WEBVTT - UK's CMA on the Microsoft Deal and Big Tech's AI Safeguards 0:00:01.480 --> 0:00:05.160 From the heart where innovation, money and power Collie in 0:00:05.280 --> 0:00:10.520 Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde. 0:00:10.240 --> 0:00:11.360 And Ed lud Love. 0:00:24.880 --> 0:00:26.799 And Caroline Heind and Bloomberg's well head quarters in New 0:00:26.840 --> 0:00:28.080 York and Ludlow He's off. 0:00:28.320 --> 0:00:29.520 This's in Bloomberg Technology. 0:00:29.680 --> 0:00:32.360 Coming up, we'll have the latest on Microsoft and Activision 0:00:32.360 --> 0:00:35.400 as UK regulators reject those claims they're. 0:00:35.240 --> 0:00:37.920 Bowing to pressure to clear the deal or ahead. 0:00:38.280 --> 0:00:40.920 Thus we'll talk ai regulation of big tech commits to 0:00:41.040 --> 0:00:44.519 safeguards for the technology that's at the White House's request. 0:00:44.880 --> 0:00:48.159 We'll bring you the details and bankrupt Crypto Exchange FTX 0:00:48.320 --> 0:00:51.880 sues San Bankman Freedom executives over one million dollars in 0:00:51.960 --> 0:00:54.160 bad deals, including a plan. 0:00:54.120 --> 0:00:55.080 To buy an island nation. 0:00:55.560 --> 0:00:58.080 We'll have more on the new laysuit and so much 0:00:58.120 --> 0:01:01.120 more throughout the hour. Meanwhile, let's go across the pond 0:01:01.480 --> 0:01:04.880 in the UK. Britain's top ad trust enforcerers pushing back 0:01:04.920 --> 0:01:07.240 against those claims that have been out there that it 0:01:07.280 --> 0:01:09.640 was kind of forced by outside pressure to reconsider its 0:01:09.720 --> 0:01:13.880 veto of the Microsoft Activision Blizzard deal. Here's the CMA CEO, 0:01:14.280 --> 0:01:18.480 Sarah Kuddle at the moment our decision on prohibition stands. 0:01:18.880 --> 0:01:22.280 We investigated very thoroughly the deal. We found that there 0:01:22.360 --> 0:01:25.480 were serious concerns in relation to cloud gaming and. 0:01:25.360 --> 0:01:27.040 The proposals that were put forward. 0:01:26.880 --> 0:01:30.560 By Microsoft at the time did not resolve our competition concerns. 0:01:30.880 --> 0:01:34.000 So Microsoft have indicated that they are considering how they 0:01:34.080 --> 0:01:37.280 might restructure the deal in a way that resolves our concerns. 0:01:38.920 --> 0:01:42.560 And the regulator had found itself increasingly isolated, pretty much 0:01:42.560 --> 0:01:44.520 the loan watchdog standing in the way of the deal. 0:01:44.600 --> 0:01:46.720 Now, after a week of drama. 0:01:46.600 --> 0:01:49.720 The acquisition has some pretty fresh momentum in the US. 0:01:49.720 --> 0:01:52.080 For example, the FDC has just paused its in house 0:01:52.120 --> 0:01:55.040 trial against Microsoft, leaving room for potential settlement talks. 0:01:55.400 --> 0:01:56.320 Let's break it all down. 0:01:56.360 --> 0:02:00.120 Bloomberg's Catherine Gammel is with us and what else did 0:02:00.400 --> 0:02:03.040 the Competition and Market Authority have to say? The CEO 0:02:03.600 --> 0:02:07.600 about this deal and how it's progressing in the UK, thanks. 0:02:07.360 --> 0:02:08.200 So much for having me. 0:02:08.560 --> 0:02:10.600 Yes, so in this morning we had said a Cardell 0:02:10.680 --> 0:02:13.040 in the London studio to talk us through where we're 0:02:13.040 --> 0:02:15.639 at with the Microsoft activision probe. And you know, one 0:02:15.639 --> 0:02:18.120 thing that she made really clear is that the UKCME 0:02:18.240 --> 0:02:21.320 has still vetoed this deal, and that veto will still 0:02:21.360 --> 0:02:29.760 stand until Microsoft offers up officially fresh restructuring ideas. So 0:02:29.800 --> 0:02:31.760 that's a big one that we need to keep in 0:02:31.800 --> 0:02:34.680 mind that those are still to be officially submitted. Another 0:02:34.760 --> 0:02:37.320 thing that was an interesting point that she made is 0:02:37.360 --> 0:02:41.440 that you know, after if they consider Microsoft's new proposals, 0:02:41.560 --> 0:02:44.000 if they still don't think that those actually address the 0:02:44.040 --> 0:02:46.519 competition issues at the heart, then this deal could be 0:02:46.600 --> 0:02:49.040 vetoed again and we might go back to the phase 0:02:49.080 --> 0:02:51.160 that we're at before, where we're at the competition appeal 0:02:51.200 --> 0:02:53.960 tribune and we're getting a full of peel. I think. 