Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in silicon vallet and beyond. This is Bloomberg technology with
Speaker 1: Emily Jay. I'm Emily Jack in San Francisco, and this
Speaker 1: is Bloomberg technology. Coming up in the next hour. TIKTOK
Speaker 1: is under fire over a challenge that involves cooking chicken
Speaker 1: with NAI quill. N Have the details on the stunt
Speaker 1: that led to a warning from the F D A.
Speaker 1: Will slayer hippo is looking for the next big thing
Speaker 1: after closing two million dollars in new funding. I'll talk
Speaker 1: to Eric Hippo about their next move. And first on Bloomberg,
Speaker 1: outgoing CEO, crack of crack, and Jesse Powell talks about
Speaker 1: why he is stepping down. Also, we'll ask what you
Speaker 1: thinks about JP morgans. You, Jamie diamond, calling crypto tokens
Speaker 1: decentralized ponzi schemes. Turning to the two big stories regarding Tiktok,
Speaker 1: the F D A has issued a warning that a
Speaker 1: new tiktok challenge could be dangerous, the so called sleepy
Speaker 1: chicken challenges, when people cook their chicken in Ni Quill. Meantime,
Speaker 1: TIKTOK will ban fundraising and all other money making opportunities
Speaker 1: for politicians and government accounts on the platform here to
Speaker 1: discuss Bloomberg's Alex barrinkle. Let's start with the challenge. How
Speaker 1: big did this one have to get for the F
Speaker 1: D A to weigh in? It got big enough for
Speaker 1: parents and folks to complain, which is typically what happens
Speaker 1: with these companies. Um, the social platforms will play a
Speaker 1: little bit of whack a mole Um searching down these challenges,
Speaker 1: these fads. We saw it with a really dangerous tide
Speaker 1: pod challenge of a few years ago on some of
Speaker 1: the other social platforms. But this one, emily, Um, the
Speaker 1: sleepy chicken challenge, it does seem like tiktok snuff this
Speaker 1: one out. If you search for that term right now
Speaker 1: in the APP, it sends you to a warning basically
Speaker 1: about dangerous challenges and dangerous fads. I will say there
Speaker 1: are a lot of kind of Um, scary type challenges,
Speaker 1: weird information that POPs up on the platforms that doesn't
Speaker 1: always get folks like the FDA to get involved. So
Speaker 1: clearly this was one that they felt like they needed
Speaker 1: to jump in on. And Emily, I will say you
Speaker 1: search for sleepy chicken. Those posts have been taken down.
Speaker 1: You search for some names that are misspelled or you
Speaker 1: had a few letters in there and those words are
Speaker 1: still up, which I just think illustrates the challenge these
Speaker 1: platforms have when it comes to locking down a misinformation
Speaker 1: like this. Yeah, we found some of them but decided
Speaker 1: not to show them to our viewers for obvious reasons.
Speaker 1: Um and and perhaps even bigger news, this decision on
Speaker 1: politicians and governments and not allowing them to make money
Speaker 1: on the platform. Can you explain how this works? Sure,
Speaker 1: of course. TIKTOK came out today basically with a pretty
Speaker 1: significant expansion of its ban on political ads political content
Speaker 1: ahead of the U S midterms. In in the past, historically,
Speaker 1: Tiktok has banned political advertisements from governments, from politicians. Now
Speaker 1: it's taking that a step further and saying these individuals
Speaker 1: also cannot fund raise. So there is no soliciting of
Speaker 1: campaign donations, there's no asking for money if you're a
Speaker 1: politician or you're a government or government entity. They also
Speaker 1: are banning these accounts from accessing any of the money
Speaker 1: making tools on the platform. That can be things like
Speaker 1: tipping from users or gifting or things like the Creator Fund,
Speaker 1: which is a fund Um that pays out users with
Speaker 1: a lot of followers for the number of views and
Speaker 1: engagements they get on the APP. So you've heard this
Speaker 1: argument before, Emily from TIKTOK. You heard Tiktok CEO in
Speaker 1: front of a Senate panel make this argument last week.
Speaker 1: Tiktok likes to attest that they are an entertainment platform,
Speaker 1: they're not a place for politics. Some of these Um
Speaker 1: prohibitions and moderating of the of this type of content
Speaker 1: kind of backs that up. Um, but it is a
Speaker 1: very notable kind of piece of News, particularly in this
Speaker 1: election season and as we start to get fired up
Speaker 1: about the next presidential election, which will come closely on
Speaker 1: the heels of the mid terms this year and quickly.
Speaker 1: How does this compared to what Meta, instagram, you know, twitter,
Speaker 1: have done in terms of their stance on politicians making money?
Speaker 1: Absolutely so. TIKTOK and twitter both have completely banned political ads.
Speaker 1: So there is no kind of money making there. On
Speaker 1: metas platform, facebook and Instagram, those ads are still able
Speaker 1: to be up there. I've still seen content on those
Speaker 1: platforms soliciting donations. So it does seem like Tiktok is
Speaker 1: taking a step further than some of its big tech peers. Um.
Speaker 1: But you know, as this evolves in social media platforms
Speaker 1: tend to exchange ideas. It will be a place that
Speaker 1: I'll certainly be watching them more closely, particularly if there's
Speaker 1: any kind of duff steps with facebook or instagram in
Speaker 1: this election season. All right, Bloomberg's Alex Barenka. Thank you
Speaker 1: very much, Claire. Hippo, one of New York's top venture
Speaker 1: capital firms, just announced plans to invest two thirty million
Speaker 1: dollars across a couple of fun that seed at earlier stages.
