Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Check in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour, Saudi
Speaker 1: Aroundco overtakes Apple as the world's most valuable company. How
Speaker 1: the tech and crypto selloff, coupled with a surge in
Speaker 1: oil prices is up ending the order of the biggest
Speaker 1: forces in the global economy. Plus two top executives are
Speaker 1: out at Twitter as the company looks to cut costs
Speaker 1: and freeze hires ahead of Elon Musk's takeover. This as
Speaker 1: Musk is looking for new funding as he cuts his
Speaker 1: Tesla margin loan. And we will be here from some
Speaker 1: top CEOs today. Ryan Chesky joins us to talk about
Speaker 1: Airbnb is quote the biggest change in a decade, and
Speaker 1: how we thinks travelers will be hit by inflation. And
Speaker 1: we'll hear from Arms CEO as the chip company gets
Speaker 1: ready for an I p O. All of that in
Speaker 1: a moment, But first I want to continue this conversation
Speaker 1: now talk about Apple in particular falling again behind Saudi
Speaker 1: Aramco as the world's most valuable company. Pierre Farragou joining
Speaker 1: us now who heads up the Global Tech Infrastructure team
Speaker 1: at New Street Research. So, Pierre, is this a changing
Speaker 1: of the guard here or is this a momentary blip?
Speaker 1: Not much is happening if you if you take a
Speaker 1: step back and look at Apple in the perspective of
Speaker 1: the world. You know, I look at on the daily
Speaker 1: basis there as as Ed mentioned, it down like that
Speaker 1: twenty percent from the high, seventeen percent from there average
Speaker 1: value of the last eighteen months. Look at Tesla down
Speaker 1: fifty nine percent, Amazon down thirty Google down thirty percent.
Speaker 1: So Apple, on the alative is exactually doing doing quite
Speaker 1: all right? Um uh. And there are a lot of
Speaker 1: reasons for that. You know, they've done very well. They've
Speaker 1: grown through the last five years earnings twenty more than uh.
Speaker 1: And they've done very well in them uh in the
Speaker 1: recent context, through the pandemic, through like inflationary pressure, they've
Speaker 1: had actually a very strong demand. UM. And then when
Speaker 1: UM investors look at Apple today in this massive set
Speaker 1: of that that's actually more you know, of a quality name,
Speaker 1: like a safe heaven for them, UM, because they tend
Speaker 1: to to consider that Apple still has like a pretty
Speaker 1: nice outlook that revenue growth could continue. You have new products,
Speaker 1: opportunities in are in UM in autos. So so like
Speaker 1: the longer term I would look for Apples still looks
Speaker 1: really attractive to investors, and that's the reason why I
Speaker 1: think they stuff didn't do that bad. So there's a
Speaker 1: kind put in an Apple's fundamentals. What about the broader
Speaker 1: tech sector. I mean, Saudi Aramco has lived above all
Speaker 1: of them, and if you look at the top six
Speaker 1: companies by market cap, Apple, Microsoft, Alphabet, Amazon, all behind
Speaker 1: an oil company. Yeah. So yeah, it's a good question.
Speaker 1: That's what I've been working on interest studays. You know, what,
Speaker 1: what are the opportunities like names to buy in this
Speaker 1: in this like broad tech tex set of UM And
Speaker 1: the way I'd like to think about it is what
Speaker 1: prey triggers the set of initially is inflation and the
Speaker 1: concern of interest rates going up, because when, of course,
Speaker 1: when you look at the very high growth company, if
Speaker 1: interests go up, it is a very negative effect on
Speaker 1: the evaluation. Now here's the way I'm thinking about about it.
Speaker 1: The million a lot of these companies are actually fairly
Speaker 1: inflation proof. So if you get an Apple, Microsoft, an Amazon.
Speaker 1: There you to pass on costs is actually not too bad.
Speaker 1: So in an fashionary environment, they should actually grow faster
Speaker 1: because they'll be able to increase their prices with with inflation.
Speaker 1: And so what I like doing are overreacting then yes,
Speaker 1: I I think that the investors reaction is creating opportunities.
Speaker 1: And you need to look at these companies who have
Speaker 1: good pricing power, who have very strong market position, and
Speaker 1: who have been battered down in recent weeks and likely
Speaker 1: even recent months, in the last six months, and you
Speaker 1: can find very I think, very interesting opportunities like the
Speaker 1: three or all that UM popped to my eyes to
Speaker 1: the Artesla of course, the stocky string and forty five
Speaker 1: times earnings. It's down from a hundred and forty times
Speaker 1: six months ago, and um it's still up to grow
Speaker 1: like earnings forty two fifty a year. Another one is
Speaker 1: c SMC is the ship manufacturer, down thirty straight on
Speaker 1: fifteen times earning, and it's it has a better gross
Speaker 1: potential in my view, uh than Apple. And then the
Speaker 1: other one interesting worth mentioning is actually Nvidia, down almost
Speaker 1: sev from the peak. And and here again a company
Speaker 1: that has a lot of pricing power, very strong leadership
Speaker 1: in their market. Everybody needs their cheap and they steket
Speaker 1: you do very well in in the next few years.