0:02:54.160 --> 0:02:56.440 Also the most important thing that you touched on a 0:02:56.440 --> 0:02:59.320 moment ago was that Cardile really put to bed any 0:02:59.320 --> 0:03:03.360 claims that they UKCME had bowed to UK political pressure 0:03:03.840 --> 0:03:07.080 or that had in some way its decision to reconsider 0:03:07.120 --> 0:03:09.440 this had in some way been a fit impacted by 0:03:09.760 --> 0:03:13.160 the FDC's loss at court on the eleventh. 0:03:13.440 --> 0:03:17.400 Yeah, trying to still stand by their independence. What then 0:03:17.960 --> 0:03:22.760 does a deal, What recommendations, what remedies are likely to 0:03:22.800 --> 0:03:25.080 actually cut the mustard when it comes to the CME. 0:03:26.440 --> 0:03:28.760 Yes, So Cardile touched on this early in her interview, 0:03:28.880 --> 0:03:30.800 and I think the only sort of remedies are going 0:03:30.840 --> 0:03:34.200 to cut the mustard at this point as divestitures. Bloomberg 0:03:34.240 --> 0:03:38.800 News reported, according to sources earlier that that this could 0:03:38.880 --> 0:03:42.400 possibly be a divestiture of their UK cloud unit. It's 0:03:42.480 --> 0:03:45.920 yet to be made public or clear what the actual 0:03:45.920 --> 0:03:48.640 remedies as that Microsoft is going to offer up the CME, 0:03:49.520 --> 0:03:52.080 so that still remains to be seen what exactly will 0:03:52.400 --> 0:03:53.120 cut the mustard. 0:03:54.560 --> 0:03:56.280 I started that phrase and we're going to keep on 0:03:56.360 --> 0:03:57.440 running with it. A little bit of. 0:03:57.360 --> 0:04:00.880 British sotuly in the morning and it's great to catch 0:04:00.960 --> 0:04:02.920 up with you. Go have a great weekend, Kafum Gammel. 0:04:03.040 --> 0:04:07.760 She has been one busy woman throughout this week. Meanwhile, well, 0:04:07.880 --> 0:04:09.760 the whole market's been busy, hasn't it In terms of 0:04:09.760 --> 0:04:12.040 fun flow data, for example, come from Bank of America 0:04:12.160 --> 0:04:15.440 showing that despite the distancing themselves from broader equity markets, 0:04:15.440 --> 0:04:18.640 investors have continued to pile into tech stocks. Tech funds, 0:04:18.720 --> 0:04:21.120 for example, attracted one point eight billion dollars in the 0:04:21.120 --> 0:04:24.160 past week, pulling in money for the fourth consecutive week 0:04:24.200 --> 0:04:27.000 and while outperforming the rest of the sectors. How long 0:04:27.040 --> 0:04:30.039 can this last Mahony Asset Management. See you, Ken Mahoney, 0:04:30.240 --> 0:04:33.120 who is invested in Microsoft, Apple, and Vidia, Tesla to 0:04:33.200 --> 0:04:35.120 name but a few, and peace to say, welcomes us 0:04:35.160 --> 0:04:38.760 and Ken. It is interesting that tech has just continued 0:04:38.800 --> 0:04:43.440 to fight off all that demongering, the fear of the economy. 0:04:43.200 --> 0:04:44.200 And plow forward. 0:04:44.440 --> 0:04:46.680 Will that come to an end perhaps with the rebalancing 0:04:46.720 --> 0:04:49.599 and then as that one hundred for example, Look. 0:04:49.400 --> 0:04:51.279 I don't think it's gonna happen because the rebalance of 0:04:51.279 --> 0:04:53.680 the NAZAG one hundred. I think it's got legs and 0:04:53.760 --> 0:04:55.440 the AI we keep talking about, and a lot of 0:04:55.480 --> 0:04:58.200 people feel like they missed it. I think when the 0:04:58.279 --> 0:05:00.680 second or third inning of this AI, I mean, this 0:05:00.720 --> 0:05:03.760 is gonna be a multi year move here. And you 0:05:03.839 --> 0:05:07.000 know the picks and shovels of the last decade or 0:05:07.080 --> 0:05:09.200 nineteen ninety nine, where was you know, Oracle and Cisco 0:05:09.680 --> 0:05:12.680 pixing shovels of this gold rush, Microsoft and the videos 0:05:12.720 --> 0:05:14.560 and the names you mentioned before. So I think in 0:05:14.640 --> 0:05:17.080 the early innings, yes, it's gonna be violatile. I don't 0:05:17.080 --> 0:05:19.200 think the nats QUE one hundred be shuffling is going 0:05:19.240 --> 0:05:21.920 to change anything because I think the fundamentals are very 0:05:21.960 --> 0:05:22.760 strong for this group. 