Speaker 1: Ben Lair is also back as a full time investor.
Speaker 1: He Co founded the firm before becoming the CEO of
Speaker 1: group nine media, which sold to Fox media. Joining me out,
Speaker 1: Eric Hippo, managing partner at Lara Hippo. Eric, great to
Speaker 1: have you back with us. Curious with the fundraising environment
Speaker 1: was like for these two funds, given a very challenging
Speaker 1: macroeconomic backdrop. Yes, hi, emily, good to be with you.
Speaker 1: The majority of these new funds were in fact ways
Speaker 1: last year. Uh and uh, and you know we have
Speaker 1: this is our twelfth year. Were these our fund aid
Speaker 1: and select force or early stage on late stage number eight,
Speaker 1: late stage number four. So we we we've done quite
Speaker 1: well and we have very loyal lps. We've we've been
Speaker 1: able to capture some new LPS as well. So it
Speaker 1: hasn't been really it's it's it hasn't been exceptionally hard. Um,
Speaker 1: I would imagine that today for new funds it would
Speaker 1: be pretty difficult. So how is the changing macro environment
Speaker 1: changing your strategy and where you're going to place your bats?
Speaker 1: So we, we have are quite well known for our
Speaker 1: consumer companies, companies like what we parker and Casper and
Speaker 1: all birds and glassier and many others, Um and, but
Speaker 1: in the in the more recent years, we've also been very,
Speaker 1: very focused on B two B, on enterprise software. We're
Speaker 1: less known for that, but we do over half of
Speaker 1: our investments in those areas and those are at the
Speaker 1: moment very exciting and we're looking forward to kind of
Speaker 1: balancing our humor business with our with our B Two
Speaker 1: B business. Now venture capitalists are announcing big funds left
Speaker 1: and right, but it seems like there's not a lot
Speaker 1: of places to put this money. I mean, is there
Speaker 1: just a lot of dry powder sitting on the sidelines. That's,
Speaker 1: you know, piling up. You know, while valuations come down
Speaker 1: and the economy resets, there is, there is a record
Speaker 1: amount of dry powder. As you say. What we're finding
Speaker 1: is that funding at the seed and Prese level, which
Speaker 1: is our specialty, uh, you know, continues and the normal,
Speaker 1: normal pace series a as well, is Um. You know,
Speaker 1: our companies are getting funded at the series there, but
Speaker 1: where things are much slower is in the later stages,
Speaker 1: series B and beyond, and that's going to do with
Speaker 1: the fact that late stage investors, Um, are really not
Speaker 1: sure about how the price, how the value companies. But
Speaker 1: as soon as the market kind of settles in the
Speaker 1: later stage, they be plenty of money to be put
Speaker 1: to work. So are you waiting for valuations to come down?
Speaker 1: Is that sort of what I hear you're saying? In
Speaker 1: in where we invest at the seed valuations have moderated.
Speaker 1: They haven't yet come down to uh, kind of three levels.
Speaker 1: But you know, we we take the very long view, uh,
Speaker 1: and so we invest in a good year and a
Speaker 1: bad year. You know our companies are going to start
Speaker 1: maturing years down the road. Um. So we um, you know,
Speaker 1: we we we find valuations to be more attractive to them,
Speaker 1: for sure. But more importantly, we have more time to
Speaker 1: do our work. There isn't a frenzy than existed last
Speaker 1: year where people wanted to close their rounds in a
Speaker 1: matter of days. Now we're back at being able to,
Speaker 1: you know, close around in a matter of weeks, giving
Speaker 1: US plenty of time to do our work and our
Speaker 1: due diligence. So what's your take on you know, I
Speaker 1: mean another reading from the Fed? Great like seemed to
Speaker 1: be continuing. How is that impacting your outlook? The biggest
Speaker 1: impact for, you know, venture capital at the moment it
Speaker 1: has to do with the fact that that the I
Speaker 1: P O market is is dead in the water Um,
Speaker 1: and so companies that wanted to go public this year
Speaker 1: are postponing that particular event, and that always has an
Speaker 1: effect on the M and a market as well. If
Speaker 1: if the I P O market is slow, the M
Speaker 1: and a market is slow as well. So, uh, you know,
Speaker 1: last year we saw a record amount of liquidity. We
Speaker 1: returned an absolute record of uh back to our limited partners.
Speaker 1: This year is much slower, but again, we take the
Speaker 1: long view. You'll have a down year, you'll have an
Speaker 1: up here it over a period of time. Uh, it
Speaker 1: doesn't really matter. Hi, uh, Eric Capo of Laro Harpo.
Speaker 1: Always going to have you here, Eric. Thank you all right.
Speaker 1: Coming up, crack and see you. Jesse Powell stepping down.
Speaker 1: What does it mean for the future of the CRYPTO exchange?
Speaker 1: Our conversation with him coming up next. This is Bloomberg.
Speaker 1: All right, quick check of the markets again. I want
Speaker 1: to bring back our Ed Ludlow, who's been watching a
Speaker 1: few more things. And what else is catching your iron? Yeah,
Speaker 1: I mean there was just so much that happened on
Speaker 1: Wednesday afternoon. As a reminder, the Fed did raise rates
Speaker 1: by seventy five basis points, and the Hawk isher prize
Speaker 1: was where rates go from here. Officials saw four point
Speaker 1: three percent by the end of four point six PC,
Speaker 1: terminal rate going into three or in. And behind me
Speaker 1: US some kind of the corners of the technology market.
