Speaker 1: From the heart of where innovation, money and power colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm Emily Tank in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up in the next hour. Musk's
Speaker 1: skepticism about bots on Twitter has one investor now suing
Speaker 1: the company for more information. More on the threats to
Speaker 1: blow up billion dollar buyout this hour, plus the future
Speaker 1: flying cars are own ed Ludlow on the ground at
Speaker 1: UP Summit in Bentonville, Arkansas, where mobility tech leaders and
Speaker 1: investors have gathered. He will bring us an exclusive interview
Speaker 1: with Joe b Aviation CEO later this hour, and my
Speaker 1: exclusive conversation with a firm CEO, Max Lection on the
Speaker 1: heels of Apple announcing it is offering a competing version
Speaker 1: of buy now, Pay later and update now on Twitter.
Speaker 1: And this Elon Musk saga Twitter shareholder has sued the
Speaker 1: company in Delaware. John so Locke, who owns five shares
Speaker 1: of Twitter, wants to judge to force the social media
Speaker 1: platform to hand over internal files about spam and fake accounts.
Speaker 1: This has become a hot button issue in the Elon
Speaker 1: Musks four billion dollar potential buyout. Max Chafskin joins us
Speaker 1: now with more so this on the back of the
Speaker 1: Texas Attorney General also opening investigation into this spot issue. Max,
Speaker 1: how are these going to potentially impact the deal? You know,
Speaker 1: when when this deal first started back in March and
Speaker 1: the Twitter executive team was so excited to have Elon
Speaker 1: Musk and all of his meme stock, you know, followers
Speaker 1: on board. Um, you know, we're seeing the flip side
Speaker 1: of that, which is these lawsuits, which of course are
Speaker 1: about real issues the bots, but also feel very much
Speaker 1: like follow on bandwagon, um, basically trying to find ways
Speaker 1: to back up the claims that Elon Musk has been
Speaker 1: trying to put forward. And and it's probably important to
Speaker 1: say that these are claims that there's not a lot
Speaker 1: of basis for. In fact, there's there's not a lot
Speaker 1: of reason beyond you know, kind of Elon Musk's personal
Speaker 1: experience to think that Twitter's bought numbers are higher than
Speaker 1: that you know, five percent figure that they've been disclosing
Speaker 1: all along. Twitter says it's cooperating. Have they handed over
Speaker 1: the information that they have or not? I mean, the
Speaker 1: the perception here is that they're trying to hide something, right, Well,
Speaker 1: and that's what that's kind of where Elon Musk's lawsuit
Speaker 1: has has or or his claims that are that he
Speaker 1: might be using to to to wheedle his way out
Speaker 1: of this deal. Where where he's landed, which is not
Speaker 1: that there are too many bots, but it's that Twitter
Speaker 1: is not, you know, disclosing properly. And this is going
Speaker 1: to be you know, a long, you know, a long dispute.
Speaker 1: There's lots of room for interpretation here because of course,
Speaker 1: the way that Twitter could you know, prove that it
Speaker 1: doesn't have as many bots as Ellen thinks that it
Speaker 1: has would be to turnover it's user data. But of
Speaker 1: course you don't necessarily want to turn over all your
Speaker 1: user data, especially not to somebody who's been kind of
Speaker 1: continuously like tweet about the deal, uh since it was announced.
Speaker 1: So so you could definitely see reasons why Twitter we
Speaker 1: want to hold back to some extent. What are you
Speaker 1: what do you think the odds are that this deal
Speaker 1: goes through? I mean, it doesn't feel likely, does it.
Speaker 1: And you know we're seeing, uh with that chart showing
Speaker 1: the big gap between the offer and Twitter's current share price.
Speaker 1: I mean it really feels like Elon Musk is doing
Speaker 1: whatever he can uh to either get out of this
Speaker 1: or at least at least get through it at a
Speaker 1: lower price. On the other hand, of course, we're seeing
Speaker 1: Twitter saying, you know, we had a deal. You know,
Speaker 1: we're we're moving forward. So so I supposed it's possible
Speaker 1: that this could, this could close, although it doesn't feel
Speaker 1: likely at the moment. All right, now, you are also
Speaker 1: in the meantime covering Cheryl Sandberg's resignation from METTA. You
Speaker 1: still got a lot of people out there wondering why
Speaker 1: and why Now you're looking at her legacy not just
Speaker 1: at Facebook and Google, but on the Internet, saying that
Speaker 1: she has left us with a future of targeted ads.
Speaker 1: Talk to us about her influence on the inter net
Speaker 1: at large. Yeah, and I think this has sort of
Speaker 1: been lost to some extent with her announcement that she
Speaker 1: was leaving. I think in part because of the way
Speaker 1: that Cheryl Sandberg chose to make that announcement. In her
Speaker 1: big farewell blog post, she talked about, you know, in
Speaker 1: two thousand seven, when she first met Mark Zuckerberg, she
Speaker 1: thought of the Internet as being this, you know, funny
Speaker 1: little place for searching for you know, images, which of
Speaker 1: course is totally crazy considering that Cheryl Sandberg for years
Speaker 1: had built Google into this advertising monolith. I mean, she
Speaker 1: was already a well known, very influential executive who had
Speaker 1: been known for basically building the entire ad words and
Speaker 1: ad sense business at Google, which are these personalized data
Speaker 1: driven ads. It's sort of like what we think of
Speaker 1: when we think of internet advertising. And Cheryl Sandberg was
Speaker 1: the one who was out there in front talking about
Speaker 1: how every business owner you know, in the country needed
Speaker 1: to to adopt this, and we saw a kind of
Speaker 1: do the same thing at Facebook. And now as she
Speaker 1: kind of moves forward to her next act, I think
Speaker 1: this this kind of creates a complication because as her
Speaker 1: sort of biggest accomplishments, which was creating this kind of
Speaker 1: scaffolding of personalized ads that have generated you know, billions
Speaker 1: of dollars across two companies, you know, that's suddenly much
Speaker 1: more controversial than it was before. It's it's both kind
Speaker 1: of a feature her her greatest achievement, but also maybe
Speaker 1: a vulnerability as she you know, moves to another job
Speaker 1: in you know, in business or politics wherever she lands
Speaker 1: in the future. Now, Apple has been adding more privacy
Speaker 1: focused features. We saw more at ww d C yesterday.
