1 00:00:02,160 --> 00:00:05,560 Speaker 1: From the heart of where innovation, money and power collive 2 00:00:06,320 --> 00:00:10,840 Speaker 1: in Silicon Valley and Beyon this is Bloomberg Technology with 3 00:00:10,920 --> 00:00:27,120 Speaker 1: Emily Jay Imed Ludlow in New York in Family Chang 4 00:00:27,160 --> 00:00:29,880 Speaker 1: This is Bloomberg Technology. Coming up in the next hour. 5 00:00:30,040 --> 00:00:33,879 Speaker 1: Mark Zuckerberg warns Meta employees that are restructuring is on 6 00:00:33,920 --> 00:00:37,599 Speaker 1: the horizon. The company is implementing a hiring freeze and 7 00:00:37,640 --> 00:00:41,159 Speaker 1: will shrink teams to quote, shift energy to other areas. 8 00:00:41,159 --> 00:00:45,159 Speaker 1: Will share more of the transcript obtained by Bloomberg. Plus, 9 00:00:45,320 --> 00:00:49,680 Speaker 1: Apple gets downgraded following Bloomberg's report about iPhone production, and 10 00:00:49,720 --> 00:00:52,879 Speaker 1: now we're learning of a high profile executive leaving the 11 00:00:52,920 --> 00:00:57,080 Speaker 1: company after a crude TikTok of him went viral. And 12 00:00:57,120 --> 00:00:59,600 Speaker 1: we've got to talk about the sell off. Across financial markets, 13 00:00:59,640 --> 00:01:01,680 Speaker 1: the S and P five drops to a twenty two 14 00:01:01,720 --> 00:01:05,759 Speaker 1: month flow as the fed hawks circle, Big Tech takes 15 00:01:05,760 --> 00:01:07,759 Speaker 1: some beating. I want to get straight to that Micron 16 00:01:08,040 --> 00:01:11,840 Speaker 1: conversation and bring in Joanne Pheeny and Advisors, capital management 17 00:01:11,880 --> 00:01:14,920 Speaker 1: partner and portfolio manager Joe and give me a second one. 18 00:01:14,959 --> 00:01:17,600 Speaker 1: I bring you some of the headlines Micron seeing first 19 00:01:17,680 --> 00:01:20,600 Speaker 1: quarter of fiscal first quarter adjusting revenue four to five 20 00:01:20,760 --> 00:01:22,840 Speaker 1: four point five billion dollars. The estimate, of course six 21 00:01:22,840 --> 00:01:25,559 Speaker 1: billion dollars, but some of the commentary around the slow 22 00:01:25,640 --> 00:01:29,640 Speaker 1: down in demand and supply catching up is pretty astonishing. 23 00:01:29,640 --> 00:01:32,720 Speaker 1: We're down much more considerably, and after ours, we've paired 24 00:01:32,720 --> 00:01:34,880 Speaker 1: some of those losses. What's your read on what we're 25 00:01:34,920 --> 00:01:38,679 Speaker 1: seeing from Micron. Yeah, you know, pretty clear investors really 26 00:01:38,720 --> 00:01:41,360 Speaker 1: accepting a pretty weak guide from Micron, and that's what 27 00:01:41,400 --> 00:01:43,959 Speaker 1: they got. But I think they are reassured that Micron 28 00:01:44,080 --> 00:01:47,640 Speaker 1: is cutting capecks by That's what investors were looking for 29 00:01:48,120 --> 00:01:50,360 Speaker 1: and indicates that micro is gonna be real careful about 30 00:01:50,400 --> 00:01:52,480 Speaker 1: adding to the problem. Clearly, we have a lot of 31 00:01:52,520 --> 00:01:54,840 Speaker 1: supply from the memory makers and not enough to may 32 00:01:54,880 --> 00:01:57,760 Speaker 1: have particularly because of the PC weakness that we're seeing. 33 00:01:57,840 --> 00:01:59,720 Speaker 1: You know, they expect PC ship this' to be down 34 00:02:00,960 --> 00:02:03,560 Speaker 1: related to memory, and so you know they're taking the 35 00:02:03,680 --> 00:02:06,000 Speaker 1: right steps. But that just shows you memory is a 36 00:02:06,120 --> 00:02:08,679 Speaker 1: very very tricky place to invest. It's very cyclical. But 37 00:02:08,760 --> 00:02:10,480 Speaker 1: let's try and throw this forward. We kind of look 38 00:02:10,560 --> 00:02:12,720 Speaker 1: to Micron as if it's a crystal ball of what's 39 00:02:12,720 --> 00:02:15,239 Speaker 1: to come in the global economy. What is the story 40 00:02:15,280 --> 00:02:18,160 Speaker 1: when it comes to consumer electronics in which geographies are 41 00:02:18,160 --> 00:02:21,160 Speaker 1: we most concerned about. Well, you know, I think we're 42 00:02:21,160 --> 00:02:24,919 Speaker 1: seeing a worldwide slowdown in some consumer demand, and that's 43 00:02:25,160 --> 00:02:27,840 Speaker 1: Micron is going to pick that up. The real question 44 00:02:28,120 --> 00:02:31,120 Speaker 1: is what's happening beyond the consumer in particular. You know, 45 00:02:31,160 --> 00:02:32,519 Speaker 1: we still have a lot of good data points and 46 00:02:32,560 --> 00:02:35,680 Speaker 1: suggests auto and industrial remains strong. They're still shortages there. 47 00:02:35,680 --> 00:02:38,040 Speaker 1: It's gonna take probably another year to work those through. 48 00:02:38,560 --> 00:02:40,720 Speaker 1: Uh So, you know, companies like Texas Instruments are wealth 49 00:02:40,760 --> 00:02:42,760 Speaker 1: positioned for that. We continue to like them, We've held 50 00:02:42,760 --> 00:02:44,880 Speaker 1: them for a long time of clients. The real question 51 00:02:44,919 --> 00:02:46,280 Speaker 1: I think people are gonna be looking for on the 52 00:02:46,320 --> 00:02:48,840 Speaker 1: call as it continues is what's happening to cloud and 53 00:02:48,919 --> 00:02:52,200 Speaker 1: data center. There's some concerns that firms seeing some consumer 54 00:02:52,200 --> 00:02:55,119 Speaker 1: weakness might slow down their investments, But the long term 55 00:02:55,160 --> 00:02:58,680 Speaker 1: fact in that world is that data usage across all 56 00:02:58,720 --> 00:03:00,919 Speaker 1: sorts of devices is going to continue to increase. We 57 00:03:00,960 --> 00:03:04,000 Speaker 1: need wider pipes, we need more storage. So ultimately, you know, 58 00:03:04,040 --> 00:03:06,760 Speaker 1: companies that play into that area, while they might suffer 59 00:03:06,760 --> 00:03:08,760 Speaker 1: a pause, are going to be really well positioned for 60 00:03:08,800 --> 00:03:10,560 Speaker 1: the long term for investors, and a lot of them 61 00:03:10,560 --> 00:03:14,000 Speaker 1: have gotten cheap, whether it's a sienna or a broadcast. Joanna, 62 00:03:14,240 --> 00:03:16,720 Speaker 1: how did we get this so wrong? I remember talking 63 00:03:16,760 --> 00:03:19,440 Speaker 1: to you, talking to Iatan King, Bloomberg News Chip reporter 64 00:03:19,919 --> 00:03:23,880 Speaker 1: about the vision for a multi multi courter cycle that 65 00:03:23,919 --> 00:03:26,600 Speaker 1: would just go on indefinitely. This was going to happen 66 00:03:26,639 --> 00:03:30,320 Speaker 1: coming out of the pandemic. But that hasn't happened, has it. Yeah, 67 00:03:30,360 --> 00:03:32,359 Speaker 1: you know, I think what we got wrong all of 68 00:03:32,440 --> 00:03:35,480 Speaker 1: us was there was so much spending during the pandemic, 69 00:03:35,800 --> 00:03:37,880 Speaker 1: and that really came on the heels of a very 70 00:03:37,880 --> 00:03:43,720 Speaker 1: strong period from to nineteen really through until the pandemic. 71 00:03:43,720 --> 00:03:46,520 Speaker 1: There are signs actually that inventory were starting to build 72 00:03:46,560 --> 00:03:49,680 Speaker 1: before the pandemic hit, and then that got disrupted by 73 00:03:49,680 --> 00:03:52,280 Speaker 1: the demandering the pandemic for PCs and everything else. And 74 00:03:52,320 --> 00:03:55,000 Speaker 1: so now we're starting to see that side really come off. 75 00:03:55,000 --> 00:03:58,680 Speaker 1: But don't let's not misconstrue the implications. I think cloud 76 00:03:58,680 --> 00:04:01,600 Speaker 1: and data sent A remains. There are concerns that firms 77 00:04:01,680 --> 00:04:03,080 Speaker 1: might take a bit of a pause on when they 78 00:04:03,080 --> 00:04:06,680 Speaker 1: do the installations, but that ultimately does still look like 79 00:04:06,720 --> 00:04:08,560 Speaker 1: a very strong segment of the market. So you really 80 00:04:08,560 --> 00:04:11,040 Speaker 1: have to pick and choose your semi conductor companies to 81 00:04:11,200 --> 00:04:13,400 Speaker 1: hold at this point. I love talking to you, Joanne, 82 00:04:13,440 --> 00:04:15,600 Speaker 1: because you've spent a lot of time looking at the 83 00:04:15,640 --> 00:04:19,160 Speaker 1: semiconductor industry, and you know you're an expert, but you're 84 00:04:19,160 --> 00:04:21,240 Speaker 1: also looking at the markets more broadly. Right I'm looking 85 00:04:21,240 --> 00:04:24,400 Speaker 1: at it and has that one hundred down significantly? Again? 86 00:04:24,440 --> 00:04:27,000 Speaker 1: With four days into the week, we're going we're heading 87 00:04:27,000 --> 00:04:30,160 Speaker 1: towards another tough week in global equity markets with a 88 00:04:30,200 --> 00:04:32,840 Speaker 1: focus on tech. What is top of mind for investors 89 00:04:32,920 --> 00:04:35,560 Speaker 1: right now? Are we still not convinced by the direction 90 00:04:35,560 --> 00:04:38,040 Speaker 1: of travel for the FED that we can concerned about 91 00:04:38,040 --> 00:04:41,560 Speaker 1: global slow down spurred by inflation? What is the story 92 00:04:41,600 --> 00:04:44,280 Speaker 1: for you? You know, there are some real solid risks 93 00:04:44,320 --> 00:04:46,120 Speaker 1: out there for the global economy. I mean, the war 94 00:04:46,160 --> 00:04:49,360 Speaker 1: in Ukraine is is not trivial. There could be bigger 95 00:04:49,440 --> 00:04:53,359 Speaker 1: risks from that. The energy situation is a concern. The 96 00:04:53,400 --> 00:04:55,520 Speaker 1: amount of that central banks around the world have to 97 00:04:55,640 --> 00:04:58,480 Speaker 1: raise raids is a concern and will that lead to recessions? 