WEBVTT - SBF's Arrest and the FTX Hearing 0:00:12.760 --> 0:00:15.360 I'm Caroline Hide of Blomberg's World headquarters in New York 0:00:15.760 --> 0:00:19.120 and Imed Ludlow in San Francisco. This is Bloomberg technology 0:00:19.320 --> 0:00:24.400 coming up old fashioned embezzlement, positioned to fail. Any regulation 0:00:24.480 --> 0:00:27.040 would have helped. They're just some of the CEO John 0:00:27.160 --> 0:00:29.240 Ray the third and the words he had to say 0:00:29.240 --> 0:00:32.000 of f t X. Understand Bankminfried. We dig into the 0:00:32.040 --> 0:00:35.240 testimony and what's to come of it. And the fd 0:00:35.479 --> 0:00:39.440 X fallout is creating headaches at other exchanges, mainly Binance, 0:00:39.479 --> 0:00:43.040 which has seen nearly four billion dollars in outflows in 0:00:43.080 --> 0:00:46.479 the past week. And Bloomberg has learned Apple's potential solution 0:00:46.560 --> 0:00:51.640 to anti competitive concerns over its app store. But first, 0:00:51.920 --> 0:00:54.120 let's get back to that huge story of the day 0:00:54.200 --> 0:00:57.320 after ft x is swift collapse sent shock waves across 0:00:57.320 --> 0:01:00.120 crypto markets. Of course, the House Financial Services commit he 0:01:00.240 --> 0:01:03.040 was out to get some answers from the senior f 0:01:03.160 --> 0:01:06.200 t X executives, a task that's been made are now 0:01:06.200 --> 0:01:08.840 more complicated by the fact that will He is arrested. 0:01:09.040 --> 0:01:12.600 Sa bakmafreed himself in the Bahamas on Monday. Williams Chris 0:01:12.800 --> 0:01:15.440 so much as with us on the latest. Just walk 0:01:15.560 --> 0:01:19.240 us through, Chris, what happens now from illegal perspective for 0:01:19.240 --> 0:01:23.600 Sam Magminfried. Yeah, well, as we can see on the screen, 0:01:24.440 --> 0:01:27.360 things are breaking right now that he's uh denied bail 0:01:27.440 --> 0:01:29.360 and the Bahamas and it's gonna be in jail if 0:01:29.680 --> 0:01:32.880 I believe the report I saw said tebrutary eight. So 0:01:33.400 --> 0:01:36.640 that pushes things down the road from the immediate future 0:01:37.360 --> 0:01:40.880 to then and uh, you know he's apparently going to 0:01:40.880 --> 0:01:45.480 fight extradition, which could take a while, could take months, 0:01:45.800 --> 0:01:49.160 could take years. Some people say, we've had people poor 0:01:49.280 --> 0:01:53.320 who have bought extraditions successfully or stolen the Bahamas and 0:01:53.320 --> 0:01:56.760 had not um. So it's a real question as to 0:01:56.840 --> 0:01:59.560 how that will proceed before he even gets here to 0:01:59.600 --> 0:02:03.480 face the charges that are facing him, which are pretty substantial. Chris, 0:02:03.520 --> 0:02:08.079 I've sat alongside you covering financial crime in the courtroom, 0:02:08.120 --> 0:02:12.080 preparing and anticipation of being in the courtroom. It's never straightforward. 0:02:12.800 --> 0:02:15.280 The burden will have to force the prosecution. Of course. 0:02:15.320 --> 0:02:17.760 What is it that they'll have to demonstrate and prove 0:02:18.160 --> 0:02:20.600 when it comes to the action Sam Bankman free took 0:02:20.720 --> 0:02:23.560 or did not take, Well, they're going to happen to 0:02:23.600 --> 0:02:27.120 show that he used. You know, either he's charged with 0:02:27.160 --> 0:02:31.920 wire fraud, UM, securities fraud, commodities fraud, and conspiracies to 0:02:31.919 --> 0:02:34.760 commit those as well, So they're gonna have to show 0:02:34.800 --> 0:02:39.400 that he used basically that he lied to investors or 0:02:39.440 --> 0:02:44.040 lied to customers by misrepresenting the state of the company's 0:02:44.080 --> 0:02:49.160 finances or omitting material facts about the company's finances. And 0:02:49.240 --> 0:02:52.919 when we say material, we mean things that would matter 0:02:53.000 --> 0:02:56.880 to a reasonable investor when they when they invest, if 0:02:56.919 --> 0:03:00.280 that would matter to them in their decision to invest 0:03:00.360 --> 0:03:02.840 with him or to give them money. Um, And that 0:03:02.880 --> 0:03:04.799 would be the burden that they would have to show 0:03:05.240 --> 0:03:09.720 on each