 0:06:19.200 of a willingness to jump into that field. Do you 0:06:19.200 --> 0:06:23.119 put any value in that data set simply talking about AI? 0:06:23.360 --> 0:06:26.720 Well, everybody's talking about AI right now, so you really 0:06:26.760 --> 0:06:30.520 have to distill fact from fiction. But there are you know, 0:06:30.600 --> 0:06:33.360 a really great conference call last week was the Meta 0:06:33.400 --> 0:06:37.280 conference call, and it wasn't just talking about AI, but 0:06:37.560 --> 0:06:41.040 very very specific ways in which the company is leveraging 0:06:41.120 --> 0:06:45.159 AI to actually improve its economics. And so it's everything 0:06:45.200 --> 0:06:49.919 from increasing the effectiveness of ad targeting, so return on 0:06:50.000 --> 0:06:53.240 ads then goes up for their customers being able to 0:06:53.560 --> 0:06:57.719 auto generate content, which is really really interesting, you know, 0:06:57.760 --> 0:07:01.400 it's kind of the fundamental principle of generative AI. And 0:07:01.400 --> 0:07:03.120 then one of the things that they've wanted to do 0:07:03.240 --> 0:07:08.240 for years is monetize their messaging platforms more effectively with 0:07:08.360 --> 0:07:11.880 click to messaging, and now with AI and empowering, that 0:07:12.280 --> 0:07:17.960 should enable them to actually monetize WhatsApp, Facebook Messenger, Instagram 0:07:17.960 --> 0:07:21.200 messaging in a much more meaningful way than they have historically. 0:07:21.400 --> 0:07:23.640 Susan Lee, the Meta CFO, is on the program talking 0:07:23.640 --> 0:07:26.000 about how AI recommendations kind of played a role in 0:07:26.040 --> 0:07:28.640 that outlook for the current period being strong. We have 0:07:28.680 --> 0:07:33.400 to think about this week, Amazon and Apple to literal megacaps, 0:07:33.400 --> 0:07:35.240 with megaanames in the world of technology. What are you 0:07:35.280 --> 0:07:37.800 expecting or hoping to hear from them. 0:07:38.040 --> 0:07:42.200 Yeah, yeah, that's a good question to expect end hope, Well, 0:07:42.400 --> 0:07:46.960 I think in Amazon's case, there's a wider range of outcomes, 0:07:47.240 --> 0:07:51.640 and the hope would be that we see a real 0:07:51.800 --> 0:07:56.560 nice inflection in North American retail profitability because that's been 0:07:56.600 --> 0:07:59.080 the part of the business that has had a tougher 0:07:59.120 --> 0:08:02.240 time because of for builds and over hiring during the pandemic, 0:08:02.480 --> 0:08:06.000 having to digest their logistics investments. But we're starting to 0:08:06.000 --> 0:08:09.440 get through that and so seeing progress there will be important. 0:08:09.480 --> 0:08:12.800 We had Prime Day, you know, which you know was 0:08:13.120 --> 0:08:16.680 clearly the best Prime Day ever, and so should hear 0:08:16.720 --> 0:08:20.240 more about that, and then Amazon Web Services is obviously 0:08:20.280 --> 0:08:22.640 a big component of the valuation of the company. We 0:08:22.720 --> 0:08:25.440 expect it to continue to decelebrate but stable, much in 0:08:25.480 --> 0:08:28.240 the same way that Microsoft was and Google was with 0:08:28.280 --> 0:08:32.199 their cloud computing platforms. And then the hope there would 0:08:32.240 --> 0:08:35.600 be that as you know, we're that we're getting through 0:08:36.320 --> 0:08:39.880 the optimizations that all of the cloud providers have talked 0:08:39.920 --> 0:08:42.320 about over the last couple of quarters, just given some 0:08:42.400 --> 0:08:46.439 of the macroheadwinds. And then last but not least, you know, advertising, 0:08:46.520 --> 0:08:51.400 it's a very significant part of the profitability equation for Amazon. 