Speaker 1: I'm Caroline Hyde of Bloomberg's well teadquarters in New York
Speaker 1: and Imed Ludlow at c e S the Consumer Electronics
Speaker 1: Show in Las Vegas. This is a special edition of
Speaker 1: Bloomberg Technology coming up this hour, and Amazon Genesis trading
Speaker 1: stitch fixed to the long list of tech companies cunning
Speaker 1: costs by laying off staff. But this is the macro picture.
Speaker 1: The ADP projects is stronger than expected jobs report for tomorrow.
Speaker 1: Plus the director of the Cyber Security and Infrastructure Security
Speaker 1: Agency tells me that cyber safety is a public good
Speaker 1: that demands quote radical transparency. We discussed with CrowdStrike CEO
Speaker 1: George Kurtz and d surrounded by electrical autonomous vehicle technology.
Speaker 1: Over at CS we'll hear from Mobile I CEO an
Speaker 1: ambition to target self driving tech to hit the streets.
Speaker 1: But first let's check in on the here, the now.
Speaker 1: The reality is the market, and the reality that is
Speaker 1: good news is once again bad news if you're long
Speaker 1: these markets. Tess if I've run off by one point
Speaker 1: one percent, nows that big tech taking the hit off
Speaker 1: by more than one point five percent. And that's because
Speaker 1: the macro picture once again looks resilient. When you look
Speaker 1: at the jobs picture, the ADP number coming in stronger
Speaker 1: than expected, those jobless claims once again showing resiliency. This
Speaker 1: just means the Federal Reserve has the bandwidth to keep
Speaker 1: on raising rates and many in the market therefore anticipating
Speaker 1: that the terminal rate where interest rates will eventually go
Speaker 1: from the Fed is about five percent by mid twenty three.
Speaker 1: We continue to therefore see fulishists in terms of where
Speaker 1: the dollar goes. We expect interest rates to go higher.
Speaker 1: The dollar goes higher to we're up about five tents
Speaker 1: six tents and percent. Flick it on. Let's dive into
Speaker 1: the micro because without out in cs I wanted to
Speaker 1: do a little bit of the individual companies. Western Digital
Speaker 1: talks of a merger now amid some of this concern
Speaker 1: around the market and indeed deals being done well. Maybe
Speaker 1: Western Digital world team up with its JA Pennese well
Speaker 1: competitor and maybe that force will be for good. We're
Speaker 1: seeing the stock valley six point six percent silver Gate
Speaker 1: though not a good news story. Let's look at, of course,
Speaker 1: a very crypto related lender, Crypto Capital, is currently forty
Speaker 1: two lower. Why well, because they're acting of their staff.
Speaker 1: After of course, the amount of fall in crypto assets
Speaker 1: meant that people drew down their deposits, they had to
Speaker 1: sell their own assets, offered a discount, and it means
Speaker 1: that the company is therefore in some grave issues. Silvergate Capital,
Speaker 1: as I say, one of the worst performance, Amazon off
Speaker 1: by more than two percent and ed. This is again
Speaker 1: all about jobs. This is about when we get a
Speaker 1: strong picture coming from the macro. What about the micro
Speaker 1: picture and technology? What about Amazon saying eighteen thousand jobs
Speaker 1: are now to go as they try to really rebalance
Speaker 1: where the costs come into this business. And I know
Speaker 1: you're all about the latest product, the latest unveiling, but
Speaker 1: you've got to be hearing about chat from that on
Speaker 1: the floor of CS. Yeah, there's certainly lots of fanfare
Speaker 1: right here in Las Vegas, but I've spoken to bankers
Speaker 1: and investors, for example, are in attendance, and you cannot
Speaker 1: get away from what's happening in the world of technology.
Speaker 1: I think what I'm hearing is that broadly they're talking
Speaker 1: about how hard it is out there, the difficulty in
Speaker 1: raising funds, the difficulty in managing the macro environment. Whether
Speaker 1: you are a startup exhibiting here for the first time
Speaker 1: on the show and floor, or you're one of the
Speaker 1: many hundreds of Fortune five companies that have gone big
Speaker 1: on the event. This is a speed dating opportunity, right.
Speaker 1: You have some of the world's biggest CEOs, investors, their bankers,
Speaker 1: their top customers, all in one place for three days
Speaker 1: of the year, to start the year, and of course
Speaker 1: they are talking about what is happening in this global economy,
Speaker 1: and of course not just trying to pitch to the
Speaker 1: consumer their latest innovations, but also what's happening with the
Speaker 1: consumer in general. Indeed, and of course the job layoffs
Speaker 1: or reflection of some of that worry around the consumer overall.
Speaker 1: We've got to dig into that story. Well. Of course,
Speaker 1: we bring in a key name, a key voice on
Speaker 1: all things Amazon and indeed all things technology. It is
Speaker 1: one Brad Stoneman, bugs head Global Tech Coverage, because of
Speaker 1: course the author of Amazon Unbound and the Everything Store,
Speaker 1: and to it an in perspective, Brad eighteen thousand is
Speaker 1: kind of a drop in the bucket when you look
Speaker 1: at the overall hiring and talented Amazon has, but still
Speaker 1: it signifies something. It certainly does. Um you go back
Speaker 1: twenty years ago after the dot com bust and Amazon
Speaker 1: was laying people off, and Jeff Bezos had a mantra
Speaker 1: and it was the only way out of this is
Speaker 1: to invent our way out. And I think that the
Speaker 1: charge right now from Andy Jazz is much different. It's
Speaker 1: the only way out of this is to cut our
Speaker 1: way out. And that's because if you look at the
Speaker 1: retail business, the oldest business at Amazon, it's just in
Speaker 1: really bad shape. It lost about two point five billion
Speaker 1: dollars last quarter, but if you back out advertising, it's
Speaker 1: probably much more nine or ten billion dollars. It's hard
Speaker 1: to believe in some of that. Of course, his investments
Speaker 1: in video and autonomous driving other experiments, but the basic
Speaker 1: oldest business at Amazon is miserably unprofitable. Investors are clamoring
Speaker 1: for Jasse to improve it, and his metal is really
Speaker 1: going to be tested over these next few quarters and years,
Speaker 1: and he's starting by cutting the cost structure. It's tough
Speaker 1: find Jesse. How much does he have the confidence of
Speaker 1: an investimation, how much does he have the confidence of
Speaker 1: the founder of the business. Well, I mean, first of all,
Speaker 1: I think it's always worth noting that he inherited a
Speaker 1: lot of these problems. It was Bezos and maybe the
Speaker 1: distracted final years of his tenure at Amazon, who authorized
Speaker 1: the major ex pre pandemic and mid pandemic expansion of
Speaker 1: fulfillment centers, of product lines, geographic expansion, and a lot
Speaker 1: of that. Jesse has had to kind of kind of
Speaker 1: unwide and narrow some of the ambitions and place more
Speaker 1: strategic bets. I think he does have the confidence of
Speaker 1: of investors, Like there's no activist investor at Amazon. There's
Speaker 1: there's fantastical rumor about Bezos coming back that will never happen.
