Speaker 1: From the heart of where innovation, money and power. CALLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Chay. This is Broomberg Technology. I'm Caroline Hyde in
Speaker 1: New York in Family Chin. Coming up in the next hour.
Speaker 1: It's no longer full steam ahead for Silicon Valley. Consumer
Speaker 1: sentiment is changing quickly, tech sector trying to keep up.
Speaker 1: We'll look at how Amazon and Apple really managed to
Speaker 1: win over these obstacles. Plus, the Chinese government tried to
Speaker 1: create a stealth TikTok account to promote propaganda in the
Speaker 1: US because to look at how Chinese state influence could
Speaker 1: be reaching younger generations. And the FTC is singling caution
Speaker 1: to big tech Mergers chair Lena Khan ruled her staff
Speaker 1: to sue Meta over its acquisition of a VR company,
Speaker 1: which wasn't necessarily an ex pens of deal to begin with.
Speaker 1: We'll discuss the aggressive tone this case is setting. We'll
Speaker 1: get to all of that in about a moment, but
Speaker 1: first let's look at Amazon proving its e commerce power
Speaker 1: and card computing businesses also helping turn out revenue that
Speaker 1: even consumers the worry they're about inflation couldn't offset it
Speaker 1: gave revenue forecast for as much as growth in the
Speaker 1: current period. Really relieved investors, and we saw it in
Speaker 1: the share price reaction. Two thousand and nine best months
Speaker 1: since two thousand and nine. Spencer Soperan covering it, particularly
Speaker 1: the consumer angle, and from the perspective, what's amazing is
Speaker 1: before the earnings, we were really worried about what Walmart
Speaker 1: was suggesting, what Best Buy was suggesting, and then roomth
Speaker 1: just Amazon shows its power and pros. Yeah, there were
Speaker 1: and relief. The word you just used earlier is exactly right.
Speaker 1: There was these kind of expectations you know, kicked in
Speaker 1: and then uh, you know, the results kind of blew
Speaker 1: those concerns away. So investors were very relieved both Amazon
Speaker 1: can resume growth like you say up to in the
Speaker 1: in the current quarter, and also people that aren't spending.
Speaker 1: They shed about a hundred thousand workers and and started
Speaker 1: getting that spending in control, whereas previous quarter they had
Speaker 1: a lot of uh, concerns about over building and having
Speaker 1: too many people, so investors were worried how long that
Speaker 1: was gonna last and drag on. This quarter showed they're
Speaker 1: kind of you know, starting to unwind that and starting
Speaker 1: to see see some uh some more positive signs and
Speaker 1: with a positive size. Of course, the fuecast was what
Speaker 1: relieved any more details you sat there on the cool yesterday,
Speaker 1: Annie Jasse or his team spell out how they managed
Speaker 1: the next quarter. Yeah. One one big thing, especially on
Speaker 1: the spending, was you know, investors are always worried about
Speaker 1: how much how quickly is Amazon going to spend whatever
Speaker 1: comes in, and because of that over build on their
Speaker 1: delivery network, They're not They're gonna cool off on you know,
Speaker 1: warehouses and delivery station and those sorts of things, but
Speaker 1: they are going to spend more and it's going to
Speaker 1: be more targeted on data centers and fueling its cloud
Speaker 1: computing business. So they really gave a signal that they're
Speaker 1: going to double down on the cloud computing and they're
Speaker 1: expecting that to remain strong even as they kind of
Speaker 1: cool off investing on the On the e commerce side
Speaker 1: and what so good or in this particular environment about
Speaker 1: Amazon visa v say the Walmarts, the best buys that
Speaker 1: have such inventory loads that they now need to basically
Speaker 1: cut the price off, is Amazon does have a very
Speaker 1: different sort of business model behind it. How has that
Speaker 1: helped to weather. Yeah, that's a great point. And uh
Speaker 1: and something that really shown in this in this earnings report,
Speaker 1: Amazon has this marketplace model where of the products sold
Speaker 1: in the second quarter, that's the highest set number has
Speaker 1: ever been before come from these independent third party merchants.
Speaker 1: And the main thing that means is when stores like
Speaker 1: Walmart Target have this inventory risk and have to take
Speaker 1: deep discounts on products they've already purchased before they reach
Speaker 1: tell them. Amazon doesn't have that inventory risk. If a
Speaker 1: merchant has to, you know, take the price down on
Speaker 1: something to sell it, even if that merchant takes a loss,
Speaker 1: Amazon is not exposed. Amazon still gets a permission, Amazon
Speaker 1: still gets paid to pack and deliver that product. So
Speaker 1: a lot of this, uh, this marketplace model kind of
Speaker 1: shields it from this inventory risk that some of the
Speaker 1: other retailers are basing. We really want to thank you
Speaker 1: as always for bringing us the expertise when it comes
Speaker 1: to Amazon. Spencers Sofa thumbs up, Happy weekend. Meanwhile, let's
Speaker 1: talk about the recent changes the navigation that these companies
Speaker 1: having to do around consumer behavior, around sentiment. Because Jason
Speaker 1: Bilson needs with us principle at full run adventures, of course,
Speaker 1: a lot of your portfolio very much around the consumer.
Speaker 1: You of course in one of us a company that's
Speaker 1: all about consumer engagement and sentiment, and I'm interested, Jason.