0:08:51.720 --> 0:08:54.160 And what we've seen out of Meta, what we've seen 0:08:54.200 --> 0:08:57.120 out of Alphabet, what we saw out of Roku late 0:08:57.200 --> 0:09:00.360 last week, the advertising market seems to be getting and 0:09:00.400 --> 0:09:02.840 so that that should that should bode well for Amazon 0:09:02.840 --> 0:09:04.559 as well. So I think you mix all that up, 0:09:05.480 --> 0:09:08.280 you know, hoping for a you know, a good, you know, 0:09:08.400 --> 0:09:12.679 better than expected report with key improvements in those three areas. 0:09:12.640 --> 0:09:14.960 Danny, of all the names you hold in your funds, 0:09:15.360 --> 0:09:18.400 which from a technology perspective impressed you the most, which 0:09:18.480 --> 0:09:19.839 is the innovator right now? 0:09:20.120 --> 0:09:20.880 Big or small? 0:09:21.920 --> 0:09:24.680 Yeah, Yeah, that's that's that's a good question. I would 0:09:24.679 --> 0:09:27.080 say if we think about the two companies that have 0:09:27.160 --> 0:09:31.199 probably been on their front foot more than any others 0:09:31.240 --> 0:09:34.679 as it relates to AI, Clearly Microsoft. You know, it 0:09:34.720 --> 0:09:36.680 was very pression of them to do the investment into 0:09:36.679 --> 0:09:39.240 open Ai. They had a lot of investments across their 0:09:39.280 --> 0:09:42.960 portfolios well before people were even talking about it, you know, 0:09:43.080 --> 0:09:46.480 chat GPT was the moment in November, but they were 0:09:46.559 --> 0:09:49.880 laying the tracks for you know, how they're positioned over 0:09:49.920 --> 0:09:52.840 the last several years. You know, clearly in Vidia, I 0:09:52.880 --> 0:09:57.520 mean you just it's it's the only like real one 0:09:57.200 --> 0:10:00.800 pure play on AI because they dominate the market for 0:10:00.920 --> 0:10:05.640 GPUs and then you know, they dominate accelerated computing and 0:10:05.840 --> 0:10:08.199 you know, and that's where all the capital's going. You know, 0:10:08.240 --> 0:10:11.920 it's interesting if you actually dissect capex that we've heard, 0:10:11.960 --> 0:10:15.080 which is growing across all the major platforms, and look 0:10:15.120 --> 0:10:18.439 at you know, the percentage that's going to accelerated computing 0:10:18.640 --> 0:10:21.960 and compute versus what's going to buildings. It's a material 0:10:22.080 --> 0:10:25.000 increase for you know, a company like Nvidia. 0:10:25.240 --> 0:10:26.400 So those would be two. 0:10:26.679 --> 0:10:29.600 Then you failed with Janice Anderson such a broad knowledge 0:10:29.640 --> 0:10:31.839 base and a lot of companies in those Funds, Thank 0:10:31.880 --> 0:10:43.400 you for your time. Walmart is staking its claim in 0:10:43.400 --> 0:10:46.720 India's retail market, paying one point four billion dollars to 0:10:46.840 --> 0:10:50.319 Tiger Global Management for its remaining stake in e commerce 0:10:50.360 --> 0:10:54.720 company Flipcart. Reports say VC firm Excel also agreed to 0:10:54.800 --> 0:10:58.440 sell it's one percent steak in flip Cart to Walmart, 0:10:58.480 --> 0:11:00.960 joining us. Now with all the details, Bug's Brendan case 0:11:01.000 --> 0:11:04.280 who covers Walmart and Hemma Palmer out of New York 0:11:04.360 --> 0:11:07.480 covering all things Hedge Funds. Okay, Brendan, let's start with you. 0:11:07.880 --> 0:11:11.120 What's the Walmart side of this story? Why go to 0:11:11.200 --> 0:11:12.720 boost the steak and flip Cart. 0:11:13.880 --> 0:11:17.400 I think from Walmart's standpoint, what this deal shows is 0:11:17.440 --> 0:11:21.439 the company's willingness to deepen its bet on India. Walmart's 0:11:21.440 --> 0:11:24.840 been pairing its international portfolio in recent years. It's gotten 0:11:24.880 --> 0:11:29.719 out of markets like the UK, Brazil, Japan, and if 0:11:29.720 --> 0:11:31.840 you look at what's left, the jewels in the crown 0:11:32.160 --> 0:11:36.319 are big important businesses in Mexico and Canada, an important 0:11:36.320 --> 0:11:40.920 business in China, and then India where Flipkart is one 0:11:40.960 --> 0:11:42.959 of the biggest e commerce companies in the country. 