Speaker 1: Right was the mega caps and some of the U
Speaker 1: S shares of Chinese list of tech companies that fell
Speaker 1: the most all told. Look at the NYC Fan Class Index,
Speaker 1: down two point six percent. And then we talked about
Speaker 1: why do we keep going on about interest rates and
Speaker 1: why every day do I stand in front of you
Speaker 1: and say rates are projected to do this, because higher
Speaker 1: rates discount the present value of future profits. For a
Speaker 1: lot of these tech companies, including the mean stocks, including
Speaker 1: the nonprofitable sector corners of the tech market, they haven't
Speaker 1: got any profit anyway. They're trading at very high multiple.
Speaker 1: So that was an area of the market that we
Speaker 1: look to. A really interesting part of the market as well.
Speaker 1: Wednesday was aerospace and defense. You heard President Putin of
Speaker 1: Russia talking about mobilizing troops and talk about an excitation
Speaker 1: of certain parts of Ukraine. Of course that war ongoing.
Speaker 1: At first defensive in aerospace stocks have been much, much higher,
Speaker 1: but actually post fed paired their gains to be to
Speaker 1: a decline of nine percent. Some breaking headlines crossing the
Speaker 1: Bloomberg terminal in the last few minutes from salesforce, one
Speaker 1: of the companies you and I do discuss more often
Speaker 1: m which is up now three in after hours, the
Speaker 1: company saying it has a four year revenue target of
Speaker 1: fifty billion dollars. Why does that matter? Well, to give
Speaker 1: you some context, in four year twenty one salesforce had
Speaker 1: revenue of around thirty five billion dollars. So it's part
Speaker 1: of their invested day presentation in the Bay area in
Speaker 1: San Francisco and Wednesday they've been telling investors kind of
Speaker 1: what their longer term expectations are, and that expectation is
Speaker 1: to boost revenue, revenue on a four year basis in
Speaker 1: a very meaningful way, to have fifty billion dollars of
Speaker 1: sales by four year, twenty six, and I know over
Speaker 1: the coming days and weeks we'll keep a close eye
Speaker 1: on that stock end absolutely. I'm actually interviewing salesforce coast
Speaker 1: at your Mark Benny off tomorrow at Dream Force. We're
Speaker 1: going to get his thoughts on the market moves and
Speaker 1: his broader outlook. I'm also curious what he thinks about
Speaker 1: the big FIGMA deal, Adoba buying Figma for twenty billion
Speaker 1: dollars in the middle of a downturn, and it'll be
Speaker 1: interesting to get his thoughts, given salesforce butts black for
Speaker 1: twenty seven billion dollars, which I believe was the biggest
Speaker 1: tech deal ever at the time. Um and and and
Speaker 1: and certainly will be interesting to get his thoughts as
Speaker 1: the Fed continues to make these decisions. Yeah, well, he's
Speaker 1: not a guy that's short of opinions. Mzy I mean,
Speaker 1: let's be honest, he's got an opinion and everything, but
Speaker 1: he's no stranger to M and a either. Not just
Speaker 1: that deal that you mentioned, but I think that's a
Speaker 1: mule soft right. And actually salesforce gone a little bit
Speaker 1: quiet in recent weeks and months. You and I used
Speaker 1: to cover them quite a lot pre pandemic period and
Speaker 1: entering the during the pandemic period, because this is obviously
Speaker 1: a company that has decent sales, but also it's a
Speaker 1: really high margin business and at the same time, Benioff
Speaker 1: is a man of many passion projects and I'm sure
Speaker 1: you'll discuss those of him too. Absolutely it's going to
Speaker 1: be a great one coming up on Thursday show Ed.
Speaker 1: Thank you. Meantime, as climate week is in full swing
Speaker 1: in New York, California Governor Gavin newsom spoke about the
Speaker 1: state's climate challenges and how to avoid blackouts like those
Speaker 1: we've seen it in past years here in the state.
Speaker 1: He spoke with my colleague David Weston from the sidelines
Speaker 1: of United Nations climate action, race to zero and the
Speaker 1: resilience form supported by Bloomberg Phil anthropies. Take a listen.
Speaker 1: We were distress tests in the most extreme had no blackouts.
Speaker 1: We were challenged, but we kept our wits and we're
Speaker 1: keeping our agenda and we're maintaining our policy principles. That,
Speaker 1: I think, will allow us more resilience in the future.
Speaker 1: So No, I don't think you have to sacrifice one
Speaker 1: for the other. I would argue not. Transitioning is the
Speaker 1: bigger risk in the bigger soccer. Transition is an important
Speaker 1: word in that sentence. It's not all of one or
Speaker 1: all the others, because a lot of experts sake. Yes,
Speaker 1: certainly we have to get to renewables, but you can't
Speaker 1: just give up, for example, on natural gas that that
Speaker 1: is actually part of the path for the transition. You
Speaker 1: do you agree with that? Under percentage bact we were
Speaker 1: able to keep the lights on because we kept a
Speaker 1: lot of our ones through cooling plants online. We were
Speaker 1: able to do backup generators. We are not naive about
Speaker 1: the situational challenges, but that doesn't mean we' and accelerate.
