1 00:00:00,880 --> 00:00:05,199 Speaker 1: From the heart of where innovation, money and power collide 2 00:00:05,400 --> 00:00:10,680 Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with 3 00:00:10,840 --> 00:00:32,280 Speaker 1: Caroline Hyde and Ed Ludlow. 4 00:00:27,200 --> 00:00:30,200 Speaker 2: Now from New York and Caroline Hyde and I'm Jackie 5 00:00:30,240 --> 00:00:31,440 Speaker 2: Devalas in San Francisco. 6 00:00:31,560 --> 00:00:33,440 Speaker 3: This is Bloomberg Technology coming up. 7 00:00:33,479 --> 00:00:36,200 Speaker 4: Apple fights back in the UK, removing its most advanced 8 00:00:36,280 --> 00:00:40,000 Speaker 4: end to end encrypted security feature. Plus President Trump is 9 00:00:40,040 --> 00:00:44,760 Speaker 4: expected to sign tariffs to counter digital services taxes despised 10 00:00:44,760 --> 00:00:47,839 Speaker 4: by US tech giants, and Coinbase says the SEC has 11 00:00:47,840 --> 00:00:50,240 Speaker 4: agreed to drop its lawsuit that accused it of running 12 00:00:50,280 --> 00:00:53,599 Speaker 4: an illegal exchange. The first a check in on these 13 00:00:53,640 --> 00:00:56,720 Speaker 4: markets and we're pulled lower once again. US economic data 14 00:00:57,280 --> 00:01:01,800 Speaker 4: showing slower activity, and there's also hire inflation expectations the 15 00:01:01,880 --> 00:01:04,360 Speaker 4: Nasdaq one hundred of by five tens of percent. The 16 00:01:04,440 --> 00:01:07,720 Speaker 4: key drags down from a points perspective, Amazon Tesla, but 17 00:01:07,840 --> 00:01:10,280 Speaker 4: we get to a key move on the day, Apple 18 00:01:10,880 --> 00:01:15,520 Speaker 4: removing its most advanced end to end encrypted security feature. 19 00:01:15,640 --> 00:01:18,880 Speaker 4: It's for cloud data, but it's to the UK user base. 20 00:01:19,240 --> 00:01:22,000 Speaker 4: It's a completely stunning development that we're seeing. After of course, 21 00:01:22,040 --> 00:01:24,160 Speaker 4: there were reports that the UK government ordered Apple to 22 00:01:24,240 --> 00:01:28,399 Speaker 4: build a backdoor into customer data globally. The person who 23 00:01:28,400 --> 00:01:31,440 Speaker 4: helps break it all down Bloomberg's Mark German, who sat 24 00:01:31,480 --> 00:01:34,759 Speaker 4: with me in New York. This is quite the fight back. 25 00:01:34,760 --> 00:01:37,440 Speaker 4: From a political perspective, this is a stunning development. 26 00:01:37,440 --> 00:01:39,240 Speaker 5: So just to give some context here, like you said, 27 00:01:39,319 --> 00:01:43,160 Speaker 5: the UK Parliament ordered Apple to build a backdoor to 28 00:01:43,200 --> 00:01:46,039 Speaker 5: give it access to user data not only for users 29 00:01:46,040 --> 00:01:49,160 Speaker 5: who live in the UK, but users globally, and so 30 00:01:49,240 --> 00:01:52,360 Speaker 5: Apple essentially had an option either build that back door 31 00:01:52,800 --> 00:01:57,000 Speaker 5: and continue to offer services like Advanced Data Protection, continue 32 00:01:57,040 --> 00:01:59,360 Speaker 5: to offer iCloud in the region. But what they decided 33 00:01:59,400 --> 00:02:02,840 Speaker 5: to instead simply remove their upgraded end to en encryption 34 00:02:02,920 --> 00:02:06,800 Speaker 5: feature that's called Advanced Data Protection. Gives you extra security 35 00:02:07,120 --> 00:02:12,679 Speaker 5: right for iCloud data, iCloud backups, text message backups, notes reminders. 36 00:02:12,960 --> 00:02:16,919 Speaker 5: They have an app called free form Safari web book marks, right, so. 37 00:02:16,880 --> 00:02:17,679 Speaker 4: They're removing that. 38 00:02:17,760 --> 00:02:20,960 Speaker 5: So now in the UK you're only getting standard encryption 39 00:02:21,040 --> 00:02:23,040 Speaker 5: for those features, but you still will get end to 40 00:02:23,120 --> 00:02:25,840 Speaker 5: encryption for imassage, FaceTime and a few other things like 41 00:02:25,880 --> 00:02:28,480 Speaker 5: passwords and health data. So that is a stunning development. 42 00:02:28,520 --> 00:02:31,239 Speaker 5: They have not removed Advanced Data Protection any other region, 43 00:02:31,280 --> 00:02:33,600 Speaker 5: and it remains available globally elsewhere. 44 00:02:34,720 --> 00:02:37,640 Speaker 2: Mark the security of Apple's products is a huge part 45 00:02:37,840 --> 00:02:40,000 Speaker 2: of its brand, as you know, where does this leave 46 00:02:40,240 --> 00:02:43,760 Speaker 2: UK consumers with relation to other products they are on 47 00:02:43,800 --> 00:02:45,240 Speaker 2: the market, Does it mean that they're going to be 48 00:02:45,280 --> 00:02:47,120 Speaker 2: substantially less protected? 49 00:02:47,560 --> 00:02:49,480 Speaker 5: Yeah, I mean end to end encryption is really the 50 00:02:49,520 --> 00:02:52,440 Speaker 5: gold standard. It means that nobody can access that data 51 00:02:52,520 --> 00:02:55,200 Speaker 5: unless you're on what Apple calls those trusted devices. So 52 00:02:55,280 --> 00:02:58,679 Speaker 5: your own Apple ID logged in iPhone, iPad, mac watch, 53 00:02:58,800 --> 00:03:01,240 Speaker 5: other products, You're not going to get that full end 54 00:03:01,240 --> 00:03:04,560 Speaker 5: to end encryption on your text message backups, on your notes, 55 00:03:04,600 --> 00:03:07,480 Speaker 5: on your reminders, things like that, and so that is 56 00:03:07,600 --> 00:03:10,560 Speaker 5: a new privacy concern in the UK. 57 00:03:11,160 --> 00:03:11,920 Speaker 4: But the other. 58 00:03:11,800 --> 00:03:16,200 Speaker 5: Option was removing all protection entirely in building that backdoor 59 00:03:16,360 --> 00:03:19,399 Speaker 5: in for the UK government. So from a compromise standpoint, 60 00:03:19,400 --> 00:03:22,000 Speaker 5: it is a big compromise Apple is making, but it 61 00:03:22,080 --> 00:03:24,640 Speaker 5: is also clear rebuke against the UK government because they 62 00:03:24,680 --> 00:03:26,000 Speaker 5: are not building that back door. 63 00:03:26,200 --> 00:03:30,239 Speaker 4: So they say, give us the historical context here, how 64 00:03:30,280 --> 00:03:33,120 Speaker 4: often does Apple react to this regional manner? 65 00:03:33,440 --> 00:03:36,200 Speaker 5: Well, in terms of regions right in China that is 66 00:03:36,280 --> 00:03:40,280 Speaker 5: the poster child for these compromises. iCloud in China is 67 00:03:40,360 --> 00:03:44,320 Speaker 5: operated by a local provider, right, not Apple servers, And 68 00:03:44,400 --> 00:03:47,800 Speaker 5: there are talks that this local provider in China for iCloud, 69 00:03:47,840 --> 00:03:50,680 Speaker 5: is actually a state backed entity, right, with connections to 70 00:03:51,360 --> 00:03:53,920 Speaker 5: the Communist Party in China. Right, So that means they 71 00:03:53,920 --> 00:03:57,680 Speaker 5: probably have full access, unfettered access to the user data 72 00:03:57,680 --> 00:04:00,920 Speaker 5: there in China. To bring Apple intelligence there, they're essentially 73 00:04:00,960 --> 00:04:05,480 Speaker 5: building what amounts to a censorship engine right in partnership 74 00:04:05,480 --> 00:04:07,720 Speaker 5: with Ali Baba, so they'll be able to go in 75 00:04:07,760 --> 00:04:11,440 Speaker 5: the Chinese government and basically monitor the output of the 76 00:04:11,480 --> 00:04:14,840 Speaker 5: AI on iPhones in China and have via Ali Baba, 77 00:04:15,040 --> 00:04:16,680 Speaker 5: Apple make tweaks to that engine. 78 00:04:17,360 --> 00:04:19,520 Speaker 3: That's Bloomberg's, Markerman, thanks for joining us. 79 00:04:19,920 --> 00:04:23,119 Speaker 2: Meanwhile, President Trump is expected to sign a memorandum today 80 00:04:23,120 --> 00:04:26,800 Speaker 2: that could allow tariffs in response to digital services taxes 81 00:04:27,080 --> 00:04:31,120 Speaker 2: that some countries impose on US giants like Alphabet and Meta. 82 00:04:31,160 --> 00:04:33,600 Speaker 2: That's according to sources. Let's get more with Bloomberg's but 83 00:04:33,760 --> 00:04:37,800 Speaker 2: Mike Shephard, Mike, who does this memorandum direct to do? 84 00:04:38,120 --> 00:04:39,960 Speaker 2: And what could those actions look like? 85 00:04:41,320 --> 00:04:45,160 Speaker 6: So what they're looking for, Jackie, is a way to 86 00:04:45,279 --> 00:04:49,280 Speaker 6: address one of President Donald Trump's and his administration's biggest 87 00:04:49,320 --> 00:04:51,680 Speaker 6: bugaboos over the years. They even took a look at 88 00:04:51,720 --> 00:04:55,120 Speaker 6: this back in twenty fourteen. These digital service taxes that 89 00:04:55,360 --> 00:04:59,920 Speaker 6: hit big American technology companies like Alphabet Inc. Like Meta 90 00:05:00,080 --> 00:05:05,200 Speaker 6: platforms with fees in Europe and other countries that are 91 00:05:05,400 --> 00:05:10,600 Speaker 6: charging for their services. And the administration has outlined this 92 00:05:10,920 --> 00:05:14,680 Speaker 6: program of possible reciprocal tariffs. It's unclear whether it would 93 00:05:14,720 --> 00:05:17,800 Speaker 6: fit directly into that or be parallel to it, but 94 00:05:17,880 --> 00:05:21,400 Speaker 6: the idea is that Trump and his team see these 95 00:05:21,960 --> 00:05:27,480 Speaker 6: taxes imposed by France and about thirty other countries worldwide 96 00:05:27,640 --> 00:05:31,520 Speaker 6: as unfair to American companies. The timing of this is 97 00:05:31,720 --> 00:05:35,599 Speaker 6: fascinating because we have the French President Emanuel Macron coming 98 00:05:35,640 --> 00:05:40,280 Speaker 6: to Washington already with an intense slate of discussions over Ukraine. 