Speaker 1: From the heart of where innovation, money and power colli
Speaker 1: in Silicon Vallet and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay I'm Emily checking San Francisco and this is
Speaker 1: Bloomberg Technology. Coming up in the next hour a Bloomberg scoop.
Speaker 1: Hackers masquerading is law enforcement tricked Apple and Meta into
Speaker 1: handing over customer data. We have all the details. Plus
Speaker 1: Apple is cutting out the middleman, the iPhone maker developing
Speaker 1: its own payment processing technology, building a full in house
Speaker 1: set of financial services offerings on top of its Apple
Speaker 1: credit card and wallet. Bloomberg's Mark German will bring us
Speaker 1: his exclusive story and Tesla's hidden competitive advantage. The electric
Speaker 1: car maker made a secret deal to help dodge the
Speaker 1: nickel crisis. Russia is one of the world's top suppliers.
Speaker 1: Now to that Bloomberg exclusive, Bloomberg learning that Apple and
Speaker 1: Meta provided customer data to presumed law enforcement officials who
Speaker 1: were really hackers in disguise. William Turton, our Bloomberg cubersecurity reporter,
Speaker 1: joins us. Now with that school will how did the
Speaker 1: hackers pull this off? Hey, Emily, thanks for having me.
Speaker 1: So here's what the hackers did. They kind of exploited
Speaker 1: what some might call a loophole in this system. When
Speaker 1: you send a request of a search warrant or subpoena
Speaker 1: to a company for data, that has to be signed
Speaker 1: by a judge. But if you send something called an
Speaker 1: emergency data request, UM that's not something that has to
Speaker 1: be signed by a judge. So what these hackers did
Speaker 1: is they broke into the email boxes of legitimate law
Speaker 1: enforcement agencies and they sent emails posing as a legitimate
Speaker 1: law enforcement officer to these companies with a forged emergency
Speaker 1: data request. And as we're reporting today, the co and
Speaker 1: he's complied with those requests and actually turned over user data.
Speaker 1: But we don't know is just the scale of this problem.
Speaker 1: We've been hearing from sources that you know, it's much
Speaker 1: bigger than these companies um AND has a much bigger scope.
Speaker 1: And that's what we're trying to find out now. So
Speaker 1: is it understandable then that Apple and Meta could have
Speaker 1: fallen for this or is this a major loophole in
Speaker 1: their systems? So, I mean, it cannot be overstated how
Speaker 1: complicated and difficult these process are. The emergency data request.
Speaker 1: Some will say it's a very legitimate form for law
Speaker 1: enforcement to get information in times of crisis, like a
Speaker 1: like a terrorist threat or someone's life is an imminent danger.
Speaker 1: And that's exactly what the hackers do in their Forge request.
Speaker 1: They will say something along the lines of there's a
Speaker 1: terrorist threat, someone's life is in danger, someone's you know,
Speaker 1: at risk of suicide, and you know, companies are expected
Speaker 1: to comply very quickly with these requests. Now, you know,
Speaker 1: I think, as it's becoming clear, companies need to have
Speaker 1: more oversight and more verification that these requests are legitimate
Speaker 1: and are coming from real law enforcement officers. Now, according
Speaker 1: to your reporting, William Discord had a similar issue. Also,
Speaker 1: Snap also got this request, but we don't know yet
Speaker 1: if they provided any of this information to the hackers.
Speaker 1: Are there other companies that could be looped into this?
Speaker 1: That's right, So yesterday Brian Krebs reported that Discord, also,
Speaker 1: you know, was a victim of the same kind of scheme.
Speaker 1: We reported today that Snap received a Forge emergency data request,
Speaker 1: but we do not know whether they actually provided data.
Speaker 1: And yes, I'm hearing from sources that many other companies,
Speaker 1: even beyond tech companies, beyond social media companies, have been
Speaker 1: affected by this Um, if anyone knows more, I you
Speaker 1: should reach out to me because I would love to
Speaker 1: know more. I think this problem extends beyond just the
Speaker 1: two companies that we've reported on today. Alright, bloombergs William
Speaker 1: Turton with that scoop, William, thank you. I want to
Speaker 1: talk more about this now with Wendy Whitmore, senior vice
Speaker 1: president for Unit forty two, the threat intelligence team at
Speaker 1: Palo Alto Networks. Wendy, thank you so much for joining us.
Speaker 1: What do you find most notable about how these accurs
Speaker 1: hackers were able to pull these off with massive companies
Speaker 1: with very established systems. Yeah, Emily, great question. So I
Speaker 1: think the biggest concern here of these attacks is clearly
Speaker 1: how well the attackers understand uh, this potential vulnerability, this
Speaker 1: process of government request to technology companies, social media companies,
Speaker 1: and understand it and are willing to take the risk
Speaker 1: to exploit it. So talk to us about why it's
Speaker 1: so apparently easy to do this. I mean, some of
Speaker 1: the folks behind these attacks we're finding out our teenagers. Yeah. Again,
Speaker 1: great questions. So the interesting thing is it's not easy
Speaker 1: at all. This is relatively complicated. So first I would
Speaker 1: say The easiest part is probably for the attackers to
Speaker 1: get access to the data that they're stealing. Last year alone,
Speaker 1: our team identified over breaches where there was stolen data leaked.