0:11:43.200 --> 0:11:46.240 Hemma other side of the table, Tiger why did they sell? 0:11:46.800 --> 0:11:49.640 Yeah, So, Tiger also been very keen on Indian investments. 0:11:49.679 --> 0:11:52.000 They were an early investor in flip cart back in 0:11:52.040 --> 0:11:54.440 two thousand and nine, getting in at like a forty 0:11:54.440 --> 0:11:57.960 two million dollar valuation. What this deal lets them do 0:11:58.360 --> 0:12:00.920 is in this environment when there are so few your IPOs, 0:12:01.280 --> 0:12:04.640 it helps them provide distributions to their investors and provide 0:12:04.640 --> 0:12:06.280 a return to them. They got a pretty good price 0:12:06.320 --> 0:12:08.280 for their exit given how early they got in. 0:12:08.440 --> 0:12:08.600 Yeah. 0:12:08.600 --> 0:12:10.840 Here on Bloomberg Technology, guys, I think we focus on 0:12:10.920 --> 0:12:14.319 India a lot simply because there's so many people there, right, Brendan, 0:12:14.400 --> 0:12:18.559 it's a big market opportunity. What's Walmart said about India 0:12:18.960 --> 0:12:20.319 and its potential for them? 0:12:20.720 --> 0:12:24.760 So, from the perspective of Walmart executives in Arkansas, India 0:12:24.920 --> 0:12:29.200 is very very meaningful. They first went into Flipkart in 0:12:29.240 --> 0:12:33.920 twenty eighteen. They bought a majority stake for sixteen billion dollars. 0:12:33.920 --> 0:12:38.640 That's actually Walmart's biggest ever acquisition. And now they've got 0:12:38.679 --> 0:12:42.080 flip cart going toe to toe with Amazon and other 0:12:42.120 --> 0:12:45.920 companies in India. The other part of it is phone pay, 0:12:46.040 --> 0:12:48.360 which is a digital payments company which used to be 0:12:48.440 --> 0:12:53.000 part of flipcart. The two separated in December, and Walmart's 0:12:53.000 --> 0:12:55.160 got really high hopes for both companies. It's talked about 0:12:55.200 --> 0:12:59.240 the potential for an initial public offering. Timing remains murky, 0:12:59.320 --> 0:13:02.760 but that's definitely something that could move the needle for 0:13:03.120 --> 0:13:04.480 the parent company as a whole. 0:13:05.120 --> 0:13:05.400 Hem A. 0:13:05.480 --> 0:13:09.959 You outline the reasons why Tiger got out of this investment, right, 0:13:10.000 --> 0:13:12.199 but give me some of the history. Why did they 0:13:12.240 --> 0:13:14.600 first get in and has it been a success for them? 0:13:15.040 --> 0:13:17.160 Yeah, so they had been an early investor in a 0:13:17.200 --> 0:13:21.000 number of Asia Asian companies. They got into flipcot in 0:13:21.040 --> 0:13:23.160 two thousand and nine. They built up a stake of 0:13:23.160 --> 0:13:26.199 a billion dollars over the years. In the past five 0:13:26.280 --> 0:13:29.480 six years, they sold some of their steak and this 0:13:29.520 --> 0:13:31.679 is the final exit for them. But what this means 0:13:31.720 --> 0:13:34.400 for investors in the fund is investors are getting a 0:13:34.440 --> 0:13:37.800 three point five billion dollar return. That's the gain on 0:13:37.840 --> 0:13:41.400 that basically one billion dollar investment. So it's a pretty 0:13:41.400 --> 0:13:41.920 good exit. 0:13:41.960 --> 0:13:42.120 You know. 0:13:42.200 --> 0:13:45.160 Keep in mind that the valuation of flip kurt is 0:13:45.480 --> 0:13:49.080 the deal was valued lower than the last round, but 0:13:49.240 --> 0:13:52.079 not terribly lower. You know, the the last round was 0:13:52.080 --> 0:13:56.000 about thirty eight billion dollars the valuation of flip cart, 0:13:56.120 --> 0:13:57.959 and this deal was done at a valuation of about 0:13:57.960 --> 0:13:58.520 thirty five. 0:13:59.080 --> 0:14:02.200 It's an interesting on the e commerce side, Brendan. It 0:14:02.280 --> 0:14:04.360 kind of fits in with the Walmart we know, but 0:14:04.440 --> 0:14:06.120 you and I spend a bit of time out in 0:14:06.240 --> 0:14:09.680 Arkansas looking under the hood. Pardon the punt of what 0:14:09.920 --> 0:14:13.200 else Walmart's investing in on the tech side. Where does 0:14:13.240 --> 0:14:16.760 flip cart fit in in within the broader tech strategy 0:14:17.280 --> 0:14:18.360 for Walmart? 