Speaker 1: From the heart of where innovation, money and power Collie
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay i'me Emily Chang in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up the next hour. Early results
Speaker 1: from third party shows Amazon's latest prime day not much
Speaker 1: better than any other day, Amazon saying not so fast.
Speaker 1: Our conversation with a prime executive is coming up. Plus
Speaker 1: Gray Scale collapse back at the SEC after rejecting a
Speaker 1: Bitcoin e t F, I'll speak with CEO Michael Sonenshein
Speaker 1: about their legal challenge and ongoing friction between Gary Gensler
Speaker 1: and the crypto community. Plus Andrew Yang joins us to
Speaker 1: talk about the state of tech entrepreneur ship in a downturn,
Speaker 1: plus his outlook for president Meantime, this week's Bloomberg Business
Speaker 1: Week cover story focuses on the roller coaster ride that
Speaker 1: has been the Musk Twitter deal. Kurt Wagner writes that
Speaker 1: for Twitter, there are no good outcomes, no matter what
Speaker 1: path a deal with Elan takes. Musk has publicly trashed
Speaker 1: Twitter's top management and alienated thousands of its employees. Vowed
Speaker 1: to slash rules that were put in place after misinformation
Speaker 1: threatened election integrity and wants to make Twitter the everything app,
Speaker 1: but hasn't really explained what that means. Here to discuss
Speaker 1: Bloomberg's Kurt Wagner. So the headline, Kurt is that Twitter
Speaker 1: faces only bad outcomes if this still closes, why do
Speaker 1: you say so? Yeah? Well, remember, Emily, there's there's two
Speaker 1: options here. One, uh, you know, the deal falls apart,
Speaker 1: and this stock that has been sort of artificially inflated
Speaker 1: is going to crash um. Employees who have sent the
Speaker 1: last six to nine months, you know, just in this
Speaker 1: total state of certainty, are gonna have to pick up
Speaker 1: and pretend like, you know, nothing ever happened. Or if
Speaker 1: if things go the way Twitter wants, then they get
Speaker 1: the guy in charge, who, you know, for the last
Speaker 1: three months has been saying that Twitter has been lying
Speaker 1: about its user base and it's, uh, you know, it
Speaker 1: doesn't have the right business model and all these things right,
Speaker 1: So it's just sort of like it feels to me
Speaker 1: that there's not really a lot of good outcomes here. Now.
Speaker 1: I got a lot of fan mail after this story
Speaker 1: came today, Emily for people who disagreed that they think
Speaker 1: you know, the free speech uh kind of vision unmust
Speaker 1: keeps talking about is going to make Twitter a much
Speaker 1: better place very shortly. But you know, even that, I
Speaker 1: would probably argue is going to create a lot of
Speaker 1: other headaches for for this platform very soon. Well, and look,
Speaker 1: Musk does have millions and millions of fans, so that's
Speaker 1: certainly not you know, out of the question that you know,
Speaker 1: some folks are are going to be very happy if
Speaker 1: this deal gets done that side. You use the words
Speaker 1: very shortly there, and I'm curious, say, say the deal
Speaker 1: does get done before October, could Elon must make significant
Speaker 1: changes to the platform before the midterm elections before November eight?
Speaker 1: I mean, the deal is supposed to close by, right,
Speaker 1: and so to me that means that Elon Musk would
Speaker 1: be in charge, and therefore are they going to be
Speaker 1: able to, you know, bring President Tromp back on the
Speaker 1: Twitter within the next week like possibly it is possible.
Speaker 1: But how much of an impact is that going to have?
Speaker 1: I don't really know, right, but I do think that
Speaker 1: there could be changes to some of these policies. They
Speaker 1: could say, Hey, all the folks who have been looking
Speaker 1: for misinformation or hate speech or voter misinformation, stand down,
Speaker 1: don't don't bother, don't do your job, and all of
Speaker 1: a sudden, you know, we could have a very different
Speaker 1: level of content on the platform very soon. What's the
Speaker 1: latest negotiations between the two parties. What are they actually
Speaker 1: talking about right now? Yeah, I mean there has been
Speaker 1: some stuff that we have reported at Bloomberg that, you know,
Speaker 1: despite the fact that both sides want the same deal price,
Speaker 1: there have been some hang ups, right is specifically that
Speaker 1: you know, it sounds like Elon Musk wants to reserve
Speaker 1: his right to possibly sue some of these executives, wants
Speaker 1: to deal closes to go after you know, maybe people
Speaker 1: kind of personally UM as a way to say, hey,
Speaker 1: you've been misleading investors and misleading me, the potential buyer
Speaker 1: this whole time. Right. Twitter of course doesn't want to
Speaker 1: to have that in there. They're also worried about this
Speaker 1: debt contingency that Ellen had to add to um, you know,
Speaker 1: the negotiations. So I imagine at this point both sides
Speaker 1: are trying to iron through those types of details, right,
Speaker 1: I mean, they claim they want the same price. I
Speaker 1: think the debt is is for the most part locked
Speaker 1: up and so you think, like, Okay, they're really at
Speaker 1: the end here where they're kind of going over those
Speaker 1: those very minute elements of a deal. All right, Kurt Wagner,
Speaker 1: thanks for keeping us updated as always, and check out
Speaker 1: that story in the latest edition of Bloomberg Business Week.
