Speaker 1: From Mahard where Innovation, money and power collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed lud Love.
Speaker 3: I'm Caroline Heider, Bloomberg's World headquarters in New York and
Speaker 3: now Med Ludlow in San Francisco.
Speaker 4: This is Bloomberg Technology.
Speaker 5: Coming up the FTC.
Speaker 3: It gears up to sue Amazon this month after a
Speaker 3: four year antitrust investigation into the company.
Speaker 5: Will bring you all the details.
Speaker 6: Plus after years in development, Microsoft's highly anticipated Starfield hits
Speaker 6: the marketplace to some rave reviews. We discussed with the
Speaker 6: heads of Bethesda Game Studios and Microsoft Gaming.
Speaker 3: And the US is seeking more details into Huawei's made
Speaker 3: in China chip as they start to wonder about the
Speaker 3: effectiveness of US curbs on the carries vast technology sector.
Speaker 3: But let's dig into these markets first and foremost, as
Speaker 3: we look at what is again a macro picture ed overall,
Speaker 3: we are seeing ism services, the data, the macro picture
Speaker 3: of health here in the United States, whereas it is lackluster.
Speaker 5: Over in Europe and over in China. And what does that.
Speaker 3: Mean, Well, we actually see rates rise here in the US.
Speaker 3: We see the dollar rise in particular up two tents
Speaker 3: of percent.
Speaker 5: And as we.
Speaker 3: Start to see a question of whether the Fed has
Speaker 3: to go further in terms of interest rate hikes to
Speaker 3: cool down the inflationary pressure here in the US, that
Speaker 3: of course means further sell off in the Nasdaq. We're
Speaker 3: off by more than one point one percent. The two
Speaker 3: year yield as we see crescendoing up some six basis points.
Speaker 3: We're above that five percent level, so notable in the
Speaker 3: minds of many at this moment. We're also looking what's
Speaker 3: happening in the Bloomberg Dollar Index, as I said, up
Speaker 3: two tens percent.
Speaker 5: What does that mean for the rest of the risk
Speaker 5: assets out there?
Speaker 3: Well, we know that Japan, China they start to talk
Speaker 3: up really trying to fight back on preserving their own currencies.
Speaker 3: What does it mean for crypto where we're seeing actually,
Speaker 3: of course continue pressure from the US dollar visa v bitcoin.
Speaker 3: We're now twenty five thousand, five seventy eight. Is this
Speaker 3: more risk a version that's playing in? Is it a
Speaker 3: strong dollar? But we're off by five ten percent. But
Speaker 3: dig into some of the micro that's dragging down the Nasdaq.
Speaker 6: Yeah, Karray, these are the biggest points movers to the
Speaker 6: downside on the Nasdaq one hundred. Clearly that hot ism
Speaker 6: print is impacting equities at the single name level, but
Speaker 6: there's news flow as well. Overnight the Wall Street Journal
Speaker 6: reporting that China Central government is telling specific agencies some
Speaker 6: agencies as the language they use to get their people
Speaker 6: to move away from using foreign handsets to domestic handsets,
Speaker 6: with particular focus on Apple's iPhone. We will discuss that
Speaker 6: later in the show, along with what's happening with Huawei,
Speaker 6: Tesla and Nvidia also big drags on the index at
Speaker 6: the innex level the Nasdaq one hundred. Two other big
Speaker 6: names that we're watching at the megacap level. Well, the
Speaker 6: first is Microsoft. As you heard later in the show,
Speaker 6: we will speak to Microsoft's gaming chief and the head
Speaker 6: of the prefers to Studio Starfield available today. So many
Speaker 6: of you have reached out to Karen and I with
Speaker 6: your thoughts on the title.
Speaker 4: We'll dig into that.
Speaker 6: But we also had the Gatekeeper's list out of the EU,
Speaker 6: which has some relevance to all of these megacat names.
Speaker 6: Then Amazon down one percent, as you know, Caroline. According
Speaker 6: to our sources, the FTC will finally act later this
Speaker 6: month with that suit.
Speaker 3: Yeah, as soon as September. That's, of course what's currently
Speaker 3: being reported by our own people on the ground. And
Speaker 3: we know that the company has been trying to well
Speaker 3: win the ear of regulators, but it's failed thus far
Speaker 3: to really offer what has been a substantive reason as
Speaker 3: to why it's marketplace in particular hasn't been deemed well
Speaker 3: overall some sort of competitive.
Speaker 5: Threat at the moment.
Speaker 3: So we're going to be digging into all of these
Speaker 3: lack of concessions.
Speaker 5: Thus far, it seems Blooms, Lea, Ninel and Lea.
Speaker 3: What is it that Amazon really has failed to show
Speaker 3: to the FTC.
Speaker 7: Yeah, the FTC has been looking at Amazon now for
Speaker 7: four years and it has a lot of concerns about
Speaker 7: the way that it has organized its marketplace. In order
Speaker 7: to get the prime badge, which you know is the
Speaker 7: one that most people buy, It's the one that when
Speaker 7: you go into the website and click on the buybox,
Speaker 7: that's the one right there. In order to get that,
Speaker 7: you have to use Amazon's logistics service, and the FTC
Speaker 7: is concerned that that unfairly ties access to the marketplace
Speaker 7: to using these other services that Amazon buys now. Amazon
Speaker 7: has tried to assuage some of the concerns about that,
Speaker 7: such as by opening up this new program called Prime
Speaker 7: Prime Sellers so that you could do your own logistics
Speaker 7: by using like ups or FedEx.
Speaker 2: But that doesn't seem to.
Speaker 7: Have resolved any concerns by the FTC.
Speaker 6: Leah, we know that in mid August, representatives from Amazon
Speaker 6: met with the three commissioners of the FTC. We talked
Speaker 6: so much about it with you on this program, but
Speaker 6: what we didn't really learn was are there any concessions
Speaker 6: or anything. Carol talked about that that Amazon tried to
Speaker 6: do to avert this from happening or is it always
Speaker 6: just going to happen?
Speaker 7: Yeah, what we've heard about that meeting. It took place
Speaker 7: in mid August. They had a video chat with all
Speaker 7: of them commissioners and sort of laid out what they
Speaker 7: think are their defenses to these things.
Speaker 5: There were no settlement talks.