98 00:04:58,520 --> 00:05:01,760 Speaker 1: Probably so the rodd slowdown that I think folks are 99 00:05:01,800 --> 00:05:05,279 Speaker 1: worried about this really has yet to resolve itself into 100 00:05:05,360 --> 00:05:07,160 Speaker 1: sort of how big, how deep, and how long it 101 00:05:07,200 --> 00:05:09,800 Speaker 1: will be and investors, you know, are concerned about how 102 00:05:09,880 --> 00:05:12,200 Speaker 1: much volatility they can stand. But if you have a 103 00:05:12,200 --> 00:05:14,200 Speaker 1: long enough time arizing, you have to look back at 104 00:05:14,279 --> 00:05:16,680 Speaker 1: history and recognize that the market sells off the most 105 00:05:17,480 --> 00:05:19,720 Speaker 1: tend to tend to do that before recessions begin, and 106 00:05:19,760 --> 00:05:22,000 Speaker 1: they take to storm to recover before we even know 107 00:05:22,080 --> 00:05:24,560 Speaker 1: officially that we've had a recession. And so for a 108 00:05:24,600 --> 00:05:27,480 Speaker 1: long enough term investor, and I mean a year, two years, 109 00:05:27,520 --> 00:05:30,479 Speaker 1: three years, there are some pretty good opportunities out there, 110 00:05:30,480 --> 00:05:32,560 Speaker 1: but one has to be able to stomach the volatility, 111 00:05:32,560 --> 00:05:35,200 Speaker 1: which doesn't look like it's going to go away anytime soon. 112 00:05:35,400 --> 00:05:38,279 Speaker 1: Stomaching the volatility. That should be my daily job title 113 00:05:38,320 --> 00:05:42,240 Speaker 1: Advisers Capital Partner, Jo Anthony. Thank you. Let's get back 114 00:05:42,240 --> 00:05:44,760 Speaker 1: to our top tech story. Meta has announced a hiring 115 00:05:44,839 --> 00:05:48,640 Speaker 1: freeze and warned employees and restructuring the Facebook parents first 116 00:05:48,720 --> 00:05:52,239 Speaker 1: ever head count cut. Let's bring in Bloomberg's Kurt Wagner, 117 00:05:52,360 --> 00:05:55,320 Speaker 1: who broke that story, but also Bloomberg Intelligence senior analyst 118 00:05:55,560 --> 00:05:57,880 Speaker 1: Man deep Seeing to discuss. Kurt, I want to start 119 00:05:57,920 --> 00:06:00,280 Speaker 1: with you set the scene for us. What do we 120 00:06:00,400 --> 00:06:04,320 Speaker 1: learn in the course of our repulity on Thursday? Yeah, 121 00:06:04,440 --> 00:06:06,760 Speaker 1: so this was during a Q and A that happens 122 00:06:06,760 --> 00:06:10,120 Speaker 1: weekly between Mark Zuckerberg and all employees that Beta, and 123 00:06:10,160 --> 00:06:12,599 Speaker 1: he said, uh, you know, hey, I promised you I 124 00:06:12,640 --> 00:06:15,240 Speaker 1: was going to come back with some uh you know, 125 00:06:15,400 --> 00:06:18,760 Speaker 1: ideas about where the budgets headed for three. And the 126 00:06:18,800 --> 00:06:22,279 Speaker 1: big news is there's gonna be hiring Freeze and that 127 00:06:22,440 --> 00:06:25,400 Speaker 1: it sounds like most teams within Meta are going to 128 00:06:25,440 --> 00:06:28,640 Speaker 1: see their budgets reduced next year. And so how exactly 129 00:06:28,680 --> 00:06:31,440 Speaker 1: that's gonna play out within each individual team is going 130 00:06:31,480 --> 00:06:34,719 Speaker 1: to be different. In some cases, you know, when someone 131 00:06:34,800 --> 00:06:36,880 Speaker 1: leaves a team, they're just not going to fill that 132 00:06:37,000 --> 00:06:39,240 Speaker 1: role again. Some people are going to be moving from 133 00:06:39,279 --> 00:06:41,480 Speaker 1: team to team, and then in some cases they're gonna 134 00:06:41,520 --> 00:06:45,160 Speaker 1: be kicking out low performers, right, which is a pretty 135 00:06:45,240 --> 00:06:47,359 Speaker 1: drastic thing that we haven't seen that Facebook in a 136 00:06:47,400 --> 00:06:50,120 Speaker 1: long time or ever. And so this really just feels 137 00:06:50,160 --> 00:06:52,640 Speaker 1: like a moment, right this company that has been growing 138 00:06:53,320 --> 00:06:56,039 Speaker 1: and expanding for eighteen years finally hitting a bit of 139 00:06:56,240 --> 00:06:58,000 Speaker 1: an issue here. I want to show you life some 140 00:06:58,080 --> 00:07:02,560 Speaker 1: of what Mark Zuckerberg told Better employees on Thursday, these 141 00:07:02,560 --> 00:07:05,880 Speaker 1: comments obtained by Bloomberg News. There are a number of 142 00:07:05,880 --> 00:07:08,039 Speaker 1: ways to reduce the size of a group. Some teams 143 00:07:08,040 --> 00:07:10,680 Speaker 1: will transfer people to other teams that are growing. A 144 00:07:10,680 --> 00:07:14,200 Speaker 1: lot of teams will choose not to backfill when somebody departs. 145 00:07:14,200 --> 00:07:17,960 Speaker 1: But ultimately he used the word shrink. Two questions. This 146 00:07:18,040 --> 00:07:21,200 Speaker 1: is a company that historically has not reduced headcount. But 147 00:07:21,360 --> 00:07:25,120 Speaker 1: what is the reality of what we're talking about here? Yeah, 148 00:07:25,200 --> 00:07:28,400 Speaker 1: we didn't get specific numbers. You may recall last week 149 00:07:28,640 --> 00:07:30,760 Speaker 1: the Wall Street Journal had a report that that met 150 00:07:30,800 --> 00:07:34,000 Speaker 1: Him might cut cost by ten percent, but that wasn't 151 00:07:34,040 --> 00:07:37,720 Speaker 1: clear if that was just headcount or other things. But again, 152 00:07:37,760 --> 00:07:39,640 Speaker 1: as you point out, this is not a company that 153 00:07:39,720 --> 00:07:42,080 Speaker 1: has normally or historically ever done this kind of thing. 154 00:07:42,160 --> 00:07:48,400 Speaker 1: So any idea of shrinking that headcount from is a 155 00:07:48,480 --> 00:07:51,840 Speaker 1: huge deal because I think last quarter they added almost 156 00:07:51,880 --> 00:07:54,080 Speaker 1: six thousand employees and in the quarter, right, so the 157 00:07:54,120 --> 00:07:55,680 Speaker 1: idea that they're going in the other direction all of 158 00:07:55,720 --> 00:07:58,000 Speaker 1: a sudden is pretty notable. All right, let me bring 159 00:07:58,080 --> 00:08:01,560 Speaker 1: in Bloomberg Intelligent Senior Tech annaly Man deep saying this 160 00:08:01,600 --> 00:08:04,160 Speaker 1: is a company that face headwinds on the bottom line, 161 00:08:04,200 --> 00:08:06,320 Speaker 1: actually the top line as well. What is your reaction 162 00:08:06,840 --> 00:08:09,560 Speaker 1: to this news. Well, the one thing is we know 163 00:08:09,920 --> 00:08:12,640 Speaker 1: every company in this space is doing that where you 164 00:08:12,720 --> 00:08:17,040 Speaker 1: heard that from Alphabet Snapchat, So it's not a total 165 00:08:17,160 --> 00:08:20,120 Speaker 1: surprise that they announced the hiring freeze. The problem for 166 00:08:20,240 --> 00:08:23,600 Speaker 1: meta is we don't have visibility to win that top 167 00:08:23,640 --> 00:08:27,400 Speaker 1: line growth will resume, not only because advertising is going 168 00:08:27,400 --> 00:08:30,600 Speaker 1: through a cyclical downturn, but also because of the challenges 169 00:08:30,640 --> 00:08:33,959 Speaker 1: that are meta specific, which is the pivot to videos, 170 00:08:34,160 --> 00:08:37,600 Speaker 1: the Apple's I d f A changes, They have the 171 00:08:37,679 --> 00:08:41,400 Speaker 1: largest exposure to direct response ads and look the reality 172 00:08:41,520 --> 00:08:47,320 Speaker 1: labs losses. They are really hurting because Facebook's metas free 173 00:08:47,320 --> 00:08:50,280 Speaker 1: cash flow went from thirty billion to less than ten 174 00:08:50,320 --> 00:08:53,720 Speaker 1: billion this year. That's huge. If you're an investor, you're 175 00:08:53,760 --> 00:08:56,720 Speaker 1: thinking when will that thirty billion free cash flow return? 176 00:08:56,800 --> 00:08:58,559 Speaker 1: And I don't think we have the visibility. So on 177 00:08:58,679 --> 00:09:02,120 Speaker 1: your screen I pulled up meta reality lads. Actually, I 178 00:09:02,160 --> 00:09:05,400 Speaker 1: think I'm right in saying last quarter sales grew four 179 00:09:05,720 --> 00:09:08,680 Speaker 1: and fifty million odd, but the loss was almost three billion. 180 00:09:09,120 --> 00:09:12,400 Speaker 1: This is part of metas pivot to the metaverse. Is 181 00:09:12,440 --> 00:09:15,000 Speaker 1: it just that it's becoming too painful the cost in 182 00:09:15,040 --> 00:09:17,520 Speaker 1: the near term. Yeah, And as an investor you have 183 00:09:17,640 --> 00:09:20,760 Speaker 1: to ask, what are these spending three billion a quarter 184 00:09:20,880 --> 00:09:23,520 Speaker 1: on just they are taking the losses, but remember these 185 00:09:23,559 --> 00:09:26,960 Speaker 1: are recurring and you know, is it going on? Product 186 00:09:27,240 --> 00:09:30,400 Speaker 1: isn't going on just adding employees, which it looks like. 187 00:09:30,440 --> 00:09:34,640 Speaker 1: I mean, they clearly over hired over the last two years. 