Speaker 1: This week's Amazon Prime flash sale may not be all
Speaker 1: it's chopped up to be. Third party researchers are saying
Speaker 1: the Prime Day sales generating the same traffic as any
Speaker 1: regular day. Bloomberg's Had Ludlow asked Jamil Ghani, Amazon's head
Speaker 1: of Prime about the data. Here's how he responded, I
Speaker 1: don't know if that's the accurate read. We've been really
Speaker 1: impressed with how many Prime members are showing up, how
Speaker 1: they're engaging with the event, and how they're shopping. They're
Speaker 1: shopping the entire store. Some of the favorite categories so
Speaker 1: far are electronics, toys, home apparel, health and personal care,
Speaker 1: top brands like Apple, lenej HP, Shark, and many many others,
Speaker 1: including items off our curated top one hundred lists. So
Speaker 1: we've been really really happy with the event so far.
Speaker 1: Our members can engage through midnight tonight, so I encourage
Speaker 1: them to check it out. What is Amazon tracking to
Speaker 1: do for this October window in dollar turns relative to July.
Speaker 1: Can you give us some granularity about the impacts of
Speaker 1: having a second window in the same calendar year. Yeah,
Speaker 1: we have to keep in mind that Prime Day this
Speaker 1: year was the largest Prime Day we've ever had, one
Speaker 1: point seven billion dollars in savings for our members around
Speaker 1: the globe. And so what we're trying to do with
Speaker 1: this event is give our Prime members yet another opportunity
Speaker 1: to say, we know that our members are always looking
Speaker 1: for savings, but no more sort than now where you know,
Speaker 1: the macro economic environment um has everybody trying to make
Speaker 1: the dollar stretch a little bit further. And so this
Speaker 1: is an opportunity for forty eight hours for our members
Speaker 1: to get an exclusive jump on their holiday shopping, its
Speaker 1: needs and wants across the entire store. And so far
Speaker 1: the engagement has been really strong. So it's too early
Speaker 1: to tell, but I expect that there will be deals
Speaker 1: throughout the event. That's something that we learned in Prime
Speaker 1: Day that our members like top brands and they like
Speaker 1: having deals throughout the entire event. You're going to continue
Speaker 1: to see that through midnight tonight. So this window will
Speaker 1: not be as big as the July window. It's too
Speaker 1: early to tell, but we're very excited by the early
Speaker 1: engagement um and it is the kickoff to uh the
Speaker 1: entire holiday season. We're gonna have deals and discounts throughout
Speaker 1: the entire period. Black Friday Cyber Monday continue to be
Speaker 1: incredibly important, but we wanted to take care of our
Speaker 1: most engaged, are most important customers first, those are our
Speaker 1: Prime members, and so this is the kickoff to the season.
Speaker 1: That is interesting, right, the idea around the pool forward
Speaker 1: in holiday spending. He told me about how that might
Speaker 1: help clear out some inventories ahead of the holiday season. Yeah,
Speaker 1: you know, this event is not about inventory. This we
Speaker 1: built this event purpose built on the top brands that
Speaker 1: are members we know are looking for as they go
Speaker 1: into the shopping season. And so this is an exclusive
Speaker 1: for eight hours for our Prime members to get a
Speaker 1: jump on their holiday shopping, ensure that they get those
Speaker 1: must have giftable items, get some of the holiday rush
Speaker 1: out of the way earlier in the season. But we're
Speaker 1: going to continue the deals and discounts for all of
Speaker 1: our customer including Prime members, going into Black Friday and
Speaker 1: Cyber Monday. You alluded to it earlier, but what are
Speaker 1: you learning about the consumer based on what they're buying.
Speaker 1: It seems through third party data they might be going
Speaker 1: for this sort of cheaper ended the spectrum in terms
Speaker 1: of the items they're buying. Is there any sense that
Speaker 1: the consumer is feeling the pain of inflation. Well, I
Speaker 1: think all of us as Americans are feeling the pinch
Speaker 1: of inflation. Um, all of us want to stretch our
Speaker 1: dollar as far as we can. What we saw in
Speaker 1: Prime Day is that members engaged across all um sales prices,
Speaker 1: from consumables and everyday essentials all the way up through
Speaker 1: the electronic devices. It's needs through wants, and that's why
Speaker 1: we built Prime Early Access sale to have the top
Speaker 1: brands across the entire store so that members can meet
Speaker 1: those needs and wants. We've got top brands in health
Speaker 1: and personal care all the way to toys, to home
Speaker 1: apparel and electronics, which are you know, uh, clearly a
Speaker 1: member ever every holiday season and so we're seeing the
Speaker 1: same in engagement now. We expect that to continue over
Speaker 1: the next several hours through midnight tonight. Amazon's head of
Speaker 1: Prime there Jamil Ghani, with our own at Ludlow For
Speaker 1: more on this, I want to bring in our Bloomberg
Speaker 1: reporter Spencer, So we're who of course covers Amazon. So Spencer,
Speaker 1: let's talk about a potential disparity here and what the
Speaker 1: third party folks are saying and what Amazon is saying.
Speaker 1: Just how good has this prime day actually been so far? Yeah?
Speaker 1: I think it's uh, what we're hearing is that there's,
Speaker 1: you know, slight lift from a usual day. Now we're
Speaker 1: getting summer biased data from what we had earlier. You know,
Speaker 1: some uh you know deep a deeper look slight lift
Speaker 1: from from a typical day, but not nearly the same
Speaker 1: amount of lift as they had in the summer prime day.