Speaker 1: So so I see opportunities um in that set of
Speaker 1: even in the midst of pare even in the midst
Speaker 1: of a supply chain shortage and a lockdown in China,
Speaker 1: I mean in video, I mean obviously Apple and Video
Speaker 1: is also exposed to that. Yeah, So yeah, it's a
Speaker 1: good point. Like the next few the next few months
Speaker 1: or even you know, the next couple of quarters could
Speaker 1: be slightly challenging for for these players. But I don't
Speaker 1: think you you have any like you know, incremental negative
Speaker 1: negative news flow coming through on that front. So we
Speaker 1: are really in the deep of the supply constraints and
Speaker 1: supply is now coming back to take time to get
Speaker 1: supply back, but it is it is already on the
Speaker 1: way up. And I think the situation in China, as
Speaker 1: much as it is like a dramatic disruption for a
Speaker 1: lot of these businesses, it's actually were understood learning Like
Speaker 1: Apple talked about it from the Earning School not so
Speaker 1: long ago, and investors are kind of putting their heads
Speaker 1: around around that situation. So I tend to overlook that
Speaker 1: and think about, you know, what are like the great
Speaker 1: compounding stories, like names that have this very high creaty
Speaker 1: growth outlook that has been like taken let us suffered
Speaker 1: so much in this pullback, and that's where I see
Speaker 1: the opportunities. But of course you have to look through
Speaker 1: the next couple of quarters. Maybe. Well, thanks for helping
Speaker 1: us try to make sense of it all here, fair,
Speaker 1: I was going to have your new Street research. Thank you.
Speaker 1: I mean time to is making some changes at it
Speaker 1: as it awaits Elon Musk's forty four billion dollar takeover,
Speaker 1: including cutting some big costs. Bloom Berk's Kurt Wagner covers
Speaker 1: Twitter for US and joins US now, so Kurt, two
Speaker 1: big executives leaving. Is this all because of Elon Musk?
Speaker 1: Or is this because of Twitter's own business problems. That's
Speaker 1: sort of the question that I'm trying to get to
Speaker 1: the answer to. As well. We have a new CEO,
Speaker 1: of course, Paraguagor Wall, who took over last November, and
Speaker 1: it's always natural for a new CEO to sort of
Speaker 1: want to leave their imprints on the new company, makes
Speaker 1: some big changes, get their own kind of executive team
Speaker 1: in there. Of course, we're in this unique situation right
Speaker 1: now with Twitter where everyone's kind of in a limbo
Speaker 1: right there, waiting for Elon Musk to take over, So
Speaker 1: it was sort of interesting timing for him to make
Speaker 1: two big moves right now. Although I'm told that this
Speaker 1: has sort of been in the works for a couple
Speaker 1: of weeks, so it's unclear exactly whether this was, you know,
Speaker 1: a plan of Elon Musk's, or something that Parragu wanted
Speaker 1: to do, sort of with Elon's blessing. I to get
Speaker 1: the sense it's maybe the latter, So let's talk about
Speaker 1: who is leaving. In the reaction, there were some not
Speaker 1: happy tweets, as one might expect when people get fired
Speaker 1: from Twitter. Well, these are two long time product executives,
Speaker 1: Cavon Baked Poor, who has been running product at Twitter
Speaker 1: for years now, and Bruce Falk, who has been running
Speaker 1: revenue product at the company. So two people who have
Speaker 1: been there for a long time and who a lot
Speaker 1: of people did really like. And when you are in
Speaker 1: a situation like this right where employees are already wondering
Speaker 1: like what comes next? What is my job going to
Speaker 1: be secure? When Ellen takes over. Is the team I'm
Speaker 1: working on going to be around when Ellen takes over.
Speaker 1: And then you see two people who a lot of
Speaker 1: people like and who have been there such a long
Speaker 1: time kind of get booted unexpectedly. I think that creates
Speaker 1: a lot of, you know, concern from employees. And so
Speaker 1: that's sort of what I've been hearing today, a lot
Speaker 1: of people scratching their head wondering what does this mean exactly,
Speaker 1: and then what happens next for the rest of us. Meantime,
Speaker 1: Mosk is still trying to get financing, scrapping part of
Speaker 1: his Tesla margin loan. Are these two things related. I
Speaker 1: think they're related in the sense that everything that Ellen
Speaker 1: does kind of either makes the deal seem more or
Speaker 1: less likely. And I think the fact that he's perhaps
Speaker 1: you know, going to get rid of this margin loan
Speaker 1: because he's able to secure a little bit more equity financing,
Speaker 1: I think that just makes the deal more likely to
Speaker 1: go through. Right. And so if you're sitting there as
Speaker 1: the CEO of Twitter, you kind of have to prepare
Speaker 1: for two scenarios, the one in which maybe the deal
Speaker 1: doesn't happen and suddenly you're still in charge what have
Speaker 1: you been doing over these last six months to to
Speaker 1: make that happen? And then the other where Ellen comes in,
Speaker 1: and then you're wondering, you know, if you're progu am,
Speaker 1: I still going to have a job under this new guy.
Speaker 1: So I think he's probably trying to navigate that. And
Speaker 1: I think Ellen getting closer and closer to getting the
Speaker 1: deal funded um probably dictates, you know, the timing of
Speaker 1: some of these things. Interesting. Alright, Well, more twists and
Speaker 1: turns to come. I'm sure bloom works. Kurt Wagner. Thanks,
Speaker 1: I'm not gonna give your timing, Emily, you know that.