Speaker 1: I'll give you an example. In areas like battery stories,
Speaker 1: we have the largest installed battery projects on planet Earth.
Speaker 1: It was two fifty megawats. Two and a half years ago,
Speaker 1: close to four thousand megawats. Say It's our largest power
Speaker 1: plant today. That's just in two and a half years.
Speaker 1: Look at what we can do in five, ten, fifteen years.
Speaker 1: So I think people are naively assuming we're not capable
Speaker 1: of doing so much more with the Innovation and entrepreneur
Speaker 1: spirit that finds the best of this country. Enormous growth
Speaker 1: in your battery capacity. You said where you could go.
Speaker 1: Where do you need to go in order to get
Speaker 1: to zero emissions? I mean, look, we have very ambitious
Speaker 1: goals to carbon neutrality, not in at zero. Carbon neutrality
Speaker 1: is five. We've established interim goals of clean energy on
Speaker 1: our electricity grid by five and of course we have
Speaker 1: the ZV man date, which is the most aggressive of
Speaker 1: any jurisdiction, certainly in the United States one of the
Speaker 1: few in the world. So we have to do multiple
Speaker 1: it is probably six gigawatts a year uh to move
Speaker 1: things along. And here's how we do it. It's not
Speaker 1: just putting unprecedented money to back up these technologies and
Speaker 1: tax and centers, which we have. That the four billion
Speaker 1: dollars of new incremental investments, setting the most aggressive policies
Speaker 1: to get the private sector to invest and fill the gaps,
Speaker 1: but also the biggest issue that we face. It's time
Speaker 1: two project deliver, not just from a supply chain perspective,
Speaker 1: but permitting perspective. The NIMBIISM huge issue, and so we
Speaker 1: did something profound this year. We have completely knocked out
Speaker 1: all of those barriers and we put in rigid timelines
Speaker 1: to get projects permitted and go through a judicial process
Speaker 1: at their challenge, and that, we think, is a game changer.
Speaker 1: Anything I read about this says carbon capture is critical,
Speaker 1: and I know that's an important part of your strategy.
Speaker 1: At the same time, how we're really taking carbon capture
Speaker 1: to scale, to the sale? You needed to be particularly
Speaker 1: out of the air. Not yet. We have direct our
Speaker 1: capture a number of companies in California. In fact, they're
Speaker 1: demonstrating that in Wyoming as we speak. We worked with
Speaker 1: the oil industry. You never believe that, since I just
Speaker 1: to referendum against our efforts on our setbacks, health and
Speaker 1: safety setbacks. But now carbon capture, sequestration. We want to
Speaker 1: invest in that and, by the way, that's an important
Speaker 1: point you're making. We were able to find some balance
Speaker 1: in that space a few years ago our mental justice community.
Speaker 1: Others were like no, we don't want to have that conversation.
Speaker 1: Green hydrogen didn't even want that conversation. So we've been
Speaker 1: accelerating on all fronts. Recognize that we need a d
Speaker 1: risk including, by the way, extending the life of our
Speaker 1: nuclear plant for five years in order to stress test
Speaker 1: this grid as we transition, and D risk and look
Speaker 1: at the issue cost, which is profoundly important. California Governor
Speaker 1: Gavin Newsom there with Bloomberg David Weston some other stories
Speaker 1: we're watching, India is wooing chip makers to the country.
Speaker 1: Under a new ten billion dollar plan, the government will
Speaker 1: increase financial incentives for manufacturers upwards of a project's total cost.
Speaker 1: India is the world's second biggest fobal phonemaker, and one
Speaker 1: music is tapping a youtube veteran to head the world's
Speaker 1: third largest record label. Robert Kinkel will become co CEO
Speaker 1: in January and soul CEO in February. Kinkel has spent
Speaker 1: the bulk of his career at Youtube, where he led
Speaker 1: creative and commercial partnerships and helped launch a subscription service.
Speaker 1: He was also part of the team and Netflix that
Speaker 1: introduced original streaming programming and beyond. Meat has suspended Chief
Speaker 1: Operating Officer Doug Ramsey. He was arrested on charges that
Speaker 1: he bit a man's nose during a fight after a
Speaker 1: college football game in Arkansas. This is another blow for
Speaker 1: the plant based Protein Company, which cut its revenue forecast
Speaker 1: last month. Welcome back to Bloomberg Technology and Emily Chang
Speaker 1: in San Francisco. When it comes to the digital revolution,
Speaker 1: Latin America is catching up fast. The venture capital firm Atlantic,
Speaker 1: which backs pre scale in American companies, just published a
Speaker 1: report showing how the digital economy in that part of
Speaker 1: the world has skyrocketed as a result of the pandemic.
Speaker 1: Let's dive deeper into all of this with Atlantico Venture
Speaker 1: Partner Hugo Bara. He was also vice president of product
Speaker 1: for Android at Google, worked at chaw me at facebook
Speaker 1: as well. Hugo, you've worn so many hats Um, so
Speaker 1: your perspective is really valuable. What are some key highlights
Speaker 1: that you learned from this report about the Latin American
Speaker 1: Digital Economy? I'm curious what surprised you, hiamily, nice to
Speaker 1: see you. There's definitely a lot to unpack in this
Speaker 1: Um report that we just published yesterday. Probably the key story,
Speaker 1: the big headline, which sort of underlying investing, is that
Speaker 1: the pandemic tech boom has been sticky in Latin America.