Speaker 7: At that meeting, so the FTC wasn't particularly interested in
Speaker 7: hearing about a settlement. Which Amazon had offered a settlement
Speaker 7: to resolve these sort of concerns in both Europe and
Speaker 7: the UK, but here in the US the FTC was
Speaker 7: not particularly interested, so that was sort.
Speaker 8: Of the last step before.
Speaker 7: A suit is filed, and we're hearing that it will
Speaker 7: probably come sometime later.
Speaker 3: This month, and just give us the context.
Speaker 5: Remind us if you've.
Speaker 3: Forgotten, of course, Lena Khan, many you expected this was
Speaker 3: likely to come. It's the big beefy world visa VI Amazon,
Speaker 3: And actually they've taken steps to sue already in May
Speaker 3: and then in June.
Speaker 7: Yeah, so this will actually be the fourth lawsuit that
Speaker 7: the FTC has filed against Amazon this year. They filed
Speaker 7: two earlier over the privacy related to Amazon's devices. Those
Speaker 7: were the ring doorbell and the echo speaker. Amazon to
Speaker 7: pay thirty million dollars and fines related to that. They
Speaker 7: filed a second suit that remains pending. Amazon can tests
Speaker 7: that one over consumer protection allegations related to Prime. The
Speaker 7: FTC says that Amazon has deliberately made it too difficult
Speaker 7: for consumers to cancel their Prime subscriptions. Amazon, as I said,
Speaker 7: is contesting that, and that lawsuit is ongoing. But this
Speaker 7: will be sort of like the big one, you know.
Speaker 7: Lena Khan was well known before she became FTC chair
Speaker 7: for this paper she wrote about Amazon. Someone was joking
Speaker 7: to me the other day that like this lawsuit is
Speaker 7: going to be like inscribed on her tombstone when she dies.
Speaker 7: So you know, the FTC has been like looking forward
Speaker 7: to this for at least the past two years, and
Speaker 7: it's going to be one of the biggest moves that
Speaker 7: they make during the administration.
Speaker 6: All right, Blombos Leah Eylan on the antitrust beat at
Speaker 6: a DC, thank you sticking with these kind of geopolitical tensions.
Speaker 6: The US is working to establish a full detail of
Speaker 6: Huawei's advances in chit technology, news of which is Chinese
Speaker 6: nationalizard and ignited speculation about the effectiveness of Washington's curbs
Speaker 6: on the country's vast technology sector. For more, let's bring
Speaker 6: in Bloomberg's and Marie Orden amh DC A calling for
Speaker 6: what they see as a warranted investigation into Huawei and
Speaker 6: the seven nanometer processor.
Speaker 4: Will we get one.
Speaker 2: Well, we heard from.
Speaker 9: Jake Salvin yesterday and he really didn't want to make
Speaker 9: a prediction. All we saw at of Huawei interesting and
Speaker 9: a coincidence if you will, or potentially on purpose. When
Speaker 9: Gina Ramando, the individual in charge of the Commerce Department
Speaker 9: which is enacting those export controls and would likely be
Speaker 9: the ones to be leading that investigation when she was
Speaker 9: leaving China. But when we heard from Jake Selva and
Speaker 9: the President's national security advisors that they need more information,
Speaker 9: they certainly want to.
Speaker 5: Look into this.
Speaker 9: But today and they might get some political pressure because
Speaker 9: today we heard from Representative Michael McCall, he's the Republican
Speaker 9: chairman of the House Foreign Relations Committee.
Speaker 8: And he was asked about this.
Speaker 9: He was asked if China's chopped chip maker SMIC warned
Speaker 9: in an investigation.
Speaker 5: He said he certainly thinks it does.
Speaker 9: And he says it sure looks like they did in
Speaker 9: terms of violating sanctions. So this is not just going
Speaker 9: to be political pressure on the White House from Congress
Speaker 9: on the Republicans side of Democratic side, it does look
Speaker 9: like they want to see how Huawei was able to
Speaker 9: come up with this phone, given the fact that SMIC
Speaker 9: is on the entity's list, Whawei itself is on the
Speaker 9: entity's list, and given the fact that you have US
Speaker 9: technology present within SMIC components, if they were to want
Speaker 9: to give it to Huawei, they would need to get
Speaker 9: release and call Washington and get and get that review
Speaker 9: before they were should be allowed to do so.
Speaker 5: According to the current rule and law.
Speaker 3: Smoothyard Highens. That's basically, well the tactics have been thus far.
Speaker 3: Do you think that ultimately gets cooled into question because
Speaker 3: Jake Sullivan seems to be sticking to that particular calls.
Speaker 5: Yeah, it was interesting.
Speaker 9: What Jake Sullivan wanted to say yesterday is that they
Speaker 9: still maintain that there is a lot of business between
Speaker 9: or seemed like he was trying to say business between
Speaker 9: Washington and Beijing on the commercial side. But these export controls,
Speaker 9: these sanctions, these investigations, if they have one, is really
Speaker 9: has to do with.
Speaker 5: National security concerns.
Speaker 9: That was the message from Gina Ramundo when she was
Speaker 9: in China, and that seemed to be the message yesday
Speaker 9: from the podium in the West Wing.
Speaker 3: I'm Mary Holden, brilliant, Thank you very much for bringing
Speaker 3: us the inside track from Washington. Meanwhile, look, let's just
Speaker 3: talk a little bit more about what's happening in China.
Speaker 5: Because the government agencies.
Speaker 3: Have in fact band staff from using iPhones, Apple iPhones
Speaker 3: and other foreign random devices at work. That's all as
Speaker 3: we understand to the Wall Street Journal, China is Apple's
Speaker 3: largest international market. Remember, and iPhones are common in both
Speaker 3: government and in the private sector, so we'll see how
Speaker 3: that continues to unfold.
Speaker 6: Time for some talking tech first up Right to Repair
Speaker 6: supporters are increasingly bullish about their chances of advancing legislation
Speaker 6: in states nationwide after Apple unexpectedly got behind a California
Speaker 6: bill that cleared a key herd all last week. Final
Speaker 6: approval of the proposal will make the Golden State the
Speaker 6: latest to pass a law requiring the electronics companies loos
Speaker 6: in control over the parts and technical know how necessary
Speaker 6: to fix their products. Microsoft and Apple face fresh investigations
Speaker 6: from EU regulators as part of the block's landmark Digital
Speaker 6: markets clamp down. Those companies are among a list of
Speaker 6: twenty two services for under the EU's Digital Markets Act,
Speaker 6: which gives them six months to fall in line with
Speaker 6: the new rules or challenge.
