Speaker 1: From the heart where innovation, money and power.
Speaker 2: Collie in Silicon Vallet Nbon This is Bloomberg Technology with
Speaker 2: Caroline Hide and Ed Ludlove.
Speaker 1: Amed Ludlow in San Francisco. Caroline Hides off today this
Speaker 1: is Bloomberg Technology coming up full earnings coverage as we
Speaker 1: rat results from pinterest and push your head to Qualcom
Speaker 1: that's out after the bell and speaking of chipmakers, will
Speaker 1: rap results from AMD and look at soft Banks r IPO,
Speaker 1: which is eyeing evaluation of more than sixty billion dollars plus.
Speaker 1: We take a deep dive into the world of crypto.
Speaker 1: We speak to the CEO of the Eyebel Scanning Cryptocurrency
Speaker 1: project World Coin. The earning story. Two names in particular
Speaker 1: that I'm looking at to start with AMD, A beat
Speaker 1: on the top of bottom line against expectations in the court,
Speaker 1: a gone signs of recovery in the PC market. A
Speaker 1: long term projection about the market opportunity for them in
Speaker 1: the context of AI and AI accelerators. Biskunjensavani. It's going
Speaker 1: to join me later in the show to go through
Speaker 1: those numbers and talk about where AMD sits in the
Speaker 1: ecosystem of chip names. Then you've got Pinterest. The story simple,
Speaker 1: the projection it's giving just shows that it's not having
Speaker 1: the same fortune in the ad space that some of
Speaker 1: its peers are. Why why is it not doing as
Speaker 1: well as the likes of Meta? And what is it
Speaker 1: about this platform that's not resonating in the same way
Speaker 1: as some of the ad based social platforms. Well, it's
Speaker 1: got the perfect guest joining us now, analyst Mark Mahaney
Speaker 1: ever caught ISI Senior Managing Director. Mark has an outperformed
Speaker 1: rating on Pinterest with a forty five dollars price target. Mark,
Speaker 1: good morning to you from San Francisco. What's the story
Speaker 1: with Pinterest? To your mind, it's the name you like
Speaker 1: it is, it's.
Speaker 3: Actually when we recently upgraded that so much for the quarter,
Speaker 3: but we're looking forward to a fundamental inflection point. That
Speaker 3: fundamental inflection point requires the overall ad market to rebound
Speaker 3: and to recover, and I think the truth from earning
Speaker 3: season so far is that it really hasn't done that.
Speaker 3: Meta had phenomenally good results, particularly in terms of its
Speaker 3: September quarter outlook, but I think that's mostly very company
Speaker 3: specific factors.
Speaker 4: Meta has a bunch of product cycles that are all.
Speaker 3: Hitting At the same time, they also have the easiest
Speaker 3: comps because they.
Speaker 4: Were most dramatic.
Speaker 3: They were the most of their company most dramatically impacted
Speaker 3: by the Apple privacy changes a year ago. So they's
Speaker 3: kind of a seuey generous case, whereas the other names
Speaker 3: are seeing modest improvement. That's Google, that's Pinterest, especially these
Speaker 3: second tier platforms like Pinterest and Snap, and Snap is
Speaker 3: seeing almost no recovery. They're still declining on a negative
Speaker 3: base to begin with, or the base that was declining
Speaker 3: last year, So we.
Speaker 4: Still need it.
Speaker 3: It's kind of still TBD, but we still like the
Speaker 3: call because we think that eventually we're going to get
Speaker 3: this recovery in the ad market, and then we're seeing
Speaker 3: a lot of initiatives at pinterest that are starting to
Speaker 3: show go off, show up in terms of accelerating user growth,
Speaker 3: nice solid growth and engagement. We just need the advertisers
Speaker 3: to start clicking in, and I think that this partnership
Speaker 3: that they're rolling out with Amazon in the back half
Speaker 3: of the year will kind of unlock that advertiser interest.
Speaker 4: So that's why we're long and we like Pinterest as
Speaker 4: a buy.
Speaker 1: Sales in the court have gone rows six percent to
Speaker 1: seven hundred and eight million dollars for the period ending
Speaker 1: June thirtieth, above street expectations. But I guess to your point,
Speaker 1: if you compare with Meta, Meta delivered double digit percentage growth.
Speaker 1: One part of Meta's story mark was AI driven recommendations
Speaker 1: and that seem to boost the AD side of the
Speaker 1: equation as well. What tools does pinterest have from a
Speaker 1: technology perspective to drive growth both at the user level
Speaker 1: and at the top line.
Speaker 4: Well, they are.
Speaker 3: They also are applying AI to figure out better.
Speaker 4: Which content to put in front of their users, to.
Speaker 3: Help advertisers better target ads and then soon to create
Speaker 3: creative But you step back Meta and Google, you know,
Speaker 3: the biggest at largest AD platforms are going to have
Speaker 3: structural advantages when it comes to AI, and then particularly
Speaker 3: I think Meta has been very aggressive and rightly so
Speaker 3: and smartly so in terms of putting a lot of
Speaker 3: money on a lot of resources behind using machine learning
Speaker 3: and AI over the last couple of years and our
Speaker 3: generative AI to build up, you know, to help out
Speaker 3: marketers find the right audience, monetize i'm sorry, optimize their
Speaker 3: campaigns and do the best targeting and tracking and measurement
Speaker 3: of those campaigns and then also very soon to start
Speaker 3: creating ads and then kind of a b testing on
Speaker 3: that massive scale, which.
Speaker 4: They couldn't do before.