Speaker 1: Do I want the company to become a public company
Speaker 1: at some point, of course, but I really want to
Speaker 1: make sure that the company that we do take public
Speaker 1: is a company that's reflective of this uh new Bold
Speaker 1: Elevision Instagart CEO Fiji Cima their last month when I
Speaker 1: asked her on studio at one point, oh, when the
Speaker 1: company might go public? Well, Piers, now is the time
Speaker 1: Bloomberg has learned. The company has filed confidentially paperwork to
Speaker 1: start the process with the sec The ten year old
Speaker 1: grocery delivery up Start was once one of the most
Speaker 1: highly valued of the gig economy companies and grew exponentially
Speaker 1: through the pandemic, but now we'll navigate a very volatile market.
Speaker 1: Instacart slashed its private market valuation by almost in March,
Speaker 1: as orders have slipped in a post pandemic world. Well
Speaker 1: it was built as Airbnb's biggest change in a decade,
Speaker 1: the company rolling out a number of new features, including
Speaker 1: categories like Castles and Amazing Pools and homes that make
Speaker 1: you go OMG, as well as split stays and air cover,
Speaker 1: which addresses one of the company's biggest issues, consumer protections.
Speaker 1: I spoke to Airbnb CEO and co founder Brian chess
Speaker 1: Ca about all the changes, along with concerns about rising prices,
Speaker 1: inflation and how that will affect their customers. Take a listen. Well,
Speaker 1: first of all, the reason that the price per night
Speaker 1: went up was mostly because people are booking more expensive airbnbs.
Speaker 1: So before the pandemic, a lot of people are traveling
Speaker 1: by themselves or one person. They were booking one, two
Speaker 1: bedroom homes. Now they're booking much bigger homes to travel
Speaker 1: with families and groups. And there's been a mixed shift
Speaker 1: from Asia to North American Europe, and these are higher
Speaker 1: price per knights. That's the primary contribution for the increase
Speaker 1: of price. You are correct, though, a lot of people
Speaker 1: aren't going to be able to travel and be able
Speaker 1: to afford to travel. But another thing. Airbnb was started
Speaker 1: during the Great Recession in two thousand eight, and people
Speaker 1: used Airbnb because it wasn't a more affordable way to travel.
Speaker 1: After two years of people not being able to leave
Speaker 1: their home, many people, I think they want to get
Speaker 1: out and this is going to be a travel rebound
Speaker 1: unlike anything we've ever seen before. Still, even though you're
Speaker 1: projecting this travel rebound, you've got Airbnb shares down to
Speaker 1: new lows. And I'm so curious how you're watching this
Speaker 1: broader market turmoil. What's your take on this? I'm not
Speaker 1: watching the broader market turmoil, and I would hope shareholders
Speaker 1: know that I'm obsessed over every single day. Are the
Speaker 1: inputs to the stock price? Not the stock price. I
Speaker 1: think that's the very best thing for shareholders. So my
Speaker 1: job is to make sure we have the best service,
Speaker 1: we have enough host they're prepared for the great travel season.
Speaker 1: That's how I'm gonna worry about. We're gonna play a
Speaker 1: long game, and I think the long term shareholders will
Speaker 1: really benefit from that. I wonder how this impacts retention
Speaker 1: and recruiting though. Are actually seeing a lot of companies
Speaker 1: that really uh, you know, Sword in the pandemic, struggling
Speaker 1: coin Base, robin Hood as well. Do you think this
Speaker 1: could impact hiring at all or the mood in Silicon Valley.
Speaker 1: I mean, we're actually completely overwhelmed with hiring. We're completely overwhelmed.
Speaker 1: Two weeks ago we announced that Airbing employees can live
Speaker 1: and work anywhere in the world, and if you move
Speaker 1: wherever you want in the country, we're not gonna lower
Speaker 1: your pay. Since we made that announcement, more than one
Speaker 1: million people visit our jobs and careers page. We only
Speaker 1: have six thousand people at the company, so um, I
Speaker 1: do think that there might be some broader kind of considerations,
Speaker 1: But Airbnb, we have quite a lot of interest, and
Speaker 1: I don't think that will change. So Twitter just announced
Speaker 1: a hiring freeze and cutting costs, potentially rescinding some offers
Speaker 1: for a different reason. And I wonder, with this, on
Speaker 1: top of other companies pausing hiring, if this could be
Speaker 1: a moment of opportunity for you. Do you see this
Speaker 1: as a chance to attract be a magnet for new talent.
Speaker 1: I mean a lot of people are reaching out to
Speaker 1: us from other big tech companies, maybe because a lot
Speaker 1: of tech companies are asking people to go back to
Speaker 1: the office three days a week, or maybe because they're
Speaker 1: not hiring as many. But make no mistake, Airbnb is
Speaker 1: stepping on the gas this summer. How are you stepping
Speaker 1: on the gas in China? We're seeing ongoing COVID lockdowns there.
Speaker 1: I know it's been a priority for you in years past.
Speaker 1: What trends are you seeing in a pack and when
Speaker 1: do you expect them to recover? You know, our China
Speaker 1: business has primarily been people in China leaving China obviously
Speaker 1: crossing a border, so it's cross border travel going to
Speaker 1: other countries. Japan was a really popular corridor, South Korea,
Speaker 1: They're going to like Europe, They're going to other places.
