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Speaker 1: From Marhard where Innovation of Money and Power Collie in

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Speaker 1: Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde

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Speaker 1: and Ed Ludlove.

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Speaker 2: I'm Caroline Heide of Bloomberg's world headquarters in New York,

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Speaker 2: and I'm Ed Ludlow in San Francisco.

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Speaker 3: This is Bloomberg Technology coming up.

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Speaker 2: Oh, Apple wiping out as much as two hundred billion

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Speaker 2: dollars in market value. That's as China broadens its iPhone. Man,

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Speaker 2: we'll discuss the outlook for the company and what it

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Speaker 2: means for US China relations.

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Speaker 4: And we'll dive deep into the world of artificial intelligence

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Speaker 4: with the CEO of Imbu, which just raised two hundred

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Speaker 4: million dollars, and we speak to the former CEO of

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Speaker 4: r go Ais he embarks on a new mission with

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Speaker 4: more than a billion dollars in backing expected to come

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Speaker 4: from SoftBank.

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Speaker 2: Meanwhile, Instacart preparing to said it's IPO price range as

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Speaker 2: soon as Monday, as the startup is gearing for its

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Speaker 2: road show. We'll bring you all that and so much more.

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Speaker 2: But Ed, the market is being dictated front and center

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Speaker 2: by what is happening with Apple right now.

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Speaker 4: Yeah, and that's exactly how we frame it. The news

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Speaker 4: Chinese authorities, according to Bloomberg sources, are thinking about expanding

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Speaker 4: a ban on the iPhone in state enterprises and in

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Speaker 4: government agencies.

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Speaker 3: The market reaction is clear, with.

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Speaker 4: Off session lows in Thursday session down around three percent,

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Speaker 4: but just following the open we were down five percent.

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Speaker 4: That was putting us on track for our biggest single

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Speaker 4: day drop since September of last year, so in a year,

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Speaker 4: and on a two day basis, we were headed for

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Speaker 4: our biggest two day drop since May of twenty twenty two.

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Speaker 4: That tells you the severity of the action, and we

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Speaker 4: will look at some of the suppliers later in the

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Speaker 4: program who are also moving to the downside. You talked

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Speaker 4: about at the top of the show that two hundred

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Speaker 4: billion dollars in market cap shed because of what's been

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Speaker 4: reported over the last twenty four hours. That was on

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Speaker 4: a two day basis. Where we're at now two point

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Speaker 4: seven to seven billion or eighty billion dollars approximately in

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Speaker 4: marketcap eighty to ninety billion shed this morning alone. And

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Speaker 4: you think about Apple as the biggest constituent of both

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Speaker 4: the S and B five hundred, then as that one

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Speaker 4: hundred Carr, You're absolutely right. It's being felt much more

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Speaker 4: broadly in financial markets this Thursday. Let's get the details

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Speaker 4: and what's happening with China's reported Apple ban with Bloomberg's

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Speaker 4: Mark gum and chief correspondent for Apple, Mark tell us

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Speaker 4: what we know at this state.

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Speaker 3: Yeah, Ed, thank you for having me.

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Speaker 5: What we're reporting is that government owned companies, government agencies,

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Speaker 5: those types of government affiliated organizations, in addition to the

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Speaker 5: government itself is either banning or plans to ban the

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Speaker 5: use of iPhones and other foreign built devices or foreign

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Speaker 5: devices from foreign run companies to China within the region. Now, Tip,

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Speaker 5: this is clearly having a major impact.

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Speaker 3: On the market.

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Speaker 5: Like you said, a couple hundred billion dollars of marketcap

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Speaker 5: getting wiped away because of this news. And one thing

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Speaker 5: I want to clarify is I think investor can Burns

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Speaker 5: is not so much on lost unit sales from a

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Speaker 5: potential ban like this from these agencies, but it's what

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Speaker 5: it means for Chinese nationalism and if people in China

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Speaker 5: are going to decide to no longer buy iPhones in

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Speaker 5: some quantity because of this, So it's not the government

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Speaker 5: employees that investors are concerned about but if this is

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Speaker 5: going to create some sort of domino effect for the

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Speaker 5: iPhone's penetration within China.

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Speaker 2: And Mark of course, Ed shouts out that the suppliers

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Speaker 2: are under pressure, market valuations being lost with Qualcom Skyworks,

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Speaker 2: we think of Micron technology as well.

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Speaker 6: What about the supply side, What about the.

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Speaker 2: Amount of manufacturing that's done in China by Apple?

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Speaker 5: Yeah, I mean if you think about the larger Apple

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Speaker 5: ecosystem in supply chain, right, when Apple is impacted by

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Speaker 5: something like this, it's not only landing at Apple's doorstep,

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Speaker 5: it's all the suppliers that contribute to the company's products,

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Speaker 5: right Qualcom you mentioned there's other technology makers Micron and

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Speaker 5: such that you mentioned that could be fearful of further

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Speaker 5: bands impacting them down the road for products that their

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Speaker 5: components are in. Certainly this is a concerning but we

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Speaker 5: have to see exactly how widespread this becomes. If you

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Speaker 5: look on social media China Mobile, there was a rumor

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Speaker 5: yesterday going around that China Mobile would not be procuring

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Speaker 5: iPhone fifteen units as part of this band. Given China

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Speaker 5: Mobile is a state run carrier. It's a major carrier

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Speaker 5: with nearly a billion customers there.

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Speaker 3: So that was quite scary.

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Speaker 5: But the carrier has come out through state media and

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Speaker 5: denied the idea that they're not going to be working

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Speaker 5: with Apple, so that is a positive there. But we

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Speaker 5: really have to see how widespread this becomes and how

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Speaker 5: this is going to impact the minds of consumers. Obviously,

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Speaker 5: this band comes at the same time that Huawei and

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Speaker 5: other Chinese phonemakers are upping their game in China too,

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Speaker 5: so clearly, just days ahead of Apple's big iPhone fifteen launch,

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Speaker 5: there is some concern going on in China. But we

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Speaker 5: still need to see how broad this goes.

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Speaker 6: Well said regarding Huawei.

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Speaker 2: Will dig into that in a moment, but for now,

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Speaker 2: we really sang Mark governman, of course our chief really

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Speaker 2: correspondent on all things Apple, and let's get the investigate.

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Speaker 2: Let's get a conversation with Alet Young now chief investment

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Speaker 2: strategists at a quantitive research firm, Map Signals, and Alec

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Speaker 2: did you agree with Mark there that really this is

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Speaker 2: the concern of not just state run businesses, but the

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Speaker 2: fact that this is Chinese nationalism, This is a consumer

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Speaker 2: no wanting, no longer wanting to purchase Apple products.

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Speaker 7: Well, thank you for having me.

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Speaker 8: Certainly a very noisy situation around Apple right now. There's

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Speaker 8: no question that part of the negative inferences that are

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Speaker 8: swirling around right now is this idea that Apple gets

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Speaker 8: caught up in a nationalist rivalry between the US and China.

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Speaker 8: If iPhones, for example, were to become stigmatized throughout Chinese

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Speaker 8: society over the next few months to the point that

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Speaker 8: it depressed demand, those types of narratives inevitably are popping

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Speaker 8: into investors' minds right now.

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Speaker 7: But I think it's.

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Speaker 8: Worth noting that so far the ban in the government agencies,

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Speaker 8: we're looking at about a half a million units according

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Speaker 8: to a lot of the Wall Street research that I'm reading,

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Speaker 8: and that's out of a total run rate over the

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Speaker 8: next twelve months of about forty five million iPhones in China.

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Speaker 8: So the current band impacts a little over one percent

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Speaker 8: of the units. Obviously, if it spreads to state owned

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Speaker 8: enterprises and it winds up having a bigger societal impact

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Speaker 8: in China on iPhone usage, it would be much worse,

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Speaker 8: much bigger, But at this.

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Speaker 7: Point it's fairly contained.

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Speaker 8: It's also worth noting that Apple has been gaining market

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Speaker 8: share in China over the last few years, about three

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Speaker 8: hundred basis points in the last twelve months.

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Speaker 1: Now.

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Speaker 7: It is true that Huawei.

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Speaker 8: Is launching more competitive bones, so you know, it'll be

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Speaker 8: interesting to see how that dynamic evolves. But the current

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Speaker 8: context is that Apple's doing very well in China.

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Speaker 2: Its valuation is done very well as well. Do you

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Speaker 2: think that basically this is a bit of a perfect storm.

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Speaker 2: Therefore we're seeing the sort of market cap erosion because

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Speaker 2: of how well tech companies have outperformed. Because we're at

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Speaker 2: a twenty nine times future earnings, Yeah, I.

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Speaker 8: Think the streets at about six fifty for next year,

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Speaker 8: so we're actually at twenty seven and change on the

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Speaker 8: forward multiple right now.

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Speaker 7: But there's no question that.

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Speaker 8: When the stock peaked at one ninety eight a few

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Speaker 8: weeks ago, it was around thirty times. It was priced

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Speaker 8: to perfection. So this type of news is not going

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Speaker 8: to be greeted favorably. In addition, we've got macro issues

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Speaker 8: with rising rates that can also pressure equity valuation.

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Speaker 7: So I think this is a healthy pullback.