99 00:05:40,839 --> 00:05:44,800 Speaker 4: Precisely, the timing around geopolitics Russia Ukraine, the timing around 100 00:05:44,839 --> 00:05:48,360 Speaker 4: Macron coming to the US. Mike also just push us 101 00:05:48,360 --> 00:05:51,080 Speaker 4: forward in terms of how we see this is what 102 00:05:51,200 --> 00:05:53,960 Speaker 4: Meta had been setting out to do. Reporting just yesterday 103 00:05:53,960 --> 00:05:56,760 Speaker 4: that he was on Capitol Hill, Mark Zuckerberg discussing some 104 00:05:56,800 --> 00:06:00,440 Speaker 4: of his policy wishes. Is this exactly one of them? 105 00:06:00,800 --> 00:06:03,400 Speaker 6: Well, they have made clear for a long time that 106 00:06:03,440 --> 00:06:06,560 Speaker 6: they object to these taxes. They see it as unfair. Now, 107 00:06:06,600 --> 00:06:09,520 Speaker 6: on the other hand, in conversations with European officials, what 108 00:06:09,600 --> 00:06:13,640 Speaker 6: we have heard and with members of other countries that 109 00:06:13,760 --> 00:06:18,880 Speaker 6: charge these taxes. France, for instance, has a goods surplus 110 00:06:18,920 --> 00:06:22,479 Speaker 6: with the US. It's a trade deficit from Donald Trump's perspective, 111 00:06:22,760 --> 00:06:26,760 Speaker 6: but France sees a services deficit with the US, so 112 00:06:26,800 --> 00:06:30,880 Speaker 6: there from their point of view, this digital service tax 113 00:06:31,120 --> 00:06:34,120 Speaker 6: is a way of evening that out and also charging 114 00:06:34,160 --> 00:06:37,360 Speaker 6: for economic activity that they see happening in this country. 115 00:06:37,560 --> 00:06:40,599 Speaker 6: It will make for a complicated round of discussions, and 116 00:06:40,640 --> 00:06:44,480 Speaker 6: the questions out there are many. One is how soon 117 00:06:44,600 --> 00:06:47,360 Speaker 6: could something like this go into effect. We've seen how 118 00:06:47,440 --> 00:06:49,520 Speaker 6: quickly Donald Trump has tried to move with some of 119 00:06:49,560 --> 00:06:54,279 Speaker 6: these other tariff's decisions, and also what level they might 120 00:06:54,360 --> 00:06:57,240 Speaker 6: set and how they would fit into other levees, whether 121 00:06:57,279 --> 00:07:00,280 Speaker 6: they would be stacked on top of other measures, for instance, 122 00:07:00,480 --> 00:07:02,920 Speaker 6: that's another open question, Mike. 123 00:07:03,000 --> 00:07:06,640 Speaker 2: We know that Mark Zuckerberg and other tech executives have 124 00:07:06,760 --> 00:07:10,000 Speaker 2: been getting closer to President Trump. 125 00:07:10,160 --> 00:07:12,960 Speaker 3: Has this been kind of one. 126 00:07:12,840 --> 00:07:16,640 Speaker 2: Of the initiatives that they've been pushing forward? Net Where 127 00:07:16,680 --> 00:07:18,000 Speaker 2: does it leave companies? 128 00:07:19,480 --> 00:07:22,800 Speaker 6: Well, that's a great question on the regulation front. Overall, 129 00:07:22,840 --> 00:07:26,559 Speaker 6: they have been pushing the administration to not only dial 130 00:07:26,720 --> 00:07:29,880 Speaker 6: back rulemaking here in the US it would hit them, 131 00:07:30,120 --> 00:07:32,280 Speaker 6: but they also want the US to be a better 132 00:07:32,320 --> 00:07:36,000 Speaker 6: ambassador for their interests abroad, especially in Europe. And we 133 00:07:36,080 --> 00:07:40,200 Speaker 6: heard jd Vance, Vice President articulating this at the Munich 134 00:07:40,240 --> 00:07:42,960 Speaker 6: Security Conference and at the AI summit in Paris that 135 00:07:43,000 --> 00:07:47,680 Speaker 6: we followed so closely, articulating this vision that regulation is 136 00:07:47,840 --> 00:07:53,520 Speaker 6: really impeding innovation and that levies like the Digital Services Tax, 137 00:07:53,560 --> 00:07:56,440 Speaker 6: which they have long opposed, are just the sort of 138 00:07:56,440 --> 00:07:58,480 Speaker 6: thing that is standing in the way of them making 139 00:07:58,560 --> 00:08:01,960 Speaker 6: breakthroughs and investments in those countries as well. 140 00:08:02,160 --> 00:08:05,880 Speaker 4: Bluemeg's Mike Shephard, we thank you. Look, Tariff's just one 141 00:08:05,960 --> 00:08:08,200 Speaker 4: of the many changes in the political landscape for big 142 00:08:08,240 --> 00:08:11,640 Speaker 4: tech and DEVA startups. Bradley Tusk joins US now to 143 00:08:11,680 --> 00:08:15,040 Speaker 4: discuss how companies should manage this fluid environments. Of course, 144 00:08:15,280 --> 00:08:18,000 Speaker 4: just pivoted his own VC to offer advice in exchange 145 00:08:18,000 --> 00:08:20,240 Speaker 4: for equity instead of cash. Bradley, You've got a wealth 146 00:08:20,280 --> 00:08:23,520 Speaker 4: of political experience. Communications Director Senator Chuck Schumer, a campaign 147 00:08:23,520 --> 00:08:25,480 Speaker 4: and manager, of course, of Michael bloombergs two thousand and 148 00:08:25,520 --> 00:08:28,520 Speaker 4: nine mayoral race. Reminder to our audience. Michael Bloomberg is 149 00:08:28,520 --> 00:08:30,680 Speaker 4: the founder and majority owner of Bloomberg LP, the parent 150 00:08:30,680 --> 00:08:33,079 Speaker 4: company of Bloomberg News. Bradley, I just wanted to put 151 00:08:33,080 --> 00:08:36,800 Speaker 4: to you, like, how does a company you advise manage 152 00:08:36,840 --> 00:08:39,280 Speaker 4: to move and navigate in this ever changing environment? 153 00:08:39,360 --> 00:08:42,600 Speaker 7: Yeah, I mean right now, I think first and foremost, 154 00:08:42,679 --> 00:08:46,400 Speaker 7: there's really a lot of disappointment amongst startups because the 155 00:08:46,520 --> 00:08:49,000 Speaker 7: venture market has been dead for the last four years, 156 00:08:49,040 --> 00:08:51,320 Speaker 7: so it as an absolute dearth of liquidity, both in 157 00:08:51,400 --> 00:08:55,280 Speaker 7: terms of IPOs and MNA activity. And last fall there 158 00:08:55,320 --> 00:08:58,240 Speaker 7: was a tremendous amount of optimism that both between reduced 159 00:08:58,320 --> 00:09:01,520 Speaker 7: interest rates and a change regulators at the federal level, 160 00:09:01,720 --> 00:09:03,720 Speaker 7: that market would really open up and we start to 161 00:09:03,720 --> 00:09:06,160 Speaker 7: see a lot of growth, and all American innovation really 162 00:09:06,200 --> 00:09:09,240 Speaker 7: relies upon that market being free and open, and that 163 00:09:09,280 --> 00:09:12,320 Speaker 7: hasn't happened at all. We have both chairman power signaling 164 00:09:12,360 --> 00:09:14,480 Speaker 7: we might be done with Ray cuts, but I think 165 00:09:14,480 --> 00:09:18,319 Speaker 7: far more important the markets are so much in turmoil. 166 00:09:18,360 --> 00:09:22,120 Speaker 7: There's so much chaos out of Washington that a smooth, 167 00:09:22,200 --> 00:09:25,160 Speaker 7: stable climate that would have paved the way for new 168 00:09:25,200 --> 00:09:27,680 Speaker 7: tech IPOs and there's literally over in one thousand s 169 00:09:27,760 --> 00:09:30,640 Speaker 7: ones file then waiting to go, and new M and 170 00:09:30,720 --> 00:09:34,240 Speaker 7: A just hasn't happened. And so right now I think 171 00:09:34,320 --> 00:09:37,760 Speaker 7: you just have to basically sit tight. But I really 172 00:09:37,800 --> 00:09:40,439 Speaker 7: do think that all the people in the venture community 173 00:09:40,440 --> 00:09:43,800 Speaker 7: that supported President Trump right now are feeling some buyer's remorse. 174 00:09:44,559 --> 00:09:48,559 Speaker 4: But if we do see President Trump being able to 175 00:09:48,600 --> 00:09:51,400 Speaker 4: push back against the Digital Services tax, be able to 176 00:09:51,400 --> 00:09:55,560 Speaker 4: push against European overreaches, they see it by fighting fire 177 00:09:55,600 --> 00:09:57,319 Speaker 4: with fire, is that not It. 178 00:09:57,280 --> 00:10:00,480 Speaker 7: Doesn't help, It doesn't help startups, it doesn't help It 179 00:10:00,559 --> 00:10:03,680 Speaker 7: might help meta, it might help you know, Apple or 180 00:10:03,679 --> 00:10:06,320 Speaker 7: someone like that. But the reality is when you have 181 00:10:06,520 --> 00:10:09,840 Speaker 7: companies that are worth anywhere from a million to one 182 00:10:09,920 --> 00:10:12,280 Speaker 7: hundred million or even a billion dollars and have revenue 183 00:10:12,280 --> 00:10:14,480 Speaker 7: from a million to a couple hundred million, they're not 184 00:10:14,520 --> 00:10:17,040 Speaker 7: paying the Digital service tax, right They're usually not even 185 00:10:17,040 --> 00:10:20,319 Speaker 7: profitable at this point. And so and the problem is this, 186 00:10:20,400 --> 00:10:23,679 Speaker 7: which is, you know, innovation ultimately happens because you have 187 00:10:23,760 --> 00:10:26,360 Speaker 7: all of these founders sort of in a garage somewhere 188 00:10:26,440 --> 00:10:28,640 Speaker 7: or the version of it, who come up with crazy 189 00:10:28,679 --> 00:10:31,120 Speaker 7: ideas and most of them fail, but once in a while, 190 00:10:31,200 --> 00:10:32,880 Speaker 7: one of them succeeds, which is what we saw with 191 00:10:32,960 --> 00:10:36,520 Speaker 7: when we mentioned Meta, Mark Zuckerberger, Apple, Steve Jobs. If 192 00:10:36,520 --> 00:10:39,599 Speaker 7: we don't have the new Zuckerbergs and Jobs and Bezoses 193 00:10:39,640 --> 00:10:42,760 Speaker 7: of the world coming up, you know, then eventually we're 194 00:10:42,760 --> 00:10:45,439 Speaker 7: going to have massive stagnation in our economy. And when 195 00:10:45,440 --> 00:10:48,560 Speaker 7: there's no liquidity in the venture market, venture capital funds 196 00:10:48,600 --> 00:10:52,240 Speaker 7: like mine can't really deploy as much. New capital LPs 197 00:10:52,280 --> 00:10:54,760 Speaker 7: can't invest as much in venture funds, and as a result, 198 00:10:54,800 --> 00:10:57,520 Speaker 7: startups either aren't being funded and they're not being created, 199 00:10:57,840 --> 00:10:59,720 Speaker 7: or they're going out of business when they don't necessarily 200 00:10:59,760 --> 00:11:02,600 Speaker 7: have do and so you know, the ripple effect is severe. 