Speaker 1: Because of the situation of China in COVID, there's not
Speaker 1: a huge amount of outbound business right now, and so
Speaker 1: our business in China is not super robust and it's
Speaker 1: going to be probably a while. It's really gonna track
Speaker 1: with the health crisis. Brian Chesky, Airbnb CEO and co founder.
Speaker 1: You can catch our full interview at Bloomberg dot com.
Speaker 1: Coming up, SO no CEO Patrick Spence joins us fresh
Speaker 1: off the company's latest earnings results. Will also talk about
Speaker 1: why so Nos is being compared to Amazon and Apple.
Speaker 1: He's next, This is Bloomberg. The same day that Sons
Speaker 1: released its second quarter result of the company also announced
Speaker 1: a number of new products, including a voice activated assistant
Speaker 1: called Sons Voice Control. This is the company's first step
Speaker 1: into the world of digital assistance, which is largely dominated
Speaker 1: by Amazon's Alexa and Apple's Series. Joining me now, so
Speaker 1: no CEO Patrick spent So, Patrick, how is yours different?
Speaker 1: Ours is very different in the fact that all the
Speaker 1: processing for it is done locally. Um and it's very
Speaker 1: so it's very private, very privacy focus, something we know
Speaker 1: a lot of our customers have been looking for. And
Speaker 1: the other thing is we've really focused it on the
Speaker 1: Sons user experience. So think about music. All your audio
Speaker 1: needs being able to move music from one room to
Speaker 1: another for instance. So ours, I like to say, is
Speaker 1: you know an inch wide and a mile deep. Whereas
Speaker 1: you know our partners at Amazon and Google, they offer
Speaker 1: you one which is a mile wide and an inch deep,
Speaker 1: and of course, um, we want to provide customers choice,
Speaker 1: so you can actually use alexas simultaneously with the Sono's
Speaker 1: voice control. So what's the long term goal with voice control?
Speaker 1: I mean tell us a little bit more, what you
Speaker 1: mean using that mile wide into apart metaphor? Yeah, so
Speaker 1: really making sure Yeah, I think I think we've seen
Speaker 1: kind of a first wave, right, and UM, we usually
Speaker 1: see this with I think Gartner's hype cycle in terms
Speaker 1: of the excitement that comes from that initial wave of um,
Speaker 1: kind of the first part of a technology curve, and
Speaker 1: we saw that with Alexa and Google Assistant, and now
Speaker 1: I think what you'll see is more purpose built assistance,
Speaker 1: which really focus on the actual user experience for a
Speaker 1: particular product or a particular brand. And so you know,
Speaker 1: we've done a lot of work to make sure that
Speaker 1: you can get the music faster. It's recalling what music
Speaker 1: you've been listening to. It's very specific to the Sonos
Speaker 1: use cases. And again, like I said, private and runs
Speaker 1: locally because we heard from customers that that's important. And
Speaker 1: so what we're really trying to do is drive engagement
Speaker 1: because we know the more customers engage, the higher their
Speaker 1: lifetime value will be, the more chance they have to
Speaker 1: come back and add another Sonos product to their system. Now,
Speaker 1: we saw strong demand for your products in the last quarter,
Speaker 1: but obviously inflation going up. So NOS products are discretionary products.
Speaker 1: You know, how do you think inflation is going to
Speaker 1: impact sales this quarter and the rest of the year.
Speaker 1: You know, we continue to see very strong consumer demand. UM.
Speaker 1: You know, last year we had a huge year UH
Speaker 1: driving top line sales growth UM and this year we
Speaker 1: planned for fift UM. We've reaffirmed that in yesterday's news
Speaker 1: UM SO so we'd obviously taken into account the fact
Speaker 1: that we know we felt we got some tail wind
Speaker 1: obviously from people being at home UM. And we feel
Speaker 1: very good about our business model. And you know this
Speaker 1: supply wheel we have of existing customers telling their friends
Speaker 1: and family they should get so Nos. The number one
Speaker 1: reason people come into so Nos is still from family
Speaker 1: and friends to telling them, and then we have existing
Speaker 1: customers come back and buy the new products. And so
Speaker 1: with a whole set of new products we announced yesterday
Speaker 1: the great portfolio we have and we have a backlog emily,
Speaker 1: So I mean, we feel really good about where we
Speaker 1: are today. Despite I know some of the macro challenges
Speaker 1: that are out there. You raise concerns about supply chain
Speaker 1: issues and rising component prices, just how you know, difficult
Speaker 1: are those going to be to navigate over the next
Speaker 1: several months. Yeah, you know, it's been something that we've
Speaker 1: been dealing with really for eight quarters at this point,
Speaker 1: and we had hoped, and I think the industry had
Speaker 1: hoped that by the second half of two UM most
Speaker 1: of those would have dissipated. That is not the case.
Speaker 1: And obviously nobody anticipated China going back into a COVID
Speaker 1: zero situation in Shanghai, and so that's really impacted things
Speaker 1: as well. And so now we're expecting, and we've been
Speaker 1: planning for the rest of twenty two to really be
Speaker 1: challenged in terms of logistics and shipping and component costs,
Speaker 1: and so we've built that into our model UM as
Speaker 1: we think about delivering the year. But I would say, Emily,
Speaker 1: at this point, from everything I can see, expect the
Speaker 1: supply chain challenges to continue for the industry for the
Speaker 1: rest of twenty two. All Right, Patrick Spence, CEO of Sonas,
Speaker 1: thank you. Welcome back to boone. We're technology Emily changing
Speaker 1: in San Francisco. Let's get back to the markets, and
Speaker 1: robin Hood is shoring in late trading after filings showed
Speaker 1: a new stakeholder. Bloomberg's Ed Ludlow here with who it
Speaker 1: is and take it away. Yeah, it's Sam Bankman Freed
Speaker 1: of course, co founder and CEO of f t X.
