Speaker 1: From the heart of where innovation, money and power Colli
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Jack in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour. President
Speaker 1: Biden in Poland at the center of Ukraine's refugee crisis
Speaker 1: as Russia's military focuses on taking full control of the
Speaker 1: dome bas region, but falters in Key. We'll look at
Speaker 1: the continuing fallout from the war from cyberspace to outer space,
Speaker 1: plus Apple dolling out an additional unusual bonus to Key
Speaker 1: engineers some upwards of two hundred thousand dollars. How to
Speaker 1: keep staff loyal as the post pandemic war for talent
Speaker 1: ramps up. We'll have more on that. Bloom School and
Speaker 1: install cart also trying to lawre new employees by taking
Speaker 1: an unexpectedly lower valuation, slashing its own valuation by almost
Speaker 1: from thirty nine to twenty four billion dollars. This is
Speaker 1: public market volatility continues. We'll discuss another work school all
Speaker 1: of that in a moment, but first let's get a
Speaker 1: look at the market. Tech stocks and in the week
Speaker 1: down are at Ludlow here now with the latest and
Speaker 1: it's not all bad news right now. Okay, look we're
Speaker 1: a little lower flat on a Friday, but we did
Speaker 1: see a late come back from the ASTAC one D
Speaker 1: very tech heavy index. Of course, that's his oil trim games.
Speaker 1: You see w t I West Texas in the media
Speaker 1: above a hundred ten dollars a barrel higher a hundred
Speaker 1: thirteen aout in US tenure yield at two point four
Speaker 1: seven percent nears two and a half percent. But coming
Speaker 1: me into my bloombow terminal, will look we have some
Speaker 1: sustained momentum in tech stocks and has that one hundred
Speaker 1: having his first back to back weekly gain since the
Speaker 1: beginning of February that despite the backdrop of higher yields.
Speaker 1: Of course, yields has impacted tech stocks with higher multiples.
Speaker 1: This concerned, of course, that it discounts the present value
Speaker 1: of future profits Elsewhere big tech names on the move,
Speaker 1: of course, this Friday, looking at Meta parent company of Facebook,
Speaker 1: it looks like the US and EU has reached a
Speaker 1: deal and accord over data movement, the flow of data
Speaker 1: between the two continents. Facebook was a company to express
Speaker 1: concern their octa continues to be lower off that high
Speaker 1: can Spotify ending its ad platform, add back platform, free
Speaker 1: to play platform in Russia as well. Emily, all right,
Speaker 1: thanks for that update. I want to move now to
Speaker 1: our top story. Talks between Russia and Ukraine are making
Speaker 1: no progress, according to a top aid to the Ukrainian president,
Speaker 1: but President Biden did make progress with EU leaders on
Speaker 1: a plan to wean Europe off Russian oil and Titan sanctions.
Speaker 1: The President also visiting troops near Poland's Ukrainian border as
Speaker 1: the war enters its second month. Joining US now works
Speaker 1: Aggie Council from the ground in Poland. Aggie, you have
Speaker 1: been near the Polish border since almost the beginning of
Speaker 1: the war. Talked to us about how the refugee crisis
Speaker 1: you're seeing is evolving. Yes, So when I first came
Speaker 1: here several weeks ago now, the waiting times for people
Speaker 1: to try and cross the border was up to sixty hours,
Speaker 1: which in a Polish and Ukrainian winter can be a
Speaker 1: real risk to people's lives, and that was a real
Speaker 1: concern for the border guards and for the authorities on
Speaker 1: both sides of the border. Now we're seeing that that
Speaker 1: process of getting people over the border has been streamlined,
Speaker 1: and it's also coupled with the fact that there are
Speaker 1: actually fewer people crossing the border now than where a
Speaker 1: couple of weeks ago. When I speak to volunteers on
Speaker 1: the ground here, a lot of them think that quite
Speaker 1: a lot of the people who have already crossed the
Speaker 1: border are those who are already going to do so,
Speaker 1: and then the ones who remain in the Ukraine are
Speaker 1: choosing to do so to be closer to their families. Now,
Speaker 1: President Biden's visit to the Polish border, is any of
Speaker 1: this changing how he feels how the US will respond
Speaker 1: to Russia. Well, to be honest, there is an immediate
Speaker 1: effect of Biden's visit in the fact that the day
Speaker 1: before he arrived here in Gejov in Poland, he and
Speaker 1: now or the White House announced that the USA would
Speaker 1: be taking in a hundred thousand of the Ukrainian refugees.
Speaker 1: Of course, that pales in comparison to the two million
Speaker 1: that Poland has has taken in. However, that is a
Speaker 1: significant step on the part of the United States, and
Speaker 1: him coming here is also a signal to Poland that
Speaker 1: they're acknowledging the humanitarian relief that Poland is doing here.
Speaker 1: And also Poland has been pushing for the EU to
Speaker 1: give them greater aid when it comes to financially supporting
Speaker 1: them throughout this refugee crisis. What's next for the president
Speaker 1: worth He after he's heading to Warsaw after this, So
Speaker 1: he's going to meet with more people in Warsaw. Today
Speaker 1: he already met with the age second airborn here in
Speaker 1: chechov Um and now he's going on to Warsaw, the
Speaker 1: capital of Poland, in order to have further meetings. And
Speaker 1: so a key factor of this this meets, these meetings
Speaker 1: that he's having here in Poland is not just the
Speaker 1: humanitarian angle, but also the security angle President due to
Speaker 1: the Polish President said in his press conference today with
Speaker 1: President Biden that he that he saw that his country
Speaker 1: was essentially the front line of the current concerns that
Speaker 1: the Native Alliance have when it comes to Russia's aggression
Speaker 1: against Ukraine. All Right, bloombergs Aggie Control for us with
Speaker 1: an update from Poland. Thank you, Aggie for your reporting
Speaker 1: there from the ground. Meantime, cybersecurity defenses around the globe
Speaker 1: remained boosted as the war on Ukraine persists. Joining US
Speaker 1: now Tony Anscomb, chief cyber threat officer of SET, the
Speaker 1: group that detected the latest round of cyber attacks targeting
Speaker 1: various Ukrainian organizations, and talk to us about this latest salvo. Tony,
Speaker 1: what is significance about the tactics you're seeing from the Russians. Well, firstly,
Speaker 1: these cyber tanks were data wipers, so I mean, we're
Speaker 1: all very familiar with things like ransomware. They're encrypted data
Speaker 1: and you can get it back if you pay pay
Speaker 1: the cyber criminal. These are just malicious pieces of code
Speaker 1: that actually do exactly what they say on the tin.
