1 00:00:16,440 --> 00:00:19,200 Speaker 1: I'm Caroline High and every World tad quarters in New York, 2 00:00:19,600 --> 00:00:22,080 Speaker 1: and I'm mad Ludlow in San Francisco. This is Bloomberg 3 00:00:22,079 --> 00:00:24,880 Speaker 1: Technology coming up in the next hour. Sam mag mun 4 00:00:24,920 --> 00:00:27,960 Speaker 1: Free says he's willing to testify before the U S. 5 00:00:28,000 --> 00:00:31,960 Speaker 1: House Financial Services Committee about the collapse of his crypto empire. 6 00:00:32,360 --> 00:00:35,840 Speaker 1: Will tell you what to expect from next week's hearing. Plus, 7 00:00:35,920 --> 00:00:39,760 Speaker 1: Huawei strikes a deal to license tech to a handset rival, 8 00:00:39,840 --> 00:00:42,440 Speaker 1: a bitter pill to swallow for the Chinese tech giant 9 00:00:42,479 --> 00:00:45,159 Speaker 1: that's blocked from selling its tech in the US. We 10 00:00:45,240 --> 00:00:48,120 Speaker 1: speak to two of their key executives, and we continue 11 00:00:48,159 --> 00:00:51,920 Speaker 1: our coverage of China's risk to dropping its COVID zero stance, 12 00:00:51,960 --> 00:00:56,440 Speaker 1: plus changes to Tessa Shanghai factory amid slowing consumer demand. 13 00:00:56,800 --> 00:01:00,040 Speaker 1: We have you covered first, though foremost it is the 14 00:01:00,200 --> 00:01:02,560 Speaker 1: markets day for us. Of course, we are once again 15 00:01:02,640 --> 00:01:05,240 Speaker 1: seeing the wind taken out of the sales of equities. 16 00:01:05,440 --> 00:01:08,320 Speaker 1: We're seeing down three quarters of a percent, so exhausting 17 00:01:08,400 --> 00:01:11,200 Speaker 1: that this camera is getting all over excited by what's 18 00:01:11,200 --> 00:01:14,319 Speaker 1: happening in these markets. Come closer, no back off. We're 19 00:01:14,360 --> 00:01:16,480 Speaker 1: having a look at the nastack off by seven tenths percent. 20 00:01:16,520 --> 00:01:19,839 Speaker 1: Look these basically, these benchmarks are off by at least 21 00:01:19,880 --> 00:01:22,200 Speaker 1: three and a half four percent on the week overall ed, 22 00:01:22,200 --> 00:01:24,400 Speaker 1: and this in large part is because we're worrying about 23 00:01:24,400 --> 00:01:27,039 Speaker 1: where the Federal Reserve is going and concerned, for example, 24 00:01:27,080 --> 00:01:29,039 Speaker 1: about how far they have to hike, when we're seeing 25 00:01:29,040 --> 00:01:32,959 Speaker 1: a PPIP producer price index that shows that prices are 26 00:01:33,000 --> 00:01:36,640 Speaker 1: just showing such resilience, inflation showing such resilience in the 27 00:01:36,680 --> 00:01:39,039 Speaker 1: face of what have been rapid rate hikes by the Fed. 28 00:01:39,240 --> 00:01:42,119 Speaker 1: Ten year yields have been climbing almost ten basis points. 29 00:01:42,240 --> 00:01:44,559 Speaker 1: Let's have a look at what's happening overall in terms 30 00:01:44,560 --> 00:01:47,680 Speaker 1: of our recession risks. As we are anticipating the warrior 31 00:01:47,680 --> 00:01:50,240 Speaker 1: about a recession, we are seeing the entire market just 32 00:01:50,280 --> 00:01:51,920 Speaker 1: getting nervous. If we can flip up the board, we 33 00:01:52,000 --> 00:01:54,640 Speaker 1: really got this chart that has evidence of where we've 34 00:01:54,680 --> 00:01:58,360 Speaker 1: been going in terms of the pickup now sixty chance. Basically, 35 00:01:58,400 --> 00:02:00,280 Speaker 1: the market sees there will be in a recept so 36 00:02:00,320 --> 00:02:03,000 Speaker 1: a contraction in this economy in the US come next year. 37 00:02:03,280 --> 00:02:05,800 Speaker 1: And we've just got to keep talking about this contagion effect, 38 00:02:05,920 --> 00:02:09,040 Speaker 1: keep talking about what happens next week, what clarity. We 39 00:02:09,080 --> 00:02:10,600 Speaker 1: get it for any because we know that the former 40 00:02:10,639 --> 00:02:13,799 Speaker 1: ft X CEO ed Sam bankmin Freed, says he is 41 00:02:13,840 --> 00:02:15,839 Speaker 1: actually willing to testify. How did he tell us? Of course, 42 00:02:15,840 --> 00:02:17,640 Speaker 1: he told us through Twitter. He announced it in a 43 00:02:17,720 --> 00:02:20,639 Speaker 1: series of tweets, in fact, saying he will answer questions 44 00:02:20,680 --> 00:02:23,080 Speaker 1: about the fall of his crypto empire from the U S. 45 00:02:23,080 --> 00:02:27,359 Speaker 1: House Financial Service eximmity. Let's bring in Alison Verstraw from Washington, 46 00:02:27,440 --> 00:02:29,560 Speaker 1: who has been all across this story, and of course 47 00:02:29,600 --> 00:02:31,919 Speaker 1: so too has our own Shinali Bassett, who of course 48 00:02:31,919 --> 00:02:34,480 Speaker 1: we'll be heading out to Washington and to that hearing 49 00:02:34,520 --> 00:02:37,520 Speaker 1: next week. And Alison, just what did you make of 50 00:02:37,560 --> 00:02:40,160 Speaker 1: the transparency we're getting them through the former Twitter. How 51 00:02:40,160 --> 00:02:43,360 Speaker 1: are we seeing the actual senators trying to speak to 52 00:02:43,480 --> 00:02:47,320 Speaker 1: Sam bankma Freed himself. You know, we're seeing everyone is 53 00:02:47,400 --> 00:02:50,960 Speaker 1: using Twitter. We see Maxine Waters from the House Financial 54 00:02:51,000 --> 00:02:55,359 Speaker 1: Services Committee is increasingly used that to put pressure on 55 00:02:55,560 --> 00:03:00,440 Speaker 1: Sam to testify. We've also seen Senator to Me came 56 00:03:00,440 --> 00:03:03,200 Speaker 1: out with his own tweet today that said, Sam, if 57 00:03:03,200 --> 00:03:04,880 Speaker 1: you do show up at the House Committee is hearing, 58 00:03:04,919 --> 00:03:07,440 Speaker 1: you better show up? But are hearing the next day? 59 00:03:07,560 --> 00:03:12,080 Speaker 1: Uh so, you know everyone's using social media. It's kind 60 00:03:12,120 --> 00:03:14,639 Speaker 1: of painful. I mean, I think was it Czi put 61 00:03:14,680 --> 00:03:17,040 Speaker 1: invest himself is like because like, no, I can't watch movies. 62 00:03:17,080 --> 00:03:19,519 Speaker 1: They're not exciting enough. I'm just addicted to crypto Twitter. 63 00:03:19,560 --> 00:03:22,040 Speaker 1: And aren't we all in? Sali Bassaka is Mickey among them? 64 00:03:22,400 --> 00:03:24,840 Speaker 1: Just talk to us about not only what you're going 65 00:03:24,880 --> 00:03:26,359 Speaker 1: to be following through Twitter, but or you're gonna be 66 00:03:26,360 --> 00:03:28,560 Speaker 1: following Shali on the ground because you're going to be there, 67 00:03:28,560 --> 00:03:31,000 Speaker 1: you're going to be expecting testimony from who and all 68 00:03:31,000 --> 00:03:33,200 Speaker 1: think the right kind of people to be giving testimony. Uh, 69 00:03:33,560 --> 00:03:35,320 Speaker 1: that's an interesting question because there are a lot of 70 00:03:35,360 --> 00:03:37,240 Speaker 1: academics that are being called upon the House and the 71 00:03:37,280 --> 00:03:40,200 Speaker 1: Senate hearings. Remember there's only one set of small witnesses 72 00:03:40,240 --> 00:03:42,800 Speaker 1: posted on the Senate Commody side. We don't have everything 73 00:03:42,840 --> 00:03:44,880 Speaker 1: from the House itself at all yet. And remember Sam 74 00:03:45,360 --> 00:03:48,280 Speaker 1: Freed said he's willing to testify. Will he show up 75 00:03:48,280 --> 00:03:51,200 Speaker 1: and testify? There was no subpoena up to all this 76 00:03:51,280 --> 00:03:53,400 Speaker 1: point as well, so a lot of questions about whether 77 00:03:53,400 --> 00:03:55,800 Speaker 1: he will be there in person. Remember he does say 78 00:03:55,840 --> 00:03:58,040 Speaker 1: that what he is trying to do is address not 79 00:03:58,160 --> 00:04:00,120 Speaker 1: only f t X and the pathway to which term 80 00:04:00,200 --> 00:04:02,560 Speaker 1: value to shareholders, but also it led to the crash. 81 00:04:02,560 --> 00:04:04,800 Speaker 1: Will be looking at what he says versus what he 82 00:04:04,800 --> 00:04:07,640 Speaker 1: has said before, as well as he says his own failings. 