201 00:11:03,800 --> 00:11:07,360 Speaker 2: Let's talk about artificial intelligence because that sector has gotten 202 00:11:07,400 --> 00:11:09,439 Speaker 2: a lot of cash from venture capitalists. So I don't 203 00:11:09,480 --> 00:11:12,679 Speaker 2: think those startup founders are actually hanging out in a garage. 204 00:11:12,880 --> 00:11:15,199 Speaker 3: But let's talk about the regulation in the space. 205 00:11:15,240 --> 00:11:17,800 Speaker 2: It's virtually non existent at the federal level, but there 206 00:11:17,880 --> 00:11:18,920 Speaker 2: is movement at. 207 00:11:18,800 --> 00:11:19,640 Speaker 3: The state level. 208 00:11:19,960 --> 00:11:22,120 Speaker 2: How do you see this shaking out and how are 209 00:11:22,120 --> 00:11:25,079 Speaker 2: you advising startups in this space to navigate it? 210 00:11:25,160 --> 00:11:25,439 Speaker 3: Right now? 211 00:11:25,520 --> 00:11:27,600 Speaker 7: Yeah, my advice is really exactly what you just said, 212 00:11:27,600 --> 00:11:30,040 Speaker 7: which is we've really got to pay attention to the states. 213 00:11:30,120 --> 00:11:32,560 Speaker 7: There's all we've seen on the federal level was one 214 00:11:32,679 --> 00:11:35,960 Speaker 7: very kind of tepet executive order from President Biden that's 215 00:11:36,000 --> 00:11:39,000 Speaker 7: already been rescinded by President Trump. But last year over 216 00:11:39,080 --> 00:11:41,920 Speaker 7: eight hundred bills around AI were introduced in state government. 217 00:11:41,920 --> 00:11:43,760 Speaker 7: There will probably be double by the time we're done 218 00:11:43,760 --> 00:11:46,400 Speaker 7: with sessions this year. And some of them are very 219 00:11:46,400 --> 00:11:48,720 Speaker 7: specific around things like deep fakes, but some of them 220 00:11:48,760 --> 00:11:51,920 Speaker 7: are very comprehensive around how you regulate allows, how you 221 00:11:52,000 --> 00:11:57,000 Speaker 7: regulate apps, and so right now, the problem with the 222 00:11:57,080 --> 00:11:59,520 Speaker 7: lack of any sort of federal leadership is we're going 223 00:11:59,559 --> 00:12:02,280 Speaker 7: to end up patchwork of fifty different states with different 224 00:12:02,280 --> 00:12:04,400 Speaker 7: sets of regulation that companies have to try to comply 225 00:12:04,520 --> 00:12:06,480 Speaker 7: with all of them. But at the moment, if you're 226 00:12:06,520 --> 00:12:09,480 Speaker 7: one of my portfolio companies, it's let's focus on the 227 00:12:09,520 --> 00:12:12,800 Speaker 7: states where legislation is the most likely to move. Let's 228 00:12:12,840 --> 00:12:14,839 Speaker 7: focus on where those bills are going and make sure 229 00:12:14,880 --> 00:12:17,000 Speaker 7: we have a seat at the table so that a 230 00:12:17,440 --> 00:12:20,320 Speaker 7: it doesn't destroy us, and be if possible, it can 231 00:12:20,360 --> 00:12:21,760 Speaker 7: help us build a regulatory mode. 232 00:12:22,679 --> 00:12:24,559 Speaker 2: What other sectors are you looking at that, you think 233 00:12:24,600 --> 00:12:27,800 Speaker 2: you can add value when it comes to this regulatory advice. 234 00:12:27,880 --> 00:12:32,800 Speaker 2: I'm thinking autonomous vehicles, cannabis, you know, startups and delivery. 235 00:12:32,800 --> 00:12:33,439 Speaker 3: What are you saying? 236 00:12:33,559 --> 00:12:33,760 Speaker 8: Yep? 237 00:12:34,000 --> 00:12:36,880 Speaker 7: All those for sure. A lot in digital health, especially 238 00:12:36,920 --> 00:12:41,240 Speaker 7: because healthcare is so big, so fragmented, so regulated, and 239 00:12:41,280 --> 00:12:43,520 Speaker 7: quite frankly so screwed up, that there's so much room 240 00:12:43,559 --> 00:12:47,080 Speaker 7: for improvement. That's a really big sector for us. Ed 241 00:12:47,120 --> 00:12:50,280 Speaker 7: tech is another one. I'm excited about nuclear and what's 242 00:12:50,320 --> 00:12:53,440 Speaker 7: happening around that. The gov tech sector has been growing 243 00:12:53,440 --> 00:12:57,880 Speaker 7: a lot lately, so that's become interesting. Transportation gaming, you know. 244 00:12:58,040 --> 00:13:00,199 Speaker 7: The good news for a business like mine, where you're 245 00:13:00,240 --> 00:13:03,000 Speaker 7: investing in and working with startups and regulated industries is 246 00:13:03,320 --> 00:13:06,440 Speaker 7: government's reach for better or worse is very broad, and 247 00:13:06,480 --> 00:13:08,960 Speaker 7: the vast majority of industries are impacted by government one 248 00:13:09,000 --> 00:13:11,480 Speaker 7: way or another, and so that gives us an opportunity 249 00:13:11,480 --> 00:13:13,000 Speaker 7: to add value. 250 00:13:13,040 --> 00:13:16,200 Speaker 4: To add value. Bradley, you have just gone on and 251 00:13:16,280 --> 00:13:18,840 Speaker 4: to say that the moment your industry, the VC industry, 252 00:13:18,880 --> 00:13:22,120 Speaker 4: the startup industry is feeling buyers remorse around Trump, but 253 00:13:22,520 --> 00:13:25,440 Speaker 4: we push back a little bit and say it's only February. Yep, 254 00:13:25,760 --> 00:13:29,319 Speaker 4: and ultimately are we likely to see your advice going 255 00:13:29,360 --> 00:13:32,320 Speaker 4: forward that things will change from a federal perspective and 256 00:13:32,440 --> 00:13:35,520 Speaker 4: things might open up from an IPO perspective, and companies 257 00:13:35,559 --> 00:13:38,280 Speaker 4: can build the next Zuckerber. We can see the next 258 00:13:38,320 --> 00:13:39,720 Speaker 4: billion dollar, trillion dollar. 259 00:13:39,880 --> 00:13:41,360 Speaker 7: I hope so because I have a lot of money 260 00:13:41,360 --> 00:13:43,839 Speaker 7: at stake here as to my live other vcs. 261 00:13:44,440 --> 00:13:45,320 Speaker 9: Look, my hope is. 262 00:13:45,320 --> 00:13:47,040 Speaker 7: And what at least I'm telling myself what I'm up 263 00:13:47,040 --> 00:13:49,360 Speaker 7: at three in the morning is Trump came in with 264 00:13:49,400 --> 00:13:52,000 Speaker 7: a burst of energy. That's who he is. They wanted 265 00:13:52,000 --> 00:13:55,240 Speaker 7: to make a splash. They have, and soon enough things 266 00:13:55,280 --> 00:13:57,560 Speaker 7: will calm down and the markets will sort of feel 267 00:13:57,559 --> 00:13:58,440 Speaker 7: better and we'll start to. 268 00:13:58,400 --> 00:13:59,880 Speaker 4: See as a new record highs. 269 00:14:00,320 --> 00:14:03,679 Speaker 7: Yeah, but it is not. It's so far not resulting 270 00:14:03,840 --> 00:14:07,480 Speaker 7: in tech company sort of listing IPOs. So that's what 271 00:14:07,520 --> 00:14:09,920 Speaker 7: we need to get to. And on one hand, it 272 00:14:10,000 --> 00:14:12,120 Speaker 7: is possible because Trump, by the way, to his credit, 273 00:14:12,160 --> 00:14:14,000 Speaker 7: just in terms of the work put in, had so 274 00:14:14,160 --> 00:14:16,520 Speaker 7: much activity on opening day and in the first week 275 00:14:16,559 --> 00:14:18,600 Speaker 7: that that there was a lot. But as a result 276 00:14:18,600 --> 00:14:20,320 Speaker 7: they've also done a lot too, so there might not 277 00:14:20,400 --> 00:14:22,800 Speaker 7: be as much to keep doing going forward. On the 278 00:14:22,840 --> 00:14:26,680 Speaker 7: other hand, he operates in chaos, right, that is how 279 00:14:27,080 --> 00:14:31,600 Speaker 7: he functions, and that's not necessarily what you want if 280 00:14:31,640 --> 00:14:34,160 Speaker 7: you are trying to take you know, young tech startups 281 00:14:34,400 --> 00:14:36,880 Speaker 7: and either sell them to bigger companies or take them public. 282 00:14:37,680 --> 00:14:40,760 Speaker 2: That's Tusk Venture CEO Bradley Task. Thanks so much for 283 00:14:40,840 --> 00:14:41,280 Speaker 2: joining us. 284 00:14:41,320 --> 00:14:41,600 Speaker 10: Thank you. 285 00:14:41,720 --> 00:14:43,160 Speaker 3: Coming up next, Ali. 286 00:14:43,000 --> 00:14:46,240 Speaker 2: Baba regains its spot is the number two company in China. 287 00:14:46,560 --> 00:14:48,560 Speaker 3: More in that. Next, this is Bloomberg. 288 00:15:02,080 --> 00:15:04,960 Speaker 4: Let's talk about Alibaba stock rally. It has catapulted the 289 00:15:05,040 --> 00:15:08,040 Speaker 4: Chinese tech darling back to the number two spot in 290 00:15:08,080 --> 00:15:10,760 Speaker 4: the country. For more bloombergs Henry Ren joins us on 291 00:15:10,800 --> 00:15:15,000 Speaker 4: this rally sustainability and indeed the breadth of the buying 292 00:15:15,040 --> 00:15:18,280 Speaker 4: of China tech. Henry just, why are we seeing this 293 00:15:18,320 --> 00:15:20,800 Speaker 4: sort of rally in Alibaba and can it sustain this number? 