Speaker 1: There was a particular note coming from Wells Fargo the
Speaker 1: court Everyone's I know it caught yours too, saying basically,
Speaker 1: if we're in a recession alone, was told the consumer,
Speaker 1: do you think that the consumer is resilient in this
Speaker 1: current environment? Thanks for having me, It's a pleasure to
Speaker 1: be on the program. Absolutely, We a foreignner, you know,
Speaker 1: really believe in the resiliency of people. We hope people
Speaker 1: at the center of everything we do, and we're optimistic
Speaker 1: about the future. We saw consumers be incredibly resalment, resilient
Speaker 1: and adaptable during the pandemic, and we believe that that
Speaker 1: will that will hold up, you know, through this economic
Speaker 1: backdrop and in the long run as we think about
Speaker 1: the next decade ahead. Why you see consumers um spend
Speaker 1: levels are high, you know, the sentiment, on the other hand,
Speaker 1: is low. They're really taking in what's happening right now,
Speaker 1: and they're adapting and they're taking precautionary steps. So we're
Speaker 1: hearing about you know, of consumers are, excuse me, are
Speaker 1: creating a budget. Of consumers are creating a a a
Speaker 1: savings account for an emergency fund. They're beginning to make changes,
Speaker 1: certainly for lower income consumers. We saw this with Walmart
Speaker 1: coming out this week and lowering their profit target when
Speaker 1: consumers are shifting dollars from from discretionary categories like apparel
Speaker 1: to categories that are more necessities like food. So consumers adapt.
Speaker 1: That's their resiliency, right. They may face tough times economically,
Speaker 1: personally or at a macro level, but they adapt, and
Speaker 1: that where we see the resiliency coming in just and
Speaker 1: also many of talked like there are different types of
Speaker 1: consumers out there. There are the consumers that at the
Speaker 1: moment are facing, you know, a balancing act. They cannot win.
Speaker 1: Groceries costs more, gas costs more, they are going to
Speaker 1: have to contail their purchases. But then there's a more
Speaker 1: luxury and purchaser who is able, despite perhaps their four
Speaker 1: oh one k falling off a cliff and despite some
Speaker 1: of their stock prices having been damaged, are still willing
Speaker 1: with the pent up demand to be traveling. And therefore
Speaker 1: your portfolio company away comes into my mind's eye, all
Speaker 1: still willing to be buying an Apple iPhone or an
Speaker 1: a ring, which perhaps costs a little bit more. Are
Speaker 1: you thinking that this consumer is bifurcated. Absolutely, I think
Speaker 1: that that's true right now. I mean, I hope we'd
Speaker 1: certainly have our eye towards opportunities that are that have
Speaker 1: the lower income consumer in mind and increasing access increasing
Speaker 1: costs for them. But I do think that we are
Speaker 1: experienced that. I mean, the reality is that this is
Speaker 1: a complex and dynamic time for consumers. As we mentioned before,
Speaker 1: spend is remaining high, sentiment is low. You know, on
Speaker 1: the one hand, consumers want to get out there and
Speaker 1: live their lives coming out of the pandemic. They want
Speaker 1: to eat out, they want to travel. Uh. You know,
Speaker 1: on the other hand, they have inflation steering them in
Speaker 1: the face and their dollars aren't going as far as
Speaker 1: they used to. Yeah, I've heard much view that actually
Speaker 1: this summer, they'll do it. This summer that like, I
Speaker 1: am just caution to the wind. I'm getting on that flight.
Speaker 1: It costs me a lot. But people are already buying.
Speaker 1: For example, Walmart said, look, we think that the shopping
Speaker 1: period for the September returned to school is actually be good.
Speaker 1: But my warriors, I'm the parent. I'm looking at Amazon
Speaker 1: Prime Day and buying my kids their lunch boxes because
Speaker 1: I don't want them to get more expensive. Are people
Speaker 1: buying stalking up now and then perhaps into the winter
Speaker 1: and in the fall, that's when we start to pull back.
Speaker 1: I think that there's a possibility of that. You know,
Speaker 1: at this moment, we're seeing a shift and spend from
Speaker 1: from durable goods, uh, these one time replacement purchases that
Speaker 1: people made during the pandemic, and they're not putting dollars
Speaker 1: towards that anymore. They're thinking about things like back to school,
Speaker 1: like travel, some of the services that they didn't get
Speaker 1: to spend on in the last couple of years, you know,
Speaker 1: with that in mind very much so though, I do
Speaker 1: believe and see that that consumers, consumers are taking precautionary
Speaker 1: steps and they will start to fall back. For the middle,
Speaker 1: middle income and upper income, we haven't seen that effect yet.
Speaker 1: For the lower income, we have seen that, and to
Speaker 1: your point, you know, in the back half of this year,
Speaker 1: that's something that we have our eye on for sure,
Speaker 1: and we're looking at your portfolio at the moment, and
Speaker 1: chime is one that comes to mind. And course you
Speaker 1: were talking about how the consumers wanting to say you
Speaker 1: seeing a change in the way in which they're wanting
Speaker 1: to have savings for emergency rainy day funds. What about
Speaker 1: just a desire to be in the market, a retail investor,
Speaker 1: one that wants to be seeing and building wealth. How
Speaker 1: are you thinking about that from a fintech perspective as well.
Speaker 1: There was a lot of energy around that, of course
Speaker 1: over the last couple of years. You know, I think
Speaker 1: the reality has set in. There's plenty of individuals that
Speaker 1: got burned that we're tracing, you know, chasing Uh you
Speaker 1: know what, what what I see as as a free
Speaker 1: lunch and that just isn't a free lunch, And so
Speaker 1: the realities are setting it. I'm hopeful that that consumers
Speaker 1: will want to continue to participate as retail investors. I
Speaker 1: think that that is important increasing access to new categories
Speaker 1: of investments. This is this is critical for for broad
Speaker 1: wealth creation. You know that being said, uh, chasing the trends,
Speaker 1: people are feeling the pain of that right now, and
Speaker 1: I think that will probably color in shape how they
Speaker 1: invest going forward. Jason, it is always fascinating to have
Speaker 1: someone who is so early in one success story like
Speaker 1: Bonomous and then gone on to bm VC and thinking
Speaker 1: about these sorts of consumer facing companies. We thank you
Speaker 1: for runadventurous principle of Jason Bolstein. There really great thoughtful answers. Now,
Speaker 1: of course, this week we have the big news of
Speaker 1: the House and the Senate have passed the Chips Act.