83 00:04:07,840 --> 00:04:09,880 Speaker 1: He also said he doesn't have access to much of 84 00:04:09,920 --> 00:04:12,240 Speaker 1: his own data, personal or professional, so you have to 85 00:04:12,280 --> 00:04:14,840 Speaker 1: wonder why he doesn't have that access and what kind 86 00:04:14,880 --> 00:04:17,880 Speaker 1: of data he will not be able to allegedly provide 87 00:04:17,880 --> 00:04:20,960 Speaker 1: to the lawmakers as they question him if he makes 88 00:04:21,000 --> 00:04:23,080 Speaker 1: it there to the Hill next week, so again the 89 00:04:23,120 --> 00:04:27,240 Speaker 1: House on Tuesday, the Senate on Wednesday, and remember the 90 00:04:27,279 --> 00:04:29,800 Speaker 1: Senators have also been seeking to try to get them 91 00:04:29,839 --> 00:04:32,640 Speaker 1: there as well, but they did not reply to them 92 00:04:32,680 --> 00:04:35,800 Speaker 1: in time for the testimony so far. So logistically, let's 93 00:04:35,800 --> 00:04:38,839 Speaker 1: see if he makes it to both. Team Shannali has 94 00:04:38,880 --> 00:04:40,680 Speaker 1: just gone to the exact point I want to bring up. 95 00:04:40,680 --> 00:04:43,560 Speaker 1: In fact, super Producers, let's bring his tweet back up 96 00:04:43,600 --> 00:04:46,000 Speaker 1: again and look at what he said, because what I'm 97 00:04:46,000 --> 00:04:49,880 Speaker 1: not understanding, Allison, is what would we learn from SPF 98 00:04:50,640 --> 00:04:55,119 Speaker 1: on Capitol Hill that we haven't already learned in the many, many, many, 99 00:04:55,200 --> 00:05:00,479 Speaker 1: many many appearances and communications that he's made the last 100 00:05:00,520 --> 00:05:05,919 Speaker 1: seven to ten days. That's a great question, and I honestly, 101 00:05:06,040 --> 00:05:08,040 Speaker 1: I feel like we're probably gonna hear a lot of 102 00:05:08,080 --> 00:05:11,760 Speaker 1: the same things. You know. Uh, he'll say that he 103 00:05:11,800 --> 00:05:14,760 Speaker 1: didn't intentionally need to commit any sort of fraud. He'll 104 00:05:14,760 --> 00:05:17,240 Speaker 1: probably talk about the fact that maybe he made some 105 00:05:17,320 --> 00:05:21,839 Speaker 1: managerial mistakes. UM So I'm sort of expecting it to 106 00:05:21,839 --> 00:05:25,320 Speaker 1: be along the same Lise. I'm actually maybe more interested 107 00:05:25,520 --> 00:05:28,120 Speaker 1: in hearing the testimony of John J. Ray, who is 108 00:05:28,160 --> 00:05:31,640 Speaker 1: the furren CEO kind of helping with the restructuring of FTX. 109 00:05:32,160 --> 00:05:35,040 Speaker 1: You know, he has access to all of this data. 110 00:05:35,160 --> 00:05:37,360 Speaker 1: He's sifting through these records. Though he's told this up 111 00:05:37,520 --> 00:05:40,760 Speaker 1: they're not very good. Um So, you know, I'm hoping 112 00:05:40,800 --> 00:05:43,440 Speaker 1: that maybe we get some some extra details from what 113 00:05:43,480 --> 00:05:47,320 Speaker 1: we've seen in the bank from seed filing so far. Actually, Shnali, 114 00:05:47,760 --> 00:05:51,560 Speaker 1: new headlines actually continue to come through about this story. 115 00:05:51,600 --> 00:05:54,120 Speaker 1: I saw a tweet or thread of tweets from the 116 00:05:54,240 --> 00:05:57,320 Speaker 1: editor at large of the block. Could you tell us 117 00:05:57,360 --> 00:05:59,719 Speaker 1: what the story is there? Please? Yeah, you are referring 118 00:05:59,760 --> 00:06:03,120 Speaker 1: to the tweet thread by Frank Tapparo, otherwise known as 119 00:06:03,120 --> 00:06:07,080 Speaker 1: syntech Frank, who four days ago released an almost two 120 00:06:07,200 --> 00:06:11,520 Speaker 1: hour podcast speaking with f SVF about what had happened here. 121 00:06:11,560 --> 00:06:13,800 Speaker 1: But really what had happened is he said he did 122 00:06:13,800 --> 00:06:17,120 Speaker 1: not know, and many employees at the Block did not 123 00:06:17,200 --> 00:06:20,760 Speaker 1: know and felt really UH put in a dark here 124 00:06:20,920 --> 00:06:23,640 Speaker 1: because what happened was an executive, the CEO of the Block, 125 00:06:23,640 --> 00:06:26,520 Speaker 1: which is supposed to be an independent news site related 126 00:06:26,560 --> 00:06:29,919 Speaker 1: to crypto, that was bought out by management about a 127 00:06:29,960 --> 00:06:32,640 Speaker 1: year or so ago. Yeah, absolutely, gotta look at that 128 00:06:32,640 --> 00:06:35,280 Speaker 1: tweet right there. So what they are finding out now 129 00:06:35,440 --> 00:06:39,200 Speaker 1: is that CEO had taken personal loans through UH, a 130 00:06:39,640 --> 00:06:43,679 Speaker 1: entity here that did not disclose that SPF had given 131 00:06:43,720 --> 00:06:46,800 Speaker 1: loans to the CEO that ended up being part of 132 00:06:46,800 --> 00:06:50,200 Speaker 1: what helped that executive lead to the buyout. So listen, 133 00:06:50,240 --> 00:06:53,240 Speaker 1: the CEO has stepped down. You are seeing the employees 134 00:06:53,279 --> 00:06:56,120 Speaker 1: really from this, they are saying they did not know 135 00:06:56,240 --> 00:06:58,520 Speaker 1: at all. This was really found out within the past 136 00:06:58,560 --> 00:07:01,000 Speaker 1: couple of days, and as I was saying, just two 137 00:07:01,080 --> 00:07:05,200 Speaker 1: days ago, they had interviewed SPF himself. And it can, 138 00:07:05,240 --> 00:07:07,839 Speaker 1: I mean, it can seem like inside baseball when journalists 139 00:07:07,839 --> 00:07:10,920 Speaker 1: are talking about other journalists. But your heart does have 140 00:07:10,960 --> 00:07:13,160 Speaker 1: to go out to people who feel completely undone, not 141 00:07:13,240 --> 00:07:16,240 Speaker 1: only by their sector collapsing the industry that they've grown 142 00:07:16,240 --> 00:07:19,400 Speaker 1: to love collapsing, but then their own CEO seemingly catching 143 00:07:19,440 --> 00:07:21,960 Speaker 1: them completely off guard and blindsiding them. I'm sure there's 144 00:07:21,960 --> 00:07:26,240 Speaker 1: more to come from that, but overall, Allison, the transparency 145 00:07:26,240 --> 00:07:29,160 Speaker 1: we're going to get from a regulatory perspective, from a 146 00:07:29,280 --> 00:07:32,040 Speaker 1: lawmaker's perspective, and I asked it to Scenalia earlier. I 147 00:07:32,040 --> 00:07:34,080 Speaker 1: asked it to you now, the people that they're going 148 00:07:34,120 --> 00:07:36,920 Speaker 1: to have in front of them giving evidence. I've seen 149 00:07:37,000 --> 00:07:40,080 Speaker 1: some talk on Twitter again that people who feel very 150 00:07:40,120 --> 00:07:42,440 Speaker 1: legitimate in this space haven't been asked, and some people 151 00:07:42,440 --> 00:07:45,000 Speaker 1: who have been asked to speak, perhaps on deemed so 152 00:07:45,120 --> 00:07:48,360 Speaker 1: legitimate just talked us about who we expect to hear from. 153 00:07:48,560 --> 00:07:51,040 Speaker 1: So on the health side of the only person that's 154 00:07:51,080 --> 00:07:53,520 Speaker 1: actually listed as a witness so far is John J. 155 00:07:53,720 --> 00:07:58,400 Speaker 1: Ray So, the current CEO of FTX. On the Senate side, 156 00:07:58,440 --> 00:08:01,280 Speaker 1: we have a pretty smart list as well. One of 157 00:08:01,320 --> 00:08:04,520 Speaker 1: them is a law professor who specializes in sort of 158 00:08:04,520 --> 00:08:08,800 Speaker 1: financial regulation and in technologies. And then the other one 159 00:08:09,080 --> 00:08:11,920 Speaker 1: is Ben mackenzie. So if you want the o C, 160 00:08:13,040 --> 00:08:15,360 Speaker 1: then you would recognize that name. He was Ryan on 161 00:08:15,440 --> 00:08:18,480 Speaker 1: the f C. He's more recently come out as a 162 00:08:18,560 --> 00:08:23,960 Speaker 1: very anti crypto skeptic and sort of crypto commentator. But 163 00:08:24,040 --> 00:08:26,120 Speaker 1: a lot of people were a little surprised to see 164 00:08:26,120 --> 00:08:30,880 Speaker 1: that name on the list. T Mosey. I think we 165 00:08:30,960 --> 00:08:34,560 Speaker 1: all better get some rest this weekend next week, said 166 00:08:34,600 --> 00:08:38,320 Speaker 1: crypto nervous sleep. Thank goodness that I do sleep Friday 167 00:08:38,400 --> 00:08:40,920 Speaker 1: night through Sunday night. All right, bloombergs Allison Verse Brow 168 00:08:40,920 --> 00:08:45,400 Speaker 1: and Shnali Bassek, thank you both. Coming up, Huawei expands 169 00:08:45,440 --> 00:08:48,600 Speaker 1: on the patent monetizing game. We'll discuss that and much 170 00:08:48,640 --> 00:08:52,719 Speaker 1: more with top executives from the company. Next, this is Bloomberg. 171 00:09:01,160 --> 00:09:03,760 Speaker 1: We wouldn't talk about. Another key story, particularly from a 172 00:09:03,800 --> 00:09:07,240 Speaker 1: genio political perspective, Huawei Technologies has agreed to license some 173 00:09:07,320 --> 00:09:10,760 Speaker 1: of its smartphone technologies well to an old rival called Opo. 174 00:09:11,160 --> 00:09:13,520 Speaker 1: One of China's top smartphone brands now, Hwei is one 175 00:09:13,520 --> 00:09:15,640 Speaker 1: of the biggest holders of five G patterns and many 176 00:09:15,640 --> 00:09:19,000 Speaker 1: patterns in fact, and it's historically not been that aggressive 177 00:09:19,000 --> 00:09:22,640 Speaker 1: in monetizing those patterns. But the telecom giant now seeing 178 00:09:22,679 --> 00:09:25,600 Speaker 1: itself perhaps in a need to look in revenues and 179 00:09:25,600 --> 00:09:28,640 Speaker 1: other areas after it's a lucrative handset business was hit 180 00:09:28,679 --> 00:09:31,440 Speaker 1: pretty hard by US trade sanctions that cut it off 181 00:09:31,679 --> 00:09:34,320 Speaker 1: in terms of access to advanced chips. I'm very pleased 182 00:09:34,320 --> 00:09:37,200 Speaker 1: to welcome, therefore to the show Huawei chief security Officer 183 00:09:37,360 --> 00:09:40,800 Speaker 1: Andy Purdy, alongside Huawei's Chief Intellectual Property counsel for the 184 00:09:40,880 --> 00:09:44,200 Speaker 1: United States, Stephen Geisler. Thank you very