294 00:15:22,240 --> 00:15:22,480 Speaker 3: Yeah? 295 00:15:22,520 --> 00:15:25,320 Speaker 11: So, Ali Baba is part of the China tech rally 296 00:15:25,360 --> 00:15:27,800 Speaker 11: that we have been seeing for the past few weeks 297 00:15:27,840 --> 00:15:32,040 Speaker 11: since Deep seeks Ai breakthrough, and the whole theasis is 298 00:15:32,080 --> 00:15:35,680 Speaker 11: basically based on the optimism over the country's tech advancement 299 00:15:36,120 --> 00:15:38,720 Speaker 11: as evidenced by Deep Seek of course, and then in 300 00:15:38,760 --> 00:15:41,080 Speaker 11: the past few weeks we have been seeing signs of 301 00:15:41,120 --> 00:15:44,440 Speaker 11: more supportive stands toward the private sector by Beijing as 302 00:15:44,480 --> 00:15:49,680 Speaker 11: well evidence by Chijin being present embracing all those important 303 00:15:49,720 --> 00:15:53,080 Speaker 11: tech leaders in a rear meeting in Beijing. And basically 304 00:15:53,120 --> 00:15:55,720 Speaker 11: the supported stands toward the private sector as well as 305 00:15:55,720 --> 00:15:59,000 Speaker 11: the tech breakthrough are all supporting the stocks. And most 306 00:15:59,040 --> 00:16:03,000 Speaker 11: importantly recent we have been having some companies reporting earnings, 307 00:16:03,040 --> 00:16:07,360 Speaker 11: including Ali Baba yesterday reporting some recovery in its core 308 00:16:07,400 --> 00:16:10,320 Speaker 11: business of domestic e commerce as well as a growing 309 00:16:10,400 --> 00:16:13,880 Speaker 11: croc cloud business. So all those factors putting together are 310 00:16:15,120 --> 00:16:18,040 Speaker 11: supporting China techs raally in the past few weeks. 311 00:16:19,000 --> 00:16:21,960 Speaker 2: Henry, what does this tell us about beijing stands on 312 00:16:22,480 --> 00:16:25,640 Speaker 2: regulation in a sector that really saw it it. 313 00:16:25,720 --> 00:16:27,160 Speaker 3: Suffer from a crackdown. 314 00:16:27,240 --> 00:16:30,440 Speaker 2: Does it mean that this pressure to scrutiny is over? 315 00:16:32,000 --> 00:16:32,480 Speaker 12: Yeah? 316 00:16:32,560 --> 00:16:34,640 Speaker 4: Interesting question. I felt. 317 00:16:36,360 --> 00:16:40,520 Speaker 11: The fact that President Hijingpin himself inviting all those tech 318 00:16:40,640 --> 00:16:43,920 Speaker 11: leaders to Beijing for a PAP talk this sign is 319 00:16:44,000 --> 00:16:46,560 Speaker 11: pretty telling, isn't it, Because in the past two or 320 00:16:46,600 --> 00:16:49,080 Speaker 11: three years, all the headlines, the top headlines we've been 321 00:16:49,080 --> 00:16:52,760 Speaker 11: seeing about more scrutiny into all those companies, not just 322 00:16:52,800 --> 00:16:55,840 Speaker 11: about those tech giants, but also the right heading companies 323 00:16:55,880 --> 00:16:59,000 Speaker 11: of d D but also the food delivery company of Maiitwan. 324 00:16:59,480 --> 00:17:04,000 Speaker 11: But this is important. This is a clear sign of pivot. However, 325 00:17:04,040 --> 00:17:06,240 Speaker 11: we still need to caution a little bit here because 326 00:17:06,280 --> 00:17:10,920 Speaker 11: the expectations is this scrutiny on those tech firms will continue, 327 00:17:11,080 --> 00:17:14,160 Speaker 11: and the priority of Beijing is pretty clear as well, 328 00:17:14,200 --> 00:17:17,080 Speaker 11: because if you see the seat map of that meeting, 329 00:17:17,440 --> 00:17:20,879 Speaker 11: Jack Ma the co founder of Ali Baba and Ponima 330 00:17:21,200 --> 00:17:24,399 Speaker 11: the CEO of Tencent, they're not sitting at the front 331 00:17:24,640 --> 00:17:28,520 Speaker 11: row of facing President cheating Pin. The tech darlings from 332 00:17:28,560 --> 00:17:32,440 Speaker 11: Beijing size are still about the heart tech, including Huawei 333 00:17:32,480 --> 00:17:35,240 Speaker 11: as well as the EV maker Buid, So we have 334 00:17:35,320 --> 00:17:36,240 Speaker 11: to keep that in mind. 335 00:17:36,640 --> 00:17:39,320 Speaker 4: Henry in just thirty seconds, it's interesting who's been buying 336 00:17:39,400 --> 00:17:42,320 Speaker 4: some of these Chinese ADRs, Ryan Cohen, as reported by 337 00:17:42,359 --> 00:17:44,000 Speaker 4: the Wall Street Journal, who else has been winning? 338 00:17:45,200 --> 00:17:48,320 Speaker 11: Yeah, So lots of heats from training activities these days, 339 00:17:48,640 --> 00:17:52,840 Speaker 11: and apart from Ryan Cohen, also billionaire investor David Tapper 340 00:17:52,920 --> 00:17:56,800 Speaker 11: as well, famous for his by Everything China coll we're 341 00:17:56,840 --> 00:18:00,520 Speaker 11: seeing more training activities among on shore mainland traders as 342 00:18:00,520 --> 00:18:03,719 Speaker 11: swallowed these days. So all those factors boosting Johnny Stocks. 343 00:18:04,560 --> 00:18:16,280 Speaker 2: That's Bloomberg's Henry Wren. Thanks for joining US. Investors are 344 00:18:16,280 --> 00:18:19,840 Speaker 2: showing their renewed enthusiasm for quantum computing off the back 345 00:18:19,840 --> 00:18:23,520 Speaker 2: of breakthroughs that indicate commercial applications for the technology could 346 00:18:23,560 --> 00:18:24,000 Speaker 2: just be a. 347 00:18:24,000 --> 00:18:24,960 Speaker 3: Few years away. 348 00:18:25,480 --> 00:18:28,880 Speaker 2: Startup Querra has raised two hundred and thirty million dollars 349 00:18:28,920 --> 00:18:32,880 Speaker 2: from backers including Google and SoftBank's Vision Fund. The company's 350 00:18:32,920 --> 00:18:35,960 Speaker 2: interim CEO, Andy Or, joins us now for more. 351 00:18:36,119 --> 00:18:38,120 Speaker 3: Andy, we just had Microsoft on the show this. 352 00:18:38,080 --> 00:18:40,879 Speaker 2: Week unveiling their quantum computing chip, and it just feels 353 00:18:40,880 --> 00:18:43,359 Speaker 2: like the field went from like an episode of Star 354 00:18:43,480 --> 00:18:46,840 Speaker 2: Trek to all of a sudden, real world applications. You 355 00:18:46,960 --> 00:18:49,840 Speaker 2: pulled together this funding fairly quickly. Talk to us about 356 00:18:49,880 --> 00:18:52,560 Speaker 2: what happened over the last couple months that allowed this 357 00:18:52,720 --> 00:18:53,560 Speaker 2: breakthrough to happen. 358 00:18:54,480 --> 00:18:57,399 Speaker 8: Well, it's an overnight success that takes about seven or 359 00:18:57,440 --> 00:19:00,879 Speaker 8: eight years. It's just that everything's coming to ruition at once, 360 00:19:00,960 --> 00:19:03,879 Speaker 8: and so from the investor point of view, you're seeing 361 00:19:03,880 --> 00:19:07,440 Speaker 8: all these exciting activities and you're thinking it's all happening now, 362 00:19:07,520 --> 00:19:09,920 Speaker 8: but it's been going on for a long time. We're 363 00:19:09,920 --> 00:19:12,880 Speaker 8: all just now reaching the surface. Where people can see us. 364 00:19:13,320 --> 00:19:15,800 Speaker 8: You know, we've been for about seven years, probably use 365 00:19:15,880 --> 00:19:18,639 Speaker 8: fifty sixty seventy million dollars to get to where we 366 00:19:18,720 --> 00:19:22,000 Speaker 8: are and now having sold quantum machines and pushing the 367 00:19:22,000 --> 00:19:25,320 Speaker 8: boundaries of the technology. We're three to five years away 368 00:19:25,320 --> 00:19:29,080 Speaker 8: from useful quantum computing as an industry as a society 369 00:19:29,240 --> 00:19:31,760 Speaker 8: in my opinion, and I think that we're going to 370 00:19:31,760 --> 00:19:34,119 Speaker 8: be one of a small handful of companies that are 371 00:19:34,119 --> 00:19:37,840 Speaker 8: going to demonstrate and deliver useful quantum computers and that 372 00:19:38,000 --> 00:19:39,360 Speaker 8: is going to be transformational. 373 00:19:39,720 --> 00:19:43,960 Speaker 13: How much does the retail investor, the institutional investor need 374 00:19:44,000 --> 00:19:47,880 Speaker 13: to understand the differences in methodology here because people are 375 00:19:47,880 --> 00:19:50,080 Speaker 13: doing it a willow is different from what we've just 376 00:19:50,080 --> 00:19:51,040 Speaker 13: seen for Microsoft. 377 00:19:51,760 --> 00:19:55,160 Speaker 8: Yes, so we call them modalities, but they're really approaches. 378 00:19:55,200 --> 00:19:59,200 Speaker 8: They're underlying technological differences. Microsoft just announced a new one. 379 00:20:00,200 --> 00:20:03,560 Speaker 8: Say there's five different modalities or technological approaches that people 380 00:20:03,600 --> 00:20:07,280 Speaker 8: are using to create a quantum computer. There's neutral atoms, 381 00:20:07,280 --> 00:20:11,560 Speaker 8: there's superconducting, there's ions, there's photons, and there's the Microsoft, 382 00:20:12,280 --> 00:20:16,880 Speaker 8: the Microsoft Topological cubit. I think that you're probably going 383 00:20:16,920 --> 00:20:21,280 Speaker 8: to see several different modalities focus on specific use cases initially, 384 00:20:21,640 --> 00:20:23,400 Speaker 8: and so I don't think you're going to see one 385 00:20:23,440 --> 00:20:26,240 Speaker 8: that's going to reign supreme. If I had to guess, 386 00:20:26,480 --> 00:20:29,320 Speaker 8: I happen to think the neutral atom quantum supercomputing that 387 00:20:29,359 --> 00:20:32,600 Speaker 8: we're building is likely the ticket that is going to win. 388 00:20:33,040 --> 00:20:36,120 Speaker 8: But I think you want to see Yeah, well, it's 389 00:20:36,119 --> 00:20:39,800 Speaker 8: funny how you like we are. But you know, it's 390 00:20:39,880 --> 00:20:43,440 Speaker 8: not just building the underlying quantum computer. It's the algorithms 391 00:20:43,480 --> 00:20:45,880 Speaker 8: that are required so that you can do something useful 392 00:20:45,920 --> 00:20:46,280 Speaker 8: with them. 393 00:20:46,440 --> 00:20:49,359 Speaker 4: Yeah, so tell us about the usefulness here, Andy, because 394 00:20:49,440 --> 00:20:51,960 Speaker 4: we had a great discussion with Microsoft really talking about 395 00:20:52,000 --> 00:20:55,439 Speaker 4: how we could end forever chemicals for example. Where are 396 00:20:55,480 --> 00:20:57,920 Speaker 4: your applications about to work and that three to five 397 00:20:58,000 --> 00:21:00,240 Speaker 4: year time frame you talk of, Yeah. 398 00:21:00,160 --> 00:21:02,679 Speaker 8: Well it's going to be baby steps. I mean, you know, 399 00:21:02,720 --> 00:21:04,879 Speaker 8: one way to think about it are things like life science, 400 00:21:04,960 --> 00:21:11,239 Speaker 8: material science, drug discovery, new materials, super conducting materials at 401 00:21:11,280 --> 00:21:15,560 Speaker 8: room temperature, new forms of encryption. These are applications. The 402 00:21:15,640 --> 00:21:20,840 Speaker 8: methodologies are simulation, optimization and machine learning. These are the 403 00:21:20,920 --> 00:21:24,760 Speaker 8: things that techniques that quantum computers can with unique power, 404 00:21:24,760 --> 00:21:27,280 Speaker 8: bring to bear to solve those kinds of problems. I 405 00:21:27,320 --> 00:21:29,840 Speaker 8: think initially three to five years from now, you're going 406 00:21:29,920 --> 00:21:34,919 Speaker 8: to see the very beginning of quantum supremacy where very small, 407 00:21:35,040 --> 00:21:37,720 Speaker 8: niche based problems are going to be solved, the classical 408 00:21:37,760 --> 00:21:40,439 Speaker 8: computers are never ever ever going to be able to solve. 