Speaker 1: Jesse is the CEO for these next couple of years,
Speaker 1: but I think it's gonna be a big test. He's
Speaker 1: known for what he did at a WS and now
Speaker 1: he has to prove himself as CEO of the whole business.
Speaker 1: He's only just the day, right, Brad, that you were
Speaker 1: speaking to Dave lymp who kind of runs the devices business.
Speaker 1: Do we have any kind of sense of the granularity
Speaker 1: where Amazon's cutting, where it got too bloated and needs
Speaker 1: to pull back. Because Andy Jase was an AWS guy,
Speaker 1: and you'd imagine that that part of the business is
Speaker 1: almost sacred. Absolutely. I mean, you know, double digit growth
Speaker 1: rates for for the for at least the near term future.
Speaker 1: Still the engine of Amazon, you know, leave it alone.
Speaker 1: Dave Limp on the Device as side got in touch
Speaker 1: actually with myself and my colleague Matt Day to say
Speaker 1: that the reductions in his group were more limited than
Speaker 1: people thought. And this is my my point. These eighteen thousand,
Speaker 1: laughs are in the core business into retail, and then
Speaker 1: it's it's hr and recruiting, because if you're not hiring,
Speaker 1: you don't need the recruiters. So this is really jazzy
Speaker 1: looking at the cost structure for the very basic part
Speaker 1: of the business. Last year was about widowing down the
Speaker 1: experiments that that weren't that weren't working. This year is
Speaker 1: about right sizing that main core part the business, retail,
Speaker 1: and showing investors that Amazon's oldest business is still a
Speaker 1: good one. We just showed that beautiful child on the screen,
Speaker 1: which kind of demonstrates the eighteen thousand jobs being caught
Speaker 1: in the grand scheme of Amazon size. It is small,
Speaker 1: but it's never pleasant, of course to lose one's job.
Speaker 1: It's not the only tech name either, that's that's taking
Speaker 1: this action. Brad Salesforce also kind of building out already
Speaker 1: reported plans to kind of downsize what do we know, right,
Speaker 1: eight thousand layoffs a smaller than at Amazon, but more
Speaker 1: consequential because that's ten percent of the staff. But look,
Speaker 1: the story is still the same if you're a if
Speaker 1: you're a fast growing company, investors are okay with low margins,
Speaker 1: but when growth rates slow, they want to see profitability
Speaker 1: and salesforce for the first time in as long as
Speaker 1: I can remember, is guiding for the current corridor under
Speaker 1: a ten percent growth rate. Okay, that is not great. Uh.
Speaker 1: You know, at the same time, they've got starboard, an
Speaker 1: activist and investor clamoring for them to cut costs. You
Speaker 1: have executives like Brett Taylor, who was the co CEO
Speaker 1: leaving Stewart Butterfield as Slack leaving UM you know, big
Speaker 1: inflated head counts from recent acquisitions like Tableau that they're
Speaker 1: now cutting back on. So it's in many respects the
Speaker 1: same story. Investors are getting impatient and they want to
Speaker 1: see tech companies now show more profitability. Brad, great to
Speaker 1: catch up with you, and well, for many of viewer
Speaker 1: they're still thinking that the worst is still to come.
Speaker 1: So still more reports than that. Brad Stone, of course
Speaker 1: is albody's ahead of global tech coverage and when you might,
Speaker 1: of course have caught some of the headlines coming out
Speaker 1: of crypto that are also jobs related. Just remember we're
Speaker 1: thinking about Genesis, they're cutting about of their head count.
Speaker 1: We've also heard from like the silver Gate Capital I
Speaker 1: was talking about it earlier, laying there's also a barrels
Speaker 1: of headlines around US authorities closing in on Sam Martin's
Speaker 1: Fred's inner circle, New York prosecutors suing Celsius is Alex
Speaker 1: Matchynsky of course for fraud, and fanatics slashing its steak
Speaker 1: and soft back backed ft FAM County Digital Pool. There
Speaker 1: was only one woman in the business who can take
Speaker 1: us to all these different headliness is in the house.
Speaker 1: When do we start? Can we start with the jobs
Speaker 1: cut just because we come off the back of Amazon
Speaker 1: and they're likes I mean silver Gate absolutely dramatic move
Speaker 1: in the share price on the back of dramatic moves
Speaker 1: that having to make. There's a lot of concerns that
Speaker 1: have been drawing around silver Gate for a while now
Speaker 1: given their exposure to the crypto industry. A few interesting
Speaker 1: things here to note here, because eight point one billion
Speaker 1: dollars of a run on deposits here and more than
Speaker 1: seven hundred million dollars worth of a loss on securities
Speaker 1: because they had to foresell essentially here. But interestingly, you
Speaker 1: have analysts coming out and saying there are very few
Speaker 1: banks I could sit there and take eight billion dollars
Speaker 1: worth of withdrawals here and run on deposits. So there
Speaker 1: is a two sided story here. But again something to
Speaker 1: watch very very very closely, because seriously, eight billion dollars
Speaker 1: of deposits usually run on deposits leads usually to more
Speaker 1: runs on deposits. So have they stemmed the bleeding here? Genesis?