Speaker 1: This has negatively impacted hurt Meta and Facebook's business model.
Speaker 1: Do you think targeted ads are eventually going away or
Speaker 1: really never or not anytime soon? Well, I mean, you
Speaker 1: know that's hard to say. Clearly, Mark Zuckerberg thinks that
Speaker 1: that this is not the future. And I think if
Speaker 1: you look at you know, why are Cheryl Sandberg and
Speaker 1: Mark Zuckerberg this you know, wonderful partnership for fourteen years,
Speaker 1: extremely lucrative for both parties. You know, why are they
Speaker 1: parting ways now? I think part of the reason is
Speaker 1: that Zuckerberg, you know, is obviously focused on this metaverse thing,
Speaker 1: which is going to be less dependent on advertising. And
Speaker 1: as you said, we have seen Apple um create, you know,
Speaker 1: basically throw up barriers for for companies like Meta to
Speaker 1: you know, to to track people across different websites. That's said,
Speaker 1: just because Apple creates these privacy rules, it's not going
Speaker 1: to stomp um websites and companies from collecting what's known
Speaker 1: as first party data. So that's data inside of Apple,
Speaker 1: data inside of Facebook and and these companies, these these
Speaker 1: big tech giants Apple, Meta, Google and so on. They
Speaker 1: have tons of data that is never going away, and
Speaker 1: this and target advertising is always going to be a
Speaker 1: huge business. The question is, you know, is it the
Speaker 1: growth business that it once was? And I think that
Speaker 1: is to be determined alright bloombox, Max Chafkin, thank you.
Speaker 1: This first six months have been the weakest first half
Speaker 1: for I P O s in years? How long will
Speaker 1: the slow down enlistings way on Wall Street and Silicon
Speaker 1: Valley and venture capital. I want to talk about all
Speaker 1: this in more with Initialized Capital General partner Alda lu
Speaker 1: Dennis Alda. Great to have you here in the studio.
Speaker 1: Great to be here, thank you. So we've seen Sequoia,
Speaker 1: hy Combinator, multiple firms come out with their version of
Speaker 1: R I P good times. What is Initialized take? Well,
Speaker 1: you know, I think what we saw was the news
Speaker 1: sort of trickling down slowly to founders, and I would
Speaker 1: say about a month and a half ago, I was
Speaker 1: hearing from one of LPs about the slowdown and they
Speaker 1: were seeing it in their public markets and their books,
Speaker 1: their public books, and VC sort of got the memo
Speaker 1: from their own LPs. And right now I'm having the
Speaker 1: conversation with our founders about how it really is looking
Speaker 1: like this as a downturn. There's still some denial in
Speaker 1: those ranks and um some defenses about how particular businesses
Speaker 1: may be able to withstand that. But initial initialized take
Speaker 1: is that yes, we are looking at a downturn, and
Speaker 1: we shouldn't panic. We're seed stage investors, so we're in
Speaker 1: the business of taking chances on founders and hoping that
Speaker 1: they'll figure out their business models and uh to conserve
Speaker 1: a little bit of capital for the longer term. The
Speaker 1: big question is how the biggest the downturn going to
Speaker 1: be sure, and I don't think anyone has the crystal ball,
Speaker 1: but at least at the early stage, at scenes stage investing,
Speaker 1: what we're really hoping is that they can find a
Speaker 1: product that people want and that people will want to
Speaker 1: grab out of their hands. And at that stage we're
Speaker 1: always going to be in the business of taking those
Speaker 1: chances and pivoting quickly and trying to find something that
Speaker 1: people watch. What are you seeing are fewer rounds closing
Speaker 1: right now or our founders saying I'm not even gonna
Speaker 1: try to fundraise at this moment. Absolutely, I've been advising
Speaker 1: companies to delay uh, you know, not to go out
Speaker 1: and rush and do a panic fundraise, because I think
Speaker 1: that vcs are exhausted from the last two years of
Speaker 1: really really bullish markets, and I know so many that
Speaker 1: are looking forward myself included to taking some time off
Speaker 1: this summer. And so it's not a great time unless
Speaker 1: you were already planning on fundraising anyway, to sort of
Speaker 1: go out there and shake the trees for some more capital.
Speaker 1: So what should founders do if they need to extend
Speaker 1: their runway? Well, there's plenty of ways to cut costs
Speaker 1: that don't involve raising capital. Uh and certainly um there
Speaker 1: are leases that they may have that they could sublet.