409 00:21:40,760 --> 00:21:43,439 Speaker 8: And then very quickly a handful of years after that, 410 00:21:43,760 --> 00:21:46,320 Speaker 8: you're going to see whole industries start to be transformed. 411 00:21:47,240 --> 00:21:50,280 Speaker 2: That's Andy or, interim CEO of Qierra. Thanks so much 412 00:21:50,320 --> 00:21:57,760 Speaker 2: for joining us. 413 00:21:58,440 --> 00:22:00,680 Speaker 4: Welcome back to BLU MyD Technology and HID in New. 414 00:22:00,680 --> 00:22:03,240 Speaker 3: York, and I'm Jackie Devalas in San Francisco. 415 00:22:03,320 --> 00:22:05,359 Speaker 4: It's going to quit check on these markets, JACKI, because 416 00:22:05,359 --> 00:22:07,400 Speaker 4: we are down on the week. We're off by four 417 00:22:07,480 --> 00:22:09,720 Speaker 4: ten percent over the last five training days. If you 418 00:22:09,840 --> 00:22:11,480 Speaker 4: look at the NAZA one hundred on the day, what 419 00:22:11,520 --> 00:22:14,280 Speaker 4: tugs are slower the likes of Tesla. Interestingly, one of 420 00:22:14,320 --> 00:22:16,199 Speaker 4: the points drags I want to go to one of 421 00:22:16,200 --> 00:22:20,440 Speaker 4: the most talked about stories today when it comes to 422 00:22:20,520 --> 00:22:23,640 Speaker 4: tech and evs. Nissan has been spiraling higher. If you're 423 00:22:23,640 --> 00:22:26,240 Speaker 4: looking at its ADLs, we're up six percent. Tesla on 424 00:22:26,280 --> 00:22:29,159 Speaker 4: the downside by two point four percent. Now this is 425 00:22:29,200 --> 00:22:32,000 Speaker 4: we get a pushback to an FT report that Japan 426 00:22:32,680 --> 00:22:36,320 Speaker 4: is courting Tesla on a Nissan investment in exchange for 427 00:22:36,440 --> 00:22:39,760 Speaker 4: US factories. Now, someone who is involved in the well 428 00:22:39,760 --> 00:22:42,239 Speaker 4: who denies any involvement in the reporting is someone who 429 00:22:42,280 --> 00:22:44,840 Speaker 4: used to be on the Tesla board. Who Eremochi Mazzuno, 430 00:22:44,920 --> 00:22:47,240 Speaker 4: a former board member of Tesla, denying that report by 431 00:22:47,280 --> 00:22:49,879 Speaker 4: the ft that he's leading a Japanese group that aims 432 00:22:49,880 --> 00:22:52,080 Speaker 4: to persuade the EV maker to invest in Nisan. This 433 00:22:52,119 --> 00:22:54,160 Speaker 4: one is going to roll on as we see Tesla 434 00:22:54,200 --> 00:22:56,880 Speaker 4: off by two percent. Interestingly in the EV sector work 435 00:22:56,920 --> 00:22:59,640 Speaker 4: by more than three percent for Rivian. Why they're warning 436 00:22:59,680 --> 00:23:03,600 Speaker 4: about first annual sales decline policy risks. Of course, EV 437 00:23:03,760 --> 00:23:06,400 Speaker 4: tax credits may be coming to an end regulatory policies 438 00:23:06,440 --> 00:23:09,000 Speaker 4: that could weigh on sales more broadly, So keep an 439 00:23:09,000 --> 00:23:11,720 Speaker 4: eye on the EV and auto space is a busy one. 440 00:23:11,920 --> 00:23:14,840 Speaker 4: Let's switch gears now because US prosecutors and regulators are 441 00:23:14,840 --> 00:23:18,800 Speaker 4: investigating a thirty two million dollar deal between CrowdStrike and 442 00:23:18,920 --> 00:23:23,720 Speaker 4: tech distributor Carasoft to provide cybersecurity tools to the IRS. Now, 443 00:23:23,720 --> 00:23:25,760 Speaker 4: it's all according to sources and a document seen by 444 00:23:25,760 --> 00:23:29,200 Speaker 4: Bloomberg News. Jake Bliberg joins US who has been reporting 445 00:23:29,240 --> 00:23:32,560 Speaker 4: out this story since October. Basically your reporting has spurred 446 00:23:32,560 --> 00:23:34,199 Speaker 4: this investigation. So what do we know? 447 00:23:34,720 --> 00:23:38,360 Speaker 14: So what we know is that last fall of following 448 00:23:38,359 --> 00:23:44,439 Speaker 14: our report, SEC investigators and DOJ investigators began interviewing people 449 00:23:44,480 --> 00:23:46,639 Speaker 14: who used to work for CrowdStrike and who worked for 450 00:23:46,680 --> 00:23:49,919 Speaker 14: the IRS, asking them what happened with this deal because 451 00:23:50,440 --> 00:23:53,520 Speaker 14: something sort of curious took place after a CrowdStrike closed it. 452 00:23:53,840 --> 00:23:57,399 Speaker 14: The IRS didn't ultimately buy the software subscriptions that the 453 00:23:57,440 --> 00:23:58,040 Speaker 14: deal was for. 454 00:24:00,000 --> 00:24:00,840 Speaker 3: What's at stake here? 455 00:24:00,880 --> 00:24:05,200 Speaker 2: What does this mean for CrowdStrike? Could it impact their revenue? 456 00:24:05,880 --> 00:24:08,040 Speaker 2: Villas in on what the company has said about the 457 00:24:08,080 --> 00:24:09,160 Speaker 2: investigation this far. 458 00:24:10,040 --> 00:24:12,399 Speaker 14: So what the company has said is that they stand 459 00:24:12,440 --> 00:24:15,880 Speaker 14: by the accounting or their accounting of this deal, and 460 00:24:16,040 --> 00:24:20,080 Speaker 14: what to say for them is scrutiny on a transaction 461 00:24:20,240 --> 00:24:24,000 Speaker 14: that came at a pretty important time for them, right 462 00:24:24,080 --> 00:24:26,520 Speaker 14: at the close of a quarter back in twenty twenty three, 463 00:24:27,160 --> 00:24:29,639 Speaker 14: and was big enough that it could have made the 464 00:24:29,680 --> 00:24:35,400 Speaker 14: difference between them meeting or falling short of market expectations 465 00:24:35,840 --> 00:24:39,080 Speaker 14: on a key metric for that quarter. Although we should 466 00:24:39,080 --> 00:24:43,000 Speaker 14: say that the company hasn't detailed just how it accounted 467 00:24:43,000 --> 00:24:45,840 Speaker 14: for this deal, but again they're saying they stand by 468 00:24:45,880 --> 00:24:47,000 Speaker 14: what they did there. 469 00:24:48,000 --> 00:24:50,680 Speaker 2: That's Bloomberg Exchange. Blinberg, thanks so much for joining us. 470 00:24:51,119 --> 00:24:55,639 Speaker 2: Now US crypto trading platform, Coinbase says the SEC has 471 00:24:55,680 --> 00:24:58,280 Speaker 2: agreed to drop its lawsuit that alleged it ran an 472 00:24:58,359 --> 00:25:03,720 Speaker 2: illegal exchange. All this pending Commissioner approval. Bloomberg Shanale Basic 473 00:25:03,800 --> 00:25:07,040 Speaker 2: is standing by with Coinbasis chief legal officer Paul Grebel. 474 00:25:07,160 --> 00:25:10,040 Speaker 15: Shanali, thank you, Jackie, Paul, thank you for joining us 475 00:25:10,040 --> 00:25:11,760 Speaker 15: today on the heels of this news. It's been a 476 00:25:11,760 --> 00:25:14,359 Speaker 15: fight that you have been fighting for a while. Now, 477 00:25:15,040 --> 00:25:18,560 Speaker 15: now that you have this agreement, what does it free 478 00:25:18,640 --> 00:25:19,879 Speaker 15: Coinbase up to do? 479 00:25:21,840 --> 00:25:24,359 Speaker 10: Good morning, Chanale. Today is a big date, not just 480 00:25:24,400 --> 00:25:27,160 Speaker 10: for Coinbase, but for crypto and for the United States. 481 00:25:27,800 --> 00:25:31,720 Speaker 10: With this case in our rearview mirror a, Coinbase is 482 00:25:31,720 --> 00:25:33,760 Speaker 10: going to be in a much stronger position to not 483 00:25:33,840 --> 00:25:37,680 Speaker 10: only push for a permanent legislation that we think will 484 00:25:37,680 --> 00:25:41,040 Speaker 10: provide clarity to the markets, but also to double down, 485 00:25:41,080 --> 00:25:44,560 Speaker 10: maybe even triple down on innovation in our own products 486 00:25:44,600 --> 00:25:46,560 Speaker 10: and services that we think are going to serve our 487 00:25:46,600 --> 00:25:47,960 Speaker 10: customers very very well. 488 00:25:48,280 --> 00:25:51,160 Speaker 15: It's interesting to see you have this initial excitement around 489 00:25:51,320 --> 00:25:53,560 Speaker 15: the agreement. When it comes to your stock performance, you're 490 00:25:53,560 --> 00:25:56,000 Speaker 15: actually now seeing your stock at the moment down on 491 00:25:56,040 --> 00:25:56,360 Speaker 15: the day. 492 00:25:56,560 --> 00:25:57,679 Speaker 4: Was a lot of this baked in. 493 00:25:58,280 --> 00:26:01,520 Speaker 15: One question I have for you is what this means 494 00:26:01,600 --> 00:26:05,160 Speaker 15: for investors in coinbase. Presumably you've been spending a lot 495 00:26:05,160 --> 00:26:05,760 Speaker 15: of money. 496 00:26:05,560 --> 00:26:06,520 Speaker 4: On legal fees. 497 00:26:06,800 --> 00:26:09,840 Speaker 15: How much have you been spending through the course of 498 00:26:09,960 --> 00:26:12,119 Speaker 15: this fight, and what is it for you up to 499 00:26:12,240 --> 00:26:13,800 Speaker 15: now spend on instead. 