of those accounts. The jury to convict Bloomberg's 0:03:09.760 --> 0:03:14.120 christ almost there on the legal and court speat thank you. Meanwhile, 0:03:14.160 --> 0:03:16.720 f t X is new chief executive and the man 0:03:16.760 --> 0:03:20.200 handling its restructuring, John Ray the third did take the 0:03:20.280 --> 0:03:23.600 stand on Capitol Hill where he called the former ft 0:03:23.840 --> 0:03:28.800 X team as quote, grossly inexperienced and unsophisticated. Take a listen, 0:03:30.000 --> 0:03:37.560 not sophisticated at all. Sophisticated perhaps in the way, uh 0:03:37.600 --> 0:03:39.520 they were able to sort of hide it from people, 0:03:40.000 --> 0:03:44.240 uh frankly, right in front of their eyes. But this 0:03:44.320 --> 0:03:48.200 isn't This isn't uh, you know, sophisticated whatsoever. This is 0:03:48.240 --> 0:03:53.520 just plain old embezzlement. Bloomberg Shnali Bassak on the ground 0:03:53.680 --> 0:03:57.280 in Washington following it blow by blow, What did we learn? 0:03:58.640 --> 0:04:01.120 F t x c O. John Ray really talking about 0:04:01.160 --> 0:04:04.240 how this is like a paperless bankruptcy and that he 0:04:04.280 --> 0:04:06.960 doesn't trust a lot of the paper trail he sees. Meanwhile, 0:04:06.960 --> 0:04:09.960 on the lawmaker side, you have recognition by some such 0:04:09.960 --> 0:04:13.320 as Congressman at french Hill who says that the losses 0:04:13.360 --> 0:04:16.320 here could really dwarf what you saw even with Bernie 0:04:16.400 --> 0:04:18.640 made off so one of the biggest bankruptcies here in 0:04:18.680 --> 0:04:23.200 American history. There's also this recognition of whether there could 0:04:23.240 --> 0:04:27.040 have been anything done to prevent something like this via regulation, 0:04:27.200 --> 0:04:29.279 via better rules of the law of land when it 0:04:29.320 --> 0:04:32.000 comes to what's happening in the United States when it 0:04:32.000 --> 0:04:34.599 comes to digital assets. But at the end of the day, 0:04:34.800 --> 0:04:36.720 you did have John Ray also saying this could have 0:04:36.800 --> 0:04:40.960 happened anywhere. Remember you had charges civil and criminal here 0:04:41.360 --> 0:04:46.599 of fraud, and also the SEC saying that the commingling 0:04:46.640 --> 0:04:50.600 of funds here were happening as he was misleading investors 0:04:50.600 --> 0:04:54.799 about certain facts about f t X, and Alameda talked 0:04:54.839 --> 0:04:59.720 to us through Shannali, really what the answer is for 0:05:00.120 --> 0:05:02.080 people who have lost money here? Was there any sort 0:05:02.080 --> 0:05:05.000 of explanation for those who have been so emotionally and 0:05:05.040 --> 0:05:08.360 but also financially involved in this as to where the 0:05:08.400 --> 0:05:12.400 buck will potentially flow for us or for international users. 0:05:13.480 --> 0:05:16.400 There's a few things here. You did have John Ray 0:05:16.560 --> 0:05:19.880 say that it's impossible to recoup everything, but you also 0:05:19.960 --> 0:05:22.000 had him say that in the United States it might 0:05:22.040 --> 0:05:24.839 be a little bit easier than other places given how 0:05:25.160 --> 0:05:27.800 the firm structured. But I would also say that remember 0:05:27.839 --> 0:05:30.440 when you look at the sec complaint, for example, they 0:05:30.520 --> 0:05:32.640 talk about how the funds were used and where the 0:05:32.680 --> 0:05:38.040 funds were used, real estate purchases, political contributions, venture capital. 0:05:38.320 --> 0:05:41.239 Remember we've already had the FTX executives say the venture 0:05:41.279 --> 0:05:45.200 capital in particular are assets, and how they treat that 0:05:45.240 --> 0:05:47.480 in the bankruptcy when they try to make customers whole 0:05:47.520 --> 0:05:49.719 again will be interesting because they're going to have to 0:05:49.760 --> 0:05:51.920 track all these assets down at the end of the day, 0:05:52.160 --> 0:05:54.600 and will they get full dollar for them at the end, 0:05:54.680 --> 0:05:56.160 and are they even going to be able to find 0:05:56.160 --> 0:05:59.640 all the assets? Meanwhile, I just want to go to 0:05:59.720 --> 0:06:04.159 your expertise, HETIONALI in the contagion effect. You've been looking 0:06:04.200 --> 0:06:06.680 a lot at the other exchanges that edged on a 0:06:06.800 --> 0:06:09.279 light on some of the crypto related names that have 0:06:09.360 --> 0:06:11.560 been sunk by this. But there has been a lot 0:06:11.640 --> 0:06:15.480 of reporting and focus on Binance, for example, on Twitter 0:06:15.600 --> 0:06:17.640 and on other areas of the media. Is that something 0:06:17.640 --> 0:06:20.159 that you think Washington is paying attention to at the moment. 