Speaker 1: We actually just put out a blog post about how
Speaker 1: it's possible to um uh even cut maybe say a
Speaker 1: small percentage of your staff or cut everyone back by
Speaker 1: one day a week and that would reduce t of
Speaker 1: uh of your labor expenses, which tend to be you know,
Speaker 1: seven seventy of the overall budget. That's and so you're
Speaker 1: advising layoffs. Well, I wouldn't say we're advising layoffs. I
Speaker 1: think we were are advising to not panic, take time
Speaker 1: to prepare if you actually need to raise capital and
Speaker 1: prepare your story and think about some cost cutting measures
Speaker 1: that may not involve laying off, including UM cutting back
Speaker 1: on expenses like snacks, or cutting back on UH retreats
Speaker 1: for those companies that have gone remote, or cutting back
Speaker 1: on offices. But suggest saying that employee employers cut employee
Speaker 1: from five to four days a week. That's interesting. I
Speaker 1: haven't heard of that before and it's certainly something should
Speaker 1: tell me more about that idea. Yeah, Avery, talking employees
Speaker 1: across the board? Are you talking about contractors? I think
Speaker 1: it depends on the teams that are involved, But certainly, UM,
Speaker 1: I think that we could afford to cut a certain
Speaker 1: amount of days or cut everyone's salary proportionally, and the
Speaker 1: most employees would be happy to accept that because if
Speaker 1: it was looking them looking at the face of getting
Speaker 1: cut entirely, or of their workforce getting cut versus taking
Speaker 1: across the board pay cut, which my husband's company did
Speaker 1: during the start of covid UH, they accepted it and
Speaker 1: they were happy that the cuts weren't deeper. What what
Speaker 1: company was that, I don't know if I can disclose
Speaker 1: on TV and but but they've they've come out of
Speaker 1: the they've come out of COVID just fine, as as
Speaker 1: many companies saying, So let's talk about what initializes looking
Speaker 1: for on the road ahead. I mean, are you still
Speaker 1: looking at are you are you still putting money out
Speaker 1: now or not? Have you also paused your investing? No,
Speaker 1: I mean we're in the business of being optimists. Were
Speaker 1: in the business of looking company looking for companies, and
Speaker 1: I've had the benefit of being an investor and being
Speaker 1: in this market through a couple of downturns, and so
Speaker 1: absolutely we're still looking at pitches, We're still talking to founders.
Speaker 1: But I do think it's true that uh, I personally
Speaker 1: was very very busy over the last couple of years
Speaker 1: and looking forward to taking some time off as my
Speaker 1: kids school ends on Friday. UM. So, when you look ahead,
Speaker 1: what are the sectors, the bets, the trends that you
Speaker 1: think are actually going to flourish in this market? Like,
Speaker 1: what are you most excited about? There's a lot of
Speaker 1: different sectors that I'm excited about. UM. I think that
Speaker 1: for one, I'm interested in the markets that appeal to
Speaker 1: UM you know, consumers that may not have received m
Speaker 1: software transformations in their businesses. Another industry that I'm interested
Speaker 1: in is sort of beauty. I think that's the one
Speaker 1: that has stoed up well in historical downturns UM and
Speaker 1: generally appeals to more female or underrepresented groups of the
Speaker 1: population as far as consumer investments go. And UM, you know,
Speaker 1: I can't. I'd be remiss if I didn't mention our
Speaker 1: funds focus on sort of crypto and with free technologies,
Speaker 1: which is one that we're still actively pursuing. Well, we've
Speaker 1: talked to Gary tan had Nauseam, your partner about those. Um,
Speaker 1: thank you for sharing your view on all that's happening
Speaker 1: with US initialized Capital General partner Paul to luke Gannist. Well,
Speaker 1: they were once bitter rivals, but now Weymo and Uber
Speaker 1: are teaming up. The companies have just announced what they
Speaker 1: are calling a deep, long term partnership. Weymo will connect
Speaker 1: its autonomous trucking operation to Uber Freight. This comes just
Speaker 1: a few months after the companies ended a drawn out
Speaker 1: legal battle over self driving technology. Weymo's trucking service, weymo Via,
Speaker 1: is expected to be running on Uber Freights network within
Speaker 1: the year and what timing. Both ubers EO Dark Casrashah
Speaker 1: and Waymo COO CEO to Quedral Mama Kana. We'll be
Speaker 1: joining us at the Bloomberg Tech Summit tomorrow. Mama Kana
Speaker 1: will be sitting down right here with me on the
Speaker 1: show as well. Coming up, we're gonna get a status
Speaker 1: update on air taxis and exclusive interview with Joe by
Speaker 1: Aviation and our own ed Ludlow joining us from a
Speaker 1: summit on the future of transportation. ED. That's right, and
Speaker 1: we're on the ground, but we're also up in the air.
Speaker 1: We're talking all things that fly, all things that electric,
Speaker 1: all things that our mobility. This is Bloomberg. Let's go
Speaker 1: live now to the up summit in Bentonville, Arkansas. Our
Speaker 1: own at Ludlow live on the ground at this invite
Speaker 1: only gathering of mobility tech CEOs, investors and startups. That
Speaker 1: is over one trillion dollars of assets in the room.
Speaker 1: He's joined out by a special guest. ED. Yeah, and
Speaker 1: it's one guy that everyone wants to speak to, Joe
Speaker 1: ben Vett, CEO of Joe Aviation. We're rubbing shoulders with
Speaker 1: all kinds of people here, right. We have investors, we
Speaker 1: have other CEOs, we have corporates that want to collaborate
Speaker 1: with CEOs, what are you trunting people about? What's your
Speaker 1: message right now? So what's really exciting right now? This
Speaker 1: is an amazing event. It's a convergence of amazing CEOs
Speaker 1: and leaders from around the world were really focused on
Speaker 1: sustainable aviation and how do we reduce the impact on
Speaker 1: our environment from aviation. We're talking electrical vertical takeoff and
Speaker 1: landing flying. I call it flying taxi. Right, let's call
Speaker 1: it what it is, flying taxi. Where are you in
Speaker 1: your cycle at job aviation for making this real? Because
Speaker 1: that's the other conversation that's happening here in the corridors right.
Speaker 1: A lot of this seems a long way in the future. Yeah,
Speaker 1: So we've been working on this for more than a decade. Uh,
Speaker 1: this is a really fantastic future and it's coming true today.
Speaker 1: We've we've been flying full scale aircraft since we've been
Speaker 1: certifying them with the f A since We've had really
Speaker 1: exciting news just today on additional progress with the FA
Speaker 1: on our certification program. So the momentum is really building.
Speaker 1: So it sounds like you have a pretty high opinion
Speaker 1: of f a A and the work, the pace that
Speaker 1: they're doing. Things I've heard from others that are kind
Speaker 1: of frustrated with the FAA because of how restricted they are.