Speaker 1: They wipe the data so it can no longer be
Speaker 1: accessed or recovered in any way. So it's very very malicious.
Speaker 1: And what is interesting about these particular variants is there
Speaker 1: was intent here because they were compiled some of them
Speaker 1: back in the end of last year, and they've been
Speaker 1: sitting on systems and we think they've been there for
Speaker 1: some time prior to actually being implemented. We don't know
Speaker 1: how they got there, but we certainly know they've been
Speaker 1: there for some time and then unleashed to coincide with
Speaker 1: Russia's attack on the Ukraine. Now, yeah, we can't attribute
Speaker 1: where these came from or who's who have who wrote
Speaker 1: these pieces of code? Um, But yes, they're they're causing
Speaker 1: causing damage. You've detected a couple of other attacks in
Speaker 1: recent weeks, But there is this lingering question of why
Speaker 1: we're not seeing more and more devastating cyber attacks from Russia.
Speaker 1: Why is that? Well, I have my own opinion here, Emily,
Speaker 1: it could well be that. Um. You know, firstly, it's
Speaker 1: very hard to attribute a cyber attack. If somebody launches
Speaker 1: a cyber attack, actually turning around and saying it came
Speaker 1: from this personal or this this group is very difficult
Speaker 1: and complex. So if all nations states have the ability
Speaker 1: to have a cyber attack on each other, it could
Speaker 1: actually be that we're sitting here looking at the new
Speaker 1: digital deterrent in the same way we think of a
Speaker 1: nuclear deterrent. Everybody has one and it's hopefully everybody using it.
Speaker 1: Maybe that's the case where we're sitting with a digital
Speaker 1: deterrent that each side knows that they both have access
Speaker 1: to tools that could do untold damage in both in
Speaker 1: societies all over the world, and maybe we're seeing that
Speaker 1: that play out. Now, how strong do you think cyber
Speaker 1: defenses are. Of course, we've been hearing these warnings from
Speaker 1: the Widen administration that companies need to buckle up boost
Speaker 1: all of their defenses. Is it going to work? Well? Hopefully.
Speaker 1: I mean, let's be clear, over the last several years,
Speaker 1: we've seen so many cyber attacks and so much infrastructure
Speaker 1: and finance and education get at tanked by ransomware, all
Speaker 1: for monetization purposes. So a lot of organizations are already
Speaker 1: very well down the path of having the right pieces
Speaker 1: in place to keep themselves protected. This is just another
Speaker 1: bump on the a cybersecurity teams to turn and say, right,
Speaker 1: you know, we need to do a little bit more.
Speaker 1: But I think this is not you know, we're not
Speaker 1: starting from scratchy, And that's my point. One thing that
Speaker 1: concerns me though, is if you look at the number
Speaker 1: of for example, water water utility companies here in the US,
Speaker 1: it's fifty of them, and many of them are very
Speaker 1: very small and very regional, and I think they probably
Speaker 1: lack a lot of the skills and resources needed to
Speaker 1: actually create that cyber secure environment. I'm I mean, I'm
Speaker 1: not far from you down in half Moon Bay, and
Speaker 1: I'm certainly the one here in Half Moon Bay is
Speaker 1: very small and very rural. All right, Well, let's hope
Speaker 1: that all of these companies, all of these different organizations,
Speaker 1: these utilities, have what they need when it comes to
Speaker 1: protecting themselves. Tony Anscom of e Set, thank you for
Speaker 1: giving us an update on cyber space. Coming up, grocery
Speaker 1: delivery giant Instacart slashing its valuation by almost but saying
Speaker 1: too good thing for employees. At least, we'll discuss why next,
Speaker 1: Mrs Bloomberg, Apple is paying a small number of engineers
Speaker 1: another round of special stock bonuses. This is part of
Speaker 1: an unusual push to retain Key Town. According to people
Speaker 1: with knowledge of the matter. Let's bring in Bloomberg's Mark
Speaker 1: German on yet another scoop. So, Mark, look, Apple pays
Speaker 1: out bonuses all the time, but this one seems more unusual.
Speaker 1: Why are they doing this? Yes, so this is a bonus.
Speaker 1: Is the second time they're doing this. This is restricted
Speaker 1: stock you and so these vest over four years right now.
Speaker 1: Obviously inflation is very high. Bay area high housing prices
Speaker 1: are increasing per usual. Uh, you're seeing a lot of
Speaker 1: poaching being done from Amazon, Microsoft and particularly Meta Slash,
Speaker 1: Facebook of Apple employees to help build their metaverse. They're
Speaker 1: also having their stringent return to work policy kicking into
Speaker 1: place over the next several weeks. So Apple wants to
Speaker 1: do everything it can to really retain that key talent.
Speaker 1: So they're giving these massive bonuses to people working in
Speaker 1: their software from car division, software engineering, and hardware engineering,
Speaker 1: and those four your vesting periods are designed to keep
Speaker 1: those people in place for the next little while. Now,
Speaker 1: Apple is you know, certainly one of those places that
Speaker 1: has always been a magnet for top talent, and they've
Speaker 1: managed to keep people for years despite all of this competition.