Speaker 3: So I think if you really want to see a
Speaker 3: winner in and that the application of generative AI to
Speaker 3: advertising models, it's probably Meta handover fist and then probably
Speaker 3: Google too. The other players will also benefit, I think,
Speaker 3: just not nearly to the extent that the large scale
Speaker 3: players will.
Speaker 1: Mark bill Ready has been in the CEO role for
Speaker 1: a year. What is your assessment, your scorecard of his
Speaker 1: leadership so far?
Speaker 3: Well, he's implemented a series of changes to try to
Speaker 3: get to regrow the user base and to raise engagement.
Speaker 3: It looks to me like he gets a V plus
Speaker 3: and a minus for doing that. I mean, since he's
Speaker 3: joined the company, you've started to get accelerating user growth again.
Speaker 3: They're doing about four hundred and fifty million maus. It's growing,
Speaker 3: you know, solidly seven percent.
Speaker 4: Year over year. That's pretty good growth for a business
Speaker 4: of that base.
Speaker 3: And you're starting to see more engagement than some of
Speaker 3: the metrics that they talk about.
Speaker 4: Like sessions or saves per user.
Speaker 3: Those are all growing faster than the number of users,
Speaker 3: so you're seeing rising engagement, so he gets kind of
Speaker 3: a B plus a minus for that, which still TBD.
Speaker 3: So whatever that's a B minus is. On the advertiser side,
Speaker 3: there are some numbers he's thrown out about the small
Speaker 3: percentage of pinterest advertisers who've adopted their tools and are
Speaker 3: spending a lot faster, like thirty percent growth year over year.
Speaker 4: I just want to know whether.
Speaker 3: That's going to expand and cover half of the pinterest
Speaker 3: advertiser base, and whether he can really get new types
Speaker 3: of advertisers onto the platform. So that's that's kind of
Speaker 3: what we're really watching for, and it'll be simple. It'll
Speaker 3: show up in the revenue growth numbers, and we won't
Speaker 3: just have revenue growth go from six percent to seven
Speaker 3: percent to eight percent year over year.
Speaker 4: I mean, it should get chunky. It should go fifteen percent,
Speaker 4: twenty percent.
Speaker 3: That would be the real test and the proof of
Speaker 3: whether he's succeeding in terms of getting advertisers to unlocking
Speaker 3: advertisers spend.
Speaker 1: It's I know it's been thirty six hours since Uber
Speaker 1: posted its numbers, but I want to get your take
Speaker 1: a milestone with surprise profitability operating profit on a gap basis,
Speaker 1: but the market seemed to sell the shares on sort
Speaker 1: of longer term growth concerns. How they continue growing, I
Speaker 1: guess at the you know, brider level, but also like
Speaker 1: the future of this business beyond its legacy mark.
Speaker 4: I think you set it up right, except that I
Speaker 4: just layer in one other thing, which.
Speaker 3: Is as we've gone, you know through earning season, it's
Speaker 3: a high bar quarter. That wasn't the case the last
Speaker 3: two quarters. Stocks had been so beaten down last year
Speaker 3: in terms of estimates, cuts and multiple d ratings, and
Speaker 3: you know this year you've had a recovery in a
Speaker 3: small recovery in fundamentals, but you certainly have had a
Speaker 3: recovery in multiples.
Speaker 4: So I just think the bar is higher.
Speaker 3: Even look at Meta, which I would consider the monster
Speaker 3: company report of the of the quarter. I mean, the
Speaker 3: forward guidance was materially better than even the bulls had
Speaker 3: thought was possible, and yet that stock is kind of
Speaker 3: barely holding onto the gains and it's kind of mid
Speaker 3: single digital three four percent gain, So it's.
Speaker 4: A tough bar. This quarter, uber put up a pretty
Speaker 4: good quarter.
Speaker 3: Expectations were high, but there was a little the revenue
Speaker 3: came in a little bit light and so, and I
Speaker 3: think that's mostly due to accounting change, but still it's
Speaker 3: like a little bit of a question mark on a
Speaker 3: stock that's had a major year to date rally. So
Speaker 3: I think you're going to I think there were some
Speaker 3: technical factors in there too, but leaving that aside, I
Speaker 3: think for some of these names, this quarter is going
Speaker 3: to be kind.
Speaker 4: Of a It's not going to be a gap up
Speaker 4: quarter for good numbers. It's going to be a consult
Speaker 4: in terms of the stock, it's going to be.
Speaker 3: A kind of a consolidation quarter, and companies are going
Speaker 3: to kind of be flatish or down mid single digit percent,
Speaker 3: And then we're going to wait and see whether the
Speaker 3: fundamentals continue the improvement in H two that we saw
Speaker 3: in H one.
Speaker 4: If that happens, especially.
Speaker 3: For ad names and online retail names like Amazon, then
Speaker 3: those stocks will go higher. But this is going to
Speaker 3: be a tough quarter for any you had quarter last quarter,
Speaker 3: you had a couple of these names traded up double
Speaker 3: digit percent, ten percent plus.
Speaker 4: I think that's much harder to happen this quarter. I
Speaker 4: think the setup is much tougher.
Speaker 1: Mark Thursday does bring Amazon quickly. What are you expecting
Speaker 1: from Amazon?
Speaker 4: There's three things that matter here.
Speaker 3: Whether the operating margins on the retail business continue to recover.
Speaker 4: I think we'll see that.
Speaker 3: Whether the online retail revenue growth rates kind of stable
Speaker 3: and maybe even start to accelerate based on recent positive
Speaker 3: data points.
Speaker 4: I think we'll see that.
Speaker 3: It's less certain to But then the most important thing
Speaker 3: is whether AWS reaccelerates. We're the way we phrased it
Speaker 3: is well the CFO used the A word i e.
