Speaker 1: From Marhard where Innovation of Money and Power Collie in
Speaker 1: Silicon Vallet NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Speaker 3: I'm Caroline Heide, Bloomerg's world headquarters in New York.
Speaker 4: And I med Lolo in San Francisco. This is Bloomberg Technology.
Speaker 3: Coming up Apple, it rebounds in China as iPhone shipment's
Speaker 3: spike in April. We bring you the details and the
Speaker 3: discounts driving the moves US.
Speaker 4: We'll have full crypto coverage. Ahead is Bitcoin and Ether
Speaker 4: Retreat and.
Speaker 3: We discuss all things AI as musks XAI raises six
Speaker 3: billion dollars, an open AI adds an oversight board. All
Speaker 3: that and so much more coming up ahead. But first
Speaker 3: let's go to these public markets. And there's a lot
Speaker 3: of macro dat to be digesting. This week shortened training
Speaker 3: week thanks to the holidays. It was in the US
Speaker 3: and the UK. But we're up five ten percent on
Speaker 3: the Nasdaq. As we do see sentiment recovering, you see
Speaker 3: home sales recovering too. With this strong economic data, what
Speaker 3: then does the FED do? It seems though for now,
Speaker 3: we're still pushing long technology, even in the face some
Speaker 3: hawkish sentiment coming around the Federal reserve.
Speaker 5: Two year yield just down a little bit.
Speaker 3: That we've got some key auctions coming two year, five
Speaker 3: year this week. How will that see demand respond to
Speaker 3: that supply. For now we're saying, actually, just yield to
Speaker 3: tick a little bit lower. We're still at elevated levels.
Speaker 3: New York crewed up two point two percent. This is
Speaker 3: more of geopolitical risk once again, concerns happening in the
Speaker 3: Middle East. Keep an eye on commodities, not also is
Speaker 3: happening in the world of risk assets. Let's look at
Speaker 3: bitcoin for a moment. Look, we're down under pressure more
Speaker 3: than two percent coming off of our low's ed It's
Speaker 3: notable that there's sixty seven thousand dollars trying to factor
Speaker 3: in what happens that nine billion dollars of bitcoin, the
Speaker 3: value of bitcoin held by Mount Gox creditors. Will we
Speaker 3: start to see some of the movement within those wallets
Speaker 3: where we see creditors regain the bitcoin, Well, we see
Speaker 3: finally them able to sell.
Speaker 5: That's a key question.
Speaker 4: Or what have you got on the micro There's going
Speaker 4: to be a really big focus on semiconductors throughout the
Speaker 4: show and on Ai. We're going to go to our
Speaker 4: team around the country to talk a little bit about that.
Speaker 4: But in Vidio is the biggest points boost on both.
Speaker 4: Then as that one hundred s and P five hundred,
Speaker 4: the story that we're going to focus on is Elon
Speaker 4: Musk's Xai closing that mega funding round. But the next
Speaker 4: step of the conversation is well, they'll probably use the
Speaker 4: Nvidia H one hundred as a cluster to train their
Speaker 4: large language models. There are other names doing well by association.
Speaker 4: AMD is coming to market more and more with its
Speaker 4: three hundred x dell by association, with Nvidia looking strong
Speaker 4: also one of the biggest gainers in that context, and
Speaker 4: Intel feeling the love a little bit as well. And
Speaker 4: then there's Apple. So we're zero done on this data
Speaker 4: from the China Academy of Information and Communications Technology, Bloomberg
Speaker 4: crunches the numbers and it looks like last month. In
Speaker 4: other words, April iphoneshipment in China jump fifty two percent
Speaker 4: year on year. Things are improving. That The backstory is
Speaker 4: that for most of twenty twenty four, Apple and some
Speaker 4: of the resellers have done a lot of discounting in
Speaker 4: China to get that smartphone market going.
Speaker 3: Yeah, certainly, And we've got a factor in there for
Speaker 3: what this really points to in terms of Chinese consumer demand,
Speaker 3: and Agrana is here with us some reallymergan intelligence and
Speaker 3: we try to piece together the picture of a very
Speaker 3: important consumer base to Apple and ultimately discouts are working.
Speaker 6: Yeah.
Speaker 7: You know, one of the things is we have had
Speaker 7: nothing but bad news coming out of China for a
Speaker 7: fair amount, I would say, now, but when you look
Speaker 7: at it, it seems that the China situation for Apple
Speaker 7: is more cyclical in nature and not structurally people just
Speaker 7: giving away the phone. So I think it's a good
Speaker 7: news for China, mean for Apple. But at the same time,
Speaker 7: we are also not hop you know, harping a lot
Speaker 7: of these numbers into our calculations of sales data because
Speaker 7: one of the things we saw in the in the
Speaker 7: last quarter, even though Jan Feb sales were really bad,
Speaker 7: but Apple came out and said that, you know, their
Speaker 7: mainland China revenue grew. So I'm not extrapolating this information
Speaker 7: down to revenue. But you know, from a sentiment point
Speaker 7: of view, I think this is good news for Apple,
Speaker 7: all right.
Speaker 4: One of the drivers of sentiment among the Chinese consumer
Speaker 4: has been discounts and incentives. We're entering June, which is
Speaker 4: kind of another modern day period of sales events in China.
Speaker 4: How sustainable is it to rely on that?
Speaker 7: So I think it's, you know, something new that Apple
Speaker 7: has to grapple with. Before this was a brand that
Speaker 7: did not, you know, go out and give sales in China.
Speaker 7: But we have seen that, I think two times in
Speaker 7: a row now that that's one way to drive the
Speaker 7: channel to make sure they don't have a butt built
Speaker 7: up inventory.
Speaker 8: Now.
Speaker 7: I think it's going to be a partner in June
Speaker 7: because if they do decide or they do announce decent
Speaker 7: enough features of AI in their phone that could potentially
Speaker 7: lead to a better referce cycle this winter, then they
Speaker 7: need to get those older phones out, you know, as
Speaker 7: soon as possible. Otherwise, you know, you're stuck with all
Speaker 7: those phones, and I mean there's no sales.
Speaker 8: There at that point.
Speaker 7: So I think it's important for them to continue this
Speaker 7: momentum at this point.
Speaker 3: And will WWDC be the momentum driver going into June?