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Speaker 8: But in terms of the bigger question, does this change

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Speaker 8: the bulkcase for Apple of the long term, I definitely

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Speaker 8: think the jury's still out. You know, there's probably some

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Speaker 8: legitimate signal in today's news, but there's also a tremendous

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Speaker 8: amount of noise, yes and overreacting to knee jerk noisy

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Speaker 8: media driven things around this.

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Speaker 7: Stock and many others.

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Speaker 8: Frankly, has it historically been a great way to make

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Speaker 8: money on Wall Street?

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Speaker 2: And was interesting is that Apple has a big event

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Speaker 2: coming up pretty soon. But Apple has also been pretty

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Speaker 2: dedicated to China in terms of what.

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Speaker 4: They've said, at least, this is the big question for

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Speaker 4: me alec. Right last quarter they said that there was

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Speaker 4: a swing in China to eight percent revenue growth in

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Speaker 4: Greater China from a three percent decline the prior quarter.

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Speaker 4: But it's what they called switchers, consumers in China that

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Speaker 4: were buying an iPhone for the first time or switching

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Speaker 4: from a domestic or other international brand. I acknowledge what

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Speaker 4: you just said, but look at the market reaction and

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Speaker 4: explain to us whether this is knee jerk or it's

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Speaker 4: the market recalibrating what they heard from Apple in that

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Speaker 4: earning school.

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Speaker 7: I think it's a little bit of both.

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Speaker 8: Obviously, it's knee jerk because investors have to react to

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Speaker 8: the news as it breaks.

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Speaker 7: We can't control when we get the news, but.

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Speaker 8: Definitely a recalibration of potential, you know, revenue headwinds, earnings

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Speaker 8: headwinds is definitely in the calculus here. But you know, ultimately,

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Speaker 8: you know, American investors were not used to gauging, you know,

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Speaker 8: government intervention of this magnitude. It's normally about the free

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Speaker 8: market deciding who's got the best product. I think on

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Speaker 8: that basis, it's clear Chinese people love iPhones, but obviously

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Speaker 8: when we have you know, the.

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Speaker 7: Government's hand at play so heavily.

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Speaker 8: It's difficult for Americans to read because frankly, it's not

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Speaker 8: something that we're used to in our home market or

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Speaker 8: really in most major markets around the world.

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Speaker 7: So we'll have to see how it plays out. But

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Speaker 7: unless you know, the government.

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Speaker 8: Takes a very heavy hand, you know, I don't think

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Speaker 8: this is going to really be looked back upon as

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Speaker 8: a major negative, game changing inflection point for the company.

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Speaker 4: You know, at the question of the day here, I'm

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Speaker 4: going back television has been is tech in trouble? You know,

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Speaker 4: in the year of Ai, the year of the FED

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Speaker 4: and valuations? Is geopolitics in China now kind of an

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Speaker 4: equal weighted risk factor.

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Speaker 8: Yeah, I mean it's definitely I don't know about equal weighted.

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Speaker 8: We've got a lot of other macro issues we're contending with,

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Speaker 8: but certainly geopolitical risk with China is at the top

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Speaker 8: of the geopolitical risk table, and certainly you know the

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Speaker 8: situation with Taiwan and now just this general competitive tension

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Speaker 8: that we seem to have going on with the Chinese.

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Speaker 8: The Trade Secretary's recent visit Jui Romando didn't really go

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Speaker 8: over that well. So it's definitely something that investors are

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Speaker 8: going to have to monitor, especially in light.

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Speaker 7: Of the.

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Speaker 8: Recent regulations around semiconductors and you know US banning their

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Speaker 8: access to certain high end semis. They're trying to do

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Speaker 8: the same to us in other areas. We've got Nvidia involved,

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Speaker 8: So it's definitely something that investors are going to have

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Speaker 8: to watch.

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Speaker 4: Alec Young, chief investment strategist at MAP Signals, thank you.

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Speaker 4: A perfect segue, because the other top story is s

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Speaker 4: k Heinex has opened an investigation into the use of

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Speaker 4: its chips in the latest phone from Huawei after a

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Speaker 4: tear down commissioned by Bloomberg of the latest device revealed

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Speaker 4: that s ke Heinez's memory and flash storage was inside,

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Speaker 4: though the Korean maker confirmed to Bloomberg it has not

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Speaker 4: worked with Huawei and it has been adhering Caroline to

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Speaker 4: US sanctions. This is an incredible story and.

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Speaker 2: This is where politics and of course supply chain really

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Speaker 2: intertwine and timing. We were just mentioning Gina Romando, of

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Speaker 2: course was over there in China Commerce Secretary. At that

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Speaker 2: exact moment, Huawei very quietly unleashes this new product, the

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Speaker 2: Mate sixty. We all wonder where the chippers come from.

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Speaker 2: Is s mic Smick as has known, or have they

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Speaker 2: been bypassing some of these very stringent what do they

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Speaker 2: call it, sort of a high walls the ability of

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Speaker 2: the US seemingly been trying to cut them off from

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Speaker 2: the supply chain that they still manage to access.

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Speaker 4: This is how it came about. Huawei put out the

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Speaker 4: Mate sixty pro. Bloomberg News got their hands on one,

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Speaker 4: took it to Tech Insights, they did a tear down.

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Speaker 4: One of the main processors was made in China by Smick.

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Speaker 4: And now they've uncovered two memory chips nand in a

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Speaker 4: high end or next gen d ram that are covered

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Speaker 4: by sanctioned sa Gainitz has responded straight away saying, look,

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Speaker 4: we didn't know about this, We did not work with Huawei.

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Speaker 2: And meanwhile, it's been this sort of moment to celebrate

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Speaker 2: for the Chinese at least this idea that they're able

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Speaker 2: to produce these incredibly powerful chips in their own country,

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Speaker 2: supply them, and therefore make an incredibly powerful new phone

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Speaker 2: that some analysts are saying, could this be the Apple

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Speaker 2: killer in China? And the question is is how much

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Speaker 2: they have managed to really build and operate and become

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Speaker 2: self sustaining when it comes to their own semiconductors in China.

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Speaker 2: We continue to dig into that key geopolitical story. We

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Speaker 2: continue to think about the knock on a Fox effects

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Speaker 2: for the entire border market ed because this is a

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Speaker 2: key concern China US what it means for Apple. Of course,

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Speaker 2: when you've got the big bell, whether that is Apple

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Speaker 2: under pressure, you're going to have the whole nastac.

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Speaker 6: On the downside.

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Speaker 2: But just think who was thinking was it was actually

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Speaker 2: in the green earlier trade. It's now off by more

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Speaker 2: than two percent. We're seeing some other key players, and

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Speaker 2: we've mentioned the suppliers to Apple being under pressure, The

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Speaker 2: Coal com for example two year yield. Though interesting that

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Speaker 2: we're seeing the bond market just get a little bit

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Speaker 2: of bid on the front end. Now we've seen, of

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Speaker 2: course many wondering about where.

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Speaker 6: We see the federal reserve go.

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Speaker 2: The job bless hims today once again strength in the

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Speaker 2: US jobs market. But for now, maybe we get a

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Speaker 2: little bit of buying moment after the sell off that

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Speaker 2: we've seen in the bond market of late. Euro under

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Speaker 2: pressure because we've got very weak European data over all,

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Speaker 2: the really peeking out the tiniest bit of growth in

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Speaker 2: the second quarter. What does that mean for the ECB

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Speaker 2: The euro is down versus the US dollar, so much

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Speaker 2: more to come on the macro and the micro. This

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Speaker 2: is win bog technology.

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Speaker 3: Time for talking tech.

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Speaker 4: First up, California Governor Gain having use and signed and

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Speaker 4: executive order on AI regulation that it instructs state agencies

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Speaker 4: to examine how artificial intelligence might threaten the security and

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Speaker 4: privacy of California residents, while also authorizing state employees to

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Speaker 4: experiment with AI tools and try integrating them into the

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Speaker 4: state's operations.

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Speaker 3: Use some tol Bloomberg News.

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Speaker 4: There's a Pandora's box being opened here and we just

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Speaker 4: want it done in a safe way. Plus billionaire Patrick

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Speaker 4: Drahi's debt laid in telecommunications empire Altice is weighing the

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Speaker 4: sale of its French data centers in a deal valued

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Speaker 4: at one point one billion dollars, as well as the

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Speaker 4: sale of part of the capital of Altis France, and

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Speaker 4: options for Portugal Telecom and its ad tech company Teeds.

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Speaker 4: All of this in an effort to shore up confidence

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Speaker 4: in his network of businesses, which have been battered by

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Speaker 4: a Portuguese corruption probe targeting key figures linked to our teas.

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Speaker 4: And Finally, a fintech owner in London is facing allegations

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Speaker 4: that he helped notorious drug traffickers attempt to launder hundreds

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Speaker 4: of millions of euros through a crypto exchange platform. The

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Speaker 4: thirty eight year old Italian is alleged to have converted

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Speaker 4: piles of cash into crypto accounts for a criminal gang.

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Speaker 4: The case puts the British financial technology scene under fresh

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Speaker 4: scrutiny amid fears that its weak controls are enabling the

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Speaker 4: movement of illicit funds around the world.