Speaker 4: Them in an EU court.
Speaker 6: Plus, Saudi Telecom is taking a nearly ten percent stake
Speaker 6: in Spain's Telefonica for roughly two point twenty five billion,
Speaker 6: as the struggling the Did based carrier prepares to lay
Speaker 6: out a new strategy for future growth. The acquisition is
Speaker 6: bound to draw scrutiny from the Spanish government, which views
Speaker 6: Telefonica as a company of strategic importance operating in this
Speaker 6: structure that is critical to the nation's defense and security.
Speaker 3: Caroline, Meanwhile, I mean so many other stories to be
Speaker 3: digging into today. One of them is, of course, after
Speaker 3: their reverse stock split one to forty we work back
Speaker 3: at three dollars forty three, but under pressure once again,
Speaker 3: we're down by three percent. And this, as we understand,
Speaker 3: the CEO is putting out really a letter talking about
Speaker 3: how they're looking to renegotiate nearly all of their leases
Speaker 3: with landlords and they plan to exit what they call
Speaker 3: unfit and underperforming locations.
Speaker 5: Really, David totally here, Ed is sort.
Speaker 3: Of at a race against time, really, isn't it. Ultimately
Speaker 3: a lot of businesses haven't been returning to the office.
Speaker 3: We now get the feel that it's back to school
Speaker 3: Septembers upon us. But ultimately they are running low on
Speaker 3: the money and they need to be renegotiating now. Of course,
Speaker 3: they've already warned that whether or not this business can
Speaker 3: be a going concern.
Speaker 4: Yeah, so that happened last month.
Speaker 6: But the reality is there are people in the tech
Speaker 6: industry that still use we work, you know, small startup
Speaker 6: shared spaces and are. Part of what Tolly said is
Speaker 6: that if we're going to close locations down just like
Speaker 6: they've done in the past, as part of this process,
Speaker 6: they're going to have to go and tell everyone that's
Speaker 6: currently working in them.
Speaker 3: Yeah, off for alternative arrangements, additional support to minimize any
Speaker 3: disruption or indeed inconvenience, but inconvenient it is if you
Speaker 3: are in someone who enjoys going into the office in
Speaker 3: some of these key locations. But we keep a close
Speaker 3: eye on what is now at three dollars forty three
Speaker 3: stock and has continued to be under pressure from New
Speaker 3: York and San Francisco.
Speaker 5: This is Bloomberg Technology.
Speaker 6: Let's go global and take a look at India's economic transformation.
Speaker 6: With multinational giants like Apple and Samsum looking to diversify
Speaker 6: their manufacturing away from China, Here's the question, is India
Speaker 6: prepared to take China's path and emerge as the next
Speaker 6: global factory to become the next economic powerhouse. Here's Bloomberg's Minarkadoshi.
Speaker 10: India is the world's second largest phone market, over two
Speaker 10: hundred million sold last year.
Speaker 2: A decade ago, most of them were important.
Speaker 10: Now the country is a net exporter with Samsung and.
Speaker 2: Apple leading the charch.
Speaker 10: Crimnisterner in the movie wants to repeat this phone success
Speaker 10: across electronic goods, electric vehicles, green energy, chemicals, textiles.
Speaker 2: The neartome goal is to reverse the.
Speaker 10: Declining share of manufacturing in GDP, targeting one trillion dollars
Speaker 10: in goods exports and most importantly, creating jobs for the
Speaker 10: largest working age population.
Speaker 2: In the world.
Speaker 10: But standing in the way of this manufacturing nvision are
Speaker 10: some old challenges, land acquisition problems, high logistics costs, and
Speaker 10: some new ones as well automation lack of skilled labor
Speaker 10: take phones, for instance. The government has implemented a mix
Speaker 10: of high import tariffs on finished phones and production incentives
Speaker 10: to boost local manufacture, but supply chain in digitization is.
Speaker 2: A long way off.
Speaker 10: According to one report, Indian factories add eighteen percent in
Speaker 10: value to the electronic devices they assemble for export, compared
Speaker 10: with thirty eight percent in China and twenty four percent
Speaker 10: in Vietnam. Manufacturing in Vietnam is also cheaper by at
Speaker 10: least a tells the mag in India campaign will benefit
Speaker 10: from record investments in infrastructure and logistics. There's also the
Speaker 10: lure of a potentially large domestic market. And now there's
Speaker 10: the China plus one wave as large global corporations seek
Speaker 10: to mitigate geopolitical risks, and they are slow in China
Speaker 10: economy by diversifying their supply chains.
Speaker 2: Since the liberal i of.
Speaker 10: Its economy in the nineties, India has come to be
Speaker 10: known as the back office to the world. After becoming
Speaker 10: a developed economy, the government also needs it to become
Speaker 10: the factory to the world.
Speaker 6: That was Bloomberg's Monarkadoshi right. Top story Microsoft shot for
Speaker 6: the sky was Starfield. It's ambitious new space role playing
Speaker 6: video game and so far looks like a pretty decent
Speaker 6: bet The highly anticipated title arrives after seven years in development.
Speaker 6: It's the first time Bethesda has entered a new universe
Speaker 6: in twenty five years. Starfield available today to everyone through
Speaker 6: Xbox Game Pass. Delighted to bring in some of the
Speaker 6: giants behind the game, Phil Spencer, CEO of Microsoft Gaming,
Speaker 6: and Todd Howard, executive director of Bethesda Games Studios and
Speaker 6: the executive producer on the title. Todd, I'm going to
Speaker 6: start with you. I asked our audience, what would you
Speaker 6: ask Todd? Big question from many, why did you not
Speaker 6: optimize this game for PC.
Speaker 2: We did.
Speaker 11: It's running great. It is a next gen PC game.
Speaker 11: We really do push the technology, so you may need
Speaker 11: to upgrade your PC for this game. But it's got
Speaker 11: a lot of great stuff going on in it, and
Speaker 11: the fans are responding awesome.