0:05:22.880 --> 0:05:25.960 Well, the fundamentals be shown in these earnings. Will we 0:05:26.040 --> 0:05:27.880 get a guide of how much AI is going to 0:05:27.920 --> 0:05:28.760 power revenue? 0:05:29.839 --> 0:05:32.080 I think so On Microsoft, by the way, which come 0:05:32.080 --> 0:05:34.599 out next week. They're very good for beating estimates and 0:05:34.680 --> 0:05:36.800 raising guidance, and then the analysts have to scramble to 0:05:36.880 --> 0:05:39.240 catch up with them and raise targets and so forth. 0:05:39.279 --> 0:05:41.120 So I suspect we're going to see that again for 0:05:41.160 --> 0:05:44.200 some time until the levels off, and this AI is 0:05:44.240 --> 0:05:47.480 helping companies longer their costs and helping their top line. 0:05:47.520 --> 0:05:48.200 So it's a creative. 0:05:48.200 --> 0:05:50.839 So it's not just a line item on an expense sheet. 0:05:51.000 --> 0:05:53.080 It's actually something that can actually help these companies. 0:05:53.200 --> 0:05:56.000 Ken a bit tactical, perhaps, but how do you play 0:05:56.000 --> 0:05:59.040 the run up and the aftermath of an earnings? 0:05:59.080 --> 0:06:00.800 Do you try and trade of it in any way? 0:06:00.880 --> 0:06:04.679 Do you just wait until the print comes and well 0:06:04.920 --> 0:06:06.360 move within that volatility? 0:06:06.400 --> 0:06:08.479 Do you trade or do you just push through? 0:06:09.560 --> 0:06:11.479 I think you kind of pushed through again. It's so 0:06:11.560 --> 0:06:14.159 difficult sometimes, like it's like rushroa roulette. We never know 0:06:14.640 --> 0:06:16.159 which ones are going to sell off, which one's going 0:06:16.200 --> 0:06:19.200 to go last week a couple of days ago Tesla 0:06:19.640 --> 0:06:21.560 Netflix we saw kind of sell the news again a 0:06:21.560 --> 0:06:23.920 little soft guidance, So we don't know exactly how they're 0:06:23.920 --> 0:06:25.880 going to go. But and I just see past this quarter, 0:06:25.920 --> 0:06:27.640 and that's probably with the investors. They kind of get in, 0:06:27.680 --> 0:06:30.040 they trade wrong, they get out, and again these are 0:06:30.160 --> 0:06:33.560 multi year I hope to think multi year growth because 0:06:33.560 --> 0:06:36.440 of what's happening AI and some other thinking about Microsoft 0:06:36.440 --> 0:06:38.680 by the way, all the different verticals you get when 0:06:38.680 --> 0:06:42.680 you own Microsoft, from gaming to network security, to Windows 0:06:42.720 --> 0:06:45.800 to you know, cloud to now AI integrating all that, 0:06:45.920 --> 0:06:48.400 So this to me is not just a good quarter 0:06:48.520 --> 0:06:50.640 to jump in and jump out. I think there's there's 0:06:50.640 --> 0:06:52.640 a lot more tailwind here. 0:06:53.080 --> 0:06:58.039 But valuations ken thirty six times future earnings currently for Microsoft, 0:06:58.040 --> 0:07:00.600 it was eighty or something for no One. 0:07:00.640 --> 0:07:01.839 Do we see a bit of softness? 