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Speaker 1: From the heart of where innovation, money and power colli

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Speaker 1: in Silicon Vallet and beyond. This is Bloomberg Technology with

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Speaker 1: Emily Jay I'm Emily checking San Francisco and this is

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Speaker 1: Bloomberg Technology. Coming up in the next hour a Bloomberg scoop.

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Speaker 1: Hackers masquerading is law enforcement tricked Apple and Meta into

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Speaker 1: handing over customer data. We have all the details. Plus

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Speaker 1: Apple is cutting out the middleman, the iPhone maker developing

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Speaker 1: its own payment processing technology, building a full in house

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Speaker 1: set of financial services offerings on top of its Apple

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Speaker 1: credit card and wallet. Bloomberg's Mark German will bring us

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Speaker 1: his exclusive story and Tesla's hidden competitive advantage. The electric

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Speaker 1: car maker made a secret deal to help dodge the

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Speaker 1: nickel crisis. Russia is one of the world's top suppliers.

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Speaker 1: Now to that Bloomberg exclusive, Bloomberg learning that Apple and

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Speaker 1: Meta provided customer data to presumed law enforcement officials who

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Speaker 1: were really hackers in disguise. William Turton, our Bloomberg cubersecurity reporter,

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Speaker 1: joins us. Now with that school will how did the

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Speaker 1: hackers pull this off? Hey, Emily, thanks for having me.

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Speaker 1: So here's what the hackers did. They kind of exploited

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Speaker 1: what some might call a loophole in this system. When

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Speaker 1: you send a request of a search warrant or subpoena

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Speaker 1: to a company for data, that has to be signed

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Speaker 1: by a judge. But if you send something called an

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Speaker 1: emergency data request, UM that's not something that has to

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Speaker 1: be signed by a judge. So what these hackers did

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Speaker 1: is they broke into the email boxes of legitimate law

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Speaker 1: enforcement agencies and they sent emails posing as a legitimate

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Speaker 1: law enforcement officer to these companies with a forged emergency

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Speaker 1: data request. And as we're reporting today, the co and

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Speaker 1: he's complied with those requests and actually turned over user data.

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Speaker 1: But we don't know is just the scale of this problem.

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Speaker 1: We've been hearing from sources that you know, it's much

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Speaker 1: bigger than these companies um AND has a much bigger scope.

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Speaker 1: And that's what we're trying to find out now. So

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Speaker 1: is it understandable then that Apple and Meta could have

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Speaker 1: fallen for this or is this a major loophole in

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Speaker 1: their systems? So, I mean, it cannot be overstated how

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Speaker 1: complicated and difficult these process are. The emergency data request.

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Speaker 1: Some will say it's a very legitimate form for law

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Speaker 1: enforcement to get information in times of crisis, like a

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Speaker 1: like a terrorist threat or someone's life is an imminent danger.

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Speaker 1: And that's exactly what the hackers do in their Forge request.

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Speaker 1: They will say something along the lines of there's a

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Speaker 1: terrorist threat, someone's life is in danger, someone's you know,

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Speaker 1: at risk of suicide, and you know, companies are expected

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Speaker 1: to comply very quickly with these requests. Now, you know,

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Speaker 1: I think, as it's becoming clear, companies need to have

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Speaker 1: more oversight and more verification that these requests are legitimate

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Speaker 1: and are coming from real law enforcement officers. Now, according

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Speaker 1: to your reporting, William Discord had a similar issue. Also,

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Speaker 1: Snap also got this request, but we don't know yet

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Speaker 1: if they provided any of this information to the hackers.

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Speaker 1: Are there other companies that could be looped into this?

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Speaker 1: That's right, So yesterday Brian Krebs reported that Discord, also,

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Speaker 1: you know, was a victim of the same kind of scheme.

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Speaker 1: We reported today that Snap received a Forge emergency data request,

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Speaker 1: but we do not know whether they actually provided data.

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Speaker 1: And yes, I'm hearing from sources that many other companies,

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Speaker 1: even beyond tech companies, beyond social media companies, have been

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Speaker 1: affected by this Um, if anyone knows more, I you

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Speaker 1: should reach out to me because I would love to

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Speaker 1: know more. I think this problem extends beyond just the

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Speaker 1: two companies that we've reported on today. Alright, bloombergs William

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Speaker 1: Turton with that scoop, William, thank you. I want to

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Speaker 1: talk more about this now with Wendy Whitmore, senior vice

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Speaker 1: president for Unit forty two, the threat intelligence team at

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Speaker 1: Palo Alto Networks. Wendy, thank you so much for joining us.

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Speaker 1: What do you find most notable about how these accurs

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Speaker 1: hackers were able to pull these off with massive companies

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Speaker 1: with very established systems. Yeah, Emily, great question. So I

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Speaker 1: think the biggest concern here of these attacks is clearly

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Speaker 1: how well the attackers understand uh, this potential vulnerability, this

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Speaker 1: process of government request to technology companies, social media companies,

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Speaker 1: and understand it and are willing to take the risk

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Speaker 1: to exploit it. So talk to us about why it's

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Speaker 1: so apparently easy to do this. I mean, some of

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Speaker 1: the folks behind these attacks we're finding out our teenagers. Yeah. Again,

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Speaker 1: great questions. So the interesting thing is it's not easy

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Speaker 1: at all. This is relatively complicated. So first I would

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Speaker 1: say The easiest part is probably for the attackers to

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Speaker 1: get access to the data that they're stealing. Last year alone,

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Speaker 1: our team identified over breaches where there was stolen data leaked.

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Speaker 1: So what the attackers do is by this information for

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Speaker 1: relatively inexpensive prices and then use that to test out

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Speaker 1: which kind of credentials they can use to legitimately break

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Speaker 1: into organizations, and in this case, they chose those to

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Speaker 1: be law enforcement organizations. The complicating part is they have

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Speaker 1: to understand that process, and then they have to be

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Speaker 1: willing to spend the time that it takes to to

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Speaker 1: do the social engineering aspects, understanding specifically who they need

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Speaker 1: to contact that these organizations to make these requests, who

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Speaker 1: the legitimate law enforcement officers are, and what their processes.

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Speaker 1: So this is certainly not an easy task for them

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Speaker 1: to orchestrate, clearly being done by people with time on

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Speaker 1: their hands. Well to that point, the folks suspected in

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Speaker 1: this particular case are minors located in the US and UK.