Speaker 6: Karen and I have been reviewing the gameplay. We've also
Speaker 6: been reviewing some of the discussion online. Phil, Good to
Speaker 6: see you Xbox game Pass. Okay, it's available to anyone
Speaker 6: that subscribes, so how can you guarantee from a sort
Speaker 6: of sales perspective that you kind of hit the heights
Speaker 6: that Skyrim has. If it's available to anyone through game Pass,
Speaker 6: how do you ensure people actually play it?
Speaker 12: Well, we can see people playing, which is great on
Speaker 12: the platform. You might know, the game has been in
Speaker 12: preview for the last week and it's already our most
Speaker 12: played next Gen exclusive game on Xbox, so we're seeing
Speaker 12: huge success. It's our biggest wish listed game on Steam
Speaker 12: across Xbox and Bethesda Game Studio's history. And now, as
Speaker 12: you said, tens of millions of Game Path subscribers and
Speaker 12: the Standard Edition retail customers all get to play today.
Speaker 12: So incredible day New franchise launching.
Speaker 4: It's a lot of.
Speaker 3: Fun and I'm sure you want to dwell on the
Speaker 3: here that now, Phil, But You've been asked and I'm
Speaker 3: going to ask it again. You mentioned exclusive, so does
Speaker 3: that mean being able to scroll six will be How
Speaker 3: do you mark as to whether this is the right track, Phil?
Speaker 12: Yeah, we look at it on a case by case basis.
Speaker 12: With the games that we build, we want to make
Speaker 12: sure our games are available in so many different places
Speaker 12: on our Xbox consoles, on.
Speaker 4: PC, also via cloud.
Speaker 12: These games can come to almost any web enabled device.
Speaker 12: We're looking at. You know, millions and millions of players
Speaker 12: who will have had access to Starfield and other Xbox
Speaker 12: Game Studios games. It's really about giving players choice around
Speaker 12: how they want to play and they build their library
Speaker 12: of games.
Speaker 3: What then, todd about timing? What then about other names,
Speaker 3: other games Calder for example, Wilder'sgate that have done significant well,
Speaker 3: how do you think about ultimately making sure everyone's addicted
Speaker 3: to your current offering right here right now?
Speaker 11: You know, I think if you look at video games now,
Speaker 11: it is so competitive. I think this year twenty twenty
Speaker 11: three could be the greatest year ever in video games.
Speaker 11: I don't know, but to have Starfield be out there
Speaker 11: and the response that we've gotten has just been incredible
Speaker 11: for everybody here at the studio. And the other thing is, yes,
Speaker 11: it's about launch, it's about today, but our games they
Speaker 11: are played for years. You know, we're twelve years after
Speaker 11: Skyrim still one of our most played games. So we
Speaker 11: like to build these worlds that people can really really
Speaker 11: get lost in the fan feedback and what it means
Speaker 11: to everybody, It really is incredible for all of us here.
Speaker 6: Todd, I want to go to another one of the
Speaker 6: audience questions, and it's very specific, but so many people
Speaker 6: asked it, why are there no vehicles on planets? Space
Speaker 6: is one thing, but what about terra firma.
Speaker 11: It's a great question. Actually it's something we consider. You know,
Speaker 11: we're going to do our space, we're going new planets.
Speaker 11: Once you do vehicles, it does change the gameplay. So
Speaker 11: by focusing once you land in your ship that you're
Speaker 11: on foot, it lets us really for the players, make
Speaker 11: it an experience where we know how fast they're seeing things.
Speaker 2: In one sense.
Speaker 11: You do have a vehicle, which is obviously have your spaceship.
Speaker 11: You can go around in space, but then on the
Speaker 11: surface you do have a jetpack which you can upgrade,
Speaker 11: which is super fun new experience for us. And obviously
Speaker 11: planets have different levels of gravity which make that unique
Speaker 11: for many planets.
Speaker 6: Phil this is so closely tied to Xbox, and I
Speaker 6: find it interesting. I have to ask you about the
Speaker 6: latest offer from Microsoft and Activision to the uk CMA.
Speaker 6: Do you think that that structure will be accepted with
Speaker 6: the UKCMA.
Speaker 12: You know, we're working cooperatively with the regulators as we've
Speaker 12: had through this whole process. As you're well aware, it's
Speaker 12: been a long process. We remain confident in the work
Speaker 12: that we're doing with the CMA and the European Commission
Speaker 12: and here with the FTC and the UA, that we
Speaker 12: will close this acquisition.
Speaker 5: Another rather specific question for you, Todd.
Speaker 3: What's been your favorite means and operation, like what you'll
Speaker 3: build out there? What's been your favorite build or indeed
Speaker 3: favorite well means of traveling through space.
Speaker 11: Favorite means of traveling through space? Well, you know, when
Speaker 11: I'm doing my ship, I like to focus on shields
Speaker 11: and defense because you never know where it's going to
Speaker 11: happen when you jump into a new system in the game,
Speaker 11: as far as character builds, it's one of the things
Speaker 11: we love to do, which is.
Speaker 5: There's so much you can do in the game.
Speaker 11: It's almost like five or six games at once, and
Speaker 11: we usually tell people just get comfortable, do what you
Speaker 11: want to do. If you want to zen out and
Speaker 11: scan planets and explore them, great, If you want to
Speaker 11: join the pirates, great, if you want to do this
Speaker 11: epic main quest. It's really whatever you want to do,
Speaker 11: whatever you're comfortable with, and really for us it is
Speaker 11: we do these worlds, but it's about the players making
Speaker 11: it their own.
Speaker 6: Todd This game took seven years to make. Generative AI
Speaker 6: now allows studios like you to expedite the creation process quickly.
Speaker 8: Well, it seems we want to do that every time.
Speaker 11: We want to do it faster, and there are areas
Speaker 11: where we can go faster, but these are complex projects.
Speaker 11: They're big technological innovation going on. There's so much design.
Speaker 11: This game has over three million words in it, so
Speaker 11: we do like to make really big games. Those will
Speaker 11: take some time, and as you mentioned before, the competition
Speaker 11: our industry is quite high. The bar is high, and
Speaker 11: we want to get there for all of our fans.