0:07:02.120 --> 0:07:04.400 Do you think these valuations can be vindicated in the 0:07:04.440 --> 0:07:05.400 short term, in the near. 0:07:05.320 --> 0:07:08.400 Term, Well, that's what we were going through this digestion 0:07:08.520 --> 0:07:12.400 process because these multiples are really kind of whacko. We 0:07:12.520 --> 0:07:14.720 get it, but the old side is too. You see 0:07:14.720 --> 0:07:17.600 some valuations with the PE six and PE seven, you 0:07:17.680 --> 0:07:19.480 look aback a year and now later and you still 0:07:19.480 --> 0:07:22.240 find some of those same companies still trading with multiples 0:07:22.240 --> 0:07:24.280 that are stuck at six or seven. So what we've 0:07:24.320 --> 0:07:26.800 seen with top line growth, with the analysts trying to 0:07:26.840 --> 0:07:29.840 play catch up, we've seen some of these multiples expand 0:07:30.200 --> 0:07:32.880 and justifiably sol because there's only a handful of companies 0:07:32.920 --> 0:07:35.720 that can really roll the way they're growing. And that's 0:07:35.720 --> 0:07:37.360 why again those multiples. 0:07:37.000 --> 0:07:40.280 Oh I'm interested in that only a handful? Are there 0:07:40.280 --> 0:07:43.440 only a handful? Are we not looking hard enough? There's 0:07:43.480 --> 0:07:46.920 sort of Kathy Wood perspective that in videos just so obvious, 0:07:46.960 --> 0:07:50.240 try and go for some slightly different AI plays. 0:07:51.800 --> 0:07:53.960 You know, I kind of think about Picte and Shovel 0:07:54.240 --> 0:07:57.160 are kind of the gatekeepers of this, and now would 0:07:57.200 --> 0:07:59.680 be Microsoft in the video and some of those names. 0:08:00.040 --> 0:08:01.960 There are gonna be some secondary names. It's gonna be 0:08:02.040 --> 0:08:04.920 like the dot com and the nineteen nineties. We're gonna 0:08:04.960 --> 0:08:07.200 have go from three to twenty. Well, there are one 0:08:07.200 --> 0:08:10.120 stra ponies. What I like about is that these companies 0:08:10.160 --> 0:08:12.040 have a lot of verticals. Again, you think about the 0:08:12.120 --> 0:08:15.040 video with the timeless striving, the video with a gaming 0:08:15.120 --> 0:08:17.920 and everything that they're doing and a creative to earnings 0:08:17.960 --> 0:08:20.560 is now this AI place, So I'd rather play this 0:08:20.600 --> 0:08:23.000 way with the kind of proven winners that already have 0:08:23.040 --> 0:08:25.160 a lot of verticals, have a lot of businesses, have 0:08:25.240 --> 0:08:28.040 a loud opportunities within those businesses. Oh and then let's 0:08:28.040 --> 0:08:30.480 at AI on top of that, and then then you 0:08:30.520 --> 0:08:31.840 get this kind of great growth rate. 0:08:32.200 --> 0:08:32.800 Ca Mahoney. 0:08:32.960 --> 0:08:34.760 Great to have some time with you, Thank you, Mahony, 0:08:34.760 --> 0:08:38.360 Asset Management CEO. It's going to be busy week ahead, 0:08:38.440 --> 0:08:40.440 so you have a fun weeknd ahead of it. Meanwhile, 0:08:40.880 --> 0:08:42.920 coming up, we're gonna be talking more about investing in 0:08:42.920 --> 0:08:46.320 ourltivision Intelligence. But at the earlier stage in private stage 0:08:46.320 --> 0:08:48.439 one received bending six hundred million dollars with a new 0:08:48.440 --> 0:08:52.120 fund backing startups focus solely on artificial intelligence at all, 0:08:52.200 --> 0:08:55.160 with Vege capitalists behind the investment. Next, I mean, well, 0:08:55.200 --> 0:08:57.080 look we're just talking about earnings. Let's talk about one 0:08:57.080 --> 0:08:59.280 company that has been under strain from a share price 0:08:59.280 --> 0:09:03.560 perspective today following its earnings, American Express ames actually lower 0:09:03.600 --> 0:09:07.000 after investors concerned by some slower payment volume growth. But 0:09:07.120 --> 0:09:09.160 I had some time with the CEO C Square a 0:09:09.200 --> 0:09:10.480 little bit earlier on the phone. 0:09:10.920 --> 0:09:12.559 He's less concerned. 0:09:12.760 --> 0:09:15.680 He was trying to reiterate, look look at our record revenue, 0:09:15.679 --> 0:09:17.360 look at our record at earnings for share, look at 0:09:17.360 --> 0:09:21.120 our record billings. And he's also showing really about some 0:09:21.240 --> 0:09:24.320 of the risks surrounding this economy. He feels, actually those 0:09:24.320 --> 0:09:28.000 recession risks are fading, that hard landing fading as we 0:09:28.120 --> 0:09:30.679 go forward. So really we see a company that he 0:09:30.760 --> 0:09:34.400 says is standing by its growth plans firing on all cylinders. 