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Speaker 1: From Marhart where Innovation, Money and Power.

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Speaker 2: Collie in Silicon Valley, NBN.

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Speaker 3: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

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Speaker 4: And Caroline Heinder Bloomberg's world headquarters in New York and

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Speaker 4: I'm d Ludlow in San Francisco.

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Speaker 2: This is Bloomberg Technology coming up.

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Speaker 4: Look Spotify it slashes its workforce by seventeen percent. Is

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Speaker 4: amit the company's steepest job cuts this year. Will break

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Speaker 4: down the streaming services, push to costs and drive profitability.

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Speaker 2: Plus, the crypto rally gains steam as Bitcoin tops forty

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Speaker 2: two thousand US dollars for the first time since April

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Speaker 2: of twenty twenty two. We'll discuss what it means for

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Speaker 2: the digital currency ecosystem in today's VC Spotlight, and.

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Speaker 4: We sit down with the oculist creator Palmer Lucky as

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Speaker 4: his defence technology startup, Andreill veils a tiny, reusable fighter

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Speaker 4: jet to blow up drones. All that and so much

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Speaker 4: more ahead, let's get into these markets. Look, we are

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Speaker 4: in sell off mode. We're just hearing from Guy and

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Speaker 4: Alex that basically we're just getting back to the levels

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Speaker 4: we're out on Thursday. Such has been the drive higher

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Speaker 4: in risk assets of late, we're off by one point

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Speaker 4: one percent. Now we know mainly just reassessing how much

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Speaker 4: we've a run up already, but also really with the

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Speaker 4: direction of travel for the Federal Reserve and a lot

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Speaker 4: of the jobs data that.

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Speaker 2: We're learning this week.

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Speaker 4: Two year yield currently up by some ten basis points,

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Speaker 4: so clearly seeing a sell off in bonds and stocks

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Speaker 4: Blue mug Donar Index on the higher side by some

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Speaker 4: five ten percent. After we've seen such weakness in the

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Speaker 4: US dollars so far this year, let's move on because

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Speaker 4: the strength of the US dollar not out matching the

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Speaker 4: strength in bitcoin and ED. We're going to dwell on

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Speaker 4: this a little bit later in the show much more.

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Speaker 4: But the fact that we are now piercing above forty

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Speaker 4: two thousand at one point in earlier training, now at

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Speaker 4: forty one and a half thousand, let's call it. We

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Speaker 4: know the driving force behind all of this. Will we

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Speaker 4: get in spot bitcoin ETF come January? Will, of course

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Speaker 4: the harving process next year draw demand yet further, But

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Speaker 4: ultimately this is about risk asset demand as well, isn't it.

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Speaker 2: Yeah, we call it our risk asset of choice, and

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Speaker 2: it's interesting that on days like today, where equities are

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Speaker 2: broadly lower, bitcoin is higher, but so are crypto related stocks.

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Speaker 2: And I guess that there are two rationales, right. It's

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Speaker 2: a proxy for Wall Street to get some exposure to

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Speaker 2: cryptocurrencies like bitcoin without investing in them directly by investing

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Speaker 2: in stocks that are relevant to it. Or the other

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Speaker 2: way of looking at it that if the thing that

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Speaker 2: is important to these equities does well, in this case bitcoin,

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Speaker 2: then they do well as well. And you are seing

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Speaker 2: some pretty outsized moves. I mean, these are big moves

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Speaker 2: right on these single names on a day where equities

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Speaker 2: are lower.

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Speaker 4: And I think perhaps we've got a little bit used

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Speaker 4: to a lack of volatility, dare we say it? In

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Speaker 4: broader bitcoin prices, we were used to things flinging about

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Speaker 4: by ten double digit percentage points. But on the day, well,

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Speaker 4: we have been only up about five six percent, But

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Speaker 4: that feels a big move. And I think these numbers,

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Speaker 4: we're still way off the sixty nine thousand dollars level

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Speaker 4: that we had in previous highs, but we were back

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Speaker 4: at that level that we saw in Eightril twenty twenty two,

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Speaker 4: prior to the Taro Luna Debarkle and all of this

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Speaker 4: just slowly rebuilding confidence really in the ecosystem.

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Speaker 2: Yeah, and we've had guests on this show saying sixty

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Speaker 2: thousand dollars next year, one hundred thousand dollars maybe next year.

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Speaker 2: Seeing is believing, I think when it comes to bitcoin.

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Speaker 2: But we're excited about twenty twenty four. The other top

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Speaker 2: story that we've got to get back to, Carrie is

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Speaker 2: Spotify reducing its workforce by seventeen percent. That's fifteen hundred jobs.

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Speaker 2: This is the company's biggest cuts yet this year. They've

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Speaker 2: done three trims. I want to bring in Bloomberg's actually

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Speaker 2: calm and give us the details. Actually, what did Spotify

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Speaker 2: say about the timing and rationale for cutting fifteen hundred employees.

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Speaker 5: Yeah, so today Spotify's CEO Daniel Eck put out a

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Speaker 5: blog post sort of explaining the cuts. He said, basically,

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Speaker 5: these decisions were going to have to be made, possibly

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Speaker 5: over the next couple years, and he decided to just

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Speaker 5: rip the band aid off and cut a bunch of

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Speaker 5: people all at once. He essentially said that yes, they've

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Speaker 5: cut operating costs quite a bit, but not enough, and

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Speaker 5: that they needed more people to go and more people

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Speaker 5: to focus on their core mission, which is building for

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Speaker 5: creators and consumers.

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Speaker 4: Yeah, I think just realigning the fact that too many

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Speaker 4: people were ultimately building things that weren't core to the

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Speaker 4: ultimate mission of building profitability or building margin, and that

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Speaker 4: seems to be what analysts like so much at the moment, Ashley.

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Speaker 4: And it's interesting that a lot of them saying eventually

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Speaker 4: margin is going to be buoyed by what have been

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Speaker 4: some really outsized commitments to the world of well podcasting

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Speaker 4: in particular.

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Speaker 5: Yes. Yeah, so the story of Spotify really is that

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Speaker 5: they since twenty nineteen, have committed over a billion dollar

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Speaker 5: to the podcast world. They bought studios, they bought creation technology,

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Speaker 5: they bought a hosting service, and really what we've seen

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Speaker 5: over the past year is just a total backtrack on

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Speaker 5: that business. And I imagine as we learn more about

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Speaker 5: today's clubs, we'll hear about how that impacts their podcast

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Speaker 5: business as it is.

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Speaker 2: Yeah, it's interesting. Loads of technology companies have gone through

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Speaker 2: this the mic grow focus on profit. The other metric

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Speaker 2: you can look at is say, well, actually, Spotify is

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Speaker 2: on track for an astonishingly good year one hundred million

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Speaker 2: new subscribers or users. It's going to add based on

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Speaker 2: how it's done so far. What is the overall health

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Speaker 2: score for Spotify actually based on your reporting.

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Speaker 5: Yeah, I mean, I think that's what's very puzzling here,

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Speaker 5: right is they've had amazing growth from a monthly average

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Speaker 5: user perspective. They do have more free users than subscription

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Speaker 5: so that's an issue. You know, they want to be

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Speaker 5: able to monetize those subscriptions more. But broadly speaking, they

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Speaker 5: continue to grow, which is pretty incredible. I think they

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Speaker 5: just have to figure out what is going to be

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Speaker 5: the way that they make more money because they keep

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Speaker 5: having to pay these music rights holders, which makes a

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Speaker 5: ton of sense, but they also need to find other

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Speaker 5: revenue opportunities. So we've seen price increases, we've seen them

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Speaker 5: cut costs, we've seen them move into podcasting, and then

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Speaker 5: very recently they moved into audiobooks. So maybe that'll be

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Speaker 5: magic bullet. I don't know.

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Speaker 4: And all of this at a time where Daniel let

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Speaker 4: does speak about the macro realities as well. He talked

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Speaker 4: about the fact that look, money's more expensive than it

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Speaker 4: used to be. Boring coss have been on the rise.

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Speaker 4: This is perhaps just really trying to instead of what

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Speaker 4: we started to talk these micro cuts that are happening

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Speaker 4: at tech companies at the moment, he's just, as you say,

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Speaker 4: ripping the band aid and just showing his intent to

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Speaker 4: still have this year of efficiency to coin a metaphrase.

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Speaker 5: Yeah, And I don't know if we knowed it at

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Speaker 5: the top, but this is the third round of cuts

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Speaker 5: this year. So they did a significant chunk in January,

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Speaker 5: they did another chunk in June, which was primarily the

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Speaker 5: podcast team. And yeah, now here we are with the

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Speaker 5: biggest cut that they've made all year. So overall, over

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Speaker 5: two thousand employees will have lost their jobs.