Speaker 1: So what the attackers do is by this information for
Speaker 1: relatively inexpensive prices and then use that to test out
Speaker 1: which kind of credentials they can use to legitimately break
Speaker 1: into organizations, and in this case, they chose those to
Speaker 1: be law enforcement organizations. The complicating part is they have
Speaker 1: to understand that process, and then they have to be
Speaker 1: willing to spend the time that it takes to to
Speaker 1: do the social engineering aspects, understanding specifically who they need
Speaker 1: to contact that these organizations to make these requests, who
Speaker 1: the legitimate law enforcement officers are, and what their processes.
Speaker 1: So this is certainly not an easy task for them
Speaker 1: to orchestrate, clearly being done by people with time on
Speaker 1: their hands. Well to that point, the folks suspected in
Speaker 1: this particular case are minors located in the US and UK.
Speaker 1: I'm reminded of the OPTA hacks that we covered last week,
Speaker 1: where you know, the suspected mastermind is a teenager who
Speaker 1: still lives with his mom in England. What do you
Speaker 1: make of the fact that these are potentially very young
Speaker 1: people behind these very disruptive attacks. It's it's incredibly concerning, right.
Speaker 1: We typically would see this level of attack orchestrated by
Speaker 1: an organization who's got clear objectives and clear financial backing.
Speaker 1: So the point is these UH, the organization related to
Speaker 1: these attacks certainly has overlapped with lapses and the activities
Speaker 1: we've seen last week. One of the things that they're
Speaker 1: doing incredibly effectively, and we see this in ransomware investigations
Speaker 1: as well, is they use time demands as a way
Speaker 1: to force an organization to make a quick decision. We
Speaker 1: see that with these ransomware attacks when there's extortion involved,
Speaker 1: and we're seeing this work very well with these emergency
Speaker 1: data requests. Now six hundred thousand open jobs in cybersecurity,
Speaker 1: that's what Bloomberg is reporting today that there are six
Speaker 1: hundred thousand jobs UH in the cyber threat landscape that
Speaker 1: are unfilled. Is that part of the reason we may
Speaker 1: be seeing an uptick in hacks. Well, I think you're
Speaker 1: seeing that. So there's no greater example of that today
Speaker 1: and the challenges that we as an industry face than
Speaker 1: as it relates to Russian Ukraine. Right, the US government
Speaker 1: has come out and provided a tremendous amount of recommendations
Speaker 1: and actions to be taken, but the reality is it's
Speaker 1: challenging for organizations across the world to implement all of
Speaker 1: them in a timely manner. Uh, it's much cheaper for
Speaker 1: the attackers to conduct these attacks, and it's much more
Speaker 1: costly and time and resource intensive for organizations to defend
Speaker 1: against them today. So yes, absolutely that's a concern. Now
Speaker 1: we're understanding that the information that was shared with these
Speaker 1: hackers includes addresses, phone numbers, I P addresses. How damaging
Speaker 1: could the release of this information be? How could the
Speaker 1: hackers use it? Well, I think that there's some concern
Speaker 1: in terms of people being cyberstocked, being at that translated
Speaker 1: to physical attacks. Right, So when you look at these
Speaker 1: the people that are behind this oftentimes so they're selling
Speaker 1: this information for really inexpensive amount, right, the equivalent of
Speaker 1: about one fifty U S dollars, So that can be
Speaker 1: used in a wide variety of ways. We want to
Speaker 1: make sure that people are protected and uh, you know
Speaker 1: that this data doesn't then translate to those type of
Speaker 1: tax So certainly law enforcement is going to be working
Speaker 1: very closely with these organizations who have released the data
Speaker 1: to make sure that they can protect people. What do
Speaker 1: you see as the learnings and takeaways here? I mean,
Speaker 1: is this a new tactic that we're going to see
Speaker 1: more cyber criminals start exploiting. Yeah, I think it's it's
Speaker 1: become pretty widespread. Right, So these lapses group attacks over
Speaker 1: the past week saw that you know which you mentioned
Speaker 1: right to Octa to Microsoft um. The level of sophistication
Speaker 1: was largely in the social engineering, so the human to
Speaker 1: human aspects as well as the persistence of their ability
Speaker 1: to figure out once they got inside an organization how
Speaker 1: they could actually get to the data that they needed.
Speaker 1: And so what the good news on that is that
Speaker 1: that largely relates to defense and depth strategies and best
Speaker 1: practices that we recommend the organizations. It doesn't often mean
Speaker 1: you have to buy millions of dollars of new technology, right.