Speaker 1: I actually think the reason that it's so interesting with
Speaker 1: the job cut issue is that broader issue you were
Speaker 1: looking at the stomach risk here, not just these single
Speaker 1: one off issues. Is it's Genesis Global Trading that is
Speaker 1: facing a lot of these cuts. Genesis Global Trading, remember,
Speaker 1: did not halt its activity. It was Genesis Lending the
Speaker 1: subsidiary that had halted withdrawals. So the fact now that
Speaker 1: you're seeing issues here financially and looking to stem issues
Speaker 1: here through the vein of job cuts for a larger
Speaker 1: part of this digital currency group Empire is really the
Speaker 1: heart of the issue. Snali, Hello from Las Vegas. Another
Speaker 1: busy day for you, my friend. It's hard to keep
Speaker 1: track of all the headlines from the crypto community. From
Speaker 1: here in Las Vegas, folks are talking about it. I
Speaker 1: think there's a big focusing on SPF right and and
Speaker 1: the latest with what's happening with him. There's a probe
Speaker 1: I believe into sp and SPF confidant. What's the latest there.
Speaker 1: I would take a look at it this way because
Speaker 1: remember we have nichads seeing now there's already been Caroline
Speaker 1: Ellison and there's already been Gary Wang who have pled guilty.
Speaker 1: When you look at the accounts brought forward, the criminal
Speaker 1: accounts wet followed by US authorities. Now the question then
Speaker 1: becomes about in Shad Singh, who is another deputy part
Speaker 1: of the penthouse suite here that stayed in the Bahamas
Speaker 1: penthouse when it came to where Sam Bankban Freed lived.
Speaker 1: This man was also close to Sam bankman Fried's brother,
Speaker 1: friends with him since high school and a director of
Speaker 1: engineering over at f t X, so very part of
Speaker 1: the inner circle here. So we have now that authorities
Speaker 1: are looking more closely at him as well. We don't
Speaker 1: know whether he'll be accused of any wrongdoing. We don't
Speaker 1: know whether he's cooperating. Both of those facts will become very,
Speaker 1: very important when we look at this overall investigation into
Speaker 1: the f t X empire itself. Who knew what and
Speaker 1: who did what when it came to customer money and
Speaker 1: potentially taking it. Remember they were accused here of taking
Speaker 1: the money and paying for personal assets. At the end
Speaker 1: of the day, talking about customer money and people taking
Speaker 1: it in accusations. Tis James getting busy to start off
Speaker 1: the year. Of course, she's the Attorney General of New York.
Speaker 1: Kind of looking at Celsius another key area that just
Speaker 1: crumbled in two There have been so many strong words
Speaker 1: crossing wires this week, and I want to read what
Speaker 1: Leticia James had said in the statement about Alex Maschinski
Speaker 1: here of Celsius, who had said Leticia James saying he
Speaker 1: promised to lead investors to financial freedom but led them
Speaker 1: down a path of financial ruin. Remember when we talked
Speaker 1: about crypto the last couple of years, we've talked about
Speaker 1: whether these big lenders what the responsibility to investors was
Speaker 1: when they're not f d I c ensured like a
Speaker 1: typical lenders in the United States. And what the Attorney
Speaker 1: General is you're really telling you here, you're the New
Speaker 1: York attorney is telling you is that they are responsible
Speaker 1: for her customer money, regardless of that backs up or not.
Speaker 1: And so that is a really important precedent, let alone
Speaker 1: the issue that Alex Maschinski here and Selsius is facing.
Speaker 1: So all of these stories, it is worth it broadening
Speaker 1: out and saying what does this mean for other lenders
Speaker 1: in the space At a time where we're already concerned
Speaker 1: the industry has been so concerned about that big pullback
Speaker 1: of lending in the industry, it will be interesting to
Speaker 1: see how this plays out. Remember, Celsius is also going
Speaker 1: through its own process here. And now what you're having
Speaker 1: is Alex mccinski really being accused here of running a
Speaker 1: scheme that ran for years before freezing withdrawals. All right,
Speaker 1: Bloomberg's Crypto Wall Street, All Things Finance correspondent shin Ali Bastak,
Speaker 1: thank you very much. There's still some focus on consumer
Speaker 1: gadgets and electronics as sees this year. Samsung, for example,
Speaker 1: is thinking about cheaper multi functional devices. The electronics Giant
Speaker 1: is showing off the new two hundred dollar version of
Speaker 1: It's a series budget smartphone, A four teen five G
Speaker 1: as a new upgraded thirteen megapixel front facing camera and
Speaker 1: at six point six in screen with an economic slowdown. Globally,
Speaker 1: Samsung's hoping that entry level phone appeals to more budget
Speaker 1: conscious consumers. Mid two smartphones were hit in two and
Speaker 1: more expensive handsets could be hit in the Korean tech
Speaker 1: giants also thinking about what you're doing at home, Samsung's
Speaker 1: bedding but doubling up a new smart home control device
Speaker 1: as a wireless charging pad will help it beat competition
Speaker 1: from the likes of Amazon. The smarting stage costs eighty
Speaker 1: dollars and can connect to a user's phone or tablet.
Speaker 1: The hub can also be used to operate smart home
Speaker 1: accessories wirelessly think fridges, firmostats, locks and lights. And to
Speaker 1: set it apart, Samsung's added that whiless charging to the
Speaker 1: hub to give juice to your phones and your ear buds.
Speaker 1: So that's what it's like. Carrow out on the exhibition floor, right,
Speaker 1: we're there in Samsung's blue if looking at their latest products,
Speaker 1: we're kind of poking fun at the idea that CS
Speaker 1: has been all about cars for so long you forget
Speaker 1: there are some consumer electronics. I thought it was so
Speaker 1: interesting that Samsung did focus on the low end, right
Speaker 1: two hundred dollars, budget conscious consumer value for money, not
Speaker 1: the dazzling one thousand dollar handsets that perhaps others have
Speaker 1: focused on in recent releases. Yeah, and it is interesting also,
Speaker 1: of course you tap such more broader global market by
Speaker 1: having entry points at that such price point. Tell me, though,
Speaker 1: I feel like the buzzword is also AI rite and
Speaker 1: I was reading some great stories and courage from you
Speaker 1: and from others talking about I mean, apparently I can
Speaker 1: get an AI bird feeder, I can get an AI
Speaker 1: focused baby carriage, fatigue fighting wristwatch. What are some of
Speaker 1: the more extraordinary things that you're seeing at the moment?