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Speaker 2: Yeah, I like your point on users. I mean, I'm

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Speaker 2: on the premium Family monthly subscription which I pay, and

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Speaker 2: I have some other family members on there which do

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Speaker 2: not pay. But I guess the free user points Big

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Speaker 2: Bloomberg's actually come and busy night early morning for you,

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Speaker 2: Thank you so much. Are more tech layoffs and other

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Speaker 2: stories happening elsewhere. Twilio cutting five percent of its workforce,

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Speaker 2: it's third major headcount reduction in order to reach profitable growth.

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Speaker 2: The cuts mostly affected salespeople for Twilio's consumer data platform

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Speaker 2: and contact center software. That's according to a memo from

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Speaker 2: the CEO, Jeff Laws and the company has shed more

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Speaker 2: than three thousand workers since September twenty twenty two, which

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Speaker 2: is about one third of its total workforce in that time.

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Speaker 4: Core Weave it's a cloud computing provider that's among the

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Speaker 4: hottest startups in the AI race. It says it's close

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Speaker 4: to minority stake sale to investors led by Fidelity, others

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Speaker 4: including as you can see JP Morgan Asset Management. We're

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Speaker 4: also gotting Zoom Ventures among them, all participating. They can

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Speaker 4: transaction the values of the company that get this seven

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Speaker 4: million dollars acording to sources, well, we can get a

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Speaker 4: source very close to the deal now, none other than

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Speaker 4: the CEO core Weave, Mike and Trader. Is great to

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Speaker 4: have you on the show. Mic and extraordinary story really

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Speaker 4: of cour We've going from its origins. Well, you are

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Speaker 4: a commodities tradee or the space for crypto, you're doing

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Speaker 4: mining aneath and then of course you become a specialized

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Speaker 4: cloud AI provider. At what makes your offering different from

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Speaker 4: the more general purpose cloud providers out there.

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Speaker 6: Sure, First of all, thank you very much. It's great

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Speaker 6: to have an opportunity to speak with you. Topically a

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Speaker 6: very exciting day over here. Weave and my whole team

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Speaker 6: is very excited about these transactions as we go into

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Speaker 6: the end of the year, looking forward to really getting

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Speaker 6: off to next year in the same putting. So, to

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Speaker 6: answer your question, Creweed is a specialized cloud computing company,

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Speaker 6: and what we mean by that is we've made every

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Speaker 6: decision from the hardware stack all the way through the

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Speaker 6: software stack to really build a cloud that is specialized

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Speaker 6: to address the needs of companies that need massive scale,

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Speaker 6: paralyized computing. When we talk about that, we're really talking

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Speaker 6: about the three industries that we address. The first one

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Speaker 6: is media and entertainment, and so if you go to

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Speaker 6: see a Marvel, you know there's a good chance that

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Speaker 6: several of those studios will have rendered their images on

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Speaker 6: our infrastructure. The second one is basic science synthetic biology,

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Speaker 6: so think of that is like drug discovery and protein folding.

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Speaker 6: And then finally and most importantly right now obviously, is

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Speaker 6: the build out of infrastructure that is very very appropriate

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Speaker 6: for artificial intelligence and machine learning.

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Speaker 2: Mike, I keep hearing about core We've I have done

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Speaker 2: all year long about just the sort of booming growth

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Speaker 2: that you've experienced I think you started the year disclosing

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Speaker 2: you had three data centers online. Now I believe it's

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Speaker 2: somewhere between fourteen and eighteen. How have you been able

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Speaker 2: to move so quickly on the infrastructure side, Yeah.

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Speaker 6: You know, great teams all across our infrastructure internal to

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Speaker 6: the company, just an incredible coordination automation to allow us

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Speaker 6: to kind.

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Speaker 2: Of build and scale that.

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Speaker 6: We also have great relationships up through the supply chains

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Speaker 6: that have been so difficult for everyone to navigate. The

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Speaker 6: support from our partners all through the supply chain has

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Speaker 6: been incredible and unimers are correct, We've made a massive

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Speaker 6: push in terms of the number of data centers that

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Speaker 6: we are in. It puts us in a position to

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Speaker 6: be able to serve the largest, most important artificial intelligence

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Speaker 6: models that are being trained, that are being served in

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Speaker 6: the public right now, and it's very exciting. We've got

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Speaker 6: a lot more work to do, but definitely improving and

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Speaker 6: increasing our footprint every day.

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Speaker 2: One of those partners is in video. We're just showing

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Speaker 2: some of your key customers on the screen, but in

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Speaker 2: VideA is a tech partner as well, right, and my

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Speaker 2: understanding is that you're actually helping them. You yourselves to

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Speaker 2: build their own next gen supercompute. What can you tell

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Speaker 2: us about that project?

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Speaker 6: So, in Videos is one of the partner of ours.

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Speaker 6: They invested alongside Magnetar and K two in our B round,

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Speaker 6: which was where we raised four hundred and twenty million

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Speaker 6: dollars in April of this year.

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Speaker 1: It was.

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Speaker 6: A kind of massive step for us as we began

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Speaker 6: to accelerate our growth through the year, and so by

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Speaker 6: having a partner like in Vidia invest in the company,

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Speaker 6: it made it very clear to all of our partners

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Speaker 6: across the debt space, across the equity space that they

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Speaker 6: had looked at our infrastructure and were comfortable with the

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Speaker 6: way that we built it in order to deliver the

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Speaker 6: most performing configuration of the accelerated compute that is defined

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Speaker 6: by their GPU.

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Speaker 4: You've been raising money, whether it be equity or debt,

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Speaker 4: at quite a pace because of course what you're doing

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Speaker 4: needs a lot of money. Would you tap the public markets?

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Speaker 4: Would you think about going public as soon as twenty

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Speaker 4: twenty four?

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Speaker 6: So, as you said, we really made three different transactions

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Speaker 6: in the capital markets this year. We did the BE

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Speaker 6: round early on that was, as I said, a quandred

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Speaker 6: and twenty one million dollar raise. We came back and

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Speaker 6: we did a very very large debt facility that was

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Speaker 6: two point three billion dollars that was really dedicated to

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Speaker 6: purchasing the capital intensive infrastructure that's required. And then this

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Speaker 6: secondary transaction is the final transaction for us for the year.

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Speaker 6: We are not committed or having no real comment around

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Speaker 6: the concept of going into the public markets other than

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Speaker 6: to say that we are capital intensive business and that

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Speaker 6: we are going to need to continue to access capital

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Speaker 6: markets in the most efficient way possible, and as far

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Speaker 6: as that goes, all options are absolutely on table for

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Speaker 6: us as we look into the future.

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Speaker 2: Mike quickly, you've built on H one hundred and DGX,

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Speaker 2: but AMD's coming with mi I three hundred. Have you

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Speaker 2: looked at that?

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Speaker 6: Yeah, so we do. We spend a lot of time

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Speaker 6: researching all of the different silicon alternatives in the market.

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Speaker 6: Right now, our focus is on the H one hundred.

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Speaker 6: I would argue that, you know, as you look across

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Speaker 6: the AI space at large, their focus is on the

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Speaker 6: H one hundred. It's an amazing piece of silicon. It

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Speaker 6: does incredible things in terms of moving the AI space forward,

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Speaker 6: and so it's really been the majority of our effort,

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Speaker 6: but we do monitor all of the different silicon alternatives

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Speaker 6: that are out there that could potentially be integrated into

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Speaker 6: a provider like US COOL.

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Speaker 2: We've see Mike can transit greats. Catch up with you

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Speaker 2: setting minorities taking that company at a big valuation. Thank you.

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Speaker 2: Coming up here on Bloomberg Technology, former US Treasury Secretary

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Speaker 2: Larry Summers weighs in and what it means to be

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Speaker 2: a member of open AI's newly formed bulb. We're gonna

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Speaker 2: bring you those details next. This is Bloomberg Technology. Okay,

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Speaker 2: time for talking tech and first up. COMMA Secretary Gina

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Speaker 2: Romondo says if the US truly wants to stop China

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Speaker 2: from making cutting edge semiconductors, then her department is going

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Speaker 2: to need more funding. During its defense forum on Saturday,

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Speaker 2: Romondo also urged American chip companies to prioritize national security

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Speaker 2: over their revenue, and one of the chip making industry's

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Speaker 2: most valuable suppliers is sinking deeper into debt despite holding

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Speaker 2: more than ninety percent share of the silica used to

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Speaker 2: polish silicon wafers, Fuso Chemical, based in Japan, hasn't lifted

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Speaker 2: prices because it fears it would sky out its relationships

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Speaker 2: with customers like Samsung, Intel, and Taiwan Semiconductor. FUSO also

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Speaker 2: struggling to make its CAPEX targets. Plus, California's Privacy Agency

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Speaker 2: has drafted a set of rules They aim to give

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Speaker 2: residents more agency over how their personal data is used

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Speaker 2: by automated tools. If adopted, the proposal would affect how

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Speaker 2: tech companies develop AI, which relates heavily on data to

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Speaker 2: train itself. Board members will discuss the draft on Friday,

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Speaker 2: though enforcement isn't likely to start anytime.