Speaker 9: I think so.
Speaker 7: I mean, I think we have heard a lot of
Speaker 7: good news, but at the same time, the stock's already
Speaker 7: done so well even ahead of those news. Now, I
Speaker 7: think by the fault, Apple itself may not have those
Speaker 7: amazing features, but if it's able to announce as Mark
Speaker 7: has alluded to a partnership with Open AI, I think
Speaker 7: that will tell people that, you know, Apple, even if
Speaker 7: they don't have their own technology, they're okay to license
Speaker 7: that from the best vendors out there. And with over
Speaker 7: a billion phones out there with people's hand, I think
Speaker 7: they can give a boost to any AI vendor who's
Speaker 7: going to give their technology to them.
Speaker 4: Blueberg Intelligence Senior analyst Santa rag Rana and all things Apple,
Speaker 4: thank you so much. Meanwhile, and sticking with China, the
Speaker 4: country is set up largest ever semiconductor investment fund to
Speaker 4: propel development the domestic chip industry. The fund, worth forty
Speaker 4: seven point five billion dollars, is the latest effort from
Speaker 4: Beijing to achieve self sufficiency as the US seeks to
Speaker 4: restrict its growth. Meanwhile, since Time Group co founder Ju
Speaker 4: Bing says, China's domestic AI chip makers and making fast
Speaker 4: progress in closing the gap on international leaders listen to this.
Speaker 10: There are shortage of resources here in Asia in general.
Speaker 10: For instance, to the shortage of compute. I think in
Speaker 10: general it's like the ten times our gap of the
Speaker 10: compute resources that we have here compared to the US leaders.
Speaker 10: But I think the Asian market is never lack of
Speaker 10: talents and never lack of data. So in terms of
Speaker 10: talents and data, I think eventually we will also be
Speaker 10: able to, you know, even though that we have lack
Speaker 10: of compute, we're able to, you know, make sure that
Speaker 10: we squeeze the last beat of the compute.
Speaker 3: Fascinating global take on the necessities of compute.
Speaker 5: Let's just talk chips a little bit more.
Speaker 3: But from the Texas Instruments perspective, we have an activist
Speaker 3: investor on our hands. Two and a half billion dollars
Speaker 3: worth of Texas Instruments is how much Elliot Investment Management
Speaker 3: has just taken in the company. What do they want?
Speaker 3: And improvement and free cash flow arout three ten percent.
Speaker 4: This technology, it's the air hardware names, the kind of
Speaker 4: semiconductor names in AI space and some others and chips
Speaker 4: that are leading the charge this Tuesday morning and videos
Speaker 4: up five percent, continuing to push fresh record highs. The
Speaker 4: story we'll get to you later in the program is
Speaker 4: Exail Musk's AI company raising significant money, the assumption being
Speaker 4: they will train current future gen models on the H
Speaker 4: one hundred series, and by association you see names AMD
Speaker 4: and Dell. That's so closely aligned within video at the
Speaker 4: moment higher texas instruments. Kray was just talking about more
Speaker 4: muted now three tens percent higher, but it had been
Speaker 4: much higher. As Elliott takes a significant stake and is
Speaker 4: concerned about free cash flows, there is an excellent conversation
Speaker 4: to be had with Mazuo's America's desk based analyst Jordan Klein.
Speaker 4: You have your ear to the ground, so to speak,
Speaker 4: more than anyone that I know. Let's start with in video, right,
Speaker 4: you know, the AI story is well told, it's well traded. Now,
Speaker 4: how much do you think the activity in VideA this
Speaker 4: session is that oh Xai is going to buy a
Speaker 4: whole load of H one hundreds or is it kind
Speaker 4: of treading water to the stock split that's coming in June.
Speaker 8: Yeah, thanks for having me ed.
Speaker 11: I think it's probably seventy eighty percent the mask XAI
Speaker 11: story versus the Starlex split. I mean, I definitely think
Speaker 11: that that stock split is going to continue to pull
Speaker 11: in retail investors. I don't think institutional money managers care
Speaker 11: so much. They're pretty much all long and overweight this stock.
Speaker 11: But I think retail investors seeing a ten for one
Speaker 11: stock split, and it's coming up soon, so that'll get
Speaker 11: people more active in the near term. But anytime you
Speaker 11: see a headline six billion in financing, you've got to
Speaker 11: assume the line's share that is not hiring people. It's
Speaker 11: actually buying compute infrastructure, which is going to be pretty
Speaker 11: good for in Vidia.
Speaker 3: Are they, therefore, these long and overweight institutional investors right
Speaker 3: to be so focused on in video? At what point
Speaker 3: do we see further divisification going on?
Speaker 11: Hand Jordan, Well, that's a great question, and I think
Speaker 11: you're really starting to see it accelerate beyond just in Vidia.
Speaker 11: I mean, if you pulled up a chart of Qualcom,
Speaker 11: you wouldn't You probably wouldn't know that Qualcomm's up the
Speaker 11: same amount as in Vidia over the last In May,
Speaker 11: they're both up about twenty eight percent, pretty unbelievable, But
Speaker 11: no one really talks about Qualcom because it's not a
Speaker 11: direct AI story. The other thing is memory stocks have
Speaker 11: been just you know, on a blistering pace higher this year,
Speaker 11: particularly Micron SEMIICAP Equipment, Taiwan Semi who makes all these chips,
Speaker 11: and the other group that I think is really catching
Speaker 11: attention as these cyclical analog semis like Texas Instruments, analog devices,
Speaker 11: microchip that have started to call a bottom in industrial
Speaker 11: demand with you know, expectations that demand will start to
Speaker 11: improve later on this year.
Speaker 4: I want to linger on Qualcom just a moment longer.
Speaker 4: I get what you're saying. We actually do talk about
Speaker 4: Qualcom quite a lot on this program, Jordan, to be fair,
Speaker 4: but the story is about AI shifting from the modern
Speaker 4: day version of the computer, which is the server rack
Speaker 4: back onto device smartphone and PC. The concern that I
Speaker 4: hear all the time is Qualcom might be the main
Speaker 4: beneficiary in the first instance. What happens if the consumer
Speaker 4: doesn't buy any of these devices.
Speaker 8: Well, that's a great question.