Speaker 1: This is a huge deal because in the US we
Speaker 1: saw a bit of a reversal of the historical trend Um,
Speaker 1: you know, or back to the historical trend in in tech,
Speaker 1: or as in Latin American particularly Brazil, we've we seem
Speaker 1: to have sort of jumped ahead of Brazil. E commerce,
Speaker 1: for instance, is three years sort of ahead of the plan.
Speaker 1: You know that that sort of growth curve has shifted
Speaker 1: up three years Um and that obviously has driven a
Speaker 1: tremendous amount of activity and acceleration in tech there. And
Speaker 1: there are some some pretty interesting and borderline absurdum stats
Speaker 1: that I think are worth talking about. So one of them,
Speaker 1: this is sort of part of the the e commerce branch,
Speaker 1: if you will, is is grocery delivery. So groceries delivery
Speaker 1: in Um in Brazil, as sort of measured by I food,
Speaker 1: which is the largest player locally, saw a six times jump,
Speaker 1: like right at the beginning of the pandemic, uh, and
Speaker 1: then since that it's grown an extra ten times. Right,
Speaker 1: so sixty times jump between the beginning of the pandemic
Speaker 1: and now, and that's basically a sustained sort of new level.
Speaker 1: Another big one is telemedicine, which is obviously pretty understandable,
Speaker 1: but virtual appointments in Brazil is measured by one of
Speaker 1: the League players, a company called connects, the salvaging uh
Speaker 1: ten next in the first year of the pandemic and
Speaker 1: then doubled since that. Right, so it's like a twenty
Speaker 1: x jump from from the beginning of times, and these
Speaker 1: are sustained new levels, which is really exciting interesting. You know,
Speaker 1: I'm curious how this is influencing where you and Atlantico
Speaker 1: are placing your bets, because you're learning about these new trends.
Speaker 1: At the same time we're going into a massive macroeconomic
Speaker 1: downturn and I wonder how that's uniquely impacting Latin America. Yeah,
Speaker 1: so I think a few things are shifting and I
Speaker 1: would probably look at the venture investing scene Um specifically.
Speaker 1: So you know without a doubt investment has gone down
Speaker 1: as compared to what happened in and UH in Um
Speaker 1: as a result of sort of this new economic reality Um,
Speaker 1: so investments slowed down. In Latin America in particular, we've
Speaker 1: noticed that foreign investors. They remained active in the region,
Speaker 1: but they're pulling back a little. But what's happened is
Speaker 1: that the local funds are sort of making up the difference, right,
Speaker 1: and this is directly in response to this sort of
Speaker 1: lasting tech boom, post pandemic. It's sort of the excitement remains,
Speaker 1: if you will. So valuations have gone down, Um, but investments,
Speaker 1: particularly in an earlier stage companies, uh, you know, continues.
Speaker 1: There's a few other unique things happening that I think
Speaker 1: are going to continue to do the fuel investment in
Speaker 1: a big way. You know, Fintech and left Ham is
Speaker 1: extremely well developed, I would argue, in some ways much
Speaker 1: more than in North America. Uh. There's a couple of
Speaker 1: examples worth mentioning, you know. First off, we saw, you know,
Speaker 1: one of the most successful Fintech come needs, the largest
Speaker 1: neo bank in the world, new bank, go public recently. Uh. That's,
Speaker 1: you know, a world class story. And there's another stat
Speaker 1: that I think also relates to to the investment climate,
Speaker 1: which is what's happening with mobile payments in Brazil. Uh,
Speaker 1: and and it's IT'S A it's a skyrocketing example. So
Speaker 1: the central bank launched, launched these sort of new instant
Speaker 1: payment rails a couple of years ago. It's called picks, uh,
Speaker 1: and picks is in some ways very similar to U
Speaker 1: P I in India, which everybody talks about. But what
Speaker 1: happened in Brazil that was interesting and different is picks
Speaker 1: got to a billion transactions per month in just under
Speaker 1: a year, which was the quarter of the time it
Speaker 1: took up I to get to that same billion a month.
Speaker 1: You know transaction level in China, forgive me. In India
Speaker 1: I need to have six times the population of Brazil. Right.
Speaker 1: So that changes consumer habits. It makes it a lot
Speaker 1: easier for e commerce and you know, an offline to online,
Speaker 1: online to offline sort of patterns to play out. So
Speaker 1: that has affected the rate at which uh, that the
Speaker 1: fintech sector is growing, and it also affects investing in
Speaker 1: Fintech specifically. You know, given that you've worked at so
Speaker 1: many big tech companies and you were more recently the
Speaker 1: head of virtual reality, uh facebook, now Meta. You know,
Speaker 1: we've seen this big shift in the public markets. Um
Speaker 1: Investors seem to be really skeptical, skeptical about this whole
Speaker 1: metaverse thing. FACEBOOK's market cap is now one six of apples,
Speaker 1: and I know it's a very different story when you
Speaker 1: worked there. Do you think this whole metaverse pivot was
Speaker 1: the right call for Mark Zuckerberg? It's a obviously hugely
Speaker 1: important question and I am biased because I do believe
Speaker 1: that virtual and augmented reality are really uh, in the
Speaker 1: future as sort of the next major competing paradigm. Um.