Speaker 1: On the floor last night was really weird. Arnold Schwartzeneger
Speaker 1: was on stage, David Hasselhoff was in a video. But
Speaker 1: the reason being is BMW tapped their sci fi inner side.
Speaker 1: We'll get to that later in the show. The other
Speaker 1: big name is Panasonic that really focused on automotive tech
Speaker 1: as well, the Japanese electronic giant no exceptions kind of
Speaker 1: the rules that are going new ELECTA capability was their
Speaker 1: deal for in car entertainment. Remember, Panasonic's main business here
Speaker 1: in North America is battery cell business. It's biggest client,
Speaker 1: Tesla is top of mind. And I spoke to the
Speaker 1: North America CEO Megan one one one Lee. This is
Speaker 1: what she had to say. We're all about customers. Panasonic
Speaker 1: is in our business in US for sixty years as
Speaker 1: a company, hundred years, we really focused on our technology
Speaker 1: and solution for customers. We love our partners, but we
Speaker 1: really want to deliver a product and technology and service
Speaker 1: that bids customer needs. That's well and focus on when
Speaker 1: you make an announcement like this at CS it's supposed
Speaker 1: to be a consumer electronics show, right, it's about forward looking.
Speaker 1: But this is a product like that make you more competitive?
Speaker 1: Does it give you a pipeline of business? UM? Yes
Speaker 1: it does. And UM as a hundred years old company
Speaker 1: and we grew up with C S two we have
Speaker 1: more and fift years or partnership with C E S
Speaker 1: and C T A. And our message this year is
Speaker 1: sustainability and thank you. Yes, why he's our climate ambassador
Speaker 1: and uh what he brings and what he's passionate about
Speaker 1: and what we want to do is nice alignment for
Speaker 1: our message. So what we're demonstrating on the floor and
Speaker 1: our message is we believe in our core belief is
Speaker 1: contribution to society with technology and I am and we
Speaker 1: are really excited that this year is all about sustainability
Speaker 1: for the future but also for the current as well.
Speaker 1: Our biggest business in North America right now is eb Battery.
Speaker 1: We also made another announcement two months ago to invest
Speaker 1: additional four billion dollars for Kansas Kansas um UH for
Speaker 1: the second battery factory. And with that we have four
Speaker 1: employees as is just focused in manufacturing eby battery. That's
Speaker 1: going to have another four thousand employees. And we're really
Speaker 1: bullish about what we're doing in eby battery, sustainability and
Speaker 1: electrification of transportation. You took us there, Let's stick with
Speaker 1: the batteries. We have to talk about Tesla. You know,
Speaker 1: the story around Tesla right now is about concern for demand.
Speaker 1: My question to you is, if there's a drop off
Speaker 1: in demand for customers like Tesla, does that impact demand
Speaker 1: for Panasonic's battery cells or does a customer like Tesla
Speaker 1: have to commit to some volume anyway, even if their
Speaker 1: demand for the end products drops. We're not that concerned
Speaker 1: about that. Right now, We're trying to really provide the quality,
Speaker 1: quantity and quality that Tesla is looking for. We have
Speaker 1: about ten years of experience working with Tesla, which has
Speaker 1: been wonderful. Um as a Japanese uh hundred years old company,
Speaker 1: working with Tesla has been a wonderful learning experience. We
Speaker 1: also announced the partnership with Lucid Yes and we are
Speaker 1: diversifying our contribution in evy battery for this market and
Speaker 1: we're not worried. We're very excited. Panasonic North America CEO there. Meanwhile,
Speaker 1: we've got so much more coming from CES Instacot CMO
Speaker 1: Laura Jones, and the company's latest connected store technologies, including
Speaker 1: caper cart, that big Purchase it made, and scan and
Speaker 1: pay feature. As a Bloomberg a little more from CS
Speaker 1: now because I got to catch up with the Instacot
Speaker 1: CMO Laura Jones, asking about how the company is thinking
Speaker 1: more B two B than B to see at the
Speaker 1: moment about becoming a technology solution. It's big companies, take
Speaker 1: a listen. We're increasingly focused on becoming a retail enablement platform.
Speaker 1: And so in addition to our marketplace which you described
Speaker 1: that personalized shopping, we're also offering technology to enable our
Speaker 1: growth three partners to bring technology into their store. So
Speaker 1: at ce S Disher, we're showcasing our caper carts, which
Speaker 1: are AI computer vision enabled shopping carts that let consumers
Speaker 1: check out as they shop. We're also showing electronic shelf
Speaker 1: tags carrot tags that help consumers and insta cart shoppers
Speaker 1: more easily find what they're looking for. And we're also
Speaker 1: showcasing some integrations between our app and that hardware. So,
Speaker 1: for example, lists you're shopping list that you'll have on
Speaker 1: insta cart, you can also access if you're shopping in store.
Speaker 1: So that'll be a great integration that really recognizes the
Speaker 1: fact that customers increasingly are shopping both online and in store. Also,
Speaker 1: another way in which instacot has been trying to pull
Speaker 1: the leavers of growth is by advertising in it all
Speaker 1: of itself on the platform. You, as CMO, I'm sure
Speaker 1: deeply integrated in this. Tell me about how you're looking
Speaker 1: to make that process easy, how you're looking to make
Speaker 1: that evolve for the uses that you have. Yes, we
Speaker 1: love that our platform can help our customers discover new
Speaker 1: brands that they'll fall in love with and that will
Speaker 1: become part of their weekly shopping routine. And so we
Speaker 1: have a really robust suite of advertising products and everything
Speaker 1: from kind of our classic sponsored products all the way
Speaker 1: through to new launches like shoppable Video that let's brands
Speaker 1: really tell a more fulsome story um and and act
Speaker 1: more like a mid funnel solution in our app to
Speaker 1: inspire users who might not have considered that product to
Speaker 1: add it to their cart. And what's great is because
Speaker 1: we're a closed loop system, you can really track and
Speaker 1: the afflicacy of these ads in a way that's quite unique.
Speaker 1: Day is still the key currency. Welcome back to bow
Speaker 1: Bog Technology. I'm count on hot and new and love low.