Speaker 1: But but you're happy we wear things stand from our
Speaker 1: regulatory standpoint, the f A has done an incredible job
Speaker 1: in with the industry over decades to make aviation the
Speaker 1: safest mode of transportation that we have. It's orders of
Speaker 1: magnitude safer than any other mode we have. And that's
Speaker 1: really really exciting, and that's what d f a's mission is.
Speaker 1: So asking me about the aircraft themselves, where are we
Speaker 1: in production? What is the target for production over say
Speaker 1: the next few months and next year. So we've we've
Speaker 1: just completed our pilot production facility. This gives us the
Speaker 1: ability to bruise tens of aircraft per year. Um, we
Speaker 1: are we have a close partnership with Toyota and right
Speaker 1: we are uh working with them on the plans for
Speaker 1: our Phase one production facility, which will be able to
Speaker 1: produce hundreds of aircraft per year. So what is the
Speaker 1: idea that you you work with Toyota to learn from
Speaker 1: their experience in manufacturing or you use their facilities. How
Speaker 1: does that clay out in practice? Yeah? So to it
Speaker 1: is amazing. They're they're known around the world for being
Speaker 1: able to build very complex machines UH an incredibly affordable
Speaker 1: price with spectacular reliability. Right. And so when we looked
Speaker 1: at who we wanted to partner with to take this
Speaker 1: to the scale that it needs to go, beyond the
Speaker 1: scale that aviation has ever been done before, we selected
Speaker 1: to it as there's really an ideal partner. I was
Speaker 1: chatting with Alaska Air CEO Ben Minoicucci earlier, and you know,
Speaker 1: he's an engineer just like you, and you know he
Speaker 1: has some skepticism about the use case for battery electric
Speaker 1: in long distance flying in you know, larger aircraft. What's
Speaker 1: your take on that, because you believe it's essential from
Speaker 1: a cobbon standpoint, from an environmental standpoint, absolutely right. And
Speaker 1: he's absolutely right. I've been working on electric aircraft since okay,
Speaker 1: uh We've we've had an order of magnitude improvement in
Speaker 1: the specific energy of batteries over that period of time.
Speaker 1: But we have a real urgent problem that we need
Speaker 1: to solve today. Aviation is one of the highest climate
Speaker 1: impact things we do on a daily basis, right, and
Speaker 1: it's imperative that we reduce that environmental footprint and electric
Speaker 1: propulsion is the solution, but battery electric only moves you.
Speaker 1: It's very valuable when you want to move across town
Speaker 1: or between cities that are close together. When we want
Speaker 1: to move around the planet, the solution is hygrogeneer electric
Speaker 1: hydrogen is three times higher specific energy than jet fuel.
Speaker 1: But that's why we talk about flying taxi. We have
Speaker 1: put emphasis on that. There's also the use case. I
Speaker 1: know that you're focused on the flying taxi, but the
Speaker 1: big name in town is Walmart. You know, they're interesting
Speaker 1: towards me about other use cases. Delivery, it's a possible avenue,
Speaker 1: right yeah, so, uh, we're very excited about moving people
Speaker 1: across town. But there's also a really valuable use case
Speaker 1: in moving goods. And we have an amazing partnership with
Speaker 1: the DoD UH where we are significantly reducing their operating
Speaker 1: costs okay uh significantly uh, improving reliability and making it
Speaker 1: possible for them to move goods around on basis around
Speaker 1: the US people around basis in the US in a
Speaker 1: in a much more efficient case. So that's that's a
Speaker 1: government relationship. That's that's could be lucrative for you. When
Speaker 1: are you going to be meaningfully revenue generating. You know,
Speaker 1: give me a real timeline for when this is a
Speaker 1: substantive business. So we are going to build this slowly. Okay,
Speaker 1: this doesn't We're not going to be able to turn
Speaker 1: it on in UH cities around the world on day one. Again. Today,
Speaker 1: we're building tens of aircraft. Uh in the next few years, right,
Speaker 1: you able to have the capacity to build hundreds of
Speaker 1: aircraft over the arc. We need orders of magnitude more
Speaker 1: aircraft than that, all right, Uh in order to really
Speaker 1: bring this vision to life of being able to move people,
Speaker 1: allow people to live where they want to live, work
Speaker 1: where they want to work. And UH. This this is
Speaker 1: if you think of back back through the epochs of history,
Speaker 1: as we moved from uh walking to riding horses, to
Speaker 1: the railroad and the automobiles. They reshaped our civilization. And
Speaker 1: you think it will do this time. I'm sorry to
Speaker 1: cut you off, jo Van. We we always need more time.
Speaker 1: That's Joe Ben beven CEO j V Aviation and and
Speaker 1: fascinating conversation. He's gonna take me for a ride, he's
Speaker 1: promised me. All right, You'll have to keep us posted
Speaker 1: on how that goes. Thank you. Welcome back to Bloomer Technology.
Speaker 1: I'm Emily Chang in San Francisco. One of the biggest
Speaker 1: threats to the United States could be its lack of
Speaker 1: modern technology inside the government, in part due to bureaucracy,
Speaker 1: from expanding AI capabilities for the military to beefing up cybersecurity.
Speaker 1: There's a very real concern that the US has fallen
Speaker 1: behind in the tech race. My next guest and others
Speaker 1: working in the Biden administration are trying to fix that.
Speaker 1: Joining me now, Kirsten Todd. She's the chief of Staff
Speaker 1: at CEASE of the Cybersecurity and Infrastructure Security Agency. It's
Speaker 1: great to see you in person after interviewing you remotely
Speaker 1: for years. Um, thank you for joining us. Thank you.
Speaker 1: So look, there's this new Pentagon AI chief who wants
Speaker 1: to crack the bureaucratic inertia when it comes to some
Speaker 1: of these issues. How would you rate how modernized US
Speaker 1: technology to fight some of these threats is at this
Speaker 1: moment and how much better do you want it to be.