Speaker 1: He's got a seven point six percent stake according to
Speaker 1: a regulatory filing based on today on Thursday's closing price
Speaker 1: of eight dollars fifty six cents a share, that would
Speaker 1: value his stake at five sixty seven million U S dollars.
Speaker 1: And you can see the reaction in after hours. We
Speaker 1: were up even higher just a few moments ago. We'll
Speaker 1: have to spend the next twenty four hours and I'm
Speaker 1: trying to work out what this means for the future
Speaker 1: of robin Hood. Of course, such a big year for
Speaker 1: the platform, build up a huge user base of retail traders,
Speaker 1: but then transactions started drop off, volatility, volumes not what
Speaker 1: investors thought. It would be one to watch going to
Speaker 1: Friday as well. Another interesting name in the world of markets.
Speaker 1: We're looking at soft Bank reporting a record and your loss,
Speaker 1: and this is Massaoshi son with a lot of problems.
Speaker 1: And you see these are the US listed shares of
Speaker 1: soft Bank. This is its Vision Fund unit that we're
Speaker 1: talking about. You're so familiar with it. But annual loss
Speaker 1: having just closed out the fiscal year of twenty point
Speaker 1: five billion dollars to zero point five billion US dollars.
Speaker 1: And you know, this is a company of knows that
Speaker 1: the invest principally in private sector right startups, but it
Speaker 1: was its public bets that really suffer. Let's bring up
Speaker 1: the board and look at some of the biggest names.
Speaker 1: This is how they performed over a twelve month basis,
Speaker 1: names like uber, Kupu and d D. That is a
Speaker 1: lot of red and you can see how that kind
Speaker 1: of failing in the investment approach kind of failed ultimately
Speaker 1: for Vision Fund. I think the other big takeaway very quickly,
Speaker 1: m is that they've really cut back the funds that
Speaker 1: the Vision Fund is deploying. You look at recent quarters,
Speaker 1: the period January March, they only authorized two point five
Speaker 1: billion dollars to put into their portfolio for new startups.
Speaker 1: That's a real departure from what we've seen in recent quarters.
Speaker 1: Think about two thousand and eighteen. You remember that one
Speaker 1: M thirty three billion dollars in a single quarter for
Speaker 1: the Vision Fund. Times to change for Massaci son how
Speaker 1: could I forget Ludlow? Thank you well. One area where
Speaker 1: soft Bank was more bullish was ARM, It's chip design
Speaker 1: unit that is preparing for an I p O. Massa
Speaker 1: son As detailed how fast ARMS growing and how it
Speaker 1: could ultimately become the most valuable asset in SoftBank's portfolio.
Speaker 1: Joining us to talk about how ARM gets there. It's
Speaker 1: CEO Renee has Renee great to have you back with us.
Speaker 1: So we're gonna get to the SoftBank stuff. But let's
Speaker 1: talk about how ARM is moving into more markets and
Speaker 1: also more valuable markets. What opportunities is that unlocking for you.
Speaker 1: We've got a great year. We just announced our results
Speaker 1: earlier yesterday or wherever you pan time. Was record revenue,
Speaker 1: record profits, record royalties, record licensing. We're seeing demand for
Speaker 1: armed technology emily across all the sectors, particularly though in
Speaker 1: the new markets such as automotive hyper scale or slush,
Speaker 1: infrastructure and IoT. We've had huge growth in all those
Speaker 1: areas that the demand for armed technology has never been better.
Speaker 1: Where do you see specific opportunities for growth? Is it,
Speaker 1: is it computing, is it automotive? You know, what are
Speaker 1: going to be the biggest parts of ARMS future In
Speaker 1: the future. One of the areas that we've been known
Speaker 1: for historically is around power and power efficiency. And if
Speaker 1: you think about smartphone, where ARM has historically been known
Speaker 1: for we've had great success. That is the ultimate device
Speaker 1: that's all about power and power efficiency. Now think about
Speaker 1: the data center or think about electronic vehicle. UH, both
Speaker 1: of those have the same type of requirements. They need
Speaker 1: to be very power efficient, they be very mindful of performance,
Speaker 1: and they have to be able to scale. UH. Those
Speaker 1: are two areas where you've seen huge growth in the
Speaker 1: in the last year, and to your point, it's an
Speaker 1: area that it needs to be a huge growth theory
Speaker 1: form going forward. Still, investors are bailing out of chip stocks.
Speaker 1: You look at the semi conductor index down further than
Speaker 1: most of the major UH in the cry so far
Speaker 1: this year. What aren't investors getting? You know, demand is high,
Speaker 1: but still concerns about supply. You know, I can't really
Speaker 1: comment on the on the valuations and what's going on
Speaker 1: the stock market is if I knew more about that,
Speaker 1: I wouldn't be in this chair. But the supply issues
Speaker 1: I do think are going to stay with us for
Speaker 1: a while. The everything involved with semi conductors is complex.