Speaker 1: He's in Las Vegas, C Yes, and and I mean,
Speaker 1: what a hundred thousand people there, but it must be
Speaker 1: bumping into a fair few pretty senior executives, right, Yeah,
Speaker 1: it's interesting. We kind of jokes about how automotive technology dominates.
Speaker 1: But you do have Samsung here with that big splashy displays.
Speaker 1: There's a lot of emphasis as well on cybersecurity, which
Speaker 1: I thought was really interesting. I caught up with Cybersecurity
Speaker 1: and Infrastructure Security Agency Chief and Director Jen Easterly, who's
Speaker 1: basically trying to hammer home this message. If you're working
Speaker 1: on new tech right from the outside, you need to
Speaker 1: be focused on cybersecurity. This is what she had to say.
Speaker 1: This is fundamentally about keeping them safe. We live in
Speaker 1: a world that's highly connected, highly digitized. The infrastructure we
Speaker 1: depend upon is all underpinned by technology, and so it's
Speaker 1: a matter of actually doing right by your clients. But
Speaker 1: I think boards and CEOs and business leaders actually need
Speaker 1: to look at corporate cyber responsibility in the way that
Speaker 1: they look at corporate social responsibility. Cybersecurity cyber safety is
Speaker 1: a social good. It's about society or resilience, and particularly
Speaker 1: with everything connected these days, you can't just worry about
Speaker 1: your own company. We have to stop putting self preservation
Speaker 1: over collaboration. Think about the software makers and to take
Speaker 1: it up. You know you've been up on stage, your
Speaker 1: audience is sitting at them, and beyond that, how do
Speaker 1: you encourage them to do this in parallel with writing
Speaker 1: code for developing new programs, introducing the cybersecurity aspect well.
Speaker 1: So there are many ways this are done. If you
Speaker 1: go back to the nineteen sixties, actually everybody blame car
Speaker 1: crashes on bad drivers, But then there was a whole
Speaker 1: movement about actually cars are unsafe at any speed because
Speaker 1: they don't have seatbelts, they don't have air bags, they
Speaker 1: don't have anti lock breaks, they don't have comple zones.
Speaker 1: So ultimately down the road, it may be a matter
Speaker 1: of regulation, but right now, what we need to do
Speaker 1: is to inform our consumers about their basic safety, and
Speaker 1: they need to be demanding radical transparency from these software
Speaker 1: makers about whether they're building software that is secured by
Speaker 1: design so lesson less flaws and defects, and secure by
Speaker 1: default with security features like multi factor authentication baked into
Speaker 1: the product so I don't have to tell my ninety
Speaker 1: year old mom or my kid, oh, you've got to
Speaker 1: enable m f A. They have no idea where multi
Speaker 1: factor authentiiation is. You know, this is about consumer safety,
Speaker 1: and again I love the innovation, but the incentives are skewed.
Speaker 1: We need to balance the incentives and at the same
Speaker 1: time leaders need to look at this cyber risk as
Speaker 1: a core business risk in their own responsibility. What's motivating
Speaker 1: you to do this now is your agency seeing a
Speaker 1: rampupp in threats are the more things crossing your desk,
Speaker 1: It's made you think, right, I actually have to start
Speaker 1: doing more to get this message. Yeah. I've been doing
Speaker 1: this for a really long time, and every year they
Speaker 1: asked the same thing. Is it going to be the
Speaker 1: same thing? Are we going to just see more threats
Speaker 1: and more attacks and more ransomware? And frankly, I don't
Speaker 1: think that that is sustainable, given that everything is increas
Speaker 1: recently digitized and connected. Six trillion dollar CYMRI cron damages
Speaker 1: last year are projected to be eight trillion this year
Speaker 1: protected to be ten point five trillion. That is the
Speaker 1: GDP of India, Germany and the United Kingdom combined. We
Speaker 1: cannot continue to allow this to happen. It's not sustainable,
Speaker 1: and so we're really trying to motivate a movement where
Speaker 1: consumers are asking hard questions so that technology are thinking
Speaker 1: about safety as much as they're thinking about innovation, that
Speaker 1: core business business leaders and CEOs and boards are embracing
Speaker 1: corporate cyber responsibility as a matter of good governance, and frankly,
Speaker 1: trying to create a paradigm shift of how government and
Speaker 1: industry relate to each other. Well, I think about the
Speaker 1: world we're in right now, the war in Ukraine being
Speaker 1: an example, he's the war in Ukraine driving an increase
Speaker 1: in ransomware attacks here in the United States, for example. No,
Speaker 1: I don't think it's driving and increase in ransomware attacks,
Speaker 1: but I do think it is a reminder that there
Speaker 1: are various serious threats out there, whether there's Russia, China, Iran,
Speaker 1: North Korea, or cyber criminals that are given safe haven
Speaker 1: and sponsored by some of these nations that can do
Speaker 1: significant harm to our businesses. But also you know what
Speaker 1: we've seen from hospitals, what we've seen from k through
Speaker 1: twelve school districts. One of the things that I worry
Speaker 1: most about are what we call target rich cyber poor entities,
Speaker 1: so that schools, that's water facilities, that's hospitals that don't
Speaker 1: have the resources to be able to raise the baseline
Speaker 1: in cyber So we're going to spend this year really
Speaker 1: working with them to ensure they have the resource, the capabilities,
Speaker 1: the expertise, the technical guidance to be able to drive
Speaker 1: down risk. But in a world where technology is created
Speaker 1: secure by design and secure by default, we won't really
Speaker 1: have to worry so much about small businesses that are
Speaker 1: going to get taken out because they're not putting cybersecurity.
Speaker 1: It's a total agency, really fascinating from genuously there, and
Speaker 1: I think it's so right to shine a light on
Speaker 1: those perhaps that don't always be able to invest in
Speaker 1: cybersecurity and many warriors, we enter a downturn head that
Speaker 1: maybe people would pull back on that sort of spending,
Speaker 1: and it's probably the most area that people need to
Speaker 1: invest in particular for your financial services company. But I'm
Speaker 1: interested as to who who is she speaking to, Who
Speaker 1: is her audience at cs when she's coming to those
Speaker 1: sorts of events. Yeah, I mean when I asked her
Speaker 1: about the motivations, right, she talks about protecting the consumer.