188 00:09:34,679 --> 00:09:38,040 Speaker 1: But the recurring losses is what is mind boggling here 189 00:09:38,040 --> 00:09:41,040 Speaker 1: and the scale of you know, the losses. And when 190 00:09:41,040 --> 00:09:43,480 Speaker 1: you compare it to an alphabet or a snapchat, which 191 00:09:43,520 --> 00:09:46,599 Speaker 1: are also investing in meta words or a R v R, 192 00:09:47,200 --> 00:09:49,160 Speaker 1: it doesn't show up in their R and D spens. 193 00:09:49,160 --> 00:09:52,319 Speaker 1: So that's where I think Meta really has to show 194 00:09:52,679 --> 00:09:55,680 Speaker 1: two investors what is it that they're spending all this 195 00:09:55,800 --> 00:10:00,200 Speaker 1: money on? What do we know about? What Zuckerberg to 196 00:10:00,240 --> 00:10:03,520 Speaker 1: say for the reasons behind this? Why now? Why are 197 00:10:03,520 --> 00:10:09,120 Speaker 1: they doing this? Well, you pointed to the macroeconomic environment, right, 198 00:10:09,160 --> 00:10:11,120 Speaker 1: and this is something that we've seen a lot of 199 00:10:11,160 --> 00:10:15,120 Speaker 1: these tech companies, especially advertising based tech companies, talk about 200 00:10:15,120 --> 00:10:17,720 Speaker 1: over the last couple of months and couple of quarters, 201 00:10:18,160 --> 00:10:21,200 Speaker 1: which is, you know, there's inflation, there's a war going 202 00:10:21,240 --> 00:10:24,600 Speaker 1: on in Europe. Uh, you see all of these things 203 00:10:24,679 --> 00:10:27,880 Speaker 1: kind of colliding and oftentimes when there is a recession 204 00:10:27,960 --> 00:10:30,000 Speaker 1: or any hint of a recession, the first budget that 205 00:10:30,040 --> 00:10:32,400 Speaker 1: tends to go with the marketing budget, right, and so 206 00:10:32,840 --> 00:10:36,360 Speaker 1: when you're making money from advertising, it can be very 207 00:10:36,360 --> 00:10:39,439 Speaker 1: cyclical with you know, that's why we see a spike 208 00:10:39,480 --> 00:10:41,960 Speaker 1: at the holidays, right, same kind of thing. When there 209 00:10:41,960 --> 00:10:46,120 Speaker 1: are reductions in marketing spend because of other things going on, 210 00:10:46,440 --> 00:10:48,959 Speaker 1: these companies usually feel at first, and so that's been 211 00:10:48,960 --> 00:10:52,040 Speaker 1: a lot of the reasoning for why they're cutting back 212 00:10:52,040 --> 00:10:55,360 Speaker 1: on these costs Mandate. There's also the other strategy, which 213 00:10:55,400 --> 00:10:57,640 Speaker 1: is to go off to video in a crowded field 214 00:10:57,679 --> 00:11:00,000 Speaker 1: with TikTok and YouTube and you and I've been discuss 215 00:11:00,040 --> 00:11:03,720 Speaker 1: saying about how the ad side of that business is tough. 216 00:11:03,880 --> 00:11:07,960 Speaker 1: Explain to me why, Well, not only you've got you know, TikTok, 217 00:11:08,080 --> 00:11:10,760 Speaker 1: there's also Netflix which is trying to get into ads, 218 00:11:10,800 --> 00:11:13,640 Speaker 1: and we know Amazon has been, uh, you know, doing 219 00:11:13,760 --> 00:11:16,720 Speaker 1: very well on the search side. So clearly this field 220 00:11:16,920 --> 00:11:20,000 Speaker 1: is getting crowded and metals problem is not only are 221 00:11:20,040 --> 00:11:24,559 Speaker 1: they losing engagement. Remember the time spent on beta, Instagram 222 00:11:24,600 --> 00:11:28,160 Speaker 1: and Facebook properties is declining, even though their daily active 223 00:11:28,240 --> 00:11:31,040 Speaker 1: user growth is holding up, but their time spantas declining. 224 00:11:31,080 --> 00:11:34,000 Speaker 1: So the impressions growth is going down and ad pricing 225 00:11:34,080 --> 00:11:36,480 Speaker 1: is going down. So that's a double valmy. And that's 226 00:11:36,559 --> 00:11:39,760 Speaker 1: why pivoting to videos is just the wrong time, because 227 00:11:39,800 --> 00:11:43,400 Speaker 1: they are behind TikTok and all these other platforms and 228 00:11:43,400 --> 00:11:45,520 Speaker 1: and it's just gonna take more time. They don't have 229 00:11:45,559 --> 00:11:48,320 Speaker 1: the creator base that a TikTok has, so they have 230 00:11:48,440 --> 00:11:50,760 Speaker 1: to bring the creators. Guess what. There has to be 231 00:11:50,800 --> 00:11:54,000 Speaker 1: a revenue sharing model that's gonna eat into the gross margin. 232 00:11:54,160 --> 00:11:57,240 Speaker 1: So a lot of problems in terms of making that pivot. 233 00:11:57,320 --> 00:12:00,400 Speaker 1: Now they should have done that before pivoting to ours. 234 00:12:00,520 --> 00:12:04,200 Speaker 1: The battle for eyeballs continues. Bloomberg's Kurt Wagner and of 235 00:12:04,200 --> 00:12:07,560 Speaker 1: course Bloomberg Intelligence senior tech analyst Man Deep sing thank 236 00:12:07,600 --> 00:12:10,720 Speaker 1: you to you both. Coming up. An Apple executive is 237 00:12:10,720 --> 00:12:15,199 Speaker 1: ousted after a viral TikTok details next, This is Bloomberg. 238 00:12:24,520 --> 00:12:27,160 Speaker 1: More bad news for Apple this week. Shares plunged by 239 00:12:27,200 --> 00:12:30,960 Speaker 1: as much as six percent Thursday, wiping twenty billion dollars 240 00:12:30,960 --> 00:12:34,240 Speaker 1: from its market value. Now Bloomberg has learned one of 241 00:12:34,240 --> 00:12:38,000 Speaker 1: the company's senior executives is leaving after a TikTok emerged 242 00:12:38,000 --> 00:12:41,520 Speaker 1: of him making an off color joke. Bloomberg's Mark German 243 00:12:41,920 --> 00:12:44,400 Speaker 1: is here to explain, Mark, what did you learn in 244 00:12:44,440 --> 00:12:48,000 Speaker 1: the course of your reporting. On Thursday today, we reported 245 00:12:48,040 --> 00:12:51,600 Speaker 1: that Tony Blovin's, Apple's longtime vice president of procurement, been 246 00:12:51,640 --> 00:12:53,839 Speaker 1: at the company for about twenty two years or so. 247 00:12:54,440 --> 00:12:56,880 Speaker 1: He is leaving the company after he appeared in a 248 00:12:57,080 --> 00:13:00,800 Speaker 1: very viral video that aired earlier this month on Instagram 249 00:13:00,840 --> 00:13:03,320 Speaker 1: in TikTok uh and in the video he made some 250 00:13:03,360 --> 00:13:07,200 Speaker 1: crude comments. This is a TikTok and Instagram account by 251 00:13:07,240 --> 00:13:09,680 Speaker 1: a creator named Daniel Mack. He goes up to people 252 00:13:09,720 --> 00:13:13,160 Speaker 1: at car shows in Beverly Hills elsewhere in the world, 253 00:13:13,520 --> 00:13:15,439 Speaker 1: goes up to people and asks them, if they're driving 254 00:13:15,440 --> 00:13:17,920 Speaker 1: a fairly expensive car, what they do for a living. 255 00:13:18,320 --> 00:13:21,320 Speaker 1: And Blevin's response was clearly not in line with what 256 00:13:21,400 --> 00:13:24,719 Speaker 1: Apple felt was acceptable, leading to his departure now from 257 00:13:24,720 --> 00:13:27,840 Speaker 1: the company. As he said, Tony Blevins as a senior 258 00:13:27,840 --> 00:13:32,120 Speaker 1: executive essentially head of procurement for Apple. That's a massive role. 259 00:13:32,840 --> 00:13:35,560 Speaker 1: What projects has he been involved in? What deals has 260 00:13:35,600 --> 00:13:39,120 Speaker 1: he done for the company? Yeah? Absolutely, Blevin's has been 261 00:13:39,160 --> 00:13:41,520 Speaker 1: headed procurement for Apple and what that means he does 262 00:13:41,559 --> 00:13:44,920 Speaker 1: all the supplier agreements and partner agreements for many of 263 00:13:44,920 --> 00:13:48,199 Speaker 1: Apple's products, particularly iPhone, the iPad, and some of their 264 00:13:48,200 --> 00:13:50,719 Speaker 1: other mobile devices. So I'll give you an example of 265 00:13:50,840 --> 00:13:53,679 Speaker 1: the Global Star deal that Apple did earlier this month 266 00:13:53,800 --> 00:13:55,679 Speaker 1: or announced earlier this month as part of the new 267 00:13:55,720 --> 00:13:58,960 Speaker 1: Satellite Emergency s OS feature for the iPhone fourteen and 268 00:13:59,000 --> 00:14:03,160 Speaker 1: fourteen pro that was overseen by Blevins. Blevins did the 269 00:14:03,200 --> 00:14:08,760 Speaker 1: complex negotiations related to Apple sourcing five g qualcom modems 270 00:14:08,760 --> 00:14:12,480 Speaker 1: for the latest iPhone units. He also did deals with Intel, 271 00:14:12,880 --> 00:14:17,800 Speaker 1: uh Samsung, Display Imagination Technologies, any of the big suppliers 272 00:14:17,800 --> 00:14:20,200 Speaker 1: that you've heard of. It was his responsibility to get 273 00:14:20,200 --> 00:14:23,480 Speaker 1: those components ahead of the competition and at better prices 274 00:14:23,560 --> 00:14:26,920 Speaker 1: than the competition, leading to Apple's strong margins. Some people 275 00:14:26,920 --> 00:14:30,320 Speaker 1: in the company say he's even irreplaceable given how important 276 00:14:30,320 --> 00:14:33,520 Speaker 1: he was to Apple's bottom line and their product roadmap. 