Speaker 1: I think when we look at where we are, we're
Speaker 1: always assessing the legacy infrastructure, what we're working from, and
Speaker 1: where we're going. I think what's so critical about where
Speaker 1: the Biden administration is today is that you have leaders
Speaker 1: across the government, across agencies at d D the director
Speaker 1: of SISSIGE and easterly Chris Ingliss, the National Cyber Director,
Speaker 1: who all appreciate the value and the need to bring technology,
Speaker 1: modern day technology into government. And there are so many
Speaker 1: efforts that have been legislated over the last year that
Speaker 1: really enforce and encourage that's spending to bring that technology.
Speaker 1: We know that government can't secure the nation or industry
Speaker 1: by itself. We've got to be working together to identify
Speaker 1: the right technologies and bring them in. And we've seen
Speaker 1: a lot of efforts that are actually creating the resources
Speaker 1: and an enormous amount of money. Um SISSA has a
Speaker 1: budget now of over two billion with the newly appropriated
Speaker 1: funds to bring that technology into modernize government and to
Speaker 1: keep it evolving to where the threats are. Last I
Speaker 1: heard there was five hundred thousand open jobs in cyber security.
Speaker 1: Is that for real? And what are the consequences of
Speaker 1: that that all of those jobs aren't being filled? So
Speaker 1: I would even say that the numbers more because when
Speaker 1: we look how much more well I think when we
Speaker 1: look at cybersecurity jobs. Everybody is part of the cyber workforce,
Speaker 1: and when we think about the accountability and responsibility that
Speaker 1: we have in cybersecurity, we all have that role. So
Speaker 1: I'm always hesitant to look at a specific number because
Speaker 1: I think we've they're all these positions. But it also
Speaker 1: pigeon fols what a cyber workforce looks like, and I
Speaker 1: think we often think it's just math and science. But
Speaker 1: one of the things that we're very focused on at
Speaker 1: SISSA is building out a diverse workforce, which isn't just
Speaker 1: about racial diversity, gender diversity, socioeconomic but it's really looking
Speaker 1: at diversity of thinking and aptitudes. And I'm really excited
Speaker 1: that we're going to actually be launching the second Neurodiversity
Speaker 1: Pilot in the federal government, where we're going to be
Speaker 1: bringing neuro diversity neurodiverse individuals into the government to create
Speaker 1: a more inclusive workplace. With the ongoing war on Ukraine,
Speaker 1: how would you rate the level of cyber threats from
Speaker 1: Russia and others at this moment? I think when we
Speaker 1: get what's happened with Russia and the invasion of Ukraine,
Speaker 1: it's a marathon. We don't know where we are in
Speaker 1: the marathon, but this is a long term battle, and
Speaker 1: I think as we see this, we have to appreciate
Speaker 1: what we've learned from this experience so far. One thing
Speaker 1: that CIS launched last August was the Joint Cyber Defense Collaborative,
Speaker 1: which is about operational collaboration with industry, where we're partnering
Speaker 1: in real time with industry. We set up slack channels,
Speaker 1: we developed a plan, we exercise the plan, and now
Speaker 1: we're working not just with our industry partners in the
Speaker 1: United States, but actually with the Ukrainian SEARCH, which is
Speaker 1: the computer Emergency Response team. They've given us information, we
Speaker 1: share that with our industry partners, and we're able to
Speaker 1: see a much better profile and threat picture than we've
Speaker 1: ever been able to see before. Some critics say that
Speaker 1: the war in Ukraine has caught the U. S. Government
Speaker 1: flat footed when it comes to cyber and that we're
Speaker 1: seeing the shifting of responsibility to the private sector. How
Speaker 1: would you respond to that? So, I actually would disagree
Speaker 1: with that pretty strongly, because actually in November we put
Speaker 1: out something called yields Up in anticipation of a potential invasion,
Speaker 1: where we asked industry to do several things. We said,
Speaker 1: lower the threshold for reporting to government. We said, empower
Speaker 1: your sissos, look at things like multi factor authentication. And
Speaker 1: what we've heard from industry systems across the boards that
Speaker 1: that was actually a very helpful tool because it gave
Speaker 1: them a heads up on not what the specific threat
Speaker 1: was going to be, but the need to create resiliency
Speaker 1: within these industry partners. There's an effort to scale up
Speaker 1: and broaden membership in the j C d C. How
Speaker 1: is that effort going, and you know, what would you
Speaker 1: like to see the role of that part of the
Speaker 1: organization be. Ultimately, I think for those of us that
Speaker 1: have been in this space for so long, you know,
Speaker 1: the term public private partnership lost its meeting, and so
Speaker 1: what we're seeing with operational collaboration is this real time
Speaker 1: threat and information sharing. So when we look at building
Speaker 1: this out, we're building it out to where the threat
Speaker 1: has been. So for example, with Russia Ukraine, we brought
Speaker 1: in financial institutions, We brought in the energy sector because
Speaker 1: those are where we had disconcerns about the threats. So
Speaker 1: I think this is one of these very deliberate, dynamic
Speaker 1: processes to bring in the right industry partners as we're
Speaker 1: moving out. So what do you think businesses still need
Speaker 1: to do that they're not doing enough of yet. So
Speaker 1: what we'd love to see I think is important is
Speaker 1: to institutionalize the shields up approach with these efforts about
Speaker 1: lowering the threshold for reporting and being able to empower
Speaker 1: as systems. But importantly, I think we're at a place
Speaker 1: now where we need to ensure that security is innovation,
Speaker 1: that secure innovation is the next step where security is
Speaker 1: a differentiator. We talk a lot about baking security into
Speaker 1: products that would go a long way right now, but
Speaker 1: the ability to see security as a positive effort. You know,
Speaker 1: if we start to see startups take on security as
Speaker 1: something that's an advantage and starting to make the business
Speaker 1: case for why to build this in, I think we'll
Speaker 1: see a lot of progress. And then I have to
Speaker 1: make a plug for multi factor authentication. We launched our
Speaker 1: multi factor authentication campaign this week. We're calling it more
Speaker 1: than a password, just getting everybody to take that on.