500 00:26:15,080 --> 00:26:18,679 Speaker 10: Well, the last four years of the Gary Gensler regime 501 00:26:18,760 --> 00:26:21,639 Speaker 10: and his war on crypto have been nothing short of 502 00:26:21,640 --> 00:26:25,840 Speaker 10: a disaster for American crypto. Writ large, in coinbases case, 503 00:26:26,080 --> 00:26:29,800 Speaker 10: we've had to spend over fifty million dollars just on 504 00:26:29,880 --> 00:26:33,400 Speaker 10: outside law firms and other advisors alone. That doesn't even 505 00:26:33,400 --> 00:26:36,959 Speaker 10: include the cost internally. That doesn't even include the tax 506 00:26:37,280 --> 00:26:41,600 Speaker 10: on innovation that Gary Gensler's misguided campaign imposed. So with 507 00:26:41,800 --> 00:26:44,840 Speaker 10: all of that now lifted, we're able to focus on 508 00:26:44,960 --> 00:26:48,080 Speaker 10: the future. As I said, I think legislation in the 509 00:26:48,119 --> 00:26:50,760 Speaker 10: Congress on market structure and stable coins is going to 510 00:26:50,760 --> 00:26:53,520 Speaker 10: be critically important. And then of course there's the whole 511 00:26:53,520 --> 00:26:56,440 Speaker 10: point of legislation as well as rulemaking at the SEC, 512 00:26:56,480 --> 00:26:59,720 Speaker 10: which is to bring new listings to our platform, to 513 00:26:59,720 --> 00:27:03,120 Speaker 10: de new products and services that provide a real alternative 514 00:27:03,240 --> 00:27:06,240 Speaker 10: in terms of financial services, and ultimately to provide a 515 00:27:06,240 --> 00:27:10,320 Speaker 10: foundation for innovations that go well beyond speculation investing in 516 00:27:10,359 --> 00:27:13,480 Speaker 10: financial services that we think are going to be tremendously 517 00:27:13,520 --> 00:27:15,080 Speaker 10: important to the US economy. 518 00:27:15,240 --> 00:27:18,280 Speaker 15: One question is what this means in terms of unlocking 519 00:27:18,680 --> 00:27:22,480 Speaker 15: new products. In terms of unlocking token listings, there has 520 00:27:22,520 --> 00:27:26,639 Speaker 15: been a lot of dispute around what is allowed in 521 00:27:26,720 --> 00:27:29,119 Speaker 15: terms of bringing to market on the coin base exchange. 522 00:27:29,240 --> 00:27:31,640 Speaker 15: Do you think that this could unlock a further wave 523 00:27:31,680 --> 00:27:33,000 Speaker 15: of listings. 524 00:27:33,359 --> 00:27:35,679 Speaker 10: Well, I think that we are going to see an 525 00:27:35,720 --> 00:27:40,040 Speaker 10: acceleration in listings on the platform going forward. Our approach 526 00:27:40,080 --> 00:27:44,000 Speaker 10: to listings that actually remained remarkably consistent over many years, 527 00:27:44,000 --> 00:27:46,000 Speaker 10: which is to look at the state of the law, 528 00:27:46,080 --> 00:27:49,920 Speaker 10: to understand where the courts are and frankly, to understand 529 00:27:49,920 --> 00:27:51,760 Speaker 10: where the course you're likely to go if and when 530 00:27:52,160 --> 00:27:54,479 Speaker 10: issues are brought before them. But I think that with 531 00:27:54,600 --> 00:27:57,600 Speaker 10: this resolution we can consign to the ash heap of 532 00:27:57,680 --> 00:28:02,840 Speaker 10: history the SEC's misguided view that somehow every digital asset 533 00:28:03,160 --> 00:28:06,440 Speaker 10: other than perhaps bitcoin, was a security. That was the 534 00:28:06,520 --> 00:28:09,000 Speaker 10: view of the SEC during the Gary Gensler regime, and 535 00:28:09,040 --> 00:28:11,040 Speaker 10: that view has now been firmly rejected by the new 536 00:28:11,080 --> 00:28:12,720 Speaker 10: leadership in charge. 537 00:28:13,400 --> 00:28:16,399 Speaker 15: What does this mean in terms of the types of 538 00:28:16,560 --> 00:28:18,480 Speaker 15: investments you're going to make in the future. You mentioned 539 00:28:18,520 --> 00:28:21,080 Speaker 15: fifty million dollars over a span of years when it 540 00:28:21,119 --> 00:28:24,840 Speaker 15: came to legal costs hiring outside lawyers. Does that fifty 541 00:28:24,920 --> 00:28:28,280 Speaker 15: million translate to fifty million in the future to new 542 00:28:28,400 --> 00:28:31,320 Speaker 15: engineers and other talents at coinbase. 543 00:28:31,480 --> 00:28:36,360 Speaker 10: Well, I think actually it translates to an even bigger 544 00:28:36,440 --> 00:28:41,520 Speaker 10: investment going forward in software development and technology in basic 545 00:28:41,640 --> 00:28:45,520 Speaker 10: science to support the advancement of cryptocurrency and crypto and 546 00:28:45,520 --> 00:28:48,960 Speaker 10: digital assets more generally all over the world. The Gensler 547 00:28:49,000 --> 00:28:51,240 Speaker 10: regime may have been great for lawyers like me, but 548 00:28:51,360 --> 00:28:55,560 Speaker 10: it's been an absolute disaster for innovation in the United States. Fortunately, 549 00:28:55,760 --> 00:28:58,480 Speaker 10: with the new leadership at the SEC turning the page, 550 00:28:58,720 --> 00:29:00,880 Speaker 10: we think we're going to be able to look forward 551 00:29:00,960 --> 00:29:04,040 Speaker 10: and focus much more on building and much less on litigating. 552 00:29:04,200 --> 00:29:07,160 Speaker 15: Paul, you mentioned rule making being a critical part of 553 00:29:07,160 --> 00:29:10,280 Speaker 15: the push moving forward. How soon do you expect more 554 00:29:10,400 --> 00:29:14,200 Speaker 15: rules that would clarify a lot of uncertainties in the 555 00:29:14,200 --> 00:29:19,000 Speaker 15: crypto industry, particularly when it comes to registrations with the SEC, 556 00:29:19,120 --> 00:29:21,120 Speaker 15: when it comes to listings and. 557 00:29:21,120 --> 00:29:26,400 Speaker 10: Otherwise, well, Coinbase has been focused on regulatory clarity and 558 00:29:26,520 --> 00:29:29,720 Speaker 10: especially rule making for years. It's one of the reasons why, 559 00:29:29,760 --> 00:29:33,320 Speaker 10: even as we were defending ourselves against this bogus meritless 560 00:29:33,320 --> 00:29:36,800 Speaker 10: case by the SEC, we actually sue the SEC ourselves 561 00:29:37,480 --> 00:29:41,360 Speaker 10: to get rules for crypto in place. I'm very confident 562 00:29:41,440 --> 00:29:45,640 Speaker 10: that with Acting Cherieta and Commissioner Purson's leadership and the 563 00:29:45,640 --> 00:29:48,760 Speaker 10: announcement recently of a crypto task Force at the SEC, 564 00:29:48,880 --> 00:29:52,040 Speaker 10: we're going to see rules that will allow companies like Coinbase, 565 00:29:52,120 --> 00:29:55,240 Speaker 10: but also many others to come in and register to 566 00:29:55,320 --> 00:30:00,880 Speaker 10: be allowed to list crypto asset securities transactions appropriately on 567 00:30:00,920 --> 00:30:04,560 Speaker 10: our platform, and then move past this phase an era 568 00:30:04,880 --> 00:30:08,920 Speaker 10: where these decisions were made in courtrooms rather than as 569 00:30:09,000 --> 00:30:13,000 Speaker 10: part of a deliberative process between industry regulators and other stakeholders. 570 00:30:13,320 --> 00:30:15,000 Speaker 15: Paul, we thank you for your time. This is Paul 571 00:30:15,000 --> 00:30:18,520 Speaker 15: Graywell Comebasis Chief legal Officer, Jackie back to you. 572 00:30:19,360 --> 00:30:19,600 Speaker 3: Thanks. 573 00:30:19,600 --> 00:30:23,600 Speaker 2: Shanali coming up x Say's fortune facelift. How the one 574 00:30:23,640 --> 00:30:26,600 Speaker 2: struggling social media platform sing improved financials. 575 00:30:26,800 --> 00:30:27,560 Speaker 3: This is Bloomberg. 576 00:30:38,480 --> 00:30:40,480 Speaker 4: Let's take a look at the social media platform X. 577 00:30:40,760 --> 00:30:42,560 Speaker 4: Of course we know it's in talks with investors for 578 00:30:42,640 --> 00:30:46,080 Speaker 4: a fresh equity fundraising value at forty four billion dollars, 579 00:30:46,360 --> 00:30:49,160 Speaker 4: but it's still mide and debt. It's improved fortunes are 580 00:30:49,160 --> 00:30:52,840 Speaker 4: really due to heavily adjustive financials and investors potential fear 581 00:30:52,880 --> 00:30:56,000 Speaker 4: of missing out and megs. Max Chraffkin joins us on 582 00:30:56,320 --> 00:30:59,880 Speaker 4: some of the opacity that Moodies calls it the undermines 583 00:30:59,880 --> 00:31:03,680 Speaker 4: the reliability this financial information that we've ultimately been drip 584 00:31:03,720 --> 00:31:05,160 Speaker 4: fed fly reports here. 585 00:31:05,400 --> 00:31:05,600 Speaker 7: Yeah. 586 00:31:05,600 --> 00:31:10,440 Speaker 16: Absolutely, so, Elon Musk and X really for almost since 587 00:31:10,520 --> 00:31:12,640 Speaker 16: Elon Musk has bought X has been trying to tell 588 00:31:12,640 --> 00:31:16,360 Speaker 16: this story that the finances are improving, that things are 589 00:31:16,360 --> 00:31:18,920 Speaker 16: getting better. We've seen lots of reasons to doubt that, 590 00:31:19,240 --> 00:31:21,920 Speaker 16: although there have been over the last few months some 591 00:31:21,960 --> 00:31:25,480 Speaker 16: sort of positive signs, maybe some advertisers perhaps coming back 592 00:31:25,760 --> 00:31:28,040 Speaker 16: partly because you know, they want to keep somebody who's 593 00:31:28,040 --> 00:31:31,160 Speaker 16: a close advisor to President Trump happy, and in this 594 00:31:31,280 --> 00:31:35,320 Speaker 16: fundraising you see some of the ways that they're trying 595 00:31:35,360 --> 00:31:38,080 Speaker 16: to sort of cover up the advertising losses or what 596 00:31:38,160 --> 00:31:41,160 Speaker 16: most of us believe are huge advertising losses. So these 597 00:31:41,200 --> 00:31:46,080 Speaker 16: include deals with Xai, which is Elon Musk's Ai company 598 00:31:46,400 --> 00:31:49,920 Speaker 16: ownership stake at Xai, a deal with chips that were 599 00:31:49,920 --> 00:31:51,240 Speaker 16: provided from. 600 00:31:51,440 --> 00:31:52,320 Speaker 4: X to Xai. 601 00:31:52,640 --> 00:31:56,120 Speaker 16: And what we're seeing is this kind of inner party transaction, 602 00:31:56,360 --> 00:31:59,200 Speaker 16: which you know, for most investors would probably be a 603 00:31:59,240 --> 00:32:01,240 Speaker 16: bit of a red flow or at least a yellow flag, 604 00:32:01,360 --> 00:32:03,120 Speaker 16: but for Elon Musk is just sort of part of 605 00:32:03,120 --> 00:32:06,160 Speaker 16: how he does business. He's always done this with his companies, 606 00:32:06,240 --> 00:32:08,880 Speaker 16: kind of combined them and done it in ways that 607 00:32:08,920 --> 00:32:10,760 Speaker 16: are not necessarily conventional. 