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Speaker 1: I'm reminded of the OPTA hacks that we covered last week,

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Speaker 1: where you know, the suspected mastermind is a teenager who

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Speaker 1: still lives with his mom in England. What do you

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Speaker 1: make of the fact that these are potentially very young

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Speaker 1: people behind these very disruptive attacks. It's it's incredibly concerning, right.

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Speaker 1: We typically would see this level of attack orchestrated by

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Speaker 1: an organization who's got clear objectives and clear financial backing.

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Speaker 1: So the point is these UH, the organization related to

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Speaker 1: these attacks certainly has overlapped with lapses and the activities

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Speaker 1: we've seen last week. One of the things that they're

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Speaker 1: doing incredibly effectively, and we see this in ransomware investigations

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Speaker 1: as well, is they use time demands as a way

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Speaker 1: to force an organization to make a quick decision. We

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Speaker 1: see that with these ransomware attacks when there's extortion involved,

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Speaker 1: and we're seeing this work very well with these emergency

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Speaker 1: data requests. Now six hundred thousand open jobs in cybersecurity,

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Speaker 1: that's what Bloomberg is reporting today that there are six

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Speaker 1: hundred thousand jobs UH in the cyber threat landscape that

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Speaker 1: are unfilled. Is that part of the reason we may

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Speaker 1: be seeing an uptick in hacks. Well, I think you're

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Speaker 1: seeing that. So there's no greater example of that today

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Speaker 1: and the challenges that we as an industry face than

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Speaker 1: as it relates to Russian Ukraine. Right, the US government

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Speaker 1: has come out and provided a tremendous amount of recommendations

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Speaker 1: and actions to be taken, but the reality is it's

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Speaker 1: challenging for organizations across the world to implement all of

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Speaker 1: them in a timely manner. Uh, it's much cheaper for

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Speaker 1: the attackers to conduct these attacks, and it's much more

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Speaker 1: costly and time and resource intensive for organizations to defend

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Speaker 1: against them today. So yes, absolutely that's a concern. Now

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Speaker 1: we're understanding that the information that was shared with these

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Speaker 1: hackers includes addresses, phone numbers, I P addresses. How damaging

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Speaker 1: could the release of this information be? How could the

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Speaker 1: hackers use it? Well, I think that there's some concern

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Speaker 1: in terms of people being cyberstocked, being at that translated

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Speaker 1: to physical attacks. Right, So when you look at these

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Speaker 1: the people that are behind this oftentimes so they're selling

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Speaker 1: this information for really inexpensive amount, right, the equivalent of

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Speaker 1: about one fifty U S dollars, So that can be

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Speaker 1: used in a wide variety of ways. We want to

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Speaker 1: make sure that people are protected and uh, you know

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Speaker 1: that this data doesn't then translate to those type of

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Speaker 1: tax So certainly law enforcement is going to be working

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Speaker 1: very closely with these organizations who have released the data

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Speaker 1: to make sure that they can protect people. What do

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Speaker 1: you see as the learnings and takeaways here? I mean,

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Speaker 1: is this a new tactic that we're going to see

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Speaker 1: more cyber criminals start exploiting. Yeah, I think it's it's

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Speaker 1: become pretty widespread. Right, So these lapses group attacks over

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Speaker 1: the past week saw that you know which you mentioned

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Speaker 1: right to Octa to Microsoft um. The level of sophistication

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Speaker 1: was largely in the social engineering, so the human to

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Speaker 1: human aspects as well as the persistence of their ability

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Speaker 1: to figure out once they got inside an organization how

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Speaker 1: they could actually get to the data that they needed.

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Speaker 1: And so what the good news on that is that

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Speaker 1: that largely relates to defense and depth strategies and best

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Speaker 1: practices that we recommend the organizations. It doesn't often mean

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Speaker 1: you have to buy millions of dollars of new technology, right.

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Speaker 1: It means we have to get back to the basics

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Speaker 1: and we have to make sure that, for example, for

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Speaker 1: help desk, that we are not asking identity verification questions

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Speaker 1: of our employees. That's information that could be easily found

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Speaker 1: on the internet. So we've got to continually focus on

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Speaker 1: security awareness trainings for organizations and make sure that they're

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Speaker 1: well implemented. As the war on Ukraine shows no signs

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Speaker 1: of d escalation, but Ukrainian forces and the West have

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Speaker 1: really put a lot of pressure on Russian forces. Do

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Speaker 1: you see Russia resorting to more cyber attacks and getting

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Speaker 1: more aggressive in the cyber landscape? Since we haven't quite

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Speaker 1: seen as potentially devastating attacks from the Russian side, is

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Speaker 1: some more expecting yet, I think it's a likely scenario.

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Speaker 1: One thing we know for certain is that the Russians

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Speaker 1: have been incredibly formidable capability when it comes to cyber

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Speaker 1: attacks and cyber warfare. So we are encouraging all of

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Speaker 1: our clients as well as non clients to be prepared

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Speaker 1: to make sure that they've got a documented incident response

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Speaker 1: plans in place, that they understand what rules and responsibilities

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Speaker 1: their employees have across the board, so that if these

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Speaker 1: attacks do occur, that we've got a well orchestrated response

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Speaker 1: plan and we can contain contain that the damage as

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Speaker 1: quickly as possible. All Right, Wendy went more power outs

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Speaker 1: on networks. Always appreciate your insight on these incidents. Thank

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Speaker 1: you so much Wendy for joining us coming up. Russia

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Speaker 1: is one of the world's largest suppliers of nickel. It

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Speaker 1: is a key component in batteries for electric cars. How

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Speaker 1: Tesla struck a secret deal to keep supplies coming. This

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Speaker 1: is Bloomberg. This back market has been up and down,

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Speaker 1: catching the attention of the SEC, which just announced a

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Speaker 1: plan for new disclosure requirements. One company that just went

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Speaker 1: public this week vs. Back is Storry, the broadband provider

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Speaker 1: listed on the New York Stock Exchange just yesterday. The transaction,

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Speaker 1: implying at one point seven six billion dollar value, were

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Speaker 1: joined out by check Kenogs Starry CEO and co founder

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Speaker 1: chet How'd you pull this off in the middle of

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Speaker 1: all this market volatility and a war that's casting a

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Speaker 1: great deal of uncertainty over the road ahead. Yeah. Well,

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Speaker 1: I think probably two or three factors that contributed to it.