Speaker 1: The bill goes to President Biden's desk next to get
Speaker 1: signed into law. Now, meanwhile, US itself as tightening restrictions
Speaker 1: on China's access to chip making gear according to two
Speaker 1: major equipment suppliers, which further under schools basically Washington's accelerating
Speaker 1: efforts to we'll win out versus Beijing's economic ambitions. Let's
Speaker 1: bring in Bloomberg's executive editor for Asia Technology, who happens
Speaker 1: to be in the US, Peter Alstrom. Thank you so
Speaker 1: much for being with us. And we have seen already
Speaker 1: there were reports that America was leaning on European equipment
Speaker 1: makers to stop setting over to Beijing into China and
Speaker 1: now leaning on US manufacturers. Talk to us about the
Speaker 1: latest news. We know, uh, that's right, Yeah, we had
Speaker 1: two CEOs of chip equipment makers who came out this
Speaker 1: week and talked about new restrictions, tighter restrictions on their
Speaker 1: ability to export gear into China. And this is part
Speaker 1: of, of of course, the ongoing tensions between the U S
Speaker 1: and China. The Biden administration has been following on these
Speaker 1: plans to try to restrict China's ability to get the
Speaker 1: equipment that they need to be able to make the
Speaker 1: most advanced chips. So what these two CEOs have talked
Speaker 1: about is that now they're widening the scope of that.
Speaker 1: In the past, the hurdle was sort of ten nanometers,
Speaker 1: which is really the most advanced chips, and now they're
Speaker 1: expanding it to fourteen nimes um. And so the chip
Speaker 1: makers are now pulling back and they're disclosing to their
Speaker 1: investors that they have these tighter restrictions. And this is
Speaker 1: part of this broader clash that the U S and
Speaker 1: China are going through right now, where the US is
Speaker 1: trying to hold back China as it tries to build
Speaker 1: it's chip making expertise in particular, but more broadly the
Speaker 1: ability to build its technology sector. China's response from your perspective,
Speaker 1: Peter Well, they've pushed back. They think that the US
Speaker 1: is unfairly trying to stop their rise in the technology area,
Speaker 1: that they want to be able to build these capabilities
Speaker 1: within the country. They're investing billions of billions of dollars
Speaker 1: into companies, into venture capital funds to be able to
Speaker 1: um invest in semiconductors in particular because that's sort of
Speaker 1: the foundation of the tech industry, but also areas like
Speaker 1: artificial intelligence and robotics, autonomous driving, etcetera. Also, of course,
Speaker 1: the animosity, shall we call it that between China and
Speaker 1: US on the tech level is also spread into the
Speaker 1: world of social media, and time and time again we've heard,
Speaker 1: perhaps the likes of Meta say, you know, the reason
Speaker 1: we need to keep on building and scaling is because
Speaker 1: otherwise China will come in, and they mean TikTok. TikTok's
Speaker 1: already got a real foothold in the US, and then
Speaker 1: might be reasons for concern. Can you elaborate a little
Speaker 1: bit on what might be a so called propaganda uh
Speaker 1: developments in that space. Yeah. TikTok, of course, is one
Speaker 1: of the apps that was developed by this Chinese company,
Speaker 1: Bite Dance. They have a whole bunch of them, but
Speaker 1: TikTok is the one that's really taken off in the
Speaker 1: U S. It's very popular with teenagers in particular, and
Speaker 1: it's um first came under scrutiny under the Trump administration,
Speaker 1: which planed on banning the app for a while, and
Speaker 1: they were going to force the company Bye Dance to
Speaker 1: sell off ownership of TikTok. It's become very popular in
Speaker 1: their concerns about national security. So the latest story that
Speaker 1: you're referring to is that we found information that the
Speaker 1: Chinese government had gone to TikTok and had tried to
Speaker 1: set up a channel where they could put on their
Speaker 1: point of view, their kind of nationalist a point of
Speaker 1: view and advocate for the Chinese point of view in
Speaker 1: the world without disclosing where it was actually coming from.
Speaker 1: TikTok in this case pushed back and said that they
Speaker 1: would not comply with those regulations. They don't want to
Speaker 1: be viewed as a propaganda arm of the Chinese government,
Speaker 1: they saidainly don't, particularly when they do want to keep
Speaker 1: on expanding in the Western world. And to that point, Peter,
Speaker 1: there has been some interesting reporting from putting back just
Speaker 1: about their foothold in gen Z and and the way
Speaker 1: in which gen Z use TikTok. Right, well, TikTok is
Speaker 1: just exploding in popularity, and it has been for quite
Speaker 1: a few years. What's really changing now are a couple
Speaker 1: of things. One, TikTok is beginning to cash in on
Speaker 1: that popularity. They figured out how to use advertising to
Speaker 1: be able to bring in revenues, and we've talked about
Speaker 1: how their revenues are surging. They're likely to go to
Speaker 1: about twelve billion dollars this year. As part of that,
Speaker 1: they're moving beyond their their old kind of platform. They
Speaker 1: used to be viewed as mostly entertainment. They were short
Speaker 1: videos that people would watch. If you had to search
Speaker 1: for something, you would typically typically go to Google, of course,
Speaker 1: But now what you're seeing is that TikTok is actually
Speaker 1: being used to find things in the way that you
Speaker 1: used to look on search, especially with the younger consumers,
Speaker 1: and getting that news as well. Executive editor for Asia
Speaker 1: Technology Peter Elstrom keeping it on linear TV for US
Speaker 1: for the time being, but meanwhile coming up shares Intel
Speaker 1: plunge today and the CEO told Bloomberg that it's stark
Speaker 1: deserves to be down. Why now mere corporal moment. Will
Speaker 1: share more in that interview. This is Bloomberg. Chip maker
Speaker 1: Intel has well slashed his sales and profit forecasts for
Speaker 1: the rest of the year. We heard that after the
Speaker 1: bell yesterday, and of course CEO pat Girl Singer consider
Speaker 1: an Intel needs more time to make its products competitive.