277 00:14:33,920 --> 00:14:36,240 Speaker 1: Mark what do we know about how Apple dealt with 278 00:14:36,400 --> 00:14:40,560 Speaker 1: this issue internally and what has Apple's response been to 279 00:14:40,680 --> 00:14:44,400 Speaker 1: our reporting? So the video was first published on TikTok 280 00:14:44,520 --> 00:14:48,080 Speaker 1: on September five and on Instagram on September six. After 281 00:14:48,120 --> 00:14:50,560 Speaker 1: the video became public, which, by the way, it has 282 00:14:50,600 --> 00:14:52,960 Speaker 1: well over a million views on TikTok and over forty 283 00:14:53,360 --> 00:14:56,560 Speaker 1: comments on Instagram, so I'd quantified it as fairly viral. 284 00:14:57,160 --> 00:15:01,000 Speaker 1: People within the Apple Operations and Procurement organization reported the 285 00:15:01,080 --> 00:15:04,520 Speaker 1: video to Apple's human resources department, which then enacted an 286 00:15:04,560 --> 00:15:09,880 Speaker 1: investigation into the situation. We're told that this month Jeff Williams, 287 00:15:09,880 --> 00:15:13,880 Speaker 1: Apple's CEO, chief operating officer, made the decision that Blevins 288 00:15:13,920 --> 00:15:17,160 Speaker 1: would be leaving the company. And today I spoke to Blevins. 289 00:15:17,240 --> 00:15:20,160 Speaker 1: He issued a statement which is in our story. It's 290 00:15:20,200 --> 00:15:22,080 Speaker 1: a formative an apology that can you can read in 291 00:15:22,120 --> 00:15:24,480 Speaker 1: the article itself. And I spoke to Apple as well, 292 00:15:24,680 --> 00:15:27,880 Speaker 1: and Apple confirmed that Blevins would be leaving the iPhone maker. 293 00:15:28,200 --> 00:15:30,600 Speaker 1: All right, those are the latest details on that report. 294 00:15:30,600 --> 00:15:41,960 Speaker 1: Bloomberg's Mark German, thank you very much. Amazon is boosting 295 00:15:42,000 --> 00:15:44,960 Speaker 1: pay for hourly workers in the US. The online retailing 296 00:15:45,000 --> 00:15:48,120 Speaker 1: gilet says the move will raised the average starting wage 297 00:15:48,160 --> 00:15:52,440 Speaker 1: for most frontline employees in warehousing and transportation to nineteen 298 00:15:52,440 --> 00:15:55,480 Speaker 1: dollars an hour. Bloomberg has learned that Amazon will close 299 00:15:55,560 --> 00:15:58,640 Speaker 1: all but one of its US call centers and shift 300 00:15:58,760 --> 00:16:02,000 Speaker 1: hundreds of office employer ease to remote work. That's a 301 00:16:02,000 --> 00:16:05,600 Speaker 1: move that would help save money on real estate, but 302 00:16:05,640 --> 00:16:08,720 Speaker 1: there are headwinds for Amazon's m and A ambition. Senator 303 00:16:08,760 --> 00:16:12,280 Speaker 1: Elizabeth Warren of Massachusetts says she and other lawmakers have 304 00:16:12,440 --> 00:16:16,520 Speaker 1: asked the FTC to reject Amazon's proposal to buy i 305 00:16:16,800 --> 00:16:19,880 Speaker 1: Robot that according to a report from Axios, last week, 306 00:16:19,920 --> 00:16:23,000 Speaker 1: the FTC asked Amazon and I Robot to send additional 307 00:16:23,040 --> 00:16:27,440 Speaker 1: information about the proposal. On Wednesday, Amazon senior vice president 308 00:16:27,440 --> 00:16:30,680 Speaker 1: of Devices told me he feels confident the deal will 309 00:16:30,680 --> 00:16:33,600 Speaker 1: go through, and soft Bank Group has begun laying off 310 00:16:33,600 --> 00:16:37,560 Speaker 1: employees at its loss making Vision Fund. Sources say that 311 00:16:37,680 --> 00:16:40,560 Speaker 1: soft Bank expects to cut at least thirty of its staff. 312 00:16:40,840 --> 00:16:44,640 Speaker 1: The London based Vision Fund unit had about five hundred employees. 313 00:16:44,720 --> 00:16:48,320 Speaker 1: It recently posted a twenty three billion dollar loss, with 314 00:16:48,400 --> 00:16:53,800 Speaker 1: most of that coming from a plunge evaluations of portfolio companies. Now, 315 00:16:53,840 --> 00:16:57,800 Speaker 1: Porsche is confident despite a lackluster I p O in Germany. 316 00:16:57,800 --> 00:17:01,440 Speaker 1: On Thursday, Porsche just eked out again during its trading debut, 317 00:17:01,440 --> 00:17:03,840 Speaker 1: with the I p O valuing the company at around 318 00:17:03,880 --> 00:17:08,119 Speaker 1: seventy three billion dollars. It's CFO told Bloomberg the company 319 00:17:08,200 --> 00:17:10,679 Speaker 1: can meet its revenue target of as much as forty 320 00:17:10,680 --> 00:17:15,040 Speaker 1: billion for this year despite the difficult macro economic situation. 321 00:17:15,359 --> 00:17:20,960 Speaker 1: Here's some of that conversation. We have successfully mastered one 322 00:17:21,000 --> 00:17:26,160 Speaker 1: of the biggest largest ip yours in Europe ever. And yeah, 323 00:17:26,359 --> 00:17:29,879 Speaker 1: so far we are very proud and yeah, and I 324 00:17:29,920 --> 00:17:33,440 Speaker 1: would like to say thank you to our entire team. 325 00:17:34,080 --> 00:17:39,760 Speaker 1: Horsberg has ensured said b Knstantia today and I cast 326 00:17:39,800 --> 00:17:44,719 Speaker 1: my mind's eye back to four years ago and you flagged. 327 00:17:44,760 --> 00:17:46,640 Speaker 1: You came out and said maybe we should I po 328 00:17:46,800 --> 00:17:50,560 Speaker 1: Porsche with a market cap of around eighty billion euros. 329 00:17:50,560 --> 00:17:54,040 Speaker 1: There was a bit pushback internally externally when you came 330 00:17:54,040 --> 00:17:57,159 Speaker 1: out with that. Do you feel vindicated? Yeah? Absolutely. It 331 00:17:57,400 --> 00:18:02,919 Speaker 1: was a tough fired over four years now, but we succeeded. 332 00:18:03,400 --> 00:18:07,000 Speaker 1: Now we can't stand here. We are very happy. Yeah, 333 00:18:07,119 --> 00:18:11,160 Speaker 1: and we see further potential for the future. Is our 334 00:18:11,280 --> 00:18:15,040 Speaker 1: strong brand? How are you going to cooperate between the 335 00:18:15,080 --> 00:18:18,359 Speaker 1: parent company Volkswagen and Porsche. You have a little bit 336 00:18:18,359 --> 00:18:21,359 Speaker 1: more independence now, but we know historically there's been tension 337 00:18:21,400 --> 00:18:24,360 Speaker 1: between the brands and the portfolio. How you can incorporate 338 00:18:24,400 --> 00:18:26,600 Speaker 1: and make sure there are synergies that work for you 339 00:18:26,640 --> 00:18:31,600 Speaker 1: at Porsche. Yeah, we have negotiated an Industrial Corporation Contract 340 00:18:32,240 --> 00:18:38,720 Speaker 1: b c W and has clearly regulated that Posher has 341 00:18:38,800 --> 00:18:43,720 Speaker 1: autonomy in future. The Posher board will decide in future 342 00:18:44,240 --> 00:18:49,120 Speaker 1: completely independent from b W. And yeah, that's a great 343 00:18:49,160 --> 00:18:54,320 Speaker 1: situation for us. We want to unlook Portia's full potential, 344 00:18:54,840 --> 00:18:58,760 Speaker 1: of course, but we have also the possibility in future 345 00:18:59,119 --> 00:19:02,919 Speaker 1: to work together vis W group brands. We are beneficial 346 00:19:03,000 --> 00:19:07,720 Speaker 1: for Porsche. That's that's the case when it comes to 347 00:19:07,840 --> 00:19:12,200 Speaker 1: sharing technologies like the tai Kan used also for the 348 00:19:12,280 --> 00:19:19,000 Speaker 1: Audi Eton GT, fooling emissions, bundling, purchasing volumes are to 349 00:19:19,240 --> 00:19:25,080 Speaker 1: using production capacities like Ccaen and Bratisla. Okay. And talking 350 00:19:25,080 --> 00:19:27,520 Speaker 1: about production, so you have the factories in Germany, you're 351 00:19:27,520 --> 00:19:31,200 Speaker 1: producing Germany, you're producing in Slovakia. Where do you build 352 00:19:31,200 --> 00:19:35,440 Speaker 1: out the factories of the future for Porsche. Yeah, hopefully 353 00:19:35,600 --> 00:19:39,640 Speaker 1: in Germany and in Slovakia. There's no as a plan 354 00:19:41,600 --> 00:19:45,280 Speaker 1: that was Porsche CFO Lutes Meshka. And what's interesting, I mean, 355 00:19:45,400 --> 00:19:50,000 Speaker 1: last year the Taykan electric Porsche out sold the traditional 356 00:19:50,160 --> 00:19:53,240 Speaker 1: nine eleven. But what's also interesting out the news on Thursday, 357 00:19:53,280 --> 00:19:57,160 Speaker 1: Porsche promising you purists out there that the nine eleven 358 00:19:57,480 --> 00:20:00,920 Speaker 1: will remain a gasoline vehicle. The nine leven will still 359 00:20:00,960 --> 00:20:04,360 Speaker 1: be running on gasoline for years to come. An interesting one. 360 00:20:04,400 --> 00:20:13,640 Speaker 1: What do you make of that? Tweet me? Welcome back 361 00:20:13,640 --> 00:20:17,320 Speaker 1: to Bloomberg Technology. IMD Lovelow in New York, India plans 362 00:20:17,320 --> 00:20:20,680 Speaker 1: to boost the financial incentives it offers makers of tablets 363 00:20:20,680 --> 00:20:24,040 Speaker 1: and laptops to manufacture them in the country. It's part 364 00:20:24,080 --> 00:20:27,840 Speaker 1: of Norndra Moody administration's effort to wou companies like Dell 365 00:20:27,920 --> 00:20:30,760 Speaker 1: and Apple, and a challenge to China, has the main 366 00:20:30,840 --> 00:20:34,200 Speaker 1: tech production base. The plan is to offer as much 367 00:20:34,240 --> 00:20:37,680 Speaker 1: as five and fifty million U S dollars per manufacturer, 368 00:20:37,840 --> 00:20:41,639 Speaker 1: According to a document seen by Bloomberg News, Apple recently 369 00:20:41,680 --> 00:20:45,840 Speaker 1: started making the new iPhone fourteen in India earlier than expected. 