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Speaker 2: Caroline really global set of stories there and and look

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Speaker 2: now we're going to return a bit more to home

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Speaker 2: and for the IPO market, we are gearing up online

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Speaker 2: grocery delivery startup and indeed on more broadly e commerce tools.

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Speaker 2: Instacart it's preparing to set a price range for its

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Speaker 2: IPO and start its investor roadshow as early as the

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Speaker 2: coming Monday. Boy, have we got this back to school

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Speaker 2: feeling right now? And I'm pleased to welcome to the

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Speaker 2: showroomg Ryan Gould, who really can set the scene of

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Speaker 2: what story they're going to be trying to tell investors

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Speaker 2: on this roadshow come Monday.

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Speaker 3: Yeah, thanks, Caroline.

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Speaker 9: I think you know, there's certainly some energy as we

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Speaker 9: head into this back to school period. Dare I say

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Speaker 9: probably a little bit of cautious optimism. You know, there's

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Speaker 9: a set of new IPOs that sort of been talked

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Speaker 9: about for you know, months, if not years in instacar case.

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Speaker 9: You know, as we said, instacart is about to said

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Speaker 9: it's price range as early as Monday, kick off a

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Speaker 9: road show, and then they could look to price it

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Speaker 9: as soon as the nineteenth, so almost a week later

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Speaker 9: trading on the twentieth. I think, you know, this is

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Speaker 9: a point that you know, we're starting to see people

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Speaker 9: sort of jostling for position. Armor is already out there.

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Speaker 9: It's the biggest ipea of the year. They've got their

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Speaker 9: price range, could be pricing soon. But you know, there's

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Speaker 9: certainly some energy, I would say, and I think probably

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Speaker 9: there are quite a few investors who are starting to

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Speaker 9: feel a little more constructive about how we think about

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Speaker 9: hypos in the US.

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Speaker 2: Mangled great to have them on very early to the game.

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Speaker 2: In terms of Bloomberg, I think we've just welcomed into

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Speaker 2: the company and already right here I'm going to beg technology.

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Speaker 6: Time now for work shifting.

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Speaker 2: It's where look we look at the changing landscape of

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Speaker 2: the labor market amid advances in technology and today. But

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Speaker 2: job Stata initial jobbers claims in particular showing resilience in

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Speaker 2: this workforce lowest levels for job as claims amid a

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Speaker 2: resilient labor market for the US, But there are issues

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Speaker 2: historic labor force games we've actually seen in particular for women,

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Speaker 2: while could be eroded, could be stalled as a panemic

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Speaker 2: era lifeline.

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Speaker 6: To daycare providers expires, with more than.

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Speaker 2: Seventy thousand childcare programs estimated to be in danger of closing.

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Speaker 2: Joining US now to discuss look whether technology can.

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Speaker 6: Off set this setback.

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Speaker 2: Alan of Ekowitz is a general partner at Spring Bank,

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Speaker 2: which invests in early stage companies building look infrastructure to

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Speaker 2: enable working women and families to succeed and ultimately, can

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Speaker 2: technology be any sort of solution in this scenario. It

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Speaker 2: seems like a terrible scenario at that.

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Speaker 10: Yeah, so it's not a great scenario. It's pretty bad timing.

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Speaker 10: We're here at the start of the school year. Against

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Speaker 10: most expectations, the percentage of moms of young children in

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Speaker 10: the workforce is actually higher than ever having recovered post pandemic,

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Speaker 10: which has huge consequences for women's lifetime earnings and career trajectories.

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Speaker 10: But as you just meant it, mention, we're about to

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Speaker 10: lose twenty four billion dollars in stimulus, which might put

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Speaker 10: three hundred children's childcare slots it.

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Speaker 7: At risk, and of course put it risk the.

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Speaker 10: Ability for all of these women to continue to participate

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Speaker 10: in the workforce. And to be really clear, of course,

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Speaker 10: this isn't just a mom issue. It's an economy issue.

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Speaker 6: It's an inviolent issue.

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Speaker 2: And you say, rightly, so it's an impact on GDP,

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Speaker 2: on earnings. What about though anyways that in companies you

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Speaker 2: invest in can be some sort of support amid perhaps

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Speaker 2: slowing money funds coming towards these childcad.

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Speaker 10: Yeah, so you know, of course, innovation can't replace infrastructure

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Speaker 10: and public policy, it can augment. So technology and startup

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Speaker 10: solutions can't print money. But there's a lot that we

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Speaker 10: can do to make it easier for families to find access,

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Speaker 10: VET and pay for childcare, and of course for care

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Speaker 10: businesses themselves, which are often pretty small mom and pop operations,

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Speaker 10: to run more efficiently and effectively. So maybe I'll give

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Speaker 10: one example from our portfolio, and also happy to talk

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Speaker 10: more broadly about areas where we think technology can make

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Speaker 10: a really big impact. But we're investors in a wonderful

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Speaker 10: company called Wealthy, which combines digital tools, AI and world

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Speaker 10: class human expertise to basically serve as a care coordinator

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Speaker 10: for the employees of some of the US's largest employers

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Speaker 10: like best Buy, Cisco, Hilton, and basically they match families

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Speaker 10: with care professionals, automate workflows, automate workfloads to get tasks

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Speaker 10: done faster while they're looking for a home healthcare aid,

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Speaker 10: pure aging mother, or backup childcare for your kids so

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Speaker 10: you don't have to miss work. So that's just one

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Speaker 10: example in our own portfolio. But you know, we think

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Speaker 10: beyond backup care and childcare specifically, there's a lot of

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Speaker 10: opportunities for technology to improve the overall care economy, ranging

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Speaker 10: from you know, first it can make hopefully care jobs better.

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Speaker 2: Yeah, dare I say artificial intelligence in that sentence?

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Speaker 10: Listen if we're if we don't talk about AI, are

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Speaker 10: we even doing a technology show right now? Surely you

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Speaker 10: know we know that, for instance, healthcare worker burnout is

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Speaker 10: an enormous problem in the industry across the care co

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Speaker 10: I mean, there's one point eight million vacancy US right now,

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Speaker 10: and for instance, things like automation or AI supported charting

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Speaker 10: and documentation could cut that work dramatically, giving people time

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Speaker 10: back in their schedules, hopefully improving some of the burnout crisis.

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Speaker 10: So that's you know, that's just sort of one one area.

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Speaker 10: You know, I think there's also a lot of room

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Speaker 10: to use innovation and technology actually even make care more affordable.

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Speaker 10: One of the things we hear from providers is that

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Speaker 10: even with government subsites in place, it can take beats

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Speaker 10: or months or those childcare payments from the government to

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Speaker 10: be sent to providers. And these are often low margin

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Speaker 10: businesses that are kind of operating months to months because

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Speaker 10: of the operational complexity and collecting that data. And there's

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Speaker 10: a lot of room for sort of modernized financial rails

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Speaker 10: and technology to move that flow.

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Speaker 4: Alana, the fear is that the tap of stimulus money

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Speaker 4: just just closes abruptly right later in the year. But

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Speaker 4: the problem of the last twelve months has been actually

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Speaker 4: getting money to people. And I wondered how closely you're

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Speaker 4: tracking sort of the fintech solution that brings government infrastructure

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Speaker 4: into the twenty first century.

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Speaker 10: Yeah, So, you know, I think there's a lot we

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Speaker 10: can do to improve the rails on how money flows

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Speaker 10: between careers and receivers, also insurance companies, employers, and the government.

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Speaker 10: We've actually been seen a decent amount of startup activity

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Speaker 10: in this space, even outside of care whether it's trying

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Speaker 10: to make it easier to access government benefits like food

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Speaker 10: stamps through companies like Propel, companies like Promise Pay that

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Speaker 10: make it easier for folks to make payments to the

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Speaker 10: government and interact with government services.

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Speaker 1: And I think there's a lot of room you know.

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Speaker 10: Look, we're all used to being able to do basically

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Speaker 10: anything from our phone, right to do our job, find

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Speaker 10: out hotel, do everything else. And I think that there's

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Speaker 10: a real push to sort of modernizing the government experiences

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Speaker 10: into our daily lives.

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Speaker 2: Alana Bakowitz from that collective, we thank you for joining

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Speaker 2: us on what is a pretty dramatic childcare cliff.

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Speaker 6: This is really much.

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Speaker 4: Welcome back to blue though technology. Ed Lovelow here in

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Speaker 4: San Francisco and Caroline heard in New.

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Speaker 2: York and Ed, let's get to what is a geopolitical picture,

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Speaker 2: a macro picture that just questions time and time again,

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Speaker 2: canon as that can technology stocks outperform, managed to continue

441
00:22:23,200 --> 00:22:25,880
Speaker 2: to gain when we're seeing rates on the higher side,

442
00:22:25,880 --> 00:22:27,879
Speaker 2: when you're seeing you for a little, contensions build between

443
00:22:27,880 --> 00:22:30,200
Speaker 2: the US and China, and ultimately when we start to

444
00:22:30,280 --> 00:22:31,240
Speaker 2: question valuations.

445
00:22:31,400 --> 00:22:32,600
Speaker 6: Today is another day of.