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Speaker 1: Number one, a very supportive investor base, which I think

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Speaker 1: is critical in this market and climate obviously, uh And

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Speaker 1: and I think the basic for that support, or the

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Speaker 1: basis for the support, including the new investors that came in,

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Speaker 1: is really the company's performance. You know, Unlike a lot

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Speaker 1: of sort of concept companies in the stack land if

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Speaker 1: you will, we um. You know, we're a real company

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Speaker 1: growing very rapidly, real revenues, real customers, very lower customer based,

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Speaker 1: massive tam um uh and and it real bottoms up

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Speaker 1: analysis in terms of what the company is going to

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Speaker 1: be doing. So so I think the deal basically got

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Speaker 1: done because of those parameters. So talk to us about

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Speaker 1: the ambition here. You know, you have for many, many

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Speaker 1: years wanted to close the digital divide and democratize access.

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Speaker 1: What's the goal with Starry? What unmet needs do you

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Speaker 1: feel like you're filling? So, you know, it really depends

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Speaker 1: on geography. But in certain areas, in urban areas in particular,

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Speaker 1: obviously in the rule is the government's had a lot

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Speaker 1: of subsidy programs that provide connectivity because I think that's

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Speaker 1: an important component for economic growth and economic engine and

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Speaker 1: healthcare education is you know, the pandemic taught us. But

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Speaker 1: there's an affordability problem in urban areas uh and UH.

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Speaker 1: Affordability ranges from people that you know, are looking for

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Speaker 1: a better product that without the television bundle, which is

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Speaker 1: typically how the cable companies sell it. For affordability for

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Speaker 1: folks that can certainly. Uh, you know, euilize the technology

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Speaker 1: and connectivity, but you are you know, can't pay. But

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Speaker 1: the government is helping with that with subsidizing with the

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Speaker 1: program called a c P or Affordable Connectivity Plan. So

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Speaker 1: endgame for us is really you know, core belief for

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Speaker 1: the company is that what we're doing is a great

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Speaker 1: work in terms of providing you know, real use case,

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Speaker 1: real resource to consumers, taking care of them, elevating the experience.

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Speaker 1: Uh and hopefully you know, by doing all of these things,

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Speaker 1: we're moving um society forward in terms of at least

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Speaker 1: economic opportunity and availability of resources to to folks that

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Speaker 1: would otherwise either be paying over too much or they

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Speaker 1: would be paying or not getting the product at all

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Speaker 1: because you know, they happen to be in a difficult

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Speaker 1: time in their lives. How is what you're offering, this

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Speaker 1: personalized network service different from what traditional legacy broadband providers

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Speaker 1: offer aside from price, and is this something that customers

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Speaker 1: really want? So yes, there are different cohorts of customers

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Speaker 1: that really look for different things. So I'll give you

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Speaker 1: an example. You know, if you're a gamer, for example,

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Speaker 1: you may be interested in different kinds of latency statistics.

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Speaker 1: You work from home potentially, and you know, cable broadband

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Speaker 1: network will give you, you know, a very marginal up link,

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Speaker 1: and we can offer you several hundred megabits up link

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Speaker 1: up to gig a bit up link. Uh. So all

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Speaker 1: of these things, you know, our bet is ultimately technology.

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Speaker 1: We lead towards personalization and what people are willing to

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Speaker 1: pay and what they want. Uh. And that's uh, that's

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Speaker 1: the purpose and then that's how we are check with.

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Speaker 1: The network is in a highly personalizable way, which is

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Speaker 1: very different than your traditional broadband network that tends to

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Speaker 1: be one size fits all. You know, teaser rates that

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Speaker 1: started whatever number and then go up the year after.

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Speaker 1: You know all what I will say, you know, hundred

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Speaker 1: year old business practices that really don't belong in a

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Speaker 1: modern ecosystem. Alright, check Canoga Starry CEO and co founder.

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Speaker 1: We'll keep watching as you continue trading. Thank you so

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Speaker 1: much for joining us. The war in Ukraine is raising

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Speaker 1: anxiety across the electric car industry, Russia being one of

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Speaker 1: the world's biggest producers of nickel, a critical component in

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Speaker 1: a VY batteries. Sources tell Bloomberg that Tesla, however, has

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Speaker 1: been signing deals to circumvent any supply disruptions. I want

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Speaker 1: to bring in analysts as she Satilla, who leads our

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Speaker 1: Commodities and energy research at Bloomberg do Energy Finances. She's

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Speaker 1: thank you so much for joining us. So, according to

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Speaker 1: our reporting, Tesla has been scouring the globe since last

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Speaker 1: year for deals on nickel. In particular, has struck a

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Speaker 1: deal with Veil, a multi year supply deal that involves

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Speaker 1: nickel coming from Canada. What is it you think that

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Speaker 1: made this deal possible? Good evening emplace. So essentially, nickel

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Speaker 1: prices are already rising slowly and steadily before the Russian

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Speaker 1: invasion of Ukraine, and part of the reason for that

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Speaker 1: was a tight market for class one nickel, which is

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Speaker 1: predominantly used in manufacturing batteries which went to electric beakers.

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Speaker 1: Now Russia was supplying almost scent of this class one nickel,

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Speaker 1: so a potential disruption. They're definitely cost an impact on

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Speaker 1: the market. Tesla strategy, although has been quite straightforward for

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Speaker 1: the last year and a half or so. They've been scouring,

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Speaker 1: as you rightly said, for nickel around the world. Deals

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Speaker 1: with pH D last year and another deal with teln

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Speaker 1: Metals and Riot into earlier this year, so they're trying

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Speaker 1: to kind of secure their place in the supply chain

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Speaker 1: and interrate verticularly as much as possible. In reality, it's

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Speaker 1: the battery metal supply chain in general that is under pressure.

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Speaker 1: How concerned should governments be and companies beyond the electric

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Speaker 1: car market b so absolutely rightingly that there's a lot

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Speaker 1: of pressure in the supply chain around the world. Um Interestingly,

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Speaker 1: even in the absence of any long term net zero

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Speaker 1: carbon emission policies, we expect demand for lethuman batteries to

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Speaker 1: rise almost nine times between now and in particularly driven

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Speaker 1: by electric vehicles. So commodities like lithium, cobalt, nickel magnees

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Speaker 1: will be required in large quantities, and actually the supply

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Speaker 1: of these are in particular parts of the world which

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Speaker 1: are sometimes not that robust in terms of government structures

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Speaker 1: or supply chain enhanced Governments and companies around the world

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Speaker 1: are trying to take matters in their own own hands

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Speaker 1: to develop the supply chain, either domestically or essentially create

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Speaker 1: these partnerships around the world. Now, obviously these companies can

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Speaker 1: work to secure extra supplies of nickel or cobalt or

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Speaker 1: lithium what else can they do beyond that? UM, so

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Speaker 1: I think two or three other interesting things they can do.