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Speaker 4: Seeing Caroline Let's stick on AI ed because the former

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Speaker 4: US Treasury Secretary Larry Summers, well, he's hoping to get

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Speaker 4: settled into his new role as a board member of

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Speaker 4: the so called interim Board of Open AI, of course,

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Speaker 4: the key AI startup. He shared his thoughts on the

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Speaker 4: matter in bluemog Television's On Wall Street week A, David weston,

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Speaker 4: take a listen.

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Speaker 1: This was something that was extraordinarily important. You know, no

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Speaker 1: one could be certain whether this is a once a

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Speaker 1: decade technology, at once a peth century technology, at once

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Speaker 1: a century technology, at once a millennium technology. No one

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Speaker 1: can know that for sure, but it sure looks like

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Speaker 1: it's awfully important to develop rapidly and safely and to

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Speaker 1: disseminate effectively and well. So when I was offered an

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Speaker 1: opportunity to be part of contributing to that, overseeing to

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Speaker 1: make sure that that was effectively done, and to do

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Speaker 1: it working with some very great people, I thought it

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Speaker 1: was a real opportunity and I was glad to do it.

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Speaker 3: I don't want to take anythway from your technological expertise,

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Speaker 3: but what you just said safely strikes me as probably

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Speaker 3: part of what you're going to be focused on, and

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Speaker 3: that gets to questions of governance about how you handle

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Speaker 3: this technology wherever it's going and how a powerful may be.

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Speaker 3: Do you have an overall sense of what you need

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Speaker 3: to do to govern it to get this safely part right?

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Speaker 1: You know, David, I've been on the job two days

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Speaker 1: and they're going to send me the onboarding packet for

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Speaker 1: the board on Sunday. So I shouldn't be saying too

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Speaker 1: much at all because I don't know enough. Here's some

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Speaker 1: things I think I know. I think I know that

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Speaker 1: a company like this has to be prepared to cooperate.

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Speaker 1: Doesn't mean always agree with but cooperate with key government

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Speaker 1: officials on regulatory issues, on national security issues, on development

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Speaker 1: of technology issues. I think I know also, and this

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Speaker 1: is integral to the structure of open AI, where the

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Speaker 1: for profit entity is itself a creature of a not

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Speaker 1: for profit entity, that this needs to be a corporation

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Speaker 1: with a conscience, and that we need to be always

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Speaker 1: thinking about the multiple stakeholders in the develop into this technology.

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Speaker 1: And as a board member, that will be part of

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Speaker 1: my responsibility working with other board members to.

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Speaker 2: Make that certain.

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Speaker 1: You know, my colleague at Harvard Lake, colleague Ken Galbraith,

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Speaker 1: said that conscious is the knowledge that someone is watching,

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Speaker 1: and I think it's the responsibility for everybody involved in

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Speaker 1: this to be thinking very carefully always about both opportunities

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Speaker 1: and uncertainties and to make sure that those are balanced

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Speaker 1: in the best way that's possible.

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Speaker 2: That was former US Treasury Secretary Larry sum Is sitting

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Speaker 2: down with Bloomberg's David Weston. We should also know that

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Speaker 2: Larry Summers is a Harvard University professor and a paid

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Speaker 2: contributor to Bloomberg TV and Will Street. We now as

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Speaker 2: we keep an eye on the situation with the Israel

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Speaker 2: Hamas Wall. The situation is also one that's been hard

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Speaker 2: to manage online. TikTok is having a hard time moderating

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Speaker 2: deep fake videos of her mass victims and other private citizens,

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Speaker 2: even though these videos violate their content moderation policies, which

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Speaker 2: ban AI generated videos of private citizens and miners. And

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Speaker 2: yet these videos are racking up thousands to millions of views.

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Speaker 2: I want to bring in Bloomberg Alex Brinko, who's been

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Speaker 2: writing about this this morning on Bloomberg. That is the struggle.

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Speaker 2: They're in contravention of the policy, but they're being seen

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Speaker 2: by millions, Alex. Absolutely.

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Speaker 7: And in the days after the October seventh attack by

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Speaker 7: Hamas in Israel on that music festival, I was looking

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Speaker 7: on the app for some of the names of some

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Speaker 7: of the believed victims, and some of the top videos

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Speaker 7: were AI generated videos that purported to and showed folks

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Speaker 7: like Shannie Luke, the twenty two year old now known

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Speaker 7: to be dead Germans. Really woman who you saw her face.

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Speaker 7: You saw an image like her standing in front of

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Speaker 7: folks in military garb holding guns, talking about her thoughts

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Speaker 7: on the attack, talking about her mother.

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Speaker 2: But this was not in.

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Speaker 7: Fact showne Luke. This was a digital resurrection, as experts

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Speaker 7: call it, where somebody went online used one of these

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Speaker 7: increasingly inexpensive tools to take some photos of her from

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Speaker 7: the Internet and turn it into an AI generated video.

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Speaker 7: Now these videos are against the content guidelines of TikTok.

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Speaker 7: Private citizens and miners are not allowed to be portrayed

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Speaker 7: in what TikTok calls synthetic media, which includes AI videos.

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Speaker 7: But that video wrapped up seven million views alone before

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Speaker 7: I sent it to TikTok and they took it down.

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Speaker 7: There are dozens of additional videos like this portraying both

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Speaker 7: victims of hamas portraying three year old murder victims in

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Speaker 7: a child's voice talking about how they died and the

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Speaker 7: injuries they sustained. And these videos are live and again

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Speaker 7: racking up thousands to millions of views and sometimes going viral.

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Speaker 7: So this is just an indicator to me of this

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Speaker 7: kind of early wave of w where AI is hitting

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Speaker 7: real people, and in particular people who, since they are deceased,

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Speaker 7: cannot actually come in and defend themselves when they see

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Speaker 7: their likeness out there on social media.

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Speaker 4: So deeply emotive, Alex and just to say what TikTok

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Speaker 4: has indeed come back. Of course parent company Byte Dancing,

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Speaker 4: Like how the platforms, TikTok continues to invest in detection

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Speaker 4: and transparency and in industry and partnerships to address this

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Speaker 4: rapidly evolving technology. But therein lies the issue. It is

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Speaker 4: a rapidly evolving technology. What do you think more could

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Speaker 4: be done internally by TikTok and indeed the other key

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Speaker 4: social media players out here.

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Speaker 7: They've already rolled out tools to ask users to opt

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Speaker 7: into label AI on videos that use AI, but most

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Speaker 7: of these videos Caroline that I came across didn't have

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Speaker 7: that label. So it's clear they need to be doing

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Speaker 7: more behind the scenes with their incredibly powerful algorithms, with

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Speaker 7: their human moderators to be picking up on this stuff.

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Speaker 7: But when I talk to experts, they're already raising a

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Speaker 7: flag not just in these digital resurrections, but also looking

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Speaker 7: forward to things like the election. Right now, a lot

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Speaker 7: of these videos have this kind of uncanny valley weird feel.

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Speaker 7: They're going to get more realistic and the apps are

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Speaker 7: going to need to do more to be able to

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Speaker 7: detect them.

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Speaker 4: Alex BLERINCA thank you so much for bringing us the

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Speaker 4: story from New York and San Francisco. This's a Bloomberg Technology.

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Speaker 2: Welcome back to Bloomberg Technology. Ed love Low here in

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Speaker 2: San Francisco.

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Speaker 4: Caroline hid and New York. Let's quit check on these

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Speaker 4: markets because actually we're having the biggest cell offon indeed

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Speaker 4: the NASAK one hundred in more than a month now

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Speaker 4: October twenty sixth we're seeing and we're off by more

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Speaker 4: than a percentage point. Now is this profit taking after

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Speaker 4: the run up that we've had. Of course throughout the

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Speaker 4: month of November, is in a little bit of caution

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Speaker 4: as perhaps we're baking a little bit too much dubbishness

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Speaker 4: into a federal reserve and the direction of travel for bonds.