446
00:22:32,520 --> 00:22:34,960
Speaker 2: Losses on the n as that big tech really feeling

447
00:22:35,160 --> 00:22:38,120
Speaker 2: the brunt of some sentiment souring and also economic data

448
00:22:38,160 --> 00:22:40,879
Speaker 2: slowing in Europe, also slowing in China. I shine a

449
00:22:40,920 --> 00:22:43,720
Speaker 2: light on what's happening to the yarn that trades offshore.

450
00:22:43,920 --> 00:22:46,200
Speaker 6: It's actually at a sixteen year low. The US STORER

451
00:22:46,240 --> 00:22:47,560
Speaker 6: has been outperforming because.

452
00:22:47,359 --> 00:22:50,080
Speaker 2: This economy seems to still be managing to weather the

453
00:22:50,119 --> 00:22:52,439
Speaker 2: storms that are being felt elsewhere. I'm looking a what's

454
00:22:52,440 --> 00:22:54,280
Speaker 2: happening in a two year yields actually getting a bed

455
00:22:54,320 --> 00:22:55,000
Speaker 2: after we've sold off.

456
00:22:55,000 --> 00:22:56,119
Speaker 6: It's back below five percent.

457
00:22:56,160 --> 00:22:58,399
Speaker 2: But nevertheless, this focus on the federal reserve and what

458
00:22:58,480 --> 00:23:01,520
Speaker 2: it does to curtail inflation and very resilient jobs market,

459
00:23:01,640 --> 00:23:03,639
Speaker 2: which we've got in the jobs jobless claims data a

460
00:23:03,680 --> 00:23:06,320
Speaker 2: little bit earlier today. Yet more evidence of that going

461
00:23:06,320 --> 00:23:07,960
Speaker 2: to some of the individual names. Because we know the

462
00:23:07,960 --> 00:23:10,080
Speaker 2: story of the day is basically a tech one.

463
00:23:10,119 --> 00:23:11,040
Speaker 6: It is that of Apple.

464
00:23:11,119 --> 00:23:13,200
Speaker 2: It is of course the concern that China will be

465
00:23:13,240 --> 00:23:16,439
Speaker 2: pushing back on allowing its own employees, government employees from

466
00:23:16,440 --> 00:23:18,360
Speaker 2: buying Apple iPhones. And what does that mean in terms

467
00:23:18,400 --> 00:23:20,720
Speaker 2: of a consumer pushback? Apple under pressure off by more

468
00:23:20,720 --> 00:23:23,000
Speaker 2: than three percent. We've seen, of course, watching ondred billion

469
00:23:23,040 --> 00:23:25,080
Speaker 2: dollars in terms of market value falling over the last

470
00:23:25,119 --> 00:23:27,480
Speaker 2: couple of days. Was seeing Qualcom suppliers really.

471
00:23:27,280 --> 00:23:29,440
Speaker 6: Feeling the pain. Actually we go to SPLC.

472
00:23:29,520 --> 00:23:31,040
Speaker 2: It's a supply chain that you can see on the

473
00:23:31,040 --> 00:23:33,719
Speaker 2: Bloomberg Qualcom kind of getting twenty two percent of its

474
00:23:33,760 --> 00:23:36,320
Speaker 2: revenue from Apple, a key supplier, and we're looking at

475
00:23:36,320 --> 00:23:37,959
Speaker 2: T Mobile though I wanted to give a little bit

476
00:23:38,000 --> 00:23:40,920
Speaker 2: of row of green today T Mobile actually giving money back.

477
00:23:40,960 --> 00:23:43,120
Speaker 2: We learned that yesterday dividends they're going to be buying

478
00:23:43,160 --> 00:23:45,359
Speaker 2: back shares, and of course that's always music to an

479
00:23:45,400 --> 00:23:48,159
Speaker 2: investor base. Is here also some bi reports saying that

480
00:23:48,200 --> 00:23:50,879
Speaker 2: look the Apple iPhone fifteen, that's going to help the

481
00:23:50,960 --> 00:23:51,639
Speaker 2: likes of T Mobile.

482
00:23:51,920 --> 00:23:54,520
Speaker 4: H Yeah, I'm not doing much to put green on

483
00:23:54,560 --> 00:23:56,679
Speaker 4: the screen today. Let's get back to that top story

484
00:23:56,680 --> 00:23:59,720
Speaker 4: in the world of technology, China planning to expand a

485
00:23:59,760 --> 00:24:03,119
Speaker 4: bag on the use of iPhones for government backed agencies

486
00:24:03,160 --> 00:24:06,560
Speaker 4: and state companies that according to Bloomberg's sources, this all

487
00:24:06,560 --> 00:24:11,440
Speaker 4: happening in Apple's biggest individual, foreign market and global production based.

488
00:24:11,480 --> 00:24:14,399
Speaker 4: Apple as well as the relevant Chinese agencies, did not

489
00:24:14,480 --> 00:24:17,280
Speaker 4: respond to requests for comment on the Bloomberg story.

490
00:24:17,359 --> 00:24:18,920
Speaker 3: Joining us now Bloomberg.

491
00:24:18,520 --> 00:24:21,720
Speaker 4: Kdie lines out of DC and quickly this is becoming

492
00:24:21,720 --> 00:24:24,439
Speaker 4: a tit for Tat twenty four hours ago, the journal

493
00:24:24,480 --> 00:24:30,160
Speaker 4: report on some government agencies Bloomberg reporting more it follows

494
00:24:30,320 --> 00:24:32,240
Speaker 4: the Gina Ramondo trip to China.

495
00:24:34,160 --> 00:24:36,640
Speaker 11: It does the Commerce Secretary made a trip to Beijing,

496
00:24:36,800 --> 00:24:40,240
Speaker 11: of course, just last weekend, she following Secretary Jennet Yellen,

497
00:24:40,680 --> 00:24:42,640
Speaker 11: the Secretary of State Anthony Blincoln.

498
00:24:42,760 --> 00:24:44,360
Speaker 6: The climate on Boijeon.

499
00:24:44,000 --> 00:24:46,199
Speaker 11: Kerry as well, all an effort to shore up the

500
00:24:46,240 --> 00:24:49,119
Speaker 11: relationship between the largest economy in the world and the

501
00:24:49,119 --> 00:24:52,000
Speaker 11: second largest economy in the world. In Ramondo specifically trying

502
00:24:52,000 --> 00:24:54,919
Speaker 11: to ease the path of US businesses doing China. She

503
00:24:54,960 --> 00:24:57,720
Speaker 11: talked a lot while in China about the uncertainty of

504
00:24:57,720 --> 00:25:00,080
Speaker 11: operating in that market, given headlines like what we they

505
00:25:00,080 --> 00:25:02,320
Speaker 11: are seeing take place with Apple, the idea that a

506
00:25:02,359 --> 00:25:05,520
Speaker 11: ban on iPhone would expand from sensitive departments too, as

507
00:25:05,560 --> 00:25:08,640
Speaker 11: you say, a government backed agencies state on enterprises. It's

508
00:25:08,680 --> 00:25:11,359
Speaker 11: not clear based on our reporting, how many companies or

509
00:25:11,400 --> 00:25:15,840
Speaker 11: agencies could eventually adopt these restrictions, but obviously a massive

510
00:25:15,880 --> 00:25:17,959
Speaker 11: risk to a company like Apple who is so dependent

511
00:25:18,040 --> 00:25:20,720
Speaker 11: on China. A from a supply chain perspective, a lot

512
00:25:20,720 --> 00:25:23,280
Speaker 11: of iPhones in the first place are made in China

513
00:25:23,400 --> 00:25:26,159
Speaker 11: in factories they're employing Chinese people. But also from a

514
00:25:26,240 --> 00:25:28,560
Speaker 11: revenue perspective, this is a market that made up about

515
00:25:28,560 --> 00:25:30,520
Speaker 11: a fit of their revenue in the latest quarter.

516
00:25:30,920 --> 00:25:33,159
Speaker 2: You put that context so perfectly, Katie. But also the

517
00:25:33,200 --> 00:25:36,040
Speaker 2: context is that this is a building concern not only

518
00:25:36,200 --> 00:25:38,920
Speaker 2: from competition. We think of Huawei and its latest phone,

519
00:25:38,960 --> 00:25:42,000
Speaker 2: reveal what that does for Chinese sales for Apple, but

520
00:25:42,040 --> 00:25:44,760
Speaker 2: also what that means for the relationship when we're thinking

521
00:25:44,880 --> 00:25:48,160
Speaker 2: of Huawei and its access to chips that the US

522
00:25:48,240 --> 00:25:50,760
Speaker 2: is trying to prevent them getting. Can you just give

523
00:25:50,840 --> 00:25:53,159
Speaker 2: us any update to what stake Sullivan and the like

524
00:25:53,160 --> 00:25:54,120
Speaker 2: of implementing on that.