0:09:34.600 --> 0:09:37.000 And it was just some tough comparisons if you're looking 0:09:37.200 --> 0:09:40.079 from the previous year in extraordinary numbers that we had 0:09:40.080 --> 0:09:43.840 in twenty twenty two post COVID interesting take on AI, though, 0:09:44.280 --> 0:09:46.120 he's trying to push back on some of the dangers 0:09:46.120 --> 0:09:48.360 of generator AI, particularly when you're looking at credit scoring, 0:09:48.400 --> 0:09:50.760 worries about bias in the system. He says, look, our models, 0:09:51.040 --> 0:09:55.040 like everyone else in the industry, heavily regulated, heavily reviewed. 0:09:55.040 --> 0:09:56.319 Our algorithms are reviewed. 0:09:56.480 --> 0:09:58.920 This doesn't come cheap, and the FED and not the 0:09:58.920 --> 0:10:02.760 oversight bodies have them in their sites, so he's. 0:10:02.559 --> 0:10:03.959 Not too fearful of that bias. 0:10:04.240 --> 0:10:14.160 From New York as a Bloomberg Technology. 0:10:15.640 --> 0:10:19.319 Wing Bench Capital is betting big on artificial intelligence. 0:10:19.320 --> 0:10:21.480 Now, the firm closing a six hundred million dollar fun 0:10:21.559 --> 0:10:24.840 that's forth to back startups focused on just really AI. 0:10:25.280 --> 0:10:28.199 Let's get right to it. The wing founding partner goa gard. 0:10:29.360 --> 0:10:31.440 I mean, is there anything out there that isn't in 0:10:31.480 --> 0:10:33.160 some way AI powered? 0:10:33.240 --> 0:10:38.200 Now? Well, our view is that. 0:10:39.679 --> 0:10:41.960 In today's day and age, as we move from digital 0:10:42.000 --> 0:10:46.640 transformation to AI transformation, if you're investing in business technology, 0:10:47.480 --> 0:10:52.920 it's not worth doing unless it's AI focused. And an 0:10:52.920 --> 0:10:55.640 example might be do you think people are even going 0:10:55.679 --> 0:10:57.960 to buy a tractor that is not A powered and 0:10:58.000 --> 0:11:02.000 cannot drive itself? So we feel that way about the 0:11:02.160 --> 0:11:03.120 entire landscape. 0:11:03.280 --> 0:11:06.600 Okay, so do you put money to work on AI 0:11:06.679 --> 0:11:09.520 powered tractor companies or is it really more about the 0:11:09.559 --> 0:11:12.920 foundational models, about the underpinnings about these companies that are 0:11:12.920 --> 0:11:15.240 going to be almost plugged into other corpus out there. 0:11:16.720 --> 0:11:20.400 Well, first, thank you for having me on the show. 0:11:21.200 --> 0:11:25.720 About half of our investments are in business applications and 0:11:25.760 --> 0:11:28.760 the other half are in software infrastructure that powers AI, 0:11:29.320 --> 0:11:32.800 data security, developer led tools, things like that. Let's mostly 0:11:32.840 --> 0:11:33.920 software and why. 0:11:33.800 --> 0:11:37.120 Are those entrepreneurs where are those companies being built? There's 0:11:37.160 --> 0:11:40.320 been this narrative that Silicon Valley is back where it's at. 0:11:40.200 --> 0:11:41.000 When it comes to AI. 0:11:41.160 --> 0:11:43.520 Is that true or is this more democratized across the 0:11:43.600 --> 0:11:44.600 US and internationally? 0:11:46.400 --> 0:11:53.080 Yeah, it is fairly significantly in California where we have 0:11:53.160 --> 0:11:55.840 companies all over the country, and we also have some 0:11:55.920 --> 0:11:56.839 in Europe and Israel. 0:11:57.120 --> 0:11:59.000 We've just been looking at some of your current portfolio 0:11:59.080 --> 0:12:03.280 already Bedrocks System inserting Unicorn, and you've had successful exits 0:12:03.280 --> 0:12:05.480 in the past. I think of fire Eye, I mean 0:12:05.600 --> 0:12:09.199 long ago, Jasper required by Cisco Mobile Iron These a 0:12:09.240 --> 0:12:12.280 lot of these not only were acquisitions or IPOs. How 0:12:12.320 --> 0:12:15.880 does that market for exits even look now at the 0:12:15.880 --> 0:12:16.319 moment for. 0:12:16.280 --> 0:12:22.760 You, well, the IPO windows kind of locked up right now, 0:12:23.000 --> 0:12:25.480 and in fact, i'd ask you when you think it's 0:12:25.480 --> 0:12:26.000 going to open. 0:12:26.080 --> 0:12:27.199 You've talked to everybody. 