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Speaker 4: But nevertheless, the sell off in stocks and a sell

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Speaker 4: off in bonds as well, the two year yields spiking

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Speaker 4: as well. I'm looking though at in spite of this

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Speaker 4: sell off in risk assets, one stands out bitcoin actually

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Speaker 4: powering up. We're up at one point in excess of

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Speaker 4: forty two thousand dollars and we're still on the higher

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Speaker 4: side despite the stronger US dollar today. You know, the

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Speaker 4: driving forces we're still talking about spot bitcoin ETF will

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Speaker 4: that we signed off in January will we get of course,

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Speaker 4: and what we know the harving's going to come next year,

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Speaker 4: but what will macro policy mean for bitcoin into twenty

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Speaker 4: twenty four. So still on the higher side, let's look

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Speaker 4: at some of the individual movers today. I'm having quick

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Speaker 4: look at Uber because well, maybe I've be including the

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Speaker 4: S and P five hundred. That's of course what's driving

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Speaker 4: it higher, up some five percent on the day. But

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Speaker 4: actually one of the only fields are green other than

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Speaker 4: cryptostocks and Uber. Let's go to some of the losers. Interestingly,

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Speaker 4: some inside selling happening and in video in November, in fact,

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Speaker 4: three hundred and seventy thousand shares were either sold or

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Speaker 4: filed to be sold by internal candidates of course executives

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Speaker 4: at the company. So we're currently see that off by

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Speaker 4: about two point four percent offter of course, a massive

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Speaker 4: run for twenty twenty three. Anady meta same that one

438
00:23:45,119 --> 00:23:47,040
Speaker 4: of course from Mark Zuckerberg himself first time in a

439
00:23:47,080 --> 00:23:49,600
Speaker 4: couple of years, ed that he's actually selling his own

440
00:23:49,680 --> 00:23:52,479
Speaker 4: company shares currently off by one point eight percent, as

441
00:23:52,520 --> 00:23:54,119
Speaker 4: you can see. But we've got a key company to

442
00:23:54,160 --> 00:23:55,160
Speaker 4: be talking about next.

443
00:23:55,760 --> 00:23:58,280
Speaker 2: Yep, and we're going private this time, Anderil is out

444
00:23:58,320 --> 00:24:01,720
Speaker 2: with a new autonomous air vehicle. Road Runner is akin

445
00:24:01,880 --> 00:24:05,960
Speaker 2: to a mini reusable fighter jet that blows up drones,

446
00:24:06,280 --> 00:24:08,280
Speaker 2: and the startup says the US will deploy it in

447
00:24:08,320 --> 00:24:10,919
Speaker 2: the field next year. Delighted to say joining US now

448
00:24:10,960 --> 00:24:14,840
Speaker 2: is Andrew founder Palmer Lucky down in Costa Mesa, California.

449
00:24:15,200 --> 00:24:20,080
Speaker 2: We've just showed images of it. But from a technology perspective, Palmer,

450
00:24:20,080 --> 00:24:22,080
Speaker 2: you've been working on this in secret and stealth for

451
00:24:22,119 --> 00:24:24,639
Speaker 2: a couple of years. What is new here? What is

452
00:24:24,640 --> 00:24:25,760
Speaker 2: the technology at play?

453
00:24:26,840 --> 00:24:26,959
Speaker 6: Well?

454
00:24:27,000 --> 00:24:29,840
Speaker 8: Roadrunner is an AI piloted autonomous air vehicle. It's got

455
00:24:29,840 --> 00:24:31,879
Speaker 8: a lot of cool features. It's powered by two twin

456
00:24:31,920 --> 00:24:35,200
Speaker 8: turbojet thrust vector and engines. It's very very fast, carries

457
00:24:35,200 --> 00:24:38,480
Speaker 8: a significant payload, It's very maneuverable. But the really cool

458
00:24:38,480 --> 00:24:41,119
Speaker 8: thing about it is that it can be reused. It's

459
00:24:41,160 --> 00:24:44,200
Speaker 8: actually a vertical takeoff and landing vehicle, and that means

460
00:24:44,440 --> 00:24:47,720
Speaker 8: that with certain payloads, you can go out there, perform

461
00:24:47,760 --> 00:24:51,560
Speaker 8: the mission, come back, reland, and then refuel, rearm and

462
00:24:51,680 --> 00:24:54,720
Speaker 8: use it again. With other payloads, Let's say a one

463
00:24:54,760 --> 00:24:57,840
Speaker 8: way warhead to go up against a large aircraft, I

464
00:24:58,080 --> 00:25:00,720
Speaker 8: can send a whole swarm of road Run is out there,

465
00:25:00,800 --> 00:25:03,639
Speaker 8: and only the ones that actually engage the target are consumed.

466
00:25:03,720 --> 00:25:06,359
Speaker 8: Everyone else can come home. And that allows you to

467
00:25:06,480 --> 00:25:09,320
Speaker 8: have much greater effective magazine depth and to use these

468
00:25:09,359 --> 00:25:12,640
Speaker 8: things in way that you can't use traditional one way missiles,

469
00:25:12,640 --> 00:25:15,280
Speaker 8: where once you launch it, it's gone, whether you launch

470
00:25:15,280 --> 00:25:17,119
Speaker 8: a bunch of them or one of them.

471
00:25:17,520 --> 00:25:19,560
Speaker 2: Palmer, we share with our audience at the top of

472
00:25:19,600 --> 00:25:21,960
Speaker 2: this segment. Actually Vance wrote about it in his story

473
00:25:22,280 --> 00:25:26,080
Speaker 2: that the US plans to put this to deployment next year, right,

474
00:25:26,200 --> 00:25:30,520
Speaker 2: But so much of the newsflow around drones has been

475
00:25:30,520 --> 00:25:32,960
Speaker 2: in the context of the war in Ukraine. You know,

476
00:25:33,080 --> 00:25:36,399
Speaker 2: drones are a key strategy for both sides, it seems.

477
00:25:36,760 --> 00:25:40,919
Speaker 2: Do you see road Runner being deployed in Ukraine in

478
00:25:40,920 --> 00:25:43,040
Speaker 2: the natime? What kind of talks have you had around that.

479
00:25:44,080 --> 00:25:45,639
Speaker 8: Well, I'll tell you this, I see it in my

480
00:25:45,760 --> 00:25:48,800
Speaker 8: mind's eye. But whether it goes there isn't up to me.

481
00:25:48,880 --> 00:25:50,800
Speaker 8: It's up to a bunch of people in the US government.

482
00:25:50,880 --> 00:25:54,160
Speaker 8: You know, the foreign military sales process, the transfer process

483
00:25:54,520 --> 00:25:58,080
Speaker 8: is government driven rather than company driven the vast majority

484
00:25:58,080 --> 00:25:59,600
Speaker 8: of the time. And we've been in Ukraine since the

485
00:25:59,600 --> 00:26:02,040
Speaker 8: second to the war, not just with our products, but

486
00:26:02,040 --> 00:26:04,240
Speaker 8: also sending people over there. I actually was in Kiev

487
00:26:04,280 --> 00:26:06,920
Speaker 8: to meet with Zelenski for the second time. I met

488
00:26:06,920 --> 00:26:08,960
Speaker 8: with him ahead of the war, because he was interested

489
00:26:08,960 --> 00:26:12,040
Speaker 8: in purchasing our technology to help secure their eastern border. Unfortunately,

490
00:26:12,240 --> 00:26:14,360
Speaker 8: that wasn't something we were able to make happen because

491
00:26:14,400 --> 00:26:18,840
Speaker 8: of those restrictions that I mentioned earlier. And so it's

492
00:26:18,880 --> 00:26:21,320
Speaker 8: certainly something that I would love to see personally.

493
00:26:21,960 --> 00:26:27,440
Speaker 4: What about demand from Europe in and of itself, Palma.

494
00:26:25,760 --> 00:26:27,840
Speaker 8: So, I mean, we have a lot of we have

495
00:26:27,880 --> 00:26:30,040
Speaker 8: a lot of European customers, and we do a lot

496
00:26:30,040 --> 00:26:32,320
Speaker 8: of work in particularly with the United Kingdom and the

497
00:26:32,400 --> 00:26:35,760
Speaker 8: UK Royal Marines especially, But you know, there's a little

498
00:26:35,800 --> 00:26:38,639
Speaker 8: bit of a tricky dynamic with some European countries. Some

499
00:26:38,720 --> 00:26:42,320
Speaker 8: European countries really see their defense apparatus as a way

500
00:26:42,440 --> 00:26:45,760
Speaker 8: to run a jobs program, and they are forcing US

501
00:26:45,800 --> 00:26:49,760
Speaker 8: companies like ANDROL to compete with their own domestic capabilities.

502
00:26:49,800 --> 00:26:52,159
Speaker 8: It might not be as advanced, might be years behind,

503
00:26:52,320 --> 00:26:54,760
Speaker 8: might be more expensive, but it's pretty hard for them

504
00:26:54,800 --> 00:26:58,240
Speaker 8: to get over the fact that they would be dropping

505
00:26:58,280 --> 00:27:01,159
Speaker 8: that internal program to buy some from an American company.

506
00:27:01,840 --> 00:27:04,600
Speaker 8: It's a difficult pill to swallow for some of these countries,

507
00:27:04,680 --> 00:27:08,000
Speaker 8: especially ones that do have what anyone would consider a

508
00:27:08,040 --> 00:27:10,000
Speaker 8: pretty strong defense industry of their own.