Speaker 1: Building new fabs is complex, Advanced technolog is complex. You
Speaker 1: have more and more complex packages, which means you have substrates,
Speaker 1: you have different packaging techniques, and the layer on top
Speaker 1: of it. You know, these automobiles, for example, that require
Speaker 1: not only a significant semig it or content, but other
Speaker 1: areas that need to be shipped into the car. The
Speaker 1: supply change has been stretched in a way that we've
Speaker 1: not seen before with the pandemic, and I think that's
Speaker 1: going to make the world really complex at least for
Speaker 1: the next year or so as far as I can see.
Speaker 1: And when are we going to see the end of
Speaker 1: these shortages? Like how long does this go on for?
Speaker 1: If I had a crystal ball again, I would probably
Speaker 1: be in in a different industry. But I think it's
Speaker 1: gonna be with for a while, Emily, because again, when
Speaker 1: you think about the investments required for semiconductors to build
Speaker 1: a five dentimeter or three dynimeter fab, there is a huge,
Speaker 1: huge lead time associated with that. The chips take longer
Speaker 1: and longer to build their longer and longer to manufacture,
Speaker 1: which means predictability gets harder. And then increasingly in some
Speaker 1: of these products you have more and more content and
Speaker 1: it's not just one chip that's not available. If you
Speaker 1: have an entire product that's all manufactured and you don't
Speaker 1: have a diode, let's say a power diode that can
Speaker 1: go into the car, the car can't ship. So again,
Speaker 1: I think going forward, UM, we've got to get our
Speaker 1: arms around when this new world is teaching us relative
Speaker 1: to supply, and I think it's going to take a
Speaker 1: little while. There's a report that soft Bank plans to
Speaker 1: keep a majority steak in ARM after you spin it off.
Speaker 1: How big a steak are we talking about here? And
Speaker 1: what what conversations have you had about this? I can't
Speaker 1: say too much about specifically we Massa son has said
Speaker 1: that ARM is preparing for an IPO, and they have
Speaker 1: said publicly that they intend to have a controlling interest
Speaker 1: going forward. I think what that says is Massa thinks
Speaker 1: that the long term prospects for holding ARM is really good.
Speaker 1: So I think that says a lot about his confidence
Speaker 1: in our future going forward. How soon could an IPO happen? Yeah?
Speaker 1: I can't really say, hard for me to kind of
Speaker 1: go forward on that area, but as we've said before,
Speaker 1: we're preparing to make that happen. Okay, but how are
Speaker 1: you evaluating this market turmoil and could that delay or
Speaker 1: influence your plans? Obviously, market timing is going to dictate
Speaker 1: a lot of things. You know, who can say what
Speaker 1: the market's going to look like. We're just doing the
Speaker 1: kind of things that we need to prepare for an IPO.
Speaker 1: All right, Renehan, CEO of ARM Thank you. Coming up.
Speaker 1: Crypto goes down and down some more. How the Tera
Speaker 1: meltdown is giving fodder to crypto skeptics and how low
Speaker 1: can markets go? That is next? This is Bloomberg. I
Speaker 1: wouldn't characterize it at this scale as a real threat
Speaker 1: to financial stability, but they're growing very rapidly and they
Speaker 1: present the same kind of risks that we have known
Speaker 1: for centuries in connection with bank runs. Dominoes are falling
Speaker 1: in crypto. First it was the collapse of algorithmic stable
Speaker 1: coin terra USD. Now it's grown up cousin tether, wavering
Speaker 1: from the peg and fueling concern over its status as
Speaker 1: a place to hide in times of turbulence. Let's talk
Speaker 1: about what it all means with Bloomberg's own Olga. Careif
Speaker 1: who covers the cryptocurrency market for us so Olga, I
Speaker 1: guess it's fair to say we're in at winter. How
Speaker 1: is this winter different from the ones that have come before? Absolutely,
Speaker 1: I think it's pretty clear we're in a crypto winter.
Speaker 1: We had one in eighteen, but of course today what
Speaker 1: we have that's different is that we have a lot
Speaker 1: more institutional investors and that's why crypto is behaving more
Speaker 1: like a risk acid that's kind of moving in line
Speaker 1: with the rest of the of the the market. So
Speaker 1: remind us how the last crypto winter played out and
Speaker 1: how you expect this one to play out, given that
Speaker 1: there are more people with skin in the game. Absolutely,
Speaker 1: definitely more people. So so what happened was in twenty eighteen,
Speaker 1: thousands of coins basically died, and lots of projects went under,
Speaker 1: and lots of new projects got hatched. And I expect
Speaker 1: we'll see the same thing happened now. You know, if
Speaker 1: this crypto winter is prolonged, a lot of this projects
Speaker 1: and coins will die and we'll see sort of a
Speaker 1: clearing of the plate and we'll see what the strong
Speaker 1: players are who are the survivors. Now, let's talk a
Speaker 1: little bit about coin Base. Their valuation dropped precipitously and
Speaker 1: just over the last few days. I'm curious when you
Speaker 1: think this means, because coin Base has been, you know,
Speaker 1: in some ways a measure of what's happening in the
Speaker 1: broader crypto space. Absolutely so, there obviously the biggest exchange
Speaker 1: in the crypto exchange in the US, and their value
Speaker 1: dropped by more than you know in the last week.