370 00:20:46,160 --> 00:20:50,359 Speaker 1: Following a smooth production rollout and sticking with Apple, the 371 00:20:50,359 --> 00:20:53,959 Speaker 1: iPhone makers shares dropped again Thursday. Apple was hit by 372 00:20:53,960 --> 00:20:56,960 Speaker 1: a rare downgrade with Bank of America seeing the tech 373 00:20:57,000 --> 00:21:00,240 Speaker 1: giants dominance at risk. Here with the details bloom Bugs 374 00:21:00,240 --> 00:21:03,800 Speaker 1: Bailey Lipshelves Bailey. Yeah, and we saw Apple fall almost 375 00:21:03,840 --> 00:21:06,960 Speaker 1: five percent after that downgrade from Bank of America, wiping 376 00:21:06,960 --> 00:21:09,439 Speaker 1: out close to a hundred and twenty billion dollars in 377 00:21:09,480 --> 00:21:13,480 Speaker 1: market value, really sounding the alarm over concerns surrounding a 378 00:21:13,520 --> 00:21:16,280 Speaker 1: weaker consumer demand over the next year, as well as 379 00:21:16,320 --> 00:21:18,920 Speaker 1: concerns really around the fact that the US dollar is 380 00:21:18,960 --> 00:21:21,760 Speaker 1: trading so strong. Apple is a company that generates more 381 00:21:21,800 --> 00:21:25,680 Speaker 1: than half of its UH sales from overseas. That really 382 00:21:25,720 --> 00:21:28,520 Speaker 1: hitting shares today. But there was a bank that came 383 00:21:28,520 --> 00:21:31,760 Speaker 1: out kind of disagreeing with that downgrade. That was Rosenblack 384 00:21:31,760 --> 00:21:34,879 Speaker 1: at that company, or that firm upgrading shares on Apple 385 00:21:35,160 --> 00:21:38,640 Speaker 1: or it's rating on Apple to buy from neutral, saying 386 00:21:38,640 --> 00:21:43,160 Speaker 1: that they're seeing strength and demand from iPhone fourteen purchases, 387 00:21:43,240 --> 00:21:47,119 Speaker 1: primarily the I four, iPhone fourteen pro and that ultra watch, 388 00:21:47,280 --> 00:21:50,560 Speaker 1: so really kind of seeing value over the near immediate 389 00:21:50,720 --> 00:21:52,919 Speaker 1: medium term and then looking at it though from a 390 00:21:53,000 --> 00:21:55,639 Speaker 1: broader standpoint. Over the last week, we've seen Apple shares 391 00:21:55,840 --> 00:21:59,080 Speaker 1: really falling under market pressure that coming after that Bloom 392 00:21:59,440 --> 00:22:01,919 Speaker 1: report that the company was pulling back on plans to 393 00:22:01,920 --> 00:22:05,560 Speaker 1: potentially ramp up production of that iPhone four team. But 394 00:22:05,680 --> 00:22:08,120 Speaker 1: Wall Street really has been disagreeing in the past few 395 00:22:08,200 --> 00:22:12,320 Speaker 1: days about whether consumers are shifting towards buying iPhone fourteen 396 00:22:12,400 --> 00:22:15,280 Speaker 1: pros and the pro Max more high end models as 397 00:22:15,280 --> 00:22:18,440 Speaker 1: opposed to that low basic entry level at the iPhone fourteen. 398 00:22:18,760 --> 00:22:21,919 Speaker 1: All right, thanks to Bloomberg's Bailey Lipscholtz, Apple was just 399 00:22:22,000 --> 00:22:24,720 Speaker 1: one drag on equity markets Thursdays then has that one 400 00:22:24,760 --> 00:22:28,720 Speaker 1: hundred fell almost three percent. Global investors are bracing for 401 00:22:28,800 --> 00:22:32,959 Speaker 1: central bank policy tightening and a slowdown across economies around 402 00:22:32,960 --> 00:22:36,800 Speaker 1: the world. Private market investors a bracing to for more 403 00:22:37,040 --> 00:22:39,720 Speaker 1: on the state of tech and venture capital. That's bringing 404 00:22:39,800 --> 00:22:44,080 Speaker 1: Andrea Lamari, general partner at Manhattan Venture Partners, and Andrew, 405 00:22:44,160 --> 00:22:46,200 Speaker 1: Let's just start with a big picture. What is going 406 00:22:46,200 --> 00:22:48,080 Speaker 1: through your head right now when you sit at your 407 00:22:48,080 --> 00:22:52,520 Speaker 1: desk and you look at the world, what do you see? Well, 408 00:22:52,560 --> 00:22:57,199 Speaker 1: and I definitely see a change in excitement across the 409 00:22:57,280 --> 00:23:01,200 Speaker 1: venture market. I think generally what US enture capitalists believe 410 00:23:01,680 --> 00:23:04,719 Speaker 1: is that we're bracing for winter yet again. But this 411 00:23:04,880 --> 00:23:08,320 Speaker 1: time around, it's really that the crystal ball going into 412 00:23:08,400 --> 00:23:11,000 Speaker 1: Q one and Q two of next year is quite 413 00:23:11,080 --> 00:23:13,400 Speaker 1: unclear for most of us, and some of us are 414 00:23:13,440 --> 00:23:15,520 Speaker 1: just breathing a side of relief that many of our 415 00:23:15,560 --> 00:23:18,399 Speaker 1: companies just have a war chest of cash sitting on 416 00:23:18,440 --> 00:23:20,400 Speaker 1: their balance sheet for now, so I think we're all 417 00:23:20,440 --> 00:23:24,600 Speaker 1: just bracing for winter. We aren't exceptionally excited about any 418 00:23:24,640 --> 00:23:26,639 Speaker 1: of the I p O prospects, so we want to 419 00:23:26,680 --> 00:23:31,159 Speaker 1: remain bullish. Ultimately, it's an assessment of where will companies 420 00:23:31,200 --> 00:23:34,520 Speaker 1: go and how will they control spending money going into 421 00:23:34,560 --> 00:23:36,880 Speaker 1: the rest of the year. I'm taking a look at 422 00:23:36,920 --> 00:23:40,520 Speaker 1: some of your firm's portfolio companies, interesting names, you know, 423 00:23:40,600 --> 00:23:43,879 Speaker 1: that's another perspective. When you speak to the founders and 424 00:23:43,920 --> 00:23:47,360 Speaker 1: executives at these firms, you know, many of them sizable. 425 00:23:47,840 --> 00:23:51,480 Speaker 1: What is your advice to them in this market? Well, 426 00:23:51,520 --> 00:23:54,480 Speaker 1: many of the companies in our portfolio are very late 427 00:23:54,560 --> 00:23:57,320 Speaker 1: stage and preparing for an I p O. Quite frankly, 428 00:23:57,320 --> 00:23:59,720 Speaker 1: we believe that there's a three step formula for the 429 00:23:59,760 --> 00:24:01,800 Speaker 1: comp bunnies that are preparing for I p O s 430 00:24:01,840 --> 00:24:04,040 Speaker 1: going into the remainder of the year, as well as 431 00:24:04,119 --> 00:24:06,600 Speaker 1: Q one and Q two, and those three things are 432 00:24:06,600 --> 00:24:09,160 Speaker 1: first and foremost that they have to have a really 433 00:24:09,160 --> 00:24:13,639 Speaker 1: compelling tail wind story that will project them really high 434 00:24:13,920 --> 00:24:17,520 Speaker 1: going into being a public company. So, for example, Trip 435 00:24:17,560 --> 00:24:21,640 Speaker 1: Actions is going to ride those very deliberate tail winds 436 00:24:21,680 --> 00:24:25,560 Speaker 1: and prepare for their confidential filing and I think overall 437 00:24:25,600 --> 00:24:28,520 Speaker 1: that tells a really compelling story that for number two 438 00:24:28,640 --> 00:24:33,080 Speaker 1: on the list is show value creation to retail investors 439 00:24:33,119 --> 00:24:35,399 Speaker 1: that once they buy into an i p O that 440 00:24:35,480 --> 00:24:38,919 Speaker 1: there's only upward mobility from there. And then number three 441 00:24:39,080 --> 00:24:43,280 Speaker 1: is that they actually can control spend and remove the 442 00:24:43,880 --> 00:24:48,680 Speaker 1: obvious nature of being unprofitable and show that path of profitability, 443 00:24:48,720 --> 00:24:50,800 Speaker 1: if not right before the i p O but after. 444 00:24:51,000 --> 00:24:53,280 Speaker 1: So those are really the three things that we're going 445 00:24:53,280 --> 00:24:57,000 Speaker 1: into our late stage companies and directing them on. Andrea 446 00:24:57,040 --> 00:24:59,639 Speaker 1: your a venture capitalist, and we're always thinking about the 447 00:24:59,680 --> 00:25:03,320 Speaker 1: FED higher rates. How brave a decision is it to 448 00:25:03,400 --> 00:25:06,800 Speaker 1: sit on the sidelines right now and not deploy capital. 449 00:25:07,960 --> 00:25:11,679 Speaker 1: I think right now, overall we all are kind of 450 00:25:11,720 --> 00:25:15,200 Speaker 1: bracing to say we can wait just a bit longer. 