Speaker 1: So I think it was the right call. I think
Speaker 1: the rate of investment, Um, you know, is, I think,
Speaker 1: where we could spend some time debating. You know, should
Speaker 1: it have been half of the investment level, for example,
Speaker 1: that it's been so far? Um. But but I have
Speaker 1: no doubt because kind of history has has kept us Um,
Speaker 1: you know, objective here that we as a society are
Speaker 1: going to go through a competing paradigm shift in the next,
Speaker 1: you know, ten to fifteen years Um, and the companies
Speaker 1: that have made the early investments, uh, you know, in
Speaker 1: in in the platforms, in some of the core technologies,
Speaker 1: are going to be the ones, you know, that have,
Speaker 1: you know, the the winning horses in the next major
Speaker 1: platform race. And and the thing about Meta is that Meta, uh,
Speaker 1: you know, is starting from much further behind than, you know,
Speaker 1: Google or apple, because they don't have sort of an
Speaker 1: operating system of major platform investment in the current competing paradigm,
Speaker 1: which is mobile and sort of the smartphone economy. Um.
Speaker 1: So it does require, to a reasonable degree, a disproportional
Speaker 1: amount of investment. Like I said, I think that you
Speaker 1: can the rate of investment, but I think, Um, you know,
Speaker 1: Strategically Thinking Twenty Years Forwards, Um, I think this will
Speaker 1: have been the right call. And you know what brought.
Speaker 1: You've worked in so many different markets. You know, China, India,
Speaker 1: you know. Now your focus is on Latin America and
Speaker 1: I know, of course, Um, you were closer to lot
Speaker 1: in America earlier in your career. You know, there's a
Speaker 1: lot of concern about the global economy. There's a lot
Speaker 1: of concerns about the smartphone market in particular. There's a
Speaker 1: new iphone out. Do you think people are going to
Speaker 1: upgrade right now, when you're paying so much more for
Speaker 1: literally everything from gas to groceries? Are you concerned about
Speaker 1: the health of the smartphone market? Um, I am, and
Speaker 1: I have been for a couple of years, because I
Speaker 1: think the industry has sort of rent out of things
Speaker 1: to to to do. You know, have sort of run
Speaker 1: out of innovation space, Um, and I'm I'm sort of
Speaker 1: dying for uh, you know, Google and apple to jump
Speaker 1: on the folding, you know folding phone bandwagon, because I think, Um,
Speaker 1: that sort of unlocks potential with a new form factor. Um.
Speaker 1: So I think there's an interesting, pretty high risk that
Speaker 1: we're going to see stagnation, as you've said, in terms
Speaker 1: of upgrades for the next couple of years until we
Speaker 1: see the next major wave of innovation. So, yes, concerned
Speaker 1: and watching it closely. All right, appreciate it, Um, and
Speaker 1: thank you for bringing us those new numbers from Latin America,
Speaker 1: Atlantic partner and also the CEO of detect, Hugo Barra.
Speaker 1: Good to have you back. All right. Coming up the
Speaker 1: TESTOS CO founder on the ethereum merge and what it
Speaker 1: means for her blockchain, which is about to get an
Speaker 1: upgrade of its own. This is Bloomberg. In the coming
Speaker 1: weeks there will be another big upgrade for or blockchain.
Speaker 1: The test as protocol approve of state network, widely considered
Speaker 1: a direct competitor of the Theorem, will undergo its eleventh upgrade.
Speaker 1: Joining me now Kathleen Brightman, Co founder of Teso. So
Speaker 1: Kathleen how will your upgrade be different from the ethereum merge?
Speaker 1: Oh Um. Well, fundamentally, test this is a cryptocurrency that
Speaker 1: as a formal mechanism, um, for proposing and ratifying upgrades
Speaker 1: the protocol, meaning Um upgrades happen seamlessly and without the
Speaker 1: use of a hard fork, which is, you know, why
Speaker 1: the etherory merge took so long. It was basically like,
Speaker 1: in their own words, hurting cats, um with TESSOS. The
Speaker 1: reason it's been able to upgrade ten times, largely seamlessly, Um,
Speaker 1: is because basically the blockchain was made with upgrading itself
Speaker 1: in mind. So there's a furmal mechanism that makes this process, Um,
Speaker 1: pretty straightforward and pretty seamless. So Um, tenth time, eleventh,
Speaker 1: hopefully hitting this Friday. Um. What kind of technical issues
Speaker 1: are you preparing for, um? and I wonder if perhaps not,
Speaker 1: because there was all this concern about the eutherium emerge
Speaker 1: and whether it would go off as plan and it
Speaker 1: seems to have been kind of a non event. Yeah,
Speaker 1: I think this has been an excellent marketing effort on
Speaker 1: behalf of etheroriums most vocal promoters to make listen to
Speaker 1: a big kerfuffle Um but actually, if you, if you
Speaker 1: prepare these things, they tend to go quite smoothly and uh,
Speaker 1: you know, maybe they'll learn that on their third or
Speaker 1: fourth time that they upgrade. Are How substantial are your
Speaker 1: upgrades compared to the etherium, or even that you've done
Speaker 1: this ten times? Um. Yeah. So, I mean one are
Speaker 1: the benefits of Tessa's as kind of a philosophy, in
Speaker 1: a way of approaching um innovation is that when you
Speaker 1: have when you have upgrades that happened on a pretty
Speaker 1: regular cadence or can be proposed a pretty regular cadence,
Speaker 1: you don't have to to use consulting speak, boil the
Speaker 1: ocean in one go, Um, and so these types of
Speaker 1: things can happen Um, piecemeal. What I mean to say is,
Speaker 1: you know, the testas consistus Algorithm has been changed wholesale twice,
Speaker 1: Um and and uh, and has also had a number
Speaker 1: of different improvements. That of edge towards Um Scaling, which
Speaker 1: I think is going to be the next big challenge, Um,
Speaker 1: for any blockchain, uh, you know, including ethereum of course. Um.