Speaker 1: And uh, basically it's a very sort of strange situation
Speaker 1: because just several months ago, much smaller competitors Blockchain, dot
Speaker 1: Com and Gemini raised money at very high evaluations. But
Speaker 1: obviously now all vcs that are looking to fund crypto
Speaker 1: company you start looking at coin basis valuations and are saying,
Speaker 1: you know, maybe the companies in our portfolios and the
Speaker 1: companies coming to us are overvalued, and so this could
Speaker 1: have a ripple effect on venture capital activity in crypto.
Speaker 1: All right, lots to continue to watch and digest. Thank
Speaker 1: you for giving us the temperature of this particular brand
Speaker 1: of winter ogo caref appreciate it. I want to continue
Speaker 1: the conversation with Nicola Julia for more on this. He's
Speaker 1: the CEO of Sowhere, an n f T based free
Speaker 1: to play fantasy sports game that just announced a partnership
Speaker 1: with Major League Baseball and the MLB Players Association to
Speaker 1: launch the official n f T based fantasy sports game
Speaker 1: for all MLB teams. Um, we're gonna get to baseball,
Speaker 1: and I'm a huge baseball fan, Nicola, But I want
Speaker 1: to ask you first about the markets and you know
Speaker 1: the fact that we're we're in in the middle of
Speaker 1: a very cold spell. What's your take? Yeah, how many
Speaker 1: thanks thanks for having me. I think us a little
Speaker 1: like for us, like we are using NFT technology to
Speaker 1: the benefits of the funds. We don't have any cryptocurrency
Speaker 1: or token that we developed, um, and so you know,
Speaker 1: we are growing independently of the crypto currency market, which
Speaker 1: is again to the benefits of the time. But does
Speaker 1: this impact at least sentiment about the future of Web three,
Speaker 1: the future of n f T s and sort of
Speaker 1: the growth of this new frontier. I think in general obviously,
Speaker 1: as any regular innovation, you have cycles, right uh and
Speaker 1: uh and so Surreal has been founded in at M
Speaker 1: during one of the biggest crypto winters, and I think,
Speaker 1: you know, building during the cycles helps because you have
Speaker 1: less destructions, you have more focused uh and uh and
Speaker 1: the less opportunistic you know, like people building in the
Speaker 1: space so um so like we love building in winters
Speaker 1: to uh. And yes, the sentiment maybe less good right now,
Speaker 1: but I think the lead once of tomorrow will be
Speaker 1: built right now. Now. There has been some controversy about
Speaker 1: what's actually happening in the n f T market. The
Speaker 1: number of traders is still growing, but n f T
Speaker 1: prices are declining. I'm curious what you're seeing in terms
Speaker 1: of your own sales and the business that you're driving. Yeah,
Speaker 1: I think what sets around upon is the usage value
Speaker 1: of n f T s. So we we've seen, you know,
Speaker 1: a lot of projects growing around the pre collectible value
Speaker 1: of these antist but you know, for us, it's all
Speaker 1: but what you can do with the n XT. So
Speaker 1: we have this fantasy game where you can play with
Speaker 1: officially lessons and extis. And so we have been growing
Speaker 1: consistently the last three hongths and in the last couple
Speaker 1: of weeks as well in terms of sales because five
Speaker 1: million in salons and we will keep them growing we
Speaker 1: expect to do seven hundred million. Uh and I think
Speaker 1: that makes all additions right, like what you can do
Speaker 1: and you can engage and retain defense because of the
Speaker 1: experience you have. Now you just announced this partnership with
Speaker 1: AMU and the players, who as we know, don't always
Speaker 1: necessarily agree, how did you convince them to get on board?
Speaker 1: And white Baseball, I think they ask us free, free,
Speaker 1: big questions. The first one is like, like, are you
Speaker 1: the best bonner to help us grow this huge category
Speaker 1: and Steve fantasy um and uh. And you know we
Speaker 1: have proven with so con that we we created this
Speaker 1: category and we are the best place to develop it
Speaker 1: with top two s pons. So that was question number one.
Speaker 1: The question number two was like, are you the best
Speaker 1: bonner to help us grow the audience? Uh? And we are.
Speaker 1: We are selling in one hundred and eighty countries because
Speaker 1: the glob we have a global audience, and we're gonna
Speaker 1: we're gonna help the mld P and the MLB uh
Speaker 1: to you know, to to grow they reach again overseas.
Speaker 1: And then the third question was like, are you the
Speaker 1: best bonner to provide the best experience to the funds
Speaker 1: And so we are building an amazing team in the
Speaker 1: US with people coming from ESPN and DraftKings in all
Speaker 1: this companies that do amazing products. Uh, and so we
Speaker 1: we are very confident, all right, excited to watch Nicola Juliets,
Speaker 1: CEO of so Rare, Thank you for joining us. Let's
Speaker 1: take a look now at China still battling a wave
Speaker 1: of COVID infections with strict lockdowns that are threatening the economy.
Speaker 1: In fact, one of China's top statistics officials says the
Speaker 1: outbreak has caused quote a huge shock to the economy,
Speaker 1: a rare recognition of the cost of the government's COVID
Speaker 1: zero strategy. I want to bring in Bloomberg's Allen one
Speaker 1: now for more on this. Who is joining us live
Speaker 1: from Shanghai, Alan, Thank you so much for joining us.