Speaker 1: The only other piece that I'll mention is that organizations
Speaker 1: focus so much on their own security, which is critical,
Speaker 1: but now we have a responsibility with the increased threat
Speaker 1: landscape to really secure the digital ecosystem, look at small
Speaker 1: businesses and other elements so that we can raise the
Speaker 1: resilience of both the public and private sector. All right,
Speaker 1: Kirsten Todd of SSA, thank you so much for joining us.
Speaker 1: Good to see you, Great to see you. I'm like,
Speaker 1: thank you, thank you. Kirsten is one of the many
Speaker 1: featured speakers at our Bloomberg Tech Summit tomorrow again. That
Speaker 1: starts noon Eastern nine am Pacific. We're gonna be talking
Speaker 1: about cybersecurity, gaming, travel, crypto e commerce, and a whole
Speaker 1: lot more. Coming up, we'll look at crypto e t s.
Speaker 1: How are they faring against the wider crypto winter we'll
Speaker 1: discuss This is Bloomberg time now for our Crypto report
Speaker 1: and a look at crypto l A t f s,
Speaker 1: which are overrepresented in the industry's worst performing list so
Speaker 1: far this year. Are crypto contributional I bosst here with more.
Speaker 1: Shanelle explain what's happening here. Yeah, what's interesting to me,
Speaker 1: Emily is that when you look at the decline in bitcoin,
Speaker 1: which is a little over thirty percent on the year,
Speaker 1: and you look at what's happening in the t F world,
Speaker 1: which are often tied to stocks tied to bitcoin, the
Speaker 1: performance is actually much much worse. Sometimes in case almost
Speaker 1: twice as bad. Bloomer's critic Gryfil found that the six
Speaker 1: worst performing non leveraged e t f s we're all
Speaker 1: tied to crypto company. So what does that mean? Global
Speaker 1: X Blockchain down sixty this year, van Act Digital Transportation
Speaker 1: with the ticker d APP down sixt fix here again
Speaker 1: nearly double what you're seeing in bitcoin itself, and nearly
Speaker 1: double what you're seeing in the likes of Bitcoin Future
Speaker 1: ETFs like Beto, so b a t O so they
Speaker 1: again they're holding the likes of coin Base, Riot Blockchain,
Speaker 1: Marathon Digital, Galaxy Digital. We've talked about this before. The
Speaker 1: equites that are trading alongside Bitcoin have seen a bigger
Speaker 1: drop off this year in many regards, and that's what
Speaker 1: you're seeing in the ts all right nationally. Thanks for
Speaker 1: that update. I want to talk about all that and
Speaker 1: more with Matthew Ball, managing partner at a Billion Co
Speaker 1: and Matt Hogan, CIO at bit Wise Asset Management. Both
Speaker 1: of you are out with your own news together launching
Speaker 1: a new index fund along with multi Coin Capital Matthew,
Speaker 1: I'll start with you tell us more about this new
Speaker 1: fund and how it works. Sure, So, the goal with
Speaker 1: the new fund was really to provide qualified purchasers an
Speaker 1: opportunity to invest in a diversified, expertly constructed thematic index
Speaker 1: of crypto tokens forties specifically that are consistent with the
Speaker 1: metaverse theme. Our goal was to take a look at
Speaker 1: the entire ecosystem, focus on bona fite liquidity tested, stress
Speaker 1: tested securities, and to provide yet another diversified access path
Speaker 1: to a multi trillion dollar investment opportunity. So, matt the
Speaker 1: fund is only open to qualified purchasers. How do you
Speaker 1: identify those? Sure? Great question, Emily. Qualified purchasers are individuals
Speaker 1: in the US that have five million or more in
Speaker 1: liquid assets. So this is one quarter of the market.
Speaker 1: A big story about crypto is it's often cracked open
Speaker 1: the market in these areas before it's expanded. The metaverse
Speaker 1: is obviously a very exciting and very early opportunity, and
Speaker 1: that's why it's most appropriate for this qualified purchaser market. Eventually,
Speaker 1: we'd love to open it up more broadly, but that's
Speaker 1: where we are today. Now, Matthew, your metaverse e t F,
Speaker 1: which we've talked a lot about, is down almost so
Speaker 1: far this year. Yes, so much of the market is down.
Speaker 1: But you know why should investors think that this et
Speaker 1: F is the right call? Well, I think the perspective
Speaker 1: on the met V e t F is it's about
Speaker 1: down year to date. That compares to about for the
Speaker 1: triple queues. A reflection of the fact that we are
Speaker 1: over indexed to growth companies commensurate with the expectation that
Speaker 1: over the coming decade. Goldman Sachs City Morgan Stanley estimate
Speaker 1: that between eight and thirteen trillion in annual GDP will
Speaker 1: come from this sector. That's fort of the digital economies
Speaker 1: growth and fifteen percent of the world economy. Over Indexing
Speaker 1: to growth is often a good play. Year to date,
Speaker 1: it has proven not to be as relates to this
Speaker 1: specific product. I see it as yet another asset class
Speaker 1: that too many, ourselves included, believe is essential. I'm an
Speaker 1: early stage and late stage private investor. The e t
Speaker 1: F is designed for public markets exposure, and this product
Speaker 1: is designed for the cryptocurrency and blockchain environment. So this
Speaker 1: is really about you see on the future, Matt, how
Speaker 1: do you see this fund evolving. Let's say five years
Speaker 1: from now. Oh, I think it's going to be a
Speaker 1: very big deal. You know, if you talk about the
Speaker 1: metaverse and you don't look one year out or two
Speaker 1: years out, but five years or ten years out. I
Speaker 1: think a lot of people feel confident that our immersion
Speaker 1: in the digital world is going to increase, and that's
Speaker 1: going to mean that these assets, which are really the
Speaker 1: core infrastructure on which an open metaverse will be built,
Speaker 1: should grow, should become common names, and we should get
Speaker 1: more and more assets in the fund. So we're very
Speaker 1: early in this opportunity. I suspect five years from now
Speaker 1: this will be, as Matt said, a much larger asset class.