Speaker 1: At the same time, while he, as should investors looked
Speaker 1: at the current quarter will be the low point. Here's
Speaker 1: some of his conversation with our colleagues and Edwards and
Speaker 1: alex Steel. We expect two and twenty three to be challenging,
Speaker 1: and we had great winds yesterday that we announced with Amazon,
Speaker 1: you know, long term multigeneration partnership with Meta and uh
Speaker 1: you know, these are areas where we're going to go
Speaker 1: fight every customer, every socket, every workload. But we expect
Speaker 1: that two and twenty three are challenging years until we
Speaker 1: get the products that are just unquestionably the best in
Speaker 1: the industry. Macrowhead winds are they something that you are
Speaker 1: factory into your expectations for the business, the extent to
Speaker 1: which you want to invest in the business. You know,
Speaker 1: the enterprise market continues to be strong, it's really focused
Speaker 1: the weakness and the consumer market has been where we've
Speaker 1: seen it quite acutely in this period of time. But
Speaker 1: like semiconductors, you know, it's a cyclic industry and it
Speaker 1: always has been, and we're going to embrace this and
Speaker 1: make the company stronger, better, and you know, some austerity
Speaker 1: helps to drive my transformation agenda more rapidly into the
Speaker 1: company as well, and thus we feel like this is
Speaker 1: the bottom. That's what we clearly communicated in the earnings call,
Speaker 1: and you know, we're off to the races to do
Speaker 1: better for ourselves and for our shareholders into the future.
Speaker 1: You guys also talked about UM, your new guidance for
Speaker 1: full year gross margins coming in around A lot of
Speaker 1: analysts were really skeptical of that number UM after the
Speaker 1: call that it's just too hopeful considering all the pricing
Speaker 1: pressures that everyone's under on chips and increase process nodes costs,
Speaker 1: et cetera. Um, what's the probability you're gonna have to
Speaker 1: revise that lower? Well, we clearly set out a framework
Speaker 1: of our financials that we are confident in that we
Speaker 1: can meet and beat, so our confidence is high. We
Speaker 1: also had some one time things in the quarter, like
Speaker 1: inventory research that will naturally reverse. You know, some of
Speaker 1: this was the dramatic swings that we saw in the quarter.
Speaker 1: You know, we weren't able to adjust our fixed costs
Speaker 1: that quickly, so we'll have more time to do that
Speaker 1: in the second half of the year. And with new
Speaker 1: products ramping, you know, they're very negative and as they
Speaker 1: start to ramp, you know, we get better margin structure.
Speaker 1: So overall, we're confident in the guide that we gave
Speaker 1: for the year, and we have a natural strength of
Speaker 1: shipping more products in this in the second half of
Speaker 1: the year. Normal yearly cyclicality. Intel stock is down thirty
Speaker 1: this year. It's down ten percent today. The market is
Speaker 1: just not buying what you're selling. What is everyone getting
Speaker 1: so wrong? Then I think we deserve to be down today.
Speaker 1: And with the earnings that we report, the guidance that
Speaker 1: we gave, you know, it's a bit of a reset
Speaker 1: and uh, I think we've disappointed ourselves and our shareholders
Speaker 1: in that respect. At the same time, we've laid out
Speaker 1: a multi year path to the future and we're confident
Speaker 1: that that will be realized and we're getting more and
Speaker 1: more proof points along the way, such as our technology
Speaker 1: and process. You know that area is one that everybody
Speaker 1: has set is most critical. And Intel seven, Intel four
Speaker 1: got very positive reviews, were ahead of schedule, and Intel
Speaker 1: three and eighteen A. And if I have leadership, process
Speaker 1: and capacity, you know Intel is going to do fine
Speaker 1: for the future. We had neither. We're getting back both
Speaker 1: of those as we go forward. So we're working on it.
Speaker 1: But clearly, this is a journey. It is a journey.
Speaker 1: What difference will the Chips Act make to your journey?
Speaker 1: You know, the Chips Act is a seminal act for
Speaker 1: this may be the most significant industrial policy legislation that's
Speaker 1: been put in place since World War Two in the US.
Speaker 1: This is huge. Clearly, we said, you know, we are
Speaker 1: expecting and to be a beneficiary of that both in
Speaker 1: the near term right with the manufacturing offsets, and we
Speaker 1: have an aggressive capital build for that. You know, the
Speaker 1: tax benefits will be helpful, but long term, the research
Speaker 1: portions of the bill are huge for long term leadership
Speaker 1: as well. This is good for the industry, it's good
Speaker 1: for the United States, and Intel will be a beneficiary there.
Speaker 1: And I'm proud to have played a part in getting
Speaker 1: it across the line. In tels, the pat gaussing on
Speaker 1: Blue Bay Team. Meanwhile, coming up, it is a date
Speaker 1: a judge decides when Musk Twitter trial when it's going
Speaker 1: to begin. Boy still until October. So Twitter's lawsuit against
Speaker 1: billionaire Elon Musk over they canceled four billion dollar buy
Speaker 1: out of the social media platform set for a five
Speaker 1: day trial starting October seventeenth in Delaware. Twitch As lawyers
Speaker 1: say they'll need only four days to prove Muskar is
Speaker 1: misusing questions about spam and robot accounts as an excuse
Speaker 1: to walk away from the deal. Musk's arguing Twitter's handover
Speaker 1: of the so called bots material hasn't been robust and
Speaker 1: the company's mishandling of that data provides a legitimate basis
Speaker 1: for backing out. Kurt Wagner joins us, now, too well,
Speaker 1: explain why we have to wait all the way until October.