Speaker 1: But yeah, a lot of these networks don't scale very well,
Speaker 1: meaning they can't handle a lot of the transactions which
Speaker 1: is why you see different things like Um congestion and
Speaker 1: and fees rising, because the cost of Um, you know,
Speaker 1: going on the blockchain and having computation there is, I guess,
Speaker 1: higher as more people use it Um. So scaling and
Speaker 1: having an approach to scaling Um is something that we've
Speaker 1: incorporated in the last two upgrades with test this and
Speaker 1: Inde Kathman do the one that's hitting on Friday. Um
Speaker 1: introduces some some concepts and some technical capabilities that lean
Speaker 1: forwards having a lot more people use the blockchain. Now
Speaker 1: it is climate week and we've been talking a lot
Speaker 1: about cryptos energy problems. How much energy does Tesso's use
Speaker 1: and how have you been working to combat its carbon footprint?
Speaker 1: The tests blockchain has been proof of stake since he
Speaker 1: is an eighteen, meaning well, it was launched with proof
Speaker 1: of steak, which has a lot less energy usage and
Speaker 1: a lot of smaller carbon footprint um than proof of
Speaker 1: work that works, such as Bitcoins, notably Um ethereum transition
Speaker 1: of course, the proof of steak Um with with their
Speaker 1: merge Um, and so I think that's been a huge
Speaker 1: relief because I think it's it's been a fact about
Speaker 1: the industry which has antagonized a lot of people who
Speaker 1: would otherwise be neutral Um. And hopefully with ethereum's transition
Speaker 1: to proof of steake, that part of the conversation at
Speaker 1: least starts to dissipate and we can focus on more
Speaker 1: interesting questions about the crypto crazy space. All right, well,
Speaker 1: we'll be watching out for your eleventh upgrade soon. Taso's
Speaker 1: CO founder, Kathleen Brightman, are we're going to have you, Kathleen.
Speaker 1: Thanks for stopping by. Jesse Palell, the outspoken, in controversial
Speaker 1: co founder of Crypto Exchange Krack and, is stepping down
Speaker 1: as CEO. Pal is known for his bold predict is
Speaker 1: about the future of Crypto, some of them right here
Speaker 1: on our show. He's also encouraged any, quote, woke employees
Speaker 1: at crack and who don't align with the company's culture
Speaker 1: and values to leave. Um. He's gonna be replaced in
Speaker 1: coming months by C O O David Ripley. He'll become
Speaker 1: the company's chair h and this is the first interview
Speaker 1: since the announcement outgoing CEO of cracking, Jesse Powell, with
Speaker 1: us now. So, Jesse, how did you come to this decision?
Speaker 1: Stepping up, not down? As you say. Yeah, I like
Speaker 1: to think of it. As you know, I'm taking a
Speaker 1: higher level role, at the chairman level. Uh, you know
Speaker 1: how ultimate oversight over the whole company. Um, Dave Ripley
Speaker 1: will be doing all the hard work for me. So
Speaker 1: appreciate that. Thanks, Dave. Um. So yeah, you know, I'm
Speaker 1: excited for this next chapter. I'm extremely confident in David
Speaker 1: Ripley and his ability to to lead this company. You know,
Speaker 1: he's been with us since we were fifty people six
Speaker 1: years ago, all the way up to, you know, mid
Speaker 1: three thousand's right now. Um, so you know he's seen
Speaker 1: it all and I'm just super glad that we have
Speaker 1: such a deep bench and someone able to to step
Speaker 1: up from the inside. And you know, we we came
Speaker 1: back around to David after running an external search and
Speaker 1: talking to over a dozen other people and you know,
Speaker 1: he's still clearly the frontrunner after all that. So I
Speaker 1: think it's in really great hands and and I'll still
Speaker 1: be actively involved day to day. Hopefully this will give
Speaker 1: me more time to go deeper on the product and
Speaker 1: user experiences, which is what I really enjoy doing. Now,
Speaker 1: obviously we're in the middle of a massive broader market downturn.
Speaker 1: It's definitely bleeding into crypto kraken's market share, according to
Speaker 1: some estimates, has shrunk by a third. Um. Did that
Speaker 1: play at all into your moving aside up, uh, stepping up,
Speaker 1: as you say, at this time? Definitely not. This is
Speaker 1: something we've been thinking about for over a year. Um.
Speaker 1: I mean it's a long time coming. I just felt
Speaker 1: like the time was right with the company being in
Speaker 1: a very good position right now in terms of our culture,
Speaker 1: our engagement of our employees, you know. So after the
Speaker 1: Jet Ski Program which you mentioned, and all the woke
Speaker 1: employees left, you know, we ran a survey internally and
Speaker 1: if people are happier and more engaged and more satisfied
Speaker 1: than ever. So I think the company is in a
Speaker 1: great spot. We've we've recently aligned on our five year strategy. Um.