Speaker 1: And I'm not sure that we're that far off. I mean,
Speaker 1: if you listen carefully to what the Amazon executive says,
Speaker 1: he uses words like shop, and he uses words like engagement,
Speaker 1: and so he doesn't use words like by and he
Speaker 1: doesn't use words like spend, you know, so so engagement
Speaker 1: can be just a cute way to say people. People
Speaker 1: are coming on the site, they're noodling around, they're looking
Speaker 1: at this, that and the other, but they're not really
Speaker 1: buying a whole lot. So What does this tell us
Speaker 1: about the state of the consumer potentially more broadly leading
Speaker 1: into the holidays, or doesn't tell us something more about Amazon? Well,
Speaker 1: I think it's a little of both, right. I Mean,
Speaker 1: it's not a secret that that consumers are pulling back,
Speaker 1: that they're dealing with higher food and fuel prices, things
Speaker 1: that they have to buy and have less money you know,
Speaker 1: to spend on things that they want to buy. And
Speaker 1: then on Amazon, we're learning like on these kind of things.
Speaker 1: Some of the top categories are like household essentials and
Speaker 1: pantry items and things people just kind of spending the
Speaker 1: stock up on things that otherwise buy and not necessarily
Speaker 1: splurging on things like electronics and whatnot. But then in
Speaker 1: terms of Amazon, is just they figured, hey, what the heck,
Speaker 1: will do another sale? And it was interesting he said
Speaker 1: it wasn't about inventory when it What it is about inventory.
Speaker 1: That's really why Amazon was able to spin this thing
Speaker 1: up so quickly, is because a lot of merchants, you know,
Speaker 1: the inventory is already there they have. Meantime, there's been
Speaker 1: some developments in unionization efforts at an Amazon warehouse in California.
Speaker 1: What's the latest on that. Yeah, this is pretty interesting
Speaker 1: to watch. So there's a one warehouse in Morino Valley
Speaker 1: in the Inland Empire, and that's a real stronghold for Amazon.
Speaker 1: That's that's probably where they where they've got the most
Speaker 1: concentrated number of facilities and employees. And so one of
Speaker 1: them just submitted signatures to push for a union election
Speaker 1: affiliated with this Amazon labor union, which was the one
Speaker 1: that uh, you know, one approval for union in in
Speaker 1: Saten Island, which Amazon is still contesting. And now there's
Speaker 1: another vote coming up next week in Albany, again affiliate
Speaker 1: with this Amazon labor union. So starting to look like
Speaker 1: this thing's spreading and and and Amazon is having a
Speaker 1: hard time containing it all right. Sponsor Soaper who covers
Speaker 1: Amazon for us, thank you. Coming up weeks after the
Speaker 1: massive Adobe figmdial, the other hot enterprise software startup has
Speaker 1: some news. Air Table CEO Howe lou is with us next.
Speaker 1: This is Bloomberg, the collaboration software startup. Air Table just
Speaker 1: announced its biggest launch of the year at its inaugural
Speaker 1: air Table Leaders Forum, coming up with a new connected
Speaker 1: apps platform that will help companies like Netflix, linked In,
Speaker 1: and i heart Media share data, manage workflows, track product
Speaker 1: roadmaps and more. Co founder and CEO, Howelu with me
Speaker 1: now for more on this, So, you know, talk to
Speaker 1: us about the trends that you're seeing an enterprise software
Speaker 1: and why an announcement like this in your mind is important,
Speaker 1: Like what problems does this solve? I mean, I think
Speaker 1: it's best to explain it in terms of where we
Speaker 1: came from and where we're going. So ten years ago,
Speaker 1: Marke and Reeson said software is eating the world. We
Speaker 1: created air Table really to kind of execute against that
Speaker 1: and empower the team's closest to the work in every
Speaker 1: company to be part of that disruption, to build the
Speaker 1: apps for themselves that they needed. Now we've seen this
Speaker 1: bigger problem within enterprises where it's not enough to just
Speaker 1: have individual apps, but those apps need to be connected
Speaker 1: and to allow the entire enterprise to all share a
Speaker 1: source of truth while enabling all those individual teams to
Speaker 1: still be really, really flexible and agile. So it's kind
Speaker 1: of the next frontier of air Table, you know, combining
Speaker 1: what we've already done literally in these connected apps across
Speaker 1: an enterprise. Air Table benefited from some of those pandemic
Speaker 1: tail winds, the shift to hybrid work has that kept up?
Speaker 1: What sort of workplace trends are you seeing now? I
Speaker 1: think a lot of what we're seeing now is that
Speaker 1: there is this huge need to rethink how work is
Speaker 1: being done right, especially in today's economy. It's not just
Speaker 1: about throwing more people at every problem. You can't just
Speaker 1: you know, double your your head count and every department
Speaker 1: to get more output. You need to rethink how efficiently
Speaker 1: you work. And that's where I think our our enterprise
Speaker 1: vision of connected apps is really going to come into plan.
Speaker 1: It's already showing up. And how we sell our table,
Speaker 1: how we're seeing our our customers adopt air table. It's
Speaker 1: really about enabling more agility and more output. Um. You know,
Speaker 1: we talked about this this customer case study during our
Speaker 1: event earlier today of Equinox actually accelerating their content production
Speaker 1: efforts by four with the same team and during a
Speaker 1: pandemic where they were all working from home, nonetheless using
Speaker 1: air table and connected apps. How do you see competition
Speaker 1: shaping up? There's a Sauna, Monday, dot Com others that
Speaker 1: are vying to be the project management tool of choice.