much, indeed, gentlemen, 185 00:09:44,200 --> 00:09:48,000 Speaker 1: for both being here. And let's start first and foremost 186 00:09:48,800 --> 00:09:52,080 Speaker 1: where we're thinking about the new areas of revenue. And 187 00:09:52,120 --> 00:09:54,840 Speaker 1: Steve and I address this question to you because how 188 00:09:54,880 --> 00:09:57,720 Speaker 1: important now is the monetization of patterns. How are you 189 00:09:57,760 --> 00:10:00,800 Speaker 1: seeing this driving in terms of percentage wise of revenue 190 00:10:00,840 --> 00:10:05,439 Speaker 1: going forward? So are the revenue we will we will 191 00:10:05,520 --> 00:10:08,439 Speaker 1: realize through patent licensing is not going to make up 192 00:10:08,520 --> 00:10:11,920 Speaker 1: for or be in lieu of products sales UH in 193 00:10:11,960 --> 00:10:14,240 Speaker 1: any given year. We're talking about numbers that are in 194 00:10:14,280 --> 00:10:18,000 Speaker 1: the hundreds of millions versus products sales, products and services 195 00:10:18,080 --> 00:10:22,080 Speaker 1: combined being in tens of billions of US dollars. So 196 00:10:22,200 --> 00:10:24,800 Speaker 1: certainly one is not going to be a replacement for 197 00:10:24,840 --> 00:10:27,720 Speaker 1: the other. We are simply trying to make sure that 198 00:10:28,320 --> 00:10:30,640 Speaker 1: based upon the money we've spent through the years on 199 00:10:30,800 --> 00:10:33,760 Speaker 1: R and D and then patenting that we're getting a 200 00:10:34,040 --> 00:10:38,480 Speaker 1: fair return on our our patent expenditures for patenting our 201 00:10:38,520 --> 00:10:43,120 Speaker 1: technologies and also using the patents to reach agreements with 202 00:10:43,160 --> 00:10:47,120 Speaker 1: our competitors and peers to make sure that the innovation 203 00:10:47,120 --> 00:10:49,480 Speaker 1: that goes into global standards such as four G and 204 00:10:49,520 --> 00:10:53,720 Speaker 1: five G telephony, for WiFi, for the audio video codex 205 00:10:53,760 --> 00:10:56,400 Speaker 1: that allow for streaming for for your viewers to watch 206 00:10:56,440 --> 00:11:00,760 Speaker 1: even today's show, that that is recuperated by not only 207 00:11:00,840 --> 00:11:06,560 Speaker 1: Huawei but other large members of the ICT industry for 208 00:11:06,720 --> 00:11:09,640 Speaker 1: what we spend on R and D. I want to 209 00:11:09,640 --> 00:11:14,559 Speaker 1: bring Andy Purdy, Huawei's chief security officer, into the conversation. Andy, 210 00:11:15,160 --> 00:11:18,079 Speaker 1: how much for a bitter pill to swallow? Is this? Huawei? 211 00:11:18,120 --> 00:11:22,520 Speaker 1: You know, you once had a significant handset business that 212 00:11:22,760 --> 00:11:27,480 Speaker 1: was a driver of revenue growth but also just accounted 213 00:11:27,520 --> 00:11:31,480 Speaker 1: for a big chunk of revenue. Now you are pivoting 214 00:11:32,000 --> 00:11:37,160 Speaker 1: essentially again, is it a bitter pill to swallow? We 215 00:11:37,280 --> 00:11:39,920 Speaker 1: deal with reality, and the reality is that we have 216 00:11:40,040 --> 00:11:44,360 Speaker 1: certain challenges. Our survival is first and foremost. Our ability 217 00:11:44,360 --> 00:11:47,240 Speaker 1: to work with partners and customers to innovate and bring 218 00:11:47,320 --> 00:11:49,880 Speaker 1: five G enabled technologies to the world is what we're about. 219 00:11:49,880 --> 00:11:52,600 Speaker 1: To help bring connectivity to the world. And so that's 220 00:11:52,600 --> 00:11:55,240 Speaker 1: where we look at. We've got tremendous opportunities out there. 221 00:11:55,600 --> 00:11:59,079 Speaker 1: The regiment, the international regime that was just talking about 222 00:11:59,440 --> 00:12:02,360 Speaker 1: the idea that there are certain standards and certain companies 223 00:12:02,360 --> 00:12:05,360 Speaker 1: may own patents relative that standards is the international system 224 00:12:05,360 --> 00:12:08,880 Speaker 1: of making sure there's fairness that competitors can buy licenses 225 00:12:08,920 --> 00:12:12,640 Speaker 1: from other competitors is a huge thing on the international stage. 226 00:12:12,840 --> 00:12:16,680 Speaker 1: They help increase innovation and increase competition around the World's 227 00:12:16,720 --> 00:12:18,520 Speaker 1: a it's a great tribute to hell well at Global 228 00:12:18,800 --> 00:12:22,559 Speaker 1: system Works in the I P area. Andy though those words, 229 00:12:22,600 --> 00:12:27,640 Speaker 1: it's about survival. Just how threatened has your business model 230 00:12:27,679 --> 00:12:32,560 Speaker 1: become through US China attentions and how non ending do 231 00:12:32,600 --> 00:12:35,120 Speaker 1: you think that this shutdown will be? This access to 232 00:12:35,120 --> 00:12:38,760 Speaker 1: the United States, this ability to sell into it. Well, 233 00:12:38,840 --> 00:12:43,240 Speaker 1: when you look at our revenues from our revenue is 234 00:12:43,280 --> 00:12:47,480 Speaker 1: dropped about thirty billion dollars, mostly because of our inability 235 00:12:47,559 --> 00:12:51,000 Speaker 1: to to buy ships for our five G phones. And 236 00:12:51,080 --> 00:12:55,680 Speaker 1: so we are emphasizing tremendous investment of this past year 237 00:12:56,160 --> 00:12:58,880 Speaker 1: in R and D or twenty billion dollars in R 238 00:12:58,880 --> 00:13:02,280 Speaker 1: and D and thousands of partnerships to help RAN five 239 00:13:02,800 --> 00:13:06,560 Speaker 1: digital transformation, the different industries such as smart mining and 240 00:13:06,600 --> 00:13:10,000 Speaker 1: smart courts, and the ability to create safer environments and 241 00:13:10,120 --> 00:13:14,520 Speaker 1: reduce sandergy consumption. And basically we are finding our way 242 00:13:14,559 --> 00:13:18,040 Speaker 1: on the road. And we're even doing hardcore scientific research 243 00:13:18,400 --> 00:13:20,920 Speaker 1: on things like wars law and Shannon's limits so that 244 00:13:21,240 --> 00:13:25,160 Speaker 1: the scientific challenges of five G, five point five G 245 00:13:25,280 --> 00:13:27,319 Speaker 1: and six G can be overcome for the benefit of 246 00:13:27,360 --> 00:13:29,600 Speaker 1: the world. So we take the world as we see 247 00:13:29,600 --> 00:13:31,959 Speaker 1: it and we're working hard and innovating. I think we 248 00:13:32,040 --> 00:13:34,559 Speaker 1: had while we're really proud of how we're moving forward 249 00:13:34,600 --> 00:13:38,560 Speaker 1: with partners around the world. Stephen, you're the US Chief 250 00:13:39,080 --> 00:13:43,840 Speaker 1: Intellectual Property Council, although it is still a Chinese maker 251 00:13:43,920 --> 00:13:46,559 Speaker 1: of handsets, cause you took us through how the deal 252 00:13:46,640 --> 00:13:49,760 Speaker 1: came about and how difficult the deal was to get done. 253 00:13:51,320 --> 00:13:57,000 Speaker 1: Certainly the deal was done through bilateral negotiations without the 254 00:13:57,000 --> 00:14:01,320 Speaker 1: need for litigation. That's important because times these deals are 255 00:14:01,400 --> 00:14:05,880 Speaker 1: are only brought about through litigation because we need the 256 00:14:06,040 --> 00:14:08,880 Speaker 1: intervention of courts to help decide things such as what 257 00:14:09,000 --> 00:14:11,920 Speaker 1: is the proper rate and what products are are should 258 00:14:11,920 --> 00:14:15,040 Speaker 1: be subject to a license agreement? Here that was not necessary. 259 00:14:15,960 --> 00:14:19,000 Speaker 1: We also view that this is a key step forward. Um, 260 00:14:19,040 --> 00:14:22,040 Speaker 1: it's not our first Chinese cross license by any means 261 00:14:22,120 --> 00:14:25,360 Speaker 1: or as it oppos but it is a major sign 262 00:14:25,640 --> 00:14:30,720 Speaker 1: that the Chinese regime for patent protection it continues to mature. 263 00:14:31,160 --> 00:14:35,880 Speaker 1: These are are two large competitors, UH bringing about a 264 00:14:36,440 --> 00:14:41,080 Speaker 1: very important agreement between the two of us. Andy. I 265 00:14:41,120 --> 00:14:45,040 Speaker 1: asked you earlier if having to license your tech rather 266 00:14:45,080 --> 00:14:48,440 Speaker 1: than selling handsets is a bit of pill to swallow, 267 00:14:48,480 --> 00:14:51,720 Speaker 1: and you said, it's the reality where we are. Now. 268 00:14:52,520 --> 00:14:55,960 Speaker 1: What is the reality of Huawei being able to sell 269 00:14:56,560 --> 00:14:59,480 Speaker 1: not just handsets in terms of smartphones, but are the 270 00:14:59,520 --> 00:15:03,600 Speaker 1: hard into the United States directly? When how does that 271 00:15:03,640 --> 00:15:09,920 Speaker 1: come about? Our emphasis for the foreseeable future is in 272 00:15:10,000 --> 00:15:12,840 Speaker 1: those parts of the world, and there are many that 273 00:15:12,880 --> 00:15:16,440 Speaker 1: are open to working with us, helping open the partnering 274 00:15:16,480 --> 00:15:19,280 Speaker 1: from us, and so they're tremendous opportunities around the world, 275 00:15:19,280 --> 00:15:21,680 Speaker 1: and so that's what we're focusing on right now, and frankly, 276 00:15:21,720 --> 00:15:23,600 Speaker 1: as those of us in the United States, and we 277 00:15:23,680 --> 00:15:25,440 Speaker 1: look at some of the things we're doing around the 278 00:15:25,480 --> 00:15:28,640 Speaker 1: world to help bring connectivity to the under connected, we 279 00:15:28,760 --> 00:15:31,120 Speaker 1: hope that in the United States there can be a 280 00:15:31,160 --> 00:15:34,840 Speaker 1: little more action and a little less talk about connecting 281 00:15:35,000 --> 00:15:38,160 Speaker 1: the rural America in a resilient way and frankly, helping 282 00:15:38,200 --> 00:15:41,240 Speaker 1: you connect and have appropriate devices for distressed communities or 283 00:15:41,320 --> 00:15:44,840 Speaker 1: communities in urban areas of the country. Americans really need 284 00:15:44,920 --> 00:15:50,800 Speaker 1: to get the benefit of connectivity overall. Is that argument Landing? 