509
00:27:10,920 --> 00:27:13,439
Speaker 4: One country that has a strong defense industry of their

510
00:27:13,480 --> 00:27:16,960
Speaker 4: own is China, and you've been outspoken on this. We've heard,

511
00:27:17,000 --> 00:27:20,520
Speaker 4: of course, not only about china strength in defense, but

512
00:27:20,600 --> 00:27:22,840
Speaker 4: also their strength in ai And of course you're twinning

513
00:27:22,840 --> 00:27:25,520
Speaker 4: the two here. I'm interested as to how much those

514
00:27:25,520 --> 00:27:29,240
Speaker 4: conversations surrounding Taiwan, the concerns there are building, and whether

515
00:27:29,359 --> 00:27:32,520
Speaker 4: or not it's actually something that you are having conversations

516
00:27:32,560 --> 00:27:33,560
Speaker 4: with the dood about.

517
00:27:34,560 --> 00:27:37,360
Speaker 8: I mean, it's all about that. Everyone is talking about

518
00:27:37,440 --> 00:27:39,879
Speaker 8: making sure that the capabilities that we're building today are

519
00:27:39,920 --> 00:27:42,040
Speaker 8: ready to go for a fight in the Pacific in

520
00:27:42,119 --> 00:27:45,560
Speaker 8: twenty twenty seven or earlier, because that is the latest

521
00:27:45,600 --> 00:27:48,119
Speaker 8: that we see China trying to launch an offensive for

522
00:27:48,119 --> 00:27:50,840
Speaker 8: a variety of reasons. That's the timing for some kind

523
00:27:50,840 --> 00:27:53,560
Speaker 8: of action against Taiwan, which is critical to our economy.

524
00:27:54,119 --> 00:27:55,920
Speaker 8: You know, there's a lot of places around the world

525
00:27:56,000 --> 00:27:58,000
Speaker 8: that we call partners. There's a lot of places around

526
00:27:58,000 --> 00:27:59,640
Speaker 8: the world that we say are important to our interests

527
00:28:00,359 --> 00:28:04,240
Speaker 8: and their semiconductor industry is really about as important as

528
00:28:04,240 --> 00:28:06,959
Speaker 8: it gets, especially for such a small country so close

529
00:28:07,280 --> 00:28:09,119
Speaker 8: to China. The good news is, I think people are

530
00:28:09,119 --> 00:28:12,560
Speaker 8: recognizing this threat. Big tech companies years ago thought that

531
00:28:12,680 --> 00:28:14,480
Speaker 8: China was something one that was going to be a

532
00:28:14,560 --> 00:28:16,240
Speaker 8: huge growth market for them. They thought they were going

533
00:28:16,280 --> 00:28:18,760
Speaker 8: to get in and sell them social media, sell them services.

534
00:28:19,040 --> 00:28:20,640
Speaker 8: And I think people are starting to realize that that's

535
00:28:20,640 --> 00:28:23,680
Speaker 8: not what's happening. They're coming here and they're eating our lunch,

536
00:28:24,200 --> 00:28:28,440
Speaker 8: and that is I think positive for tech companies decision

537
00:28:28,640 --> 00:28:31,000
Speaker 8: to start working with the dood again.

538
00:28:32,240 --> 00:28:35,920
Speaker 2: There's an interest, in an intense interest, excuse me, in Anderil.

539
00:28:36,280 --> 00:28:39,280
Speaker 2: People don't, let's know that much about the company. So

540
00:28:39,320 --> 00:28:42,680
Speaker 2: if we take the kind of Taiwan case study road

541
00:28:42,760 --> 00:28:45,560
Speaker 2: Runner aside, what are the products and technologies that you

542
00:28:45,680 --> 00:28:49,000
Speaker 2: can offer that you would deploy it and get a

543
00:28:49,080 --> 00:28:50,880
Speaker 2: hypothetical scenario like that.

544
00:28:51,560 --> 00:28:54,120
Speaker 8: Well, our core product is something called Lattice AI. It's

545
00:28:54,200 --> 00:28:56,880
Speaker 8: kind of the AI engine that powers all of our products.

546
00:28:56,880 --> 00:28:59,280
Speaker 8: We actually have more people at ANDROL working on software

547
00:28:59,480 --> 00:29:02,680
Speaker 8: than hardware, even though we have over a dozen hardware products,

548
00:29:02,680 --> 00:29:05,880
Speaker 8: and that's because Lattice is something our software investment is

549
00:29:05,920 --> 00:29:08,440
Speaker 8: something that can reach across all these systems and a

550
00:29:08,440 --> 00:29:11,240
Speaker 8: lot of external systems. Lattice AI is integrated with more

551
00:29:11,320 --> 00:29:15,000
Speaker 8: third party products than anderill made products. Even so, we

552
00:29:15,080 --> 00:29:18,520
Speaker 8: make loitering munitions like the Altis Line, we make autonomous

553
00:29:18,600 --> 00:29:22,400
Speaker 8: underwater vehicles like the Dive Submarine. We make counter UAS systems,

554
00:29:22,520 --> 00:29:26,880
Speaker 8: electronic warfare systems, surveillance systems, tactical UAS systems like the

555
00:29:26,920 --> 00:29:29,800
Speaker 8: Ghost helicopter drone. We've got a lot of things that

556
00:29:29,840 --> 00:29:32,680
Speaker 8: could make a really big difference. And again, everything that

557
00:29:32,720 --> 00:29:35,600
Speaker 8: we're doing, and most of what the DoD is doing,

558
00:29:35,680 --> 00:29:38,800
Speaker 8: is preparing for our conflict with a great power like

559
00:29:38,880 --> 00:29:42,240
Speaker 8: China in the Pacific on a near term timeframe. Anything

560
00:29:42,240 --> 00:29:44,120
Speaker 8: that we make that is not going to be ready

561
00:29:44,160 --> 00:29:46,600
Speaker 8: to go into that type of fight, whether it's a

562
00:29:46,640 --> 00:29:51,280
Speaker 8: blockade or a real invasion, is not something that I

563
00:29:51,320 --> 00:29:55,680
Speaker 8: think is particularly relevant or worth heavy investment at Palma.

564
00:29:55,720 --> 00:29:57,560
Speaker 2: When I posted on social media, you are coming on

565
00:29:57,600 --> 00:29:59,760
Speaker 2: the show, I guess the most common question from the

566
00:29:59,800 --> 00:30:02,880
Speaker 2: r audience was about manufacturing. You know, if you take

567
00:30:02,960 --> 00:30:05,880
Speaker 2: Roadrunner as an example, they know it's a cutting edge technology,

568
00:30:06,320 --> 00:30:08,640
Speaker 2: but they actually want to know more about how you

569
00:30:08,720 --> 00:30:10,760
Speaker 2: scale the output of that product.

570
00:30:10,960 --> 00:30:12,960
Speaker 8: Well, there's a few things that go into that, you know,

571
00:30:12,960 --> 00:30:15,479
Speaker 8: first of all, Androl is a defense product company more

572
00:30:15,520 --> 00:30:17,880
Speaker 8: than a defense contractor. We use our own money to

573
00:30:17,880 --> 00:30:20,120
Speaker 8: decide what to build, how to build it, and then

574
00:30:20,160 --> 00:30:21,760
Speaker 8: we build it and sell it when it's done. And

575
00:30:21,760 --> 00:30:24,920
Speaker 8: it's very different than companies that get paid more when

576
00:30:24,960 --> 00:30:27,280
Speaker 8: they have let's say, an inefficient manufacturing process or a

577
00:30:27,280 --> 00:30:30,880
Speaker 8: longer manufacturing process because they're on a cost plus contract.

578
00:30:31,120 --> 00:30:33,520
Speaker 8: And our head of manufacturing comes from Tesla, where he

579
00:30:33,640 --> 00:30:36,400
Speaker 8: scaled several lines to very very large numbers of vehicles.

580
00:30:36,400 --> 00:30:38,280
Speaker 8: We have a lot of other people who have experienced

581
00:30:38,280 --> 00:30:41,640
Speaker 8: making consumer electronics on a very tight schedule. We've done

582
00:30:41,760 --> 00:30:45,080
Speaker 8: five new revisions of Century Tower, four new revisions of

583
00:30:45,160 --> 00:30:49,320
Speaker 8: Cent of our Ghost drone in just five or six years,

584
00:30:49,320 --> 00:30:52,520
Speaker 8: and so we're on more of a consumer electronics manufacturing

585
00:30:52,560 --> 00:30:55,520
Speaker 8: and iteration cycle than any traditional defense.

586
00:30:55,240 --> 00:30:55,840
Speaker 2: Company would be.

587
00:30:55,880 --> 00:30:59,280
Speaker 8: And look, my previous company was OCULUSVR. I started that

588
00:30:59,320 --> 00:31:01,520
Speaker 8: when I was nineteen years old living in a camper trailer,

589
00:31:01,680 --> 00:31:03,720
Speaker 8: sold it to Facebook for a few billion dollars. Was

590
00:31:03,720 --> 00:31:05,880
Speaker 8: there for a few years before getting fired. But while

591
00:31:05,920 --> 00:31:08,520
Speaker 8: I was there, we've made millions of virtual reality headsets

592
00:31:08,560 --> 00:31:11,800
Speaker 8: in China. I know how China does things. I know

593
00:31:11,880 --> 00:31:14,120
Speaker 8: how these things can be done, and I'm trying to

594
00:31:14,120 --> 00:31:17,160
Speaker 8: bring a little bit of that Chinese energy here to

595
00:31:17,320 --> 00:31:20,560
Speaker 8: US manufacturing, absent all the stuff that I hate about China.