0:14:18.679 --> 0:14:21.960 Certainly flip cart and phone pay are a big piece 0:14:22.000 --> 0:14:23.800 of the puzzle. Yeah, I think it's fair to say 0:14:23.840 --> 0:14:27.200 that Walmart has learned a lot from those companies and 0:14:27.320 --> 0:14:30.000 will probably can continue to learn more from those companies 0:14:30.600 --> 0:14:33.160 if you shift the focus back to the US, You're 0:14:33.200 --> 0:14:36.440 still talking about a big focus on e commerce, and 0:14:36.480 --> 0:14:38.800 in terms of an investment, the way that's kind of 0:14:38.840 --> 0:14:42.800 manifesting itself right now is in sort of a rethinking, 0:14:42.960 --> 0:14:47.080 kind of an overhaul of a lot of distribution centers 0:14:47.160 --> 0:14:51.760 and a lot of stores, basically boosting the bet on automation, 0:14:52.640 --> 0:14:56.920 robotics and trying to just become more efficient in terms 0:14:56.960 --> 0:14:59.239 of fulfilling the online demand. 0:14:59.040 --> 0:14:59.400 That they have. 0:15:00.000 --> 0:15:02.640 All right, team reporting thanks to Bloomberg's hem Obama out 0:15:02.640 --> 0:15:05.560 of New York. Brennan case had adelas mister big Box. 0:15:05.600 --> 0:15:17.560 We call him mister Walmart. Time for talking tech. First Up, 0:15:17.560 --> 0:15:21.400 Disney and NBC are paying lobbyists to watch over legislation 0:15:21.640 --> 0:15:24.440 that would bar them from using AI as a state 0:15:24.520 --> 0:15:27.280 tax break. The New York bill comes as both companies 0:15:27.320 --> 0:15:30.680 battle Hollywood writer and actor strikes over the future use 0:15:30.720 --> 0:15:35.720 of AI, displacing workers in film and TV productions. Plus 0:15:35.800 --> 0:15:38.920 Curve Finance, a native token of one of crypto's top 0:15:38.960 --> 0:15:43.920 decentralized exchanges, tumbled after the platform said it had been hacked. 0:15:44.200 --> 0:15:47.760 A glitch in programming language Viper, which is widely used 0:15:47.760 --> 0:15:51.400 in DeFi apps, led to estimated losses ranging from twenty 0:15:51.800 --> 0:15:55.760 to forty million US dollars, and US and European officials 0:15:55.800 --> 0:15:59.960 are growing increasingly concerned by China's rush into the product 0:16:00.600 --> 0:16:04.840 of legacy chips. President Biden limited controls over China's ability 0:16:05.000 --> 0:16:08.280 to secure these advanced chips the power AI models, but 0:16:08.360 --> 0:16:12.240 Beijing's responded by pouring billions of dollars into factories for 0:16:12.320 --> 0:16:15.640 the so called legacy chips that are not banned and 0:16:15.680 --> 0:16:19.200 are still essential to the global economy. Let's stick with 0:16:19.240 --> 0:16:21.720 a story and bring in Bloombo's Cada lines outed DC. 0:16:22.200 --> 0:16:24.480 The concerns are clear. The question is what are they 0:16:24.520 --> 0:16:25.280 going to do about it? 0:16:26.560 --> 0:16:28.800 Yeah, and it's a really tough question ed because they 0:16:28.800 --> 0:16:31.160 want to tread semi lightly with China here. They are 0:16:31.160 --> 0:16:34.160 trying to be very targeted, narrow specific in the restrictions 0:16:34.160 --> 0:16:36.240 they put into place so as not to escalate in 0:16:36.320 --> 0:16:38.960 dramatic fashion this trade war in tit for tat that 0:16:39.040 --> 0:16:41.520 is going on between the largest economies. Hence why the 0:16:41.520 --> 0:16:45.520 Biden administration specifically focused on this advanced chip making technology. 