Speaker 1: What is air tables advantage? Yeah, I think the whole
Speaker 1: idea behind declaring our north star as connected apps is
Speaker 1: that we're actually elevating ourselves out of that world of
Speaker 1: project management. We actually don't really care as much about
Speaker 1: the task management small team use cases that I think
Speaker 1: a lot of the other products are are going after,
Speaker 1: and instead we're really trying to solve this bigger problem
Speaker 1: across an entire enterprise where you need these shared sources
Speaker 1: of truth, these high value golden data sets as we
Speaker 1: call them. You know, for instance, Netflix having this this
Speaker 1: master list of all the content titles they're producing and
Speaker 1: then wanting to manage all of their marketing, their post production,
Speaker 1: their legal rights management, etcetera. Workflows across that data set. UM.
Speaker 1: And so it's really you know, us going out and
Speaker 1: taking on more companies like service Now or even Salesforce
Speaker 1: with their app cloud efforts. UM. When we think about
Speaker 1: going and deploying apps across every other part of the enterprise,
Speaker 1: not just doing projects or tasks. I think some people
Speaker 1: are still recovering from the shock of the big Adobe
Speaker 1: Figma deal twenty billion dollars, and I just I'm dying
Speaker 1: to hear your thoughts on it. Given that air table
Speaker 1: is one of the few you know hot enterprise software
Speaker 1: startups that's often mentioned in the same breath as Figma.
Speaker 1: What's your take on this deal. I think Figma is
Speaker 1: an incredible product company, has a great team. Um you know,
Speaker 1: they started around the same time as us, so weirdly
Speaker 1: we've been parallel. I think we both started around both
Speaker 1: spent years building a pretty technically interesting product before launching.
Speaker 1: These were not products air Table nor Figma that were
Speaker 1: built overnight as a hack project, but really a deliberate
Speaker 1: taking on of a really, really large market opportunity. I
Speaker 1: think ultimately the trend that's really benefited both of us
Speaker 1: is that for the first time on the web, when
Speaker 1: both of us started, you could build these really rich
Speaker 1: desktop grade experiences, right Sigma could not have been built.
Speaker 1: You couldn't build that level of experience in the web,
Speaker 1: nor could you build air Table in the web. And
Speaker 1: so I think we're both bright place right time to
Speaker 1: take on really large market opportunities and disrupting some incumbents
Speaker 1: as a result. Is getting acquired like that something that's
Speaker 1: attractive to you. Are you on the I P O path? Instead?
Speaker 1: I think that the best companies have to think about
Speaker 1: how to build an independent business, right I mean, when
Speaker 1: you look at Figma, one of the reasons why it
Speaker 1: was so attractive as a business and why it's valued
Speaker 1: so much in this steal is because actually they could
Speaker 1: go to Long alone. They have the leverage. I mean,
Speaker 1: it's it's growing very quickly, it's an amazing business, there's
Speaker 1: a massive tam and it's truly a disruptive and delightful product,
Speaker 1: right And so I think if you can go out
Speaker 1: and build a company that is truly capable of being
Speaker 1: a star in a star independent business on the I
Speaker 1: P O path, then I think that also raises your attractiveness,
Speaker 1: in this case for Figma, through M and a deal.
Speaker 1: So we've always been squarely focused on just building the
Speaker 1: best product and ultimately business and company that we can
Speaker 1: and you know, we're not optimizing foreign acquisition. So we've
Speaker 1: seen valuations of tech startups fall across the board. You
Speaker 1: raised at an almost twelve billion dollar valuation at the
Speaker 1: end of last year. Does that number hold up in
Speaker 1: a downturn or is air table in the rare category
Speaker 1: of startups like Figma potentially where that number potentially goes up.
Speaker 1: So the way I've always thought about it is the
Speaker 1: short term valuation is just it's a point in time.
Speaker 1: And what really matters for both us as team members
Speaker 1: working on this company, for shareholders who may consider investing
Speaker 1: in our table is what is the long term expected
Speaker 1: value of this business? And especially since we're private and
Speaker 1: we don't have a public liquid value right now, what
Speaker 1: do we think this company will be worth in one year,
Speaker 1: two year, or three years, And especially as the operators
Speaker 1: within the business, what can we do to drive towards
Speaker 1: the best possible result? And so I think as we
Speaker 1: push into connected apps and this bigger and bigger possibility,
Speaker 1: you know, solving a problem for enterprises at large um
Speaker 1: actually generating you know, multimillion dollar contracts repeatedly. Uh and
Speaker 1: even you know, driving up are already best in class
Speaker 1: left dollar retention. I think we feel very good about
Speaker 1: the clear path that we can get to building a
Speaker 1: really extraordinary business that's highly differentiated as the unit economics
Speaker 1: to support a really freemium multiple. And you know, whether
Speaker 1: there's overall multiple compression in the public markets in the
Speaker 1: near term, you know, I think the great businesses that
Speaker 1: ultimately go after really large hands and have durable growth
Speaker 1: potential can outgrow any of that compression because they just
Speaker 1: keep growing and growing. All right, interesting, interesting response there,
Speaker 1: Air Table co founder and CEO, Howelu, good to have
Speaker 1: you back here on this show. Thank you for stopping by.
Speaker 1: Welcome back to Bloomer Technology and Emily Changing in San Francisco.