Speaker 1: It means we have to get back to the basics
Speaker 1: and we have to make sure that, for example, for
Speaker 1: help desk, that we are not asking identity verification questions
Speaker 1: of our employees. That's information that could be easily found
Speaker 1: on the internet. So we've got to continually focus on
Speaker 1: security awareness trainings for organizations and make sure that they're
Speaker 1: well implemented. As the war on Ukraine shows no signs
Speaker 1: of d escalation, but Ukrainian forces and the West have
Speaker 1: really put a lot of pressure on Russian forces. Do
Speaker 1: you see Russia resorting to more cyber attacks and getting
Speaker 1: more aggressive in the cyber landscape? Since we haven't quite
Speaker 1: seen as potentially devastating attacks from the Russian side, is
Speaker 1: some more expecting yet, I think it's a likely scenario.
Speaker 1: One thing we know for certain is that the Russians
Speaker 1: have been incredibly formidable capability when it comes to cyber
Speaker 1: attacks and cyber warfare. So we are encouraging all of
Speaker 1: our clients as well as non clients to be prepared
Speaker 1: to make sure that they've got a documented incident response
Speaker 1: plans in place, that they understand what rules and responsibilities
Speaker 1: their employees have across the board, so that if these
Speaker 1: attacks do occur, that we've got a well orchestrated response
Speaker 1: plan and we can contain contain that the damage as
Speaker 1: quickly as possible. All Right, Wendy went more power outs
Speaker 1: on networks. Always appreciate your insight on these incidents. Thank
Speaker 1: you so much Wendy for joining us coming up. Russia
Speaker 1: is one of the world's largest suppliers of nickel. It
Speaker 1: is a key component in batteries for electric cars. How
Speaker 1: Tesla struck a secret deal to keep supplies coming. This
Speaker 1: is Bloomberg. This back market has been up and down,
Speaker 1: catching the attention of the SEC, which just announced a
Speaker 1: plan for new disclosure requirements. One company that just went
Speaker 1: public this week vs. Back is Storry, the broadband provider
Speaker 1: listed on the New York Stock Exchange just yesterday. The transaction,
Speaker 1: implying at one point seven six billion dollar value, were
Speaker 1: joined out by check Kenogs Starry CEO and co founder
Speaker 1: chet How'd you pull this off in the middle of
Speaker 1: all this market volatility and a war that's casting a
Speaker 1: great deal of uncertainty over the road ahead. Yeah. Well,
Speaker 1: I think probably two or three factors that contributed to it.
Speaker 1: Number one, a very supportive investor base, which I think
Speaker 1: is critical in this market and climate obviously, uh And
Speaker 1: and I think the basic for that support, or the
Speaker 1: basis for the support, including the new investors that came in,
Speaker 1: is really the company's performance. You know, Unlike a lot
Speaker 1: of sort of concept companies in the stack land if
Speaker 1: you will, we um. You know, we're a real company
Speaker 1: growing very rapidly, real revenues, real customers, very lower customer based,
Speaker 1: massive tam um uh and and it real bottoms up
Speaker 1: analysis in terms of what the company is going to
Speaker 1: be doing. So so I think the deal basically got
Speaker 1: done because of those parameters. So talk to us about
Speaker 1: the ambition here. You know, you have for many, many
Speaker 1: years wanted to close the digital divide and democratize access.
Speaker 1: What's the goal with Starry? What unmet needs do you
Speaker 1: feel like you're filling? So, you know, it really depends
Speaker 1: on geography. But in certain areas, in urban areas in particular,
Speaker 1: obviously in the rule is the government's had a lot
Speaker 1: of subsidy programs that provide connectivity because I think that's
Speaker 1: an important component for economic growth and economic engine and
Speaker 1: healthcare education is you know, the pandemic taught us. But
Speaker 1: there's an affordability problem in urban areas uh and UH.
Speaker 1: Affordability ranges from people that you know, are looking for
Speaker 1: a better product that without the television bundle, which is
Speaker 1: typically how the cable companies sell it. For affordability for
Speaker 1: folks that can certainly. Uh, you know, euilize the technology
Speaker 1: and connectivity, but you are you know, can't pay. But
Speaker 1: the government is helping with that with subsidizing with the
Speaker 1: program called a c P or Affordable Connectivity Plan. So
Speaker 1: endgame for us is really you know, core belief for
Speaker 1: the company is that what we're doing is a great
Speaker 1: work in terms of providing you know, real use case,
Speaker 1: real resource to consumers, taking care of them, elevating the experience.
Speaker 1: Uh and hopefully you know, by doing all of these things,
Speaker 1: we're moving um society forward in terms of at least
Speaker 1: economic opportunity and availability of resources to to folks that
Speaker 1: would otherwise either be paying over too much or they
Speaker 1: would be paying or not getting the product at all
Speaker 1: because you know, they happen to be in a difficult
Speaker 1: time in their lives. How is what you're offering, this
Speaker 1: personalized network service different from what traditional legacy broadband providers
Speaker 1: offer aside from price, and is this something that customers
Speaker 1: really want? So yes, there are different cohorts of customers
Speaker 1: that really look for different things. So I'll give you
Speaker 1: an example. You know, if you're a gamer, for example,
Speaker 1: you may be interested in different kinds of latency statistics.