Speaker 3: Every time it's great having some time with you, Todd
Speaker 3: Howard and indeed Phil Spencer. We thank you both, Phil Spencer,
Speaker 3: We'll see you, Maxloft Game and Todd Howard, executive director
Speaker 3: of Bethesda Game Studios and of course the executive producer
Speaker 3: of Starfield. From New York and San Francisco. There's a
Speaker 3: Blue Meg Technology. Wellcome back to Blue Meg Technology. I'm
Speaker 3: Caroline Hid in New York.
Speaker 6: And I'm ed Lovelow in San Francisco. Quick check in
Speaker 6: on the market. Then as that one hundred at the
Speaker 6: index level, Carro and you know, we've really started to
Speaker 6: kind of accelerate other clients down one point two percent.
Speaker 6: You talked at the top of the show about the
Speaker 6: hot print fort ism data that seems to have weighed
Speaker 6: on sentiment. But some megacap names also under pressure a
Speaker 6: lot in the newsfod that.
Speaker 4: We've covered off.
Speaker 6: There's one specific name that I wanted to bring you,
Speaker 6: which is by DO, China's search giant, the Google of China.
Speaker 6: There's a really interesting tech Watch column. This is by
Speaker 6: DO over the last seven days, but we're down in
Speaker 6: the last two sessions. The theory is that there could
Speaker 6: be some room to run on this stock because not
Speaker 6: only did it sort of get the regulatory approvals from
Speaker 6: China to deploy its generative AI tool to the public,
Speaker 6: but ernie bot has hit a million downloads. And what
Speaker 6: our colleagues in Bloomberg mus have done is look at
Speaker 6: all the technical indicators, look at the options market, and say,
Speaker 6: there's a lot of hype around AI, but this is
Speaker 6: one name.
Speaker 4: That we might want to watch for.
Speaker 6: So I wanted to squeeze that in while we had
Speaker 6: a minute.
Speaker 3: It's good because I'm going to be digging into the
Speaker 3: world of AI a little bit more with.
Speaker 5: A VC air Street Capital.
Speaker 3: Of course, Nathan Binet is going to be joining us,
Speaker 3: and he's been all focused on by Do. But let's
Speaker 3: go from bay Do to Binance. Right now the world
Speaker 3: of crypto. Two finance executives ed overseeing regions including Eastern
Speaker 3: Europe and Russia. Well they've left, and actually it's just
Speaker 3: adding the drip drip drip of continued roll revolving doors.
Speaker 5: At the moment, the senior managers just aparting.
Speaker 3: This comes as we know that regulators in the US
Speaker 3: and elsewhere are cracking down in the company.
Speaker 5: But EMOTIONALI Bessek joins US.
Speaker 3: More So, is this in any way idiosyncratic to Eastern
Speaker 3: Europe and Russia or is this.
Speaker 5: A broader theme.
Speaker 8: There's definitely a broader theme here.
Speaker 13: We know that there are a number of very senior
Speaker 13: executives here. Remember the Wall Street Journal had also reported
Speaker 13: that Helen High, who ran the global feat business, is
Speaker 13: among those who have departed.
Speaker 8: Then we also have the person.
Speaker 13: Who as a global head of product who had left
Speaker 13: very recently as well. We also have the person who
Speaker 13: ran the finance business in the Asia Pacific region. So
Speaker 13: certainly across regions you are seeing different members of the
Speaker 13: Binance senior leadership teams start to exit. Now, remember crypto
Speaker 13: tends to be a business where people come and go
Speaker 13: a lot. However, you're only as good as your business here.
Speaker 13: I know that this is a technology business, but it
Speaker 13: is the people who are expanding in those areas, and
Speaker 13: finance has always been kind of the central pivotal international
Speaker 13: player when it comes to the crypto community, as well
Speaker 13: as being such a large exchange across the world. So
Speaker 13: to your point on is it just Eastern Europe, the
Speaker 13: fact that we've seen such senior executives had to Global
Speaker 13: Product Asia as well, as Eastern Europe definitely indicates that
Speaker 13: you are seeing issues in different.
Speaker 3: Areas Czy though, yes, putting a bit of a kind
Speaker 3: of we silver lining to it all saying look, they're
Speaker 3: going on to new ventures, some people will great talent
Speaker 3: are coming from outside of buy Now and for what.
Speaker 13: It's worth, having this conversation with you and now is
Speaker 13: making me giggle. We'll hear that because you are seeing
Speaker 13: this at other companies. You are seeing places like Goldman
Speaker 13: say the same exact thing. And so as far as
Speaker 13: talent leaving going other places and having a relationship to
Speaker 13: the extent can prove that relationship is playing out. That's
Speaker 13: the benefit of having your first job or such a
Speaker 13: high level position at such a key exchange as you
Speaker 13: build new crypto products. But again, the only benefit from
Speaker 13: the company comes if that relationship or.
Speaker 4: To continue shannata. We're going to go pretty deep on
Speaker 4: another name in just a minute.
Speaker 6: But Binance, like many others, is just as embattled, particularly
Speaker 6: with the SEC scrutiny, and this is a thing that
Speaker 6: CZ has to still deal with of course.
Speaker 13: Yeah, remember that is of course a very big problem
Speaker 13: here when you come to the lawsuits that they're facing
Speaker 13: as well as the regulatory scrutiny, particularly here in the
Speaker 13: United States. I would also say it's not just the
Speaker 13: SEC that it's facing. Remember we're not too many months
Speaker 13: away from when their own stable coin product had faced
Speaker 13: scrutiny here via the issuer that it worked with.
Speaker 8: Through the New York Department of Financial Services.
Speaker 13: And these are all pretty critical pieces of the puzzle
Speaker 13: when you think about what the crypto industry relies on
Speaker 13: and what they trade at the end of the day.
Speaker 8: So it is kind of coming from all sides, isn't it.
Speaker 13: But again, these are now years long issues that Binance
Speaker 13: has been facing, and so these executives leaving is not
Speaker 13: just about regulation anymore's about business.
Speaker 4: Away from Binance.
Speaker 6: Shnali, It's that time of the week where I ask
Speaker 6: you what is the latest on the Bitcoin sport ETF.
Speaker 13: Saga, And you know, we are weeks away from the
Speaker 13: next set of answers from the SEC on whether they're
Speaker 13: going to approve or punt or deny more ETFs. And
Speaker 13: given that we are just days away from when they've
Speaker 13: punted yet again on a host of ETFs tied to
Speaker 13: major providers.
Speaker 8: You know, just a day ago we were speaking to.