Speaker 1: The global self and semi conductor shares continues, but one
Speaker 1: name in Japan bucking the trend. Are all back with
Speaker 1: a look at Socio next. Ed. Yeah, we don't often
Speaker 1: talk about Japan, but let's look at Socio next in
Speaker 1: the context of this big sell off we've seen in
Speaker 1: global chip stocks. It had its trading debut in Japan
Speaker 1: in Tokyo on Wednesday, jumping a lot of investor interest here,
Speaker 1: generating around sixty seven billion yen or four hundred and
Speaker 1: fifty six million dollars of proceeds. And what's so interesting
Speaker 1: about this name. It's a maker of systems on a
Speaker 1: chip or logic processes for one of A better description
Speaker 1: is there's a lot of appetite right now for what
Speaker 1: it's offering in a market where we have a lot
Speaker 1: of questions about global chip demand. If we bring up
Speaker 1: the next chart, this was actually the biggest I PO
Speaker 1: in Japan, so far this year on a gross proceeds
Speaker 1: generated basis. It was the four f p O for
Speaker 1: a chip maker out of Japan this year. So it's
Speaker 1: really interesting to see that name buck the trend. We're
Speaker 1: also getting data points out of vander this Wednesday. They
Speaker 1: actually see retail investors taking a keen interest in the
Speaker 1: chip space, even if we see institutional money kind of
Speaker 1: sitting on the sidelines or pulling out because we have
Speaker 1: concerns about a global slowdown, and speaking about those concerns,
Speaker 1: we look at this terminal chart. It investors are really
Speaker 1: pulling back earnings expectations for the chip sector. We've had
Speaker 1: bad news from a broad range of names. We're concerned
Speaker 1: about a slowdown in demand for consumer electronics, for memory
Speaker 1: chips in particular Aro and the PC market that scoop
Speaker 1: overnight from Bloomberg. The Intel, according to sources, is going
Speaker 1: to cut thousands of jobs because of the PC slowdown. Well,
Speaker 1: this is the result the market pulling back its expectations.
Speaker 1: But one name in Japan's socio next, as we said,
Speaker 1: m bucking that trend. All right, ed, thank you a
Speaker 1: name we don't normally hear about. Appreciate it. I want
Speaker 1: to zoom out now of chip stocks and get back
Speaker 1: to the broader macro environment with rising inflation and a
Speaker 1: falling market. The state of valuations and venture capital and
Speaker 1: startup innovation on top of mind. At the Greenwich Economic
Speaker 1: Forum that is underway right now. Our next guest, entrepreneur
Speaker 1: and former presidential Canada, Andrew Yang, joins us from there. Now, So, Andrew, obviously,
Speaker 1: so much talk about what is going to happen with
Speaker 1: this economy. Are we or are we not going into
Speaker 1: a recession? Given your Venture for America background, I'm curious
Speaker 1: what your outlook is if you are an entrepreneur trying
Speaker 1: to get started in a downturn. Well, if you look
Speaker 1: at the track record of high growth companies, Emily, and
Speaker 1: you know this full well, most of the really meaningful
Speaker 1: companies get started in a downturn like this one for
Speaker 1: a host of reasons. The fact is that an enterprise
Speaker 1: that succeeds in this time is going to be poised
Speaker 1: to really mushroom as soon as the climate starts training
Speaker 1: more positive. So I do think that this is going
Speaker 1: to be a very very tough time, but guaranteed we're
Speaker 1: going to see tons of meaningful firms come out of
Speaker 1: this period. What's your sense of how this tough time
Speaker 1: will compare to let's say, the financial crisis or even
Speaker 1: the dot com bust. Is there's something different about it. No,
Speaker 1: I think we have a ways to go on the
Speaker 1: down slope myself. I mean, we can all see very
Speaker 1: clearly that the Fed is going to be checking up
Speaker 1: interest rates for the foreseeable and there are a lot
Speaker 1: of valuations that don't make as much sense in that environment.
Speaker 1: So we're we're going to all find out together how
Speaker 1: this compares to some of the tough times of the past.
Speaker 1: But I certainly think that, uh, folks should try and
Speaker 1: keep some powder dry, you know, make sure that you
Speaker 1: have enough cash to make it through for a little
Speaker 1: bit longer than you might hope. San Francisco is one
Speaker 1: city that's having a tough time recovering from the pandemic,
Speaker 1: and now there's this downturn. You've got companies going remote,
Speaker 1: You've got companies moving to Austin or a Miami. Do
Speaker 1: you think this the center of innovation, that the fundamental
Speaker 1: center of gravity is actually going to shift and become
Speaker 1: more distributed or is it too early to say that? Now?
Speaker 1: You and I both have friends who have decamped to
Speaker 1: Austin or Miami, and I'm a big believer that innovation
Speaker 1: and growth will follow wherever the talent goes. So if
Speaker 1: you have people who have permanently settled in Austin, I
Speaker 1: think you're going to see uh permanent shift truly. Um Now,
Speaker 1: the Bay Area, in my view, still has the highest
Speaker 1: concentration of tech talent, so it's still going to be
Speaker 1: the envy of many other cities. But I do think
Speaker 1: we're in a permanently different time where talent is going
Speaker 1: to be more distributed, and because of that, you want
Speaker 1: to see capital be more distributed, uh and growth companies
Speaker 1: come out of places where they might not have otherwise.
Speaker 1: Congress has been trying to rein in big tech, and
Speaker 1: big tech has retaliated by spending a ton of money
Speaker 1: to kill one of the most aggressive oversight bills in years.