Speaker 1: You work from home potentially, and you know, cable broadband
Speaker 1: network will give you, you know, a very marginal up link,
Speaker 1: and we can offer you several hundred megabits up link
Speaker 1: up to gig a bit up link. Uh. So all
Speaker 1: of these things, you know, our bet is ultimately technology.
Speaker 1: We lead towards personalization and what people are willing to
Speaker 1: pay and what they want. Uh. And that's uh, that's
Speaker 1: the purpose and then that's how we are check with.
Speaker 1: The network is in a highly personalizable way, which is
Speaker 1: very different than your traditional broadband network that tends to
Speaker 1: be one size fits all. You know, teaser rates that
Speaker 1: started whatever number and then go up the year after.
Speaker 1: You know all what I will say, you know, hundred
Speaker 1: year old business practices that really don't belong in a
Speaker 1: modern ecosystem. Alright, check Canoga Starry CEO and co founder.
Speaker 1: We'll keep watching as you continue trading. Thank you so
Speaker 1: much for joining us. The war in Ukraine is raising
Speaker 1: anxiety across the electric car industry, Russia being one of
Speaker 1: the world's biggest producers of nickel, a critical component in
Speaker 1: a VY batteries. Sources tell Bloomberg that Tesla, however, has
Speaker 1: been signing deals to circumvent any supply disruptions. I want
Speaker 1: to bring in analysts as she Satilla, who leads our
Speaker 1: Commodities and energy research at Bloomberg do Energy Finances. She's
Speaker 1: thank you so much for joining us. So, according to
Speaker 1: our reporting, Tesla has been scouring the globe since last
Speaker 1: year for deals on nickel. In particular, has struck a
Speaker 1: deal with Veil, a multi year supply deal that involves
Speaker 1: nickel coming from Canada. What is it you think that
Speaker 1: made this deal possible? Good evening emplace. So essentially, nickel
Speaker 1: prices are already rising slowly and steadily before the Russian
Speaker 1: invasion of Ukraine, and part of the reason for that
Speaker 1: was a tight market for class one nickel, which is
Speaker 1: predominantly used in manufacturing batteries which went to electric beakers.
Speaker 1: Now Russia was supplying almost scent of this class one nickel,
Speaker 1: so a potential disruption. They're definitely cost an impact on
Speaker 1: the market. Tesla strategy, although has been quite straightforward for
Speaker 1: the last year and a half or so. They've been scouring,
Speaker 1: as you rightly said, for nickel around the world. Deals
Speaker 1: with pH D last year and another deal with teln
Speaker 1: Metals and Riot into earlier this year, so they're trying
Speaker 1: to kind of secure their place in the supply chain
Speaker 1: and interrate verticularly as much as possible. In reality, it's
Speaker 1: the battery metal supply chain in general that is under pressure.
Speaker 1: How concerned should governments be and companies beyond the electric
Speaker 1: car market b so absolutely rightingly that there's a lot
Speaker 1: of pressure in the supply chain around the world. Um Interestingly,
Speaker 1: even in the absence of any long term net zero
Speaker 1: carbon emission policies, we expect demand for lethuman batteries to
Speaker 1: rise almost nine times between now and in particularly driven
Speaker 1: by electric vehicles. So commodities like lithium, cobalt, nickel magnees
Speaker 1: will be required in large quantities, and actually the supply
Speaker 1: of these are in particular parts of the world which
Speaker 1: are sometimes not that robust in terms of government structures
Speaker 1: or supply chain enhanced Governments and companies around the world
Speaker 1: are trying to take matters in their own own hands
Speaker 1: to develop the supply chain, either domestically or essentially create
Speaker 1: these partnerships around the world. Now, obviously these companies can
Speaker 1: work to secure extra supplies of nickel or cobalt or
Speaker 1: lithium what else can they do beyond that? UM, so
Speaker 1: I think two or three other interesting things they can do.
Speaker 1: The first one is UM they can use different battery
Speaker 1: chemistryes to reduce dependence on one specific material or metal.
Speaker 1: For example, Tesla has been using more of lithium and
Speaker 1: fosters batteries which require less nickel, although they have lower
Speaker 1: range and lower performance. UM. There is a move towards
Speaker 1: using batteries which have hired magnees content and less nickel content. UM.
Speaker 1: The second thing that would be done is building more
Speaker 1: charging infrastructure. If you build more charging infrastructure, you need
Speaker 1: batteries that slightly lower range as well. Perhaps. And the
Speaker 1: third thing that could be done is recycling. So UM
Speaker 1: from twenty onwards you will have a lot of batteries UM,
Speaker 1: large volume of batteries that would be available for recycling,
Speaker 1: and we probably need to make yourse oft time. All right,
Speaker 1: she Saiitia, thank you for that context. They're head of
Speaker 1: Commodities and Energy Research at Bloomberg and welcome back to
Speaker 1: Bloomberg Technology, Emily Jack in San Francisco. This week, I
Speaker 1: spoke exclusively with Uber CEO Dark Causa Shocking about the
Speaker 1: company's plan to quote out Amazon, Amazon, take a listen.