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Speaker 1: The first one is UM they can use different battery

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Speaker 1: chemistryes to reduce dependence on one specific material or metal.

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Speaker 1: For example, Tesla has been using more of lithium and

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Speaker 1: fosters batteries which require less nickel, although they have lower

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Speaker 1: range and lower performance. UM. There is a move towards

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Speaker 1: using batteries which have hired magnees content and less nickel content. UM.

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Speaker 1: The second thing that would be done is building more

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Speaker 1: charging infrastructure. If you build more charging infrastructure, you need

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Speaker 1: batteries that slightly lower range as well. Perhaps. And the

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Speaker 1: third thing that could be done is recycling. So UM

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Speaker 1: from twenty onwards you will have a lot of batteries UM,

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Speaker 1: large volume of batteries that would be available for recycling,

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Speaker 1: and we probably need to make yourse oft time. All right,

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Speaker 1: she Saiitia, thank you for that context. They're head of

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Speaker 1: Commodities and Energy Research at Bloomberg and welcome back to

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Speaker 1: Bloomberg Technology, Emily Jack in San Francisco. This week, I

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Speaker 1: spoke exclusively with Uber CEO Dark Causa Shocking about the

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Speaker 1: company's plan to quote out Amazon, Amazon, take a listen.

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Speaker 1: I think that Amazon has is an incredible company and

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Speaker 1: no one is ever going to replace Amazon. But we

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Speaker 1: can essentially use our technology local logistics capabilities to power

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Speaker 1: the local merchant or restaurant to deliver anything within an hour,

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Speaker 1: which we think is a delightful experience causa. He says,

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Speaker 1: Uber's delivery business could eventually grow to be bigger than rides,

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Speaker 1: the idea being that it doesn't deliver just food, but

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Speaker 1: potentially anything. This coming at a time though, when other

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Speaker 1: delivery services are cutting back, instat Carts slashing its valuation

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Speaker 1: and the information reporting go Puff plans to cut hundreds

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Speaker 1: of employees. Here to discuss. Andrea Walney, general partner at

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Speaker 1: Manhattan Venture Partners. And Andrea, you're an investor in instat

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Speaker 1: cart What do you make of of instat carts move here?

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Speaker 1: Should we be worried about its business? Thanks so much, Emily,

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Speaker 1: So overall, we're really not worried. I think generally this

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Speaker 1: act of actually reducing the valuation is very much so

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Speaker 1: based on the value of the stock options that the

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Speaker 1: company is issuing to their employees today and any incoming employees.

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Speaker 1: We think this move is really smart for the hiring

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Speaker 1: and recruitment of new employees, because generally what employees want

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Speaker 1: to see is the upside upside in their stock right.

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Speaker 1: They want to see that there's going to be value

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Speaker 1: accruel once they joined the company. So overall, we think

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Speaker 1: that this is a move that made headlines because they

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Speaker 1: were one of the first companies to do it, amiss

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Speaker 1: all the volatility in the market, and we just assume

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Speaker 1: that many and many other companies are going to join

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Speaker 1: suit in this. But doesn't it mean that anyone who

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Speaker 1: exercise their shares that the original valuation thirty nine billion

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Speaker 1: dollars would be underwater now? Well, the folks that did

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Speaker 1: exercise their stock options are probably there to hold on

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Speaker 1: and see where the company goes as per their I

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Speaker 1: p O and the plans there. So overall, with the

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Speaker 1: lack of liquidity now leading up to the I p O, yes,

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Speaker 1: those employees just have to bear with us and hold on.

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Speaker 1: But generally the tax treatment between the four owner and

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Speaker 1: A which is the valuation, right, that's the addit valuation

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Speaker 1: that every company who is private has to do once

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Speaker 1: a year at least between that spread of the foreigner

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Speaker 1: and A and where they actually sell the stock is

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Speaker 1: what's really meaningful. So if we reduce that valuation price,

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Speaker 1: it means that they can have more upside leading up

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Speaker 1: to what they ultimately sell the stock. At meantime, we

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Speaker 1: just saw go Puff planning to cut hundreds of employees

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Speaker 1: according to a report from The Information cutting forty million

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Speaker 1: dollars in cost three of their global workforce. Do you

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Speaker 1: think we're going to see more companies slashing their valuations

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Speaker 1: like Insta cart and potentially going through these mass layoffs. Yeah, Emily, so,

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Speaker 1: I truly think that we're about to see a one

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Speaker 1: eighty reverse of the Great Resignation. I think many companies

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Speaker 1: are using this opportunity of the volatility in the market

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Speaker 1: to reduce spend, reduce opex, increase their margins, get to profitability,

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Speaker 1: and show both investors private and public that they can

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Speaker 1: succeed as they grow, right, And so we do think

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Speaker 1: that we're going to see a lot of companies. You know, further,

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Speaker 1: even though we are expecting the opposite of the Great Resignation,

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Speaker 1: we expect the talent pool and the recruitment landscape to

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Speaker 1: be just as competitive as it ever was. And so

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Speaker 1: with that being said, companies need to find really compelling

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Speaker 1: ways to recruit and retain, and so with that, they

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Speaker 1: are going to be looking for ways to show the

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Speaker 1: talent pool that's out there that they can have an

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Speaker 1: increase in the value of the stock they're getting issued.

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Speaker 1: So we think there's gonna be a lot more of

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Speaker 1: the layoff and news coming out. We expect a lot

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Speaker 1: of companies are having conversations with the board of directors

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Speaker 1: to say, what should we do around our valuation, should

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Speaker 1: we bring it back down to real levels, and then

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Speaker 1: how should we plan ahead for our hiring plans going

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Speaker 1: into the rest of the year. Generally, companies like insta Car.

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Speaker 1: Last year we're really really focused on profitability and broke

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Speaker 1: even because of that, and now companies like insta Car

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Speaker 1: are focusing on top line continuous sing the focus on growth,

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Speaker 1: and then furthermore really just focusing on that reduction of

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Speaker 1: um spend across the board. So profitability is key, margins

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Speaker 1: are key, and retaining talent from the executive level on

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Speaker 1: down is also incredibly important. Now public companies in this

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Speaker 1: space also seeing their stocks slide. Uber and door Dash,

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Speaker 1: for example, down here today, and I'm curious what you

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Speaker 1: think of Uber's vision here to be the future of

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Speaker 1: driving retail. That you know, the idea that they could

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Speaker 1: deliver something faster, for example, than Amazon. And if you

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Speaker 1: think that's gonna work, well, Uber certainly has the fleet

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Speaker 1: capacity to be capacity to do so. But these days

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Speaker 1: their fleet is suffering. So I do think they're going

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Speaker 1: to have to uh revitalize the way that they really

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Speaker 1: incentivized the driver base and furthermore increase their own margins

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Speaker 1: because it's not like Uber has always been the company

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Speaker 1: to who that they understand how to focus on unit economics.