608 00:32:11,720 --> 00:32:14,520 Speaker 2: Max Just looking at a simple figure how much revenue 609 00:32:14,640 --> 00:32:18,320 Speaker 2: the company generated, it's still substantially less than what it 610 00:32:18,400 --> 00:32:22,040 Speaker 2: was generating prior to Musk coming in. Why are investors 611 00:32:22,360 --> 00:32:23,560 Speaker 2: still so confident? 612 00:32:23,960 --> 00:32:25,640 Speaker 16: Yeah, the story points it out, but I think a 613 00:32:25,680 --> 00:32:26,400 Speaker 16: lot of it. 614 00:32:26,240 --> 00:32:27,360 Speaker 4: Is just fomo. 615 00:32:27,520 --> 00:32:29,880 Speaker 16: It's this sense that fear of missing out, the sense 616 00:32:29,880 --> 00:32:33,040 Speaker 16: that Elon Musk is in a hot place, he is 617 00:32:33,120 --> 00:32:35,520 Speaker 16: at the arm of the most powerful person in the world, 618 00:32:36,240 --> 00:32:38,520 Speaker 16: and that is driving at least some of this excitement. 619 00:32:38,560 --> 00:32:42,400 Speaker 16: We've seen similar run ups in value at Tesla and 620 00:32:42,440 --> 00:32:45,680 Speaker 16: at Musk's other companies where people just sort of are thinking, hey, 621 00:32:45,960 --> 00:32:47,520 Speaker 16: this is going to work out one way or another, 622 00:32:47,680 --> 00:32:49,920 Speaker 16: and then you also have the kind of AI angle. 623 00:32:49,960 --> 00:32:53,520 Speaker 16: Of course, there's a lot of hype around AI X 624 00:32:53,680 --> 00:32:58,000 Speaker 16: has or is related to this chatbot thing called Groc, 625 00:32:58,040 --> 00:33:00,959 Speaker 16: which is inside of X. So I think it's a 626 00:33:01,000 --> 00:33:03,720 Speaker 16: bet on that it's a bet on Musk, and I 627 00:33:03,760 --> 00:33:06,880 Speaker 16: think a lot of anytime you're seeing investors wanting to 628 00:33:06,920 --> 00:33:09,480 Speaker 16: do business with a Musk company, you got to think 629 00:33:09,520 --> 00:33:14,600 Speaker 16: about the larger Elon Musk empire, SpaceX one Day or Starlink, 630 00:33:14,800 --> 00:33:16,680 Speaker 16: one of Musk companies is going to have an IPO. 631 00:33:17,040 --> 00:33:19,400 Speaker 16: Lots of these guys are going to want in on that. 632 00:33:19,680 --> 00:33:21,840 Speaker 16: There are lots of there are reasons to stay close 633 00:33:21,840 --> 00:33:25,440 Speaker 16: to Elon Musk, even if you're not necessarily a true 634 00:33:25,440 --> 00:33:27,320 Speaker 16: believer in any particular deal. 635 00:33:28,240 --> 00:33:31,160 Speaker 2: That's Bloomberg's Max Chafkin, thanks so much for joining us. 636 00:33:31,600 --> 00:33:34,680 Speaker 2: The DOES staffer who resigned after a report LinkedIn to 637 00:33:34,840 --> 00:33:39,200 Speaker 2: racism and eugenics has been reinstated at the Social Security Administration. 638 00:33:39,280 --> 00:33:43,320 Speaker 2: According to a source, Marco Elez, who reportedly advocated for 639 00:33:43,360 --> 00:33:47,800 Speaker 2: a quote eugenic immigration policy and argued against mixed raced 640 00:33:47,840 --> 00:33:51,680 Speaker 2: relationships and posts on X, had received support from Musk 641 00:33:52,000 --> 00:33:55,840 Speaker 2: President Trump and Vice President JD. Vance after his departure 642 00:33:55,880 --> 00:33:56,720 Speaker 2: earlier this month. 643 00:33:57,000 --> 00:34:00,680 Speaker 4: Caroline, let's just talk more about what's happening around the 644 00:34:00,720 --> 00:34:06,200 Speaker 4: world with nonprofits that target online extremism and authoritarian propaganda. 645 00:34:06,280 --> 00:34:09,040 Speaker 4: They're slashing operations, They're laying off employees. This is after 646 00:34:09,040 --> 00:34:11,200 Speaker 4: the government cost cutting push led by Elon Musk and 647 00:34:11,200 --> 00:34:14,360 Speaker 4: President Trump, but a stop to some vital US support 648 00:34:14,360 --> 00:34:17,160 Speaker 4: for many. This is according to nearly a dozen sources 649 00:34:17,400 --> 00:34:19,799 Speaker 4: who spoke with Bloomberg. Jeff Stone is one of the 650 00:34:19,800 --> 00:34:25,040 Speaker 4: reporters on this lengthy piece, and we perhaps are unsurprised 651 00:34:25,480 --> 00:34:27,640 Speaker 4: that this is what the repercussions are when you start 652 00:34:27,680 --> 00:34:28,920 Speaker 4: to pull away at fact checking. 653 00:34:29,520 --> 00:34:33,680 Speaker 9: We should be unsurprised. A significant a small but significant 654 00:34:33,760 --> 00:34:38,080 Speaker 9: portion of US foreign aid has for years been dedicated 655 00:34:38,120 --> 00:34:41,200 Speaker 9: to projects that are often independent media projects. But what 656 00:34:41,239 --> 00:34:45,800 Speaker 9: they do is fight extremism online. They flag and refute 657 00:34:45,840 --> 00:34:50,439 Speaker 9: Russian propaganda, particularly in countries US allied countries that are 658 00:34:50,480 --> 00:34:54,799 Speaker 9: thinking about closer relationships with the Kremlin. So these are 659 00:34:54,880 --> 00:34:58,200 Speaker 9: small organizations that have a really vital part of the 660 00:34:58,239 --> 00:35:01,359 Speaker 9: way that people around the world consuming media. A lot 661 00:35:01,440 --> 00:35:04,919 Speaker 9: of them are thinking about cutting back on staff and 662 00:35:05,480 --> 00:35:07,320 Speaker 9: pausing a lot of their projects. 663 00:35:07,719 --> 00:35:11,480 Speaker 2: Jeff, what recourse do these organizations have. Is there any 664 00:35:11,560 --> 00:35:13,440 Speaker 2: other place that they can kind of fill in the 665 00:35:13,520 --> 00:35:16,680 Speaker 2: gap and funding that they were previously receiving that's now 666 00:35:16,680 --> 00:35:17,160 Speaker 2: being cut. 667 00:35:17,400 --> 00:35:20,520 Speaker 9: It really depends on It really depends on the organization, Jackie. 668 00:35:20,880 --> 00:35:23,440 Speaker 9: Some of them are closing entirely, some of them are 669 00:35:23,480 --> 00:35:27,000 Speaker 9: laying off staff, others. Most of them are scrambling to 670 00:35:27,040 --> 00:35:30,560 Speaker 9: find different sources of funding, whether that be asking their 671 00:35:30,560 --> 00:35:34,160 Speaker 9: other investors for more cash. But a lot of them 672 00:35:34,200 --> 00:35:35,919 Speaker 9: are really trying to figure that out now. The short 673 00:35:35,920 --> 00:35:39,600 Speaker 9: answer is there's not an immediate path to sustainability, but. 674 00:35:39,560 --> 00:35:42,200 Speaker 4: It's not all about money. They might be putting back 675 00:35:42,200 --> 00:35:45,040 Speaker 4: from anti disinformation for other reasons, right. 676 00:35:45,360 --> 00:35:49,799 Speaker 9: That's right, Caroline. Disinformation has become an incredibly loaded word. Obviously, 677 00:35:50,600 --> 00:35:53,600 Speaker 9: a lot of the right wing side of things has 678 00:35:53,680 --> 00:35:57,839 Speaker 9: often conflated it with censorship. These organizations are a little 679 00:35:57,840 --> 00:36:01,839 Speaker 9: bit different. What they do is flag extremism, and they 680 00:36:01,840 --> 00:36:05,640 Speaker 9: will flag threats, often potentially violent threats to law enforcement 681 00:36:05,680 --> 00:36:11,759 Speaker 9: around the world. So under that political aspect of disinformation, 682 00:36:12,440 --> 00:36:14,040 Speaker 9: these other projects are also folding. 683 00:36:15,120 --> 00:36:17,240 Speaker 3: That's Bloomberg, Steffstone, thanks for joining. 684 00:36:17,080 --> 00:36:27,440 Speaker 2: Us at a time when DEI has fallen out of 685 00:36:27,480 --> 00:36:31,080 Speaker 2: favor in Washington and with some big tech firms. Stacy 686 00:36:31,160 --> 00:36:35,200 Speaker 2: Brown Philpott's new fund is targeting diverse founders. The former 687 00:36:35,239 --> 00:36:38,239 Speaker 2: Task Gravit CEO has raised one hundred and seventy two 688 00:36:38,480 --> 00:36:42,000 Speaker 2: million dollars for underinvested startups. She's here to tell us 689 00:36:42,040 --> 00:36:44,920 Speaker 2: more about Cherry Rock Capital. Stacey, thanks so much for 690 00:36:44,960 --> 00:36:48,600 Speaker 2: coming in. Tell us more about the company's investment philosophy 691 00:36:48,960 --> 00:36:53,640 Speaker 2: and how you managed to bring investors institutional investors, especially 692 00:36:53,920 --> 00:36:57,120 Speaker 2: that now was the time to bet big on underrepresented founders. 693 00:36:57,440 --> 00:36:58,600 Speaker 3: Well, thank you for having me. 694 00:36:58,800 --> 00:37:02,480 Speaker 12: Cherry Rock Capital is focused on investing at the series 695 00:37:02,520 --> 00:37:06,399 Speaker 12: A series B stage in underinvested founders, where we see 696 00:37:06,600 --> 00:37:08,560 Speaker 12: a gap in the market, which is an opportunity to 697 00:37:08,600 --> 00:37:12,280 Speaker 12: generate outsize returns. As you just said, we have institutional 698 00:37:12,360 --> 00:37:17,160 Speaker 12: investors like Mass Mutual, JP Morgan, Goldman, Sachs, top tier 699 00:37:17,200 --> 00:37:21,280 Speaker 12: capital partners, Pivotal Ventures, and they all wanna see great returns. 