Speaker 13: Executive at Valkyrie, which has a penny application, who said
Speaker 13: that people believes that there's a fifty percent chance that
Speaker 13: after October they finally get an answer either way, and
Speaker 13: there is a grand hope that there will be approval.
Speaker 13: But it is pretty fascinating to see the Grayscale Bitcoin Trust,
Speaker 13: for example, how it's trading. It's still at a twenty
Speaker 13: percent discount to its net asset value. Remember that gap
Speaker 13: had closed after the initial decision last week from the
Speaker 13: district judge regarding their law suit against the SEC.
Speaker 8: As far as Grayscale goes, they're.
Speaker 13: Asking the SEC for answers as well. They are only
Speaker 13: a couple days into that forty five day waiting period.
Speaker 13: But that forty five day waiting period, the longer it
Speaker 13: goes on, the more frustrating it is for everybody who
Speaker 13: has an application that is sitting on the sidelines, that
Speaker 13: is waiting for an answer in October.
Speaker 6: Yeah, and it is an important question because the market
Speaker 6: is trying to play it. And if there's anyone that
Speaker 6: understands the moving timeline, it's Bloomberg Snali Bassek, thank.
Speaker 4: You very much. Okay.
Speaker 6: As the AI height brings founders and a fresh influx
Speaker 6: of VC dollars to San Francisco. One industry has been
Speaker 6: left ruing what might have been crypto. That's the view
Speaker 6: of Ripple Labs co founder Chris Last and I sat
Speaker 6: down with him yesterday here in San Francisco, a c
Speaker 6: the larcens now trying to help fixed the outlines how
Speaker 6: he feels the federal government and US regulators have cost
Speaker 6: San Francisco the title is the blockchain capital of the world.
Speaker 4: Have listened.
Speaker 14: That's really unfortunate because I think unfortunately this administration made
Speaker 14: a really bad call.
Speaker 4: At the city level or the federal or the federal level.
Speaker 14: They pretty much killed San Francisco from being what it was,
Speaker 14: the blockchain capital of the world. We owned it, and
Speaker 14: we don't anymore because the Biden administration, for whatever reason,
Speaker 14: decided they want to push this industry offshore. And so
Speaker 14: it's London, Singapore, Dubai that really are the global capitals
Speaker 14: of blockchain. That's unfortunate. Maybe our vacancy rate would behalf
Speaker 14: of what it is here in San Francisco. It's thirty percent.
Speaker 14: It might have been fifteen percent if we still were
Speaker 14: the global blockchain capital the world.
Speaker 4: So that was a missed opportunity.
Speaker 14: It's really unfortunate it hurt the city.
Speaker 6: The latest with Rippled Labs action at the federal level
Speaker 6: is that you have objected to the SEC's request to
Speaker 6: appeal the original court ruling, which was a positive for
Speaker 6: Ripple in the sense that it found the cryptocurrency xop
Speaker 6: was not a security when it was sold to the public.
Speaker 6: Could you just explain what the latest is with that
Speaker 6: legal dispute.
Speaker 14: Well, I think the bottom line is the SEC lost
Speaker 14: on everything that was important to them and important in
Speaker 14: regulation of the industry. The case still continues. There's appeal
Speaker 14: processes that everybody has the right to do. But we
Speaker 14: think that this is really groundbreaking. This is the law
Speaker 14: of the land, and it's actually quite good news.
Speaker 4: I think.
Speaker 14: For again, I think the US screwed up here on
Speaker 14: crypto and blockchain policy. This is the beginning now through
Speaker 14: the court's unfortunately, instead of the regulators to get that
Speaker 14: clarity and get.
Speaker 4: Us back in the work.
Speaker 6: There's kind of both happening in parallel. There's your situation
Speaker 6: with the SEC. Think about the application pending for bitcoins
Speaker 6: for ETF. You know, Gary Gensler and the SEC have
Speaker 6: both decisions to make applications and fights that.
Speaker 4: They are are on not willing to pick.
Speaker 6: How has that reflected on Gary Gensler to your mind
Speaker 6: as the lead of that.
Speaker 14: Well you bring up, yeah, you bring up a great point.
Speaker 14: You saw in the latest challenge on the ETF the
Speaker 14: Bitcoin ETF. Again SEC lost, but not only that, the
Speaker 14: judge really admonished the SEC. I really called them out
Speaker 14: in a way that you don't really see very often.
Speaker 14: I think it's just more proof that Gary Ginsler's decision
Speaker 14: of sort of engaging this regulation by enforcement rather than
Speaker 14: getting clear laws. He knows they're not clear. He just
Speaker 14: likes that lack of clarity so that he can go
Speaker 14: after anybody and make up the rules as he goes
Speaker 14: along through bullying. And that's not the American way. This
Speaker 14: should be a congress. We should have clear rules from
Speaker 14: the legislatures, not through the sort of unelected, power hungry
Speaker 14: and really misplaced decision maker that you see in Gary Gensler.
Speaker 6: Well, Cara, I mean you heard it strong words against
Speaker 6: the chair of the lead US regulator, But he's basically
Speaker 6: making an appeal, which is we want the federal government
Speaker 6: to write laws, not keep going to court over and
Speaker 6: over again with the same agency.
Speaker 5: And yet they haven't.
Speaker 3: And it's interesting we're getting more and more clamor that
Speaker 3: perhaps this isn't a partisan issue, perhaps this becomes bipartisan
Speaker 3: in some way. But Ed, what's interesting is just Dwell
Speaker 3: on the San Francisco element here, because this is what
Speaker 3: really took my attention. How he feels that what the
Speaker 3: sort of sucking sound of crypto and blockchain has hurt
Speaker 3: the city and indeed the district yet more.
Speaker 4: Yeah.
Speaker 6: So the economic data point that he cited was commercial
Speaker 6: real estate or office vacancy, which last quarter was at
Speaker 6: thirty two percent CBRO data, and he said it would
Speaker 6: be fifteen percent probably had this become such an unhappy
Speaker 6: place for blockchain companies in particular, And he's saying to newfounders,
Speaker 6: don't come here the city's to fix. You have better
Speaker 6: lot going to Singapore or Dubai because they have proactive
Speaker 6: regulation that supports the founding and building of companies in
Speaker 6: that space.