Speaker 1: So it's just it's just a good time for me
Speaker 1: to step away. Um, you know, after planning this for
Speaker 1: a long time. Of course they'll be a transition period.
Speaker 1: You know, we're we're looking to hire a new CEO
Speaker 1: to backfill Dave. So they'll be a bit of a
Speaker 1: handoff period. Um, but you know, every everything is great.
Speaker 1: You know, I hate to go out at the bottom
Speaker 1: of the market. You know, I mean Dave's performance is
Speaker 1: going to look amazing when things bounce back and I
Speaker 1: won't get credit for that. But Um, you know, there's
Speaker 1: never there's never a perfect time. So let's go back
Speaker 1: to those woke employees, as you called them. Of course,
Speaker 1: this was very controversial at the time that you said it,
Speaker 1: and I'm curious if you faced any backlash or you're
Speaker 1: worried about facing any black backlash in your future endeavors.
Speaker 1: Not at all actually. You know, after that whole thing happened,
Speaker 1: we had a tremendous amount of support come in, record
Speaker 1: breaking numbers of job applications coming in and you know,
Speaker 1: I think a lot of people were just waiting for
Speaker 1: somebody to say it and they're looking for a place
Speaker 1: where where they can be themselves and not have to
Speaker 1: walk on eggshells and, you know, they're looking for a
Speaker 1: place where they can just get to work and work
Speaker 1: on important things and not be distracted by, you know,
Speaker 1: little petty grievances that people have. And so, you know,
Speaker 1: I think it actually attracts people and and deters the
Speaker 1: wrong kind of people that, you know, are really not
Speaker 1: cut out to be working in a professional environment. Now,
Speaker 1: Jamie diamond just had this to say about crypto. Take
Speaker 1: a quick listen. I'm a major skeptic on crypto tokens,
Speaker 1: which you call currency, like bitcoin. They are decentralized ponzi schemes,
Speaker 1: decentralized ponzi schemes. What's your reaction to that? I feel
Speaker 1: like it's better than the centralized Ponzi scheme, which is
Speaker 1: the stock market and national currencies. You know, I mean
Speaker 1: it's an upgrade right. We should be asking the question
Speaker 1: is it and is it an improvement? You know, you
Speaker 1: can point out problems with anything, and the question really is,
Speaker 1: is it not perfect, but is it an improvement over
Speaker 1: the existing system? And crypto helps a tremendous number of
Speaker 1: people in the world. There are tons of unbanked people
Speaker 1: in the world. It might be hard for Jamie diamond
Speaker 1: to understand that running a bank in the United States,
Speaker 1: but there are people, billions of people all over the
Speaker 1: world that don't have bank accounts or access to financial services,
Speaker 1: and Cryptos a real lifeline to those people. Now I
Speaker 1: have to revisit some of your predictions that you made
Speaker 1: right here. One bitcoin, per Lambeau, I believe you said,
Speaker 1: you know, to the moon, infinity and beyond. You know
Speaker 1: it hasn't gotten there. And how do you reflect on that?
Speaker 1: And do you think it still will get there? And
Speaker 1: and you know just how much farther off is a
Speaker 1: hundred thousand? I do think we'll get there. I look
Speaker 1: at this Rainbow Chart for Bitcoin. You know we're at
Speaker 1: the bottom. We're at the, you know, extreme buy territory
Speaker 1: right now. Um, I bought in again at eighteen thousand.
Speaker 1: You know, I'm still very long term Wi ish. I
Speaker 1: still haven't sold a share of my cracking stock in
Speaker 1: eleven years. I'm extremely bullish on the company. I'm extremely
Speaker 1: bullish on Crypto. So, you know, I think the fundamentals
Speaker 1: just keep getting stronger for crypto. Uh, the user adoption
Speaker 1: keeps growing, the networks get more secure. You know, we
Speaker 1: keep proving that we can do these upgrades to to
Speaker 1: these networks in a secure, uh, in orderly fashion, and
Speaker 1: so everything just keeps looking better over time. You know,
Speaker 1: I think the macro environment is playing a big role
Speaker 1: in what's happening with crypto now. You know, people don't
Speaker 1: know if they're gonna be able to afford gas or
Speaker 1: groceries next week. So that certainly affects one's discretionary income or,
Speaker 1: you know, ability to invest long term. But you know,
Speaker 1: aside from the speculative value of Crypto, you know again
Speaker 1: it's it's solving real problems for people. It does have
Speaker 1: a functional use case in in many parts of the world,
Speaker 1: and so, you know, I think we should look at
Speaker 1: it more from that perspective, like what is the good
Speaker 1: will that this is doing? Can we measure this value
Speaker 1: that the crypto brings to the world by some other
Speaker 1: means besides like the financial value, you know, the appreciation
Speaker 1: of the asset, but you know, what problems is it
Speaker 1: really solving for people? Um, Jesse Powell, outgoing CEO of
Speaker 1: crack in, Um, we'll be watching you in your chairman role, Um,
Speaker 1: and whatever else you do next. Thank you for joining us.
Speaker 1: That does it for this edition of Bloomberg Technology. Coming
Speaker 1: up Thursday I'll be interviewing Mark Bennie off at Dream Force,
Speaker 1: the salesforce co CEO, and I will be with you live,
Speaker 1: and also the CEO of impossible foods as well. This
Speaker 1: is Bloomberg