285 00:15:51,200 --> 00:15:54,240 Speaker 1: And who are you speaking to here in the United States? 286 00:15:54,320 --> 00:15:56,920 Speaker 1: Are people do they still want in any way to 287 00:15:57,040 --> 00:16:01,240 Speaker 1: grant access directly or indirectly for your technology they feel 288 00:16:01,240 --> 00:16:02,920 Speaker 1: the need for it, because I was amazed to see 289 00:16:02,960 --> 00:16:05,200 Speaker 1: just how many patterns you put into the United States, 290 00:16:05,200 --> 00:16:09,320 Speaker 1: for example, p a year like you're number one. M Well, 291 00:16:10,080 --> 00:16:12,320 Speaker 1: as I said, our focus is not to do business 292 00:16:12,360 --> 00:16:14,040 Speaker 1: in the United States, and as we talk about the 293 00:16:14,160 --> 00:16:17,160 Speaker 1: lessons we are learning and five G transformation around the 294 00:16:17,160 --> 00:16:19,720 Speaker 1: world is not to enable us in new business. We 295 00:16:19,760 --> 00:16:21,720 Speaker 1: think there are lessons that we're learning. We think there 296 00:16:21,720 --> 00:16:24,280 Speaker 1: are lessons as the United States can learn from success 297 00:16:24,280 --> 00:16:26,840 Speaker 1: stories and other parts of the world. But I mentioned 298 00:16:26,840 --> 00:16:29,960 Speaker 1: the smart mining and smart ports, But but healthcare and 299 00:16:30,000 --> 00:16:35,920 Speaker 1: manufacturing consistency, reducing energy consumption, and telecommunications. The United States 300 00:16:36,040 --> 00:16:38,000 Speaker 1: needs to step up and be much more active in 301 00:16:38,040 --> 00:16:40,240 Speaker 1: these things to help the competitiveness of the United States 302 00:16:40,280 --> 00:16:44,920 Speaker 1: and help the American people. I'm interested, Stephen, and I'm 303 00:16:44,920 --> 00:16:47,120 Speaker 1: wondering if you can take us in the money direction. 304 00:16:47,320 --> 00:16:51,640 Speaker 1: In your focus as Chief Intellectual Property Council, you are 305 00:16:51,800 --> 00:16:53,680 Speaker 1: not only just announcing, of course, to deal with oper 306 00:16:53,800 --> 00:16:55,760 Speaker 1: but you made public for the first time that you're 307 00:16:55,800 --> 00:17:00,120 Speaker 1: also doing licensing five G Samsung. How much with some 308 00:17:00,160 --> 00:17:02,400 Speaker 1: of these partners, particularly when it comes to Samsung, to Apple, 309 00:17:02,480 --> 00:17:05,000 Speaker 1: to the huge players in this space, how much you're 310 00:17:05,080 --> 00:17:08,040 Speaker 1: charging them in terms of patent use, and are you 311 00:17:08,160 --> 00:17:10,399 Speaker 1: thinking about royalties in a different way. You're going to 312 00:17:10,440 --> 00:17:14,920 Speaker 1: have to change the maths and be more aggressive. Well so, so, first, 313 00:17:15,320 --> 00:17:18,159 Speaker 1: we don't view ourselves as aggressive. We are certainly active 314 00:17:18,160 --> 00:17:21,840 Speaker 1: in the licensing space, uh where third parties have done 315 00:17:21,880 --> 00:17:25,760 Speaker 1: independent studies of our licensing, our rates for our patents 316 00:17:25,840 --> 00:17:29,080 Speaker 1: versus many of our competitors. We actually are much more 317 00:17:29,160 --> 00:17:30,879 Speaker 1: in the middle of the pack. So we are not 318 00:17:31,040 --> 00:17:35,000 Speaker 1: looking to set the highest rates in in any industry 319 00:17:35,280 --> 00:17:39,840 Speaker 1: or technology. Um. The importance of of U S patents, 320 00:17:39,840 --> 00:17:42,560 Speaker 1: for instance, which which you've mentioned previously, is still important 321 00:17:42,640 --> 00:17:44,879 Speaker 1: regardless of whether we ever sell a product again in 322 00:17:44,920 --> 00:17:49,280 Speaker 1: the United States. Our patents our technologies are being used 323 00:17:49,320 --> 00:17:53,159 Speaker 1: by US companies. Many of those companies have have freely 324 00:17:53,440 --> 00:17:57,480 Speaker 1: without litigation, have joined into license agreements with Whalwei to 325 00:17:57,600 --> 00:18:00,639 Speaker 1: pay for the rights to use our patent of technology 326 00:18:00,640 --> 00:18:03,080 Speaker 1: in the United States. No one in the United States 327 00:18:03,080 --> 00:18:06,800 Speaker 1: can use WiFi, particularly the new WiFi six which is 328 00:18:06,880 --> 00:18:11,040 Speaker 1: the the a X version without using Quawis technology. Same 329 00:18:11,080 --> 00:18:15,280 Speaker 1: things four genes five G. We are licensing car manufacturers 330 00:18:15,280 --> 00:18:17,920 Speaker 1: and their suppliers all around the world, from Japan to 331 00:18:18,080 --> 00:18:21,119 Speaker 1: China to the UK, to Germany to the United States 332 00:18:21,160 --> 00:18:24,720 Speaker 1: on their use of our four G technology in connected cars. 333 00:18:25,280 --> 00:18:29,040 Speaker 1: And so that is the important thing is making sure 334 00:18:29,040 --> 00:18:33,159 Speaker 1: people understand the difference between global use of standardized technology, 335 00:18:33,480 --> 00:18:36,960 Speaker 1: which which always a leader in in providing that technology, 336 00:18:37,480 --> 00:18:42,840 Speaker 1: versus product sales. Okay, Huawei chief Security Officer Andy Perdy 337 00:18:42,880 --> 00:18:45,719 Speaker 1: and Chief Intellectual Property Council for the U S Stephen 338 00:18:45,760 --> 00:18:49,159 Speaker 1: Guys that thank you both and concerns Linga that some 339 00:18:49,200 --> 00:18:52,240 Speaker 1: of the biggest Chinese tech firms will be delisted in 340 00:18:52,280 --> 00:18:55,200 Speaker 1: the US. As of Wednesday, about one of j D 341 00:18:55,400 --> 00:18:59,400 Speaker 1: dot com shaes was circulating in Hong Kong's settlement system. 342 00:18:59,440 --> 00:19:02,600 Speaker 1: This is in Vesta's move to convert them from US exchanges. 343 00:19:02,640 --> 00:19:05,840 Speaker 1: That's a near doubling from the end of according to 344 00:19:05,880 --> 00:19:10,159 Speaker 1: Bloomberg calculation. Similarly, Ali Barber's Hong Kong listed share portion 345 00:19:10,280 --> 00:19:13,680 Speaker 1: rows eleven percentage points during the same period, a steady 346 00:19:13,720 --> 00:19:17,159 Speaker 1: shift into Asia, which shows traders are continuing to hedge 347 00:19:17,400 --> 00:19:21,520 Speaker 1: risks associated with the US China spat. Now coming up, 348 00:19:21,880 --> 00:19:26,159 Speaker 1: everyone's doing it? Are you? Lenser Ai? It's the latest 349 00:19:26,200 --> 00:19:28,080 Speaker 1: d ai application. You've got to take my word for it. 350 00:19:28,119 --> 00:19:32,720 Speaker 1: That makes yourselfies look even better? Caroline and I, well, 351 00:19:32,800 --> 00:19:34,359 Speaker 1: I don't want to give it too much away. Just 352 00:19:34,400 --> 00:19:49,680 Speaker 1: wait and see all that next. This is Bloomberg. So 353 00:19:50,080 --> 00:19:55,760 Speaker 1: that's us. That's Caroline right there, that's supposedly me using 354 00:19:55,800 --> 00:19:58,920 Speaker 1: the lenser Ai app and all in one image editing 355 00:19:58,920 --> 00:20:05,480 Speaker 1: app for your selfies. Don't yours are really good? You 356 00:20:05,560 --> 00:20:09,040 Speaker 1: look really hot, really smart? Even it does this remotely 357 00:20:09,080 --> 00:20:11,360 Speaker 1: look like me, not in the slightest. I'm kind of 358 00:20:11,800 --> 00:20:15,320 Speaker 1: a bit depressed that. I mean what I've just morphed 359 00:20:15,359 --> 00:20:19,520 Speaker 1: into sort of an artistic Italian gentlemen. I've morphed into 360 00:20:19,520 --> 00:20:22,160 Speaker 1: someone I really don't recognize, but they're kind of hot. 361 00:20:22,760 --> 00:20:24,720 Speaker 1: It was an interesting experience, like a lot of my 362 00:20:24,920 --> 00:20:29,840 Speaker 1: photos were rejected, but we're back the real you and I. 363 00:20:30,280 --> 00:20:33,640 Speaker 1: We just there's one photo where I look so unwell 364 00:20:33,720 --> 00:20:37,800 Speaker 1: and miserable and completely unlike myself