596
00:31:21,960 --> 00:31:25,040
Speaker 4: Interesting perspective on what you can learn, perhaps even though

597
00:31:25,040 --> 00:31:27,640
Speaker 4: you dislike parts of what's evident. I'm palm up to

598
00:31:27,680 --> 00:31:31,840
Speaker 4: that point. I mean, everyone's currently handringing about artificial intelligence

599
00:31:31,960 --> 00:31:34,760
Speaker 4: US versus China, China versus everyone. I mean, you've just

600
00:31:34,800 --> 00:31:37,000
Speaker 4: been in the UK, I mean at least saying that

601
00:31:37,040 --> 00:31:39,120
Speaker 4: you've been building relationships there, and we just think about

602
00:31:39,120 --> 00:31:41,719
Speaker 4: the UKAI summit, where what was it, thirty one country

603
00:31:41,800 --> 00:31:44,240
Speaker 4: signed up to some sort of guardrails When it comes

604
00:31:44,240 --> 00:31:47,880
Speaker 4: to well, the acceleration of deployment of AI in the military.

605
00:31:48,280 --> 00:31:51,080
Speaker 4: What do you make of these moves too put in

606
00:31:51,120 --> 00:31:54,440
Speaker 4: guardrails in artificial intelligence's use within military.

607
00:31:55,240 --> 00:31:58,280
Speaker 8: A lot of these are decades behind. The US government

608
00:31:58,320 --> 00:32:00,760
Speaker 8: has been thinking about these things literally for decades. It

609
00:32:00,800 --> 00:32:03,760
Speaker 8: really bothers me when people say, oh, man, we need

610
00:32:03,760 --> 00:32:06,360
Speaker 8: to come up with rules that tell the DD what

611
00:32:06,400 --> 00:32:08,120
Speaker 8: to do about AI. I mean they haven't been thinking

612
00:32:08,120 --> 00:32:11,080
Speaker 8: about these things. They don't understand how important autonomous weapons.

613
00:32:11,080 --> 00:32:13,160
Speaker 8: I mean, what are you talking about. The US Government's

614
00:32:13,160 --> 00:32:16,560
Speaker 8: been deploying autonomous weapons like radar seeking missiles and missiles

615
00:32:16,600 --> 00:32:19,320
Speaker 8: that can differentiate between targets for decades. Now, look at

616
00:32:19,320 --> 00:32:20,960
Speaker 8: something like a sea ram or a sea whiz. The

617
00:32:20,960 --> 00:32:23,680
Speaker 8: automated guns that are protecting our bases and our ships

618
00:32:23,760 --> 00:32:27,280
Speaker 8: from incoming mortar fire, incoming artillery fire, incoming missile and

619
00:32:27,400 --> 00:32:28,040
Speaker 8: rocket fire.

620
00:32:28,280 --> 00:32:29,440
Speaker 2: Those are autonomous weapons.

621
00:32:29,480 --> 00:32:31,480
Speaker 8: They're making decisions about what to shoot down and what

622
00:32:31,560 --> 00:32:34,280
Speaker 8: to not without a person manually deciding what to do,

623
00:32:34,560 --> 00:32:37,280
Speaker 8: beyond deciding to turn on the system and allow it

624
00:32:37,280 --> 00:32:38,160
Speaker 8: to engage targets.

625
00:32:38,200 --> 00:32:38,560
Speaker 1: Period.

626
00:32:38,840 --> 00:32:41,440
Speaker 8: So the US government has very strong doctrine around this

627
00:32:41,520 --> 00:32:44,240
Speaker 8: that really boils down to making sure a human is

628
00:32:44,280 --> 00:32:47,360
Speaker 8: always responsible for any decision, and that doesn't mean that

629
00:32:47,360 --> 00:32:49,480
Speaker 8: the person's responsible for pulling the trigger. I hate this

630
00:32:49,600 --> 00:32:50,120
Speaker 8: idea too.

631
00:32:50,160 --> 00:32:51,200
Speaker 2: People say, well, can't.

632
00:32:50,960 --> 00:32:53,120
Speaker 8: You agree that a day I should never be able

633
00:32:53,120 --> 00:32:55,400
Speaker 8: to decide when to pull the trigger. And I don't

634
00:32:55,400 --> 00:32:57,040
Speaker 8: agree with that because I don't think there's any moral

635
00:32:57,080 --> 00:32:59,600
Speaker 8: high ground in making let's say, a landmine that can't

636
00:32:59,600 --> 00:33:01,800
Speaker 8: tell the difference between a school bus full of children

637
00:33:02,160 --> 00:33:05,000
Speaker 8: and a Russian tank column. I think that it is

638
00:33:05,080 --> 00:33:06,560
Speaker 8: good for it to be able to decide when to

639
00:33:06,600 --> 00:33:08,960
Speaker 8: pull the trigger as long as a person is taking

640
00:33:08,960 --> 00:33:12,280
Speaker 8: responsibility for that employment and whatever goes wrong in the end.

641
00:33:12,280 --> 00:33:14,600
Speaker 8: And so I'd see a lot of this is performative.

642
00:33:14,600 --> 00:33:16,600
Speaker 8: There are people who have never thought about AI, never

643
00:33:16,640 --> 00:33:19,920
Speaker 8: thought about weapons until very recently, and they're now declaring

644
00:33:19,960 --> 00:33:25,120
Speaker 8: themselves to be AI safety experts, and they are decades

645
00:33:25,160 --> 00:33:28,120
Speaker 8: behind the people who have actually been working on autonomous

646
00:33:28,160 --> 00:33:30,840
Speaker 8: weapons policy and ethics and guidelines. I think the United

647
00:33:30,840 --> 00:33:33,800
Speaker 8: States is clearly far and away the leader in this space.

648
00:33:34,520 --> 00:33:36,239
Speaker 2: Palmer, I just wanted to point out, you know, when

649
00:33:36,280 --> 00:33:38,200
Speaker 2: I put on social media coming on the show. Of course,

650
00:33:38,240 --> 00:33:41,080
Speaker 2: there are a body of people out there that don't

651
00:33:41,080 --> 00:33:43,680
Speaker 2: agree with the use of any technology in the context

652
00:33:43,680 --> 00:33:47,520
Speaker 2: of war because they don't want to have any consideration

653
00:33:47,600 --> 00:33:52,000
Speaker 2: of war right they are believe in peace. Frankly, it

654
00:33:52,000 --> 00:33:53,760
Speaker 2: would be remissing me not to ask you as well

655
00:33:53,760 --> 00:33:56,520
Speaker 2: about Oculus. You mentioned it in your prior answer. I

656
00:33:56,520 --> 00:33:59,640
Speaker 2: think we're almost at the ten year anniversary of then

657
00:33:59,760 --> 00:34:05,320
Speaker 2: Faith for acquiring then your company Oculus. Over the last

658
00:34:05,360 --> 00:34:09,920
Speaker 2: ten years, where have we landed in VR and AR.

659
00:34:10,320 --> 00:34:13,160
Speaker 2: This year, we had Metaquest three, we had Vision Pro

660
00:34:13,280 --> 00:34:16,879
Speaker 2: from Apple. Just give me your assessment of the technology

661
00:34:16,920 --> 00:34:18,480
Speaker 2: field for headsets.

662
00:34:19,719 --> 00:34:21,680
Speaker 8: Well, the people who think that we shouldn't be using

663
00:34:21,719 --> 00:34:23,359
Speaker 8: tech in any of this stuff, I'd say, let's arm

664
00:34:23,480 --> 00:34:25,879
Speaker 8: Nato with sticks and stones and water guns and see

665
00:34:25,920 --> 00:34:28,760
Speaker 8: how that goes for you guys. As far as VR,

666
00:34:28,880 --> 00:34:32,600
Speaker 8: I'm really excited with how it's going. I am happy

667
00:34:32,640 --> 00:34:35,720
Speaker 8: to see a lot of my deeply held technical beliefs

668
00:34:35,760 --> 00:34:38,360
Speaker 8: playing out in the market. One example is the Apple

669
00:34:38,440 --> 00:34:41,960
Speaker 8: Vision Pro being kind of an augmented reality, virtual reality,

670
00:34:42,000 --> 00:34:45,160
Speaker 8: mixed reality combo headset that is doing full reprojection of

671
00:34:45,160 --> 00:34:47,680
Speaker 8: the world where it's capturing the world using sensors and

672
00:34:47,719 --> 00:34:50,319
Speaker 8: then using all new photons to project in your eyes,

673
00:34:50,440 --> 00:34:53,319
Speaker 8: rather than an optically transparent AR system that a lot

674
00:34:53,320 --> 00:34:55,320
Speaker 8: of people were trying to build over the last decade.