Speaker 1: These assets will be much more familiar. But investors do
Speaker 1: have the opportunity to access them today. They're able to
Speaker 1: get in early on this decade long mega trend. So
Speaker 1: I would love to get your thoughts, Matt on on
Speaker 1: the crypto winter that just seems to be ongoing and
Speaker 1: colder on some days than others. We can't seem to
Speaker 1: Bitcoin can't seem to break out of this thirty thousand
Speaker 1: dollar route. You know, where is this going? How long
Speaker 1: does it last? Yeah? I think what we've seen is
Speaker 1: a macro induced crypto winner. We've seen a rewriting of
Speaker 1: all growth investments, and that includes crypto. If you look
Speaker 1: under the hood, the sort of fundamentals of crypto continue
Speaker 1: to be strong. Venture capital activity is strong, Developer activity
Speaker 1: is strong, new project and launches are strong. Companies like
Speaker 1: coin based are doing interesting things. So underneath the surface,
Speaker 1: all this great activity is going on. We need the
Speaker 1: macro markets to normalize and then you'll see the impact
Speaker 1: of that fundamental progress. I suspect we still have a
Speaker 1: few months to go before those macro markets normalized, but
Speaker 1: once they do, at least historically, what you've seen is
Speaker 1: crypto rebound aggressively because the underlying trends are just so positive,
Speaker 1: and that continues to be true in this market. You know, Matthew,
Speaker 1: it can be hard for investors to believe in in
Speaker 1: this view of the future, whether it is crypto or
Speaker 1: the metaverse. The Queen Jubilee was this week. We saw
Speaker 1: a hologram of the Queen in a carriage. You tweeted
Speaker 1: about it. How do you see this as uh, you know,
Speaker 1: an indication of where the metaverse and some of these
Speaker 1: future technologies are headed. The monarchy verse as you say,
Speaker 1: I think the most important thing is to recognize that
Speaker 1: the advent of graphics based computing using three D simulation
Speaker 1: to solve problems that previously we're outside of our reach,
Speaker 1: while also recognizing that younger generations, in particular I grew
Speaker 1: up using text My identity was reflected by an email
Speaker 1: address and a message board user name. Slowly grew into
Speaker 1: more and more multimedia, more live experiences, and now we see,
Speaker 1: through roadblocks, Minecraft and others, an entire new generation gen
Speaker 1: Z that is reflecting themselves through three D objects, three
Speaker 1: D avatars existing in three D space. The confluence of
Speaker 1: graphics based computing on the industrial side, mixed with societal
Speaker 1: and behavioral changes among younger demographics, boasted by new technological
Speaker 1: paradigms such as blockchain and imminent XR hardware, gives me
Speaker 1: confidence in what's around the corner. Holograms and holography, a
Speaker 1: field that we previously believed was just for Star Trek
Speaker 1: and the Jetsons, is actually imminent. We're going to see
Speaker 1: it deployed globally in retail stores over the coming years.
Speaker 1: All Right, We'll be watching Matthew Ball Appillion co Matt Hogan,
Speaker 1: bit Wise Asset Management. Good to have you both. We'll
Speaker 1: keep our eyes on your E T F. Apple pay
Speaker 1: Later lets you split the cost of an Apple Pay
Speaker 1: purchase into four equal payments spread over six weeks, with
Speaker 1: zero interest and no fees of any kind. And Apple
Speaker 1: pay Later is available everywhere Apple Pay is accepted in
Speaker 1: apps and online. That was Apple, they're officially unveiling it's
Speaker 1: new by now pay later service, Apple pay Later, allowing
Speaker 1: customers to split purchases through Apple Pay with four payments,
Speaker 1: interest free over six weeks. That announcement initially caused shares
Speaker 1: of a firm which offers a similar service to fall,
Speaker 1: but they've rebounded, joining me now exclusively in this week's
Speaker 1: edition of Teconomics is a firm CEO and co founder
Speaker 1: Max leve Kiction. So Max is big question of what
Speaker 1: this means for a firm and other b n p
Speaker 1: L services. We want to know how big your mote is.
Speaker 1: A firm is lined up big merchants that are you know,
Speaker 1: very much embedded in what you offer, like Walmart, Amazon,
Speaker 1: Major airlines, Shopify. Will Apple be able to penetrate all
Speaker 1: these merchants? So, first of all, thank you for listening
Speaker 1: out our motes. I think they're quite significant, just as importantly,
Speaker 1: and that's really not why I'm not particularly worried about
Speaker 1: Apple pay entering the biopulator space. They're focused on the
Speaker 1: convenience of a six week product, which I think is great,
Speaker 1: and there's plenty of competitors, and they should be worried.
Speaker 1: I think this spells certain level of concern for folks
Speaker 1: that are really specialized in this really short term product.
Speaker 1: We spent ten years building out technology, data partnerships, integrations,
Speaker 1: really really good underwriting models so that we can offer
Speaker 1: consumers plans from six weeks to sixty months that is
Speaker 1: unique and different and special, and it involves not just
Speaker 1: data and underwriting, also involves capital partnerships figuring out how
Speaker 1: to manage capital markets in you know, rising interest r environments, etcetera.
Speaker 1: So we feel very very good about just to sheer
Speaker 1: complexity of what we do protects us really well. That said,
Speaker 1: I'm genuinely excited for two reasons about Apple pleat or One.