Speaker 1: But meanwhile we get the drip feed of news and
Speaker 1: we understand Musk has indeed filed counterclaims in the lawsuit
Speaker 1: over the buy out, but we're not gonna be able
Speaker 1: to read them. Yeah, exactly. I believe they're not public
Speaker 1: right now, so we can speculate as to what they
Speaker 1: might say. And my guess is he's gonna say, hey, listen,
Speaker 1: the thing is a real issue, and you know, see
Speaker 1: you in October. We can talk about it. But as
Speaker 1: you mentioned, you know, this trial, we knew it was
Speaker 1: going to be in October. The two sides were kind
Speaker 1: of arguing a little bit over when it was going
Speaker 1: to be. Twitter had wanted it to actually be a
Speaker 1: week earlier than what it scheduled, which is right now
Speaker 1: for Monday, October se um. So clearly they were able to,
Speaker 1: you know, find a date that works for everybody, and
Speaker 1: I guess we'll see you there five days, four days,
Speaker 1: all of it. I mean, Delaware, a court in Delaware
Speaker 1: is known for speed, right, But is this particularly fast
Speaker 1: or give it a context here? Yeah, it does. It
Speaker 1: feels a little fast to me. But at the same time,
Speaker 1: I mean, so much this this, you know, feels like
Speaker 1: a sort of simple case in the sense that both
Speaker 1: sides have already signed this merger agreement, right, we know,
Speaker 1: um the issues at hand, right, it's this, it's this
Speaker 1: body issue, and so um to me, it's like everything
Speaker 1: is already kind of laid out. And so as you
Speaker 1: pointed out, I think Twitter thought that they could do
Speaker 1: this in even four days. The trial is supposed to
Speaker 1: be five, so clearly they think they can make their
Speaker 1: case quite quickly, and um, you know, we'll we'll find out,
Speaker 1: but it sounds like it's going to be that five
Speaker 1: day week, uh, and hopefully have a verdict or some
Speaker 1: kind of solution by the end of the week. October one.
Speaker 1: For lawyers, three months is pretty short for our short
Speaker 1: term media mindset. It feels like an eternity. What are
Speaker 1: you expecting next? What do we look out for? Yeah, well,
Speaker 1: behind the scenes, we're going to see both sides, you know,
Speaker 1: doing all the things that you do for a trial. Right.
Speaker 1: They're going to be requesting documentation and providing documentation to
Speaker 1: one another. They're going to be setting up witnesses, uh,
Speaker 1: you know, all of that stuff. I think in the meantime,
Speaker 1: there is supposed to be a vote from Twitter shareholders
Speaker 1: in September uh to kind of form formulas or formulate sorry,
Speaker 1: the deal, excuse me for create the deal and make
Speaker 1: sure everything is good to go. And um, that's going
Speaker 1: to be in September, And that's a way for them
Speaker 1: to try to show that they're moving forward with this
Speaker 1: whole thing and they're not. You know letting this get derailed.
Speaker 1: It's a Friday. I don't know what my name is anymore,
Speaker 1: let alone how I say formalize or formulate. Ko Wagner,
Speaker 1: thank you so much of being in the studio. Appreciate it.
Speaker 1: They well. Meanwhile, Federal Trade Commissioner Chair that is, Lena
Speaker 1: Kahn is sending a pretty strong warning sign to Silicon
Speaker 1: Valley by trying to block metas pursuit of a VR
Speaker 1: fitness app. Within can't overruled, actually her staf's recommendations to
Speaker 1: allow Meta to buy the company as part of its
Speaker 1: metaverse expansion. Now, that aggressive approach for a pretty minor
Speaker 1: deal seemingly suggest that the FTC is going to play
Speaker 1: hardball with big tech M and A, as if we
Speaker 1: hadn't guessed that already. Plombergs Max Chafkin is here to
Speaker 1: tell us first and foremost, NUNA can't overruling sort of
Speaker 1: advice by her own economists, their own lawyers within the
Speaker 1: FTC to say no, look, we're going to go ahead
Speaker 1: and pursue this case. How big a deal is that, Well,
Speaker 1: it's a big deal in a sense that what we're
Speaker 1: finally seeing is Lena con sort of following through on
Speaker 1: something that I guess a lot of political observers have
Speaker 1: been expecting and that hadn't happened kind of in the
Speaker 1: early days of the Biden administration because you had this
Speaker 1: to too deadlock on the FTC. UH. Now we have
Speaker 1: another Democratic Commissioner, so it's three too, so all of
Speaker 1: a sudden, cases like this can proceed. And the rationale
Speaker 1: here is basically that Facebook had already has dominance of VR, which,
Speaker 1: although it's a nascent platform, you know, is potentially an
Speaker 1: important platform, and in acquiring this smaller company, as you said,
Speaker 1: for not a huge amount of money that you know,
Speaker 1: allows it to to extend its dominance. This is super
Speaker 1: controversial kind of in Silicon Valley because what Facebook is
Speaker 1: doing is something that not only has it been doing
Speaker 1: for basically, you know, the last decade, but the entire
Speaker 1: industry has been doing. Right. It's a totally part of
Speaker 1: the playbook that these small that these big tech giants
Speaker 1: um look to get into new platforms like VR by
Speaker 1: doing uh purchasing, and and the FTC is saying, hey,
Speaker 1: you know, wait a minute, maybe it's not going to
Speaker 1: work anymore. I mean, according to the House, what was
Speaker 1: it metro has made a hundred or so purchases of
Speaker 1: smaller companies, and of course the FDC itself is already
Speaker 1: pursuing a monopolization case when it comes to social media.
Speaker 1: They now saying that, look, you're monopolizing the world of
Speaker 1: virtual reality. But is Meta the main company that's going
Speaker 1: to be at risk here or is this more precedent
Speaker 1: setting for an alphabet or a or an Apple. Well,
Speaker 1: I think it's certainly something that Meta in particular has
Speaker 1: you know, employed extensively. You know, we're seeing separately. What
Speaker 1: makes this case, this lawsuits so interesting is that separately,
Speaker 1: of course, um Mark Zuckerberg is running into real problems,
Speaker 1: problems with growth, problems with you know, privacy, you know
Speaker 1: that the Apple stuff. And we're seeing you know, earnings
Speaker 1: that are disappointing. And the way that Facebook has gotten
Speaker 1: around sorry, Meta has gotten around this, you know, in
Speaker 1: the past, is by buying companies. You know, when there
Speaker 1: was the shift to mobile um some of that innovation
Speaker 1: happened inside of inside a company, inside a company then
Speaker 1: called Facebook. But but what really propelled uh Meta Facebook
Speaker 1: two dominance was the acquisition of Instagram. Of course, that
Speaker 1: was not a huge acquisition, not that much bigger than
Speaker 1: when we're talking about here, and then the acquisition of
Speaker 1: What's App and that is, you know, given it this
Speaker 1: huge dominance of social media. You know, if Facebook had
Speaker 1: its druthers, if Mark Zuckerberg had his brothers right now,
Speaker 1: you know, he'd probably trying to buy TikTok. Of course,
Speaker 1: that's kind of out of the question right now because
Speaker 1: you know that CC is never going to go for that.