0:16:45.520 --> 0:16:46.640 They didn't really touch. 0:16:46.440 --> 0:16:51.200 Anything bigger than fourteen nanometers, so that leaves legacy chips 0:16:51.240 --> 0:16:53.680 is essentially fair game for China, typically those twenty eight 0:16:53.760 --> 0:16:56.600 nanimeters and wider, and that is really what they're ramping 0:16:56.680 --> 0:16:59.280 up here. Yes, that technology is more than a decade old, 0:16:59.280 --> 0:17:01.240 but as you allude to it, it is still very 0:17:01.280 --> 0:17:04.919 critical in terms of things like smartphones and evs. It 0:17:04.960 --> 0:17:07.600 is the shortages of legacy chips that were such a 0:17:07.600 --> 0:17:10.639 problem in the pandemic era, when chip shortages wiped billions 0:17:10.680 --> 0:17:14.320 of dollars off of company's ability to sell things like cars, 0:17:14.320 --> 0:17:16.639 for example. So this is highly critical. And the concern 0:17:16.680 --> 0:17:19.399 here is that if China can dominate that market, flood 0:17:19.400 --> 0:17:22.000 the market essentially with these legacy ships, that even Western 0:17:22.040 --> 0:17:24.520 companies are going to be dependent on China for them. 0:17:24.880 --> 0:17:27.679 That goes Beijing more leverage. So the US and Europe 0:17:27.720 --> 0:17:30.880 are looking into we understand how they could potentially rain 0:17:30.960 --> 0:17:32.760 China back here, but again they don't want to cast 0:17:32.800 --> 0:17:35.320 too wide a net for fear of the retaliation that 0:17:35.359 --> 0:17:36.640 could bring from Beijing. 0:17:37.400 --> 0:17:41.840 Well that's exactly my point that you're in DC. This 0:17:42.000 --> 0:17:45.240 seems to be a worrying story at a time where 0:17:46.200 --> 0:17:48.080 the main act is in DC are trying to get 0:17:48.119 --> 0:17:50.280 us on a friendlier footing with China. 0:17:50.560 --> 0:17:54.159 Yeah. Yeah, it's a difficult tight rope that the Biden 0:17:54.160 --> 0:17:56.679 administration in particular is trying to walk at as you 0:17:56.720 --> 0:17:59.520 do have administration officials like Secretary of Save Anthony B. 0:17:59.520 --> 0:18:03.320 Lincoln or Treasury Secretary Jen Ellen actually making the trip 0:18:03.359 --> 0:18:06.480 to China to try and re establish communication with their 0:18:06.520 --> 0:18:08.680 counterparts at the same time that you have this tit 0:18:08.720 --> 0:18:11.080 for tat back and forth on triggered measures. And that's 0:18:11.119 --> 0:18:13.119 why when we're looking forward to things like what we 0:18:13.240 --> 0:18:16.520 understand could be an executive order on outbound investment into 0:18:16.600 --> 0:18:18.840 China in just a couple of weeks in mid August. 0:18:18.840 --> 0:18:21.480 They're trying to keep it very narrow, very specific. We 0:18:21.560 --> 0:18:24.879 understand that executive order, we'll focus on things like semiconductors, 0:18:24.920 --> 0:18:28.000 AI and quantum computing. They aren't trying to put a 0:18:28.080 --> 0:18:31.680 wide cast on on outbound investment into China. Just keep 0:18:31.680 --> 0:18:34.800 it focused on what would protect US national security interest 0:18:34.880 --> 0:18:38.080 and not harm China too greatly economically, because the line 0:18:38.080 --> 0:18:42.480 continually out of the administration is that this isn't about 0:18:42.520 --> 0:18:44.440 to do damage to the China economy. It is only 0:18:44.480 --> 0:18:47.800 about protecting national security and interest and really just de 0:18:48.000 --> 0:18:50.800 risking rather than decoupling with China. But it's a very 0:18:51.160 --> 0:18:53.119 difficult equation for these officials D. 0:18:53.720 --> 0:18:56.960 And it's another example of the US and EU being 0:18:57.000 --> 0:18:59.919 aligned in this particular issue over China. 