Speaker 3: But I feel that that must be something that well
Speaker 3: reflects on the US more broadly. What is it just
Speaker 3: because it's an added wound into San Francisco at a
Speaker 3: time where they're still trying to bring workers back to
Speaker 3: the city trailers still trying to ensure that their rualer
Speaker 3: state is full in some way, not just in crypto,
Speaker 3: but in software, in anything but AI.
Speaker 6: Basically, his answer was very quick and simple. The federal
Speaker 6: government were the main sort of driver of people out,
Speaker 6: but there's no champion in San Francisco right now trying
Speaker 6: to bring them back in.
Speaker 4: And that's why we have a vacuum.
Speaker 3: Really interesting take on particular niche on that focus on
Speaker 3: that city. But coming up, let's go even more broad
Speaker 3: and we're interested to talk about what's happening in Europe
Speaker 3: and cultivating the startup scene there as well. Big new
Speaker 3: rays coming from air Street Capital. It's a venture firm
Speaker 3: backed by Spotify CEO Daniel Eck. We're going to be
Speaker 3: joined by Nathan Banish, he's general partner in air Street Capital.
Speaker 3: That's next. I mean, while before we go to private
Speaker 3: let's go to the public markets. We just want to
Speaker 3: shine a light in the fact that we are at
Speaker 3: basically session lows the SMP off by more than percentage point,
Speaker 3: looking in the nasdak off by one point four percent.
Speaker 3: This is a question of macro data. Is the US
Speaker 3: economy too strong? Does a fence still have to hike
Speaker 3: the rates, go and stay above that five percent level
Speaker 3: of the two year from New York and San Francisco.
Speaker 15: This is Blueberg Technology.
Speaker 5: It is at time our VC round up starting with
Speaker 5: five hundred global Look.
Speaker 3: It's one of the most active early stage venture investors
Speaker 3: over in Southeast Asia. It's an early backer of GRAB
Speaker 3: and they just raise one hundred and forty three million
Speaker 3: dollars to ramp up investments in the region. Firm now
Speaker 3: has more than two point four billion dollars in assets
Speaker 3: and the management. Meanwhile, the Blank Chech company started by
Speaker 3: former IndyCar driver, that's Michael Andretti.
Speaker 5: Here he's imagine with AI startup. It's about it Ai.
Speaker 5: According to sources, the merger values about are at.
Speaker 3: About two hundred million dollars plus Jared Kushner's Affinity Partners.
Speaker 3: It's acquiring one hundred and fifty million dollar minority stake
Speaker 3: in an Israeli car company. This marks the first investment
Speaker 3: in Israel for the Miami based private equity firm, which
Speaker 3: is backed by Saudi Arabia's Soften Wealth Fund, A really
Speaker 3: global one.
Speaker 5: Ad.
Speaker 6: Yeah, those are the VC headlines. Let's stick with the
Speaker 6: world of venture capital. Air Street Capital, venture firm focused
Speaker 6: on early stage AI startups, has just raised a second
Speaker 6: fund worth one hundred and twenty one million dollars. We're
Speaker 6: backing from Spotify's CEO, Daniel eck Let's bring in Nathan Benaish,
Speaker 6: general partner at air Street Capital for today's VC Spotlight.
Speaker 6: We asked this question, Naean every time. How quickly did
Speaker 6: you raise and close that fund?
Speaker 16: That's a privilege to be here. Thanks for having me. Yeah,
Speaker 16: you know, it's it's definitely a great time to be
Speaker 16: investing in this space. You know, this is just a
Speaker 16: moment in time.
Speaker 11: You know.
Speaker 16: I tend to think that raising funds is basically a
Speaker 16: job over you're entire the career, and it's just a
Speaker 16: little snapshot in the journey. But there was a lot
Speaker 16: of interest, and yeah, we're fortunate to end up where
Speaker 16: we did.
Speaker 3: You are well known across Europe, clearly backing from well
Speaker 3: the pinoff in the public markets that is Spotify, But
Speaker 3: I'm interested in basically the areas of opportunity. Many would say, look,
Speaker 3: AI is kind of dominated by San Francisco right now,
Speaker 3: but I think a mistrell over in Europe which had
Speaker 3: a phenomenal first race. What opportunities in artificial intelligence are
Speaker 3: you seeing from the region.
Speaker 16: Yeah, I think the opportunities for AI are genuinely global.
Speaker 16: What's fascinating about Europe is it has this very strong
Speaker 16: academic and research base for many years. Many of the
Speaker 16: major contributors to landmark AI research papers that are going
Speaker 16: to underpin the technology that works today, you know, had
Speaker 16: their early careers in Europe. And I'm investing both in
Speaker 16: Europe and in North America. I've been particularly interested in
Speaker 16: pharmaceuticals and drug discovery, where I think AI is one
Speaker 16: of these amazing native languages to explain biology. Interested in
Speaker 16: enterprise software and automation, and also emerging sectors like robotics
Speaker 16: and national security and defense.
Speaker 6: Nathan can be startups in Europe building large language models
Speaker 6: compete with those being built here by the likes of
Speaker 6: open Ai by Google.
Speaker 16: Yeah. I think the foundation model space is particularly tricky.
Speaker 16: I mean, as we all know, it's very capital intensive,
Speaker 16: and it's probably going to be just a couple of
Speaker 16: winners here that will form this kind of bedrock of
Speaker 16: web services. I'm particularly not extremely drawn to these companies
Speaker 16: because I'm not sure they make for great venture investments,
Speaker 16: particularly for early stage funds. But it's definitely an interesting
Speaker 16: domain to watch and never say never, but it's not
Speaker 16: really the focus for me.
Speaker 3: What's interesting is we came to Nathan on a story
Speaker 3: really global, one of sort of venture backed by Saudi
Speaker 3: Arabian money investing in Israeli style, and I'm interested as
Speaker 3: to where the competition is form my allocation of checks.
Speaker 3: Are you seeing Chinese money, are you seeing Middle Eastern
Speaker 3: money coming into the startups across Europe? And are they
Speaker 3: taking it? And are you investing alongside them?