Speaker 1: I think that Amazon has is an incredible company and
Speaker 1: no one is ever going to replace Amazon. But we
Speaker 1: can essentially use our technology local logistics capabilities to power
Speaker 1: the local merchant or restaurant to deliver anything within an hour,
Speaker 1: which we think is a delightful experience causa. He says,
Speaker 1: Uber's delivery business could eventually grow to be bigger than rides,
Speaker 1: the idea being that it doesn't deliver just food, but
Speaker 1: potentially anything. This coming at a time though, when other
Speaker 1: delivery services are cutting back, instat Carts slashing its valuation
Speaker 1: and the information reporting go Puff plans to cut hundreds
Speaker 1: of employees. Here to discuss. Andrea Walney, general partner at
Speaker 1: Manhattan Venture Partners. And Andrea, you're an investor in instat
Speaker 1: cart What do you make of of instat carts move here?
Speaker 1: Should we be worried about its business? Thanks so much, Emily,
Speaker 1: So overall, we're really not worried. I think generally this
Speaker 1: act of actually reducing the valuation is very much so
Speaker 1: based on the value of the stock options that the
Speaker 1: company is issuing to their employees today and any incoming employees.
Speaker 1: We think this move is really smart for the hiring
Speaker 1: and recruitment of new employees, because generally what employees want
Speaker 1: to see is the upside upside in their stock right.
Speaker 1: They want to see that there's going to be value
Speaker 1: accruel once they joined the company. So overall, we think
Speaker 1: that this is a move that made headlines because they
Speaker 1: were one of the first companies to do it, amiss
Speaker 1: all the volatility in the market, and we just assume
Speaker 1: that many and many other companies are going to join
Speaker 1: suit in this. But doesn't it mean that anyone who
Speaker 1: exercise their shares that the original valuation thirty nine billion
Speaker 1: dollars would be underwater now? Well, the folks that did
Speaker 1: exercise their stock options are probably there to hold on
Speaker 1: and see where the company goes as per their I
Speaker 1: p O and the plans there. So overall, with the
Speaker 1: lack of liquidity now leading up to the I p O, yes,
Speaker 1: those employees just have to bear with us and hold on.
Speaker 1: But generally the tax treatment between the four owner and
Speaker 1: A which is the valuation, right, that's the addit valuation
Speaker 1: that every company who is private has to do once
Speaker 1: a year at least between that spread of the foreigner
Speaker 1: and A and where they actually sell the stock is
Speaker 1: what's really meaningful. So if we reduce that valuation price,
Speaker 1: it means that they can have more upside leading up
Speaker 1: to what they ultimately sell the stock. At meantime, we
Speaker 1: just saw go Puff planning to cut hundreds of employees
Speaker 1: according to a report from The Information cutting forty million
Speaker 1: dollars in cost three of their global workforce. Do you
Speaker 1: think we're going to see more companies slashing their valuations
Speaker 1: like Insta cart and potentially going through these mass layoffs. Yeah, Emily, so,
Speaker 1: I truly think that we're about to see a one
Speaker 1: eighty reverse of the Great Resignation. I think many companies
Speaker 1: are using this opportunity of the volatility in the market
Speaker 1: to reduce spend, reduce opex, increase their margins, get to profitability,
Speaker 1: and show both investors private and public that they can
Speaker 1: succeed as they grow, right, And so we do think
Speaker 1: that we're going to see a lot of companies. You know, further,
Speaker 1: even though we are expecting the opposite of the Great Resignation,
Speaker 1: we expect the talent pool and the recruitment landscape to
Speaker 1: be just as competitive as it ever was. And so
Speaker 1: with that being said, companies need to find really compelling
Speaker 1: ways to recruit and retain, and so with that, they
Speaker 1: are going to be looking for ways to show the
Speaker 1: talent pool that's out there that they can have an
Speaker 1: increase in the value of the stock they're getting issued.
Speaker 1: So we think there's gonna be a lot more of
Speaker 1: the layoff and news coming out. We expect a lot
Speaker 1: of companies are having conversations with the board of directors
Speaker 1: to say, what should we do around our valuation, should
Speaker 1: we bring it back down to real levels, and then
Speaker 1: how should we plan ahead for our hiring plans going
Speaker 1: into the rest of the year. Generally, companies like insta Car.