Speaker 1: You know, that is an incentive for the private sector
Speaker 1: to act to make sure cybersecurity is top of mind
Speaker 1: when they're they're working on their latest technology. But actually,
Speaker 1: what I heard was that that was a message to
Speaker 1: the private sector. Right, She's saying, hey, and you know,
Speaker 1: Gen's a rock star in this world, not just kind
Speaker 1: of a government official, but a rock star in the
Speaker 1: world of cybersecurity. And what I heard was private sector
Speaker 1: he's get on board with this and get your act together.
Speaker 1: And that's fortunate Caroline because we can continue this conversation
Speaker 1: with CrowdStrike CEO George. And what's more is, actually, you
Speaker 1: know Jen very well. Um, do you agree with that
Speaker 1: that the Jen's message was to you frankly that you
Speaker 1: the private sector, but also those outside of cybersecurity needs
Speaker 1: to be doing a lot more. Yeah, it might have
Speaker 1: been more to Microsoft, but you have to ask her
Speaker 1: in terms of building software by design. But I think
Speaker 1: as a as an industry, um, you know, we have
Speaker 1: to have security built by design and we're at CS
Speaker 1: and I think a big part of it is there
Speaker 1: are many different consumer devices that come to the consumer
Speaker 1: not secure out of the box and not looked after
Speaker 1: for their lifetime, and that becomes problematic and creates risk
Speaker 1: in the environment. Microsoft, what did you mean by that? Well,
Speaker 1: when you look at the technologies that are in play
Speaker 1: and a lot of the exploits that happened there on
Speaker 1: Microsoft technologies, I mean it patched tuesday. Is you know
Speaker 1: how many vulnerabilities can we patch? So many of the
Speaker 1: big breaches that we've investigated report on have exploited Microsoft technology.
Speaker 1: So I think what she was saying and I was
Speaker 1: on the panel with her today, right, which was it's like,
Speaker 1: you can't blame the victim in other crimes, we don't
Speaker 1: blame the victim. Right in cybersecurity, it's like, well, they
Speaker 1: didn't pass it, in't do this, Well, how did that
Speaker 1: vulnerability get there in the first place? And creating secure
Speaker 1: software by design is really important for the consumer and
Speaker 1: the enterprise. George, let's talk a little bit about safety
Speaker 1: and indeed whether threats are indeed coming from three? Are
Speaker 1: we seeing anything novel and anything new? And he knew
Speaker 1: kind of attack as any new players within this game. Well,
Speaker 1: when we think about three and a challenging macro environment,
Speaker 1: where we have to look at is during a recession,
Speaker 1: and I've been through many of them. I've been doing
Speaker 1: security for a long time. Cybers adversaries tend to get
Speaker 1: more active cyber crime goes up. Why because we've seen it.
Speaker 1: You've reported on the layoffs in tech and in other places.
Speaker 1: Whenever people are coming and going, there's always an opportunity
Speaker 1: to abuse that identity. When people aren't minding quote the
Speaker 1: store and looking after systems, there's opportunity for these crime actors.
Speaker 1: So we think it's even more important as we get
Speaker 1: into a challenging environment that cybersecurity is front center for
Speaker 1: large and small companies and of course the consumer. Oh,
Speaker 1: I'll see the same question I asked Jen, which is
Speaker 1: where are the threats coming from? You know, I asked
Speaker 1: about the war in Ukraine and whether there was a
Speaker 1: direct correlation with the war in Ukraine and a rampup
Speaker 1: and activity in ransomware as an example. She said, no,
Speaker 1: that's not the case. But we keep hearing, well, the
Speaker 1: threats there, that's what's motivating her to speak. So where
Speaker 1: are they coming from? The threats? Well, we break the
Speaker 1: threats threat actors into three different groups. We have nation
Speaker 1: state actors, we have e crime, and we have activism. Right,
Speaker 1: just a simple way to think about it. So the
Speaker 1: nation state actors Russia, China, North Korea, etcetera. I ranum
Speaker 1: are always going to be active, whether it's good times,
Speaker 1: bad times, war or not war. They're always going to
Speaker 1: be out there. And when we think about Russia, I
Speaker 1: would think I would say many thought there would be
Speaker 1: more activity around the uk Ukraine conflict. But it's not
Speaker 1: like Russia forgot what they were doing. They're still very
Speaker 1: active in this environment and collecting information. Maybe not as
Speaker 1: destructive as we thought. Then you turn to e crime.
Speaker 1: E crime is a huge business. Jen talked about it. Uh,
Speaker 1: it's really ransomware as a service. E crime as a service.
Speaker 1: You really don't need to understand anything almost about technology.
Speaker 1: You can buy access from an access broker. You can
Speaker 1: buy a ransomware from a ransomware as a service, by
Speaker 1: the way, as a revenue share on that as well.
Speaker 1: They've got their own business model, so they actually collect
Speaker 1: the piece of that revenue and then at the end
Speaker 1: of the day, you just assemble it together, you execute
Speaker 1: your campaign, and you can make a lot of money
Speaker 1: without a lot of risk. George, aside from attackers ow
Speaker 1: revenue streams, talk to us about yours because as people
Speaker 1: do doll back spending R and D and maybe their
Speaker 1: own cybersecurity during a period of downturn, we have seen,
Speaker 1: for example, your own revenue of crowd strike hit by that.