Speaker 4: Is an acceleration.
Speaker 3: And look, if AWS growth reaccelerates, I think you'll see
Speaker 3: a lot of follow through on stock. I think the
Speaker 3: stock can go higher. I just don't know whether they
Speaker 3: will be able to see that. They didn't see it
Speaker 3: in the gym quarter. I'm pretty certain whether they're starting
Speaker 3: to see signs of that in September quarter is a
Speaker 3: big unknown to everybody. So what that's going to be
Speaker 3: the most important thing to glean from that earning scar.
Speaker 1: All right, Hi, bar Courter, Mark Mahoney, evercre thank you
Speaker 1: so much for your time. I think we'll just stick
Speaker 1: with Amazon. Actually, Amazon launching the biggest overhaul of its
Speaker 1: grocery business since it acquired Whole Foods Markets six years
Speaker 1: ago for thirteen point seven billion dollars. For more in
Speaker 1: the details. That's bringing Bloomberg's Matt Day, who's been writing
Speaker 1: about this in Business Week. What I enjoyed about your
Speaker 1: article is you put Amazon in the context of the
Speaker 1: entire landscape for groceries in this country. But what does
Speaker 1: the reset look like.
Speaker 5: It looks like trying to kind of push together all
Speaker 5: the disjointed parts of its grocery business. Right, Amazon bought
Speaker 5: Whole Foods several years ago. Amazon has its own Amazon
Speaker 5: Fresh online delivery business. They've opened a few dozen stores.
Speaker 5: They're trying to make all of that kind of sing
Speaker 5: better together. Right So, right now, if you go online,
Speaker 5: try to shop for groceries on Amazon, you might wind
Speaker 5: up making three separate purchases with three separate deliveries. They've
Speaker 5: said they're going to funnel that under one single basket,
Speaker 5: one single cart, and then eventually they're hoping to start
Speaker 5: re expanding that that brand new Amazon Fresh physical grocery
Speaker 5: chain they started back during the pandemic.
Speaker 1: What is Andy Jase's attitude towards the grocery business. So
Speaker 1: you've guys reported that he's taken a look at other units,
Speaker 1: for example, Prime Video, and said, well, let's get this
Speaker 1: under control. So what do we know about how he
Speaker 1: views the grocery opportunity.
Speaker 5: So since Jeff Bezos first nudge Amazon toward grocery getting
Speaker 5: on fifteen twenty years ago, the rest now has been
Speaker 5: kind of the same for Amazon. Like listen, grocery shops
Speaker 5: the most frequent purchase that people make. You know, we
Speaker 5: need to be there if we're going to be a
Speaker 5: lot of you know, globe straddling retailer.
Speaker 2: Right.
Speaker 5: Amazon's got a tidy business of course already. But we've
Speaker 5: heard Andy Jassey makes some of the similar comments that
Speaker 5: you know, listen, groceries are a really important category. We
Speaker 5: think we have something to say there, and we're committed
Speaker 5: to it for the long term. You know that said,
Speaker 5: they did make a pretty big tap on the brakes,
Speaker 5: you know this about this time of year ago when
Speaker 5: they stopped expanding Amazon Press stores and really taking a
Speaker 5: hard look at, you know, whether their grocery strategy was
Speaker 5: the right one. They think they're there, but you know,
Speaker 5: I guess we'll see, all right.
Speaker 1: Bloombo's Matt Day check out his piece and Business Week
Speaker 1: about the big Amazon Grocery reset. AMD reported better than
Speaker 1: expected second quarter results, which signal some an optimism about
Speaker 1: the chip maker's AI potential, the CEO saying, quote, while
Speaker 1: we're still in the very early days of the new
Speaker 1: era of AI, it's clear that it represents a multi
Speaker 1: billion dollar growth opportunity for AMD. Joining US now Bloomberg
Speaker 1: Intelligence is chip handelist Congensabani, So the opportunity is framed
Speaker 1: as being one hundred and fifty billion dollars by twenty
Speaker 1: twenty seven. We're talking specifically about AI accelerators. The stock
Speaker 1: now it session loads down eight percent. What do we
Speaker 1: not like about what AMD said?
Speaker 6: I think the stock reaction is due to the lack
Speaker 6: of any quantifiable matrix around the AI business. I mean, look,
Speaker 6: there's no doubt that there is definite positive customer interests,
Speaker 6: there's definite positive customer feedback. But these processes take a
Speaker 6: long time. You go from sampling to customers, they need
Speaker 6: to qualify it place the pos an Even after that
Speaker 6: there's a couple of quarters for the ramp. So I
Speaker 6: think the stock reaction is due to the lack of
Speaker 6: any quantifiable matrix around the magnitude and the timing of
Speaker 6: the revenue upside from this business for next year.
Speaker 1: The way the AMD framed it is the customer engagements
Speaker 1: engagements with seven x in the quarter gone, But that
Speaker 1: doesn't equate to booking revenue. That's your point exactly, Yes,
Speaker 1: And talk about where AMD is in the life cycle
Speaker 1: of its AI offering. You know, on this show Bling
Speaker 1: with Technology, we always talking about in video in h
Speaker 1: one hundreds, but that is just the latest generation of
Speaker 1: a number of AI relevant GPUs from Nvidia that have
Speaker 1: been in the market for a long time. His AMD
Speaker 1: actually got anything out there in the wild that customers
Speaker 1: have their hands on.
Speaker 6: I mean, for Apple tablets comparison, the Mi three hundred
Speaker 6: x will be the specific AIGPU which is supposed to
Speaker 6: SAMP or go to a production ramp in Q four.