Speaker 1: Is Apple facing you know, a bigger challenge with other
Speaker 1: big tech companies at this moment because of the post
Speaker 1: pandemic environment. I think every tech company is facing the
Speaker 1: same issue. Right. You have people leaving Google, you have
Speaker 1: people leaving Microsoft, Amazon, Apple, you have people leaving all
Speaker 1: of these companies, right, so they're all competing with different
Speaker 1: benefits to keep their top talent. Uh. Interestingly, Apple is
Speaker 1: the place that you go to me be if you're
Speaker 1: a veteran in your field, Right, if you're the type
Speaker 1: of person who wants to work on a product that
Speaker 1: you know is going to be used by hundreds of
Speaker 1: millions or billions of people. That's not necessarily the same
Speaker 1: perk that you get by working and maybe Meta or
Speaker 1: Google or Facebook if we're talking about hardware or one
Speaker 1: unified service. So it is pretty enticing, you know, for
Speaker 1: certain people to work at Apple. Now, Apple doesn't always
Speaker 1: pay as much as competing companies, right, I know, Meta
Speaker 1: you know is paying more than Apple for a number
Speaker 1: of very similar positions if you compare it Apples to Apples. Right.
Speaker 1: Meta also has their remote work policy in place, so
Speaker 1: you could work at Meta. You can work remotely for
Speaker 1: as long as you want, whereas Apple for three days
Speaker 1: per week you're expected in the office. Likewise, with Google
Speaker 1: you to be expected in the office three days per week.
Speaker 1: So everyone is competing for top talent in order to
Speaker 1: keep turning out these products. All right, well we'll see
Speaker 1: how that shakes out. Apples to Apples, as you say,
Speaker 1: Mark German, as always, thank you, meantime grocery to every upstart.
Speaker 1: Instacart has slashed its valuation by almost to reflect public
Speaker 1: market declines across the tech industry. The company raised money
Speaker 1: at a thirty nine billion dollar valuation last year. The
Speaker 1: new valuation twenty four billion dollars, but the company believes
Speaker 1: the new number will give new employees more upside. I
Speaker 1: want to bring in Bloombergs Jackie Dablos now for more
Speaker 1: details on this, another bloomberg scoop, So Jackie, insta cart
Speaker 1: is voluntarily lowering its valuation. This is fairly unprecedented. But
Speaker 1: of course if you look at companies like door dash
Speaker 1: where we've seen massive declines, Shopify, where we see massive declines,
Speaker 1: they say, this just makes sense. Give us a more
Speaker 1: context on why they're doing this. You put it perfectly,
Speaker 1: This is not that unusual for perhaps a public company
Speaker 1: that is already you know, has employees eyes on their
Speaker 1: share price. What instacart is doing is behaving more like
Speaker 1: a public company. There's been so much speculation that they
Speaker 1: could potentially I p O this year, but when you
Speaker 1: look at what's going on in the public markets, they
Speaker 1: took a step back and said that there's a bigger
Speaker 1: issue at play here outside of going public, which is
Speaker 1: the war for tech talent. Exactly what's going on in
Speaker 1: other companies around Silicon Valley, and so what's happening here
Speaker 1: now is that they're going to prioritize these recruitment efforts
Speaker 1: new hires entice them in by giving them shares at
Speaker 1: a lower price and then unlocking that upside as the
Speaker 1: company continues to grow. Now, as I understand, in insta
Speaker 1: cart CEO Fi g c MO explain some of their
Speaker 1: reasoning at an all hands meeting at the company today.
Speaker 1: Instacart also released this statement to us, saying, we're confident
Speaker 1: in the strength of our business, but we're not immune
Speaker 1: to the market turbulence that has impacted leading technology companies,
Speaker 1: both public and private. We can't control the market, but
Speaker 1: we can control how we respond. How do you think employees, Jackie,
Speaker 1: are going to respond to this. I mean, it is
Speaker 1: one thing if you come into a company at a
Speaker 1: thirty nine billion dollar valuation, and it's a different thing
Speaker 1: when you find out the next day it's worth billion dollars. Instead,
Speaker 1: it's a delicate balance, and they are taking a look
Speaker 1: at what it's going to take to get to the
Speaker 1: next level, to achieve that next phase of growth, and
Speaker 1: they will need the people to get there, and so
Speaker 1: absolutely for those long time employees, for even the employees
Speaker 1: of Caper. As you recall, they acquired a company for
Speaker 1: stock earlier in October. Those employees will now only you know,
Speaker 1: see a cut of about less from where the purchase
Speaker 1: price was. So there are going to be winners and losers.
Speaker 1: But this is about the long term play. And here
Speaker 1: instacart is saying we want to be a real player
Speaker 1: in this search for talent, and I think they're going
Speaker 1: to accomplish it. But you also have to think about
Speaker 1: what this means for for investors. They came in at
Speaker 1: a thirty nine billion dollar her valuation this time around.
Speaker 1: Last year they poured in two hundred and sixty five
Speaker 1: million dollars heavyweights like Andreas and Horowitz Sequoia. So there
Speaker 1: are going to be those that don't benefit from this
Speaker 1: type of move, But overall, the long term play is
Speaker 1: they're going to have the talent to really take them
Speaker 1: to the next level. Al Right, Well, our very own
Speaker 1: Bradstone is gonna be sitting down with insta Cart CEO
Speaker 1: fij cmo at Shop Talk next week. I'm sure this
Speaker 1: will be on the top of his agenda to talk
Speaker 1: to her about, so we'll be looking for highlights from
Speaker 1: that conversation. Jackie Dablos, who covers in stacart for us,
Speaker 1: thank you. Coming up in video eying a deal with
Speaker 1: one of the biggest rivals it has, and that is Intel.