Speaker 1: Your thought on on whether that bill potentially needs to
Speaker 1: be revived and whether strong regulation is really needed. Oh,
Speaker 1: it's interesting, Emily. The political climate has changed such that
Speaker 1: tech now is a bit of a punching bag for
Speaker 1: both parties. UM And I'm of the belief that there
Speaker 1: have been some excesses that regulation would be appropriate for
Speaker 1: and a lot is going to hinge upon what the
Speaker 1: political climate is after these mid terms. Right now, the
Speaker 1: Senate is toss up. By most accounts, Republicans are slightly
Speaker 1: favored in the House, and I think that might change
Speaker 1: the prospects of some of the bills that we're talking about.
Speaker 1: You've been very vocal about data collection. You launch the
Speaker 1: Data Dividend products to help Americans take control of your data.
Speaker 1: How are you feeling about how tech companies are handling
Speaker 1: that data right now and especially going in to an
Speaker 1: a lot action. Uh, you know, it's it's fascinating, Emily,
Speaker 1: As you know, I I championed the c p r
Speaker 1: A and data privacy UH regulations in California, where you are,
Speaker 1: And because California is now set a higher bar, UH,
Speaker 1: national legislation is increasingly likely and on the table in
Speaker 1: part because tech companies wanted to supplant and replace the
Speaker 1: rules in California. Our data is being used not to
Speaker 1: our benefit. It's uh two hundred billion dollar plus a
Speaker 1: year industry. It's eroding our democracy, our kids, mental health. UM.
Speaker 1: So I'm someone who thinks that we should own our
Speaker 1: data UH and not only have it used more to
Speaker 1: our benefit. But if there is going to be market
Speaker 1: value game, but we should join in that benefit. UM.
Speaker 1: So that that's where I'd like the national approach to go.
Speaker 1: Europe has new rules that are coming online in which
Speaker 1: is right around the corner, and I think that's going
Speaker 1: to increase pressure on the States to have a more
Speaker 1: modernized approach. You've been branching out into crypto and Web three,
Speaker 1: and I'm curious what role or how much of a
Speaker 1: role you think crypto will play in fundraising going into
Speaker 1: and if you think Democrats or Republicans have more of
Speaker 1: an advantage. No, I think the single biggest donor in
Speaker 1: the last cycle with Sam Bankman Freedom you all probably
Speaker 1: know well. Uh So Web three, in my view, is
Speaker 1: going to be a very fascinating UM political force to
Speaker 1: be reckoned with UM. Right now, they're concerned obviously UM
Speaker 1: largely with the regulation on crypto itself. UM, but I
Speaker 1: think that you're going to see more people pushing into
Speaker 1: politics because now, uh the interaction with DC is going
Speaker 1: to be one of the main drivers of whether enterprises
Speaker 1: are able to grow and operate UM succes fully anywhere,
Speaker 1: but certainly whether they're going to be headquartered here in
Speaker 1: the US. You also launched Lobby three earlier this year.
Speaker 1: I'm so curious how many people have bought into the
Speaker 1: tokens and what positions is Lobby three going to be
Speaker 1: advocating for. Lobby three has been a great energized community
Speaker 1: of people that want to push for a common sense
Speaker 1: regulation out of dc UM that is intelligent and sophisticated
Speaker 1: and doesn't try and throw different UM types of assets together,
Speaker 1: that has one regulator instead of kind of a hodgepodge UM.
Speaker 1: And it's been awesome getting to know people who want
Speaker 1: the best things for creators and entrepreneurs in the space UM.
Speaker 1: Any time I go to a web gry gathering, there's
Speaker 1: some folks who are part of the Lobby three community
Speaker 1: and it's been a lot of fun. As a former
Speaker 1: presidential candidate and the code chair now of the Forward Party,
Speaker 1: I'd love to see into your crystal ball. Do you
Speaker 1: think of Biden Trump face off in? Is that inevitable?
Speaker 1: It's the most likely matchup right now, Emily Uh. The
Speaker 1: odds are that Trump declares at the end of this year,
Speaker 1: after the mid terms, and then Biden declares either Q
Speaker 1: one or Q two of next year. UM, I will
Speaker 1: say that those two candidates will have a combined age
Speaker 1: of a d Fifty nine percent of Americans are not
Speaker 1: excited about either of them. So the question is whether
Speaker 1: unity ticket or some independent effort arises, and a group
Speaker 1: called No Labels is very publicly invested fifty three million
Speaker 1: dollars in ballot access for a potential unity ticket. I
Speaker 1: think there's going to be a lot of enthusiasm for
Speaker 1: some alternative after people face the reality that it is
Speaker 1: a rematch in between Trump and Biden. So let's say
Speaker 1: Biden doesn't run. Do you think the Democrats have a
Speaker 1: strong enough bench. Who's on that bench? Would you consider
Speaker 1: running again? Well? I think Joe Biden likely declares because
Speaker 1: he feels he's the only one who can defeat Donald
Speaker 1: Trump because he did it once, and you can't argue
Speaker 1: with the fact that he did defeat Trump once. UM.
Speaker 1: But it's also tough to slot in another Democrat who
Speaker 1: you have the same confidence in. Uh, necessarily if you're Joe,
Speaker 1: or even if you're anyone, because right now, UM, it's
Speaker 1: unclear who the Democratic nominee would be. UM. I think
Speaker 1: that's one reason why Joe is going to run again, honestly, So,
Speaker 1: how are you going to spend the next couple of
Speaker 1: years if you're not running again? You know, where are
Speaker 1: we going to see you place your energy and efforts
Speaker 1: and priorities Given a very critical election coming up, So
Speaker 1: the Board Party has endorsed a number of candidates around
Speaker 1: the country, including a US ended candidate named Evan McMullen,
Speaker 1: whom I'm going out to campaign in Utah for UH
Speaker 1: this weekend. We think we need to change the underlying
Speaker 1: incentives for our lawmakers and leaders by doing away with
Speaker 1: closed party primaries and replacing them with primaries where anyone
Speaker 1: can vote for anyone through something called ranked choice voting.