0:06:21.240 --> 0:06:23.600 I think they're pretty tied up with f t X 0:06:23.680 --> 0:06:26.159 at the moment, So that's a great question if I 0:06:26.200 --> 0:06:30.080 asked anything about whether it's finance or stable coin industries 0:06:30.200 --> 0:06:34.039 or anything else. Really, the focus really here is on 0:06:34.160 --> 0:06:36.719 f t X right now because people have lost so 0:06:36.839 --> 0:06:39.159 much money and there is a lot of anger. But 0:06:39.240 --> 0:06:42.240 to the point that you're making their finance is a 0:06:42.320 --> 0:06:46.000 largely international exchange. Of course, there's also finance US. But 0:06:46.120 --> 0:06:48.000 the issue you were talking about earlier in the show 0:06:48.480 --> 0:06:50.719 was net outflows to the tune of about four billion 0:06:50.760 --> 0:06:53.600 dollars in a week. I thought Nansen's analysis of this 0:06:53.640 --> 0:06:56.560 was interesting. Kind of not to fret this is the 0:06:56.640 --> 0:06:59.280 small percentage of total assets, but it does goes to 0:06:59.360 --> 0:07:02.320 show the cost to mur fears around holding money in 0:07:02.400 --> 0:07:06.839 an exchange, especially as the industry gets more concentrated. Plus 0:07:06.880 --> 0:07:10.120 that issue with stable coin withdrawals, to keep an eye 0:07:10.120 --> 0:07:12.440 on as the industry faces pressure. What happens to the 0:07:12.440 --> 0:07:17.960 stable coin industry. Whenever you have a congressional committee hearing 0:07:18.000 --> 0:07:21.440 like this, Nali, Yes, you get the testimony from those 0:07:21.600 --> 0:07:23.720 called as witnesses. We also kind of get this broad 0:07:23.840 --> 0:07:28.160 range of opinion from those committee members that pose questions. 0:07:28.520 --> 0:07:30.960 Do we get any sense of what the committee members 0:07:31.040 --> 0:07:34.480 want to happen next? What happens next based on what 0:07:34.640 --> 0:07:38.680 was discussed in that room? Well, one thing actually and 0:07:38.960 --> 0:07:42.000 no shocker here, but when there's frustration in the committee 0:07:42.080 --> 0:07:44.840 often it's backward looking, and so there were a lot 0:07:44.840 --> 0:07:46.960 of questions about what had happened, how does it happened? 0:07:47.160 --> 0:07:49.680 But there was also a fair bit of frustration that 0:07:49.720 --> 0:07:52.720 he was arrested yesterday before he was able to testify 0:07:52.920 --> 0:07:57.840 here today under oath to give Americans more clarity on 0:07:57.960 --> 0:08:00.640 what had happened here, I would say also, if you 0:08:00.680 --> 0:08:03.800 want that clarity, go to the indictment from the Southern 0:08:03.800 --> 0:08:05.760 District of New York, go to the SEC complaint and 0:08:05.800 --> 0:08:08.000 the CFTC complained. There's a lot of detail in there, 0:08:08.200 --> 0:08:10.400 but there was certainly a lot of frustration here we're 0:08:10.400 --> 0:08:13.320 not hearing from Sam BigMan freed himself under oath, which 0:08:13.360 --> 0:08:15.840 we know he had said he didn't have all the 0:08:15.880 --> 0:08:19.640 details because he didn't have all the data. Shanali Bassek 0:08:19.880 --> 0:08:23.200 just fantastic day of reporting in of course the White 0:08:23.200 --> 0:08:25.600 House or indeed in Washington or generally. We thank her 0:08:25.680 --> 0:08:27.440 so much, and let's just talk a little bit for 0:08:27.480 --> 0:08:29.800 a moment about what's been happening. The update that, of 0:08:29.840 --> 0:08:33.240 course Sam Backminfried has been denied bail by a judge 0:08:33.240 --> 0:08:35.880 in the Bahamas in order to return to jail. We 0:08:35.960 --> 0:08:38.400 understand in the island country. Now what's interesting