Speaker 1: They won't even let him buy this tiny VR company.
Speaker 1: And of course, leading Colm, we knew that how writings
Speaker 1: in Academia was about Amazon and about the world of consolidation.
Speaker 1: It's sort of taking a bit of time, hasn't it
Speaker 1: to finally get this bite rather than the bog? Yeah,
Speaker 1: And as I said, you know, we she has a
Speaker 1: very narrow window and Bloomberg has written about this over
Speaker 1: the past couple of months. But because you you had
Speaker 1: a to two deadlock, she really wasn't able to do anything.
Speaker 1: You get this new um Democratic Commissioner, and that gives
Speaker 1: her a three to edge. It allows a case like
Speaker 1: this to proceed. But the issue is that once we
Speaker 1: hit the mid terms, uh, if Republicans take control of
Speaker 1: Congress or take control of one of the uh, you know,
Speaker 1: houses of Congress. As we expect, then you're gonna see pushback,
Speaker 1: congressional pushback, probably from Republicans, and that's gonna limit her
Speaker 1: ability to get things done. So there's this very narrow
Speaker 1: window politically, and she is of course trying to pursue it.
Speaker 1: So so in that sense, it's not that surprising. Yeah,
Speaker 1: of course the two Republicans voting against this action on
Speaker 1: the FDC. Max, always great to have your expertise with us.
Speaker 1: Thank you for most Max Chafkin. I have a great weekend. Meanwhile,
Speaker 1: coming up, as the world slowly but surely still moves
Speaker 1: towards Web three, as we like to call it, we'll
Speaker 1: talk about the need well maybe own your own digital
Speaker 1: identity in domain names, unstoppable domains. It's just race and funding.
Speaker 1: It's the new unicorn in the Web three space. Tune
Speaker 1: in for the interview with the CEO of the spring Back.
Speaker 1: Time now for our crypto report, and here's some optimism
Speaker 1: to wrap up the week. Bitcoin Etheria, Well, it's two
Speaker 1: largest digital tokens headed towards them best months this amid
Speaker 1: a revival of risk appetite in global markets. That's bringing
Speaker 1: our crypto contributor Shnati Bassett, who, well, we know risk
Speaker 1: assets were well played for the month of July. Absolutely,
Speaker 1: So let's talk about what that means for bitcoin, because
Speaker 1: on a seven day basis, Caroline, you're seeing it up
Speaker 1: more than five percent. It is starting to waiver a
Speaker 1: little bit under twenty four dollars, but it does have
Speaker 1: a nice little rally. And you look at that rally
Speaker 1: right here in the middle of the week, right after
Speaker 1: the Federal Reserve raised interest rates. That was supposed to
Speaker 1: be something that may have muted risk appetite, but it
Speaker 1: certainly did not in the case of bitcoin this week.
Speaker 1: And if you take a look at bitcoin over the
Speaker 1: full year, where does that leave us in terms of
Speaker 1: climbing back up towards where we were before? We have
Speaker 1: a long way to go, because we were closer to
Speaker 1: sixty eight thousand when we looked at it at the
Speaker 1: high over the one year period, we're not even really
Speaker 1: where we were for the average for the full year.
Speaker 1: With the full year average was a little over forty one.
Speaker 1: So that twenty four thousand mark is exciting little jump
Speaker 1: you have here, it still is less than half of
Speaker 1: where you were almost a third of where you were
Speaker 1: at the peak uh in the last year. Let's look
Speaker 1: in etherium as well here, because actually you had an
Speaker 1: even bigger jump this week in ethereum than you had
Speaker 1: in bitcoin. Of course, it is a smaller asset, is
Speaker 1: a smaller asset by it's a market value thirteen point
Speaker 1: five percent jump there. So there's a lot of excitement
Speaker 1: here about ethereum, about the merge that has anticipated in
Speaker 1: the coming months. So the question here is this is
Speaker 1: this a valuation play when you look at ethereum versus bitcoin?
Speaker 1: Is that a fundamental player? People more excited about ethereum future.
Speaker 1: Let's look at a year though you do have that
Speaker 1: percent to client over the year in ethereum as well,
Speaker 1: still a long way to climb back. Context is everything, Jannali,
Speaker 1: thank you, and you're gonna be sticking with us because
Speaker 1: we're going to turn our attention to our next topic,
Speaker 1: digital identities now unstoppable domains, talking evaluations. Web three digital
Speaker 1: identity startup just become the latest crypto start up to
Speaker 1: become a unicorn. Indeed, the crypto winter not actually affecting
Speaker 1: everyone in the same way. In place to say that
Speaker 1: Matthew Gold is with us CEO found a congratulations on
Speaker 1: the fundraise and stand being led by some key vcs
Speaker 1: in the space. Talk to us about what Unstoppable Domains
Speaker 1: is trying to do. Am I going to be buying
Speaker 1: Caroline dot high, dot ether or whatever it is in
Speaker 1: the future and what reason when I needed? Yeah, So
Speaker 1: we're on a mission to use their own identity to
Speaker 1: all three billion Internet users on the planet, and we
Speaker 1: do that by creating n f T s and in
Speaker 1: this case, in f T domains like Caroline do n
Speaker 1: f T and we believe you're going to use that
Speaker 1: not only for retending receiving crypto payments. So if you
Speaker 1: believe in crypto, long term, everyone on the planet's going
Speaker 1: to be sending crypto to each other, So you're definitely
Speaker 1: gonna want to domain name to make that simpler. But
Speaker 1: we also think you're gonna use that to log into
Speaker 1: all your different apps, and people are already doing that
Speaker 1: right now for Web three applications, and we think it's
Speaker 1: going to spread across to the rest of the Internet
Speaker 1: as well. The rest of the Internet. Talk to us
Speaker 1: about how Unstoppable to the Unstoppable Domains is kind of
Speaker 1: creating the next version of the Internet alongside you and
Speaker 1: your rivals. What was the real pitch you had to
Speaker 1: investors to really buy into the future here at a
Speaker 1: time where we're facing so much pressure on the market overall. Yeah, Well,
Speaker 1: people spend or more of their time online now just
Speaker 1: staring at the screen, and less than one percent of
Speaker 1: the things that you own are likely digital assets. And
Speaker 1: we think that over the coming decades that's gonna change.