451 00:25:15,240 --> 00:25:17,159 Speaker 1: I think that there will be a lot of questions 452 00:25:17,200 --> 00:25:20,080 Speaker 1: coming from the limited partner community that are investing in 453 00:25:20,080 --> 00:25:23,040 Speaker 1: these venture funds going into Q one of next year 454 00:25:23,200 --> 00:25:25,800 Speaker 1: if many of us do not deploy capital for the 455 00:25:25,800 --> 00:25:28,240 Speaker 1: remainder of this year. But for now, I think we're 456 00:25:28,240 --> 00:25:31,080 Speaker 1: all just really comfortable sitting tight and saying, hey, we're 457 00:25:31,119 --> 00:25:33,480 Speaker 1: here to just support our portfolio companies so that the 458 00:25:33,640 --> 00:25:37,200 Speaker 1: end the year really strong and focus less on where 459 00:25:37,240 --> 00:25:39,840 Speaker 1: the FED is going with the higher interest rate hype, 460 00:25:40,080 --> 00:25:43,200 Speaker 1: and say, listen, let's just control where the balance sheet 461 00:25:43,280 --> 00:25:46,440 Speaker 1: is going. Sit tight, many of them still have hiring 462 00:25:46,560 --> 00:25:49,840 Speaker 1: freezes that are in place, and stop spending money on 463 00:25:49,920 --> 00:25:52,359 Speaker 1: crazy R and D projects. To wrap up a beer, 464 00:25:52,640 --> 00:25:54,520 Speaker 1: are we talking about this is being sort of a 465 00:25:54,640 --> 00:25:58,919 Speaker 1: multi courtA not phenomenon the process. I mean, do you 466 00:25:58,960 --> 00:26:00,600 Speaker 1: think that we get to the end did this year 467 00:26:01,200 --> 00:26:03,879 Speaker 1: first quarter of next and things change or are you 468 00:26:03,960 --> 00:26:06,000 Speaker 1: kind of battening down the hatches a bit A bit 469 00:26:06,040 --> 00:26:09,560 Speaker 1: longer term than that. I would say we're all battening 470 00:26:09,560 --> 00:26:11,960 Speaker 1: down the hatches a bit longer than that. I don't 471 00:26:12,040 --> 00:26:15,480 Speaker 1: see much of the dismay going into Q two of 472 00:26:15,560 --> 00:26:17,560 Speaker 1: next year, but at least Q one, because I think 473 00:26:17,560 --> 00:26:22,080 Speaker 1: we're all going to have a really retrospective look on 474 00:26:22,080 --> 00:26:26,280 Speaker 1: once we get into the first quarter overall companies, at 475 00:26:26,359 --> 00:26:29,120 Speaker 1: least we'll be able to display that they controlled spend, 476 00:26:29,600 --> 00:26:32,359 Speaker 1: they cut costs where they needed to, and show that 477 00:26:32,440 --> 00:26:35,000 Speaker 1: the growth can continue. But I don't know if I 478 00:26:35,080 --> 00:26:37,040 Speaker 1: see that it's going to be any more than quite 479 00:26:37,040 --> 00:26:40,600 Speaker 1: frankly neutral until we go to Q two or companies say, okay, 480 00:26:40,600 --> 00:26:43,200 Speaker 1: now that we have a handle on our balance sheet, 481 00:26:43,400 --> 00:26:46,480 Speaker 1: we could really rev up where we had controlled all 482 00:26:46,480 --> 00:26:49,520 Speaker 1: of our costs in two. So I'm much more bullish 483 00:26:49,520 --> 00:26:52,879 Speaker 1: about a Q two A trajectory from here. There's a 484 00:26:53,000 --> 00:26:57,159 Speaker 1: term that we've bandied around a little bit, the I 485 00:26:57,280 --> 00:26:59,960 Speaker 1: p O winter. Is there an I p O winter, 486 00:27:00,119 --> 00:27:04,400 Speaker 1: particularly for tech? I absolutely think so. I think we're 487 00:27:04,440 --> 00:27:07,159 Speaker 1: all really excited, And of course we obviously have a 488 00:27:07,200 --> 00:27:09,159 Speaker 1: bit of a bias to say, okay, we might have 489 00:27:09,240 --> 00:27:12,879 Speaker 1: prospects such as Instacart that will really be a shining star, 490 00:27:13,320 --> 00:27:16,199 Speaker 1: maybe even a trojan horse for some other companies that 491 00:27:16,240 --> 00:27:19,399 Speaker 1: are comparable to go public at that time frame in 492 00:27:19,480 --> 00:27:22,640 Speaker 1: Q four, But really that I p A winter, it's 493 00:27:22,680 --> 00:27:24,920 Speaker 1: gonna be freezing, it's gonna be chilly, and it's gonna 494 00:27:24,960 --> 00:27:28,280 Speaker 1: go until the second half of December. If we don't 495 00:27:28,280 --> 00:27:31,000 Speaker 1: see any I p O s by November, late November, 496 00:27:31,440 --> 00:27:33,720 Speaker 1: and then the first week of December, I really would 497 00:27:33,720 --> 00:27:36,680 Speaker 1: say it's quite maybe quite a cold winter going into 498 00:27:36,760 --> 00:27:41,080 Speaker 1: Q one. I kind of like your sort of refreshing honesty, 499 00:27:41,160 --> 00:27:43,280 Speaker 1: you know, if you're being honest with yourself, And we 500 00:27:43,359 --> 00:27:48,919 Speaker 1: think back to say the beginning of well, we just 501 00:27:49,080 --> 00:27:55,360 Speaker 1: really overvaluing growth. We were overvaluing growth at all costs 502 00:27:55,560 --> 00:27:59,200 Speaker 1: in lieu of profitability. I absolutely think so. I think 503 00:27:59,240 --> 00:28:03,000 Speaker 1: companies we want a hundred x are growth because that's 504 00:28:03,000 --> 00:28:07,879 Speaker 1: what startups are fueled to do. However, now we're really 505 00:28:07,960 --> 00:28:11,680 Speaker 1: seeing what the after effects, the aftershocks of that are 506 00:28:11,680 --> 00:28:15,040 Speaker 1: going to be. And right now companies are pricing you know, 507 00:28:15,119 --> 00:28:18,880 Speaker 1: well below ten x forward revenues, and I think that 508 00:28:18,880 --> 00:28:21,280 Speaker 1: that's a healthy place for us to be. And I 509 00:28:21,320 --> 00:28:24,360 Speaker 1: think that that's going to take, you know, another two 510 00:28:24,520 --> 00:28:28,480 Speaker 1: three quarters to recover from when it comes to valuation stabilization. 511 00:28:28,880 --> 00:28:31,960 Speaker 1: And at this point in time, companies are just absolutely 512 00:28:32,080 --> 00:28:35,800 Speaker 1: terrified of taking a valuation haircut, so they're agreeing to 513 00:28:35,880 --> 00:28:39,360 Speaker 1: some pretty aggressive investor friendly terms in new rounds of 514 00:28:39,360 --> 00:28:43,920 Speaker 1: funding today. Alright, Manhattan, Benja Partners General partner, Andrea Lamary, 515 00:28:44,200 --> 00:28:46,360 Speaker 1: what a pleasure to have you on. Come back, Thank you. 516 00:28:46,840 --> 00:28:48,920 Speaker 1: All right? Coming up, as voters head to the polls 517 00:28:49,000 --> 00:28:53,040 Speaker 1: in November, how will the results impact blockchain policy? Will 518 00:28:53,080 --> 00:28:56,120 Speaker 1: share the results of a survey all about that. Next, 519 00:28:56,600 --> 00:29:13,680 Speaker 1: this is Bloomberg alright, time for our daily crypto report. 520 00:29:13,680 --> 00:29:16,840 Speaker 1: Bloomberg Snelly Bassett take it from him. Thank you. Ed. 521 00:29:16,880 --> 00:29:19,320 Speaker 1: We're going to talk today about the intersection of crypto, 522 00:29:19,400 --> 00:29:22,240 Speaker 1: Web three and politics because there's a new pull out 523 00:29:22,240 --> 00:29:25,200 Speaker 1: from Hound Ventures and Morning Consults, and for more on 524 00:29:25,240 --> 00:29:28,720 Speaker 1: those findings is Hound Ventures chief policy Officer. To Mike 525 00:29:28,760 --> 00:29:31,320 Speaker 1: and Tillman, thank you so much for joining us. I'm 526 00:29:31,320 --> 00:29:33,720 Speaker 1: really curious here because you have about eight hundred people 527 00:29:33,720 --> 00:29:36,160 Speaker 1: are so that you surveyed through this with Monty or 528 00:29:36,160 --> 00:29:39,440 Speaker 1: more in consult But was there anything really surprising to you? 529 00:29:39,520 --> 00:29:42,000 Speaker 1: We know more money has been going into crypto lobbying, 530 00:29:42,080 --> 00:29:43,960 Speaker 1: We know that this is going to be seen as 531 00:29:44,000 --> 00:29:47,520 Speaker 1: an issue for lawmakers. But what was different here that 532 00:29:47,600 --> 00:29:50,200 Speaker 1: you didn't expect to see? Well, there are a couple 533 00:29:50,240 --> 00:29:53,840 Speaker 1: of real standout issues going into these critical midterm elections. 534 00:29:53,880 --> 00:29:56,920 Speaker 1: We recognize that the next Congress is very likely to 535 00:29:56,960 --> 00:30:00,480 Speaker 1: write the rules that will define policy architecture for the 536 00:30:00,520 --> 00:30:03,440 Speaker 1: next generation of the Internet, and it's critical for those 537 00:30:03,440 --> 00:30:07,480 Speaker 1: policymakers to know what Americans are thinking as they embark 538 00:30:07,520 --> 00:30:10,480 Speaker 1: on that process. The first big takeaway for us is 539 00:30:10,520 --> 00:30:14,880 Speaker 1: that the Web three voter is now a very significant constituency. 540 00:30:15,200 --> 00:30:17,800 Speaker 1: If you think historically, for example, about the role that 541 00:30:17,960 --> 00:30:20,960 Speaker 1: organized labor has played in US elections, and it's been 542 00:30:21,000 --> 00:30:25,680 Speaker 1: a very consequential role. We now have more voters in 543 00:30:25,720 --> 00:30:29,200 Speaker 1: these key swing states that hold digital assets than hold 544 00:30:29,360 --> 00:30:32,120 Speaker 1: an organized labor card a union card. So this is 545 00:30:32,160 --> 00:30:35,760 Speaker 1: a very substantial swath of the electorate we're talking about. 