Speaker 6: So no, and Vidia is running right now deployed as
Speaker 6: second generation GPUs in the field already. But AMD is
Speaker 6: a TAD would relate to this game.
Speaker 1: The story for A and D is AI accelerators. What
Speaker 1: is an AI accelerator.
Speaker 6: I think most people are of for CPU, which is
Speaker 6: a general purpose compute designed to process a lot of
Speaker 6: different tasks and do it well. But an accelerator is
Speaker 6: a chip specifically designed to fastly process one specific type
Speaker 6: of task, hence the name accelerator because it accelerates the
Speaker 6: processing of one specific type of task. So GPU in
Speaker 6: theory is a type of accelerator. The other types of
Speaker 6: accelerators are ACIC chips like from once from Broadcom. The
Speaker 6: TPU that Google uses is an accelerator. So when there's
Speaker 6: a chip designed to only do compute for a specific task,
Speaker 6: but do it very, very fast, that's what we call
Speaker 6: it as an accelerator.
Speaker 1: Away from the excitement of AI, this earning season has
Speaker 1: been about the core legacy businesses. What did you learn
Speaker 1: about AMD's health in PC and in data center?
Speaker 6: I mean similar to Intel, the results around PC was
Speaker 6: really good. It shows that the PC market bottom is
Speaker 6: finally turning and on its path to a recovery and
Speaker 6: the second half seasonality is going to be a tailwind there.
Speaker 6: When it comes to data center though, we have seen
Speaker 6: it again both from Indian Intel, that the enterprise market
Speaker 6: remains a mixed environment. There's still some inventory that needs
Speaker 6: to be cleared and the demand is not as strong
Speaker 6: and on the side on the data center for the
Speaker 6: cloud guys, though coming into this year, we know that
Speaker 6: the total wallet spend is lower than what we expected
Speaker 6: at the end of twenty twenty two. And they're heavily
Speaker 6: spending in their AI cloud portion, which forces them to
Speaker 6: optimize in the non AI cloud pustion. And that's where
Speaker 6: these players have the big market. What the AMD and
Speaker 6: INDEL are feeling deadborn?
Speaker 1: All right, Bloomberg Intelligence is Conngensabani. Check out his earnings
Speaker 1: outlook on the Bloomberg terminal. Sticking with chip, soft Bank
Speaker 1: is also feeling optimistic about AI. The company's semiconductor unit
Speaker 1: ARM is targeting an IPO valued between sixty and seventy
Speaker 1: billion dollars. According to Bloomberg sources, the company could go
Speaker 1: public as soon as September. Earlier this year, bankers had
Speaker 1: pitched valuations ranging from thirty billion to seventy billion dollars,
Speaker 1: but m CEO Rene Has and soft Bank's Masayoshi's Sun
Speaker 1: considered the lower end of that range too low. This
Speaker 1: debut would surpass most in the chipping industry, all right.
Speaker 1: Coming up, Sticking with AI impacting the workforce, how some
Speaker 1: US states are seeking to regulate the new tech. This
Speaker 1: is Bloomberg time now for work shifting. Where we look
Speaker 1: at the changing landscape of the labor market amid advances
Speaker 1: in technology. First, I'm trying to sort winners from losers
Speaker 1: as AI spreads through the economy. The stock market already
Speaker 1: is and it goes way beyond Nvidia and Microsoft. A
Speaker 1: trio of researchers from California universities say companies work with
Speaker 1: workforces ripe is for AI are beating the market. Their study,
Speaker 1: titled Generative AI and Firm Values, depicts a market that
Speaker 1: is already making broad judgments about how automation impact things
Speaker 1: like cash flows and stock valuation, as intelligence systems cement
Speaker 1: themselves as tools of production. Sticking with AI, US states
Speaker 1: are seeking to regulate AI with new legislation. North Dakota's
Speaker 1: AI related measures were among more than a dozen that
Speaker 1: have passed legislatures across the US, covering matters that range
Speaker 1: from road maintenance to examining potential racial discrimination by automated
Speaker 1: systems and companies that contract social media influences and now
Speaker 1: demanding that those influencers by insurance businesses partnering with semi
Speaker 1: famous people on TikTok, Instagram, and YouTube want the personalities
Speaker 1: to take out policies to protect the brands that they're
Speaker 1: promoting before they can expect any more deals here with
Speaker 1: all the details. Bloomberg's Alex Brinka out in La, Okay.
Speaker 1: Why does a semi famous influencer need an insurance policy?
Speaker 1: What is the argument here?
Speaker 7: Well, it's all about usually these are brands who are
Speaker 7: contracting these influencers. When brands go to influencers an ask
Speaker 7: them to make content for them, either for their own
Speaker 7: channels or to post on social media, there's always been
Speaker 7: the inherent level of risk, right you're turning over your
Speaker 7: brand voice to these influencers, to these internet individuals, and
Speaker 7: now it seems like they're taking it a step further.
Speaker 7: As influencers have become such a bigger part of their
Speaker 7: marketing spend, it seems like brands are looking to cap
Speaker 7: some of that risk by asking these creators to take
Speaker 7: out these insurance policies that would protect them from doing
Speaker 7: things like using music that's not licensed for commercial use,
Speaker 7: or as I see here in La almost every single day,
Speaker 7: taking pictures in front of a painted wall of a
Speaker 7: building and that building image happen to be copywritten. So
Speaker 7: brands are really looking to kind of cap their risk here.
Speaker 7: But It's a really interesting move for creators, a lot
Speaker 7: of which are not making so much money in every
Speaker 7: single year.
Speaker 1: So I guess the question is is the threat of
Speaker 1: legal action real? Have we seen lawsuits against people trying
Speaker 1: to make their name online?