here is 0:08:38.400 --> 0:08:40.760 the judge is also setting the extradition hearing for bank 0:08:40.800 --> 0:08:44.080 Win freed for February the eighth, and learn the arraignment 0:08:44.080 --> 0:08:46.360 on Tuesday. Has Laways said that he would fight plans, 0:08:46.400 --> 0:08:48.680 of course, to send him back to the United States 0:08:48.760 --> 0:08:51.240 to face charges. I mean, while coming up the future 0:08:51.520 --> 0:08:55.160 of the cybersecurity industry and as we head towards three, 0:08:55.200 --> 0:08:56.680 what that really looks like. We're going to get you 0:08:56.679 --> 0:09:00.319 the perfect insight an exclusive conversation. Palo Alto Neck Works 0:09:00.440 --> 0:09:14.079 CEO of Nikesha Aura US next a Bloomberg. We've got 0:09:14.080 --> 0:09:16.600 to talk cyber right now because it's been an increasingly 0:09:16.640 --> 0:09:20.200 important focus for companies, for governments, and of course this 0:09:20.280 --> 0:09:22.960 year we're going to talk about cyber crime as it persists. 0:09:23.200 --> 0:09:26.520 Plo Alto Network CEO Nikesha Aura Choice US from its 0:09:26.520 --> 0:09:29.840 Global Cybersecurity Conference in Las Vegas, bringing together more than 0:09:30.400 --> 0:09:35.360 cybersecurity professionals to discuss just that the increasing nature and 0:09:35.480 --> 0:09:39.400 all encompassing global nature of cyber crime. Nikesh, But what 0:09:39.480 --> 0:09:42.040 about cyber spending? We want to understand right now when 0:09:42.080 --> 0:09:44.080 you're getting up on your fireside chats, when you're thinking 0:09:44.080 --> 0:09:46.040 about innovation in the space, as you have been with 0:09:46.080 --> 0:09:49.360 the course with Glogle Cloud, are people still willing to 0:09:49.520 --> 0:09:51.240 spend as much as they used to in this this 0:09:51.400 --> 0:09:55.880 environment of economic downturn. Well, Caroline, first of all, thank 0:09:55.880 --> 0:09:58.679 you for having me as we kick off our IGNITE 0:09:58.720 --> 0:10:01.960 conference in Las Vegas. I know there's a lot of 0:10:01.960 --> 0:10:04.880 conversation around the macro environment and what is going on 0:10:05.240 --> 0:10:08.280 with potential budgets and cyberspending and I T spending to 0:10:08.280 --> 0:10:11.520 be honest in the future, and whilst we are seeing 0:10:11.600 --> 0:10:15.240 some degree of caution from the customers out there. I 0:10:15.240 --> 0:10:17.680 don't think the demand is going away because there's a 0:10:17.720 --> 0:10:20.600 lot of historical debt that needs to be paid. Because 0:10:20.600 --> 0:10:22.960 we've built infrastructure over the last thirty years which needs 0:10:23.000 --> 0:10:26.200 to be replaced. Because everyone's relying on technology and that 0:10:26.280 --> 0:10:29.599 requires a lot of our customers to upgrade their capabilities 0:10:29.760 --> 0:10:32.800 to get more and more up to speed with the 0:10:32.840 --> 0:10:34.959 current techniques in the market. And as you know, the 0:10:35.000 --> 0:10:38.080 bad actors aren't waiting in an economic downturn. They're attacking 0:10:38.080 --> 0:10:41.880 with fugusto they are. And therefore, what of the space, 0:10:41.920 --> 0:10:44.400 the competition in the space, the people, the customers do 0:10:44.480 --> 0:10:46.520 they turn to in this moment? Is it market shap 0:10:46.559 --> 0:10:48.800 that's been growing for you? And how have you been 0:10:48.800 --> 0:10:51.640 winning that? If so? Well, Caroline, four and a half 0:10:51.679 --> 0:10:53.880 years ago we were a single product company. In the 0:10:53.920 --> 0:10:55.600 last four and a half years we have built a 0:10:55.600 --> 0:10:59.560 portfolio where we lead in thirteen categories of cybersecurity. This 0:10:59.640 --> 0:11:01.719 is a few which hasn't been done before by any 0:11:01.760 --> 0:11:05.240 cybersecurity companies. So, you know, the silver lining in this 0:11:05.400 --> 0:11:08.719 macroeconomic environment is that customers are looking to reduce their 0:11:08.720 --> 0:11:12.960 total cost of ownership and increase their security posture. Security 0:11:12.960 --> 0:11:14.920 outcome as you'd like to call it, and that makes 0:11:15.000 --> 0:11:17.439 us