546 00:30:36,360 --> 00:30:38,520 Speaker 1: The second big takeaway for US is that this is 547 00:30:38,560 --> 00:30:42,640 Speaker 1: an issue that is prepartisan or bipartisan. There are substantial 548 00:30:42,640 --> 00:30:45,840 Speaker 1: majorities of voters that say they will vote against They'll 549 00:30:45,880 --> 00:30:49,560 Speaker 1: be less likely to vote for candidates who aren't in 550 00:30:49,680 --> 00:30:54,000 Speaker 1: favor of or supportive of constructive policy making around the 551 00:30:54,040 --> 00:30:58,160 Speaker 1: future of Web three. On that really quickly, because you know, 552 00:30:58,240 --> 00:31:00,480 Speaker 1: you think about this is either a bipart is an issue, 553 00:31:00,520 --> 00:31:03,360 Speaker 1: but you know, on one hand, voters seem to be 554 00:31:03,440 --> 00:31:06,520 Speaker 1: more likely to post standidates who standard with policies, but 555 00:31:06,560 --> 00:31:11,480 Speaker 1: they're slightly leaning towards Democratic senators. Why is that the case. 556 00:31:11,720 --> 00:31:16,040 Speaker 1: Traditionally the Democrats have been tougher on the financial industry 557 00:31:16,080 --> 00:31:20,120 Speaker 1: and technology, So why in this instance are you expecting 558 00:31:20,480 --> 00:31:23,880 Speaker 1: that not to be the case. Well, as a group, 559 00:31:24,040 --> 00:31:26,840 Speaker 1: Web three voters tend to be younger, they tend to 560 00:31:26,880 --> 00:31:30,160 Speaker 1: be more diverse, and they tend to be solidly middle 561 00:31:30,200 --> 00:31:33,640 Speaker 1: class and at least in a couple of those categories 562 00:31:33,680 --> 00:31:39,440 Speaker 1: you do see close alignment. Broadly speaking, with the Democratic Party. Again, 563 00:31:39,480 --> 00:31:43,000 Speaker 1: the fascinating thing to us on the whole is the 564 00:31:43,040 --> 00:31:47,120 Speaker 1: degree of unanimity that we find across party lines and 565 00:31:47,160 --> 00:31:50,840 Speaker 1: across ideological lines when it comes to these results. This 566 00:31:50,920 --> 00:31:54,280 Speaker 1: is one of the last bastions of true bipartisanship in 567 00:31:54,320 --> 00:31:58,120 Speaker 1: American public policy today. And the other critical thing which 568 00:31:58,120 --> 00:32:01,800 Speaker 1: I would highlight is over mind percent of the voters 569 00:32:01,840 --> 00:32:05,640 Speaker 1: that we surveyed were in favor of the core principles 570 00:32:05,720 --> 00:32:09,600 Speaker 1: that underlie Web three. So specifically, there we're talking about 571 00:32:09,680 --> 00:32:13,640 Speaker 1: digital platforms that are community owned, community governed, and give 572 00:32:13,760 --> 00:32:16,920 Speaker 1: individuals a greater say in how their data is used. 573 00:32:17,080 --> 00:32:19,920 Speaker 1: That's a big deal, yea. And on that exact note, 574 00:32:20,000 --> 00:32:22,800 Speaker 1: here are we talking about crypto more largely? Are we 575 00:32:22,840 --> 00:32:25,560 Speaker 1: talking about tokens? Are we talking about Web three? What 576 00:32:26,000 --> 00:32:28,880 Speaker 1: part of the spectrum here are voters really interested in 577 00:32:28,960 --> 00:32:33,680 Speaker 1: and seeing more policy being thoughtful towards well? Over sevent 578 00:32:34,760 --> 00:32:38,040 Speaker 1: of voters feel the big tech has too much power 579 00:32:38,160 --> 00:32:41,400 Speaker 1: in their lives. They are looking for an alternative to 580 00:32:41,760 --> 00:32:45,520 Speaker 1: a digital framework that frankly isn't working very well. It's 581 00:32:45,560 --> 00:32:50,760 Speaker 1: neither desirable nor sustainable, and growing numbers of the electorate 582 00:32:50,880 --> 00:32:54,120 Speaker 1: are I think cluing into that fact. What we see 583 00:32:54,240 --> 00:32:58,160 Speaker 1: is that there is a broad appreciation of the potential 584 00:32:58,240 --> 00:33:01,320 Speaker 1: that Web three has to create an Internet that gives 585 00:33:01,520 --> 00:33:06,800 Speaker 1: more opportunity to more individuals and democratizees access to a 586 00:33:06,840 --> 00:33:10,760 Speaker 1: lot of the financial and digital tools that have historically 587 00:33:10,840 --> 00:33:13,480 Speaker 1: been the domain of very small numbers of people, and 588 00:33:13,600 --> 00:33:16,240 Speaker 1: voters are responding to that in a big way. Now, 589 00:33:16,280 --> 00:33:18,480 Speaker 1: do you think that in any fashion this will be 590 00:33:18,520 --> 00:33:22,920 Speaker 1: a single issue voter kind of situation here? Given so 591 00:33:23,000 --> 00:33:25,920 Speaker 1: much else is happening, especially in the economy when you 592 00:33:25,920 --> 00:33:28,240 Speaker 1: see a lot of people really burn from inflation here. 593 00:33:28,640 --> 00:33:30,560 Speaker 1: Do you the a a war going on in Europe? 594 00:33:30,880 --> 00:33:33,240 Speaker 1: To what extent does this fall into all of the 595 00:33:33,280 --> 00:33:36,280 Speaker 1: other issues that are happening in America today? Well, we 596 00:33:36,360 --> 00:33:39,000 Speaker 1: know that for a subset of these voters, these are 597 00:33:39,120 --> 00:33:42,280 Speaker 1: very strongly held views, and they are passionate about the 598 00:33:42,280 --> 00:33:46,160 Speaker 1: potential of this technology. And they're also passionate, frankly about 599 00:33:46,160 --> 00:33:48,480 Speaker 1: the need to build a better Internet, the need to 600 00:33:48,520 --> 00:33:52,360 Speaker 1: develop a new digital architecture that is going to meet 601 00:33:52,400 --> 00:33:55,400 Speaker 1: their needs a lot better than what we have today. 602 00:33:55,440 --> 00:33:59,320 Speaker 1: Beyond that, this is I think the early days of 603 00:33:59,360 --> 00:34:02,000 Speaker 1: what has the potential to become a very large and 604 00:34:02,120 --> 00:34:06,600 Speaker 1: very powerful constituency in American politics. Uh. And it is 605 00:34:06,760 --> 00:34:10,239 Speaker 1: unlike anything we've seen before, and that it is simultaneously 606 00:34:10,560 --> 00:34:14,200 Speaker 1: an industry, but it's also a community, and that convergence 607 00:34:14,280 --> 00:34:18,160 Speaker 1: is creating some big opportunities to think differently about how 608 00:34:18,200 --> 00:34:21,359 Speaker 1: we define policy in this space. You know, this is 609 00:34:21,680 --> 00:34:24,240 Speaker 1: the mid terms right around the corner here, the second 610 00:34:24,239 --> 00:34:26,880 Speaker 1: part of Biden's term. To what extent do you expect 611 00:34:26,920 --> 00:34:29,680 Speaker 1: to see a serious movement on a lot of the 612 00:34:29,719 --> 00:34:34,160 Speaker 1: crypto regulation that has been promised from from lawmakers now 613 00:34:34,200 --> 00:34:37,840 Speaker 1: for many many months. Well, we already today are in 614 00:34:37,840 --> 00:34:41,480 Speaker 1: a pretty remarkable position when you consider where we were 615 00:34:41,560 --> 00:34:44,480 Speaker 1: just two years ago. The fact that we have multiple 616 00:34:44,840 --> 00:34:49,560 Speaker 1: very serious bipartisan pieces of legislation working their way through Congress, 617 00:34:49,840 --> 00:34:52,719 Speaker 1: a very serious executive order that's forging a whole of 618 00:34:52,760 --> 00:34:56,799 Speaker 1: government approach to digital assets and web three. All of 619 00:34:56,840 --> 00:35:00,200 Speaker 1: these are promising signs. We've certainly got a long way ago. 620 00:35:00,360 --> 00:35:03,600 Speaker 1: And my assumption is that a lot of the legislating 621 00:35:03,640 --> 00:35:05,880 Speaker 1: at least is going to fall on the shoulders of 622 00:35:05,920 --> 00:35:08,400 Speaker 1: the next Congress. But the fact that there is a 623 00:35:08,560 --> 00:35:14,480 Speaker 1: real opportunity to create the cornerstones, to establish the cornerstones 624 00:35:14,880 --> 00:35:18,960 Speaker 1: of what this new digital policy framework will involve, is 625 00:35:19,320 --> 00:35:22,400 Speaker 1: something none of us should take lightly and frankly why 626 00:35:22,719 --> 00:35:26,600 Speaker 1: these elections and the voters that decide them are so 627 00:35:26,680 --> 00:35:31,040 Speaker 1: important to Mega Tillman Pound Ventures Chief policy Officer, thank 628 00:35:31,080 --> 00:35:33,360 Speaker 1: you so much on the heels of your new survey 629 00:35:33,400 --> 00:35:44,440 Speaker 1: out with Morning Consulted back to you. This week, the 630 00:35:44,520 --> 00:35:48,080 Speaker 1: company Illumina is hosting the Genomics Forum in San Diego. 