675
00:34:55,320 --> 00:34:58,600
Speaker 8: I've always been on the hard AR full reprojection side.

676
00:34:58,719 --> 00:35:00,680
Speaker 8: Happy to see that kind of pan out with Apple.

677
00:35:00,760 --> 00:35:02,760
Speaker 8: I've used the new Apple headset. It's amazing.

678
00:35:04,080 --> 00:35:04,319
Speaker 2: You know.

679
00:35:04,480 --> 00:35:07,600
Speaker 8: Probably the best accomplishment that I've done on the VR

680
00:35:07,719 --> 00:35:11,040
Speaker 8: side was making sure that VR came back from the dead.

681
00:35:11,280 --> 00:35:13,359
Speaker 8: It is now something that other people are working on,

682
00:35:13,480 --> 00:35:15,000
Speaker 8: so that for the rest of my life, I'm going

683
00:35:15,080 --> 00:35:16,279
Speaker 8: to be able to go out and buy really nice

684
00:35:16,360 --> 00:35:19,200
Speaker 8: virtual reality headsets without having to do it myself, which

685
00:35:19,239 --> 00:35:20,600
Speaker 8: is what I was doing when I was fifteen and

686
00:35:20,640 --> 00:35:21,920
Speaker 8: sixteen starting Oculos.

687
00:35:23,360 --> 00:35:26,520
Speaker 2: Andreill founder Palmer Lucky. Good to catch up. Good to

688
00:35:26,520 --> 00:35:28,920
Speaker 2: have you with us here on Bloomberg Technology. Thank you

689
00:35:28,920 --> 00:35:32,560
Speaker 2: for your time. So coming up on the show, the

690
00:35:32,600 --> 00:35:36,680
Speaker 2: crypto rally Gaviz steam as Bitcoin tops forty two thousand

691
00:35:37,080 --> 00:35:39,480
Speaker 2: US dollars, we're going to keep conversation going and discuss

692
00:35:39,719 --> 00:35:43,400
Speaker 2: investing in the digital currency ecosystem more broadly. That's the

693
00:35:43,480 --> 00:35:46,239
Speaker 2: VC Spotlight. Next, this is Bloomberg Technology.

694
00:36:00,040 --> 00:36:02,200
Speaker 4: Let's talk crypto for a moment, because Bitcoin, if you

695
00:36:02,200 --> 00:36:04,879
Speaker 4: hadn't noticed, has just surged past forty two thousand dollars again,

696
00:36:04,880 --> 00:36:07,440
Speaker 4: extending the largest digital tokens at rally to more than

697
00:36:07,480 --> 00:36:09,839
Speaker 4: one hundred and fifty percent so far this year, far

698
00:36:10,280 --> 00:36:13,800
Speaker 4: outpacing stocks and other risk assets. For today's VC Spotlight,

699
00:36:13,840 --> 00:36:16,359
Speaker 4: that we're going to be investing and looking at the

700
00:36:16,440 --> 00:36:19,680
Speaker 4: turn of digital currency ecosystem and the startups within it.

701
00:36:19,760 --> 00:36:22,560
Speaker 4: Morgan Bellers with us NFX general partner. You invest in

702
00:36:22,560 --> 00:36:25,759
Speaker 4: a whole broad remit of companies, but what we love

703
00:36:25,800 --> 00:36:27,160
Speaker 4: is your background and the fact that you were there

704
00:36:27,200 --> 00:36:29,240
Speaker 4: building one of the first ever stable coins with Libro,

705
00:36:29,320 --> 00:36:31,800
Speaker 4: and as part of Facebook, you of course investing companies

706
00:36:31,840 --> 00:36:35,480
Speaker 4: such as Ramp, which is about FIAT into crypto. This

707
00:36:35,920 --> 00:36:39,759
Speaker 4: exuberance around bitcoin seems to be about institutional access, whether

708
00:36:39,840 --> 00:36:42,640
Speaker 4: or not we get a bitcoin, a spot, bitcoin ETF

709
00:36:43,520 --> 00:36:46,360
Speaker 4: where do you think that really works for the ecosystem

710
00:36:46,360 --> 00:36:46,920
Speaker 4: at large?

711
00:36:47,280 --> 00:36:50,920
Speaker 9: Thank you again for having me so seeing this turn

712
00:36:51,280 --> 00:36:55,480
Speaker 9: is exciting, although cautiously optimistic. I think that there have

713
00:36:55,560 --> 00:37:00,279
Speaker 9: been several like Schrodinger's cats in crypto is dead?

714
00:37:00,360 --> 00:37:00,920
Speaker 2: Is it Alive?

715
00:37:01,320 --> 00:37:03,920
Speaker 9: And one of those has been the BITCOINYTF like is

716
00:37:03,920 --> 00:37:04,239
Speaker 9: it dead?

717
00:37:04,320 --> 00:37:04,840
Speaker 5: Is it alive?

718
00:37:05,200 --> 00:37:07,640
Speaker 9: And I think we're turning a corner as I not

719
00:37:07,719 --> 00:37:10,840
Speaker 9: gotten all of the wood, that it might finally actually

720
00:37:10,880 --> 00:37:13,760
Speaker 9: be happening, which would be huge, if not the largest

721
00:37:14,640 --> 00:37:18,440
Speaker 9: impact that could be had on institutional adoption. And the

722
00:37:18,480 --> 00:37:22,719
Speaker 9: second Joininger's cat was Binance, Like people were worried about Binance.

723
00:37:22,760 --> 00:37:24,800
Speaker 9: What was there, what wasn't there? What was going to happen,

724
00:37:24,880 --> 00:37:27,719
Speaker 9: what wasn't going to happen, and I think what we

725
00:37:27,760 --> 00:37:32,800
Speaker 9: saw happen a few weeks ago was like minimal impact

726
00:37:32,840 --> 00:37:34,719
Speaker 9: on the space, so I think it. So those are

727
00:37:34,760 --> 00:37:39,279
Speaker 9: two huge unknowns that I think are now becoming known

728
00:37:39,560 --> 00:37:43,440
Speaker 9: in a positive way. So that's exciting for the space.

729
00:37:44,280 --> 00:37:46,360
Speaker 2: Morgan. Earlier in the show, Caroline and I were talking

730
00:37:46,360 --> 00:37:49,440
Speaker 2: about how you know when bitcoin goes up, publicly traded

731
00:37:49,520 --> 00:37:52,759
Speaker 2: crypto related stocks also go up, either because it's like

732
00:37:52,760 --> 00:37:55,840
Speaker 2: a proxy for exposure if you're not invested in a

733
00:37:56,239 --> 00:38:00,440
Speaker 2: digital currency, or it's a logic where well, if coins

734
00:38:00,440 --> 00:38:03,640
Speaker 2: doing well, that's the thing that underpins all of those companies,

735
00:38:03,800 --> 00:38:06,560
Speaker 2: so they do as well. Spin that forward to the

736
00:38:06,640 --> 00:38:10,719
Speaker 2: VC context, is bitcoin being up good for you when

737
00:38:10,760 --> 00:38:12,920
Speaker 2: you decide okay, I'm going to invest here here or that.

738
00:38:13,480 --> 00:38:15,960
Speaker 9: I like to think that I stay sober enough that

739
00:38:16,080 --> 00:38:19,440
Speaker 9: it doesn't matter, but in reality it probably does affect

740
00:38:19,520 --> 00:38:21,320
Speaker 9: mine and others psyches.

741
00:38:21,360 --> 00:38:23,240
Speaker 2: I think I've said this on the show.

742
00:38:23,040 --> 00:38:26,480
Speaker 9: Before, but for me, there's always three questions, which is

743
00:38:26,520 --> 00:38:30,600
Speaker 9: one is this company solving a problem for anyone? Two

744
00:38:30,680 --> 00:38:34,280
Speaker 9: is anyone using this thing? And three is this product

745
00:38:34,360 --> 00:38:36,520
Speaker 9: or a company making money or has any potential to

746
00:38:37,200 --> 00:38:40,520
Speaker 9: make money? And when you look at the history of

747
00:38:40,840 --> 00:38:44,080
Speaker 9: crypto and crypto startups at blockchain companies, there's very few

748
00:38:44,520 --> 00:38:47,920
Speaker 9: that actually check all three of those boxes, let alone

749
00:38:48,440 --> 00:38:51,080
Speaker 9: one or two. And bitcoin is one of the few

750
00:38:51,880 --> 00:38:54,799
Speaker 9: use cases that is, you know, checks all of those

751
00:38:54,800 --> 00:38:58,200
Speaker 9: boxes and is real and is definitely a case study

752
00:38:58,239 --> 00:39:02,399
Speaker 9: for potentially other But at the seed stage, I try

753
00:39:02,440 --> 00:39:05,040
Speaker 9: to not look at the price of bitcoin when.