Speaker 1: If there's one thing you remember from this interview out there,
Speaker 1: if you're you know, generally not that into politics, ranked
Speaker 1: choice voting is the way out of this mess. It's
Speaker 1: a way that anyone could vote for anyone with no
Speaker 1: spim er effect, and it rewards more moderate, reasonable, collaborative
Speaker 1: candidates who actually come through for voters. Um. So I'm
Speaker 1: going to be trying to make rank choices voting the
Speaker 1: law and as many places as possible, and I'm happy
Speaker 1: to say it's spreading around the country all right. Uh,
Speaker 1: Andrew Yang. Always great to have you with us, entrepreneur
Speaker 1: obviously a former presidential candidate co chair of the former party.
Speaker 1: Thank you Andrew for stopping by coming up. The latest
Speaker 1: salvo comes up from Gray Scale versus the SEC. Gray
Speaker 1: Scale CEO joining Snack to talk about the case for
Speaker 1: a Bitcoin e t F. This is Bloomberg Crypto Acid
Speaker 1: manager Gray Scale Investment says there is no justification for
Speaker 1: the SEC's rejection of a Bitcoin e TF earlier this year,
Speaker 1: the firm saying the secs rationale raises more questions than
Speaker 1: answers and will undermine trust in crypto. Here to explain
Speaker 1: is Gray Scale CEO Michael Son and Shine. Michael, thank
Speaker 1: you so much for joining us. So give us the latest.
Speaker 1: Where does the lawsuit with the SEC stand at this moment? Well,
Speaker 1: last night, Emily, we filed our opening brief for the lawsuit.
Speaker 1: So this lays out our initial legal arguments to the
Speaker 1: court um and it's really the first substantive document as
Speaker 1: part of the litigation process. So it's important to remember
Speaker 1: this is a case about bitcoin, but we're putting in
Speaker 1: front of our you know, in front of the court system,
Speaker 1: really straightforward, common sense arguments. I think one of the
Speaker 1: new arguments that's laid out here has to do with
Speaker 1: this idea of a significant market tests which the SEC
Speaker 1: has applied to bitcoin ETF applications. They've applied this very
Speaker 1: stringently to spot bitcoin e t F applications like gray
Speaker 1: Scale UM and other spot bit cooin e tfs that
Speaker 1: have been denied, but very leniently to Bitcoin futures et
Speaker 1: F applications, which is why we have several of them
Speaker 1: in the market. And there's really been no justification as
Speaker 1: to why this test is the in fact only test
Speaker 1: that the SEC should be using. And we've also never
Speaker 1: seen them use a test like this before when it
Speaker 1: comes to evaluating new products to bring to market. Have
Speaker 1: you spoken at all with Gary Gainsler directly? You know,
Speaker 1: we have regular dialogue with really everyone in d C,
Speaker 1: my legal team and myself for down in d C
Speaker 1: almost weekly these days, so we speak with all different
Speaker 1: parts of the SEC and other regulators. Now, look, recently,
Speaker 1: there have been a ton of cases fraud and bankruptcy
Speaker 1: in crypto. There's Tera, there's Celsius, there's three hours. Why
Speaker 1: is now the right time to prove to the SEC
Speaker 1: that this market is no worse in terms of market
Speaker 1: manipulation than others. Well, that's exactly the point. This significant
Speaker 1: market tests that the SEC has laid out they believe
Speaker 1: protects investors from fraud and manipulation, and they got comfortable
Speaker 1: with that. When it comes to bitcoin futures, Well, the
Speaker 1: interesting thing in the flaw in that logic is that
Speaker 1: bitcoin futures derived their pricing from the underlying spot bitcoin market,
Speaker 1: which underpins GBTC and any other spot bitcoin et F
Speaker 1: application that's become, you know, in front of the SEC
Speaker 1: and ulterily been rejected or denied. I think what we're
Speaker 1: seeing though in d C is probably the most engagement
Speaker 1: and understanding we've ever seen around crypto. You've bipartisans support
Speaker 1: now with a variety of bills passing across the floor
Speaker 1: of Congress, and I think we and other industry you
Speaker 1: know heavyweights are calling on our regulators, calling on our
Speaker 1: legislators to really develop new frameworks because otherwise we're squandering
Speaker 1: innovation here in the United States. The Winkled Boss Brothers
Speaker 1: were the first to try this spot bitcoin ETF. It
Speaker 1: didn't fail. The road is littered with carcasses of others
Speaker 1: who have tried and failed, how is gray Scale, with
Speaker 1: its huge scale, in your view, different? It's a great question, Emily.
Speaker 1: So today Gray Scale Bitcoin Trust ticker g BTC is
Speaker 1: the largest bitcoin fund in the world. It owns over
Speaker 1: three percent of all bitcoin outstanding. A recent count said
Speaker 1: that there are more than eight hundred and fifty tho
Speaker 1: investors who own shares of g BTC in the US alone,
Speaker 1: and that represents all fifty states. So, when we, as
Speaker 1: an asset manager, are taking a product that's been in
Speaker 1: the market, has billions of dollars of assets, hundreds of
Speaker 1: millions of dollars of daily trading volume, has voluntarily become
Speaker 1: an sec reporting company, and we know that the right
Speaker 1: thing for investors to protect them, to put additional disclosures
Speaker 1: and surveillance in place by becoming an et F is
Speaker 1: the right thing for them. But our regulator is really
Speaker 1: shunning the opportunity to do so. Well, we certainly take
Speaker 1: issue with that, and so our team has been putting
Speaker 1: the entire resources of the firm behind the et F
Speaker 1: initiative and we're as committed as we've ever been to it.