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Speaker 1: So generally, though they have the fleet and logistics down, um,

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Speaker 1: it's not there to say that they've proven themselves as

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Speaker 1: it relates to being able to scale the logistics side

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Speaker 1: of the business. So I think overall they have a

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Speaker 1: fighting chance. But Amazon has always been the clear winner

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Speaker 1: in this category, and it's investing a lot in this space.

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Speaker 1: So I think from a bet perspective, we're looking at

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Speaker 1: where Uber can sit, but overall Amazon has always been

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Speaker 1: the leading category winner. Here isn't a cautionary tale here, Andrea,

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Speaker 1: for investors and for employees and perspective employees, I mean,

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Speaker 1: we all thought valuations were getting pretty hot towards the

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Speaker 1: end of last year, and now you know, at least

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Speaker 1: as you're saying, we're going to see a lot of

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Speaker 1: companies bring those numbers down. Yes, So overall, I think

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Speaker 1: the cautionary tale to see here is that these companies

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Speaker 1: that are raising money from big crossover funds, and when

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Speaker 1: I say crossover, I mean the funds that are the

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Speaker 1: mutual funds, they're the hedge funds that invest in both

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Speaker 1: private and public companies, and then they really hold onto

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Speaker 1: those positions once the company goes public. Those crossover investors

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Speaker 1: have a war chest of a ton of capital to deploy,

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Speaker 1: and their risk profile is very very different than a

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Speaker 1: traditional venture investor or retail investor. So what I say

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Speaker 1: to investors is that we have to really look out

432
00:26:23,320 --> 00:26:25,800
Speaker 1: to say for the late stage companies that are raising

433
00:26:25,840 --> 00:26:28,680
Speaker 1: money um and furthermore just sitting on their own war

434
00:26:28,760 --> 00:26:32,119
Speaker 1: chest of a balance sheet. Those companies really raised a

435
00:26:32,160 --> 00:26:35,359
Speaker 1: lot of rounds from those crossover investors who can weather

436
00:26:35,440 --> 00:26:38,480
Speaker 1: the storm and plan on holding onto those positions and

437
00:26:38,560 --> 00:26:42,680
Speaker 1: setting up arbitrage opportunities long after the company goes public,

438
00:26:42,880 --> 00:26:46,480
Speaker 1: which is a very different strategy than a traditional venture investor. Right,

439
00:26:46,720 --> 00:26:51,080
Speaker 1: traditional venture investors. Their role is primarily to distribute and

440
00:26:51,160 --> 00:26:54,080
Speaker 1: cash out once a company has a lack of UH

441
00:26:54,080 --> 00:26:56,760
Speaker 1: and the lack of expires. And so I think that

442
00:26:56,840 --> 00:27:00,280
Speaker 1: tail is that, you know, measure the risk profile, measure

443
00:27:00,359 --> 00:27:04,000
Speaker 1: risk tolerance, you know, battened down the hatches. But furthermore,

444
00:27:04,040 --> 00:27:06,000
Speaker 1: we're always going to be looking for companies in the

445
00:27:06,080 --> 00:27:10,160
Speaker 1: venture community that are investing into growth, increasing their margins,

446
00:27:10,240 --> 00:27:13,040
Speaker 1: and showing that they can become profitable if and when

447
00:27:13,080 --> 00:27:15,639
Speaker 1: they wanted to be. So are you saying, Andrea, that

448
00:27:15,720 --> 00:27:18,879
Speaker 1: some of these big crossover funds, I'll just throw a

449
00:27:18,960 --> 00:27:21,879
Speaker 1: name out there, like Tiger Global, are they driving up

450
00:27:21,960 --> 00:27:27,959
Speaker 1: valuations in an unhealthy way? I think that overall, Tiger

451
00:27:28,000 --> 00:27:31,560
Speaker 1: Global and many other businesses that are operating similar to

452
00:27:31,640 --> 00:27:34,359
Speaker 1: theirs in the venture and crossover space were the ones

453
00:27:34,440 --> 00:27:37,960
Speaker 1: that have had war chests that are sizeably larger than

454
00:27:38,040 --> 00:27:40,880
Speaker 1: most traditional venture funds, and so in the last few

455
00:27:40,960 --> 00:27:44,000
Speaker 1: years they've proven that they could be very, very competitive

456
00:27:44,080 --> 00:27:48,920
Speaker 1: because their strategy is so focused on arbitraging opportunities once

457
00:27:49,000 --> 00:27:53,000
Speaker 1: companies go public. So overall, I don't think anything Tiger

458
00:27:53,240 --> 00:27:57,200
Speaker 1: has been doing from an activity perspective has been predicated

459
00:27:57,200 --> 00:28:00,560
Speaker 1: on them trying to drive up valuations. They've been very

460
00:28:00,600 --> 00:28:03,679
Speaker 1: competitive for that reason. But for now it seems like

461
00:28:03,760 --> 00:28:07,359
Speaker 1: groups like Tiger and others are very much so focused

462
00:28:07,400 --> 00:28:10,400
Speaker 1: on making sure that they kind of sit back see

463
00:28:10,400 --> 00:28:13,000
Speaker 1: where things pan out, and they're not as focused on

464
00:28:13,160 --> 00:28:15,919
Speaker 1: driving up valuations or putting all their bets in the

465
00:28:15,960 --> 00:28:20,160
Speaker 1: private markets in recent days. All Right, Andrea well Night,

466
00:28:20,200 --> 00:28:22,800
Speaker 1: general partner in Manhattan Venture Partners, will be watching to

467
00:28:22,800 --> 00:28:25,960
Speaker 1: see if some of the stuff you've predicted comes true.