Speaker 11: I mean, I think that is the risk that unless
Speaker 11: you give consumers a reason to go out and replace
Speaker 11: or upgrade their smartphone or their PC or notebook, they're
Speaker 11: probably just going to sit there and use what they
Speaker 11: already have.
Speaker 8: These phones are so good today.
Speaker 11: I think that's why you need to see Apple and
Speaker 11: other you know, like Google, who controls Android, you know,
Speaker 11: create real new functionality and features related to AI that
Speaker 11: offer efficiency, productivity, real new things that you can do
Speaker 11: with your phone that you can't do with an existing
Speaker 11: phone to drive you to upgrade. If they don't do that,
Speaker 11: then I think it's just going to be all a
Speaker 11: marketing ploy and consumers going to are going to basically say,
Speaker 11: there's no reason for me to spend another eleven twelve
Speaker 11: hundred dollars to get a phone that's going to basically
Speaker 11: operate the same way. So the so the onus is
Speaker 11: on the ecosystem, the software. But I think it's going
Speaker 11: to evolve and develop faster than people think. So I
Speaker 11: think it a year from now a lot of people
Speaker 11: are going to be motivated to actually upgrade. The other
Speaker 11: thing is is if you hold your phone for longer,
Speaker 11: you're probably more willing to future proof a new purchase
Speaker 11: and say I'd rather just have the product that can
Speaker 11: handle AI, even if it's a year or two out,
Speaker 11: than buying something right now that can't.
Speaker 3: And I think all owners therefore is on WWDC that
Speaker 3: comes in June, is on understanding how we use aipcs.
Speaker 3: Microsoft trying to articulate that recently, Jordan, going back though
Speaker 3: to your focus on Analog, and you've been saying, look,
Speaker 3: this is being brought up more and more by investors.
Speaker 3: The news case today that an activist investor is getting
Speaker 3: into Texas instruments. Well, they want cashflow, they want rewards
Speaker 3: to shareholders. But what are you hearing that shareholders want
Speaker 3: from Analog right now?
Speaker 11: Well, Analog is probably one of the most forward looking
Speaker 11: groups of semis. They have a lot of exposure to auto, industrial,
Speaker 11: you know, communications, consumer, so they're very macro sensitive and
Speaker 11: you know, people tend to buy analog when they think
Speaker 11: estimates have bottomed, and in six months.
Speaker 8: Those numbers are going to start to go up.
Speaker 11: Pretty much what you heard in April and May from
Speaker 11: all these analog companies is that industrial, which is one
Speaker 11: of the biggest end markets for analog, has bottomed. You know,
Speaker 11: June July will be the bottom quarter, and that order
Speaker 11: rates and a book to bill will start to improve thereafter.
Speaker 11: Now we don't really know how fast, but they're saying
Speaker 11: the pmis are starting to show improvement globally and that
Speaker 11: should lead to you know, probably upward revisions by maybe
Speaker 11: late this year, but definitely in the next year. So
Speaker 11: that's why people buy these. They don't have AI, but
Speaker 11: that's actually good. They kind of diversify investors beyond just
Speaker 11: AI into more macrocyclical and markets.
Speaker 4: Your cell sites desk made some upgrades in the analog
Speaker 4: space last week. Having had a long holiday, wee can
Speaker 4: think about it. What was investor reaction to that?
Speaker 8: Well, I'll be honest, I didn't get any pushback.
Speaker 11: You know, sometimes on these upgrades people are like, you,
Speaker 11: guys are way too late. You know, this is going
Speaker 11: to be a poor call because the valuations don't support
Speaker 11: the fundamentals.
Speaker 8: I didn't get any of that.
Speaker 11: I get a lot of people asking, you know, is
Speaker 11: now the right time to buy these? They are up
Speaker 11: a fair amount this year, not as much as Nvidia
Speaker 11: and the AI trade, but they're up fifteen to twenty percent,
Speaker 11: and the valuations are quite high on next year's numbers,
Speaker 11: so they already discount or let's say, you know, assume
Speaker 11: a pretty good recovery from let's say the end of
Speaker 11: this year into next year. So that's where the pushback
Speaker 11: is is that isn't this all in the stocks already?
Speaker 8: Isn't it too late to be buying? You know? TI
Speaker 8: and ADI and microship.
Speaker 11: At these levels, and we don't really have a lot
Speaker 11: of visibility into the shape of the analog recovery. Is
Speaker 11: it going to be a V shaped recovery or is
Speaker 11: it going to be like a U or L shape
Speaker 11: recovery that takes a long time time. So still a
Speaker 11: lot of questions, But my sense is that if you
Speaker 11: keep seeing these stacks act well, even if the new
Speaker 11: flower is mixed, they're going to keep going up.
Speaker 4: Jordan klinem Zuo always plugged in. Okay, it's time for
Speaker 4: talking tech and in the news. Asia's e commerce leader
Speaker 4: C is under increased scrutiny by Indonesia's antitrust authorities for
Speaker 4: unfairly favoring its own delivery service and hearing C and
Speaker 4: its e commerce arms. Shoppy is alleged to have set
Speaker 4: up an algorithm that prioritized its own services over competitors.
Speaker 4: A follow up hearing has been scheduled for June eleventh,
Speaker 4: in which Shoppy's legal team will respond. Plus Home Dimotors
Speaker 4: has tapped more banks, including Morgan Stanley, as advisors for
Speaker 4: a potential IPO of its India units. This could be
Speaker 4: one of the biggest listings in India. Ever, the banks
Speaker 4: joined City, HSBC and JP Morgan, which could all raise
Speaker 4: about two point five billion dollars, as previously reported by Bloomberg,
Speaker 4: and healthcare payment software maker waste Star is looking to
Speaker 4: raise as much as one point zero four billion in
Speaker 4: an IPO that would make it one of the biggest
Speaker 4: this year. According to a filing, wastereters offering forty five
Speaker 4: million shares for twenty dollars to twenty three dollars apiece.
Speaker 4: The company filed for a NASZAK listing in October, but
Speaker 4: it has been monitoring market conditions as it weighs timing
Speaker 4: of a launch. Wastar plans to trade on the NASDAK
Speaker 4: Global Select Market under the ticker way Cara.