Speaker 1: How the competitors could be looking to collaborate to end
Speaker 1: the chip crisis. That is next, This is Bloomberg. After
Speaker 1: returning to making computer monitors, Apple should now go back
Speaker 1: to another market, home WiFi routers. Five years ago, Apple's
Speaker 1: Mac business was a mess. The Mac mcpro had dropped
Speaker 1: key features, The MacPro was a disaster, and updates to
Speaker 1: the Macikre and mc minnie were nowhere to be found.
Speaker 1: Apple had even stopped making routers and monitors. The story
Speaker 1: today could not be more different. Maxim have a fair
Speaker 1: blend of performance, battery life and aesthetics, and Apple external
Speaker 1: monitors are back on sale. Next up should be those routers.
Speaker 1: Turned back the clock and Apple was one of the
Speaker 1: first major proponents of WiFi, launching an airport face station
Speaker 1: accessory that let users plug in Ethernet cable to give
Speaker 1: their entire home wireless Internet. Over time, Apple launched several
Speaker 1: new variations like the high end Airport Extreme, a low
Speaker 1: end Airport Express, and the Time Capsule for wirelessly backing
Speaker 1: up Mac data. But then Apple discontinued its routers without
Speaker 1: giving any real explanation, seating the market to competitors like
Speaker 1: Arrow and others. Apple should now return to making privacy focused,
Speaker 1: well designed, and well integrated routers for its own product
Speaker 1: hardware ecosystem. That router, of course, should be mesh, so
Speaker 1: it should include multiple pieces to expand wireless Internet reliably
Speaker 1: across an entire home. Apple could even jam those routers
Speaker 1: into a home pod Mini, taking a page out of
Speaker 1: Nesson's book and creating a product that competes nicely with
Speaker 1: both the Google and Amazon ecosystems. I'm Mark German. This
Speaker 1: is power On. You can subscribe to Mark's weekly power
Speaker 1: On newsletter at Bloomberg dot com. Now let's get an
Speaker 1: update on the world of chips within video. One of
Speaker 1: the world's biggest chip makers said earlier this week it
Speaker 1: is considering tapping its main rival Intel to manufacture those chips.
Speaker 1: Let's get more on this with our very own in King,
Speaker 1: who of course covers the chip industry for us. Why
Speaker 1: would nvidio Ian decide to use Intel as its foundry. Yeah,
Speaker 1: I mean it's important to put these remarks in context.
Speaker 1: Kind of typical piece of Jensen lying the CEO, kind
Speaker 1: of talking really he said, look, we're open to looking
Speaker 1: at any new suppliers. Having as many supplies as we
Speaker 1: can possibly get makes sense Intel, if you know, if
Speaker 1: they can get back to leading edge, if they can
Speaker 1: get back to you know, the best production, best performance,
Speaker 1: then will definitely look at them. So what's the next
Speaker 1: step here, what's going to get Intel over the line
Speaker 1: or an invidio say over the line? Yeah, I mean
Speaker 1: the the other side of the gentsen wing experiences. He
Speaker 1: you know, he makes positive complementary remarks about Intel, says
Speaker 1: this is the right thing for Intel to do, and
Speaker 1: then says, oh, by the way, yeah, you know, getting
Speaker 1: to be as good as TSMC is going to be
Speaker 1: really difficult. They'll have to change their whole culture. And
Speaker 1: he starts on this long list of comparisons, unfavorable comparisons
Speaker 1: with TSMC and Samsung and says how good they are.
Speaker 1: So the bottom line is, he said, it will take
Speaker 1: a long time. Now, yesterday we slash you also broke
Speaker 1: some news about the arm I p O and looking
Speaker 1: at a sixty billion dollar valuation. This, of course, that
Speaker 1: deal that in video couldn't close. Sixty billion seems high,
Speaker 1: doesn't it It does? I mean if you compare it
Speaker 1: to what the semi conductor sort of average multiples would
Speaker 1: give you its turn twenty billion dollars above what even
Speaker 1: the highest end would be. But if you look at
Speaker 1: it from the price of what the video transaction had become,
Speaker 1: given the appreciation of video shares, it's about on par
Speaker 1: with what in video would have ended up paying for ARM.
Speaker 1: And what we're being told is that this is really
Speaker 1: just trying to set a floor in people's minds about
Speaker 1: what really soft Bank thinks this company is worth, because this,
Speaker 1: as Massa Sonders said, this is a really pervasive company.
Speaker 1: These companies everywhere. It's way more than just another chip company.
Speaker 1: And this ARM I p O is way more than
Speaker 1: just a traditional I p O. Right, It's kind of complicated,
Speaker 1: that's right. I mean, there's obviously a lot of stake.
Speaker 1: There's obviously one of the most important companies in the
Speaker 1: semiconductor industry, what will be the largest I p O
Speaker 1: in the sector by a long way. And at the
Speaker 1: same time, soft Bank, as we said in the stories,
Speaker 1: topping these tapping these banks and saying, oh, yes, if
Speaker 1: you want to underwrite this I p O, then you're
Speaker 1: going to have to basically loan us some money. You know,
Speaker 1: it's it's attaching multiple billions of dollars of margin loans
Speaker 1: to the mandate, which again is is an interesting way
Speaker 1: to do things and obviously has you know, potentially positive
Speaker 1: consequences for softbanks liquidity. Alright, and King, thank you for
Speaker 1: those updates and all the news this week coming up,
Speaker 1: Why everyone seems to be searching for evs on Google
Speaker 1: this month? Put the more on Ukraine and rising gas
Speaker 1: prices be an inflection point for the world's transition to
Speaker 1: electric cars. We love more on that next, plus advice
Speaker 1: for startups in uncertain times as the war on Ukraine
Speaker 1: and inflation rattle markets worldwide. This is Bloomberg. Welcome back
Speaker 1: to Bloomberg Technology. I'm only chang in San Francisco. I
Speaker 1: want to talk about what's going viral now. As gas
Speaker 1: prices surge at the pump this month, swarms of people
Speaker 1: took to Google to search all things ev top of
Speaker 1: the pile of questions, how much does it cost to
Speaker 1: charge an electric car? Searches for that phrase. We're up
Speaker 1: this month according to Google, trends are at Ludlow is
Speaker 1: here with why and and we've all felt that pain
Speaker 1: at the pump and it hurts. Could all this searching
Speaker 1: be the beginning of a big transition, a big momentum
Speaker 1: shift for e v s. Yeah, that's what everyone's been
Speaker 1: talking about. Right now is a good time to own
Speaker 1: an EVY. You look at the relative cost of running
Speaker 1: a car on gas versus running on electricity, and the
Speaker 1: gap has just got wider in terms of costs of ownership.