a perfect partner for them because we have spent 0:11:17.480 --> 0:11:19.640 the time in the last four or five years trying 0:11:19.640 --> 0:11:23.160 to put our platform together and that's helping us because 0:11:23.240 --> 0:11:25.800 you know, people are coming to us in this consolidation 0:11:26.240 --> 0:11:29.520 seat of driven market the cash. It's been a busy 0:11:29.520 --> 0:11:31.920 week for Caroline and I'm we're only two days in. 0:11:32.040 --> 0:11:36.079 We called Monday Merging Monday because of just the relentless 0:11:36.160 --> 0:11:39.239 news for an M and A. You're in ignite two 0:11:40.840 --> 0:11:45.520 of your friends and peers and industry colleagues. Historically, I 0:11:45.559 --> 0:11:48.240 look at your M and A track record, semin a 0:11:48.240 --> 0:11:51.480 an option for you guys right now. Well, you know 0:11:51.480 --> 0:11:54.040 we've bought seventeen companies so far since I've been here 0:11:54.080 --> 0:11:55.320 for four and a half years. So yes, you know 0:11:55.360 --> 0:11:57.760 we have appetite for M and A as you can 0:11:57.800 --> 0:12:01.560 probably tell. But we really focus done expanding our product 0:12:01.600 --> 0:12:04.680 capability and product portfolio, and we've done M A slightly 0:12:04.760 --> 0:12:08.480 differently than traditionally an enterprise. We've actually looked for number 0:12:08.520 --> 0:12:10.840 one or number two in our in a particular category. 0:12:11.480 --> 0:12:13.320 We made sure that the founders have come to work 0:12:13.320 --> 0:12:16.000 at Bolt stayed with us. We made made sure they 0:12:16.120 --> 0:12:18.160 run our business. In fact, you know, I was noticed 0:12:18.320 --> 0:12:21.840 noting the statistics this morning. We have fourteen thousand employees. 0:12:22.080 --> 0:12:23.960 Eighty percent of those people are new to Poulto in 0:12:23.960 --> 0:12:26.640 the last four years. So we have made sure that 0:12:26.720 --> 0:12:29.920 this transition that we've undergone through M and A and 0:12:30.000 --> 0:12:33.680 through organic development has been sort of balanced with increasing 0:12:33.679 --> 0:12:36.080 in our own capabilities. So we think we've paid off 0:12:36.120 --> 0:12:38.840 all the cybersecurity technical debt we've had to pay to 0:12:38.920 --> 0:12:41.280 build this into a large platform company for the future. 0:12:42.400 --> 0:12:47.000 I didn't I didn't hear enough. I didn't hear no. Yes. 0:12:47.840 --> 0:12:50.960 Well I didn't hear yes either. Fair enough. Caroline made 0:12:50.960 --> 0:12:53.480 a really good point earlier when we were talking before 0:12:53.520 --> 0:12:57.160 the show that when it comes to cyber security, cyber 0:12:57.240 --> 0:13:00.839 crime is not moderating, even if the spend of your 0:13:00.880 --> 0:13:06.560 customers is. What are the drivers behind corporates who think, right, 0:13:06.679 --> 0:13:09.600 I better now protect myself and invest in this area. 0:13:09.679 --> 0:13:12.200 What are the key events from this year that has 0:13:12.280 --> 0:13:15.840 pushed executives to get their checkbook out? Well I did 0:13:16.080 --> 0:13:20.920 last year. In two we had twenty confirmed randsomwhere victims, 0:13:21.240 --> 0:13:25.080 which means companies had to deal with an environment where 0:13:25.120 --> 0:13:28.520 their technology did not help them. They got breached, their 0:13:28.559 --> 0:13:31.400 systems were shut down, they had business interruption, and they 0:13:31.400 --> 0:13:33.880 either had to negotiate their way out of a situation 0:13:34.120 --> 0:13:35.960 or had to pay rand somewhere to get out of it, 0:13:36.160 --> 0:13:38.320 to get to you know, get back to business. Now 0:13:38.840 --> 0:13:41.240 that leaves boundarily of a scar on you. You're gonna 0:13:41.280 --> 0:13:43.040 sit down with your I T team and their security 0:13:43.040 --> 0:13:46.480 teams like this should never happen again. So the market 0:13:46.559 --> 0:13:50.480 just in Mint Mint customers who are not paying attention 0:13:50.480 --> 0:13:53.679 to cybersecurity, and what's happening is, you know, the whole pandemic, 0:13:53.800 --> 0:13:56.320 the whole rework from home, the whole fact that you 0:13:56.400 --> 0:13:57.880 have you know, online was the only way to get 0:13:57.920 --> 0:14:00.640 business done because your stores were closed. Has put a 0:14:00.679 --> 0:14:04.199 tremendous focus on making sure that your technology infrastructure is 0:14:04.200 --> 0:14:07.840 working at the time that requires it to be uninterruptable, 0:14:08.000 --> 0:14:10.960 It requires it to have business continuity, and their cyber 0:14:11.000 --> 0:14:14.199 becomes your biggest risk if something happens to your tech infrastructure. 