Speaker 3: Now let's turn our attention to other types of assets
Speaker 3: that people are training and these one's being digital, the
Speaker 3: world of crypto, and we've got so much to digest.
Speaker 3: We're still awaiting potentially a further decision from the SEC
Speaker 3: on Ether ETFs.
Speaker 5: Those are for issuers. Meanwhile, Bitcoin on.
Speaker 3: The downside, as you can currently see, that's after administrator's
Speaker 3: really been trying to step up efforts to return nine
Speaker 3: billion dollars worth of bitcoin from the failed mount Gox
Speaker 3: that was once the world's biggest bitcoin exchange. We've got
Speaker 3: to break it all down. I can turn of it
Speaker 3: just with us co CEO, co founder of August. You've
Speaker 3: got a platform basing design for the management and settlement
Speaker 3: of digital assets. And I'm just going to quickly dwell
Speaker 3: on some of the price pressures on bitcoin. Ultimately, this
Speaker 3: is a story of supply of people waiting finally for
Speaker 3: creditors to be repaid in some way and then maybe
Speaker 3: they sell out. But Mountgox always seems to overhang the market.
Speaker 3: Would it be a long term overhang?
Speaker 8: Yeah, it's a great question.
Speaker 5: You know, as you.
Speaker 12: Mentioned, we have roughly one hundred and forty two thousand bitcoin,
Speaker 12: one hundred and forty three thousand bitcoin cash, and roughly
Speaker 12: sixty nine billion yen that's due to creditors.
Speaker 8: That being said, we've.
Speaker 12: Seen historically in the past where there is custodial movement
Speaker 12: for different wall preparations due for distribution, although both the
Speaker 12: company and the former CEO have said that that's going
Speaker 12: to likely be much closer to October thirty, first of
Speaker 12: twenty four this year, and so you know, I think
Speaker 12: a lot of this is very much narrative sell pressure
Speaker 12: as opposed to actual distributions that we're expected to happen.
Speaker 3: Les goes to the narrative of a four because is
Speaker 3: it me or did everyone get upended by this? There
Speaker 3: is so much debate as to why suddenly the SEC
Speaker 3: seems to have, against its own self and own desires,
Speaker 3: be allowing that to be an eth ETF coming sometime soon.
Speaker 3: We know that issuers have still got to get some
Speaker 3: sort of go ahead, But I wats your view on
Speaker 3: why this has happened.
Speaker 12: Yeah, I mean to your point around you know, everyone
Speaker 12: being relatively surprised and under exposed. You could even see
Speaker 12: it in polymarket So a prediction marketplace which earlier last
Speaker 12: week showed roughly five percent probability for the ETHTF approval,
Speaker 12: and that was then immediately repriced to roughly seventy percent,
Speaker 12: and then of course the approval announcement. And so I
Speaker 12: think what has been more surprising for everyone to see
Speaker 12: in the space is that we're continuing to see crypto
Speaker 12: becoming a center topic for the twenty twenty four presidential election.
Speaker 12: We obviously had the FIT twenty one. The Financial Initutional
Speaker 12: Technology Bill also get passed in Congress as well, and
Speaker 12: so that's been a full focus this year, and so
Speaker 12: we're going to continue to see that as we near
Speaker 12: the debate in June of this year as well.
Speaker 4: Will you take him by surprise, Hia.
Speaker 8: I certainly was.
Speaker 6: It's a good question, I would say again, not only
Speaker 6: you know, I myself am very bullish ETH and the
Speaker 6: entire ETH ecosystem, but we did see a number of
Speaker 6: our clients under exposed to ETH, and there was a
Speaker 6: large rotation into both ETH BTC EATH Salana rotation.
Speaker 12: There's a lot of anticipation right now around Salana ETF
Speaker 12: being next on the list. And you know, you really
Speaker 12: saw also the ETH ecosystem tokens outperformed. So you Sawlido,
Speaker 12: for example, that was up roughly forty percent, and in
Speaker 12: options a lot of activity.
Speaker 5: That said, implied.
Speaker 12: Volatility is still down and we're seeing muted activity since
Speaker 12: the announcement, and a lot of that is because Caroline,
Speaker 12: as you mentioned at the beginning, there's still questions around
Speaker 12: what the timeline is for the listing of the ETF itself.
Speaker 12: We've heard anything between the next week through end of summer,
Speaker 12: and so there's a lot of expectations right now over
Speaker 12: what that timeline will be, since as well the issuers
Speaker 12: themselves were caught off guard.
Speaker 4: Is too all right, I'm trying to get to the
Speaker 4: root of what the bigger picture is here. You know,
Speaker 4: we talk about Ethereum being the most commercially used blockchain.
Speaker 4: Kavita Goodzo's on the show with me on Friday saying that, well,
Speaker 4: if Bitcoin is digital gold, ether is digital oil, what's
Speaker 4: your kind of bigger picture on why this is important.
Speaker 12: Eth is truly one of the foundational pieces of the
Speaker 12: entire ecosystem today. If you look at where most of
Speaker 12: the activity is centered, it is centered around Ethereum and
Speaker 12: its layer twos, and without question, it's one of the
Speaker 12: most active chains.
Speaker 5: In a space.
Speaker 12: And so even though you've seen alternative chains come about,
Speaker 12: you know, Ethereum is still very much the main chain
Speaker 12: where most of the activity in the space is happening
Speaker 12: and where a lot of the total value locked still
Speaker 12: stays to this day. Even if you look at some
Speaker 12: of the upcoming token launchers, those projects are very ETH
Speaker 12: specific independent, and so, you know, I think the question
Speaker 12: here is that ETH is a core foundational token for
Speaker 12: the industry, and having that be accepted as an ETA
Speaker 12: is really the main narrative for us being able to
Speaker 12: bring crypto mainstream.
Speaker 3: That and in presidential election in the United States could
Speaker 3: have thought it.
Speaker 5: We thank you.
Speaker 3: I Cantarovich, August co CEO, co founder.
Speaker 4: Welcome back to Lilimberg Technology. I love Low in San Francisco.
Speaker 5: Caroline how I'm right here on Neil.