Speaker 1: We've seen your reporting earlier in the middle of this lockdown,
Speaker 1: we saw your refrigerator getting low. You talked about your
Speaker 1: inability to go out and get more food. Talk to
Speaker 1: us about how you're doing right now and what exactly
Speaker 1: you can and in the midst of this lockdown at
Speaker 1: this date, well, I was Tyde. I'm on date forty
Speaker 1: three of my four day lockdown. And joking aside. Uh yeah,
Speaker 1: it's been. It's been incredibly talk very frustrating, as known
Speaker 1: as the people like me in the situation right now,
Speaker 1: I've actually walked downstairs, walk within my compound and and
Speaker 1: get pick up like a food. Uh that's that's delivered
Speaker 1: to me. Obviously not not many shops are open, so um,
Speaker 1: you know, I'm sort of like sort of stuck to
Speaker 1: whatever is available. Although the other day I think get
Speaker 1: some connective fried chicken. So the food situation has ease
Speaker 1: a little bit, but there's still a lot of concerned
Speaker 1: about these cardin facilities. People are still being um casse
Speaker 1: in a course too into into going into these facilities
Speaker 1: if you test positive, and they've actually tightened some of
Speaker 1: these restrictions before if you live in a building where
Speaker 1: you have some positive cases, as long as they're any
Speaker 1: close contacts, you don't live in the same floor or
Speaker 1: something that and you wouldn't have to go. But now
Speaker 1: even if you test negative and as someone in the
Speaker 1: building that test positive, the likelihood is that you know,
Speaker 1: you could be sent into these uh coin facilities. And
Speaker 1: we've seen some of these images that look pretty uh
Speaker 1: pretty grim. We've seen the frustration in social media post
Speaker 1: people who can't get food? How would you describe the mood?
Speaker 1: How are people in Shanghai taking this well? I think
Speaker 1: there's a lot of people like me. Uh. I hate
Speaker 1: to meet his analogy, but I'm going to There's this
Speaker 1: book by Elizabeth cool or Ross of Deaf and Dying,
Speaker 1: where when you have some really bad news about about
Speaker 1: you know, maybe your help or something, and you know,
Speaker 1: you're go into shock and anger and moved through the
Speaker 1: several stages of despair until you reach the final stage,
Speaker 1: which is uh, acceptance. And I think a lot of
Speaker 1: us are at that stage of acceptance and which right
Speaker 1: now we're just waiting around hoping that you know, this
Speaker 1: lockdown will end sooner or later. Right now, the most
Speaker 1: important metric of all is this one called community spread
Speaker 1: against the number of cases outside of these quarantining facilities.
Speaker 1: And there are three three consecutive days of no community spread.
Speaker 1: Theoretically we should be able to be released from lockdown
Speaker 1: and last month for two days, and then the third
Speaker 1: day there are a couple of kids that popped up
Speaker 1: and we're back to square one. So that's why we're
Speaker 1: looking at it right now. I mean number of cases,
Speaker 1: Shining has been falling, but communist spread has still been persistent.
Speaker 1: So we're hoping that at some point, um, you know,
Speaker 1: we're going to be released. Like it's very frustrating and
Speaker 1: and we just got to wait and see. So there's
Speaker 1: obviously a question about how this impacts not just the
Speaker 1: local economy but the global economy. Now we're also hearing
Speaker 1: rumors about a lockdown in Beijing. The Chinese government, as
Speaker 1: I understand it, has denied those rumors, but we are
Speaker 1: seeing a lockdown light situation. What can you tell us, Well,
Speaker 1: I think two points. First impact on the economy into Paiging. Well,
Speaker 1: you know, yeah, exactly, even though the number kids in Beijing,
Speaker 1: um that there have been that maning you know, roughly
Speaker 1: in the teens um. But the problem is that it's
Speaker 1: it's still there. And the guvernment said that you know,
Speaker 1: there's there's not gonna be locked out in Beijing. That's
Speaker 1: what we were told as well, you know, but it
Speaker 1: seems that you know, they're moving in upper direction obviously
Speaker 1: direction and did be shutting down subways, they would do
Speaker 1: a lot more mass testing. So I would tell us
Speaker 1: some of my Beging friends stock up, especially coke. You know,
Speaker 1: buy lots of coke because that's a valuable commodity during
Speaker 1: its lockdown. And you're right, there's been a big impact
Speaker 1: on the glotal economy, especially on you know recently we
Speaker 1: see all the day to coming out of China. It's
Speaker 1: pretty ugly, manufacturers contracting. We don't of course, consumption is
Speaker 1: weak and inflation is surging, just like in the rest
Speaker 1: of the rest of the world. Um so, and what
Speaker 1: does I mean for China. I mean basically that it's
Speaker 1: not it's not going to meet his ambitious growth targets
Speaker 1: for this year. Why I don't think so anyway. Um now,
Speaker 1: long for us from Shanghai. Thank you so much for
Speaker 1: joining us all. And I know it's early in the
Speaker 1: morning there before. You really appreciate you giving us a
Speaker 1: view from China that doesn't For the sedition of the show,
Speaker 1: we're gonna be back tomorrow, I'll be joined by Greylock
Speaker 1: Partners and LinkedIn co founder Reid Hoffman. Always fun to
Speaker 1: talk to him, and of course check out our new
Speaker 1: podcast anywhere you get your podcasts. I'm Emily Changing in
Speaker 1: San Francisco. This is Bloomberg