468
00:28:26,560 --> 00:28:31,000
Speaker 1: Coming up, the future of decentralized wireless, We're gonna talk

469
00:28:31,000 --> 00:28:33,840
Speaker 1: with Noble Labs about their recent two hundred million dollar

470
00:28:33,920 --> 00:28:36,119
Speaker 1: funding round and how they plan on using that to

471
00:28:36,240 --> 00:28:40,840
Speaker 1: expand their crypto wireless network. That is next this is

472
00:28:40,880 --> 00:28:53,280
Speaker 1: bloomer Halium, the creator of a blockchain that powers a

473
00:28:53,440 --> 00:28:57,200
Speaker 1: d centralized wireless network, just announced a two hundred million

474
00:28:57,200 --> 00:29:01,440
Speaker 1: dollar rays in funding lad by Agriglobal Andagies and Horror.

475
00:29:01,440 --> 00:29:05,520
Speaker 1: It's valuing them at one point to billion dollars. Helium

476
00:29:05,560 --> 00:29:08,160
Speaker 1: also changing its name to Noval Labs. I want to

477
00:29:08,200 --> 00:29:11,200
Speaker 1: bring in Noval Labs CEO Amir Haleem for more on

478
00:29:11,240 --> 00:29:13,240
Speaker 1: all of this as part of our crypto rapport. So

479
00:29:13,320 --> 00:29:19,880
Speaker 1: walk us through how a crypto wireless network actually works. Yeah.

480
00:29:19,920 --> 00:29:22,280
Speaker 1: So I think that the really really the easiest way

481
00:29:22,320 --> 00:29:25,680
Speaker 1: to think about what Helium does is it empowers ordinary people,

482
00:29:25,840 --> 00:29:28,640
Speaker 1: everyday people to participate in the telecom business. Right, this

483
00:29:28,720 --> 00:29:32,880
Speaker 1: is the most entrenched industry that's almost impossible for like

484
00:29:32,920 --> 00:29:36,160
Speaker 1: a regular person to participate in. And what Helium is

485
00:29:36,200 --> 00:29:40,000
Speaker 1: really pioneered is the ability for really everyday people to

486
00:29:40,040 --> 00:29:43,360
Speaker 1: become part of the telecom business with this sort of decentralization,

487
00:29:43,360 --> 00:29:47,320
Speaker 1: in this crypto twistedment. So everyday participants by a little

488
00:29:47,360 --> 00:29:49,840
Speaker 1: piece of harnorware called the hotspot. You can think of

489
00:29:49,840 --> 00:29:53,120
Speaker 1: it as a miniature cell tower um, and they earn HNT,

490
00:29:53,320 --> 00:29:56,960
Speaker 1: which is the Helium token for providing network coverage that

491
00:29:57,080 --> 00:29:59,240
Speaker 1: other people can use. That's that's sort of the simplest

492
00:29:59,240 --> 00:30:01,200
Speaker 1: word you think become it does. What are some of

493
00:30:01,240 --> 00:30:05,440
Speaker 1: your first use cases and customers. Yeah, so there's been

494
00:30:05,440 --> 00:30:08,240
Speaker 1: some interesting ones. I mean, the network today is focused

495
00:30:08,280 --> 00:30:10,680
Speaker 1: on the Internet of Things, right, which is most these sensors,

496
00:30:11,560 --> 00:30:13,880
Speaker 1: small devices that are battery powered, and so we've seen

497
00:30:13,920 --> 00:30:18,280
Speaker 1: everything from drone delivery, so packages being delivered by drones

498
00:30:18,320 --> 00:30:21,920
Speaker 1: that are orchestrated through the helium network, precision agriculture, things

499
00:30:21,920 --> 00:30:25,880
Speaker 1: like wildfire monitoring, connected rat traps. You know, there's the

500
00:30:25,960 --> 00:30:28,440
Speaker 1: number of use cases extremely broad, and IoT as a

501
00:30:28,520 --> 00:30:33,360
Speaker 1: category has been one that has really lacked a network

502
00:30:33,440 --> 00:30:35,920
Speaker 1: that supports the kinds of applications that we're now seeing

503
00:30:35,920 --> 00:30:38,080
Speaker 1: getting built. So it's we're really starting to see like

504
00:30:38,120 --> 00:30:41,360
Speaker 1: the transformation of an idea which was IoT ten years

505
00:30:41,360 --> 00:30:44,840
Speaker 1: ago to to the reality, which is people and businesses

506
00:30:44,880 --> 00:30:48,600
Speaker 1: starting to deploy sensors that solve the real problems. So

507
00:30:48,800 --> 00:30:51,080
Speaker 1: is the goal here to take share from major wireless

508
00:30:51,120 --> 00:30:54,640
Speaker 1: carriers and how do you plan to do that? You know,

509
00:30:54,840 --> 00:30:57,400
Speaker 1: I think the goal really is to try and build

510
00:30:57,440 --> 00:31:01,600
Speaker 1: an alternative to what we have today, Like the the

511
00:31:01,640 --> 00:31:04,400
Speaker 1: Internet or access to the Internet has been something which

512
00:31:04,400 --> 00:31:09,680
Speaker 1: has been so difficult, uh to separate from a sort

513
00:31:09,720 --> 00:31:12,640
Speaker 1: of small constituent of of companies that own access to

514
00:31:12,680 --> 00:31:16,440
Speaker 1: the Internet. It's incredibly difficult to to decentralize that way

515
00:31:16,520 --> 00:31:19,160
Speaker 1: due to so many different modes, whether it's sectrum, whether

516
00:31:19,200 --> 00:31:22,120
Speaker 1: it's physical access. UH. And so what we see now

517
00:31:22,280 --> 00:31:25,400
Speaker 1: is uh the sort of convergence of all these different technologies,

518
00:31:25,400 --> 00:31:28,840
Speaker 1: including crypto, that makes it possible now for us to

519
00:31:28,840 --> 00:31:32,240
Speaker 1: provide an alternative that is completely open, that is very private,

520
00:31:32,240 --> 00:31:35,040
Speaker 1: that is very secure, that is really owned by the people,

521
00:31:35,240 --> 00:31:37,880
Speaker 1: rather than a small group of companies that typically haven't

522
00:31:37,880 --> 00:31:42,760
Speaker 1: stranglehold in this industry. Now, given your fundraising announcement today

523
00:31:42,800 --> 00:31:45,640
Speaker 1: two hundred million dollars, including from Tiger Global, we were

524
00:31:45,680 --> 00:31:49,440
Speaker 1: just having a conversation earlier with Andrea Walnett Manhattan Venture Partners,

525
00:31:49,880 --> 00:31:53,400
Speaker 1: who maintains that some of these bigger funds like Tiger

526
00:31:53,440 --> 00:31:56,440
Speaker 1: Global are driving up valuations because they simply have so