525
00:25:55,400 --> 00:25:59,240
Speaker 11: Yeah, this is a very prevalent topic of conversation here

526
00:25:59,240 --> 00:26:01,520
Speaker 11: in Washington now, because, of course, it was just last

527
00:26:01,520 --> 00:26:03,880
Speaker 11: week that Huawei announced its smartphone that it had really

528
00:26:03,960 --> 00:26:07,040
Speaker 11: said was a triumph against US sanctions because it was

529
00:26:07,119 --> 00:26:12,000
Speaker 11: made using Chinese made chips from SMIC. So in theory,

530
00:26:12,040 --> 00:26:13,720
Speaker 11: what China is saying is that they were able to

531
00:26:13,720 --> 00:26:15,960
Speaker 11: get around sanctions, do this in spite of sanctions. What

532
00:26:16,000 --> 00:26:18,320
Speaker 11: we're hearing from authorities here in the US on Capitol Hill,

533
00:26:18,359 --> 00:26:20,800
Speaker 11: for example, though, is that this we have actually been

534
00:26:20,800 --> 00:26:24,399
Speaker 11: done in violation of sanctions. Congressman Michael McCall, who of

535
00:26:24,440 --> 00:26:27,040
Speaker 11: course is a Republican he chairs the House Foreign Affairs Committee,

536
00:26:27,119 --> 00:26:30,840
Speaker 11: was speaking overnight saying that smi C may require an

537
00:26:30,920 --> 00:26:35,480
Speaker 11: investigation because he thinks it's obvious the company violated sanctions

538
00:26:35,520 --> 00:26:38,520
Speaker 11: by supplying components to Huawei, and of course this is

539
00:26:38,560 --> 00:26:40,720
Speaker 11: a company that's on the entity list here in the

540
00:26:40,800 --> 00:26:43,520
Speaker 11: US for national security concerns, and that's been echoed by

541
00:26:43,560 --> 00:26:46,560
Speaker 11: others as well. Mike Gallagher, who chairs the China Select

542
00:26:46,560 --> 00:26:49,440
Speaker 11: Committee in the House, also was saying that the US

543
00:26:49,480 --> 00:26:52,640
Speaker 11: may need to look at a ban or an ending

544
00:26:52,720 --> 00:26:55,920
Speaker 11: of all experts to both experts, rather to both Huawei

545
00:26:56,160 --> 00:26:59,080
Speaker 11: and SMI C. It is this idea of national security

546
00:26:59,200 --> 00:27:00,560
Speaker 11: risk on the part of the U s US being

547
00:27:00,600 --> 00:27:04,520
Speaker 11: paramount and more restrictions potentially being looked at as a

548
00:27:04,520 --> 00:27:06,520
Speaker 11: result of that, so as Ed was saying at the

549
00:27:06,600 --> 00:27:08,959
Speaker 11: very beginning, it is this kind of tit for tat idea.

550
00:27:09,240 --> 00:27:11,919
Speaker 11: The US moves to restrict one thing, China moves to

551
00:27:11,960 --> 00:27:14,359
Speaker 11: restrict another, and it seems like this is just the

552
00:27:14,400 --> 00:27:16,080
Speaker 11: pattern that we are in at this point.

553
00:27:17,200 --> 00:27:19,800
Speaker 4: Cara and Kaylee to appoint that Kaye made a minute ago.

554
00:27:19,880 --> 00:27:21,679
Speaker 4: City Groups put a note out since we've gone on

555
00:27:21,720 --> 00:27:24,719
Speaker 4: air basically saying what Kaylee did that we don't know

556
00:27:24,760 --> 00:27:28,200
Speaker 4: how many companies or government agencies or people in them

557
00:27:28,359 --> 00:27:31,119
Speaker 4: using iPhones, But it's probably the case that they were

558
00:27:31,160 --> 00:27:34,480
Speaker 4: already transitioning away from iPhone anyway, so it might have

559
00:27:34,560 --> 00:27:38,159
Speaker 4: limited impact. I guess that that note, Kaylee speaks to

560
00:27:38,200 --> 00:27:42,080
Speaker 4: the point that relations between the US and China, in

561
00:27:42,119 --> 00:27:45,440
Speaker 4: spite of Ramondo's visit, are still not good, right.

562
00:27:45,480 --> 00:27:47,040
Speaker 3: We're not in a good place right now.

563
00:27:48,520 --> 00:27:51,040
Speaker 11: No, absolutely not. And this is the tricky dance. On

564
00:27:51,080 --> 00:27:53,600
Speaker 11: the one hand, you are trying geopolitically to make sure

565
00:27:53,640 --> 00:27:55,879
Speaker 11: that the relationship is more stable or at least the

566
00:27:55,920 --> 00:27:59,080
Speaker 11: two sides are talking. On the other hand, to protect

567
00:27:59,200 --> 00:28:02,600
Speaker 11: national security interests or economic interests or otherwise. You also

568
00:28:02,640 --> 00:28:05,760
Speaker 11: are seeing very targeted action that works in theory against

569
00:28:05,880 --> 00:28:09,000
Speaker 11: China's interests, things like the executive order on outbound investment

570
00:28:09,240 --> 00:28:14,200
Speaker 11: into certain areas of technology like quantum computing, artificial intelligence, semiconductors.

571
00:28:14,240 --> 00:28:17,680
Speaker 11: It makes it very difficult for countries to interact with China,

572
00:28:17,760 --> 00:28:21,159
Speaker 11: to engage with China, but also clearly for companies themselves

573
00:28:21,160 --> 00:28:23,879
Speaker 11: to figure out how exactly to navigate this market. And

574
00:28:23,880 --> 00:28:25,480
Speaker 11: to the point of the City Group note you were

575
00:28:25,520 --> 00:28:28,679
Speaker 11: just talking about their ed this is the idea that

576
00:28:28,720 --> 00:28:31,280
Speaker 11: it may not just be necessarily about iPhone sales, but

577
00:28:31,320 --> 00:28:35,040
Speaker 11: more broadly about the environment and the uncertainty around.

578
00:28:34,680 --> 00:28:37,840
Speaker 2: It and no wonder Therefore, in videos down you're seeing

579
00:28:37,880 --> 00:28:41,800
Speaker 2: the likes of Tesla down other companies with big exposure

580
00:28:41,840 --> 00:28:43,640
Speaker 2: to China, and I just think of the rm IPO

581
00:28:43,680 --> 00:28:46,320
Speaker 2: that's coming as well. Kaeline's brilliant to break it down

582
00:28:46,360 --> 00:28:49,320
Speaker 2: from a Washington perspectively. Thank you, let's just shift gears.

583
00:28:49,440 --> 00:28:52,440
Speaker 2: But it's probably also home that Washington hasn't Zion because

584
00:28:52,520 --> 00:28:54,760
Speaker 2: Crypto is where we're going next. But it's an update

585
00:28:54,800 --> 00:28:59,200
Speaker 2: on the FTX case. Former executive Ryan Salem is planning

586
00:28:59,240 --> 00:29:02,360
Speaker 2: to plead Gill to criminal charges over the collapse of FTX.

587
00:29:02,400 --> 00:29:05,120
Speaker 2: According to sources, now Sellon was a co chief executive

588
00:29:05,120 --> 00:29:08,600
Speaker 2: of FTX is Bahamas subsidiary before the exchange basically imploded

589
00:29:08,680 --> 00:29:11,240
Speaker 2: last November. Le's for again, someone who's been all across

590
00:29:11,240 --> 00:29:14,400
Speaker 2: it the Mootionnali Basse for more and perhaps given the

591
00:29:14,400 --> 00:29:18,080
Speaker 2: other key executives before, this isn't too much of a surprise.

592
00:29:18,320 --> 00:29:20,920
Speaker 12: One thing that is potentially different here is whether or

593
00:29:20,960 --> 00:29:23,360
Speaker 12: not he will cooperate. That has not been ascertained yet.

594
00:29:23,400 --> 00:29:26,480
Speaker 12: According to this scoop by our own EVA, Benny Morrison,

595
00:29:26,520 --> 00:29:29,240
Speaker 12: who has really been reporting on Ryan Salem's role in

596
00:29:29,280 --> 00:29:33,560
Speaker 12: this for many months now. Remember when the initial issue

597
00:29:33,840 --> 00:29:36,440
Speaker 12: had come to the fore in the Bahamas, it was

598
00:29:36,520 --> 00:29:40,480
Speaker 12: Ryan Salem himself who had really brought the case to

599
00:29:40,640 --> 00:29:44,800
Speaker 12: Bhaman officials very specifically that customer funds may have been

600
00:29:44,920 --> 00:29:45,600
Speaker 12: coll mingled.

601
00:29:45,840 --> 00:29:47,240
Speaker 6: And so to come.

602
00:29:47,040 --> 00:29:51,040
Speaker 12: Back around in this fashion is quite interesting because even

603
00:29:51,040 --> 00:29:54,520
Speaker 12: though he may plead guilty to certain charges criminal charges,

604
00:29:54,680 --> 00:29:56,320
Speaker 12: it's not clear what his level.

605
00:29:56,120 --> 00:29:57,040
Speaker 6: Of cooperation will be.

606
00:29:57,960 --> 00:30:01,160
Speaker 4: Well, the timing is interesting and Beau because Sam Bankman

607
00:30:01,240 --> 00:30:05,600
Speaker 4: freed himself, I think, is scheduled to stand trial one

608
00:30:05,600 --> 00:30:09,360
Speaker 4: month from now. You know, does that contribute to that

609
00:30:10,120 --> 00:30:10,840
Speaker 4: court case?

610
00:30:11,400 --> 00:30:12,160
Speaker 6: It certainly could.