Speaker 7: We have, and there have been a couple key cases
Speaker 7: mentioned by our colleague and some good report today. One
Speaker 7: is being Energy. It's an energy drink that ed If
Speaker 7: you spend any time on TikTok, you see creators big
Speaker 7: and small promoting it. There was a lawsuit that alleged
Speaker 7: that creators who are promoting the energy drink was using
Speaker 7: music on TikTok that was not sanctioned for commercial use.
Speaker 7: Not every sound or song you see on TikTok are
Speaker 7: you able to use in something like an ad. There
Speaker 7: was also a suit in London against a beauty brand
Speaker 7: called Iconic, where a creator took a picture in front
Speaker 7: of a piece of wal art that wasn't that was copywritten.
Speaker 7: So these things are beginning to come up, But the
Speaker 7: economics of these are really interesting. You could be a
Speaker 7: creator who is looking to get paid four thousand dollars
Speaker 7: for one post, but the brand is then asking you
Speaker 7: to take out a two million dollar insurance policy basically
Speaker 7: to indemnify them and asking you to spend two thousand
Speaker 7: a year to keep that policy viable. So quite interesting
Speaker 7: economics here that's being asked of these creators as brands
Speaker 7: are looking to them to create content frankly a lot
Speaker 7: cheaper sometimes than they can make it house.
Speaker 1: So some of the numbers behind these policy limits are incredible.
Speaker 1: But how does it work? Hey, insurance broker, I'm an influencer.
Speaker 1: I need you know. Do you see where are you
Speaker 1: getting this from? Is there a market for insurers who
Speaker 1: are saying, oh, we better protect these famous people.
Speaker 7: I would call the market ed pretty budding for larger creators,
Speaker 7: famous names that you and I might not, people who
Speaker 7: are celebrities online. This has been kind of par for
Speaker 7: the course. But when you start to talk about the
Speaker 7: vast majority of creators who are smaller micro influencers who
Speaker 7: have one thousand to ten thousand followers, that's kind of
Speaker 7: a scattershot approach. The brokers that are calling talk to
Speaker 7: say that they basically do it on a case by
Speaker 7: case basis. They look at the creator, they see how
Speaker 7: controversial they are, and they pick a number based on
Speaker 7: their own internal calculations.
Speaker 1: All right, Bloomberg's autis baring around in LA and all
Speaker 1: things influencer insurance.
Speaker 2: Thank you very much.
Speaker 1: Welcome back to Bloombow Technology ed Lovelo. Here in San Francisco,
Speaker 1: it's the search for crypto clarity. Investors are seeing the
Speaker 1: cryptocurrency market surge and sync as two federal New York
Speaker 1: dodges issued decidedly different rulings over one single question, is
Speaker 1: crypto a security? On July thirteenth, shares of coinbas surge
Speaker 1: twenty four percent as US District judge and Alisa Torrez
Speaker 1: found Ripple Lads issued tokens were not a security, despite
Speaker 1: the SEC's arguments that it was. Then on the following Tuesday,
Speaker 1: District Judge jed Rakoff found Terrorform Labs tokens maybe a security,
Speaker 1: prompting coinbase to fall as much as nine point five percent.
Speaker 1: Another story in the world of crypto, FDx co founder
Speaker 1: Samuel Bankman Freed claims that revoking his bond and jailing
Speaker 1: him for speaking with a newspaper reporter violate his free
Speaker 1: speech rights. For more who else Bloomberg Shnli Basset joins
Speaker 1: us hard ones understand, but what is Bankman Freed's argument, Yeah.
Speaker 8: Let's take a minute to talk to about what got
Speaker 8: us here. About July twentieth, you had the New York
Speaker 8: Times publishing a story that kind of got into here.
Speaker 8: Google documents that had the priving private writings of the
Speaker 8: Caroline Ellison, who would have been slated to be a
Speaker 8: star witness in the trial. Here when you look at
Speaker 8: what had happened between Sam Bagman frieda and his workings
Speaker 8: inside of FTX. Remember, Caroline Ellison was once dating Sam
Speaker 8: Bagmanfried and some of what she had said, according to
Speaker 8: the New York Times reporting, was that she was uncertain
Speaker 8: about how she had ran Alameda, that she didn't particularly
Speaker 8: feel well suited to run the company, and it felt
Speaker 8: weird given that they had been dating on and off.
Speaker 1: These two.
Speaker 8: Now within a day, the US prosecutors had alleged SBF
Speaker 8: of providing the press with these writings to discredit her
Speaker 8: as a witness. Now, what Sam Bagmanfried is saying, because
Speaker 8: the prosecutors had asked a judge last week to revoke
Speaker 8: that to hundred fifty million dollars bond, he is saying
Speaker 8: that revoking that bond would would violate his freesprice reach.
Speaker 1: This is exactly his.
Speaker 8: Response that the Sam Megman Freed's contact with the New
Speaker 8: York Times Reporter was not an attempt to intimidate Missus
Speaker 8: Elson or to chain the jewelry pool. It was a
Speaker 8: proper exercise of his rights to make fair comment on
Speaker 8: an article already in progress for which the reporter had
Speaker 8: already had alternate sources. So that is where we stand today.
Speaker 8: Significant dispute over from Sam Megman Freed. We will see
Speaker 8: how this trial plays.
Speaker 1: Out, and we will continue to track it. Balloobotionnati Bassics
Speaker 1: stay with us because we're sticking with the broader crypto theme,
Speaker 1: but turning to a different project in the crypto verse.