527
00:31:56,560 --> 00:31:59,680
Speaker 1: much money to plow into startups. What do you make

528
00:31:59,720 --> 00:32:02,400
Speaker 1: of that critique and do you think it applies at

529
00:32:02,400 --> 00:32:06,840
Speaker 1: all to Nova? If you look at the telecom industry,

530
00:32:06,880 --> 00:32:08,840
Speaker 1: I mean, it is one of the few industries that

531
00:32:08,960 --> 00:32:12,000
Speaker 1: is valued and trillions of dollars, right, and so the

532
00:32:12,280 --> 00:32:15,920
Speaker 1: opportunity here is so large that I think it is

533
00:32:16,040 --> 00:32:19,320
Speaker 1: quite difficult to ascribe evaluation to it. Right. It's obviously

534
00:32:19,360 --> 00:32:21,200
Speaker 1: obviously I'm biased, and I'm not going to say that

535
00:32:21,240 --> 00:32:23,720
Speaker 1: we're overvalued or anything like that, but I think the

536
00:32:23,760 --> 00:32:27,840
Speaker 1: opportunity that we're looking at is so big and so unique, right.

537
00:32:27,880 --> 00:32:30,040
Speaker 1: I think Helium is one of the few crypto projects

538
00:32:30,080 --> 00:32:32,720
Speaker 1: that has a real tangible like, you know, really world

539
00:32:32,880 --> 00:32:35,880
Speaker 1: use case that everyone can understand, right when people get

540
00:32:35,920 --> 00:32:39,440
Speaker 1: to participate and become basically a little a miniature cell tower, right,

541
00:32:39,600 --> 00:32:41,920
Speaker 1: And so if you think about how that grows. You know,

542
00:32:42,000 --> 00:32:45,320
Speaker 1: today the network is focused mostly on IoT, but as

543
00:32:45,360 --> 00:32:47,240
Speaker 1: you think of the expansion, and there are now something

544
00:32:47,280 --> 00:32:50,200
Speaker 1: like twenty thousand five G hotspots being deployed, and you know,

545
00:32:50,240 --> 00:32:52,760
Speaker 1: we expect there to be other types of wireless network

546
00:32:53,320 --> 00:32:55,360
Speaker 1: that get built on top of Helium too, whether that's

547
00:32:55,440 --> 00:33:00,480
Speaker 1: Qui Fi, Bluetooth six G, or any other future technology. Meantime,

548
00:33:00,560 --> 00:33:04,960
Speaker 1: we are seeing companies more broadly slash evaluation plan for layoffs.

549
00:33:05,280 --> 00:33:07,200
Speaker 1: We're in the middle now of of what seems to

550
00:33:07,200 --> 00:33:10,440
Speaker 1: be a market downturn. How are you you know, are

551
00:33:10,480 --> 00:33:12,920
Speaker 1: you changing your strategy at all? Are being more conservative

552
00:33:13,000 --> 00:33:19,080
Speaker 1: with your cash as you navigate these macroeconomic conditions? You know,

553
00:33:19,360 --> 00:33:23,040
Speaker 1: I think we've generally been the believers in small teams

554
00:33:23,120 --> 00:33:25,640
Speaker 1: that that can do big things. And you know, today

555
00:33:25,680 --> 00:33:29,960
Speaker 1: we are sixty or so employees and looking to grow um.

556
00:33:30,080 --> 00:33:32,880
Speaker 1: But you know, I think the philosophy of the company

557
00:33:32,880 --> 00:33:34,840
Speaker 1: has always been that small teams can do lots of

558
00:33:34,880 --> 00:33:37,320
Speaker 1: big things. And that has allowed us to be very

559
00:33:37,320 --> 00:33:40,760
Speaker 1: flexible in different economic conditions. Right we are looking to

560
00:33:40,800 --> 00:33:44,480
Speaker 1: add two thousand employees and put ourselves in dangering that way. So,

561
00:33:44,880 --> 00:33:46,440
Speaker 1: you know, I think there's a lot of pressure on

562
00:33:46,520 --> 00:33:49,840
Speaker 1: startups to to show growth in multiple directions, and one

563
00:33:49,880 --> 00:33:52,840
Speaker 1: of those is is head count um and so we're

564
00:33:52,880 --> 00:33:54,800
Speaker 1: we've always been careful about that and I think that

565
00:33:54,840 --> 00:33:56,800
Speaker 1: will serve as well going forward. Because you built this

566
00:33:56,840 --> 00:34:00,560
Speaker 1: culture of trying to be disruptive this play, and as

567
00:34:00,560 --> 00:34:03,800
Speaker 1: a result of being able to use crypto economics, you

568
00:34:03,840 --> 00:34:06,160
Speaker 1: really get to build an entire community behind you. You know,

569
00:34:06,280 --> 00:34:09,080
Speaker 1: So the size of the actual founding team or the

570
00:34:09,080 --> 00:34:10,879
Speaker 1: core team matters a hull of a lot less because

571
00:34:10,880 --> 00:34:14,319
Speaker 1: you've got a six hundred thousand plus spot hosts who

572
00:34:14,360 --> 00:34:16,359
Speaker 1: are really the ones that actually running the network, who

573
00:34:16,360 --> 00:34:18,080
Speaker 1: owned the network, and that's you know, those are the

574
00:34:18,160 --> 00:34:22,960
Speaker 1: numbers that matter rather than than our individual headcounts. All right, interesting,

575
00:34:23,000 --> 00:34:27,480
Speaker 1: Amir Helleen, CEO of newly branded Nova Labs, thank you

576
00:34:27,880 --> 00:34:40,239
Speaker 1: for joining us. Apple is developing its own payment processing

577
00:34:40,320 --> 00:34:45,040
Speaker 1: technology and infrastructure for future financial products. According to Bloomberg sources,

578
00:34:45,040 --> 00:34:47,040
Speaker 1: This as the iPhone maker is trying to reduce its

579
00:34:47,080 --> 00:34:50,960
Speaker 1: reliance on outside partners over time. Let's bring in Bloomberg's

580
00:34:50,960 --> 00:34:54,440
Speaker 1: Mark German for this scoop And why Mark, what's the

581
00:34:54,480 --> 00:34:58,600
Speaker 1: plan here? The plan is to bring the underlying infrastructure,

582
00:34:58,600 --> 00:35:03,920
Speaker 1: the underlying processing, underlying you know, development process for Apple's

583
00:35:04,000 --> 00:35:08,040
Speaker 1: future fintech products, things beyond Apple Pay, things beyond the

584
00:35:08,080 --> 00:35:10,279
Speaker 1: Apple card and the Apple cash card. Will Apple in

585
00:35:10,360 --> 00:35:13,200
Speaker 1: house right right now, as we know, Apple has a

586
00:35:13,239 --> 00:35:17,240
Speaker 1: few partners in the fintech space, Goldman Sachs, Core Card,

587
00:35:17,600 --> 00:35:20,080
Speaker 1: Green Dot Bank, and a few others. They want to

588
00:35:20,080 --> 00:35:23,160
Speaker 1: bring the underlying technology that they leverage from those partners

589
00:35:23,400 --> 00:35:26,880
Speaker 1: in house for the next suite of Apple financial services.