Speaker 1: Are you feeling that the worst is over? You worried
Speaker 1: as you go into twenty three, Well, we think about
Speaker 1: when we go into three. Obviously many companies have seen
Speaker 1: head winds, uh, you know, lengthening sales cycle, those sort
Speaker 1: of things, um as as other companies enterprise SMBs evaluate
Speaker 1: their own their own budgets. But at the end of
Speaker 1: the day, when I think about security, it is a
Speaker 1: very resilient industry. And for me, the hierarchy of needs
Speaker 1: and corporate needs, it's like shelter. You have to have security,
Speaker 1: whether by regulation or by business resiliency. And one of
Speaker 1: the things that Jen and I spoke about was really
Speaker 1: that it's a board issue. The board is looking at
Speaker 1: business resiliency, not just the annoyance of someone's a single
Speaker 1: computer being impacted. We've seen companies literally get taken off
Speaker 1: the map four weeks and months on end because they
Speaker 1: didn't have the resiliency in their cybersecurity program only five
Speaker 1: days into three George CEO, CrowdStrike will have you back, Caroline,
Speaker 1: and I hope at some point again. This year, Mobil,
Speaker 1: the self driving startups spun off from Intel, says revenue
Speaker 1: from automated driver assistance systems will total more than seventeen
Speaker 1: billion dollars through Earlier. Like CEO and non Shashuit told
Speaker 1: me about their ambitious plans, I think what we're telling
Speaker 1: investors is if you look at the pipeline, the booked
Speaker 1: business pipeline going forward is significantly higher than the guidelines
Speaker 1: that we are giving. For example, the design wins of
Speaker 1: this year of two account for six point seven billion
Speaker 1: dollars of book business, which is four times more than
Speaker 1: the guideline that the guidance for two. It means that
Speaker 1: you know, when we look at our growth going forward,
Speaker 1: it is very very significant. Significant. Also in our a
Speaker 1: SP in terms of the dollar per car that mobilize
Speaker 1: receiving is doubling as as we go. As we go forward,
Speaker 1: for example, there's six point seven billion dollars accounts for
Speaker 1: about sixty million chips design wins this year sort of
Speaker 1: about one hundred dollar a SP compared to fifty dollar
Speaker 1: SP of today. What those wins? That was it? The
Speaker 1: idea that you kind of spun off from Mentel and
Speaker 1: suddenly mobilizing the headlines and all the automakers and here
Speaker 1: one go, I want to do business with their always
Speaker 1: that kind of already in the works that that pipeline
Speaker 1: and business. I think visibility will play a significant role
Speaker 1: as we go as we go forward, but we are
Speaker 1: only three months after the I p OH, so it's
Speaker 1: not visibility that played the role here. It is things
Speaker 1: that have been in the work. Especially we launched a
Speaker 1: very significant product called Supervision in China, Vision Supervisious. Stop
Speaker 1: and tell me what supervision is. Is this full autonomy
Speaker 1: or is this a driver assistant technology? So legally the
Speaker 1: driver assistant technology, but it's really full autonomy. So the
Speaker 1: way it works together, the way to imagine it is
Speaker 1: really the ultimate evolution of driving assist. Driving assist today
Speaker 1: is a front facing camera sometimes the radar. Now we
Speaker 1: imagine you have three hundred sixty degree awareness. Eight makeup
Speaker 1: pixels are eleven cameras of eleven makeup pixels around the car,
Speaker 1: providing huge resolution of data to a high performance computer. Thing.
Speaker 1: You'll build a full you know, environmental model, details, environmental model,
Speaker 1: and now you can drive autonomously. And is this really
Speaker 1: why it's in consumer cars today? Seventies seven zero, seventy
Speaker 1: thousand beagles in China already. Okay, this is from a
Speaker 1: single brand. We have a book business for nine brands,
Speaker 1: over six o em s launching starting from this year
Speaker 1: up to when you say this year, do you mean
Speaker 1: vehicles that roll off the production nine three and they
Speaker 1: carry this technology, characters technology, So from the drivers experience.
Speaker 1: It's kind of full autonomy, but from illegal it is
Speaker 1: eyes on. You need to be you need to be
Speaker 1: alert because there could be all sorts of black swans
Speaker 1: or you know, edge cases in which the driver is
Speaker 1: limited to China as a market or jurisdiction, or are
Speaker 1: you rolling this outgload. We're rolling the SOUB globally, starting
Speaker 1: in China, rolling the SOUB globally. And how much of
Speaker 1: a contributing factor is supervision to that seventeen billion dollar
Speaker 1: forecast through so it accounts for three point five billion.
Speaker 1: But really the inter stinct number is that we started
Speaker 1: deploying supervision only six months ago. So during it and
Speaker 1: then during this six months, we have nine brands, six
Speaker 1: car O m so with the book business for the
Speaker 1: sports one, give me some names. I gonna mention the
Speaker 1: names that it's not that important, but it's really global.
Speaker 1: This is the first time you've seen me since twenties twenty. Yes,
Speaker 1: but still you know, carmakers have their own agenda when
Speaker 1: to really release. But I don't think it's critical who
Speaker 1: it is, what it's critical. It's global, it's in Europe,
Speaker 1: it's a new we, it's in China. So it's really
Speaker 1: it's really global. And what is also important about supervision,
Speaker 1: it's really a bridge towards full autonomy, towards what we
Speaker 1: call eyes off, where you can legally disconnect from from driving,
Speaker 1: because if you invest in supervision, going from eyes off
Speaker 1: is really becoming incremental, adding active sensors, a bit more
Speaker 1: compute than that's it. It wasn't taking your bait head
Speaker 1: the last time I saw you. It wasn't going to
Speaker 1: name names. But of course, I mean that's really and
Speaker 1: that he's had a consumer conference, right, because mobilizn't known
Speaker 1: by a consumer. It's just what's in your car already. Yeah,
Speaker 1: to cut through the jargon, Mobili makes chips or system
Speaker 1: on chips, which provides some kind of advanced driver assistance,
Speaker 1: but they sell them directly to the car makers, or
Speaker 1: at least to their Tier one suppliers. But what's interesting
Speaker 1: is this goes back to the whole theme. This is real.
Speaker 1: Their product is real, and they're ramping up their output
Speaker 1: of it. And it's kind of a departure from the
Speaker 1: cs of the past, where all of this stuff is
Speaker 1: concept related or it's so distant. And I found that
Speaker 1: quite refreshing and to be Honest, if you walk around
Speaker 1: the halls here, there are lots of names that a
Speaker 1: consumer wouldn't recognize, but they do have tangible products and
Speaker 1: I find that fascinating. Yeah, I mean a m D
Speaker 1: is one of the keynote speakers, and not many who
Speaker 1: use the phone or use a technical device particularly no
Speaker 1: that's an m D chip or not. But I suppose
Speaker 1: to all of this it speaks to getting their name
Speaker 1: out there, ramping up and as we're talking about yesterday
Speaker 1: with Keith, it's all about prognosis and this year right,
Speaker 1: even if I can say the word pragmatism, maybe a
Speaker 1: little bit like the rest of the market's feeling pragmatism
Speaker 1: and profit. That's the way all the peace. Meanwhile, we've
Speaker 1: got a pee coming up, a president nons but it's
Speaker 1: Technolysis Research, President, chief familist bobbo'donald. He's joining us. Yes,
Speaker 1: let's wrap up today's coverage of Cree and all the
Speaker 1: unfailings with bobbo Donald, President and chief analyst Technolysis Research.