0:19:00.080 --> 0:19:02.080 As Kadie lyons, how a, DC, thank you. 0:19:02.080 --> 0:19:04.240 We are going to talk more about chips later in 0:19:04.280 --> 0:19:07.720 the program, but coming up SOFI shares surging today. We're 0:19:07.720 --> 0:19:10.280 going to discuss why with the CEO of the company, 0:19:10.440 --> 0:19:20.280 Anthony Nodo. That's coming up next. This is Bloomberg Technology. 0:19:28.920 --> 0:19:32.399 Welcome back to Bloomberg Technology Ed Lodlow here in San Francisco. Now, 0:19:32.440 --> 0:19:35.359 if there is one single name that we're watching, it 0:19:35.480 --> 0:19:38.439 is so Fi. Biggest jump on an industra basis in 0:19:38.440 --> 0:19:41.760 the year, up more than eighteen percent, now raising its 0:19:41.800 --> 0:19:45.520 full year revenue guidance. Adding members in the quarter just gone. 0:19:45.520 --> 0:19:48.240 There's a lot of momentum in this stock and in 0:19:48.280 --> 0:19:51.520 this company. Let's get more on the company's earnings and 0:19:51.560 --> 0:19:56.200 bring in Sofi CEO Anthony Noo. Anthony, welcome to Bloomberg Technology, 0:19:56.240 --> 0:19:58.320 and thank you for your time. I want to understand 0:19:58.359 --> 0:20:02.000 something better. The five hundred eighty four thousand members that 0:20:02.040 --> 0:20:04.320 you added in the court have just gone. What does 0:20:04.359 --> 0:20:07.560 that mean? Are they depositors? What kind of services are 0:20:07.560 --> 0:20:08.800 they using? 0:20:09.920 --> 0:20:13.360 Sure, the members are someone that has a product with us. 0:20:13.359 --> 0:20:15.840 So in the quarter we added five hundred and eighty 0:20:15.880 --> 0:20:19.760 four thousand members, up forty four percent. The two largest 0:20:19.840 --> 0:20:22.000 pieces of that were so Fi Money, which is a 0:20:22.119 --> 0:20:25.600 checking savers account. You get four point four percent interest 0:20:25.680 --> 0:20:28.439 on savings. If you do direct deposit with us, you 0:20:28.440 --> 0:20:31.880 can spend any time anywhere you want, no restrictions, no fees. 0:20:32.160 --> 0:20:34.480 And we also because we're treating you as a member, 0:20:34.560 --> 0:20:38.159 you get access to our member benefits reward programs as 0:20:38.200 --> 0:20:41.679 well as a free certified official planner. In addition to that, 0:20:41.720 --> 0:20:44.000 we offer a credit card that would be in that number. 0:20:44.760 --> 0:20:47.000 In addition to that, we also offer brokers so you 0:20:47.040 --> 0:20:51.600 can buy single stocks without commissions ETFs. We have six 0:20:51.680 --> 0:20:55.200 robo accounts, and then we offer cryptocurrency and we most 0:20:55.240 --> 0:20:59.840 recently did an IPO oddity IPO. So in addition to 0:21:00.000 --> 0:21:03.280 four different types of loans, we have those products that 0:21:03.520 --> 0:21:05.880 I just mentioned, and then we also have a technology 0:21:06.160 --> 0:21:07.960 platform revenue segment. 0:21:09.080 --> 0:21:12.280 On the depositor and deposit side. Is this as simple 0:21:12.359 --> 0:21:16.280 as you taking business from the regional banks that suffered 0:21:16.280 --> 0:21:17.560 in the first half of this year. 0:21:18.680 --> 0:21:20.840 We're taking business, but it's not from the regional banks. 0:21:20.880 --> 0:21:22.960 It's from the largest banks in the country, the top 0:21:23.040 --> 0:21:26.720 five banks in the country by deposit accounts or checking 0:21:26.760 --> 0:21:27.520 sales accounts. 0:21:27.640 --> 0:21:29.840 That's where we're getting the bulk of our market share from. 0:21:30.240 --> 0:21:32.480 We've positioned so far over the last five and a 0:21:32.520 --> 0:21:34.760 half years to be a one stop shop for all 0:21:34.800 --> 0:21:37.840 your financial services needs. So we give you all the 0:21:37.880 --> 0:21:40.360