Speaker 1: So you can see a lot of value being created
Speaker 1: in crypto, trillions of dollars in value here. We think
Speaker 1: that's only going to increase. And uh, you know, you
Speaker 1: see Mark Zuckerberg spending ten billion dollars to build the
Speaker 1: meta person br and that just says to us that
Speaker 1: there's a huge bull market in digital assets over the
Speaker 1: next decade. And we think that one of the first
Speaker 1: things you're gonna want to own online is going to
Speaker 1: be your name and your reputation. And that's really the
Speaker 1: push behind digital identity. Oh, Matthew, I'm already thinking how
Speaker 1: hard it was to get my Twitter name or my
Speaker 1: website name or things like that. They're going to be countless.
Speaker 1: I mean, we're gonna have to have like Caroline Hyde
Speaker 1: version one to three like, what explain to me exactly
Speaker 1: how it's gonna look, how it's gonna feel the domains. Yeah,
Speaker 1: so you actually had a really good example there. How
Speaker 1: much do you think, you know, Elon musk Twitter handle
Speaker 1: is worth to him, right, and it's probably worth a
Speaker 1: million dollars? And the thing is he doesn't own that
Speaker 1: name on Twitter, uh, and you know he could get
Speaker 1: kicked off on Twitter and then and he could lose it, right.
Speaker 1: And this is kind of a whole promise of Web
Speaker 1: three and crypto in general, is that you should be
Speaker 1: owning these digital assets. And so instead of having like
Speaker 1: one name on Twitter and a different name on Instagram
Speaker 1: and a different one on Reddit, you could have a
Speaker 1: single name that you own and control inside your crypto wallet,
Speaker 1: and then you can use that to sign into these
Speaker 1: uh different social applications, and then you would have a
Speaker 1: consistent reputation. How expensive would it be? Like what what
Speaker 1: if someone just went out there involved the celebrity ones up? Yeah? Yeah,
Speaker 1: So the domain names are anywhere from five dollars to
Speaker 1: thousands of dollars. It's kind of like the traditional domain
Speaker 1: name industry, with one major differences. There's no renewal fees.
Speaker 1: For n f T domains because they are blockchain assets,
Speaker 1: and through our partners, you can actually get domain names
Speaker 1: for freeze. So a lot of wallet apps now are
Speaker 1: working with us to make sure that everyone who downloads
Speaker 1: a digital crypto wallet also gets a domain name so
Speaker 1: that they have an easy end point to deposit money
Speaker 1: into their application. So there's not gonna be a barrier
Speaker 1: to entry here if someone wants to get on. But
Speaker 1: then on the high end, we are seeing sales for
Speaker 1: these domain names in the hundreds of thousands of dollars
Speaker 1: for some of the poor previeu ones. How help us
Speaker 1: understand this? One of your investors in online talking about
Speaker 1: how you're kind of what coin basis scripto you are
Speaker 1: to web three, What does that really mean and how
Speaker 1: does that kind of put you at the center of
Speaker 1: an industry in that kind of a way. Yeah, So, um,
Speaker 1: the very first simple use case is sending cryptocurrency, and
Speaker 1: if you have like twenty or thirty different cryptocurrency addresses,
Speaker 1: you're not gonna be able to remember all of them,
Speaker 1: and they're really long computer hex decimal addresses. So that's
Speaker 1: kind of like I P addresses on the Internet in
Speaker 1: the early nineties and everyone replaced those with domain names
Speaker 1: like dot com and this is like that except for individuals.
Speaker 1: So for dot com domain names, where you have you know,
Speaker 1: maybe cifty million businesses and three million registered domains. For this,
Speaker 1: we actually think it's gonna be every single user on
Speaker 1: the Internet. So that's three billion people, um with a
Speaker 1: with an n f T domain to make it easier
Speaker 1: for people to find information about them, verify information about them,
Speaker 1: and send them money. So if you asked me like
Speaker 1: what am I going to be using this for, um,
Speaker 1: we think it's gonna help you have portable reputation on
Speaker 1: the Internet. And so you know, we have two major
Speaker 1: problems on the Internet. One right now is that you
Speaker 1: actually can't own any thing, and then the other one
Speaker 1: is all these problems around frauds, spam bots, etcetera. We
Speaker 1: actually just talked about with the Musk and the prior segment,
Speaker 1: and if you had portable reputation, you could actually help
Speaker 1: solve that problem. So I'll give you for instance, um
Speaker 1: my dad actually bought tickets on eBay and it happened
Speaker 1: to be from a scammer. And the thing is is
Speaker 1: that scammer can actually just go and then start selling
Speaker 1: you know, fake tickets or whatever on a different website
Speaker 1: on Amazon Marketplace. And because there's not a consistent reputation
Speaker 1: across applications online, um, these applications can't check and see
Speaker 1: if that person is potentially uh doing fraud. But if
Speaker 1: you had a consistent reputation so that you were Caroline
Speaker 1: dot n f t on one platform, and then your
Speaker 1: Caroline dot n ft over here and your Caroline dot
Speaker 1: n ft on Twitter, and then you have a consistent reputation,
Speaker 1: and we think that actually makes the Internet saver. Very briefly,
Speaker 1: Matthew and I understand it's a hard one to have
Speaker 1: to tackle, but you know, this is a time where
Speaker 1: valuations of crumbles. You managed to get an above a
Speaker 1: billion and a sixty five million amount, did you have
Speaker 1: to down down rade a little bit when you first
Speaker 1: started having the conversations. So we've seen cooling across the
Speaker 1: whole market, so unstop whole domains. There's no exception to that.