631 00:35:48,160 --> 00:35:51,920 Speaker 1: It includes speakers from Barack Obama to Bill Gates, and Thursday, 632 00:35:52,120 --> 00:35:55,960 Speaker 1: Illuminate announced its first new sequencing technology in more than 633 00:35:56,040 --> 00:35:58,840 Speaker 1: two years. The company says it can read a person's 634 00:35:59,040 --> 00:36:02,320 Speaker 1: entire genetic code for as little as two hundred dollars 635 00:36:02,320 --> 00:36:04,480 Speaker 1: a pop. Here for a bloom Bag exclusive on the 636 00:36:04,480 --> 00:36:08,160 Speaker 1: announcement is a luminous CEO Francis to SUSA. Frances talked 637 00:36:08,160 --> 00:36:10,520 Speaker 1: to me about the technology that's gone into this latest 638 00:36:10,600 --> 00:36:14,160 Speaker 1: iteration of sequencing tech. What have you actually done to 639 00:36:14,360 --> 00:36:19,680 Speaker 1: update it? This is a huge movement step forward in 640 00:36:19,719 --> 00:36:23,520 Speaker 1: our technology platform. We really redid every part of the 641 00:36:23,560 --> 00:36:29,120 Speaker 1: sequencer so we've invented an entire new chemistry called Exley SPS. 642 00:36:29,160 --> 00:36:32,440 Speaker 1: We invented a whole new optic system, including the glass 643 00:36:32,480 --> 00:36:34,400 Speaker 1: we needed for the lens. This didn't exist anywhere in 644 00:36:34,400 --> 00:36:36,600 Speaker 1: the world, so we had to invent new glass to 645 00:36:36,719 --> 00:36:39,600 Speaker 1: use in the lens. We've invented a whole new data 646 00:36:39,640 --> 00:36:43,680 Speaker 1: path with high performance compute on the machine itself. So 647 00:36:43,760 --> 00:36:46,480 Speaker 1: really this has been just a ground up redo of 648 00:36:46,680 --> 00:36:49,600 Speaker 1: our sequencer platform so that we could get a major 649 00:36:49,719 --> 00:36:52,480 Speaker 1: step change in terms of performance and really bring the 650 00:36:52,560 --> 00:36:56,040 Speaker 1: price of sequencing, of genomic sequencing, you know, down to 651 00:36:56,160 --> 00:36:59,200 Speaker 1: the market. We're also able to make this more sustainable 652 00:36:59,239 --> 00:37:02,920 Speaker 1: product and eliminate the need for the cold chain. So 653 00:37:03,280 --> 00:37:07,400 Speaker 1: before that you needed dry ice to ship the reagents 654 00:37:07,480 --> 00:37:10,080 Speaker 1: to run the machine to the labs around the world, 655 00:37:10,200 --> 00:37:12,359 Speaker 1: and you don't need that anymore. And so this makes 656 00:37:12,360 --> 00:37:15,359 Speaker 1: a sequence are accessible to countries around the world that 657 00:37:15,480 --> 00:37:17,680 Speaker 1: don't have access to cold chaine. So it's a big 658 00:37:17,680 --> 00:37:20,920 Speaker 1: step forward in accessibility. For instance, your ultimate goal is 659 00:37:20,960 --> 00:37:24,320 Speaker 1: a one hundred dollar genome, you're at two hundred dollars. 660 00:37:24,360 --> 00:37:28,520 Speaker 1: It's it's just you playing it safe, you know. Our path, 661 00:37:28,840 --> 00:37:31,400 Speaker 1: our strategy as a company has been to drive the 662 00:37:31,440 --> 00:37:33,960 Speaker 1: prices down, and we've done that over the course of 663 00:37:34,000 --> 00:37:36,080 Speaker 1: many years. When we first launched our sequence or in 664 00:37:36,120 --> 00:37:39,440 Speaker 1: two thousand and seven, the price to sequence one genome 665 00:37:39,719 --> 00:37:42,319 Speaker 1: was a hundred and fifty thousand dollars and that was 666 00:37:42,360 --> 00:37:45,239 Speaker 1: a breakthrough price in the market. We've gone from a 667 00:37:45,320 --> 00:37:48,360 Speaker 1: hundred and fifty thousand dollars or genome to two hundred 668 00:37:48,360 --> 00:37:51,040 Speaker 1: dollars a genome in that time for two thousand and 669 00:37:51,080 --> 00:37:55,560 Speaker 1: seven until today, so greater than price reduction, and we're 670 00:37:55,600 --> 00:37:58,880 Speaker 1: not stopping there. We believe to make genomics accessible to 671 00:37:58,960 --> 00:38:01,040 Speaker 1: everybody and have to differ prints in healthcare that it 672 00:38:01,080 --> 00:38:05,000 Speaker 1: can we need to keep going. Does this once again 673 00:38:05,320 --> 00:38:08,279 Speaker 1: make you the market leader, the tech leader? Do you 674 00:38:08,400 --> 00:38:12,799 Speaker 1: leap frog back to that position of leadership? You know, 675 00:38:12,960 --> 00:38:15,000 Speaker 1: we do. We really believe that in order to move 676 00:38:15,120 --> 00:38:19,080 Speaker 1: the market forward, we need just to drive more innovation 677 00:38:19,239 --> 00:38:22,600 Speaker 1: to make sequencing accessible. At this point, we do believe 678 00:38:22,640 --> 00:38:26,840 Speaker 1: that our products represent the best sort of value proposition 679 00:38:26,880 --> 00:38:29,759 Speaker 1: to customers in terms of performance and price. But look, 680 00:38:29,800 --> 00:38:32,480 Speaker 1: the reality is were very early in this market right 681 00:38:32,520 --> 00:38:35,239 Speaker 1: If you think about the market opportunity in front of us, 682 00:38:35,680 --> 00:38:39,880 Speaker 1: we still have largely untapped the medical need for genomic sequencing, 683 00:38:40,000 --> 00:38:42,520 Speaker 1: So the vast majority is of the market is still 684 00:38:42,520 --> 00:38:44,640 Speaker 1: in front of us. A lot of innovation to do 685 00:38:44,800 --> 00:38:47,319 Speaker 1: to really open up the markets, as do we think 686 00:38:47,360 --> 00:38:50,680 Speaker 1: they need to be. I want to ask you about 687 00:38:50,760 --> 00:38:53,040 Speaker 1: the reality of this for your customers. We're talking about 688 00:38:53,120 --> 00:38:57,520 Speaker 1: labs right, complicated, sophisticated lads. You're talking two D genome, 689 00:38:57,920 --> 00:38:59,960 Speaker 1: but it's an expensive cost for them. What have your 690 00:39:00,080 --> 00:39:02,400 Speaker 1: pre order has been like, what does the initial interest 691 00:39:02,680 --> 00:39:07,680 Speaker 1: from your customer they's been well, the earlier response has 692 00:39:07,719 --> 00:39:10,880 Speaker 1: been phenomenal. You know, we gave a sneak beak to 693 00:39:10,960 --> 00:39:13,360 Speaker 1: a few customers before we made the variety of the 694 00:39:13,360 --> 00:39:17,080 Speaker 1: announcement this morning, and every single one of them pre ordered. 695 00:39:17,080 --> 00:39:19,719 Speaker 1: So we're at this stage now we're taking orders. We 696 00:39:19,760 --> 00:39:22,960 Speaker 1: ship the instrument in Q one of next year, so 697 00:39:23,040 --> 00:39:25,319 Speaker 1: a few months from now, and we're gonna be taking 698 00:39:25,400 --> 00:39:27,960 Speaker 1: orders between now and then. The response has been strong 699 00:39:28,000 --> 00:39:31,120 Speaker 1: on the number of fronts. People really appreciate the price reduction, 700 00:39:31,440 --> 00:39:35,440 Speaker 1: People love the sustainability features, so reducing the waste and 701 00:39:35,480 --> 00:39:38,120 Speaker 1: the plastic and people we had a couple of customers 702 00:39:38,120 --> 00:39:40,239 Speaker 1: come to us in tears about the fact that you 703 00:39:40,320 --> 00:39:43,360 Speaker 1: no longer need a cold chain so this product is 704 00:39:43,400 --> 00:39:45,920 Speaker 1: now available in parts of the world that just didn't 705 00:39:45,960 --> 00:39:49,560 Speaker 1: have access to hide through with sequencing. Francis, your seven 706 00:39:49,600 --> 00:39:53,160 Speaker 1: billion dollar deal for Grail was vetoed by the European 707 00:39:53,280 --> 00:39:56,279 Speaker 1: Union this stage of the process, do you give up? 708 00:39:58,200 --> 00:40:01,240 Speaker 1: You know, the deal for Grailer's an important one because, 709 00:40:01,520 --> 00:40:04,040 Speaker 1: as you know, we invented with Grail was a blood 710 00:40:04,080 --> 00:40:07,760 Speaker 1: test that can find fifty types of cancer across stages. 711 00:40:08,280 --> 00:40:11,520 Speaker 1: That's life changing because we know that ten million people 712 00:40:11,520 --> 00:40:14,520 Speaker 1: a year die of cancer, and we also know that 713 00:40:14,520 --> 00:40:17,080 Speaker 1: if you catch a cancer early, your arts are surviving 714 00:40:17,760 --> 00:40:20,319 Speaker 1: are so much higher than if you catch it late. 715 00:40:20,480 --> 00:40:23,680 Speaker 1: Now of the people who die from cancer die from 716 00:40:23,719 --> 00:40:26,959 Speaker 1: cancers that are caught at late stages. So by doing 717 00:40:26,960 --> 00:40:29,640 Speaker 1: the blood to die, rolling out Grill's blood tays more broadly. 718 00:40:30,000 --> 00:40:31,759 Speaker 1: You know, we believe that that has the potential to 719 00:40:31,800 --> 00:40:34,520 Speaker 1: save many lives around the world, and we can roll 720 00:40:34,600 --> 00:40:37,000 Speaker 1: out more broadly than Grailed with on its own. So 721 00:40:37,280 --> 00:40:40,360 Speaker 1: it's important. We're going to continue through the process to 722 00:40:40,400 --> 00:40:43,960 Speaker 1: see if we can win on appeal with the European Commission. Alright, 723 00:40:44,040 --> 00:40:47,600 Speaker 1: Iluminous CEO, frances to Zoza, a pleasure to have you 724 00:40:47,640 --> 00:40:49,520 Speaker 1: on the program. That does it. For this edition of 725 00:40:49,520 --> 00:40:52,960 Speaker 1: Bloomberg Technology Friday, we'll have Katie Horn of Horn Ventures 726 00:40:53,000 --> 00:40:55,520 Speaker 1: to talk about her bets for the future of the Internet. 727 00:40:55,520 --> 00:40:57,719 Speaker 1: Don't forget to check out our podcast. You can find 728 00:40:57,719 --> 00:41:00,680 Speaker 1: it on the terminal, on Apple, Spotify. Of course, I 729 00:41:00,920 --> 00:41:03,319 Speaker 1: heart this is Bloomberg.