754
00:39:06,360 --> 00:39:09,160
Speaker 4: What you look at is probably the general energy of

755
00:39:09,360 --> 00:39:12,719
Speaker 4: building in the seed stage right now. And to that end,

756
00:39:12,800 --> 00:39:15,960
Speaker 4: amid what has been termed yet another crypto winter, has

757
00:39:16,000 --> 00:39:18,239
Speaker 4: the building still been going? Have there been problems that

758
00:39:18,280 --> 00:39:20,720
Speaker 4: are being solved in this time where we could stop

759
00:39:20,719 --> 00:39:23,280
Speaker 4: just talking about prices and actually look at what fundamentally

760
00:39:23,360 --> 00:39:23,880
Speaker 4: is being built.

761
00:39:24,120 --> 00:39:28,960
Speaker 9: Building is still going. When the market was nuts, you

762
00:39:29,120 --> 00:39:31,960
Speaker 9: had what my partner James caused, the fruit flies coming in.

763
00:39:32,080 --> 00:39:34,920
Speaker 9: So the founders who thought it was just like, you know,

764
00:39:34,960 --> 00:39:37,640
Speaker 9: the sexiest successory to have a crypto company and thought

765
00:39:37,680 --> 00:39:41,239
Speaker 9: overnight they would be worth a lot on paper. And

766
00:39:41,280 --> 00:39:44,359
Speaker 9: what the market cooling down dat is it filtered those

767
00:39:44,440 --> 00:39:47,560
Speaker 9: founders out. So now you really only have founders coming

768
00:39:47,600 --> 00:39:50,240
Speaker 9: in who really really care, who actually have a problem

769
00:39:50,280 --> 00:39:53,480
Speaker 9: to solve, So in a weird way. The bear market's

770
00:39:53,600 --> 00:39:56,879
Speaker 9: very nice because it automatically applies a filter at least

771
00:39:56,920 --> 00:39:59,479
Speaker 9: to the top of the funnel of startups that isn't

772
00:39:59,480 --> 00:40:01,880
Speaker 9: necessarily there in a ballmarket.

773
00:40:03,200 --> 00:40:05,600
Speaker 2: Morgan, bigger picture. We've had a lot of guests on

774
00:40:05,640 --> 00:40:08,480
Speaker 2: the show that criticized the US as a regulatory environment

775
00:40:08,680 --> 00:40:12,839
Speaker 2: or a market environment to foster the underlying technology, let's

776
00:40:12,840 --> 00:40:15,480
Speaker 2: say blockchain in this instance. Your view on that.

777
00:40:16,040 --> 00:40:19,600
Speaker 9: I am proud to be an American. However, I do

778
00:40:19,760 --> 00:40:24,360
Speaker 9: wish that crypto regulation was a bit more founder friendly

779
00:40:24,960 --> 00:40:27,960
Speaker 9: than it currently is. To bring back my Schrodinger's cat analogy,

780
00:40:28,000 --> 00:40:29,680
Speaker 9: which I think still applies here.

781
00:40:29,800 --> 00:40:30,760
Speaker 2: There are a lot of.

782
00:40:31,360 --> 00:40:36,160
Speaker 9: Unknowns or fears or concerns about which way various regulatory

783
00:40:36,200 --> 00:40:39,960
Speaker 9: bodies can go on various regulatory topics in crypto that

784
00:40:40,200 --> 00:40:45,080
Speaker 9: are scaring founders away from starting companies in the US.

785
00:40:45,840 --> 00:40:49,880
Speaker 9: And if there was more clarity in one direction or

786
00:40:49,880 --> 00:40:52,840
Speaker 9: another that would limit the amount of guessing or fear

787
00:40:52,880 --> 00:40:55,239
Speaker 9: that was required to start a company, I think that

788
00:40:55,280 --> 00:41:00,440
Speaker 9: would be a lot more conducive to founders, specific specifically

789
00:41:00,480 --> 00:41:04,120
Speaker 9: starting companies in this space in the United States.

790
00:41:04,160 --> 00:41:06,640
Speaker 2: Morgan Bella an f X general partner. We always enjoy

791
00:41:06,680 --> 00:41:10,080
Speaker 2: having you on the show, The Schrodinger's Cat Analogy. Let's

792
00:41:10,080 --> 00:41:12,280
Speaker 2: see if it gets traction, we'll see.

793
00:41:12,440 --> 00:41:13,719
Speaker 9: I'm a dog person, by the way.

794
00:41:13,800 --> 00:41:16,640
Speaker 2: But oh, I know I've met as you know, I've

795
00:41:16,680 --> 00:41:18,719
Speaker 2: met your dog, which is always at your side. But

796
00:41:19,040 --> 00:41:29,720
Speaker 2: we're out of time for today. Thank you, okay. Apple's

797
00:41:29,719 --> 00:41:33,320
Speaker 2: long anticipated breakup with its main financial services partner, Goldman

798
00:41:33,400 --> 00:41:36,160
Speaker 2: Sacks is underway, with the iPhone maker offering the bank

799
00:41:36,160 --> 00:41:39,120
Speaker 2: a path out of their deal. But who might replace Goldman?

800
00:41:39,400 --> 00:41:42,080
Speaker 2: It's the focus of this week's Power On column, and

801
00:41:42,719 --> 00:41:45,000
Speaker 2: Bloomberg's Mark German joins me here in San Francisco. You

802
00:41:45,040 --> 00:41:48,600
Speaker 2: have a thesis Chase outline it. Yeah, first of all,

803
00:41:48,640 --> 00:41:49,279
Speaker 2: thank you for having me.

804
00:41:49,320 --> 00:41:52,880
Speaker 10: We've heard about City Bank, We've heard about American Express,

805
00:41:52,920 --> 00:41:56,520
Speaker 10: but I think Chase is absolutely the most likely company

806
00:41:56,600 --> 00:41:58,920
Speaker 10: to take over four Goldman Sacks.

807
00:41:58,960 --> 00:42:01,880
Speaker 2: In terms of the Apple card partnership, Chase is a lot.

808
00:42:01,760 --> 00:42:03,799
Speaker 10: Going for it. It makes a ton of money, so

809
00:42:03,840 --> 00:42:06,440
Speaker 10: it has the cash balance, It has the management, It

810
00:42:06,440 --> 00:42:09,399
Speaker 10: has the reserves to take on a partnership that may

811
00:42:09,440 --> 00:42:12,319
Speaker 10: not be entirely lucrative at the get go. It does

812
00:42:12,400 --> 00:42:15,120
Speaker 10: have time to sort of bake into its financials that

813
00:42:15,160 --> 00:42:18,480
Speaker 10: this is going to be a long term strategy and partnership. Goldman,

814
00:42:18,480 --> 00:42:20,520
Speaker 10: as you know, lost a couple billion dollars maybe a

815
00:42:20,520 --> 00:42:21,480
Speaker 10: little bit more than that on this.

816
00:42:21,840 --> 00:42:24,280
Speaker 2: They couldn't really sustain it. Chase probably could.

817
00:42:24,480 --> 00:42:27,040
Speaker 10: The other thing is is Apple and Chase, most people

818
00:42:27,120 --> 00:42:30,160
Speaker 10: don't know, have a long term relationship. Chase is one

819
00:42:30,160 --> 00:42:32,759
Speaker 10: of the biggest partners for credit card transactions in the

820
00:42:32,800 --> 00:42:37,360
Speaker 10: app store, Apple online services, Apples, retail stores, online stores,

821
00:42:37,640 --> 00:42:40,200
Speaker 10: and Apple probably gets a better rate right because of

822
00:42:40,239 --> 00:42:42,279
Speaker 10: that deal with Chase and how much Chase credit card

823
00:42:42,320 --> 00:42:44,879
Speaker 10: usage there is. And there's all sorts of stuff behind

824
00:42:44,880 --> 00:42:47,759
Speaker 10: the scenes storing Apple's cash balance, so that long term

825
00:42:47,800 --> 00:42:50,280
Speaker 10: relationship means their prime for a bigger expansion.

826
00:42:50,640 --> 00:42:52,440
Speaker 4: It was a great write up. I urged people to

827
00:42:52,480 --> 00:42:55,400
Speaker 4: go wells also learned that well Steve scuer is off

828
00:42:55,400 --> 00:42:58,759
Speaker 4: playing golf with Eddiq sometimes Mark Coman always with the

829
00:42:58,760 --> 00:43:00,440
Speaker 4: facts you thank you meanwhile. That does it for this

830
00:43:00,600 --> 00:43:02,279
Speaker 4: edition of Bloomberg Technology.

831
00:43:02,640 --> 00:43:05,320
Speaker 2: Check out the pod Apple, Spotify, Heart and on Bloomberg.

832
00:43:05,400 --> 00:43:08,120
Speaker 2: This is Bloomberg Technology