0:12:29.280 --> 0:12:33.120 But in the long term, we feel that capital markets 0:12:33.120 --> 0:12:36.080 go up and down, but the role of technology in 0:12:36.120 --> 0:12:40.280 the economy is growing, and particularly this time around, we 0:12:40.400 --> 0:12:46.760 feel that anything that can tolerate ninety five percent accuracy 0:12:47.559 --> 0:12:53.400 will be impacted or significantly by AI. So we just 0:12:53.440 --> 0:12:56.480 feel the opportunity is so enormous and will pervade. 0:12:56.480 --> 0:12:59.720 All of GDP and the LPs saw that opportunity to 0:12:59.840 --> 0:13:03.000 how quickly were you able to raise the six hundred million. 0:13:05.040 --> 0:13:06.280 Yeah, it went pretty quickly. 0:13:06.320 --> 0:13:09.160 It was a slightly more difficult environment than last time, 0:13:09.200 --> 0:13:12.000 but in some ways our last one was raised right 0:13:12.040 --> 0:13:14.680 at the start of COVID, so this one felt a 0:13:14.679 --> 0:13:16.920 little easier and it took about the same amount of 0:13:16.960 --> 0:13:18.880 time in a few months. 0:13:19.120 --> 0:13:22.160 And you really are focused on the very early stage. 0:13:22.679 --> 0:13:26.920 How broad are these companies already when you're starting to 0:13:26.920 --> 0:13:28.000 look at them and you're looking at. 0:13:28.040 --> 0:13:29.640 Entrepreneurs with an idea. 0:13:30.040 --> 0:13:33.000 Are you having to see revenue already being generated? How 0:13:33.000 --> 0:13:36.280 are you deciding which companies to back in what is 0:13:36.440 --> 0:13:37.600 a very noisy field. 0:13:40.000 --> 0:13:42.960 Half the companies are seed stage, the other half our 0:13:43.000 --> 0:13:46.600 series age. We write checks in the seed up to 0:13:46.679 --> 0:13:49.200 three or four million, and in the series age up 0:13:49.200 --> 0:13:51.480 to twenty million as our first check, So it's a 0:13:51.480 --> 0:13:55.439 pretty wide remit. I would say that we are quite 0:13:55.720 --> 0:13:59.360 distinct in that ninety five percent of our companies have 0:13:59.440 --> 0:14:01.720 less than a milllion dollars in revenue when we invest. 0:14:02.160 --> 0:14:07.199 So we invested Inception pre product in very early revenue 0:14:07.240 --> 0:14:10.520 as well, and we're willing to take on that uncertainty 0:14:10.559 --> 0:14:13.360 because it results in the best long term returns. 0:14:14.240 --> 0:14:16.560 Well, come back when you start to write those checks, 0:14:16.559 --> 0:14:18.960 when we start to hear about or maybe even an 0:14:18.960 --> 0:14:24.320 Ibo window opening for your larger, more well older mature companies. 0:14:24.320 --> 0:14:27.200 Wing Value Partner, thank you so much for your time. 0:14:34.840 --> 0:14:37.640 Time now for talking tech. First up TikTok Shop. It's 0:14:37.680 --> 0:14:40.400 teaming up with a fintech platform at Home to expand 0:14:40.400 --> 0:14:44.040 its online retail platform in Malaysia. And platform will integrate 0:14:44.040 --> 0:14:47.120 a tomes by now pay later service check out rivaling 0:14:47.120 --> 0:14:50.400 the likes of c and Ali. Babba's BMPL options. Parent 0:14:50.440 --> 0:14:53.640 company fit Dance says it's looking to invest billions of 0:14:53.640 --> 0:14:57.280 dollars in Southeast Asia markets in the coming years. Meanwhile, 0:14:57.320 --> 0:15:01.040 Open Ai seems to support certain requirements here government regulation. 