Speaker 1: Plugging in and charging has been more cost effective. So
Speaker 1: we've seen it. People take to Google. There's other third
Speaker 1: party data out there through online auctions, for example, second
Speaker 1: hand car websites. They're thinking, where can I get an
Speaker 1: EVY as soon as possible. Celebrities are also jumping in
Speaker 1: on the fun here, and there was a tweet from
Speaker 1: iced Tea that got a lot of attention. Iced Tea
Speaker 1: so he makes this joke right that he's at the
Speaker 1: gas station and he's been robbed. He says, I've been robbed,
Speaker 1: and he has this kind of long, dire tribe through
Speaker 1: the tweet. Get to the end of the tweet and
Speaker 1: you realize he's talking literally, of course, about the price
Speaker 1: of gas, not that he's literally been physically robbed while
Speaker 1: filling up his car right pump number nine, I believe
Speaker 1: was the culprit. I think it's got it's got like
Speaker 1: a million likes. Um. Then there was Elon Musk dancing
Speaker 1: in Europe. How do we know this has to do
Speaker 1: with gas prices and not just enjoying Elon's dancing moves.
Speaker 1: There's that tweet. This is the other point, right that
Speaker 1: there are all these people that have decided because things
Speaker 1: are so bad at the gas pump. They're talking about
Speaker 1: and they're venting on Twitter that they want an e
Speaker 1: V and Elon Musk was dancing in Berlin because they're
Speaker 1: opening up a new factory, right, they're going to slowly
Speaker 1: ramp up production there. The picture look how happy is
Speaker 1: But the pictures speak to a much bigger point. There's
Speaker 1: all this potential in the world right now, the Austin
Speaker 1: Planet in Texas, other EV makers coming online. I know
Speaker 1: it's ridiculous, isn't it, But the point is that those
Speaker 1: things are exciting. They're not here right now, and it's
Speaker 1: really hard to get hold of an electric vehicle. If
Speaker 1: youve gone Testa's website and try by one that's being
Speaker 1: built in Fremont or in Europe. The wait times are
Speaker 1: so long. So yeah, things are really tough right now
Speaker 1: at the gas pump. There's lots of excitement from Musk
Speaker 1: and co. About the future for evs, but getting your
Speaker 1: hands on one, it's really difficult. Does Ellen have moves out?
Speaker 1: What do you think? I declined to answer that one.
Speaker 1: And the pawing of the drone that was the best?
Speaker 1: All right, thank you well. With the war on Ukraine
Speaker 1: still raging along with inflation, investors and companies around the
Speaker 1: world are reassessing how long will it will last? What's
Speaker 1: the path forward? Let's talk about all this and more
Speaker 1: with Mercedes Bent of light speed Ventures. Mercedes, how are
Speaker 1: you assessing what the impact this is? What impact is
Speaker 1: going to have? Obviously we're seeing what's happening to public markets,
Speaker 1: but what about private markets? Thanks so much for having
Speaker 1: the Emily, and I would say for the private markets,
Speaker 1: we've been noticing that the later stage is being affected
Speaker 1: a lot. A lot of the crossover hedge funds had
Speaker 1: come into the market and now their core is really
Speaker 1: diving down quite a bit, and so that's meant that
Speaker 1: people are being much more wary of late stage rounds.
Speaker 1: When you look at the comparables. Also for the late
Speaker 1: stage rounds. You know, private companies might be raising at
Speaker 1: ten x or a hundred x revenues multiples. But then
Speaker 1: you see that same company with a very similar business
Speaker 1: model and the public markets is trading at three to
Speaker 1: you know, six x, and so then you ask yourself, well,
Speaker 1: what's really the possibility for this company if it was
Speaker 1: to go public anytime soon? Should I be paying this
Speaker 1: high of a multiple. So that's happening on the growth side,
Speaker 1: but then on the early stage side, we are seeing
Speaker 1: a lot of activity that doesn't seem entirely affected yet.
Speaker 1: So when I say early stage, I'm talking about seed
Speaker 1: A s, those rounds, and that has still been kind
Speaker 1: of business as usual. We just saw insta cart slash
Speaker 1: its valuation by from thirty nine to twenty four billion dollars.
Speaker 1: What do you make of that? And are we going
Speaker 1: to see more companies doing this? I think we're going
Speaker 1: to continue to see more companies who are having to
Speaker 1: reassess what the dollar about, what the revenue is worth,
Speaker 1: and think through whether or not the prospects for the
Speaker 1: next twelve months are the same. We certainly are thinking
Speaker 1: about it across our entire portfolio and being much more
Speaker 1: cautious about our kind of growth stage valuations. Meantime, we
Speaker 1: were speaking earlier with a chief economist at City talking
Speaker 1: about inflation, Andrew Holland Horse. Take a listen to what
Speaker 1: he had to say. This is not four percent inflation,
Speaker 1: This is not five percent inflation. This is inflation that's
Speaker 1: around eight percent and set to pick up closer to
Speaker 1: nine percent in the next monthly reading on a year
Speaker 1: on your basis um. And so that's why there's been
Speaker 1: such a change in expectations for what the FED will do.