611
00:30:12,240 --> 00:30:15,400
Speaker 12: And remember the other folks at Alameda and FTX who

612
00:30:15,400 --> 00:30:18,400
Speaker 12: have already come forward, they are cooperating, and so we

613
00:30:18,480 --> 00:30:21,280
Speaker 12: know that whether or not he does testify, it definitely

614
00:30:21,360 --> 00:30:25,160
Speaker 12: adds another element to this trial. Remember, I just kind

615
00:30:25,200 --> 00:30:27,560
Speaker 12: of want to talk about their relationship for a moment here,

616
00:30:27,720 --> 00:30:29,600
Speaker 12: because I had a lot of my own reporting around it.

617
00:30:29,600 --> 00:30:33,000
Speaker 12: I had interviewed actually both men right before the collapse

618
00:30:33,040 --> 00:30:35,840
Speaker 12: of FTX. I spoke to Ryan Salem just a week

619
00:30:35,960 --> 00:30:40,200
Speaker 12: or so before. The interesting thing about both Ryan and

620
00:30:41,320 --> 00:30:44,240
Speaker 12: Sam Bankman Fried here is they were not always in

621
00:30:44,280 --> 00:30:47,200
Speaker 12: the same place. Ryan was back and forth between the

622
00:30:47,400 --> 00:30:50,520
Speaker 12: DC suburbs and Bahamas. When I spoke to the people

623
00:30:50,560 --> 00:30:52,640
Speaker 12: around them, I was always told that they kind of

624
00:30:52,760 --> 00:30:55,920
Speaker 12: kept separately. You had Ryan Salem really donating to the

625
00:30:55,920 --> 00:30:59,160
Speaker 12: tune of twenty four million dollars to Republican candidates, when

626
00:30:59,200 --> 00:31:01,720
Speaker 12: Sam Bangman Free was donating to tens of millions to

627
00:31:01,800 --> 00:31:05,640
Speaker 12: Democratic candidates. They seem to have some pivotal differences. So

628
00:31:06,040 --> 00:31:10,160
Speaker 12: Ryan Salem's role in all of this is certainly interesting

629
00:31:10,320 --> 00:31:13,400
Speaker 12: leading up to this trial, though still very early to

630
00:31:13,480 --> 00:31:15,320
Speaker 12: tell exactly what that.

631
00:31:15,280 --> 00:31:18,240
Speaker 2: Would be interesting those political donations, you remind us for

632
00:31:18,680 --> 00:31:24,280
Speaker 2: us withdrawer, they withdrew the campaign finance law issues being

633
00:31:24,440 --> 00:31:26,240
Speaker 2: alleged these particular men Ryn.

634
00:31:26,800 --> 00:31:27,400
Speaker 3: Part of this.

635
00:31:27,360 --> 00:31:30,520
Speaker 12: Issue here also was how the money was used to

636
00:31:30,520 --> 00:31:34,200
Speaker 12: the point you're making, and the campaign dance violations was

637
00:31:34,320 --> 00:31:39,400
Speaker 12: a definite worry here until those violations were withdrawn. But

638
00:31:39,520 --> 00:31:42,080
Speaker 12: remember that they still are a big question mark about

639
00:31:42,080 --> 00:31:45,680
Speaker 12: the role of cryptocurrencies in Washington and why these senators

640
00:31:45,680 --> 00:31:46,560
Speaker 12: had taken the money in.

641
00:31:46,520 --> 00:31:47,120
Speaker 6: The first place.

642
00:31:47,160 --> 00:31:49,960
Speaker 12: What was ultimate motive I'm going back to our initial

643
00:31:49,960 --> 00:31:52,560
Speaker 12: reporting because remember it was not a little bit of money.

644
00:31:52,560 --> 00:31:56,000
Speaker 12: Both of these men were donating almost more than anybody

645
00:31:56,000 --> 00:31:59,240
Speaker 12: else in the most recent cycle. And I'm just going

646
00:31:59,280 --> 00:32:02,680
Speaker 12: back and looking to remember here, Ryan Salem, there were

647
00:32:02,720 --> 00:32:05,760
Speaker 12: some pro crypto, very clearly pro crypto candidates that he

648
00:32:05,840 --> 00:32:08,480
Speaker 12: was giving to make no bones about it. Remember when

649
00:32:08,480 --> 00:32:11,040
Speaker 12: Sam was giving, he mostly said that this was a

650
00:32:11,040 --> 00:32:15,560
Speaker 12: matter of pandemic preparedness and altruism, effective altruism, but not

651
00:32:16,120 --> 00:32:19,040
Speaker 12: a matter as Ryan had said more explicitly about crypto.

652
00:32:19,800 --> 00:32:25,080
Speaker 12: Ryan had also had donated to you very plainly here.

653
00:32:25,160 --> 00:32:25,720
Speaker 6: A lot of.

654
00:32:27,200 --> 00:32:29,760
Speaker 12: Candidates were ties to Donald Trump. They had different rationales

655
00:32:29,800 --> 00:32:31,760
Speaker 12: for why they gave, and so it's kind of hard

656
00:32:31,760 --> 00:32:34,000
Speaker 12: to tell at this point what the motive was.

657
00:32:35,320 --> 00:32:39,280
Speaker 4: Bloomboag Snali B's sick such deep reporting on what has

658
00:32:39,320 --> 00:32:41,640
Speaker 4: been an endless saga. When you'll be back for more,

659
00:32:41,680 --> 00:32:44,240
Speaker 4: Thank you very much. Okay, I'm next coming up on

660
00:32:44,280 --> 00:32:45,320
Speaker 4: Bloomberg Technology.

661
00:32:45,920 --> 00:32:46,719
Speaker 3: Keep on Trucking.

662
00:32:47,040 --> 00:32:49,600
Speaker 4: The founders of the former self driving unit of Ford

663
00:32:49,640 --> 00:32:52,680
Speaker 4: and Volkswagen are back and they're launching a new autonomous

664
00:32:52,720 --> 00:32:56,120
Speaker 4: trucking startup. The co founder and CEO Brian Seleski joins

665
00:32:56,160 --> 00:32:58,200
Speaker 4: us next in an exclusive interview.

666
00:32:58,200 --> 00:32:59,400
Speaker 3: This is Bloomberg Technology.

667
00:33:20,840 --> 00:33:23,719
Speaker 4: The founders of r Go AI, the autonomous vehicle company

668
00:33:23,720 --> 00:33:26,280
Speaker 4: that was shut down last year, are back and they're

669
00:33:26,280 --> 00:33:28,600
Speaker 4: at it again with a new self driving business, this

670
00:33:28,680 --> 00:33:33,160
Speaker 4: time focused on autonomous trucking rather than consumer cars. It's

671
00:33:33,200 --> 00:33:37,640
Speaker 4: called Stack AV, and it's backed by none other than SoftBank.

672
00:33:37,760 --> 00:33:42,200
Speaker 4: One Pittsburgh official told Bloomberg he expects SoftBank's commitment to

673
00:33:42,440 --> 00:33:46,040
Speaker 4: Stack to be more than one billion US dollars. Let's

674
00:33:46,040 --> 00:33:48,720
Speaker 4: bring in Stack AV co founder and CEO Brian Celeski

675
00:33:49,040 --> 00:33:50,200
Speaker 4: for more on his new venture.

676
00:33:50,200 --> 00:33:52,000
Speaker 3: In an exclusive conversation.

677
00:33:52,920 --> 00:33:56,160
Speaker 4: Brian, just start by explaining what you're doing with Stack AV,

678
00:33:56,400 --> 00:33:58,800
Speaker 4: what the technology is, and what the end goal is.

679
00:34:00,040 --> 00:34:01,040
Speaker 1: Yeah, it's great to be here.

680
00:34:01,280 --> 00:34:03,520
Speaker 13: Well, as you said, we're announcing the formation of our

681
00:34:03,560 --> 00:34:07,800
Speaker 13: new self driving startup called stack We're building fully autonomous

682
00:34:07,800 --> 00:34:10,719
Speaker 13: class eight trucks and we're looking to solve really some

683
00:34:10,800 --> 00:34:13,680
Speaker 13: of the biggest issues that the trucking industry faces, whether

684
00:34:13,719 --> 00:34:18,360
Speaker 13: it be driver shortages, retention, issues, over the road, safety,

685
00:34:18,880 --> 00:34:21,560
Speaker 13: and just the inefficiencies that we saw in the supply.

686
00:34:21,320 --> 00:34:22,480
Speaker 1: Chain during the pandemic.

687
00:34:22,760 --> 00:34:26,400
Speaker 13: We really think self driving trucks has a huge opportunity

688
00:34:26,400 --> 00:34:27,760
Speaker 13: here to solve some of those issues.

689
00:34:28,680 --> 00:34:31,399
Speaker 4: Yeah, Brian, you're coming out of stealth, and whether it's

690
00:34:31,400 --> 00:34:35,279
Speaker 4: with more than a billion dollars or not, you've kind

691
00:34:35,320 --> 00:34:37,839
Speaker 4: of moved very quickly to grow. Where will you need

692
00:34:37,880 --> 00:34:40,200
Speaker 4: to spend Like, talk to me about the talent costs,

693
00:34:40,239 --> 00:34:41,640
Speaker 4: the compute costs.

694
00:34:41,840 --> 00:34:42,640
Speaker 3: In your project.