0:15:01.200 --> 0:15:03.880 This is according to an internal policy memo drafted Forralling 0:15:03.920 --> 0:15:05.880 a meeting with the White House officials and other tech 0:15:05.880 --> 0:15:06.960 executives back in May. 0:15:07.280 --> 0:15:07.440 Now. 0:15:07.440 --> 0:15:10.000 The document laid out a series of policy commitments and 0:15:10.040 --> 0:15:15.360 a government licensing system. Executives from leading AI firms like Well, OpenAI, 0:15:15.480 --> 0:15:19.440 Meta Alphabet will join President Biden today to discuss transparency 0:15:19.440 --> 0:15:20.520 and security of AI. 0:15:20.720 --> 0:15:22.680 Will have that plus FTX. 0:15:22.880 --> 0:15:26.040 It's banking on a new lawsuit against its centorious founder 0:15:26.080 --> 0:15:27.960 and former Topic associates. 0:15:27.920 --> 0:15:30.080 In order to recover cash for its creditors. 0:15:30.120 --> 0:15:33.440 Now the suit Sam Mackwin Freed, co founder Gary Wang, 0:15:33.480 --> 0:15:36.760 and others, it's all as from making fraudulant transfers that 0:15:36.800 --> 0:15:40.080 benefited them personally but in nothing for FTX more broadly, 0:15:40.200 --> 0:15:42.760 and the complaint is filed Thursday, and it seeks to 0:15:42.840 --> 0:15:46.040 undo more than a billion dollars from those transactions. And 0:15:46.520 --> 0:15:49.960 while those details just keep on coming. And what's so 0:15:50.080 --> 0:15:53.560 interesting is some of the intricacies within this recent lawsuit 0:15:53.880 --> 0:15:56.840 and the co founder Sam Mamuin Freed and former top executives. 0:15:56.880 --> 0:15:58.880 Let's get straight to it with Hannah Miller to really 0:15:59.160 --> 0:16:02.880 discuss well, some of the more questionable behavior. And the 0:16:02.920 --> 0:16:05.120 thing that caught my eye and we'll catch everyone's eye 0:16:06.000 --> 0:16:06.880 is a private island. 0:16:07.200 --> 0:16:08.240 Really what was that for? 0:16:09.480 --> 0:16:12.080 Yes, So, the complaint alleges that there was this memo 0:16:12.280 --> 0:16:16.640 exchanged between an executive at the FTX Foundation, which was 0:16:16.680 --> 0:16:20.520 the charity arm of FTX, and Gabriel Bankman Freed Sam Bankman, 0:16:20.560 --> 0:16:23.960 Freed's brother, and it basically laid out this plan that 0:16:24.040 --> 0:16:26.360 you know, hey, maybe we should buy the country of 0:16:26.520 --> 0:16:30.080 Nauru uh and build a bunker there that could be 0:16:30.200 --> 0:16:34.560 used to protect effective altruists in the event of an 0:16:34.560 --> 0:16:38.080 apocalyptic you know, crisis that would take over the world. 0:16:38.160 --> 0:16:42.040 And we know that Sam Bankman Freed publicly said that 0:16:42.080 --> 0:16:45.920 he embraced effective altruism, so it makes sense that that's. 0:16:45.760 --> 0:16:46.800 Who they'd want to protect. 0:16:47.280 --> 0:16:49.680 A wonder who would have been in that crew, uh 0:16:49.840 --> 0:16:54.200 if any la. Some of the other allegations are well 0:16:54.320 --> 0:16:56.920 just about the sheer amount of money that was already 0:16:57.000 --> 0:17:01.240 realized to have been lost prior to the ultimate demise, 0:17:01.320 --> 0:17:04.480 particularly by well heads of alimedia, and like can you 0:17:04.560 --> 0:17:06.800 just detail some of the other more shocking revelations and 0:17:06.960 --> 0:17:09.399 just the knowledge of how badly this was doing. 0:17:10.440 --> 0:17:13.280 So the complaint alleges that in March twenty twenty two, 0:17:13.480 --> 0:17:17.320 Caroline Ellison, the former CEO of Hour Meter Research, estimated 0:17:17.320 --> 0:17:20.680 that there was a ten billion dollar deficit around the 0:17:20.720 --> 0:17:22.640 same time she gave herself. 0:17:22.280 --> 0:17:24.800 A twenty two million dollar bonus. 0:17:24.840 --> 0:17:27.480 That's what the complaint alleges. So it's very interesting to 0:17:27.520 --> 0:17:30.920 see that contrast there, but it highlights how the executives 0:17:30.960 --> 0:17:33.840 really you know, were very generous to themselves that they 0:17:34.240 --> 0:17:39.399 took you know, huge bonuses equity even in your common shares. 0:17:39.600 --> 0:17:41.119 I mean some of the details. 