Speaker 3: Let's get you to check on these markets, because now
Speaker 3: we're managing to power through what had been a little
Speaker 3: bit of concern as we head towards an all important
Speaker 3: week from economic data perspective PCE number, that favorite inflationary
Speaker 3: data for the Federal Reserve, and indeed we still got
Speaker 3: some strong data that's been happening throughout the day. We've
Speaker 3: got sentiment looking pretty good, housing data strong. What does
Speaker 3: that mean for the offend? We're looking at managing and
Speaker 3: now's that one hundred to the higher side of three
Speaker 3: tenths of a percent.
Speaker 5: But on the downside we are.
Speaker 3: Seeing Europe closed lower ed and we're off by just
Speaker 3: six tens percent. Remember, we maybe have a slightly thinner
Speaker 3: liquidity this week all round, as we've had holiday shorten
Speaker 3: weeks both in the UK and indeed here in the US,
Speaker 3: I'm looking at bitcoin under pressure as we think about
Speaker 3: potentially mantgoxx smilar movements within the wallets of that previous
Speaker 3: big bitcoin exchange that went under all the way back
Speaker 3: in twenty fourteen, still nine billion dollars worth of bitcoin
Speaker 3: locked up.
Speaker 5: Will we start to see that move Will it's still
Speaker 5: that start to be sold.
Speaker 3: Let's move on to have a look at what's happening
Speaker 3: on individual movers. What's the microdata telling us on a
Speaker 3: company like mRNA Moderna down because we the run up
Speaker 3: that we saw last week, we had a record run
Speaker 3: ten days back to back of gains for this particular stock.
Speaker 5: We're just taking some profits, perhaps perhaps for Maderna at
Speaker 5: the moment.
Speaker 3: I'm looking what's happening though, for the likes of Texas Instruments.
Speaker 5: We talked about it.
Speaker 3: This is all about an activist investor taking two and
Speaker 3: a half billion dollar steak. This coming come of course
Speaker 3: from Elliott what do they want more cash? Please coming
Speaker 3: from Texas Instruments, but also keep an eye on other
Speaker 3: chip makers in video leading the child.
Speaker 5: Maybe this is why.
Speaker 3: We managed to see tech stocks do well and the
Speaker 3: face of some anxiety around data and the macro. We're
Speaker 3: up five percent on in video and that's all around
Speaker 3: the key story of Elon Musk raising money for xai
Speaker 3: ed and well that means for key chip makers.
Speaker 4: Yeah, this is a story that we've covered step by
Speaker 4: step for a number of months now. Elon Musk's artificial
Speaker 4: intelligence startup Xai has raised six billion dollars in a
Speaker 4: bid to challenge his former allies over at open Ai.
Speaker 4: It comes less than a year after Xai's debut and
Speaker 4: marks one of the bigger investments in the field. Joining
Speaker 4: us now is Bloomberg's Kurt Wagner. We know the numbers,
Speaker 4: they published them in a blog, but I guess a
Speaker 4: good place to start is that he also managed to
Speaker 4: attract some very big name investors, those that you kind
Speaker 4: of want behind you.
Speaker 9: Yeah, that's right, Alor Equity and recent horror with Sequoia Capital.
Speaker 9: You may realize or recognize that a lot of these
Speaker 9: names are also folks who invested in x or. You
Speaker 9: know what was Twitter when Elon took over, and so
Speaker 9: he's kind of tapped into a similar or familiar pool
Speaker 9: of investors. As you mentioned, raised six billion dollars. I
Speaker 9: believe the pre money valuation was eighteen billions, so when
Speaker 9: you attack on the six we're now looking at evaluation
Speaker 9: around twenty four billion. And what's still a little confusing
Speaker 9: is you know whether these XAI investors who are also
Speaker 9: invested in x you know what the terms or what
Speaker 9: the structure of that arrangement looks like. But you do
Speaker 9: see him going back to a very familiar pool of
Speaker 9: investors here.
Speaker 3: Well, interesting is Tesla has been under pressure and there's
Speaker 3: always that ongoing anxiety as to where Elon's focus really
Speaker 3: lies here at the moment. How much are we seeing
Speaker 3: this is well, he's frustrated by a lack of ownership
Speaker 3: of Tesla now and shareholder ownership and what he now
Speaker 3: wants to create when it comes to a supercomputer to
Speaker 3: power Grock AI.
Speaker 9: Yeah, well, I think the big difference here is that
Speaker 9: you know, investors in particular are just incredibly excited about Ai,
Speaker 9: more so than I think they probably were about Twitter.
Speaker 9: And so you know, you look at Twitter and you
Speaker 9: see him spending all this time there and think like,
Speaker 9: what's the business upside and it's not very promising. But
Speaker 9: when you look at an AI company, you know, the
Speaker 9: returns are much more exciting. Or at least you could
Speaker 9: imagine much more exciting. So if he's going to be distracted,
Speaker 9: I would imagine investors are more comfortable with him being
Speaker 9: distracted with Xai than they are with X right now,
Speaker 9: just simply from a business standpoint.
Speaker 4: Elon Musk has been saying a lot on X but
Speaker 4: I think it's worth just spending a moment cut and
Speaker 4: reminding the audience the relationship between X the social media
Speaker 4: platform and company, and Xai and how they work between
Speaker 4: the two of them.
Speaker 8: Yeah.
Speaker 9: So Xai's main product, and really only product right now,
Speaker 9: is a chatbot called Grock, and it is trained using
Speaker 9: data from x and so you know, all the conversation
Speaker 9: that's happening on X is being used to.
Speaker 8: Train this chatbot.
Speaker 9: And Elon has talked about the importance of making groc
Speaker 9: very real time and how X is a differentiator there
Speaker 9: right because it's it's a platform that's full of news
Speaker 9: and commentary around current events and how that plays into Grox.
Speaker 9: So that's the relationship right now right here. Total speculation,
Speaker 9: but I don't think it's crazy to think of X
Speaker 9: as you know, kind of becoming a more formal part
Speaker 9: of x AI in the future. It would certainly, you know,
Speaker 9: take a little pressure off of the company. It would
Speaker 9: tie it to again, this this AI business model that
Speaker 9: I think people are very excited about, certainly investors are
Speaker 9: excited about. But right now, you know X Data Training XAI,
Speaker 9: which is the Grock output, and we see that product
Speaker 9: being integrated into X right now as well.