695
00:34:43,800 --> 00:34:45,719
Speaker 13: Well, our priority is to build a great company that

696
00:34:45,760 --> 00:34:48,759
Speaker 13: can really scale and move fast and realize those benefits.

697
00:34:49,960 --> 00:34:54,640
Speaker 13: You know, there's the number of people like it's required

698
00:34:54,640 --> 00:34:58,400
Speaker 13: to build this technology is enormous. The capital needs are

699
00:34:58,400 --> 00:35:03,480
Speaker 13: obviously large, but our priority is to build that fantastic

700
00:35:03,560 --> 00:35:06,440
Speaker 13: team and to really get the technology deployed as quickly

701
00:35:06,440 --> 00:35:09,040
Speaker 13: as we can and get test vehicles up and running.

702
00:35:09,880 --> 00:35:11,839
Speaker 13: We are a new company, but we have been moving

703
00:35:11,920 --> 00:35:14,560
Speaker 13: quickly and just excited about the team that we built.

704
00:35:15,400 --> 00:35:19,239
Speaker 4: Yeah, Brian, you've always looked more holistically at autonomous technology.

705
00:35:19,719 --> 00:35:22,839
Speaker 4: This is a very specific technology and use case. It's

706
00:35:22,960 --> 00:35:25,279
Speaker 4: very similar to what Aurora is doing, and so I

707
00:35:25,440 --> 00:35:28,280
Speaker 4: just wondered why you sense this was the best way

708
00:35:28,680 --> 00:35:30,760
Speaker 4: of commercializing.

709
00:35:31,360 --> 00:35:33,680
Speaker 13: Well, you know, we think that the business model is

710
00:35:33,719 --> 00:35:37,120
Speaker 13: really interesting. The cost of goods have really to ship

711
00:35:37,200 --> 00:35:40,279
Speaker 13: goods has really increased substantially. We know a lot of

712
00:35:40,320 --> 00:35:45,319
Speaker 13: small businesses are feeling the pain times to deliver our

713
00:35:45,800 --> 00:35:49,880
Speaker 13: increasing across the industry, especially in larger markets. So we

714
00:35:49,960 --> 00:35:52,680
Speaker 13: just think that autonomous trucking has the ability to address

715
00:35:52,719 --> 00:35:55,759
Speaker 13: a lot of those inefficiencies. And it just it isn't

716
00:35:55,800 --> 00:35:58,440
Speaker 13: just in the autonomous part of it, the self driving

717
00:35:58,480 --> 00:36:02,040
Speaker 13: aspect of it. It's also in the scheduling and the

718
00:36:02,120 --> 00:36:05,759
Speaker 13: overall logistics, the way the system works. There's just a

719
00:36:05,760 --> 00:36:09,200
Speaker 13: lot of opportunity for improvement. And we think not just

720
00:36:09,239 --> 00:36:11,960
Speaker 13: taking the benefits of AI, but also the benefits of

721
00:36:12,000 --> 00:36:14,920
Speaker 13: generative AI, and a lot of the latest advancements that

722
00:36:14,960 --> 00:36:17,120
Speaker 13: we've seen over the last year we think can really

723
00:36:17,120 --> 00:36:19,640
Speaker 13: be applied to the entire logistics equation.

724
00:36:20,120 --> 00:36:22,680
Speaker 6: So, Brian, does that speed up things?

725
00:36:22,760 --> 00:36:27,160
Speaker 2: Because ultimately the Ford VW backing became impatient.

726
00:36:27,640 --> 00:36:28,200
Speaker 6: I think it was.

727
00:36:28,200 --> 00:36:30,200
Speaker 2: Quoted that one Ford executive said it was easier to

728
00:36:30,200 --> 00:36:31,520
Speaker 2: put a man on the moon than it was to

729
00:36:31,520 --> 00:36:34,520
Speaker 2: get autonomous driving really up and running. Did you just

730
00:36:34,600 --> 00:36:38,120
Speaker 2: need a different mindset of length of time to commit

731
00:36:38,160 --> 00:36:38,799
Speaker 2: capital here?

732
00:36:39,840 --> 00:36:45,319
Speaker 1: Well, I think this requires patient, long term capital. It requires.

733
00:36:46,440 --> 00:36:49,360
Speaker 13: And it certainly requires a big vision in order to

734
00:36:49,760 --> 00:36:51,400
Speaker 13: make this happen. But at the end of the day,

735
00:36:51,440 --> 00:36:55,120
Speaker 13: we want to improve people's lives. We want to we

736
00:36:55,160 --> 00:36:58,320
Speaker 13: want to improve the overall cost structure in that entire

737
00:36:58,360 --> 00:37:00,480
Speaker 13: supply chain. Then the only way we're going to do

738
00:37:00,560 --> 00:37:03,640
Speaker 13: that is by making big changes to how it works right,

739
00:37:04,000 --> 00:37:05,960
Speaker 13: and that means anytime you're working on sort of a

740
00:37:06,000 --> 00:37:08,600
Speaker 13: world scale problem, that means that you have to really

741
00:37:09,560 --> 00:37:11,400
Speaker 13: you have to really work in the details, and you

742
00:37:11,480 --> 00:37:13,239
Speaker 13: have to take a big vision and try to make

743
00:37:13,239 --> 00:37:15,880
Speaker 13: it a reality. That takes capital, it takes time, and

744
00:37:15,920 --> 00:37:18,160
Speaker 13: I think what you're seeing in the field in general

745
00:37:19,120 --> 00:37:21,400
Speaker 13: is that you know, different companies are sort of playing

746
00:37:21,400 --> 00:37:23,440
Speaker 13: to their strengths and how they feel they can be

747
00:37:23,520 --> 00:37:27,880
Speaker 13: most successful and adapt their business. What's unique and exciting

748
00:37:27,920 --> 00:37:30,680
Speaker 13: about this is that soft Bank has a large commitment

749
00:37:30,719 --> 00:37:34,279
Speaker 13: to AI in general. They believe in the power that

750
00:37:34,320 --> 00:37:38,000
Speaker 13: AI has in transforming our everyday lives and making it better.

751
00:37:38,320 --> 00:37:40,560
Speaker 1: And that's where stackav comes out of.

752
00:37:40,920 --> 00:37:46,040
Speaker 13: Is doing that, doing that and applying it to applying

753
00:37:46,080 --> 00:37:46,520
Speaker 13: it to try it.

754
00:37:46,680 --> 00:37:51,000
Speaker 4: Yes, Brian SoftBank said, they're not just backing you with capital,

755
00:37:51,040 --> 00:37:54,600
Speaker 4: but also with AI competence as well. Could you just

756
00:37:54,680 --> 00:37:58,239
Speaker 4: explain that, is that your point of differentiation here your

757
00:37:58,320 --> 00:38:00,720
Speaker 4: access to software and talent.

758
00:38:01,680 --> 00:38:05,480
Speaker 13: Well, we have access to the entire SoftBank group, the

759
00:38:05,640 --> 00:38:07,960
Speaker 13: entire team. They've been wonderful and giving us such a

760
00:38:08,000 --> 00:38:10,960
Speaker 13: huge lift and getting the company started. They see a

761
00:38:11,000 --> 00:38:13,319
Speaker 13: lot in terms of business models and what works and

762
00:38:13,320 --> 00:38:15,880
Speaker 13: what doesn't. We've seen a lot our team in terms

763
00:38:15,880 --> 00:38:17,640
Speaker 13: of what works and doesn't and to be able to

764
00:38:17,640 --> 00:38:19,160
Speaker 13: see around the corners with the.

765
00:38:20,040 --> 00:38:21,279
Speaker 1: How to build the technology.

766
00:38:21,719 --> 00:38:23,640
Speaker 13: And so at the end of the day, putting those

767
00:38:23,640 --> 00:38:26,799
Speaker 13: two brains, if you will, together, we think we have

768
00:38:26,840 --> 00:38:30,960
Speaker 13: a really differentiated story and in a very compelling team

769
00:38:30,960 --> 00:38:31,759
Speaker 13: that can win here.

770
00:38:32,520 --> 00:38:33,920
Speaker 6: And well that's happening.

771
00:38:34,320 --> 00:38:37,840
Speaker 2: Stack av co founder and CEO Ran Celeski brilliant to

772
00:38:37,880 --> 00:38:38,120
Speaker 2: have you.

773
00:38:38,239 --> 00:38:38,719
Speaker 6: We thank you.

774
00:38:47,000 --> 00:38:50,640
Speaker 4: AI startup in View, the company formerly known as Generally Intelligent.

775
00:38:50,680 --> 00:38:52,880
Speaker 4: It has just raised two hundred million dollars Series B

776
00:38:53,239 --> 00:38:56,359
Speaker 4: an evaluation of over one billion dollars. Joining us now

777
00:38:56,360 --> 00:39:00,160
Speaker 4: on set is kenjun Q, CEO of MBU. You also

778
00:39:00,239 --> 00:39:02,560
Speaker 4: secure ten than h one hundreds and that's become like

779
00:39:02,600 --> 00:39:05,000
Speaker 4: the badge of honor for people building a foundation model.

780
00:39:05,080 --> 00:39:09,040
Speaker 4: So what was more important the cash or the compute.