Speaker 1: This is really a FED now that is in inflation
Speaker 1: fighting mode. And when you're in inflation fighting mode, you
Speaker 1: need to get rates to a level that actually provides
Speaker 1: some restraint on the economy. Mercedes, this is going to
Speaker 1: impact companies on all fronts. How are you telling them
Speaker 1: to manage this? We're certainly telling our companies at the
Speaker 1: early stage to, you know, think about how they're building
Speaker 1: their models in a much more sustainable way. You might
Speaker 1: be entering the bear market, you might be entering the
Speaker 1: period where capital is not going to be successful, and
Speaker 1: so they really need to have a plan for how
Speaker 1: they're going to support themselves. With the funding they have
Speaker 1: and also rely on insider funding for the next eighteen
Speaker 1: to twenty four months. We also have a number of
Speaker 1: businesses that affected from a supply chain perspective, and so
Speaker 1: we've been working with them over the last few really
Speaker 1: quarters and years, because this isn't just the most recent phenomenon,
Speaker 1: but it's been going on during will with COVID, we've
Speaker 1: been working with them on alternative supply chain routes and
Speaker 1: ensuring that you know, they are even getting their demand
Speaker 1: forecasted further and further ahead so that they don't have
Speaker 1: to be as reactive to short term supply chain fluctuations.
Speaker 1: All right, mercedeses Bent light Speed Adventures partner, thank you
Speaker 1: for giving us your perspective on all of this coming up.
Speaker 1: Volatility also still the name of the game in crypto.
Speaker 1: We're going to talk about it all with a Kantrovich
Speaker 1: of falcon x. Are Crypto segment is next. This is
Speaker 1: Bloomber time for our crypto report now, as Ethereum is
Speaker 1: rising for another day, outperforming Bitcoin for a second week,
Speaker 1: let's talk about it all with our crypto contributor Sinali Boss. Sectionally,
Speaker 1: what's giving ethereum a boost. It's really interesting to look
Speaker 1: at but we should first look at bitcoin here, Emily,
Speaker 1: because with a fifteen percent rise in Bitcoin over two weeks,
Speaker 1: it is over forty four thousand dollars. It's really over
Speaker 1: forty four thousand, four hundred dollars. Here significant lift in
Speaker 1: the last couple of days. But to your point, you
Speaker 1: are right, it is not rising as fast as Ethereum
Speaker 1: has been rising over the last two week period, where
Speaker 1: you see more than twenty percent rise in the price
Speaker 1: over the two week period. People seem to be getting
Speaker 1: very excited here a about the merge, the move to
Speaker 1: proof of stake concept. But it will be interesting. Remember,
Speaker 1: ethereum has a lower base to rise off of, so
Speaker 1: the percentage rises are easier to see over there. The
Speaker 1: market cap is still a very wide between the two cryptocurrencies,
Speaker 1: so let's see what investors prefer. Still a long way
Speaker 1: for Ethereum to go. Okay, So Noal I stay with us.
Speaker 1: We're gonna be talking about this and more with our
Speaker 1: next guest, Ia Kantorovich, head of institutional coverage at Falcon
Speaker 1: as Iah, what do you make of Ethereum's latest run.
Speaker 1: Does it have to do with the merge or something more.
Speaker 1: Absolutely Shanali hit the nail on the head. I think
Speaker 1: right now we're seeing seeing two things in the market.
Speaker 1: The first is with the bullish activity around bitcoin, possibly
Speaker 1: fueled by the news that Terra was planning on purchasing
Speaker 1: roughly three billion dollars worth of bitcoin for their treasury,
Speaker 1: and then seeing a lot of a lot of hedge
Speaker 1: funds and retail investors, h and aggregators taking profit share
Speaker 1: off of Bitcoin and transferring that into E and all
Speaker 1: coins asnally mentioned into that two point oh merge and
Speaker 1: the excitement around that, Well two questions there for you,
Speaker 1: what what more heat do you have behind eat when
Speaker 1: you see some of the money already moving over and
Speaker 1: what more room do more old coins like Terra have
Speaker 1: to run here with that excitement that other funds have
Speaker 1: behind it. So a lot of it has to do
Speaker 1: with the growth of the applications that are being built
Speaker 1: on top of these layer ones. So whether it's a
Speaker 1: theory m or you're seeing that price activity also happening
Speaker 1: on top of layer ones like Avalanche this week, and
Speaker 1: a lot of that interoperability happening with bridging Bitcoin into
Speaker 1: these different layer ones being able to use that store
Speaker 1: value asset as collateral for usage on those platforms. In addition,
Speaker 1: just to overall more protocols and projects working on the
Speaker 1: travel rule and tackling that in order to make define
Speaker 1: more accessible. All of these are very exciting for the
Speaker 1: application of these layer ones. Meantime, I we're still seeing
Speaker 1: bitcoin trade within this fairly narrow range, and it's been
Speaker 1: happening now going on two months. Why is that given
Speaker 1: all of the activity, A lot of it has to
Speaker 1: do with the fact that bitcoin is now adopted by institutions,
Speaker 1: and so we're seeing that volatility drop which really needs
Speaker 1: the mass adoption, both with what we're seeing across the desk,
Speaker 1: in the conversations we're having with institutions across the board,
Speaker 1: and you're starting to see bitcoin trade very similar to
Speaker 1: some of the assets in traditional finance, and so in
Speaker 1: general there's more liquidity in the markets. Uh, and you're
Speaker 1: seeing bitcoin and the price of bitcoin being driven by
Speaker 1: institutions as opposed to crypto native volatility traders. It's still
Speaker 1: gotten a good lift here over the last couple of weeks.