Speaker 1: Last year we're really really focused on profitability and broke
Speaker 1: even because of that, and now companies like insta Car
Speaker 1: are focusing on top line continuous sing the focus on growth,
Speaker 1: and then furthermore really just focusing on that reduction of
Speaker 1: um spend across the board. So profitability is key, margins
Speaker 1: are key, and retaining talent from the executive level on
Speaker 1: down is also incredibly important. Now public companies in this
Speaker 1: space also seeing their stocks slide. Uber and door Dash,
Speaker 1: for example, down here today, and I'm curious what you
Speaker 1: think of Uber's vision here to be the future of
Speaker 1: driving retail. That you know, the idea that they could
Speaker 1: deliver something faster, for example, than Amazon. And if you
Speaker 1: think that's gonna work, well, Uber certainly has the fleet
Speaker 1: capacity to be capacity to do so. But these days
Speaker 1: their fleet is suffering. So I do think they're going
Speaker 1: to have to uh revitalize the way that they really
Speaker 1: incentivized the driver base and furthermore increase their own margins
Speaker 1: because it's not like Uber has always been the company
Speaker 1: to who that they understand how to focus on unit economics.
Speaker 1: So generally, though they have the fleet and logistics down, um,
Speaker 1: it's not there to say that they've proven themselves as
Speaker 1: it relates to being able to scale the logistics side
Speaker 1: of the business. So I think overall they have a
Speaker 1: fighting chance. But Amazon has always been the clear winner
Speaker 1: in this category, and it's investing a lot in this space.
Speaker 1: So I think from a bet perspective, we're looking at
Speaker 1: where Uber can sit, but overall Amazon has always been
Speaker 1: the leading category winner. Here isn't a cautionary tale here, Andrea,
Speaker 1: for investors and for employees and perspective employees, I mean,
Speaker 1: we all thought valuations were getting pretty hot towards the
Speaker 1: end of last year, and now you know, at least
Speaker 1: as you're saying, we're going to see a lot of
Speaker 1: companies bring those numbers down. Yes, So overall, I think
Speaker 1: the cautionary tale to see here is that these companies
Speaker 1: that are raising money from big crossover funds, and when
Speaker 1: I say crossover, I mean the funds that are the
Speaker 1: mutual funds, they're the hedge funds that invest in both
Speaker 1: private and public companies, and then they really hold onto
Speaker 1: those positions once the company goes public. Those crossover investors
Speaker 1: have a war chest of a ton of capital to deploy,
Speaker 1: and their risk profile is very very different than a
Speaker 1: traditional venture investor or retail investor. So what I say
Speaker 1: to investors is that we have to really look out
Speaker 1: to say for the late stage companies that are raising
Speaker 1: money um and furthermore just sitting on their own war
Speaker 1: chest of a balance sheet. Those companies really raised a
Speaker 1: lot of rounds from those crossover investors who can weather
Speaker 1: the storm and plan on holding onto those positions and
Speaker 1: setting up arbitrage opportunities long after the company goes public,
Speaker 1: which is a very different strategy than a traditional venture investor. Right,
Speaker 1: traditional venture investors. Their role is primarily to distribute and
Speaker 1: cash out once a company has a lack of UH
Speaker 1: and the lack of expires. And so I think that
Speaker 1: tail is that, you know, measure the risk profile, measure
Speaker 1: risk tolerance, you know, battened down the hatches. But furthermore,
Speaker 1: we're always going to be looking for companies in the
Speaker 1: venture community that are investing into growth, increasing their margins,
Speaker 1: and showing that they can become profitable if and when
Speaker 1: they wanted to be. So are you saying, Andrea, that
Speaker 1: some of these big crossover funds, I'll just throw a
Speaker 1: name out there, like Tiger Global, are they driving up
Speaker 1: valuations in an unhealthy way? I think that overall, Tiger
Speaker 1: Global and many other businesses that are operating similar to
Speaker 1: theirs in the venture and crossover space were the ones
Speaker 1: that have had war chests that are sizeably larger than
Speaker 1: most traditional venture funds, and so in the last few
Speaker 1: years they've proven that they could be very, very competitive
Speaker 1: because their strategy is so focused on arbitraging opportunities once
Speaker 1: companies go public. So overall, I don't think anything Tiger
Speaker 1: has been doing from an activity perspective has been predicated
Speaker 1: on them trying to drive up valuations. They've been very
Speaker 1: competitive for that reason. But for now it seems like
Speaker 1: groups like Tiger and others are very much so focused
Speaker 1: on making sure that they kind of sit back see
Speaker 1: where things pan out, and they're not as focused on
Speaker 1: driving up valuations or putting all their bets in the
Speaker 1: private markets in recent days. All Right, Andrea well Night,
Speaker 1: general partner in Manhattan Venture Partners, will be watching to
Speaker 1: see if some of the stuff you've predicted comes true.
Speaker 1: Coming up, the future of decentralized wireless, We're gonna talk
Speaker 1: with Noble Labs about their recent two hundred million dollar
Speaker 1: funding round and how they plan on using that to
Speaker 1: expand their crypto wireless network. That is next this is
Speaker 1: bloomer Halium, the creator of a blockchain that powers a
Speaker 1: d centralized wireless network, just announced a two hundred million
Speaker 1: dollar rays in funding lad by Agriglobal Andagies and Horror.
Speaker 1: It's valuing them at one point to billion dollars. Helium
Speaker 1: also changing its name to Noval Labs. I want to
Speaker 1: bring in Noval Labs CEO Amir Haleem for more on
Speaker 1: all of this as part of our crypto rapport. So
Speaker 1: walk us through how a crypto wireless network actually works. Yeah.