Speaker 1: World Coin, the company aiming to create digital IDs by
Speaker 1: scanning people's eyeballs, has been suspended in Kenya after launching
Speaker 1: just last week. This is the country looks into security
Speaker 1: and data concerns. We spoke with Chris Perskin, president of
Speaker 1: coin Fund, an investor in world Coin, about its availability
Speaker 1: in the future here in the United States.
Speaker 9: Sorry here, I've had my orb personally scanned. It's a
Speaker 9: matter of when will the token drop, and I think
Speaker 9: maybe it goes back to Gosh it sounds like a
Speaker 9: lot of these cryptocurrencies are a lot like oranges, and
Speaker 9: so as that narrative plays out, I think you'll see
Speaker 9: the token become available here.
Speaker 1: But yeah, it's here.
Speaker 9: You can get your eye scanned on the ORB and again,
Speaker 9: I think it's going to deliver real utility as we
Speaker 9: go into this brave new world.
Speaker 1: That was a key investor for more. We're joined by
Speaker 1: world Cooin CEO Alex Blani. Alex, welcome to Bloomberg Technology
Speaker 1: and thank you for your time. Optimism from one of
Speaker 1: your biggest investors about the potential of world Coin, but
Speaker 1: acknowledgment of security incidents and sort of existing controversy around
Speaker 1: the company and what's happened. What is your response to that?
Speaker 2: Well, I mean that is contrary, is not surprising to us, right,
Speaker 2: I think there is this immediate reaction to biometrics and
Speaker 2: specifically our scanning, and that is to be expected. However,
Speaker 2: the technology is actually privacy preserving and we believe it's
Speaker 2: going to be very very important in a time in
Speaker 2: which AI will become increasingly powerful.
Speaker 8: You know, in the twenty four hours of the launch
Speaker 8: there was a very very very significant uptake already when
Speaker 8: you look at the world coin token that had dropped,
Speaker 8: how has that uptake continued? And have you seen a
Speaker 8: taper ring at all?
Speaker 2: It stayed surprisingly constant. Honestly, we did not see much
Speaker 2: change either up or down. It's very early, of course,
Speaker 2: this is a multi year long or even multi decade
Speaker 2: long project, so I think very like super super early
Speaker 2: in the game here. However, I'm really really happy how
Speaker 2: last week went from all parties, so I think it
Speaker 2: was a great, great start, but we have a lot
Speaker 2: of ground to cover going forward.
Speaker 8: How many people have now signed up for the scanning,
Speaker 8: how many people have got into the token, and when
Speaker 8: do you see it coming to the United States, if
Speaker 8: at all.
Speaker 2: I actually do not have the exact numbers as of
Speaker 2: right now, but it's a little over two million. We
Speaker 2: had a like crazy, crazy spike in demand last week.
Speaker 2: We had I think over six hundred thousand app downloads
Speaker 2: in the first couple of days, and we hadlines really
Speaker 2: all over the world, which was very kind of very
Speaker 2: encouraging and very cool to see everywhere from Tokyo to
Speaker 2: Hong Kong to Singapore to you know, kind of in Europe, Spain, Argentina,
Speaker 2: not really so it was a very very stressful week.
Speaker 2: We had a lot of kind of demand to react to,
Speaker 2: and especially early on, our service actually broke down under that.
Speaker 2: But yeah, where it's as I's said, it's early. We
Speaker 2: have to grow and kind of roll out more devices
Speaker 2: in the coming months, so it's really just the beginning
Speaker 2: of a long.
Speaker 1: Spread Alex, we refer to world coin as a crypto project,
Speaker 1: but I'm interesting in the retinal scanning component, the underlying technology.
Speaker 1: Could you explain to our audience where your competence lays.
Speaker 1: Is it in that retinal scanning technology that you guys
Speaker 1: have been doing most of your work, or do you
Speaker 1: get that from a third party?
Speaker 2: So, first of all, worldcoin is a protocol. It's an
Speaker 2: open source and eventually fully decentralized protocol that everyone can
Speaker 2: use and everyone can integrate web. So it is not
Speaker 2: a company. I think that's the first important thing to understand.
Speaker 2: I'm the CEO of Tools for Humanity, which is a
Speaker 2: kind of one of the main and of course the
Speaker 2: founding contributor to roldcin, but there will be many others
Speaker 2: as we go forward. But now to your question actually
Speaker 2: explaining or the COMPETENCEI lies, how does it fit together
Speaker 2: with crypto. The original idea of world cooin was starting
Speaker 2: a financial network based on the idea of proof of personnel.
Speaker 2: Proof of person essentially means that you, as a user,
Speaker 2: you can verify online that you are a unique human
Speaker 2: being without revealing any privacy related data. So you actually,
Speaker 2: let's say, let's stay actually with Twitter or X. You
Speaker 2: want to verify on X that you're an actual human
Speaker 2: being you're not about, which we believe will be increasingly
Speaker 2: important as we go forward, as AI becomes increasing and powerful,
Speaker 2: you will be able to just do that with world
Speaker 2: ide without revealing any personal information about yourself by using
Speaker 2: what is called zero knowledge proofs, and that is for example,
Speaker 2: that's one of the pieces why crypto is important. In cryptography.