700 00:37:21,600 --> 00:37:23,560 Speaker 12: So what we see is a real opportunity to do 701 00:37:23,640 --> 00:37:27,200 Speaker 12: just that by focusing on underinvested founders who generally lack 702 00:37:27,280 --> 00:37:28,120 Speaker 12: access to capital. 703 00:37:28,440 --> 00:37:33,280 Speaker 2: Did this anti DEI climate, especially over the last couple 704 00:37:33,239 --> 00:37:35,840 Speaker 2: of weeks, which has it it really intensified. Did that 705 00:37:35,920 --> 00:37:38,560 Speaker 2: affect your ability to to fund raise because it just 706 00:37:38,560 --> 00:37:39,560 Speaker 2: closed in January? 707 00:37:39,640 --> 00:37:40,520 Speaker 4: Right, we did. 708 00:37:40,600 --> 00:37:42,880 Speaker 12: We just closed in January. But you can see the 709 00:37:42,960 --> 00:37:45,799 Speaker 12: names of LPs that we have. Our limited partners are 710 00:37:45,840 --> 00:37:48,759 Speaker 12: focused on generating returns. This is something we're doing for 711 00:37:48,800 --> 00:37:51,719 Speaker 12: the long term. I'm building an enduring institution that will 712 00:37:51,800 --> 00:37:54,680 Speaker 12: last for more than twenty years, and they see the 713 00:37:54,719 --> 00:37:59,120 Speaker 12: opportunity over that duration to generate outsize returns, not just 714 00:37:59,120 --> 00:38:01,400 Speaker 12: for them, but all so for our founders. So the 715 00:38:01,440 --> 00:38:03,319 Speaker 12: current backdrop didn't really affect us at all. 716 00:38:03,760 --> 00:38:07,480 Speaker 4: So, Stacey, where do you think in particular sector points 717 00:38:08,560 --> 00:38:10,839 Speaker 4: all the areas that are like you to bring these 718 00:38:10,880 --> 00:38:12,040 Speaker 4: outsized returns. 719 00:38:13,520 --> 00:38:16,400 Speaker 12: Well, we're focused on five sectors right now. Our first 720 00:38:16,400 --> 00:38:18,880 Speaker 12: investment was in a company called Coactive, which is an 721 00:38:19,000 --> 00:38:25,080 Speaker 12: enterprise multimodal AI company that helps businesses organize and analyze audio, video, 722 00:38:25,239 --> 00:38:28,680 Speaker 12: and image data. We think that sector is very exciting. 723 00:38:28,880 --> 00:38:31,799 Speaker 12: We also invested Invitable Health, which is a digital health 724 00:38:31,800 --> 00:38:35,320 Speaker 12: company that provides health insurance to small businesses who employ 725 00:38:35,400 --> 00:38:38,279 Speaker 12: hourly workers. We think that sector is very exciting and 726 00:38:38,320 --> 00:38:40,520 Speaker 12: we're close to some investments in the future of work 727 00:38:40,680 --> 00:38:41,680 Speaker 12: and fintech. 728 00:38:41,280 --> 00:38:44,520 Speaker 4: Sectors as well. Help You were a founding Sorry you go, Jockie, 729 00:38:45,239 --> 00:38:46,160 Speaker 4: You were a founding. 730 00:38:45,880 --> 00:38:49,320 Speaker 2: Member of soft Bank's Opportunity Fund, which had a similar mission. 731 00:38:49,760 --> 00:38:52,799 Speaker 2: What did you learn from their investing in similar startups 732 00:38:53,239 --> 00:38:55,719 Speaker 2: that you would do differently here with Terry Rock. 733 00:38:56,160 --> 00:38:59,440 Speaker 12: Well, we learned that focus brings clarity. We didn't have 734 00:38:59,480 --> 00:39:02,799 Speaker 12: a pipeline problem of finding underinvested entrepreneurs with the soft 735 00:39:02,800 --> 00:39:05,720 Speaker 12: Bank Opportunity Fund, which is now called the Open Opportunity Fund, 736 00:39:06,080 --> 00:39:08,200 Speaker 12: but we decided to focus just on Series A and 737 00:39:08,239 --> 00:39:11,000 Speaker 12: Series B where we see a big opportunity to generate alpha, 738 00:39:11,320 --> 00:39:13,120 Speaker 12: and all our LPs want to see us greet generate 739 00:39:13,160 --> 00:39:15,520 Speaker 12: great returns, and the way to do that is through alpha. 740 00:39:15,719 --> 00:39:17,759 Speaker 4: Stacey told us about the conversation you've been having with 741 00:39:17,800 --> 00:39:21,839 Speaker 4: the founders of Coactive AI of Vitable Health. When you're 742 00:39:21,920 --> 00:39:25,239 Speaker 4: seeking them out, what is their environment like to raise 743 00:39:25,280 --> 00:39:27,640 Speaker 4: funds at the moment? Are they actually quietly seeing more 744 00:39:27,640 --> 00:39:29,280 Speaker 4: support in this environment or less. 745 00:39:31,080 --> 00:39:34,600 Speaker 12: We love the founders at Coactive, Cody and and Will 746 00:39:34,760 --> 00:39:38,480 Speaker 12: and Joseph over at Vitable, They're focused on scaling and 747 00:39:38,520 --> 00:39:41,880 Speaker 12: growing their businesses. Their go to market strategy, hiring the 748 00:39:41,880 --> 00:39:44,560 Speaker 12: best people, and they chose to work with Terry Rock 749 00:39:44,600 --> 00:39:47,480 Speaker 12: Capital because we help them do just that. We co 750 00:39:47,560 --> 00:39:51,560 Speaker 12: invested and coactive alongside Emerson Collective. We joined and recent 751 00:39:51,600 --> 00:39:55,520 Speaker 12: Horowitz and bestmer Venture partners on the cap table with Vitable, 752 00:39:55,640 --> 00:39:58,520 Speaker 12: we joined First Round Capital and City's Impact Fund on 753 00:39:58,560 --> 00:40:01,239 Speaker 12: the cap table. So they were looking for a great 754 00:40:01,280 --> 00:40:04,560 Speaker 12: set of investors and bringing car Cherry Rock Capital in 755 00:40:04,719 --> 00:40:08,000 Speaker 12: was really about helping them scale, which is what I 756 00:40:08,040 --> 00:40:10,680 Speaker 12: did when I was the CEO of task Rabbit. So 757 00:40:10,760 --> 00:40:14,240 Speaker 12: the founders that we're looking for have found early product 758 00:40:14,239 --> 00:40:16,040 Speaker 12: market fit, They've got a few. 759 00:40:15,880 --> 00:40:17,680 Speaker 4: Million dollars in revenue. 760 00:40:17,520 --> 00:40:20,160 Speaker 12: And now they're looking for help like we bring over 761 00:40:20,200 --> 00:40:23,440 Speaker 12: sixty years of operating experience to scale their businesses. 762 00:40:23,920 --> 00:40:26,240 Speaker 2: Let's talk about what LPs want to see as well, 763 00:40:26,320 --> 00:40:30,000 Speaker 2: because there haven't been that many IPOs over the last 764 00:40:30,080 --> 00:40:33,560 Speaker 2: couple of years. What catalysts do you think the market 765 00:40:33,680 --> 00:40:36,600 Speaker 2: needs in VC to really kind of catalyze the truth 766 00:40:36,640 --> 00:40:37,279 Speaker 2: that we've been in. 767 00:40:38,000 --> 00:40:39,120 Speaker 4: What timing is everything? 768 00:40:39,320 --> 00:40:41,200 Speaker 12: I think this is a great time to invest when 769 00:40:41,200 --> 00:40:44,200 Speaker 12: you look at the economic cycle for venture. The twenty foot, 770 00:40:44,280 --> 00:40:48,080 Speaker 12: twenty four and twenty twenty five vintage is a great vintage. 771 00:40:48,160 --> 00:40:50,279 Speaker 12: So I think we have raised our hundred and seventy 772 00:40:50,280 --> 00:40:52,960 Speaker 12: two million dollars at a great time. Our LPs also 773 00:40:53,080 --> 00:40:56,520 Speaker 12: want us to create differentiation. When we go out and 774 00:40:56,560 --> 00:40:59,120 Speaker 12: we win deals, we come in at the best valuation 775 00:40:59,320 --> 00:41:01,880 Speaker 12: we can come in because that really determines our exit 776 00:41:02,160 --> 00:41:05,800 Speaker 12: in our returns. So we're very disciplined in our diligence process, 777 00:41:06,000 --> 00:41:07,880 Speaker 12: and they want to make sure that we are disciplined 778 00:41:08,080 --> 00:41:10,720 Speaker 12: so that we can generate the best possible return for them. 779 00:41:11,080 --> 00:41:13,560 Speaker 4: Stacy Brown, Philpark has been great speaking with you, founder 780 00:41:13,560 --> 00:41:16,640 Speaker 4: of Cherry Rock Capital, on the fundraise. Now let's bring 781 00:41:16,640 --> 00:41:20,040 Speaker 4: you some breaking news because we understand that post Tim 782 00:41:20,120 --> 00:41:23,840 Speaker 4: Cook meeting with President Trump, Trump is currently saying that 783 00:41:23,840 --> 00:41:26,480 Speaker 4: Apple will build plants in the United States and not 784 00:41:26,840 --> 00:41:29,360 Speaker 4: in Mexico. He's saying that Apple is shifting his plants 785 00:41:29,719 --> 00:41:32,640 Speaker 4: because of the tariffs that he's been imposing, and Trump 786 00:41:32,719 --> 00:41:34,000 Speaker 4: is saying that we're going to have a lot of 787 00:41:34,080 --> 00:41:38,080 Speaker 4: chip makers as well coming to the United States. President 788 00:41:38,120 --> 00:41:41,200 Speaker 4: Trump speaking after, of course, he met with Tim Cook yesterday. 789 00:41:41,400 --> 00:41:44,120 Speaker 4: Apple currently still remaining up four tenths of a percent, 790 00:41:44,600 --> 00:41:46,800 Speaker 4: but there is a lot to navigate when it comes 791 00:41:46,800 --> 00:41:50,000 Speaker 4: to the White house and doing business here in the 792 00:41:50,080 --> 00:41:53,200 Speaker 4: United States for technology chants such as Apple and the like. 793 00:41:53,840 --> 00:41:56,360 Speaker 4: Now from New York and San Francisco. That does it 794 00:41:56,400 --> 00:41:58,719 Speaker 4: for this edition of Bloemberg Technology. You do not want 795 00:41:58,760 --> 00:42:01,120 Speaker 4: to forget to check out upcast. You can find it 796 00:42:01,200 --> 00:42:03,120 Speaker 4: on the terminal as well as online on Apple, Spotify, 797 00:42:03,160 --> 00:42:06,080 Speaker 4: and iHeart. From New York, San Francisco. This is Boomberg