Speaker 5: And to be as truth seeking as possible. Co Wagner,
Speaker 5: we thank you so much for breaking it down.
Speaker 3: And of course that was what was being talked about
Speaker 3: by Elon Musk last week at the Viva Tech conference
Speaker 3: and some of his frustration with open ai, which of
Speaker 3: course remember back in the day he did help co
Speaker 3: create and then left. Let's talk about open ai right
Speaker 3: now because it has created a board committee to evaluate
Speaker 3: the safety and security of its AI models. Is a
Speaker 3: governance change basically made weeks after top executive on the
Speaker 3: subject resigned along with some deputies, and the company basically
Speaker 3: disbanded this internal team. I'm going to break it all
Speaker 3: down when Blueberg's Rachel Metz and that they're trying to
Speaker 3: make an effort here to show they are caring about safety,
Speaker 3: about alignment with humanity. But who is on this board
Speaker 3: and should we therefore take them at face value.
Speaker 1: Yeah, that was one of the first things I noticed, actually,
Speaker 1: is that they said in a blog post that Sam
Speaker 1: Altman is one of the leaders of this board, as
Speaker 1: well as a couple of the board members, existing board members,
Speaker 1: and a handful of current employees. And then it sounds
Speaker 1: like they're going to include consultation without side people, and
Speaker 1: they need two of them. I mean, I think it's
Speaker 1: going to be interesting to watch and see how these
Speaker 1: people all work together and then like what kind of
Speaker 1: recommendations they actually come up with. We know that Ilia Subskiper,
Speaker 1: who had been the company's chief scientist and was involved
Speaker 1: in the ousting, the very brief ousting of Sam Altman,
Speaker 1: I disagreed with Altman about safety related issues. Ilia is
Speaker 1: gone now, as is his chief deputy, and so things
Speaker 1: are things are changing. It is important to say, though,
Speaker 1: that the company has long had lots of safety people
Speaker 1: working on safety across the company, so it's not like
Speaker 1: there weren't already people working on safety of models there.
Speaker 1: This is an additional layer.
Speaker 4: The timing is interesting that to former board members of
Speaker 4: open Ai pend and op ed in The Economists over
Speaker 4: the weekend basically saying that they are worried continue to
Speaker 4: be worried about governance of open in AI. You know
Speaker 4: it's difficult, Rachel, but does this new format or oversight
Speaker 4: board answer some of their concerns.
Speaker 1: I'm not sure that it does. I would guess that
Speaker 1: they would say not really, because this is created with
Speaker 1: a lot of people that are already at open AI.
Speaker 1: One thing that also stood out to me is there
Speaker 1: doesn't to be a lot of diversity in this group,
Speaker 1: especially in terms of gender diversity, So that just on
Speaker 1: the on the surface, I feel like that's like a
Speaker 1: pretty obvious thing that is missing from there. But also
Speaker 1: if you have a lot of people that are already
Speaker 1: involved in the company involved in this kind of group,
Speaker 1: it's hard for me to see how you would get
Speaker 1: that much outside input that would then be taken seriously.
Speaker 3: And Rachel, I'm so glad you bring that up because then,
Speaker 3: of course, last week we saw that Meta has an
Speaker 3: AI oversight board.
Speaker 5: Guess what that is.
Speaker 4: For white guys? Yeah, blue most Rachel Mets. I think
Speaker 4: you know the issue of the people behind the models,
Speaker 4: that the actual human oversight is super important, and we're
Speaker 4: really grateful to you and the team on the AI
Speaker 4: team for all of the coverage. Boo Versus, Rachel MeTx,
Speaker 4: thank you. A lot. More to come here on Bloomberg
Speaker 4: Technology coming out. We're going to be joined by Framework
Speaker 4: Ventures co founder Van Spencer, and we're going to go
Speaker 4: back to that conversation about crypto and in particular the
Speaker 4: idea of spot ef ETF. Stick with us. We'll be
Speaker 4: right back. This is Bloomberg Technology.
Speaker 3: Right up platforms. Of course, we're talking crypto mining here.
Speaker 3: It's made an unsolicited nine hundred and fifty million dollar
Speaker 3: offer to buy arrival Bitfarms after the smaller bitcoin miner
Speaker 3: actually rebuffed it's takeover approach last month.
Speaker 5: Let's get to it. Bloomberg's Matthew Monks. They've been building
Speaker 5: up a stake and.
Speaker 3: Now they want to buy sort of against their own desires,
Speaker 3: it seems.
Speaker 13: Yeah, so this is really exciting. We have our hostle
Speaker 13: takeover situation in the bitcoin space or a mining space.
Speaker 13: This is a classic old school bear hug maneuver. They
Speaker 13: took a nine point twenty five percent stake in the target,
Speaker 13: they're going public with the offer, and they're effectively launching
Speaker 13: a proxy fight against the board. Put some new board
Speaker 13: members onto it. So you know, bitcoin is a whole
Speaker 13: new fangled thing, but this is like old school, classic
Speaker 13: M and A.
Speaker 3: And then not liking the governance, for example of farms
Speaker 3: after they've had some changing within corporate leadership. But I'm interested, Matthew, like,
Speaker 3: what does this tell us about consolidation in the newest space.
Speaker 13: Well, listen, big fish eats little fish. The bitcoin mining
Speaker 13: space right now is under enormous pressure following the having
Speaker 13: as which we all know, which really cut down the
Speaker 13: bitcoin rewards and really cut into the revenue of these companies.
Speaker 13: Riot isn't much better, stronger financial shape. It's got like
Speaker 13: eighty nine hundred bitcoin, seven hundred million in cash, and
Speaker 13: as you know, as you noted, the target has you know,
Speaker 13: got some CEO corporate governance challenges. So it's right for
Speaker 13: the taking.
Speaker 3: Really fascinating what we're going to be seeing in the
Speaker 3: crypture space, particularly as everyone worries about energy going forward
Speaker 3: to I think monks in the house, we appreciate you
Speaker 3: taking us through the old school in the new school,
Speaker 3: and you're going to be focusing a little bit more
Speaker 3: on the newest school of it.
Speaker 4: Yeah, dive deeper into the world of cryptod this time
Speaker 4: from the investors perspective. With Framework Ventures co found Events,
Speaker 4: Spencer joins us in today's VC Spotlight, and you know Events.