0:14:14.520 --> 0:14:18.440 Because you do a global cyber survey, and what caught 0:14:18.480 --> 0:14:21.600 my eye was not only just how everyone has experienced 0:14:21.600 --> 0:14:26.760 it was reported experience of cybersecurity incident, but What really 0:14:26.800 --> 0:14:29.520 interested me was the talent issue, and you talk about 0:14:29.520 --> 0:14:32.520 a cyber skills shortage, and that basically most respondents is 0:14:32.560 --> 0:14:36.040 saying that having to tend to automated ways of tackling 0:14:36.040 --> 0:14:38.920 cybersecurity because of talent shortage. How are you looking to 0:14:38.920 --> 0:14:42.000 tackle that talent shortage in this market? So, Caroline, like 0:14:42.080 --> 0:14:43.920 you already gave the answer and what you said, I 0:14:43.960 --> 0:14:46.120 don't think we have a talent shortage. I think we 0:14:46.200 --> 0:14:49.120 have a you know, sort of a perpetration of too 0:14:49.120 --> 0:14:51.800 many vendors, too much integration, which is done by our 0:14:51.840 --> 0:14:54.680 customers who in some cases don't have all the skills 0:14:54.720 --> 0:14:57.520 needed because they're running a two thousand, five thousand, ten 0:14:57.520 --> 0:15:00.600 thousand people organization, and they should be busy doing their business, 0:15:00.800 --> 0:15:05.480 not worrying about protecting their infrastructure by stitching cybersecurity solutions. 0:15:05.680 --> 0:15:07.880 That job should be our job, that should be the 0:15:07.880 --> 0:15:09.960 industry's job. And that's kind of what we've been working 0:15:10.000 --> 0:15:11.680 on phil last four and a half years. Four and 0:15:11.680 --> 0:15:13.560 a half years ago, we went out and said, listen, 0:15:13.760 --> 0:15:16.080 this is a data problem, this is an AI problem. 0:15:16.240 --> 0:15:18.560 It was funny I was remarking earlier that I played 0:15:18.560 --> 0:15:21.320 with GPT three and chat GPT over the weekend, and 0:15:21.360 --> 0:15:23.680 it is giving you a little window into what AI 0:15:23.760 --> 0:15:26.560 is capable of. How natural language processing should be able 0:15:26.560 --> 0:15:28.840 to answer you a question without requiring humans to get 0:15:28.880 --> 0:15:31.000 involved and looking at screens and trying to figure out 0:15:31.000 --> 0:15:32.640 what the problem is. So I think this is a 0:15:32.720 --> 0:15:35.040 data problem. I think this is an AI problem. We 0:15:35.080 --> 0:15:39.040 need more data and AI professionals, not really cybersecurity professionals. 0:15:39.080 --> 0:15:42.120 We can understand fifty different vendors in the infrastructure and 0:15:42.160 --> 0:15:44.120 stitch it one at a time for each customer. So 0:15:44.360 --> 0:15:46.920 this is an automation problem. This is an AI problem. 0:15:46.960 --> 0:15:49.600 This can be solved, but our customers have to step 0:15:49.640 --> 0:15:52.080 up and embrace automation and AI because if they don't, 0:15:52.160 --> 0:15:54.120 we're gonna have more ransom of our victims next year 0:15:54.160 --> 0:15:57.040 than we had last year. We had a chat GBT 0:15:57.240 --> 0:16:00.400 ease there on a hands carry How familiar with that? 0:16:00.560 --> 0:16:03.320 Palo Alto Network CEO Nikesha are a really good to 0:16:03.320 --> 0:16:05.840 catch up, Caroline. Not grateful to have you on the show. 0:16:13.520 --> 0:16:16.400 Let's talk about Twitter's Trust and Safety Council. It's no 0:16:16.480 --> 0:16:18.800 more a group of independent experts. It was created in 0:16:19.640 --> 0:16:23.320 to help tackle child sexual exploitation, hate speech, harassment other 0:16:23.360 --> 0:16:26.200 problems on the platform, but it's now been disbanded and 0:16:26.240 --> 0:16:28.800 a letter was sent to the team saying, as Twitter 0:16:28.880 --> 0:16:31.680 moves into a new phase, we are reevaluating how best 0:16:31.680 --> 0:16:34.960 to bring external insights into our product and policy development work. 0:16:35.600 --> 0:16:38.080 Several members recently quit the group over concerns about the 0:16:38.080 --> 0:16:42.640 company's ability to police the platform for harmful contented Yeah, 0:16:42.640 --> 0:16:45.440 that's right, Kara and Apples making some changes of its own, 0:16:45.960 --> 0:16:49.760 preparing to allow alternative app stores on its iPhones and 0:16:49.800 --> 0:16:53.320 iPads as part of a sweeping overhaul to comply with 0:16:53.440 --> 0:16:58.200 strict European Union requirements coming in bloom Bus. Mark Goerman 0:16:58.520 --> 0:17:01.600 broke that story and joins us. Now, Mark, what have 0:17:01.680 --> 0:17:04.240 you learned in your reporting about the changes that Apple 0:17:04.359 --> 0:17:08.360 is working on internally? Thank you both for having me. Yeah, 0:17:08.400 --> 0:17:11.160 have you explained it well. Basically, Apple has a major 0:17:11.240 --> 0:17:14.880 project in the works across its software and services organizations 0:17:15.200 --> 0:17:18.920 to really revamp the underpinnings of iOS and iPad os, 0:17:19.040 --> 0:17:22.440 some of its other operating systems to meet these very 0:17:22.440 --> 0:17:27.280 stringent and very broad requirements coming into place from the 0:17:27.320 --> 0:17:30.600 European Union. Now, as part of these requirements, they're really 0:17:30.600 --> 0:17:32.880 going to start making the iPhone a little bit more 0:17:32.920 --> 0:17:35.959 like Android. Right. I'm sure some people aren't gonna like, uh, 0:17:36.119 --> 0:17:39.320 you know, to hear that comparison. But there's the reality. 0:17:39.400 --> 0:17:42.840 You're gonna see some sideloading, which means installing apps from 0:17:42.920 --> 0:17:46.280 third party app stores, from different websites, from other sources 0:17:46.280 --> 0:17:48.280 on the Internet. You're going to see them begin to 0:17:48.359 --> 0:17:51.800 slightly open up the NFC processor on the phone, which 0:17:51.800 --> 0:17:54.040 is the chip that allows you to do mobile pay 0:17:54.040 --> 0:17:56.480 with Apple pay, so it's Apple to pay payments for 0:17:56.520 --> 0:17:58.440 the first time, may be able to come to third 0:17:58.480 --> 0:18:02.560 party apps like your bank or Venmo or PayPal. You're 0:18:02.560 --> 0:18:04.880 also going to see a change to the browsing engine. 0:18:05.080 --> 0:18:07.560 So there's third party web browsers available on the iPhone, 0:18:07.560 --> 0:18:10.680 whether that's Firefox or whether that's Chrome. But what most 0:18:10.680 --> 0:18:13.679 people don't know is that those applications still use the 0:18:13.800 --> 0:18:18.360 underlying mechanics, the underlying engine of an Apple Safari web browser. 0:18:18.680 --> 0:18:20.960 There's also some work being done to open up the 0:18:20.960 --> 0:18:24.679 Fine My network. Do you remember Tile that Square competitors 0:18:24.680 --> 0:18:27.479 to the air tag. They've complained for months about not 0:18:27.520 --> 0:18:31.440 being able to have the same iPhone based pairing functionality 0:18:31.480 --> 0:18:33.520 as the air tag. So Apple is going to try 0:18:33.560 --> 0:18:35.600 to bridge that gap as well. That's interesting, of course, 0:18:35.600 --> 0:18:38.119 because you bring up a competitor basically that Apple wouldam 0:18:38.119 --> 0:18:40.720 built something pretty similar to all of this is about competition. 0:18:40.760 --> 0:18:43.080 We've are gonna gotten thirty seconds left. But will this 0:18:43.200 --> 0:18:46.040 ultimately satisfied you think, because you're saying it's like Android, 0:18:46.119 --> 0:18:49.320 but Google is also they think it's too powerful. As 0:18:49.359 --> 0:18:52.840 long as Apple hits all the requirements that the European 0:18:52.960 --> 0:18:56.440 Union is outlined with the Digital Markets Act for I'm 0:18:56.480 --> 0:18:58.960 not really sure what else people or the government can 0:18:58.960 --> 0:19:02.080 complain about. Out the downside for Apple if they don't comply. 