that I was kind 365 00:20:37,800 --> 00:20:40,439 Speaker 1: of a bit a bit depressed by it, but probably, 366 00:20:40,480 --> 00:20:41,800 Speaker 1: as I kept saying, it sort of felt like my 367 00:20:41,880 --> 00:20:44,679 Speaker 1: insides after all the holiday parties. But I am interested 368 00:20:44,720 --> 00:20:47,840 Speaker 1: in that. Some people out there, right, one particular noted 369 00:20:47,840 --> 00:20:51,520 Speaker 1: economist thinks this sort of AI, particularly chat GPT for example, 370 00:20:51,880 --> 00:20:56,479 Speaker 1: is great strides in technology, right, I mean, is this 371 00:20:56,560 --> 00:20:58,760 Speaker 1: the best thing since sliced bread? Is this a game 372 00:20:58,840 --> 00:21:01,520 Speaker 1: change of revolutionary? As far as I can tell, it's 373 00:21:01,560 --> 00:21:04,000 Speaker 1: just strange pictures of you and I, but you got 374 00:21:04,119 --> 00:21:07,040 Speaker 1: to experience. Yeah, they've got to sew pll on it. 375 00:21:07,520 --> 00:21:10,359 Speaker 1: Larry Summers says this will change us in terms of 376 00:21:10,400 --> 00:21:14,200 Speaker 1: it's as important as the wheel and fire. Seemingly actually, 377 00:21:14,240 --> 00:21:26,680 Speaker 1: most think it is revolutionary. This is broom back. It's 378 00:21:26,720 --> 00:21:29,520 Speaker 1: not like there's an incredible amount of money that's ready 379 00:21:29,520 --> 00:21:32,280 Speaker 1: to be deployed. I think the pace of investments in 380 00:21:32,320 --> 00:21:34,840 Speaker 1: the venture ecosystem was masked a bit by capital that 381 00:21:34,920 --> 00:21:38,000 Speaker 1: was coming from non traditional ventures and corporate balance sheets 382 00:21:38,160 --> 00:21:40,199 Speaker 1: and so I think today what you're gonna see is 383 00:21:40,760 --> 00:21:44,399 Speaker 1: a shift, probably not in terms of opportunity sets, in 384 00:21:44,480 --> 00:21:47,080 Speaker 1: terms of how fast money gets deployed in the ecosystem, 385 00:21:47,200 --> 00:21:48,600 Speaker 1: but I think you're going to see people look for 386 00:21:48,680 --> 00:21:51,160 Speaker 1: complete different dynamics within the balance sheets and the capital 387 00:21:51,200 --> 00:21:55,080 Speaker 1: structures as the management team that they're investing in. That 388 00:21:55,240 --> 00:21:57,959 Speaker 1: was pitch Books Director of Research needs are To Whooney, 389 00:21:58,359 --> 00:22:01,000 Speaker 1: giving his take on the current dynamics at play in 390 00:22:01,000 --> 00:22:04,359 Speaker 1: the world of VC. It's because someone else's take. Denish A. 391 00:22:04,480 --> 00:22:07,920 Speaker 1: Kiers with us now general partner at Lux Capital, a 392 00:22:08,000 --> 00:22:12,000 Speaker 1: firm focusing on investments in emerging technologies. Four billion dollars 393 00:22:12,119 --> 00:22:16,199 Speaker 1: in assets under management. It's been a week. It's been 394 00:22:16,520 --> 00:22:20,320 Speaker 1: a big week for markets, for the world economics. Karen 395 00:22:20,320 --> 00:22:22,320 Speaker 1: and I have been talking a lot about data. You know, 396 00:22:22,400 --> 00:22:25,480 Speaker 1: there was various data sets, but the big takeaway is 397 00:22:25,520 --> 00:22:27,720 Speaker 1: that whether you do it on a volume basis, deal 398 00:22:27,760 --> 00:22:32,520 Speaker 1: count basis, dollar value basis, two is nothing compared to 399 00:22:33,320 --> 00:22:37,800 Speaker 1: one in your world. Why, well, it's great to be here, 400 00:22:37,840 --> 00:22:40,840 Speaker 1: Thanks for having me. I was expecting my lensa avatar 401 00:22:40,960 --> 00:22:43,440 Speaker 1: to show up instead of myself, but delighted to be here. 402 00:22:43,520 --> 00:22:46,719 Speaker 1: So no denying two was a roller coaster, and I 403 00:22:46,760 --> 00:22:49,760 Speaker 1: think we're still in for a long ride with ahead 404 00:22:49,760 --> 00:22:53,240 Speaker 1: of us. Many would say the exuberance of one needed 405 00:22:53,240 --> 00:22:55,240 Speaker 1: a correction, and that came with a bit of a 406 00:22:55,320 --> 00:22:59,320 Speaker 1: jarring surprise to some but also met the expectations of others. 407 00:22:59,320 --> 00:23:01,919 Speaker 1: It was, in anyway, is a long time coming. But 408 00:23:01,960 --> 00:23:04,520 Speaker 1: I still think we're just at the precipice of understanding 409 00:23:04,520 --> 00:23:08,399 Speaker 1: what the impact will be on valuations across stages, and 410 00:23:08,520 --> 00:23:11,160 Speaker 1: certainly for us it's it's an area where we think 411 00:23:11,160 --> 00:23:13,960 Speaker 1: there's a real exciting opportunity to continue being bullish on 412 00:23:14,040 --> 00:23:16,720 Speaker 1: long term opportunities. I am going to let Caroline have 413 00:23:16,760 --> 00:23:18,320 Speaker 1: all the fun, and I'm going to ask you a 414 00:23:18,359 --> 00:23:21,080 Speaker 1: slightly dull question about economics if you allow me to. 415 00:23:21,680 --> 00:23:25,280 Speaker 1: It's never dullared well, I know it's important. The funny 416 00:23:25,280 --> 00:23:26,919 Speaker 1: thing is that if you're a well i'm assuming if 417 00:23:26,960 --> 00:23:30,359 Speaker 1: you're a venture capitalist, you assess a broad range of data, 418 00:23:30,520 --> 00:23:34,399 Speaker 1: just as a public market analyst would or investor inflation 419 00:23:34,640 --> 00:23:36,679 Speaker 1: in the FED. You know, in every day for US 420 00:23:36,760 --> 00:23:40,560 Speaker 1: inflation in the FED. What does it mean to you 421 00:23:40,800 --> 00:23:43,520 Speaker 1: at this stage in the cycle. Well, you know we're VC, 422 00:23:43,720 --> 00:23:46,600 Speaker 1: so we're long term investors were not day traders. Obviously, 423 00:23:46,640 --> 00:23:48,879 Speaker 1: there's no denying the impact of the macer on the 424 00:23:48,920 --> 00:23:50,960 Speaker 1: micro and we've seen that very clearly in terms of 425 00:23:50,960 --> 00:23:54,879 Speaker 1: the opportunities for exits for for venture backed companies. But 426 00:23:54,920 --> 00:23:58,639 Speaker 1: when we're investing in deep technologies companies that we believe 427 00:23:58,720 --> 00:24:01,840 Speaker 1: our market makers, we have to look with a longer perspective, 428 00:24:01,840 --> 00:24:05,560 Speaker 1: and so you know three does not look particularly promising, 429 00:24:05,560 --> 00:24:07,640 Speaker 1: although none of us are nostra damas, but we're looking 430 00:24:07,680 --> 00:24:10,480 Speaker 1: ahead five to ten years from now and those opportunities 431 00:24:10,960 --> 00:24:13,280 Speaker 1: are very exciting to be investing in their early days. 432 00:24:13,920 --> 00:24:17,120 Speaker 1: Do you know you've just made general partner congratulations And 433 00:24:17,440 --> 00:24:19,760 Speaker 1: you focus a lot in the health space, in particular, 434 00:24:20,160 --> 00:24:23,960 Speaker 1: very much focused on female focused businesses. To what is 435 00:24:24,000 --> 00:24:27,760 Speaker 1: that more recession proof than other areas healthcare? Many have 436 00:24:27,840 --> 00:24:29,840 Speaker 1: turned to in the public market saying that this is 437 00:24:29,840 --> 00:24:31,840 Speaker 1: wanting to be investing for into at the moment with 438 00:24:32,440 --> 00:24:34,720 Speaker 1: higher interest rates and with a slower growth prospect. What 439 00:24:34,760 --> 00:24:39,520 Speaker 1: do you see in terms of the smaller, now growing industries. Absolutely, 440 00:24:39,560 --> 00:24:42,040 Speaker 1: I mean I've often said that health and digital health 441 00:24:42,119 --> 00:24:44,160 Speaker 1: is recession proof. Now that's not to say that it's 442 00:24:44,200 --> 00:24:46,800 Speaker 1: immune to the macro conditions. That's definitely not the case 443 00:24:46,800 --> 00:24:48,840 Speaker 1: in any look at the public markets, no matter how 444 00:24:48,880 --> 00:24:52,480 Speaker 1: well they're faring um, you know, respectively, it's it's very 445 00:24:52,520 --> 00:24:56,040 Speaker 1: clear that they're not. That being said, people will continue 446 00:24:56,080 --> 00:24:59,000 Speaker 1: to get sick, they will continue to have babies, we 447 00:24:59,040 --> 00:25:03,720 Speaker 1: will continue to have needs for therapeutics and for interventioning care, 448 00:25:03,800 --> 00:25:07,120 Speaker 1: perhaps more so in the future even than we do today. 