Speaker 4: Where we start is by asking if you, as an individual,
Speaker 4: were taken by surprise at the pace of conversation around
Speaker 4: a spot eth etf Absolutely not.
Speaker 2: We were one of the few firms that predicted, I think,
Speaker 2: on this show that it was going to happen. And
Speaker 2: we've still got a couple of months until it starts trading,
Speaker 2: so people have time to get into position. But Ether
Speaker 2: is the clear asset that should have the second etf.
Speaker 2: It has the most stable coins, it has higher feed
Speaker 2: based than Bitcoin, it has a dividend, it's deflationary. This
Speaker 2: is an asset that people want to own. And so
Speaker 2: I know the bears were prognosticating for quite some time
Speaker 2: about how the odds were ten percent or you know. Now,
Speaker 2: I think the line is that the Ethan flows will
Speaker 2: be lower than expected, but we'd happily fade that as well,
Speaker 2: and we're firmly in the camp that eth is going
Speaker 2: to be a huge beneficiary from these flows.
Speaker 4: Vance you said a couple of months, what leads you
Speaker 4: to believe trading will start in a couple of months
Speaker 4: and what you think the regulatory roadmap is from here.
Speaker 2: Yeah, so the nineteen B fours, which is the first
Speaker 2: part of the process, had been approved, and that was
Speaker 2: kind of the crux of the political pivot that happened
Speaker 2: last week. Now you have to get the s ones approved,
Speaker 2: and you know, there's a lot of complexity in the
Speaker 2: s ones in and of themselves, but we view this
Speaker 2: delay as positive. You're going to have that same natural
Speaker 2: build up that bitcoin had once it looked like it
Speaker 2: was going to get approved. You're going to have additional
Speaker 2: sales and marketing that's going to happen. And I think
Speaker 2: the bigger thing is that, to some extent, eth is
Speaker 2: going to ride the codetails of all the access that
Speaker 2: bitcoin is created, the access into the ris, the financial advisors,
Speaker 2: the wirehouses, and so you know, you think about someone
Speaker 2: wants to put a dollar in the crypto, what do
Speaker 2: they do? When people think about the Magnificent seven, they
Speaker 2: don't go all in on one of them. Maybe they
Speaker 2: do a peanut butter spread. Maybe they go overweight one
Speaker 2: or the other, but you know, both or all seven
Speaker 2: of those are components of a smart investing strategy. We
Speaker 2: think the same thing is going to happen here.
Speaker 4: I don't really know where to go with the peanut
Speaker 4: butter jelly analogy. You got to if you're talking about nvidio,
Speaker 4: you've probably got a pretty thick peanut butter layer and
Speaker 4: a very small little jaml chunky. That's one way of
Speaker 4: putting it. I always do my best to be consistent
Speaker 4: and ask the same question consistently. This happens, and that
Speaker 4: is what are the principal differences in bitcoin spot etf
Speaker 4: ether spot etf But I guess what we're actually asking
Speaker 4: is the principle difference between an ethery and based blockchain
Speaker 4: and bitcoin blockchain.
Speaker 2: So Bitcoin's digital gold, right, and you know, you can
Speaker 2: view the rigidness of its roadmap. You know there is
Speaker 2: no future roadmap for bitcoin being either a future of
Speaker 2: a bug or a bug in the sense that you know,
Speaker 2: Bitcoin is going to be bitcoin for the next one
Speaker 2: hundred years. Eth is at the forefront of the tokenization
Speaker 2: movement that it's going to really define the next few
Speaker 2: decades of traditional finance. We're going to start with the
Speaker 2: stable coins one hundred billion dollars of stable coins that
Speaker 2: are on chain today, but now black rocks bringing on
Speaker 2: fixed income, people bringing on equities, people are bringing on commodities,
Speaker 2: people are bringing on private credit, and so ETH is
Speaker 2: at the forefront of that movement. And it's also just
Speaker 2: a very different asset. You know, it does about two
Speaker 2: to three billion dollars of profits per year. It dividends,
Speaker 2: is out. The asset itself is deflationary. You know, it's
Speaker 2: proof of steak. It's it's a very different asset than Bitcoin.
Speaker 2: I would say, it's more of a textile growth play.
Speaker 2: And if if bitcoin is digital gold, eth is Apple.
Speaker 2: It's building the app Store of finance. And just like
Speaker 2: people thought that, you know, the app store was a
Speaker 2: toy or a gimmick, you know, ten years ago, people
Speaker 2: are going to be really surprised at the uniqueness of
Speaker 2: the fees and and just the scale of the business
Speaker 2: that Eth is going to generate from the tokenization weight
Speaker 2: that's taking place. And it's literally think it's al Tutor Jones,
Speaker 2: it's all these guys, you know, they're all in the stream.
Speaker 4: Okay, So that the Van spencercle is that Ether is Apple.
Speaker 4: Kavita Gupta was on the show on Friday and said
Speaker 4: it's digital oil. If bitcoin is digital gold, Ether is
Speaker 4: digital oil. I'd love to talk try about kind of
Speaker 4: the ripple secondary effects of what might happen if the
Speaker 4: approvals come as expected. You know, we talk often in
Speaker 4: our Bloomberg use coverage on this program. The Ethereum blockchain
Speaker 4: is the most commercially used globally. There is a DeFi
Speaker 4: component to all of this. What is the sort of
Speaker 4: crystal ball into the future if the approvals happen in
Speaker 4: the cadence at which you set out.
Speaker 2: Yeah, so, you know, I think we take pride in
Speaker 2: you know, we manage just around one point eight billion
Speaker 2: dollars today. We're a venture firm at our core, but
Speaker 2: we play in the liquid markets as well, and we're
Speaker 2: one of the few firms that's bought nine figures of
Speaker 2: crypto pretty consistently on on open market exchanges over time.
Speaker 2: And I can tell you from first and experience that
Speaker 2: that moves the price pretty meaningfully. And eth is a
Speaker 2: much smaller asset than bitcoin. It's a much more reflexive asset.
Speaker 2: There's much less of it available. If you have you know,
Speaker 2: even pro rata the share of flows to bitcoin by
Speaker 2: market cap, that is going to make a significant impact
Speaker 2: in the market structure. And flows of crypto writ large,
Speaker 2: and so you can think about it back to twenty twenty.