Speaker 2: There are something called zero knowledge proofs that lets you
Speaker 2: prove certain statements without actually revealing the underlying information, which
Speaker 2: is very very important the to do that, so as
Speaker 2: a user, to receive your world idea, you have to
Speaker 2: verify yourself in front of a physical device. It's a
Speaker 2: twenty centimeter sphere. It's called the ORB and they will
Speaker 2: be really all over the world in public spaces, in
Speaker 2: malls and even kind of wonder around cities. It's a
Speaker 2: decentralized model, so it's not we as a project operate
Speaker 2: these but rather you have entrepreneurs and pounders all over
Speaker 2: the world that actually can operate these devices and then
Speaker 2: earn world kinds of very sign up and you as
Speaker 2: a user, you download the app. It's called world App,
Speaker 2: which is the first app that actually allows you to
Speaker 2: do that. When many others will come and you click
Speaker 2: on a map, you say I want to verify. Now
Speaker 2: you go in front of one of those devices and
Speaker 2: you receive your world ID, which then lets you verify
Speaker 2: online with whoever integrates it in the future.
Speaker 1: Sam Outman is one of the founders of this initiative
Speaker 1: and world ID day to day, what role does he
Speaker 1: play you and he separating your time and your duties.
Speaker 2: Sam is very clearly focused on open AI, given he's
Speaker 2: the CEO of open I and I'm the CEO of
Speaker 2: tools Freemenity. However, he is a cool founder here so
Speaker 2: all important initiatives. He's obviously very over off. If there's
Speaker 2: work streams that really touch him he's involved with and otherwise,
Speaker 2: involvement changes a week do week depending on what we
Speaker 2: actually work on, like is it mostly product or engineering focused,
Speaker 2: he's less involved. If it's let's say a hunder as
Speaker 2: he's much more involved. That really depends on what is
Speaker 2: happening in the business day to day.
Speaker 8: Now, I'm kind of curious here. We talked about the
Speaker 8: Kenyan government's reaction to World Coin more recently at the
Speaker 8: start of this interview. I'm wondering if you are working
Speaker 8: with the Kenyan government to address some of the concerns
Speaker 8: that they may have, given how important the market was
Speaker 8: earlier on in the project.
Speaker 2: Yes, we work with the government, with actually multiple government
Speaker 2: bodies to resolve all the open uncertainties or questions that
Speaker 2: there are. Certainly that the campus spike in demand that
Speaker 2: we saw last week was very, very surprising, So we
Speaker 2: really hope that we can get back to delivering the
Speaker 2: actual product in Kenya. However, of course, we will comply
Speaker 2: with the government and all the questions that might arise
Speaker 2: and work with all the regulators that are important to
Speaker 2: do so. So we stopped operating in Kenya until that
Speaker 2: is the fact, and we hope that we can resume
Speaker 2: operations really soon.
Speaker 8: Now, how do you address cod security concerns as well?
Speaker 8: Recognizing that there were worries about stolen creventionals when it
Speaker 8: came to world ID earlier on black market sales. Are
Speaker 8: these things that you are working and find a way
Speaker 8: to prevent in the future.
Speaker 2: Yes, they actually are not surprising. So essentially, first of all,
Speaker 2: let's explain what we're actually talking about here and what
Speaker 2: was reported on. What was reported on is that users
Speaker 2: in countries where let's say Worldquin is not available China,
Speaker 2: by accounts from users where world quin is available let's
Speaker 2: say Portocoal or a robi And what that actually means
Speaker 2: is not you do not sell you biometric data or
Speaker 2: anything like that. That I think that was one of
Speaker 2: the major misunderstandings that it's very important to clarify. But
Speaker 2: rather you sell your login credentials. So let's say email
Speaker 2: address and your password. Let's say that's the best analogy
Speaker 2: to kind of normal use cases, and that is not
Speaker 2: even in midterm, it's not a concern because as a user,
Speaker 2: you can just recover your account. You can go back
Speaker 2: to an ORB and recover your account. And essentially what
Speaker 2: that means is that the other party that acquired the
Speaker 2: account basically acquired something that will turn out to be
Speaker 2: worthless because the credentials words just start wrooking, and so
Speaker 2: this is not an actual medium to long term concern
Speaker 2: and privacy from the user is not compromising anyfore.
Speaker 1: All right, Alex Blaniir of world Coin, Bloomberg Shnali Bassek,
Speaker 1: thanks to you both. Coming up on Bloomberg Technology. We're
Speaker 1: going to speak to the CEO of Portage about the
Speaker 1: state of fundraising in Silicon Valley. Today's VC spotlight focus
Speaker 1: on fintech as we go to break watching shares of
Speaker 1: micro Strategy down around seven percent in the session, the
Speaker 1: leadership of that company giving some pretty consistent long term
Speaker 1: bullish outlook on bitcoin, which of course underpins quite a
Speaker 1: large chunk of their balance sheet.
Speaker 2: This is Bloomberg.
Speaker 1: A story in private markets we're tracking. Charles Lee, the
Speaker 1: former head of Hong Kong's Stock Exchange, has raised four
Speaker 1: hundred and fifty eight million in a Series C funding
Speaker 1: round for his new company, Microconnect. The company is a
Speaker 1: platform to link international capital to small businesses in China.
Speaker 1: The firm announce the funding with participation from new and
Speaker 1: existing investors in Europe, North America, the Middle East and
Speaker 1: in Greater China. All right, joining us now, Adam. Firstly,
Speaker 1: Portage ceo Port's Capital Solutions delivers flexible equity capital solutions
Speaker 1: and strategic resources to help public and private later stage
Speaker 1: fintech and financial services businesses. It's our daily Venture Spotlight segment. Adam,
Speaker 1: good morning to you from San Francisco. Welcome to the program.
Speaker 2: Good to be back on. Thanks.
Speaker 1: So there's this idea we've been talking about VC Spotlight
Speaker 1: that if you look at the backward looking data in
Speaker 1: twenty twenty three, activity broadly for venture backed startups has
Speaker 1: dropped off. But if I go on Bloomberg dot com,
Speaker 1: go on replays of this show and I look at
Speaker 1: the headlines lots of people closing funds and lots of
Speaker 1: companies raising money, what is your on the ground take
Speaker 1: of what's happening right now from an activity perspective.