Speaker 1: You and I are back here in person for the
Speaker 1: first time. What is your reactions what you see around? Well,
Speaker 1: you know, I was came into the show kind of
Speaker 1: curious to see would it really come back? Would this
Speaker 1: be this? Yes? Kind of right. I mean I look
Speaker 1: around the main floor and it's pretty busy. Actually, some
Speaker 1: of the other places I've been in the Venetian for example,
Speaker 1: we're actually busier. Um, so what the energy is there? Right,
Speaker 1: there's a lot of energy. And I think what we're
Speaker 1: seeing in general is that, as you were discussing in
Speaker 1: the last segment, a lot of things are kind of
Speaker 1: more practical. They're they're finishing the ideas that were brought
Speaker 1: up a couple of years ago. Right, we had a
Speaker 1: lot of big visions, uh in nineteen you know, nineteens
Speaker 1: and early twenty and now it's like, we've got to
Speaker 1: finish these things. It's not as exciting from a news perspective,
Speaker 1: but it's practical. It's practical, it's perhaps profitable. Tell you
Speaker 1: what's also practical as we went out to our audience
Speaker 1: to just see and hear what they think of this
Speaker 1: year of CS when they're excited about it, whether they're
Speaker 1: being more practical, and what they're expecting to hear out
Speaker 1: of it, Bob and overall we are twitter poll results,
Speaker 1: whether yes, in fact that they are caring about what's
Speaker 1: going to be happening out of CES they're paying attention
Speaker 1: to the announcements. So thirty eight percent that was the majority.
Speaker 1: But I have to hand it to you that like unfortunately,
Speaker 1: it's pretty it was pretty evenly split. Thirty four percent
Speaker 1: say no, they don't think it's going to be too busy.
Speaker 1: They're not worried about the announcements. And then a third
Speaker 1: of the people we asked basically said what is CS.
Speaker 1: So for those who don't know what it is or
Speaker 1: why they should care? What this here? Should they've been
Speaker 1: listening for? What this here? Will they hair out of CS? Well?
Speaker 1: You know to me, Caroly, Caroline, part of the issue
Speaker 1: is around AI becoming really mainstream, and we're seeing that
Speaker 1: in a lot of interesting ways. We see it in
Speaker 1: small levels. We see it in things like you know,
Speaker 1: John Dear did the keynote this morning, and their tractors
Speaker 1: and the things that they do in the AI they're
Speaker 1: using their We see it in the new chips you
Speaker 1: mentioned a m D and until they are integrating AI
Speaker 1: processing now, obviously the impact of things like chat, GPT
Speaker 1: and Dolly have opened people's eyes to what AI can do,
Speaker 1: and so all of a sudden. I think there's a
Speaker 1: lot more recognition that, hey, this theoretical thing that we've
Speaker 1: been talking about is now very real and it's going
Speaker 1: to have an impact. And we see it playing out
Speaker 1: in other small ways, like just making things easier to
Speaker 1: use and adapting to how we use them. Talk to
Speaker 1: us about efficiencies, easier to use, interoperability as well, because
Speaker 1: for many they've all got the household gadgets were not
Speaker 1: actually talked to each other. This seems to be something
Speaker 1: that people are really now tackling with AI too. Yeah. Well,
Speaker 1: and you know, one of the big stories out of
Speaker 1: the show is around what's called the Matter Standard, and
Speaker 1: it's a it's a technical standard, is just a way
Speaker 1: for devices to communicate with each other in a smart home.
Speaker 1: But what's why it's important is it allows things from
Speaker 1: Amazon and Apple and Google to all start to work together.
Speaker 1: In the past, those were completely separate ecosystems. Now you
Speaker 1: can get all these devices working together and a bunch
Speaker 1: of other players, and that's new, and that's different. Their
Speaker 1: exhibitors here, they're big tech companies, are also bankers, investors, analysts.
Speaker 1: You can't get away from the headlines of people talking
Speaker 1: about Amazon layoffs. Yeah, I mean it's a big story.
Speaker 1: And interestingly, I just met with the Ammon Amazon Devices
Speaker 1: Group right before I came here, in fact, and you know,
Speaker 1: I asked him about that and they're like, look, we
Speaker 1: are still very much committed because they've been driving a
Speaker 1: lot obviously with Alexa uh there, and a lot of
Speaker 1: the rumors have been about that Devices group, but they
Speaker 1: are like, look, you know, the whole Devices group isn't
Speaker 1: going away. Yes, we're being asked to refine things and
Speaker 1: focus on the things that matter, and matter pardon the pun,
Speaker 1: happens to be one of them. But they also have
Speaker 1: announcements around sidewalk, which is there another smart home technology capability,
Speaker 1: all of which are designed to ultimately allow people to
Speaker 1: actually use these smart home devices in a way that's
Speaker 1: more intuitive very quickly. One products you're looking out for,
Speaker 1: what is it? Um? I would say, I'm actually most
Speaker 1: curious to see the PC chips from m D and
Speaker 1: Intel the PCs day enabled. There you go, Bob, great
Speaker 1: to have your voice back on past. Bobo Donal, president
Speaker 1: and chief Antilistic Technolysis Research get then get his steps
Speaker 1: back in as he marches through the vast quantity of
Speaker 1: exhibitions and Ed, we want to thank you that does
Speaker 1: it for this addition of blue bag technology. But stick
Speaker 1: with Ed. He's there on social media, but also he's
Speaker 1: still in Vegas for CS for the conversation with the
Speaker 1: Delta Sea you Ed basting the two eds lockhorns. You
Speaker 1: don't want to miss it. Plus, don't forget to check
Speaker 1: out our podcast. Find it on the terminal on Apple
Speaker 1: or Spotify on iHeart from New York from Las Vegas,
Speaker 1: lis A. Broomberg