449 00:25:07,320 --> 00:25:09,199 Speaker 1: And I think as a result, what we're seeing is 450 00:25:09,320 --> 00:25:14,639 Speaker 1: really expanded interest and also a bit of of a 451 00:25:14,760 --> 00:25:17,639 Speaker 1: slightly better opportunity than you're seeing, certainly not just on 452 00:25:17,680 --> 00:25:20,320 Speaker 1: the public side, you know. Pitchbook, I think just yesterday 453 00:25:20,359 --> 00:25:23,520 Speaker 1: published a report showing that the media deal valuations for 454 00:25:23,640 --> 00:25:27,080 Speaker 1: venture backed healthcare companies is actually up thirty three percent 455 00:25:27,200 --> 00:25:29,640 Speaker 1: year over a year, which is a really interesting take 456 00:25:29,800 --> 00:25:31,720 Speaker 1: visa of you where the rest of the market seemed 457 00:25:31,720 --> 00:25:34,200 Speaker 1: to be sitting. You know, one of our companies was 458 00:25:34,200 --> 00:25:36,080 Speaker 1: was on your show just a few weeks ago for 459 00:25:36,160 --> 00:25:38,639 Speaker 1: their series E, and that was a really exciting one 460 00:25:38,680 --> 00:25:41,600 Speaker 1: in women's health, where there's a lot of continued interest. Yeah, 461 00:25:41,600 --> 00:25:43,720 Speaker 1: shout out to Maven Clinic and were so pleased to 462 00:25:43,720 --> 00:25:46,000 Speaker 1: be able to stop the new show with that and 463 00:25:46,040 --> 00:25:49,160 Speaker 1: I with joining the show in that respect to bring 464 00:25:49,240 --> 00:25:51,520 Speaker 1: us that series E. But I'm gonna ask a sensitive 465 00:25:51,600 --> 00:25:53,600 Speaker 1: question now, Dia, and I know because you don't want 466 00:25:53,600 --> 00:25:55,840 Speaker 1: to shy away from these sorts of things. Lux Capital, 467 00:25:55,840 --> 00:25:58,359 Speaker 1: of course, has been enbrolled in the ft X situation. 468 00:25:58,400 --> 00:26:00,600 Speaker 1: You roat checks, not you per me, of course, and 469 00:26:00,640 --> 00:26:02,439 Speaker 1: you're not. Therefore, I'm not going to ask you about 470 00:26:02,480 --> 00:26:04,720 Speaker 1: your own due diligence in the space. But what do 471 00:26:04,760 --> 00:26:07,560 Speaker 1: you think internally the lessons you've learned are when you're 472 00:26:07,560 --> 00:26:10,719 Speaker 1: looking at writing checks in a diff more difficult situation 473 00:26:10,920 --> 00:26:13,679 Speaker 1: environment that we currently are, how are you looking for 474 00:26:13,720 --> 00:26:17,040 Speaker 1: companies to be building their corporate governance to be ensuring 475 00:26:17,080 --> 00:26:18,840 Speaker 1: that they're giving you all the accounts that you need 476 00:26:18,880 --> 00:26:22,120 Speaker 1: and the growth stories really there, you know, I think 477 00:26:22,160 --> 00:26:25,359 Speaker 1: this is something that's not necessarily just unique to that situation. 478 00:26:25,400 --> 00:26:28,359 Speaker 1: There are other cases across healthcare in the recent months 479 00:26:28,359 --> 00:26:31,080 Speaker 1: and years that have also really put a lens on 480 00:26:31,119 --> 00:26:33,960 Speaker 1: the importance of due diligence, and so there's no doubt 481 00:26:34,000 --> 00:26:36,840 Speaker 1: that that continues to be very important across the board. 482 00:26:37,080 --> 00:26:39,040 Speaker 1: And I think perhaps some of the slowdown that we're 483 00:26:39,040 --> 00:26:43,040 Speaker 1: anticipating in terms of the exuberance of because of you, 484 00:26:43,080 --> 00:26:46,720 Speaker 1: what we're expecting in three will give all investors more time, 485 00:26:47,320 --> 00:26:49,800 Speaker 1: um and more space to be able to do that, 486 00:26:49,840 --> 00:26:54,160 Speaker 1: which you know is certainly a positive thing. Dina. Come 487 00:26:54,200 --> 00:26:57,879 Speaker 1: back in the new year. Tell us how that is 488 00:26:57,920 --> 00:27:00,439 Speaker 1: starting to unfold for you, Dina Shoka. We love having 489 00:27:00,440 --> 00:27:02,520 Speaker 1: our run. Thank you general partner, Ever it lacks capital. 490 00:27:02,760 --> 00:27:04,800 Speaker 1: Wishing you happy holidays. We don't get to chat before 491 00:27:04,800 --> 00:27:07,000 Speaker 1: me while Let's talk exits now because we were just 492 00:27:07,040 --> 00:27:09,080 Speaker 1: going there and then and there's some are still happening 493 00:27:09,240 --> 00:27:12,080 Speaker 1: in the global startup space. In fact, let's go global 494 00:27:12,080 --> 00:27:15,720 Speaker 1: because Istanbul based quick commerce platform that's getting just for 495 00:27:15,880 --> 00:27:18,280 Speaker 1: its rival Gerrillas Technologies in a deal that was valued 496 00:27:18,280 --> 00:27:20,560 Speaker 1: at one point two billion according to sources. Now it 497 00:27:20,640 --> 00:27:23,800 Speaker 1: marks the increasing consolidation and what we all thought at 498 00:27:23,800 --> 00:27:26,200 Speaker 1: one point was an absolutely booming industry you couldn't move 499 00:27:26,240 --> 00:27:29,040 Speaker 1: for quick deliveries. But Guerrillas raised funds valuing the company 500 00:27:29,040 --> 00:27:32,000 Speaker 1: at about three billion before and I've been exploring its 501 00:27:32,040 --> 00:27:34,720 Speaker 1: options after. Investors just became so much more cautious over 502 00:27:34,720 --> 00:27:38,480 Speaker 1: the industry's path to profitability. I mean ed we were 503 00:27:38,480 --> 00:27:41,960 Speaker 1: all talking about how quickly one could order their various 504 00:27:42,040 --> 00:27:44,560 Speaker 1: groceries and they'd be coming within twenty minutes or so. 505 00:27:44,640 --> 00:27:47,920 Speaker 1: But it just became ever more evident that these companies 506 00:27:47,920 --> 00:27:49,880 Speaker 1: were not going to be able to head to profitability 507 00:27:49,880 --> 00:27:52,119 Speaker 1: with this many players in the space. So there's a 508 00:27:52,119 --> 00:27:54,359 Speaker 1: fantastic quote in the story from the founder of the 509 00:27:54,359 --> 00:27:57,679 Speaker 1: company saying, markets go up and go down for consumers 510 00:27:57,760 --> 00:28:00,480 Speaker 1: love our service. Convenience is here to stay. You know, 511 00:28:00,480 --> 00:28:02,960 Speaker 1: whether that's true or not, we don't yet know. You know, 512 00:28:03,000 --> 00:28:05,679 Speaker 1: the proofs in the pudding, but you know it's holiday 513 00:28:05,720 --> 00:28:08,119 Speaker 1: season and go to a lot of drinks with vcs 514 00:28:08,240 --> 00:28:10,080 Speaker 1: and you know they do say it's a case by 515 00:28:10,119 --> 00:28:13,680 Speaker 1: case basis. There are some fantastic startups that are borne 516 00:28:13,680 --> 00:28:16,280 Speaker 1: out of recession, that grow out of recession, and there's 517 00:28:16,320 --> 00:28:19,280 Speaker 1: opportunity right now if you can pick them out. Yeah, 518 00:28:19,320 --> 00:28:21,119 Speaker 1: and I think that this is what's going to be interesting. 519 00:28:21,200 --> 00:28:24,440 Speaker 1: Where are the exits being made? Are you doing exits 520 00:28:24,440 --> 00:28:28,159 Speaker 1: from acquisition one private company to a private company or ed? 521 00:28:28,440 --> 00:28:30,240 Speaker 1: Are you still managing to get to the public market 522 00:28:31,160 --> 00:28:33,600 Speaker 1: if that dreaded word, well, dreaded is not fair, but 523 00:28:33,840 --> 00:28:38,040 Speaker 1: spack interesting. So let's get more from another guest, Sam's 524 00:28:38,080 --> 00:28:41,440 Speaker 1: id CEO of get Around, which just went public on 525 00:28:41,520 --> 00:28:44,920 Speaker 1: the New York Stock Exchange or listed is shares. Get 526 00:28:44,960 --> 00:28:47,320 Speaker 1: Around is a company I know, you know I've written 527 00:28:47,320 --> 00:28:52,120 Speaker 1: about Get Around. We've reported about broadly, this platform in 528 00:28:52,160 --> 00:28:56,360 Speaker 1: which owners of vehicles can list their cars to be 529 00:28:56,440 --> 00:29:00,920 Speaker 1: rented out. It's like Airbnb for cars, Sam, why list 530 00:29:01,280 --> 00:29:04,280 Speaker 1: via this mechanism? I mean for us, you know, we 531 00:29:04,240 --> 00:29:06,360 Speaker 1: were in public be as you know, we had great partners, 532 00:29:06,920 --> 00:29:09,920 Speaker 1: We found committed capital capital that really allows us to 533 00:29:10,000 --> 00:29:11,560 Speaker 1: x you on our business plan, and it was really 534 00:29:11,560 --> 00:29:15,840 Speaker 1: about just continue to create long term value um and 535 00:29:15,920 --> 00:29:18,200 Speaker 1: to get out into the public markets and able to 536 00:29:18,240 --> 00:29:21,640 Speaker 1: have access to that, you know, uh, the public markets directly. 537 00:29:22,200 --> 00:29:23,840 Speaker 1: We felt it was the right thing for for us 538 00:29:23,840 --> 00:29:27,080 Speaker 1: in this particular circumstance, in this particular category. What sort 539 00:29:27,080 --> 00:29:29,960 Speaker 1: of with the money coming in, what does that now 540 00:29:30,000 --> 00:29:32,960 Speaker 1: create you in terms of space to build? Where are 541 00:29:32,960 --> 00:29:36,000 Speaker 1: you able to now drive forward? Get Around, particularly at 542 00:29:36,000 --> 00:29:38,240 Speaker 1: a time when more people might be incentivized to share 543 00:29:38,240 --> 00:29:42,880 Speaker 1: their car to get money in that way. Yeah, I 544 00:29:42,880 --> 00:29:44,160 Speaker 1: mean it is that type of time. I mean, I 545 00:29:44,200 --> 00:29:46,280 Speaker 1: think a lot of consumers are looking for options to 546 00:29:46,320 --> 00:29:50,360 Speaker 1: make extra money potentially, you know, drive extra income or 547 00:29:50,360 --> 00:29:52,840 Speaker 1: offset costs. And we you know, we just felt that 548 00:29:53,160 --> 00:29:55,720 Speaker 1: opportunity is right given what we see in the category 549 00:29:55,760 --> 00:29:57,880 Speaker 1: and in the market and some of the trends with 550 00:29:59,240 --> 00:30:02,840 Speaker 1: our partners and in more generally with the shift to 551 00:30:02,840 --> 00:30:06,200 Speaker 1: more consumers, you know, moving towards mobility and continuing to 552 00:30:06,200 --> 00:30:10,000 Speaker 1: shift those those those patterns of mobility. Um, you know, 553 00:30:10,040 --> 00:30:13,360 Speaker 1: we felt the time was right. Hey Sam, really quick, 554 00:30:14,400 --> 00:30:19,200 Speaker 1: you're pipping your great rival Turo to the public markets. 