Speaker 1: What kind of timeline do you see for a resolution
Speaker 1: of this case? Well, we filed the lawsuit earlier this summer,
Speaker 1: and at that time we were guided to believe it
Speaker 1: could be anywhere from nine to twelve months, although it
Speaker 1: could be longer, could be shorter. What you're going to
Speaker 1: see now that Grace Scale has filed its opening brief
Speaker 1: is over the coming weeks you'll see a variety of
Speaker 1: amikus briefs. So these are other parties that are filing
Speaker 1: briefs with the court to put in front of the
Speaker 1: judges presiding over the case to really talk about their
Speaker 1: points of view on the issues at hand. And then
Speaker 1: ultimately you'll see a brief from the SEC a couple
Speaker 1: of weeks later with their responses to the arguments that
Speaker 1: our legal team is outlined. We're also, you know, in
Speaker 1: the middle of what could be a really massive economic downturn.
Speaker 1: We've just heard from Andrew Yang who said he thinks
Speaker 1: we've got a lot further downward to go. What is
Speaker 1: your outlook and what it means for crypto. We're certainly
Speaker 1: in a crypto winter, and a crypto winter is characterized
Speaker 1: now by sustained lower prices. We're seeing from the investment community,
Speaker 1: though that the lower prices are not causing them to
Speaker 1: shy away from the asset class. In fact, we're actually
Speaker 1: seeing investors continue to diversify. So a lot of investors
Speaker 1: now kind of have that core position in bitcoin or
Speaker 1: position in ethereum or both, and they're now looking at
Speaker 1: other opportunities, and one of them is actually infrastructure. Just
Speaker 1: last week, our team launched a totally new offering, Gray
Speaker 1: Scale Digital Infrastructure Opportunities LLC, which is an operating company
Speaker 1: that investors can put capital to work in that's actually
Speaker 1: buying bitcoin mining hardware, plugging it into the network, and
Speaker 1: distributing that value back out to shareholders. So for a
Speaker 1: lot of investors, they've had that token exposure now and
Speaker 1: now it's time that they think about the underlying infrastructure
Speaker 1: that secures the network. And so there's a lot of
Speaker 1: opportunity and a lot of activity going on despite the
Speaker 1: sustained lower pricing environment we find ourselves in speaking of
Speaker 1: the underlying infrastructure. The etherory emerge ended up being kind
Speaker 1: of a non event. What do you think the next
Speaker 1: big event is going to be? You know, that will
Speaker 1: you know, catalyze changes and potentially blockchain technology. You know,
Speaker 1: Emily respectfully, as someone who's been in crypto for nine
Speaker 1: years of it actually was a big event because this
Speaker 1: was a question mark hanging over Ethereum for a long time.
Speaker 1: Could we see a very well known, very well trafficked,
Speaker 1: very well utilized digital asset protocol move and make such
Speaker 1: a meaningful move from proof of work to proof of
Speaker 1: steak and Ethereum did it now? I think as we're
Speaker 1: seeing the outcome of that, it's very very early days
Speaker 1: and we're starting to see the development of more and
Speaker 1: more staking around Ethereum and other assets um. What's coming
Speaker 1: next is other upgrades to the Ethereum network, things like
Speaker 1: the ability to unstake assets that are put into the
Speaker 1: network for staking, and other upgrades that will come down
Speaker 1: the line. But I certainly think it's an accomplishment for
Speaker 1: all the developers and everyone who really put a lot
Speaker 1: of time in many, many years of planning and energy
Speaker 1: into getting Ethereum to make the switch over. Alright, point taken,
Speaker 1: Michael sawnashein Gray Scale CEO. We're gonna continue to follow
Speaker 1: your challenge to the SEC. Appreciate you stopping by. Apple
Speaker 1: is withholding its latest employee benefits from staff at its
Speaker 1: only unionized retail store, the reason given the store needs
Speaker 1: to negotiate the perks with Apple via their collective bargaining arrangement,
Speaker 1: but excluding unionized stores from new benefits not a new trend.
Speaker 1: Starbucks also rolled out a series of new perks at
Speaker 1: nine US in union stores, including raises and student debt coaching,
Speaker 1: while saying that it can't legally provide them unilaterally two
Speaker 1: sites with union activity. SpaceX plans to pronounce two new
Speaker 1: space tourists slated to fly on the Starship Rocket, Dennis Tito,
Speaker 1: the world's first ever space tourist in two thousand one,
Speaker 1: and his wife. The couple paid an undisclosed amount to
Speaker 1: fly around the Moon on Starship. Once the vehicle is complete,
Speaker 1: they will travel with ten other undisclosed passengers on a
Speaker 1: roughly week long journey. The trip doesn't include a landing
Speaker 1: on the lunar surface, and it's unclear if the other
Speaker 1: passengers have been chosen yet. And that does it For
Speaker 1: this edition of Bloomberg Technology On Thursday, we've got Tron's
Speaker 1: Justin Son on s talk about the future of DOWS
Speaker 1: and all things crypto and web three and don't forget
Speaker 1: to check out our podcast wherever you get your podcasts.
Speaker 1: I'm Emily Changing in San Francisco. This is Bloomberg