Speaker 1: So I think that the really really the easiest way
Speaker 1: to think about what Helium does is it empowers ordinary people,
Speaker 1: everyday people to participate in the telecom business. Right, this
Speaker 1: is the most entrenched industry that's almost impossible for like
Speaker 1: a regular person to participate in. And what Helium is
Speaker 1: really pioneered is the ability for really everyday people to
Speaker 1: become part of the telecom business with this sort of decentralization,
Speaker 1: in this crypto twistedment. So everyday participants by a little
Speaker 1: piece of harnorware called the hotspot. You can think of
Speaker 1: it as a miniature cell tower um, and they earn HNT,
Speaker 1: which is the Helium token for providing network coverage that
Speaker 1: other people can use. That's that's sort of the simplest
Speaker 1: word you think become it does. What are some of
Speaker 1: your first use cases and customers. Yeah, so there's been
Speaker 1: some interesting ones. I mean, the network today is focused
Speaker 1: on the Internet of Things, right, which is most these sensors,
Speaker 1: small devices that are battery powered, and so we've seen
Speaker 1: everything from drone delivery, so packages being delivered by drones
Speaker 1: that are orchestrated through the helium network, precision agriculture, things
Speaker 1: like wildfire monitoring, connected rat traps. You know, there's the
Speaker 1: number of use cases extremely broad, and IoT as a
Speaker 1: category has been one that has really lacked a network
Speaker 1: that supports the kinds of applications that we're now seeing
Speaker 1: getting built. So it's we're really starting to see like
Speaker 1: the transformation of an idea which was IoT ten years
Speaker 1: ago to to the reality, which is people and businesses
Speaker 1: starting to deploy sensors that solve the real problems. So
Speaker 1: is the goal here to take share from major wireless
Speaker 1: carriers and how do you plan to do that? You know,
Speaker 1: I think the goal really is to try and build
Speaker 1: an alternative to what we have today, Like the the
Speaker 1: Internet or access to the Internet has been something which
Speaker 1: has been so difficult, uh to separate from a sort
Speaker 1: of small constituent of of companies that own access to
Speaker 1: the Internet. It's incredibly difficult to to decentralize that way
Speaker 1: due to so many different modes, whether it's sectrum, whether
Speaker 1: it's physical access. UH. And so what we see now
Speaker 1: is uh the sort of convergence of all these different technologies,
Speaker 1: including crypto, that makes it possible now for us to
Speaker 1: provide an alternative that is completely open, that is very private,
Speaker 1: that is very secure, that is really owned by the people,
Speaker 1: rather than a small group of companies that typically haven't
Speaker 1: stranglehold in this industry. Now, given your fundraising announcement today
Speaker 1: two hundred million dollars, including from Tiger Global, we were
Speaker 1: just having a conversation earlier with Andrea Walnett Manhattan Venture Partners,
Speaker 1: who maintains that some of these bigger funds like Tiger
Speaker 1: Global are driving up valuations because they simply have so
Speaker 1: much money to plow into startups. What do you make
Speaker 1: of that critique and do you think it applies at
Speaker 1: all to Nova? If you look at the telecom industry,
Speaker 1: I mean, it is one of the few industries that
Speaker 1: is valued and trillions of dollars, right, and so the
Speaker 1: opportunity here is so large that I think it is
Speaker 1: quite difficult to ascribe evaluation to it. Right. It's obviously
Speaker 1: obviously I'm biased, and I'm not going to say that
Speaker 1: we're overvalued or anything like that, but I think the
Speaker 1: opportunity that we're looking at is so big and so unique, right.
Speaker 1: I think Helium is one of the few crypto projects
Speaker 1: that has a real tangible like, you know, really world
Speaker 1: use case that everyone can understand, right when people get
Speaker 1: to participate and become basically a little a miniature cell tower, right,
Speaker 1: And so if you think about how that grows. You know,
Speaker 1: today the network is focused mostly on IoT, but as
Speaker 1: you think of the expansion, and there are now something
Speaker 1: like twenty thousand five G hotspots being deployed, and you know,
Speaker 1: we expect there to be other types of wireless network
Speaker 1: that get built on top of Helium too, whether that's
Speaker 1: Qui Fi, Bluetooth six G, or any other future technology. Meantime,
Speaker 1: we are seeing companies more broadly slash evaluation plan for layoffs.
Speaker 1: We're in the middle now of of what seems to
Speaker 1: be a market downturn. How are you you know, are
Speaker 1: you changing your strategy at all? Are being more conservative
Speaker 1: with your cash as you navigate these macroeconomic conditions? You know,
Speaker 1: I think we've generally been the believers in small teams
Speaker 1: that that can do big things. And you know, today
Speaker 1: we are sixty or so employees and looking to grow um.