555 00:30:19,600 --> 00:30:25,840 Speaker 1: The reception interesting, What do you make of that? Yeah, Look, 556 00:30:25,880 --> 00:30:28,280 Speaker 1: I think there's no denying the macro is. It's just 557 00:30:28,320 --> 00:30:31,600 Speaker 1: a challenging market environment. But we aren't really optimizing for 558 00:30:31,760 --> 00:30:34,480 Speaker 1: that as much as optimizing for you know, really giving 559 00:30:34,520 --> 00:30:36,600 Speaker 1: fuel to the business in order to really execute on 560 00:30:36,600 --> 00:30:40,000 Speaker 1: our plans. And so you know, the way we think 561 00:30:40,000 --> 00:30:42,080 Speaker 1: about that is, really we want to continue to execute 562 00:30:42,240 --> 00:30:44,840 Speaker 1: create long term value, and over time we think that 563 00:30:44,960 --> 00:30:48,000 Speaker 1: you know, the market will respond and start to value 564 00:30:48,000 --> 00:30:52,320 Speaker 1: companies properly on fundamentals. Some thanks for spending some time 565 00:30:52,320 --> 00:30:54,560 Speaker 1: with us from the floor. Then I see Sam' side 566 00:30:54,560 --> 00:30:57,960 Speaker 1: CEO again around Meanwhile, coming up, we're gonna talk much 567 00:30:57,960 --> 00:31:00,440 Speaker 1: more about all the ongoing fall out in the collapse 568 00:31:00,440 --> 00:31:03,480 Speaker 1: of f t X lawmakers questioning officials over a silver 569 00:31:03,560 --> 00:31:06,240 Speaker 1: Gate Capital. It's a small bank that's facing some big 570 00:31:06,280 --> 00:31:09,400 Speaker 1: pain after a decision to really take on cryptoclients. This 571 00:31:09,520 --> 00:31:37,520 Speaker 1: is Bloomberg. It was once pretty obscure, smaller bank, and 572 00:31:37,560 --> 00:31:39,760 Speaker 1: then it got into crypto. Silver Gate Capital is and 573 00:31:39,840 --> 00:31:41,600 Speaker 1: what I'm talking about. It found its niche when it 574 00:31:41,640 --> 00:31:45,000 Speaker 1: started providing banking services to some pretty major crypto clients, 575 00:31:45,200 --> 00:31:48,880 Speaker 1: including well some background Freeze, f t X and Alameda Research. 576 00:31:49,320 --> 00:31:52,120 Speaker 1: Now it's of course facing scrutiny from regulators and lawmakers 577 00:31:52,120 --> 00:31:54,520 Speaker 1: on the back of that decision. Joining us now on 578 00:31:54,560 --> 00:31:58,080 Speaker 1: a great set of reporting Bloomberg's banking reporter Max Rays, 579 00:31:58,400 --> 00:32:01,080 Speaker 1: and Max just talk to us a out how solve 580 00:32:01,160 --> 00:32:03,680 Speaker 1: gate first of all, got in to servicing these sourts 581 00:32:03,680 --> 00:32:07,160 Speaker 1: of clients. Sure, first of all, thank you for having me, 582 00:32:07,240 --> 00:32:08,959 Speaker 1: and I think it might be helpful to back up 583 00:32:09,000 --> 00:32:12,480 Speaker 1: for a second sort of explain sort of the the 584 00:32:12,560 --> 00:32:16,520 Speaker 1: value proposition here for a bank. For for banks that 585 00:32:16,560 --> 00:32:20,240 Speaker 1: aren't dealing with crypto, you know, they're not helping to 586 00:32:20,440 --> 00:32:24,760 Speaker 1: exchange um tokens or anything like that. They're literally just 587 00:32:24,960 --> 00:32:30,120 Speaker 1: holding deposits for crypto customers and sending them, helping them 588 00:32:30,160 --> 00:32:32,880 Speaker 1: to send them back and forth right between themselves. The 589 00:32:33,240 --> 00:32:35,680 Speaker 1: value there is that you can bring these deposits onto 590 00:32:35,680 --> 00:32:37,600 Speaker 1: your balance sheet and you do not have to pay 591 00:32:37,600 --> 00:32:40,680 Speaker 1: out interests, right, so you essentially have a very affordable 592 00:32:40,680 --> 00:32:45,520 Speaker 1: way to fund yourself. And that's sort of what drew company, 593 00:32:45,560 --> 00:32:47,640 Speaker 1: a company like silver Gate into this, and other banks 594 00:32:47,680 --> 00:32:51,280 Speaker 1: have done it as well, Customers Bank, ORPS Signature Bank, 595 00:32:51,680 --> 00:32:56,840 Speaker 1: but obviously a few of them have had banking relationships 596 00:32:56,840 --> 00:33:01,400 Speaker 1: with f t X and Alameda. That has folks raising concerns. 597 00:33:01,400 --> 00:33:04,400 Speaker 1: Short sellers are kind of dog piling the stock, and 598 00:33:04,520 --> 00:33:07,720 Speaker 1: you have bombmakers who are asking questions and it's a 599 00:33:07,800 --> 00:33:10,960 Speaker 1: result of these relationships. From your early reporting and digging 600 00:33:11,000 --> 00:33:14,800 Speaker 1: around just how exposed has silver Gate become. What sort 601 00:33:14,800 --> 00:33:18,760 Speaker 1: of areas within the financial services they offered made it 602 00:33:19,200 --> 00:33:23,040 Speaker 1: more difficult to extricate themselves. Now, Yeah, I think the 603 00:33:23,080 --> 00:33:26,360 Speaker 1: biggest level of exposure is just the deposits they held 604 00:33:26,360 --> 00:33:28,280 Speaker 1: on their bound sheet. Silver Gate has said that they 605 00:33:28,320 --> 00:33:30,920 Speaker 1: did not lend to ft X. They made it very 606 00:33:30,960 --> 00:33:33,120 Speaker 1: clear that their only relationship with f t X and 607 00:33:33,200 --> 00:33:37,880 Speaker 1: related entities including Elomated Research the Hedge Fund, was a 608 00:33:37,920 --> 00:33:41,520 Speaker 1: deposit relationship, and so if you have to deposit with 609 00:33:41,600 --> 00:33:45,120 Speaker 1: silver Gate, you can send money to other clients who 610 00:33:45,160 --> 00:33:47,840 Speaker 1: also have those deposits on a platform they call the 611 00:33:48,040 --> 00:33:51,320 Speaker 1: sent the silver Gate Exchange Network. And what are reporting 612 00:33:51,320 --> 00:33:55,400 Speaker 1: indicating was indicated was that customers had been directed to 613 00:33:55,600 --> 00:33:59,320 Speaker 1: buy f t X to send money to Alometer Research, 614 00:33:59,680 --> 00:34:01,520 Speaker 1: and that was to in at least one case, a 615 00:34:01,600 --> 00:34:05,200 Speaker 1: silver Gate bank account, and that has raised concerns and 616 00:34:05,280 --> 00:34:07,880 Speaker 1: questions from lawmakers. Are reporting doesn't go any further and 617 00:34:08,239 --> 00:34:11,840 Speaker 1: saying sort of how that tied into the kind of 618 00:34:11,880 --> 00:34:15,239 Speaker 1: commingling of funds and so on that have been alleged 619 00:34:15,280 --> 00:34:17,160 Speaker 1: when it comes to at X and Alameda, But it 620 00:34:17,200 --> 00:34:21,560 Speaker 1: does mean that silver Gate is part of these really 621 00:34:21,600 --> 00:34:26,359 Speaker 1: difficult questions being raised by lawmakers, by regulators, by investors. 622 00:34:26,440 --> 00:34:29,600 Speaker 1: You know, how how did no one spot us? Right? 623 00:34:30,520 --> 00:34:33,120 Speaker 1: You raise a good point, Max about the short interests 624 00:34:33,160 --> 00:34:35,759 Speaker 1: on the stock in that it's publicly traded, right, it 625 00:34:35,800 --> 00:34:38,840 Speaker 1: almost has its own rise and full story. I was 626 00:34:38,840 --> 00:34:41,920 Speaker 1: looking my Bloomberg to the end of one when the 627 00:34:41,960 --> 00:34:45,959 Speaker 1: stock was above two dollars a share. Now we're down 628 00:34:45,960 --> 00:34:49,080 Speaker 1: at twenty one dollars a share. I mean, what was 629 00:34:49,120 --> 00:34:52,239 Speaker 1: the invest anxiety here. For Silvergate, it was just their 630 00:34:52,280 --> 00:34:57,160 Speaker 1: exposure to the contagion. So you would you what would 631 00:34:57,160 --> 00:34:59,200 Speaker 1: be helpful to do with his zoom out right, because 632 00:34:59,640 --> 00:35:02,760 Speaker 1: around this time last year we were talking about digital 633 00:35:02,760 --> 00:35:05,040 Speaker 1: assets being at all time highs and that's when the 634 00:35:05,080 --> 00:35:09,680 Speaker 1: stock hit two just about that period. But over the 635 00:35:09,760 --> 00:35:12,080 Speaker 1: last year we've had more events than just f t X. 636 00:35:12,280 --> 00:35:15,839 Speaker 1: We've had the blow up of the Terra Luna ecosystem, 637 00:35:15,880 --> 00:35:18,200 Speaker 1: which in turn led to the collapse of Three Arrow 638 00:35:18,239 --> 00:35:22,720 Speaker 1: Scare Capital, the collapse of Celsius, so publicly traded stocks 639 00:35:22,719 --> 