Speaker 1: And we're just fortunate enough to be working with some
Speaker 1: investors who've been in space for a long time. Can
Speaker 1: terrorist or leave for this. They've been investing in crypto
Speaker 1: for tim plus years. So I would actually say that
Speaker 1: founders out there looking to raise money. Um, if you're
Speaker 1: in it for the long run, then I think you'll
Speaker 1: be fine going out and funding right now. It is
Speaker 1: significantly harder than it was, but that's okay. I mean,
Speaker 1: if you're here to really create utility for users instead
Speaker 1: of speculation, you'll still find a business model that works
Speaker 1: and you'll still be able to figure it out. Well said,
Speaker 1: I think will thank you so much. See founder of
Speaker 1: Unstoppable Domains and Shinelli Bassett has always thank you so much.
Speaker 1: We want to take a moment to look at the
Speaker 1: relationship between Hollywood and anti abortion states. Now. We often
Speaker 1: consider perhaps media companies, movie stars to be relatively outspoken
Speaker 1: about the overturning of ROVERSUS Wade, even some attending protests sometimes,
Speaker 1: but the Hollywood machine is sort of not taking sides.
Speaker 1: It's spending billions in film and TV production in states
Speaker 1: seeking to restrict or outlaw abortion. We want to talk
Speaker 1: about perhaps some of the tension there with Blue Begs
Speaker 1: Media and Entertainment editor Kelly Gilbam. Of course, who is here.
Speaker 1: He's just got over COVID, So we thank you so
Speaker 1: much for doing it with us and and Kelly and
Speaker 1: what I'm really interested in is we're not going to
Speaker 1: take sides either, because we know this as a nation divided,
Speaker 1: but talk to us about how there is a tension
Speaker 1: perhaps between employees that work at certain media companies and
Speaker 1: the decision making process that media is in terms of
Speaker 1: spending money and making movies and TV productions in states
Speaker 1: that perhaps some employees might feel don't reflect some of
Speaker 1: the way they want their us to reflecting hard position
Speaker 1: for these big media companies to be in today, you know, Hollywood.
Speaker 1: I think people they're kind of see the business says
Speaker 1: both being part of culture and leading culture. So when
Speaker 1: there is a big social issue, UH, they feel strongly
Speaker 1: about they like to be at the forefront of that.
Speaker 1: But at the same time, UM, for each project that
Speaker 1: you see, each television show, each movie, these take years
Speaker 1: and years of planning. They're incredibly expensive, and every single
Speaker 1: line item on the budget UM that can be removed
Speaker 1: UM is going to be good for the overall production.
Speaker 1: And sometimes the financials mean the difference between something getting
Speaker 1: made and not getting made. So states like Georgia, for example,
Speaker 1: that has UH tried to put in more restrictive abortion
Speaker 1: laws have been really good at being the cheaper option
Speaker 1: for some of these companies, So they've got to balance
Speaker 1: getting their projects made. But at the same time, they
Speaker 1: do have a lot of employees that are pretty outspoken,
Speaker 1: and not only that, but they've got business partners like
Speaker 1: actors and directors that are outspoken to about their values.
Speaker 1: So they're trying to both run the companies and and
Speaker 1: try to keep these employees happy and not make this
Speaker 1: a talent retention issue at the same time. Interesting the
Speaker 1: talent retention and element of it, Kelly as well, are
Speaker 1: their New states other states that are trying to woo
Speaker 1: the making of movies and TV in that place because
Speaker 1: they say, look, we're not looking to change anything up
Speaker 1: in terms of nobility to access healthcare. You know, I
Speaker 1: haven't seen. I did a lot of reporting on this,
Speaker 1: and I was a little surprised at the other states,
Speaker 1: um that are not seeking to restrict abortion rights. Uh,
Speaker 1: they're not selling themselves quite as much. UM. I covered
Speaker 1: one talked about one interesting case and a story I
Speaker 1: wrote about a film called Eric LaRue. This is a
Speaker 1: film directed by Michael Shannon. It actually was a project
Speaker 1: that was set to start filming in Arkansas. That's a
Speaker 1: state that has some of the most severe abortion restrictions. UM,
Speaker 1: and the filmmakers actually decided to move to North Carolina,
Speaker 1: a more free state. But the film officials that I
Speaker 1: spoke to in North Carolina weren't out there trying to say, hey,
Speaker 1: come here. They're just saying, you know, that's great. But honestly,
Speaker 1: we heard about it from you in the press. Um.
Speaker 1: You know, they're not trying to make that pitch that hard,
Speaker 1: but you know, it could be something that affects the
Speaker 1: business long term. UM. If people are pressuring the executives
Speaker 1: of this company, if they're finding, you know, actors that
Speaker 1: are going to attract people at the box office don't
Speaker 1: want to film in those states, it could be a
Speaker 1: long term benefit for other states or other countries, Um,
Speaker 1: that both have financial incentives for filmmakers and are more
Speaker 1: free on the abortion issue. It's a fascinating read. Thank
Speaker 1: you so much for spending some time just outlining the
Speaker 1: depth of your reporting that went into it all. Kelly Gilblum,
Speaker 1: of course she is immediate and entertainment editor here with Bloomberg,
Speaker 1: and of course that now does it from this edition
Speaker 1: of Bloomberg Technology. We have a special episode coming up Monday,
Speaker 1: I'm going to focus on antitrust legislation, scrutinary, a big
Speaker 1: tech in particular. We've just been discussing it, of course
Speaker 1: with our own Max Traffkin about the FDC, the focus
Speaker 1: on meta, so you do not want to miss that conversation.
Speaker 1: I meanwhile, of course catch the podcast. Can find it
Speaker 1: on the terminals as online on apples, Spotify. I heart
Speaker 1: you don't want to miss that one either. Have a
Speaker 1: wonderful weekend everyone, This is Bloomberg