Speaker 1: But you know, I think the philosophy of the company
Speaker 1: has always been that small teams can do lots of
Speaker 1: big things. And that has allowed us to be very
Speaker 1: flexible in different economic conditions. Right we are looking to
Speaker 1: add two thousand employees and put ourselves in dangering that way. So,
Speaker 1: you know, I think there's a lot of pressure on
Speaker 1: startups to to show growth in multiple directions, and one
Speaker 1: of those is is head count um and so we're
Speaker 1: we've always been careful about that and I think that
Speaker 1: will serve as well going forward. Because you built this
Speaker 1: culture of trying to be disruptive this play, and as
Speaker 1: a result of being able to use crypto economics, you
Speaker 1: really get to build an entire community behind you. You know,
Speaker 1: So the size of the actual founding team or the
Speaker 1: core team matters a hull of a lot less because
Speaker 1: you've got a six hundred thousand plus spot hosts who
Speaker 1: are really the ones that actually running the network, who
Speaker 1: owned the network, and that's you know, those are the
Speaker 1: numbers that matter rather than than our individual headcounts. All right, interesting,
Speaker 1: Amir Helleen, CEO of newly branded Nova Labs, thank you
Speaker 1: for joining us. Apple is developing its own payment processing
Speaker 1: technology and infrastructure for future financial products. According to Bloomberg sources,
Speaker 1: This as the iPhone maker is trying to reduce its
Speaker 1: reliance on outside partners over time. Let's bring in Bloomberg's
Speaker 1: Mark German for this scoop And why Mark, what's the
Speaker 1: plan here? The plan is to bring the underlying infrastructure,
Speaker 1: the underlying processing, underlying you know, development process for Apple's
Speaker 1: future fintech products, things beyond Apple Pay, things beyond the
Speaker 1: Apple card and the Apple cash card. Will Apple in
Speaker 1: house right right now, as we know, Apple has a
Speaker 1: few partners in the fintech space, Goldman Sachs, Core Card,
Speaker 1: Green Dot Bank, and a few others. They want to
Speaker 1: bring the underlying technology that they leverage from those partners
Speaker 1: in house for the next suite of Apple financial services.
Speaker 1: So who have this hurt definitely would hurt core Card right,
Speaker 1: every credit card, most financial products, they require what's known
Speaker 1: as a core processor or is it payment processor. That's
Speaker 1: the engine that allows banks to either approve or reject
Speaker 1: a transaction. Now, the core processor core Card in this
Speaker 1: case does a lot more. They handle disputes, they handle
Speaker 1: parts of customer service through Goldman Sachs, they handle other
Speaker 1: underlying infrastructure for the financial system. And you saw their
Speaker 1: stock dropped, I believe more than ten percent this morning
Speaker 1: on the news of the story. That's because investors in
Speaker 1: the company and analysts know how important core Card is
Speaker 1: to the Apple Card and Golden Sex. Now Apples building
Speaker 1: their own full on replacement for the work done by
Speaker 1: core Card, meaning core Card won't be Apple's partner in
Speaker 1: all likelihood in future fintech products. Apple will be going
Speaker 1: at it alone. So this will be Apple's biggest for
Speaker 1: a yet into the world of finance. I mean, it
Speaker 1: sounds like it's not going to be easy. Are they
Speaker 1: going to be able to pull this off? This is
Speaker 1: a multi year effort with many engineers and other people
Speaker 1: across Apple in all sorts of teams across the company.
Speaker 1: They're investing hundreds of millions of dollars, if not billions
Speaker 1: in this. You saw an acquisition recently called Credit Kudos
Speaker 1: from the UK. Now that company has technology to help
Speaker 1: determine credit scores. That's part of Apple's push. Right This
Speaker 1: is all part of the same thing because Apple will
Speaker 1: for the first time also be working with credit bureaus
Speaker 1: to make lending decisions and approval decisions for fintech product
Speaker 1: applications for the first time. Right now, they go through
Speaker 1: core Card and Golden sacks to work with the transunions
Speaker 1: and Equifaxes of the world. Now they're trying to build
Speaker 1: that on their own as well. So this is a major,
Speaker 1: major effort, very much underlying the whole future plans Apple has.
Speaker 1: And you know there's a few services Apple has in
Speaker 1: the works right now that go well beyond Apple Pay.
Speaker 1: They're working on a buy now later program actually to
Speaker 1: buy now later programs to compete with the firm and
Speaker 1: others that will launch, you know, this year and next.
Speaker 1: And you're also seeing them work on a hardware subscription
Speaker 1: service which also is going to rely on this new platform,
Speaker 1: particularly for subscribing monthly to an iPhone. Quickly, when can
Speaker 1: we expect the first product that will rely on this
Speaker 1: new system, So buy now, Pay Later will be the
Speaker 1: first product, and that will launch either this year or next.
Speaker 1: All right, Mark German with get another scoop. Thanks so much, Mark,
Speaker 1: as always, thanks, and that does it for this edition
Speaker 1: of Bloomberg Technology. You don't forget to check out our podcast.
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Speaker 1: catch it every day. I'm Emily checking in San Francisco.
Speaker 1: This is Bloomberg,