0:17:41.200 --> 0:17:44.840 What was it potentially alleged fraudulent transfers of four hundred 0:17:44.840 --> 0:17:47.719 and seventy seven million dollars worth of FTX common shares 0:17:47.760 --> 0:17:50.880 to the former director of engineering, payments made by Sam 0:17:50.920 --> 0:17:54.560 Macmunfried allegedly granted himself, right some more than six million 0:17:54.600 --> 0:17:57.040 dollars in equity. I mean, all of this starts to 0:17:57.040 --> 0:17:59.080 add up. Can you just remind us of the timeline 0:17:59.200 --> 0:18:01.840 of all of this to when these sorts of accusations 0:18:02.240 --> 0:18:05.119 are going to be laid, whether we can really understand 0:18:05.160 --> 0:18:07.280 whether there's truth to them or not, and ultimately whether 0:18:07.320 --> 0:18:10.080 the creditors are going to see much So. 0:18:10.119 --> 0:18:13.200 The allegations spread out over a period of several years 0:18:13.320 --> 0:18:16.440 leading up to the collapse of FTX. You know, there's 0:18:16.480 --> 0:18:19.720 stuff happening in twenty twenty one, twenty twenty two, according 0:18:19.720 --> 0:18:23.640 to the complaint, but that is prior to the collapse 0:18:23.680 --> 0:18:27.680 of FTX, which was in November twenty twenty two. Prior 0:18:27.680 --> 0:18:30.520 to that, the company had given this perception that it 0:18:30.560 --> 0:18:33.800 was extremely strong and engaged in a series of bailouts 0:18:33.840 --> 0:18:36.960 helping out struggling crypto companies. During the summer of twenty 0:18:37.000 --> 0:18:37.480 twenty two. 0:18:39.160 --> 0:18:43.840 I'm just kind of also interested, I suppose in robin Hood. 0:18:43.880 --> 0:18:45.879 Within all of this, can you just remind us as 0:18:45.920 --> 0:18:48.800 to how much money ended up being purchased of a 0:18:48.840 --> 0:18:51.320 public company. We're all so aware of that purchase and 0:18:51.320 --> 0:18:54.240 then felt the one point FTX wanted to actually buy 0:18:54.280 --> 0:18:55.160 out robin Hood. 0:18:55.560 --> 0:18:57.400 They used money from Alamedia. 0:18:56.960 --> 0:19:01.200 Though, yes, the complaint alleges that and Bankment Freed and 0:19:01.240 --> 0:19:05.280 Gary Wang, his co founder, actually took over five hundred 0:19:05.320 --> 0:19:08.680 and million, five hundred million dollars from Alameda and used 0:19:08.760 --> 0:19:13.080 that to buy robin Hood shares. So they just took 0:19:13.119 --> 0:19:16.639 that money. They didn't really have to give anything in return, 0:19:16.680 --> 0:19:20.399 according to the complaints allegations. So it's pretty crazy to 0:19:20.400 --> 0:19:23.200 see that they were really, you know, taking huge steps 0:19:23.280 --> 0:19:26.159 in terms of you know, looking at robin Hood. 0:19:26.560 --> 0:19:29.959 I feel I've become numb to pretty crazy allegations and 0:19:30.000 --> 0:19:32.440 you keep them coming. Thank you so much, Hannah Miller 0:19:32.720 --> 0:19:35.000 on All Things FTX. Remember you've got to go and 0:19:35.040 --> 0:19:37.400 listen to the podcast. So they have about Sammi Munfried 0:19:37.440 --> 0:19:48.200 as well. Welcome back to Bloomberg Technology. Now let's talk 0:19:48.240 --> 0:19:51.040 a little bit what's happening over in Washington, because leading 0:19:51.119 --> 0:19:55.359 USAI companies publicly admitted to safeguards to the booming technology 0:19:55.400 --> 0:19:59.120 at the White House's request. Today, President Biden joined by 0:19:59.119 --> 0:20:02.240 executive from Amazon and Alphabet Meta, Microsoft, Open Ai, and 0:20:02.359 --> 0:20:06.159 others for a key event. We understand now one advisor 0:20:06.600 --> 0:20:10.240 to the administration has been Neverinasing Creato AI. 0:20:10.320 --> 0:20:10.679 CEO. 0:20:10.760 --> 0:20:13.720 Creato is a responsible AI governance platform and you empower 0:20:14.040 --> 0:20:18.240 organizations basically to deliver to embed AI responsibly by trying 0:20:18.240 --> 0:20:20.520