00:35:26,480 Speaker 1: with the exposure to crypto, that's silver Gate, that's other companies, 640 00:35:26,520 --> 00:35:30,040 Speaker 1: that's you know, names like micro Strategy, which literally just 641 00:35:30,080 --> 00:35:32,360 Speaker 1: hold a bit corn on the balance sheet. All of 642 00:35:32,360 --> 00:35:34,719 Speaker 1: those companies have taken a beating in the last year 643 00:35:34,880 --> 00:35:38,520 Speaker 1: because of this anxiety, and just the blow up of 644 00:35:38,560 --> 00:35:41,640 Speaker 1: f t X sort of accelerated and worse than that impact, 645 00:35:41,960 --> 00:35:46,000 Speaker 1: I would say, max would have silver Getting said about 646 00:35:46,000 --> 00:35:49,520 Speaker 1: all of this very quickly. Certainly, silver Gate has been 647 00:35:49,520 --> 00:35:52,440 Speaker 1: pretty clear in saying that the controls that they had 648 00:35:52,520 --> 00:35:56,000 Speaker 1: in place were sufficient, that they again had no sort 649 00:35:56,000 --> 00:35:59,120 Speaker 1: of lending or any other kind of relationship, and that 650 00:35:59,480 --> 00:36:02,800 Speaker 1: they were in one statement to NBC, they describe themselves 651 00:36:02,840 --> 00:36:08,200 Speaker 1: as victims of SPF and is misleading practices the same 652 00:36:08,200 --> 00:36:11,080 Speaker 1: way everyone else's. So the company has been pretty frank 653 00:36:11,080 --> 00:36:14,279 Speaker 1: in denying any claims of wrongdoing. And it should be 654 00:36:14,320 --> 00:36:17,440 Speaker 1: made clear that authorities have not alleged any wrongdoing. They 655 00:36:17,480 --> 00:36:20,040 Speaker 1: have been accused of wrongdoing, yes, by authorities. It's just 656 00:36:20,040 --> 00:36:23,400 Speaker 1: there are questions circling. Yeah, thank you for your reporting. 657 00:36:23,400 --> 00:36:28,200 Speaker 1: Bloomberg's Max rays there coming up. The world's most populous 658 00:36:28,280 --> 00:36:32,040 Speaker 1: nation rapidly pulling back on its COVID zero policies. We'll 659 00:36:32,040 --> 00:36:34,000 Speaker 1: tell you what this means to the health of people 660 00:36:34,040 --> 00:36:36,520 Speaker 1: in China, but also, of course the tech companies doing 661 00:36:36,560 --> 00:36:54,000 Speaker 1: business there. Next this is Bloomberg. While Hong Kong has 662 00:36:54,080 --> 00:36:57,200 Speaker 1: served as a blueprint for China's opening up from COVID, 663 00:36:57,480 --> 00:37:01,600 Speaker 1: it's also a huge, huge cars canary tale. Now. When 664 00:37:01,600 --> 00:37:05,200 Speaker 1: the omicron variants swept through this modern city of seven 665 00:37:05,200 --> 00:37:07,680 Speaker 1: and a half million earlier part of this year, the 666 00:37:07,800 --> 00:37:12,880 Speaker 1: city's sophisticated healthcare system was simply overwhelmed. At one point, 667 00:37:12,960 --> 00:37:15,840 Speaker 1: Hong Kong had the world's highest death rate due to COVID. 668 00:37:16,200 --> 00:37:19,360 Speaker 1: There simply wasn't enough space to put all the patients 669 00:37:19,840 --> 00:37:22,719 Speaker 1: or bodies. Some of the sick were put outside on 670 00:37:22,800 --> 00:37:26,279 Speaker 1: bourneys as body bags, with the deceased stacked up in 671 00:37:26,360 --> 00:37:31,080 Speaker 1: some words, next to the infected living mords two were inundated. 672 00:37:31,719 --> 00:37:35,040 Speaker 1: Most of Hong Kong's nearly eleven thousand total COVID deaths 673 00:37:35,280 --> 00:37:39,760 Speaker 1: happened between February and April of this year. Like Hong Kong, 674 00:37:39,880 --> 00:37:44,120 Speaker 1: China has a largely under vaccinated elderly population, but on 675 00:37:44,160 --> 00:37:48,200 Speaker 1: a much much larger scale, and China too doesn't have 676 00:37:48,360 --> 00:37:53,040 Speaker 1: the more sophisticated mRNA vaccinations available. We have to remembered 677 00:37:53,040 --> 00:37:56,840 Speaker 1: as China has been protected to public for so long, 678 00:37:57,239 --> 00:38:01,239 Speaker 1: there has been no hurt amenity in China. Uh so um. 679 00:38:01,280 --> 00:38:05,080 Speaker 1: This is going to start, and this process is not 680 00:38:05,120 --> 00:38:08,200 Speaker 1: going to be smooth. It will be quite difficult. With 681 00:38:08,239 --> 00:38:13,000 Speaker 1: a sudden dismantling of COVID restrictions, including mandatory PCR testing 682 00:38:13,040 --> 00:38:16,440 Speaker 1: to enter public spaces, China is bracing for a surge 683 00:38:16,560 --> 00:38:20,920 Speaker 1: in infections and death more than two million fatalities by 684 00:38:20,960 --> 00:38:25,080 Speaker 1: one estimate. Criticism of COVID zero is rapidly being replaced 685 00:38:25,120 --> 00:38:29,279 Speaker 1: by concern that the rapid policy shift away from the 686 00:38:29,440 --> 00:38:33,320 Speaker 1: all out eradication of the virus is happening too fast, 687 00:38:33,600 --> 00:38:36,799 Speaker 1: and that China is ill prepared like Hong Kong was 688 00:38:36,880 --> 00:38:41,520 Speaker 1: back in March for a health crisis of unseen proportions. 689 00:38:41,880 --> 00:38:48,239 Speaker 1: Stephen Angel, Bloomberg News, Hong Kong, I mean, clearly a 690 00:38:48,320 --> 00:38:51,080 Speaker 1: very tough story to continue to have to talk about. 691 00:38:51,160 --> 00:38:54,879 Speaker 1: We forget the health impacts, of course, the death impacts, 692 00:38:55,200 --> 00:38:56,960 Speaker 1: and but also we have to talk, because we do 693 00:38:57,000 --> 00:38:59,440 Speaker 1: a bloom Berg time and time again, the economic impacts 694 00:38:59,440 --> 00:39:00,799 Speaker 1: of all of this. We want to thank our Asia 695 00:39:00,840 --> 00:39:03,799 Speaker 1: G correspondent Steven Angle for that piece, because you've been 696 00:39:03,840 --> 00:39:06,560 Speaker 1: doing some really thoughtful leadership in terms of what's happening 697 00:39:06,560 --> 00:39:08,840 Speaker 1: from companies such as Tesla, companies that are desperate to 698 00:39:08,880 --> 00:39:11,920 Speaker 1: get into China and then find for the demand is 699 00:39:11,920 --> 00:39:15,120 Speaker 1: being eroded, but in some ways the supply too. You know, 700 00:39:15,200 --> 00:39:18,920 Speaker 1: we may have stopped tracking the virus um in Europe 701 00:39:18,960 --> 00:39:21,080 Speaker 1: and in North America day to day, but in China. 702 00:39:21,239 --> 00:39:24,040 Speaker 1: You know, look how quickly have we gone from COVID 703 00:39:24,200 --> 00:39:28,080 Speaker 1: impacting production or impacting the ability of tech companies like 704 00:39:28,200 --> 00:39:31,200 Speaker 1: Tesla to carry out their business to now the impact 705 00:39:31,239 --> 00:39:34,040 Speaker 1: on demand. Right, and even though there's this reopening and 706 00:39:34,080 --> 00:39:36,719 Speaker 1: easing of restrictions. There are lots of questions about that. 707 00:39:36,760 --> 00:39:40,040 Speaker 1: The most recent report from Bloomberg. According to sources, they're 708 00:39:40,040 --> 00:39:42,799 Speaker 1: actually going to shut down the assembly lines imminently in 709 00:39:42,840 --> 00:39:45,480 Speaker 1: Shanghai and then later in the Chinese New Year in 710 00:39:45,560 --> 00:39:48,200 Speaker 1: January do the same. Some of that, according to sources, 711 00:39:48,280 --> 00:39:51,400 Speaker 1: is for maintenance upgrades, but there's still this question about demand. 712 00:39:51,440 --> 00:39:55,080 Speaker 1: It's a really difficult situation I supposed to understand and 713 00:39:55,120 --> 00:39:57,320 Speaker 1: how hard is that going to be to peel apart? 714 00:39:57,400 --> 00:39:59,920 Speaker 1: What is just the usual way of things during the 715 00:40:00,000 --> 00:40:02,560 Speaker 1: beginning of January for China and what actually is the 716 00:40:02,600 --> 00:40:05,960 Speaker 1: COVID impact here? Well, usual things for the beginning part 717 00:40:05,960 --> 00:40:07,640 Speaker 1: of January when you had the Chinese New Year and 718 00:40:07,680 --> 00:40:10,160 Speaker 1: normal for Tesla to do maintenance. It's just that Tesla 719 00:40:10,200 --> 00:40:13,720 Speaker 1: doesn't communicate and say here's our plan, and so investors, 720 00:40:13,760 --> 00:40:15,440 Speaker 1: if you look at the share price this week, have 721 00:40:15,560 --> 00:40:17,640 Speaker 1: got a little nervous despite a positive end for the 722 00:40:17,640 --> 00:40:20,200 Speaker 1: stock on Friday. I have a feeling we'll be talking 723 00:40:20,239 --> 00:40:23,759 Speaker 1: about both China, both Tesla planning more next week. But 724 00:40:23,960 --> 00:40:28,080 Speaker 1: for today, Ed, that's it for this addition of Bloomberg Technology. Hey, yeah, 725 00:40:28,120 --> 00:40:30,320 Speaker 1: that does it? Don't forget to check out our podcast. 726 00:40:30,400 --> 00:40:32,520 Speaker 1: You can find it on the Bloomberg Terminal of course, 727 00:40:32,520 --> 00:40:36,880 Speaker 1: on Apple, Spotify and always on iHeart Radio, Big Week Carrow. 728 00:40:37,000 --> 00:41:00,960 Speaker 1: But that's it for us. This is Bloomberg two.