Speaker 1: It is really proven itself in some ways. But what
Speaker 1: is really going to give bitcoin another leg here and
Speaker 1: make more institutions comfortable with the cryptocurrency. So you know,
Speaker 1: there are a number of institutions still going through due
Speaker 1: diligence with applying bitcoin, whether it's onto their balance sheet
Speaker 1: or into their investment thesis. So we still don't have
Speaker 1: a hundred percent of institutions in crypto, and so we're
Speaker 1: starting to and continuing to see that trickle roll into
Speaker 1: the space as institutions are looking for a store value
Speaker 1: asset and also just for returns across their portfolio in
Speaker 1: the market as today. Meantime, Falcon Acts has some pretty
Speaker 1: big ambitions to get the next billion crypto users on board.
Speaker 1: Reports that you've are marked a hundred fifty million dollars
Speaker 1: for acquisitions globally. Talk to us about your expansion plans.
Speaker 1: So we're really excited about the talent that we've brought
Speaker 1: onto our executive team, very excited about to see Walter
Speaker 1: suj Gelotti and John Kaplan coming to us from Bloomberg,
Speaker 1: Carda Ripple and Pinterest and having that caliber of talent
Speaker 1: joining us with a vision of a token ie feature.
Speaker 1: You know you mentioned before are about this preference for
Speaker 1: some funds to get into either I'm wondering, I, as
Speaker 1: you talk to all of these institutions as you grow,
Speaker 1: how much is energy consumption a topic as you go along?
Speaker 1: S G is very much top of mind, and so
Speaker 1: to the earlier point that you mentioned, this transition from
Speaker 1: proof of work to proof of steak is going to
Speaker 1: be very very important to the adoption that institutions view
Speaker 1: for ethereum. How are you watching the war on Ukraine
Speaker 1: as it plays out? Obviously we've seen bitcoin be used
Speaker 1: for humanitarian efforts, We've seen this executive order from President Biden,
Speaker 1: but there are also these remaining concerns about Russians specifically
Speaker 1: using cryptocurrency for illicit things to circumvent sanctions for example,
Speaker 1: How does all of this continue to play out specific
Speaker 1: to Ukraine? What we've seen in the effort to support Ukraine,
Speaker 1: whether it's within Ukraine itself, be a Dows or enough
Speaker 1: Teeth projects that more global Ukrainian projects. Uh, it's really
Speaker 1: just the validation that cryptocurrency is adopted and the interest
Speaker 1: is widespread. We're seeing that real time value in action
Speaker 1: across this currency system, and more broadly, you know, very
Speaker 1: um in terms of how it looks for all of
Speaker 1: the players in the ecosystem. We're continuing business as usual
Speaker 1: with the continued k y c amail that we have
Speaker 1: across the board, which is also super important about the
Speaker 1: underlying blockchain and its ability to be traceable and trackable.
Speaker 1: And there's this question going on also about you know,
Speaker 1: whether bitcoin can really replace traditional currencies, what function it
Speaker 1: has for for example Ukrainians who are using it to
Speaker 1: convert their money or to raise money via n f
Speaker 1: t S or etheroryum or otherwise. When you're talking two
Speaker 1: institutions as well, do they see it becoming a replacement
Speaker 1: over some period of time. That's a great question. I
Speaker 1: would say today institutions aren't viewing these major cryptocurrency assets
Speaker 1: as replacements uh, more so as uh something that goes
Speaker 1: alongside more. Really, where the focus is is around stable
Speaker 1: coins and that widespread adoption uh and the way it's
Speaker 1: being adopted overall across all of the institutions using it today.
Speaker 1: I cantavish falcon X always great to have you here.
Speaker 1: Thank you, along with Bloomberg's Shanali bassik Alright coming up
Speaker 1: the space race of the century. Russia remains a key
Speaker 1: leader in numerous space technologies, but with the War on Ukraine,
Speaker 1: a new era maybe taking flight that is next. This
Speaker 1: is Bloomberg. The war in Ukraine isn't just changing the
Speaker 1: game in cyberspace, but outer space as well. Satellite companies
Speaker 1: that relied on Russia's soy Use rocket to get to
Speaker 1: orbit are down looking for a new ride amid sanctions
Speaker 1: and Russia cutting off access. US launch providers like Northrop
Speaker 1: in ul A use Russian built r O D one
Speaker 1: eight engines. Now Russia's ross Cosmos is facing competition not
Speaker 1: just from the likes of SpaceX, but also startups focused
Speaker 1: on building rocket engines. One of those startups is are
Speaker 1: some Major whose founder and CEO Joe Loreenti, joins us
Speaker 1: now alongside our very own at ludload. Joe, thank you
Speaker 1: so much for joining us. So I'd love for you
Speaker 1: to set the stage here. What's happening in outer space
Speaker 1: since the war on Ukraine started. We're seeing some big
Speaker 1: shifts in the sort of center of gravity if you will,
Speaker 1: for space technologies. Yeah, you touched on two of the
Speaker 1: big headlines. There's the lack of launch from soy US
Speaker 1: for Western players. Famously, in the last couple of weeks,
Speaker 1: one way of the UK based company has been forced
Speaker 1: to buy launches from a competitor in space X has
Speaker 1: their own Internet constellation. So that's one big piece of
Speaker 1: the story. And the second is the embargo on Russian
Speaker 1: rocket engine in which Russia announced that they will no
Speaker 1: longer be selling here to the US. So I think
Speaker 1: the most common question I get on that piece of
Speaker 1: news is the US was buying Russian rocket engines. I
Speaker 1: think that one always surprises folks. Yeah, it is a
Speaker 1: bit of a surprise, isn't it, given that the police
Speaker 1: coll tensions and you know, I think folks forget that
Speaker 1: before SpaceX, there wasn't a lot of options out there, right, Joe,
Speaker 1: So this must be pretty good news for you in
Speaker 1: your currany. Is your phone ringing quite a lot to
Speaker 1: ask about the readiness of your rocket engine? Is? Yeah?