Speaker 1: They chose the right thing by consumers. The no late fees,
Speaker 1: no gimmicks, no tracks, no fees of any kind. That's
Speaker 1: a really the right message. And it sends the right
Speaker 1: statement to the rest of the world. Credit cards, frankly
Speaker 1: have some real competition, and it's great to to hear
Speaker 1: companies powerful as Apple say that out loud, there's a
Speaker 1: better alternative. And part two, I think just telling the world,
Speaker 1: telling the consumer that this is a thing, this is
Speaker 1: the thing that better than your credit card, including perhaps
Speaker 1: Apple's own credit card, is great. So we feel like
Speaker 1: this creates a really nice tail wind for US. But
Speaker 1: Apple does have a huge potential base of one billion
Speaker 1: iPhone users that has to be too big for even
Speaker 1: the largest merchants to ignore. How do you think about that?
Speaker 1: And mean are you are you preparing for a cut
Speaker 1: of what you know a firm now gets and you
Speaker 1: know buy now pay later requests to go to Apple.
Speaker 1: You know, I think in the world of TRUSI or
Speaker 1: some maybe that's what I've been a concern. But just
Speaker 1: for context, in the US, buy Now Pay Later is
Speaker 1: I believe some five percent of e commerce and of
Speaker 1: commerce overall, it's really tiny. I don't think there's much concern.
Speaker 1: When Paypall announced their entry into the space, also was
Speaker 1: the six weeks product. I think everyone was sort of
Speaker 1: pulling their breath a little bit. And we've stated at
Speaker 1: the time that this just isn't going to register in
Speaker 1: our world because there's just so much ground to cover.
Speaker 1: We're all competing with credit cards, and credit cards are
Speaker 1: competing with cash. There's a lot of room to grow
Speaker 1: for all involved. So no, not concern all. I have
Speaker 1: to ask about your broader view on the macro environment.
Speaker 1: Elon Musk says he has a super bad feeling about
Speaker 1: the economy. Tesla laying off ten percent, Klara buy now,
Speaker 1: pay later competitor again, maybe not apples to apples, but
Speaker 1: they're laying How do you feel about the economy? Does
Speaker 1: a firm have any layoffs or hiring freezes planned? We're
Speaker 1: not just not laying off, sorry for double negative, We're
Speaker 1: actually hiring. Um I think laying off is you know,
Speaker 1: no comment on Eline, he's got feelings that I only
Speaker 1: wish I could match. But I think in my world,
Speaker 1: when you feel the need to hire, that means you
Speaker 1: haven't done the necessary thinking and working in the past.
Speaker 1: And so we are hiring because we have real needs
Speaker 1: to grow the product, to build new things, to deliver
Speaker 1: value to consumers and merchants. Most importantly right now as
Speaker 1: the economy taters on. You know, Kuno's recession, down tourn
Speaker 1: whatever it is, it's not. You know, it's going to
Speaker 1: get worse before it gets better. We have a mission
Speaker 1: to deliver spending power in a responsible way to consumers
Speaker 1: and to improve the top line and growth of our
Speaker 1: merchant partners, and we take it very, very seriously. We're
Speaker 1: gearing up for time to shine, for growth, for new products,
Speaker 1: new ways of delivering value, and that's why we need
Speaker 1: more people. There's certainly no no, no, no time to
Speaker 1: rest for us. We have a lot of words to do.
Speaker 1: A keyword you just use there is responsible. We are
Speaker 1: hearing more and more stories of especially young people, getting
Speaker 1: in trouble with buy now, pay later. Are you doing
Speaker 1: more to warn some of your potential customers about the
Speaker 1: risks of taking out a number of small, different loans
Speaker 1: and the longer term impact it could have. I mean,
Speaker 1: as we've talked about, this has drawn the scrutiny of regulators.
Speaker 1: First of all, I mean I've said it before, but
Speaker 1: I'll repeat it. I think it's really important that the
Speaker 1: regulators understand how this particular flavor works. I think as
Speaker 1: they dig in deeper, they will see that this is
Speaker 1: a better product than a credit card, simply because credit
Speaker 1: cards essentially allow you to refinance your own debts in perpetuity,
Speaker 1: which is not that different from paida lending. And so
Speaker 1: I think it's really really important that regulators see what
Speaker 1: by now pay lator can do, which I hollly believe
Speaker 1: is a healthier can shumor product. Too. It is really
Speaker 1: important for consumers to understand when they're overextended. The underlying
Speaker 1: reason why we chose to never charge lafees was that
Speaker 1: we are permanently aligned with the borrower. If the borrower
Speaker 1: is late, banks and credit cards make more money. That
Speaker 1: is a bad misalignment of interest, especially in a downturn.
Speaker 1: We don't make a penny if consumers can pay us
Speaker 1: back if they're late. We just have to find a
Speaker 1: way of not making the mistake again, basically, and so
Speaker 1: this lack of lafees is a really powerful motivator for
Speaker 1: us to design products and to approve only as far
Speaker 1: as we believe people will pay us back. And that's
Speaker 1: one side of it. The other side is you have
Speaker 1: to help people build their credit history. Firm has always
Speaker 1: reported with those industries laying us furnished information to the bureaus,
Speaker 1: specifically so that the consumers can build their history with
Speaker 1: the credit bureaus. Majority of my competitors don't do that.
Speaker 1: I think it's a really really important social mission and
Speaker 1: we're very committed to that as well. So we feel
Speaker 1: like we're doing a lot to be on the right
Speaker 1: side here and we'll certainly do more. Exelection CEO and
Speaker 1: co founder of a firm, Thanks for joining us so
Speaker 1: quickly on the back of that Apple announcement. Appreciate hearing
Speaker 1: your perspective, and that doesn't for this edition of the show.
Speaker 1: We've got a huge day tomorrow. The Bloomberg Technology Summit
Speaker 1: is happening. The theme is looking Forward. Andy Jazzy, the
Speaker 1: CEO of Amazon, Dar Kasra Shah he at uber too,
Speaker 1: Kedram Wakana of Weymo, the CEO of MasterCard as well