Speaker 10: So, for certainly, we had a false down in Q
Speaker 10: one where we felt things were coming back and then
Speaker 10: we got slammed by SVV and all the consequences.
Speaker 11: Related to it. I think Q two will prove to
Speaker 11: be the low. I think anecdotically you're right.
Speaker 10: What we're seeing ourselves and with my colleagues across the
Speaker 10: venture and growth markets is things are really picking up.
Speaker 10: I don't think we've been busier in twelve to eighteen
Speaker 10: months from terms of perspective term sheets that we've gotten,
Speaker 10: market deals that we're closing.
Speaker 11: So it does feel a lot better.
Speaker 10: I think will be much more comfortable if we have
Speaker 10: better visibility on where the FED lies in the fall.
Speaker 11: But absolutely the sentiment in the market is much stronger.
Speaker 1: Firm is focused largely in fintech and financial services, and
Speaker 1: you reference the volatility around Silicon Valley Banks collapsed. His
Speaker 1: interest in fintech disruption of traditional banking carried on into
Speaker 1: the second half of this year based on what happened
Speaker 1: with Silicon Valley Bank.
Speaker 10: Yeah, I think that the fintech market as a segment
Speaker 10: within tech definitely has been hit the most, and understandably,
Speaker 10: I think there was new business models that people underwrote
Speaker 10: that haven't panned out, So, you know, I think rightfully
Speaker 10: fintech was hit the most.
Speaker 11: But the strongest companies in the market are doing really well.
Speaker 10: If we look at our own portfolio, well Simple or Albert,
Speaker 10: which are directed consumer businesses, they've never been stronger.
Speaker 11: They're continuing to.
Speaker 2: Have great growth.
Speaker 10: More importantly, they're profitable and their customer acquisition costs are
Speaker 10: really contracting us.
Speaker 11: There's just less competition in the market.
Speaker 1: So question for an investment you focused on fintech and
Speaker 1: financial services, what is your attitude towards AI and how
Speaker 1: that fits in with your existing portfolio companies.
Speaker 10: So first and foremost, you know, across our portfolio, we're
Speaker 10: focused on how do we take costs out of our
Speaker 10: business businesses. There's huge opportunities within your engineering stack. There's
Speaker 10: huge opportunity in terms of customer service and you know,
Speaker 10: operating leverage growth is you know, going to be significant
Speaker 10: because of successful implementation of AI, and that's where we're
Speaker 10: going to be focused, you know, in the early stages.
Speaker 10: I think ultimately there's the opportunities to invest in the
Speaker 10: AI companies themselves. But right now, you know, the tooling
Speaker 10: that's available for free out in the market is the
Speaker 10: best advantage that we can use, and it's within our
Speaker 10: existing portfolio.
Speaker 1: When a potential portfolio company of founders sits in front
Speaker 1: of you, do you want to hear them pay that
Speaker 1: they're going after the big banks and their business or
Speaker 1: do you want to have them have something more focused,
Speaker 1: more niche that isn't yet in the marketplace.
Speaker 4: We want to hear about.
Speaker 10: It is that a specific segment is really going to
Speaker 10: love their product and they're addressing a specific issue that
Speaker 10: that segment's facing. So it's not necessarily where are we
Speaker 10: taking customers from, it's where they underserved and why are
Speaker 10: you going to serve them better quickly?
Speaker 1: Adam, final question, where's the talent right now in fintech?
Speaker 1: Geographically speaking?
Speaker 11: That is a great question. I think it's everywhere.
Speaker 10: It's a wonderful part about this distributed workforce. You know,
Speaker 10: we have portfolio companies that have employees all the way
Speaker 10: from Dubai to India to New York to your regional
Speaker 10: places in the United States, and Canada is becoming a.
Speaker 11: Greater hubb as well.
Speaker 10: So I think it's a great time to be building
Speaker 10: companies because talent is everywhere, and in a distributed world,
Speaker 10: they're excited to work for him.
Speaker 5: You know.
Speaker 1: The Canada Talent conversation is definitely one for another show,
Speaker 1: Adam Fleski. The portage thank you so much a viral
Speaker 1: story we continue to watch. Yesterday, we reported that YouTube
Speaker 1: style mister bast sued his ghost kitchen business partner Virtual Dining,
Speaker 1: saying the company's sacrifice quality in its bid for rapid
Speaker 1: expansion well today. Virtual Dining has responded, saying, quote, the
Speaker 1: complaint is riddled with false statements and inaccuracies and a
Speaker 1: thinly veiled attempt to distract from mister Donaldson's and Beasts investments,
Speaker 1: breaches of the agreements between the parties. It is a
Speaker 1: story we continue to monitor and bring the last on
Speaker 1: elsewhere and going viral. Hollywood strikes are still going this time.
Speaker 1: The Writers Guild of America sent an email to its
Speaker 1: members saying that the head of the Alliance of Motion
Speaker 1: Picture and Television Producers requested a meeting on Friday to
Speaker 1: discuss resuming contract talks that according to the Associated Press,
Speaker 1: it was not immediately known whether a similar message was
Speaker 1: sent to union leaders for Hollywood actors. That does it
Speaker 1: for this edition of Bloomberg Technology from here in San Francisco,
Speaker 1: don't forget. You can recap everything in the show on
Speaker 1: our podcast. I know many of you that listen to
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Speaker 1: here in San Francisco. There is still so much to
Speaker 1: come this earning season here on Bloomberg Technology. This is
Speaker 1: Bloomberg