781
00:39:08,840 --> 00:39:11,680
Speaker 14: Both honestly, so cash is much easier to come by

782
00:39:11,760 --> 00:39:15,080
Speaker 14: than compute, and we managed to get our compute quite

783
00:39:15,080 --> 00:39:18,000
Speaker 14: early because we saw this coming and so we're very

784
00:39:18,040 --> 00:39:18,880
Speaker 14: excited to have both.

785
00:39:19,640 --> 00:39:20,960
Speaker 3: Was that the structure of the deal?

786
00:39:21,000 --> 00:39:22,839
Speaker 4: I have to ask the videos one of your back

787
00:39:22,920 --> 00:39:25,600
Speaker 4: is a Nvidia's book back to many Did they just

788
00:39:25,680 --> 00:39:29,280
Speaker 4: participate in the round or was their payment in chips?

789
00:39:29,320 --> 00:39:30,040
Speaker 3: If you see what I.

790
00:39:30,000 --> 00:39:32,680
Speaker 4: Mean, No, it's all cash, well cash and is a

791
00:39:32,719 --> 00:39:35,640
Speaker 4: quick follow on what are you building? I mean, we

792
00:39:35,680 --> 00:39:38,200
Speaker 4: know a few companies building one hundred billion parameter to

793
00:39:38,239 --> 00:39:39,839
Speaker 4: foundation models, that's right.

794
00:39:40,239 --> 00:39:43,840
Speaker 14: So we're really focused on AI agents, which are systems

795
00:39:43,840 --> 00:39:46,399
Speaker 14: that can take action in the world and help us

796
00:39:46,400 --> 00:39:50,200
Speaker 14: as people accomplish much larger goals. So today's AI systems

797
00:39:50,600 --> 00:39:53,640
Speaker 14: they generate an output, but they're not going to go

798
00:39:53,680 --> 00:39:55,400
Speaker 14: off and do a bunch of research if you're writing

799
00:39:55,400 --> 00:39:58,000
Speaker 14: an essay and come back and restructure the argument and

800
00:39:58,040 --> 00:40:00,920
Speaker 14: think through and reason through what's happened. And so we

801
00:40:01,040 --> 00:40:04,560
Speaker 14: build systems optimized for reasoning so that we can end

802
00:40:04,640 --> 00:40:07,799
Speaker 14: up with AI that can actually help us do you

803
00:40:07,800 --> 00:40:10,319
Speaker 14: know what we say? What we want and not just

804
00:40:10,360 --> 00:40:10,920
Speaker 14: what we say.

805
00:40:11,760 --> 00:40:15,840
Speaker 2: What's amazing, Candrin is two hundred million for a bold

806
00:40:16,040 --> 00:40:19,400
Speaker 2: focus on AI agents that people actually haven't been able.

807
00:40:19,200 --> 00:40:21,799
Speaker 6: To play with or see your touch. Maybe one of

808
00:40:21,840 --> 00:40:22,799
Speaker 6: your key backers has.

809
00:40:22,880 --> 00:40:25,160
Speaker 2: But I'm interested as to how far down the road

810
00:40:25,239 --> 00:40:27,280
Speaker 2: you are in terms of development from real perspective.

811
00:40:28,480 --> 00:40:31,080
Speaker 14: Yeah, it's a great question. I think it's always hard

812
00:40:31,120 --> 00:40:33,799
Speaker 14: to tell. We are quite excited over the next couple

813
00:40:33,840 --> 00:40:36,560
Speaker 14: of years to hopefully have things that people can use.

814
00:40:36,600 --> 00:40:37,960
Speaker 14: It might be sooner, it might be later.

815
00:40:38,239 --> 00:40:39,799
Speaker 6: I think, you know, just.

816
00:40:39,760 --> 00:40:43,400
Speaker 14: Like how Apple for Apple iPhone was under development for

817
00:40:43,440 --> 00:40:45,400
Speaker 14: ten years before it came out, It's not going to

818
00:40:45,400 --> 00:40:47,799
Speaker 14: be ten years. But there is a right time for

819
00:40:47,920 --> 00:40:50,719
Speaker 14: technology to be taken to market, and there is a

820
00:40:50,760 --> 00:40:53,480
Speaker 14: such thing as bringing it to market too early. So

821
00:40:53,640 --> 00:40:57,680
Speaker 14: we really believe in serious use, seriously using these systems

822
00:40:57,680 --> 00:41:01,800
Speaker 14: ourselves internally every single day and having some beta users

823
00:41:01,840 --> 00:41:04,880
Speaker 14: that are using them every day. And that's what teaches us, Okay,

824
00:41:04,960 --> 00:41:06,640
Speaker 14: this is good enough, this is not good enough. We

825
00:41:06,680 --> 00:41:08,560
Speaker 14: need to improve the reasoning models in these ways.

826
00:41:08,920 --> 00:41:11,759
Speaker 2: It's really interesting the previous founders that was just talking

827
00:41:11,800 --> 00:41:14,399
Speaker 2: about the need for patient capital and looking at your

828
00:41:14,400 --> 00:41:16,880
Speaker 2: cap table, it kind of looks similar.

829
00:41:17,160 --> 00:41:18,400
Speaker 6: I mean, it's not a normal.

830
00:41:18,160 --> 00:41:20,600
Speaker 2: Cap table in terms of VC money because in fact

831
00:41:20,600 --> 00:41:23,040
Speaker 2: it's the Astera Institute and actually kind of a not

832
00:41:23,080 --> 00:41:23,520
Speaker 2: for profit.

833
00:41:23,520 --> 00:41:24,880
Speaker 6: You've got in video, you got cruise.

834
00:41:25,200 --> 00:41:27,480
Speaker 2: Are they behind you in the idea that this is

835
00:41:27,520 --> 00:41:28,520
Speaker 2: going to take some time?

836
00:41:29,800 --> 00:41:32,040
Speaker 14: They are, and that's actually what we were looking for

837
00:41:32,080 --> 00:41:34,800
Speaker 14: in this round. I think something that's important to remember

838
00:41:34,840 --> 00:41:38,359
Speaker 14: is that open Ai didn't ship chat GBT until five

839
00:41:38,480 --> 00:41:42,160
Speaker 14: six years after they were founded, and it's whenever we're

840
00:41:42,160 --> 00:41:46,480
Speaker 14: building a really deep technology technological breakthrough like this that

841
00:41:47,040 --> 00:41:48,719
Speaker 14: run time is necessary.

842
00:41:49,160 --> 00:41:50,680
Speaker 4: Kenja, can you tell me a little bit about your

843
00:41:50,680 --> 00:41:54,120
Speaker 4: business and company. Are you highly concentrated in San Francisco?

844
00:41:54,480 --> 00:41:57,400
Speaker 4: Are all of your talented engineers here and if so,

845
00:41:57,520 --> 00:41:58,600
Speaker 4: why San Francisco.

846
00:41:59,040 --> 00:42:01,480
Speaker 14: Yeah, that's a great question. We are primarily based in

847
00:42:01,520 --> 00:42:04,279
Speaker 14: San Francisco in person in the office every day, and

848
00:42:04,320 --> 00:42:07,480
Speaker 14: we do have some remote team members, remote engineers. We

849
00:42:07,520 --> 00:42:09,520
Speaker 14: structure it as a kind of hub and spoke model

850
00:42:09,560 --> 00:42:12,839
Speaker 14: where the collaborative hub is optimized for collaboration in San

851
00:42:12,840 --> 00:42:16,479
Speaker 14: Francisco and remote team members are optimized for autonomy because

852
00:42:16,480 --> 00:42:19,799
Speaker 14: that's often what we want remotely. San Francisco is just

853
00:42:19,840 --> 00:42:23,040
Speaker 14: a great technology hub. You know. We host lots of

854
00:42:23,080 --> 00:42:26,520
Speaker 14: events this Thursday Nights in AI series and meet a

855
00:42:26,560 --> 00:42:28,680
Speaker 14: lot of people here, have a lot of potential customers here,

856
00:42:28,719 --> 00:42:29,640
Speaker 14: so it's a good place to be.

857
00:42:29,880 --> 00:42:30,920
Speaker 6: A decade in the making.

858
00:42:31,200 --> 00:42:33,520
Speaker 2: You are building what the archive then that group house

859
00:42:33,520 --> 00:42:36,880
Speaker 2: of like minded thinkers and builders and still focused on

860
00:42:36,920 --> 00:42:40,680
Speaker 2: the SF beat. Really overall, we thank you in bu Ceo,

861
00:42:40,760 --> 00:42:42,200
Speaker 2: Candre and Q joining us.

862
00:42:42,320 --> 00:42:44,319
Speaker 6: What amazing show. But that does it for this edition

863
00:42:44,320 --> 00:42:45,440
Speaker 6: of Bloomberg Technology yet.

864
00:42:46,160 --> 00:42:46,839
Speaker 3: Yeah, don't forget.

865
00:42:46,880 --> 00:42:50,680
Speaker 4: You can recap on our podcast wherever you get yours, Apple, Spotify, iHeart,

866
00:42:50,680 --> 00:42:53,279
Speaker 4: and on Bloomberg from here in SF and New York.

867
00:42:53,600 --> 00:42:54,880
Speaker 3: This is Bloomberg Technology