Speaker 16: I actually don't see that much for sure. In you
Speaker 16: know the news we've seen, you know, AI generally become
Speaker 16: part of the geopolitical discourse, and you know, it's one
Speaker 16: of the kind of vectors through which you know, various
Speaker 16: companies are going to be competitive going forward, and so
Speaker 16: it makes sense the government should be involved, and I
Speaker 16: think the UK government has been making some interesting moves
Speaker 16: there as well. On the investing landscape, I don't really
Speaker 16: see them. We tend to work with European and North
Speaker 16: American partners for pretty much exclusively, but yeah, it hasn't
Speaker 16: really crossed my roadmap as much.
Speaker 3: And Nathan, what is interesting, is of course where you're
Speaker 3: coming to us from. And indeed, well the times you
Speaker 3: have with the UK sector in particular, and that is
Speaker 3: one that we talk about time and time again. London
Speaker 3: and its ability to continue to be a dominant force
Speaker 3: in aid tech.
Speaker 6: I think back to IVP they talked about it, Nathan,
Speaker 6: being a London based bridge to Europe. You're going to
Speaker 6: run your firm out of London. What's it like in
Speaker 6: this post Brexit world? Is it a good place to
Speaker 6: be a VC?
Speaker 1: Yeah?
Speaker 16: I think you know, VC's definitely gone global, particularly in
Speaker 16: the last couple of years. I think firms that have
Speaker 16: been reticent to write checks over Zoom, you know, are
Speaker 16: no longer like that. I mean for me, actually, I've
Speaker 16: invested two checks over Zoom and sold the company before
Speaker 16: I actually met the founders in person, So this can happen.
Speaker 16: I'm completely happy with that. I tend to use London
Speaker 16: as the base and then I'm very happy to travel
Speaker 16: wherever I need to in Europe in North America. But
Speaker 16: as you say, you know, Europe is a is a
Speaker 16: hardbed for talent and you know, a deep mind kind
Speaker 16: of winning the power balance with Google to be like
Speaker 16: the de facto AI lab for the company and being
Speaker 16: based in London, I think is a big win. And
Speaker 16: with open EI joining the fray Ananthropic as well, I
Speaker 16: think it's a it's a great and to be in
Speaker 16: the space.
Speaker 6: We've tracked all the data this year from pitch book
Speaker 6: or see the insights wherever about the flow of VC
Speaker 6: dollars to San Francisco in the context of AI and mL.
Speaker 6: I just wondered if you could explain any bright spots
Speaker 6: that you see, even if it's at a city level
Speaker 6: where there is a lot of talent, there's a lot
Speaker 6: of dollars flowing to very specific areas in Europe.
Speaker 16: Yeah, I think it's a very distributed kind of game,
Speaker 16: and as you know, like seed is very local in
Speaker 16: a way, so you do have to be present in
Speaker 16: different ecosystems, which is you know why we try and
Speaker 16: make key contributions into the space through state of a report,
Speaker 16: through running best practice meetups and kind of trying to
Speaker 16: lift the lift sort of all boats. Basically by showing
Speaker 16: best practices. We invest in everything from you know, a
Speaker 16: spin out in Studdeguard to you know, companies in Zurich
Speaker 16: or Paris or Stockholm, and so I think if you
Speaker 16: kind of own the megaphone online where basically the forum
Speaker 16: for machine learners to debate is based Twitter or x
Speaker 16: dot com, then that's a great place to start to
Speaker 16: meet people. And so I think when I'm in New York,
Speaker 16: people think I live there. When I'm in London, people
Speaker 16: think I live there. I just go wherever the opportunities are.
Speaker 3: And Nathan, you of course have PhD in cancer biology
Speaker 3: from the University of Cambridge. Where is the opportunity in
Speaker 3: the biotech meets AI space.
Speaker 16: I think it's a radical transformation for how drugs are developed, designed, marketed,
Speaker 16: how patients are selected for trials, and how we monitor
Speaker 16: successive trials as patients are going through them. And I
Speaker 16: think every one of those steps in the process that
Speaker 16: I described can be really be rethought using better data capture,
Speaker 16: better machine learning, trying to remove a lot of the
Speaker 16: biases and irreproducibility issues that you see because a lot
Speaker 16: of this process has still been very artisanal. Many of
Speaker 16: the drug discovery companies that are publicly traded today and
Speaker 16: suffering are based on science side of the lab that
Speaker 16: is sometimes not particularly reproducible because it's all done by
Speaker 16: you know, human people pipetting things in a lab. And
Speaker 16: so I think once you move to this industrialization of
Speaker 16: biology where you use automation and you use machine learning,
Speaker 16: then you start to create companies that I think are
Speaker 16: far more resilient because they have many more shots on
Speaker 16: gold than a single drug, and so they look like
Speaker 16: multi portfolio companies. And we see this with Xcentia and
Speaker 16: with Recursion, you know, two companies that were privileged to
Speaker 16: be a part of And it's a really exciting generation
Speaker 16: of technology talent machine learners that are coming into biology.
Speaker 16: Is the kind of new domain to build value is
Speaker 16: far more exciting than kind of optimizing flicks on the internet.
Speaker 3: Here's too exciting and optimism to finish the conversation, Nathan VENETI,
Speaker 3: we thank you for your time, General partner over an
Speaker 3: air street.
Speaker 5: Capital on the rais.
Speaker 6: Time for going viral and burning Man is still the
Speaker 6: talk of the internet. Off The annual Nevada Festival turned
Speaker 6: into a multi day mudfest. Bloomberg Technologies. Ellen Hughitt has
Speaker 6: first and experience and writes about how Wi Fi is
Speaker 6: commodity in today's tech day.
Speaker 4: Ellen, what was it like?
Speaker 17: Well, it's funny as a reporter to be in the
Speaker 17: middle of what we later found out was a news event.
Speaker 17: But you know, it sounded dramatic if you were reading
Speaker 17: about it on the news, and certainly there were some
Speaker 17: people for whom this was very inconvenient and a little scary.
Speaker 1: But I think it really wasn't as bad as it sounds,
Speaker 1: and it kind of brought people together, you know, talk
Speaker 1: about a reason for everyone to band together, share resources,
Speaker 1: try to find ways to have a laugh, even though
Speaker 1: we were all a little wet and cold and very muddy.
Speaker 5: Wet and cold and money sounds like lastomary to me.
Speaker 3: We thank you, Ellen Hewittt getting back safely from New
Speaker 3: York from San Francisco.
Speaker 5: That's it for this edition of Bloomberg Technology. Check out
Speaker 5: the podcast