Speaker 1: The obviously, the international piece of this has been extremely busy.
Speaker 1: The US government has been extremely busy, and then the
Speaker 1: commercial side is extremely impacted here as well. Uh. SpaceX
Speaker 1: obviously is doing a tremendous job of filling filling their
Speaker 1: manifest with satellite operators. But the entire world is gone
Speaker 1: from a position of is the launch market oversaturated? To
Speaker 1: why is one web buying launches from a competitor. So
Speaker 1: I think that we're going to continue to stay really busy,
Speaker 1: and luckily it's just shining a light on the propulsion
Speaker 1: industrial based globally and how how companies like as A
Speaker 1: Major can come to help out both commercial entrants and
Speaker 1: uh the US government. So talk to us about that.
Speaker 1: How is URSA Major different from SpaceX or Blue Origin
Speaker 1: or what the Russians have to offer. Well, we're different
Speaker 1: from the Russians and that we're entirely domestic, so we
Speaker 1: can provide rocket engines here to the US government and
Speaker 1: the US players and Western players as it suits them.
Speaker 1: But uh, as far as our business model and how
Speaker 1: we differentiate ourselves from a SpaceX or Blue Origin, were
Speaker 1: entirely propulsion focused. So our engines are designed to meet
Speaker 1: a wide range of needs from space launch on orbit
Speaker 1: to hypersonic testing in the case of some of our customers.
Speaker 1: So there's a technological advantage there in which the engines
Speaker 1: are designed for a wide range about gins and pretty
Speaker 1: diverse capability. But there's also an economic side of it
Speaker 1: in which we have a production line that we just
Speaker 1: got rolling in this year, So there are some economies
Speaker 1: of scale for for us delivering the same type of engine.
Speaker 1: The multiple customers are multiple applications. Hey, joy, let's talk
Speaker 1: about that production line. I actually was listening to Elon
Speaker 1: Muskin Texas recently talk about how SpaceX is building one
Speaker 1: Raptor engine a day almost, but of course SpaceX doesn't
Speaker 1: sell their Raptor engines to anyone else. What kind of
Speaker 1: pace of production of you guys got, and how quickly
Speaker 1: and how to build these things? Three D printing right, Yeah,
Speaker 1: one of day is a tremendous pace. So we just
Speaker 1: started production in January of this year, and we hope
Speaker 1: to be delivering thirty engines to customers by the end
Speaker 1: of this year. But the focus is really shifting us
Speaker 1: from a capacity perspective of how many engines per year
Speaker 1: to a rate much like Elon said, an engine a day.
Speaker 1: We'd like to be at two engines a week here
Speaker 1: in the not too distant future. So the ramping there
Speaker 1: is really limited by how quickly we can assemble the engines.
Speaker 1: You touched on the three D printing piece. Almost every
Speaker 1: part of these engines that is a primary component or
Speaker 1: a metallic component is three D printed. We then hand
Speaker 1: assemble them here in Colorado and test them about a
Speaker 1: hundred yards from where they are assembled. So I'm sitting
Speaker 1: not too far from where we fire our rocket engines. Joe,
Speaker 1: There's another part of the story, and that is hypersonic weapons.
Speaker 1: The US has confirmed that Russia has used hypersonic weapons
Speaker 1: against Ukraine. But the US is behind not just Russia,
Speaker 1: but also China in hypersonic weapons, and the government is
Speaker 1: calling on companies like you to help change this. Talk
Speaker 1: to us about why this is important. Yeah, that's that's
Speaker 1: the other side of the coin of the story here.
Speaker 1: We just saw We just saw Russia claim that they
Speaker 1: had used the first hypersonic weapon and warfare. So the
Speaker 1: US has been developing hypersonic capabilities for many years now,
Speaker 1: but seen over the last couple of years as a
Speaker 1: resurgence of focus on flight testing hypersonics. So our engines
Speaker 1: are unique in that they are capable of being used
Speaker 1: on a number of applications, number of different vehicles, and
Speaker 1: they're capable of things like deep throttle or multiple restarts,
Speaker 1: so we can simulate flight across a pretty wide range
Speaker 1: of hyper missions. And that's really important for this next
Speaker 1: phase of development because the US will be forced to
Speaker 1: develop not just new hypersonic vehicles, but new technology and
Speaker 1: new capabilities, and that flight testing is an enormous component.
Speaker 1: Hey Joe, we only got a few seconds. How much
Speaker 1: money you guys gonna make this year? It's hard to say. Yeah,
Speaker 1: the years definitely early, but we were excited to see
Speaker 1: a pretty heavy focus from the DoD budget that was
Speaker 1: just recently approved on hypersonic testing and space flight. So um,
Speaker 1: some some nice tail wins for us. All right, fascinating
Speaker 1: stuff what you're doing and what's happening out there in
Speaker 1: outer space or some major founder and CEO Joe Loreenty
Speaker 1: and Bloomberg's at Ludlow, Thank you both. That does it
Speaker 1: for this edition of Bloomberg Technology. Join us next week
Speaker 1: for a conversation our very own brad Stone will be
Speaker 1: sitting down with Insta cart CEO v G Cimo at
Speaker 1: the shop Talk conference in Las Vegas, along with Georgash
Speaker 1: president Christopher Payne. Also next week, I'll be speaking with
Speaker 1: Uber CEO Dara Causa Shah. He will be joining you
Speaker 1: live from shop Talk. Don't don't forget to tune in
Speaker 1: for a lot of interesting conversations. I'm emily changing in
Speaker 1: San Francisco, have a wonderful weekend everyone, and don't forget
Speaker 1: to check out our podcast, This Is Bloomberg