Speaker 2: Twenty twenty, you know, Michael Saylor was on the scene.
Speaker 2: We were buying digital gold that was going to be
Speaker 2: the only asset that we were going to buy in
Speaker 2: that bowl run. And sure enough, you know, eth bitcoin.
Speaker 2: The ratio between the two went up three x in
Speaker 2: the span of three months. And I think with this catalyst,
Speaker 2: with the setup of the relative lack of supply and
Speaker 2: just the narrative that you know, these are not just
Speaker 2: you know, pet rocks that sit around and we call
Speaker 2: stores and value, but there are things that we actually
Speaker 2: build with as technology that's going to be a huge
Speaker 2: tailwind for ETH. And so it's hard to overstate just
Speaker 2: how positive we are. And this is kind of a
Speaker 2: surprising decision for a lot of people, the ETF, but
Speaker 2: this has always been baked into the cake for us.
Speaker 4: Thence you use the word political earlier in this conversation.
Speaker 4: It's an election year. We have a presidential election in
Speaker 4: this country where at least one of the candidates has
Speaker 4: tried to make crypto a battleground topic. Does this approval
Speaker 4: process for spot EFTF have any relevance to that.
Speaker 2: Absolutely, there's sixty million of US in the US that
Speaker 2: hold crypto. There's hundreds of millions, if not a billion,
Speaker 2: globally that hold crypto. You know, in a lot of
Speaker 2: these emerging markets as well, there's more wallets on crypto
Speaker 2: accounts than there are bank accounts. Like, this industry is
Speaker 2: not going anywhere. And I think it's you know, the
Speaker 2: Democrats that have finally gotten the memo on this, and
Speaker 2: it's amazing to see, you know, the party that I
Speaker 2: call home finally pivot on this decision. And FIT twenty one,
Speaker 2: which is the Regulatory Clarity Bill, provides a pathway for
Speaker 2: stable point issuers, application developers, people want to tokenized assets
Speaker 2: to stay in the US, and that is so important. Tether,
Speaker 2: which I think is the you know, the thirtieth largest
Speaker 2: buyer of US treasuries is overseas. That is absolutely embarrassing.
Speaker 2: And we want those industries in the US. And so
Speaker 2: you know, we should be rooting for any growth industry
Speaker 2: with entrepreneurs and real technology to stay here. And I
Speaker 2: think that's finally what's happening politically.
Speaker 4: Framework Ventures, co found Events, Spencer come back talk to
Speaker 4: us later in the year. And let's see if the
Speaker 4: approvals came into your timeline. Thank you.
Speaker 5: Now, perhaps while you were celebrating, you weren't doing it.
Speaker 3: At the box office, a disappointing Memorial Day weekend for
Speaker 3: the movies furiosa Man Max Saga took in just thirty
Speaker 3: two million dollars domestically, while the Garfield movie came in
Speaker 3: close second thirty one point one million dollars.
Speaker 5: According to data from.
Speaker 3: Com School Now, the Furio results might be the worst
Speaker 3: performance for a number one film released on Memorial Day
Speaker 3: weekend in decades. This all comes as the industry bounces
Speaker 3: back from strikes remember writers actors last year, and a
Speaker 3: consumer shift to watching films at home now and Bloomberg
Speaker 3: Intelligence actually notes that, look, twenty twenty five has going
Speaker 3: to be much better film industry. That's when perhaps some
Speaker 3: of the strikes uncrystallize themselves. But ed we're having to
Speaker 3: depend on less marketing as well budget tightening.
Speaker 5: It's all about word of mouth and it's not really working.
Speaker 4: I find Furious so interesting because I saw it everywhere
Speaker 4: on social media. You know, Chris Hemsworth doing all the
Speaker 4: media events around the world, but I didn't go and
Speaker 4: see it and for me, it goes back to the
Speaker 4: idea of theatrical release at the box office or a
Speaker 4: streaming release. This weekend, I wasn't in the movie theater.
Speaker 4: I was at home watching Atlas on Netflix, which is
Speaker 4: the new Jennifer Lopez movie about her trying to take
Speaker 4: down humanoid AI that's gone rogue. So that's interesting. On
Speaker 4: the strategy side, was that any good actually was pretty
Speaker 4: good and Jennifer Lopez was pretty good in it. But
Speaker 4: one of the things that Chris palmery are editor notes
Speaker 4: in his column about the box office this weekend is
Speaker 4: they were unfortunate because there's some good stuff it's coming
Speaker 4: in the summer, and as you note twenty twenty five,
Speaker 4: there's a much bigger kind of pipeline.
Speaker 3: But just think about the hype around Oppenheimer and Barbie
Speaker 3: in the previous year. No wonder you're going to see
Speaker 3: perhaps year on year comparisons being tough.
Speaker 5: I mean, the actual fact that we came in.
Speaker 3: Well below the worst case scenarios being fought out here.
Speaker 3: It is what thirty seven percent down from this time
Speaker 3: last year's holiday weekend.
Speaker 5: At the box office.
Speaker 3: People are not wanting to spend in that way right now,
Speaker 3: and certainly like even though it's a rainy Monday, I
Speaker 3: wasn't thinking about getting and hitting the cinemas at the moment.
Speaker 3: I'm more thinking about, you know, how to do it
Speaker 3: at home?
Speaker 4: What one quick thing Garfield from my childhood, our childhood, right, like,
Speaker 4: why remake another Garfield? Just come up with a new
Speaker 4: movie please at.
Speaker 3: Some point, Well, if it's going to be frozen, take
Speaker 3: four or one thing like that.
Speaker 5: Sometimes these franchises they work out. Meanwhile, look that does it.
Speaker 5: With this edition of Really.
Speaker 4: Big Technology, it was a really busy start to a
Speaker 4: short week. So check out the podcast. You know where
Speaker 4: to find it, Apple, Spotify, iHeart, and it's carry noted
Speaker 4: like this is a really big week for economic data
Speaker 4: and markets. There's some earnings thrown in there as well.
Speaker 4: But we started talking about AI and crypto and I
Speaker 4: probably suspect that's how we'll carry on from New York
Speaker 4: City and San Francisco. This is Bloomberg Technology