590
00:35:27,680 --> 00:35:33,279
Speaker 1: So who have this hurt definitely would hurt core Card right,

591
00:35:33,680 --> 00:35:36,879
Speaker 1: every credit card, most financial products, they require what's known

592
00:35:36,920 --> 00:35:40,160
Speaker 1: as a core processor or is it payment processor. That's

593
00:35:40,200 --> 00:35:43,880
Speaker 1: the engine that allows banks to either approve or reject

594
00:35:43,960 --> 00:35:46,880
Speaker 1: a transaction. Now, the core processor core Card in this

595
00:35:46,960 --> 00:35:49,879
Speaker 1: case does a lot more. They handle disputes, they handle

596
00:35:49,960 --> 00:35:53,600
Speaker 1: parts of customer service through Goldman Sachs, they handle other

597
00:35:53,719 --> 00:35:57,439
Speaker 1: underlying infrastructure for the financial system. And you saw their

598
00:35:57,440 --> 00:36:00,000
Speaker 1: stock dropped, I believe more than ten percent this morning

599
00:36:00,040 --> 00:36:02,759
Speaker 1: on the news of the story. That's because investors in

600
00:36:02,800 --> 00:36:06,480
Speaker 1: the company and analysts know how important core Card is

601
00:36:06,520 --> 00:36:09,160
Speaker 1: to the Apple Card and Golden Sex. Now Apples building

602
00:36:09,200 --> 00:36:12,200
Speaker 1: their own full on replacement for the work done by

603
00:36:12,200 --> 00:36:15,120
Speaker 1: core Card, meaning core Card won't be Apple's partner in

604
00:36:15,160 --> 00:36:18,200
Speaker 1: all likelihood in future fintech products. Apple will be going

605
00:36:18,239 --> 00:36:21,840
Speaker 1: at it alone. So this will be Apple's biggest for

606
00:36:22,000 --> 00:36:24,080
Speaker 1: a yet into the world of finance. I mean, it

607
00:36:24,120 --> 00:36:26,200
Speaker 1: sounds like it's not going to be easy. Are they

608
00:36:26,200 --> 00:36:28,840
Speaker 1: going to be able to pull this off? This is

609
00:36:28,880 --> 00:36:32,200
Speaker 1: a multi year effort with many engineers and other people

610
00:36:32,239 --> 00:36:35,640
Speaker 1: across Apple in all sorts of teams across the company.

611
00:36:35,920 --> 00:36:38,840
Speaker 1: They're investing hundreds of millions of dollars, if not billions

612
00:36:38,840 --> 00:36:42,200
Speaker 1: in this. You saw an acquisition recently called Credit Kudos

613
00:36:42,200 --> 00:36:44,920
Speaker 1: from the UK. Now that company has technology to help

614
00:36:44,960 --> 00:36:48,640
Speaker 1: determine credit scores. That's part of Apple's push. Right This

615
00:36:48,680 --> 00:36:51,200
Speaker 1: is all part of the same thing because Apple will

616
00:36:51,280 --> 00:36:53,880
Speaker 1: for the first time also be working with credit bureaus

617
00:36:54,120 --> 00:36:58,440
Speaker 1: to make lending decisions and approval decisions for fintech product

618
00:36:58,480 --> 00:37:01,480
Speaker 1: applications for the first time. Right now, they go through

619
00:37:01,520 --> 00:37:03,919
Speaker 1: core Card and Golden sacks to work with the transunions

620
00:37:03,920 --> 00:37:06,240
Speaker 1: and Equifaxes of the world. Now they're trying to build

621
00:37:06,239 --> 00:37:09,120
Speaker 1: that on their own as well. So this is a major,

622
00:37:09,280 --> 00:37:13,520
Speaker 1: major effort, very much underlying the whole future plans Apple has.

623
00:37:13,920 --> 00:37:15,800
Speaker 1: And you know there's a few services Apple has in

624
00:37:15,880 --> 00:37:17,960
Speaker 1: the works right now that go well beyond Apple Pay.

625
00:37:18,080 --> 00:37:20,480
Speaker 1: They're working on a buy now later program actually to

626
00:37:20,680 --> 00:37:23,480
Speaker 1: buy now later programs to compete with the firm and

627
00:37:23,520 --> 00:37:25,840
Speaker 1: others that will launch, you know, this year and next.

628
00:37:26,160 --> 00:37:28,759
Speaker 1: And you're also seeing them work on a hardware subscription

629
00:37:28,800 --> 00:37:31,360
Speaker 1: service which also is going to rely on this new platform,

630
00:37:31,400 --> 00:37:35,879
Speaker 1: particularly for subscribing monthly to an iPhone. Quickly, when can

631
00:37:35,880 --> 00:37:37,799
Speaker 1: we expect the first product that will rely on this

632
00:37:37,840 --> 00:37:40,560
Speaker 1: new system, So buy now, Pay Later will be the

633
00:37:40,560 --> 00:37:43,000
Speaker 1: first product, and that will launch either this year or next.

634
00:37:44,000 --> 00:37:47,520
Speaker 1: All right, Mark German with get another scoop. Thanks so much, Mark,

635
00:37:47,840 --> 00:37:50,840
Speaker 1: as always, thanks, and that does it for this edition

636
00:37:51,000 --> 00:37:54,239
Speaker 1: of Bloomberg Technology. You don't forget to check out our podcast.

637
00:37:54,280 --> 00:37:57,080
Speaker 1: You can find it on the terminal, Apple, Spotify, i Heeart,

638
00:37:57,239 --> 00:38:01,880
Speaker 1: anywhere you get your podcast for this daily news round up,

639
00:38:02,000 --> 00:38:04,840
Speaker 1: catch it every day. I'm Emily checking in San Francisco.

640
00:38:05,080 --> 00:38:06,400
Speaker 1: This is Bloomberg,