0:19:02.480 --> 0:19:06.680 We're talking ten to of annual global revenue as fine 0:19:06.720 --> 0:19:09.880 switch for Apple as of last year. That's eighty billion dollars. 0:19:10.880 --> 0:19:14.080 Quite the chunk of change. Mark German Money talks always. 0:19:14.400 --> 0:19:16.240 We thank you so much. Is always great to have 0:19:16.320 --> 0:19:26.520 him on with a scoot. Welcome back to Bloomberg Technology. 0:19:26.520 --> 0:19:28.920 I'm Caroline Hyde in New York with Ed Ludlow in 0:19:28.960 --> 0:19:31.280 San Francisco, and you are always a busy man across 0:19:31.280 --> 0:19:34.080 our screens, but also by writing scoop after scoop. Just 0:19:34.080 --> 0:19:37.560 tell us about the SpaceX fundraising one. Yes, so Bloomberg 0:19:37.600 --> 0:19:40.640 has learned that Elon must SpaceX wants to sell insider 0:19:40.720 --> 0:19:43.639 shares at a price that would raise the company's valuation 0:19:44.040 --> 0:19:47.320 to about a hundred and fifty forty billion dollars. According 0:19:47.359 --> 0:19:50.919 to sources, this makes SpaceX the most valuable private company 0:19:50.920 --> 0:19:54.600 in the US. It's up from a seven billion dollar 0:19:54.680 --> 0:19:58.399 valuation in July. That's according to pitchbook data. You know, 0:19:58.520 --> 0:20:01.119 this is a company that's dominated ting right the market 0:20:01.200 --> 0:20:04.280 for commercial space launch. They have Starlink, which is their 0:20:04.480 --> 0:20:07.560 satellite based internet and you know, in the past, Musk 0:20:07.600 --> 0:20:10.320 has said that Starlink could be spun off in a 0:20:10.400 --> 0:20:13.840 listing right once cash flows more predictable. I'm really interesting 0:20:13.920 --> 0:20:16.560 your take on this story. You know, it's a tender offer. 0:20:16.640 --> 0:20:18.440 We don't know yet for certain if they'll do a 0:20:18.520 --> 0:20:21.000 primary as well. And I know, you know, you know 0:20:21.040 --> 0:20:23.359 this bending on for every seller, there's a buyer, and 0:20:23.400 --> 0:20:26.000 buyer there's a seller. But what what gets me is 0:20:26.040 --> 0:20:29.439 that there's clearly an appetite from investors to get involved 0:20:29.440 --> 0:20:34.040 in SpaceX, and when it's led by well, ostensibly one 0:20:34.119 --> 0:20:36.040 Elon Musk. I know that he of course has very 0:20:36.040 --> 0:20:39.320 powerful CEOs and operational chief's female at that. But I'm 0:20:39.359 --> 0:20:42.480 interested in why on the one side, you're talking earlier 0:20:42.480 --> 0:20:45.480 about Tessa shares have been under pressure. Worry about the distraction, 0:20:45.880 --> 0:20:49.720 but then the privately held business people answer worried. Yeah. 0:20:49.960 --> 0:20:52.320 I mean it's a very hard one to answer. Gwin 0:20:52.400 --> 0:20:54.960 shot well, as you alluded to, you know runs day 0:20:54.960 --> 0:20:57.959 to day SpaceX. But Elon Musk is still involved, you know, 0:20:58.000 --> 0:21:00.399 in his pay testimony the other day, he's said that 0:21:00.400 --> 0:21:03.640 that's still a key area of focus for him. So 0:21:03.840 --> 0:21:06.760 it's a question that overhangs both companies. But the private 0:21:06.840 --> 0:21:10.040 entity SpaceX at least seems more immune to this key 0:21:10.040 --> 0:21:12.679 man risk element that tests the shares appear to be 0:21:12.760 --> 0:21:16.080 under yeah for now, well, still going to the moon, 0:21:16.119 --> 0:21:19.200 it would seem in terms of overall valuation of that business. 0:21:19.200 --> 0:21:23.040 And let's talk about valuations and businesses private and whether 0:21:23.040 --> 0:21:25.040 the exit strategies are still there. We want to talk 0:21:25.040 --> 0:21:27.320 about fundraise, we want to want to talk about deal sentiment. 0:21:27.560 --> 0:21:31.600 We've got great local focus for that here in New York. 0:21:31.720 --> 0:21:34.560 Cameron and Sary's with us board partner at Greycroft is 0:21:34.560 --> 0:21:36.280 also the former head of M and A at Pinterest. 0:21:36.400 --> 0:21:38.399 So basically, Cameron, you can talk about everything that we 0:21:38.400 --> 0:21:39.879 want to talk about the moment because it's a hot 0:21:39.920 --> 0:21:42.679