WEBVTT - Apple Pulls UK Cloud Encryption; CrowdStrike-Carahsoft Deal Under Scrutiny 0:00:00.880 --> 0:00:05.199 From the heart of where innovation, money and power collide 0:00:05.400 --> 0:00:10.680 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:10.840 --> 0:00:32.280 Caroline Hyde and Ed Ludlow. 0:00:27.200 --> 0:00:30.200 Now from New York and Caroline Hyde and I'm Jackie 0:00:30.240 --> 0:00:31.440 Devalas in San Francisco. 0:00:31.560 --> 0:00:33.440 This is Bloomberg Technology coming up. 0:00:33.479 --> 0:00:36.200 Apple fights back in the UK, removing its most advanced 0:00:36.280 --> 0:00:40.000 end to end encrypted security feature. Plus President Trump is 0:00:40.040 --> 0:00:44.760 expected to sign tariffs to counter digital services taxes despised 0:00:44.760 --> 0:00:47.839 by US tech giants, and Coinbase says the SEC has 0:00:47.840 --> 0:00:50.240 agreed to drop its lawsuit that accused it of running 0:00:50.280 --> 0:00:53.599 an illegal exchange. The first a check in on these 0:00:53.640 --> 0:00:56.720 markets and we're pulled lower once again. US economic data 0:00:57.280 --> 0:01:01.800 showing slower activity, and there's also hire inflation expectations the 0:01:01.880 --> 0:01:04.360 Nasdaq one hundred of by five tens of percent. The 0:01:04.440 --> 0:01:07.720 key drags down from a points perspective, Amazon Tesla, but 0:01:07.840 --> 0:01:10.280 we get to a key move on the day, Apple 0:01:10.880 --> 0:01:15.520 removing its most advanced end to end encrypted security feature. 0:01:15.640 --> 0:01:18.880 It's for cloud data, but it's to the UK user base. 0:01:19.240 --> 0:01:22.000 It's a completely stunning development that we're seeing. After of course, 0:01:22.040 --> 0:01:24.160 there were reports that the UK government ordered Apple to 0:01:24.240 --> 0:01:28.399 build a backdoor into customer data globally. The person who 0:01:28.400 --> 0:01:31.440 helps break it all down Bloomberg's Mark German, who sat 0:01:31.480 --> 0:01:34.759 with me in New York. This is quite the fight back. 0:01:34.760 --> 0:01:37.440 From a political perspective, this is a stunning development. 0:01:37.440 --> 0:01:39.240 So just to give some context here, like you said, 0:01:39.319 --> 0:01:43.160 the UK Parliament ordered Apple to build a backdoor to 0:01:43.200 --> 0:01:46.039 give it access to user data not only for users 0:01:46.040 --> 0:01:49.160 who live in the UK, but users globally, and so 0:01:49.240 --> 0:01:52.360 Apple essentially had an option either build that back door 0:01:52.800 --> 0:01:57.000 and continue to offer services like Advanced Data Protection, continue 0:01:57.040 --> 0:01:59.360 to offer iCloud in the region. But what they decided 0:01:59.400 --> 0:02:02.840 to instead simply remove their upgraded end to en encryption 0:02:02.920 --> 0:02:06.800 feature that's called Advanced Data Protection. Gives you extra security 0:02:07.120 --> 0:02:12.679 right for iCloud data, iCloud backups, text message backups, notes reminders. 0:02:12.960 --> 0:02:16.919 They have an app called free form Safari web book marks, right, so. 0:02:16.880 --> 0:02:17.679 They're removing that. 0:02:17.760 --> 0:02:20.960 So now in the UK you're only getting standard encryption 0:02:21.040 --> 0:02:23.040 for those features, but you still will get end to 0:02:23.120 --> 0:02:25.840 encryption for imassage, FaceTime and a few other things like 0:02:25.880 --> 0:02:28.480 passwords and health data. So that is a stunning development. 0:02:28.520 --> 0:02:31.239 They have not removed Advanced Data Protection any other region, 0:02:31.280 --> 0:02:33.600 and it remains available globally elsewhere. 0:02:34.720 --> 0:02:37.640 Mark the security of Apple's products is a huge part 0:02:37.840 --> 0:02:40.000 of its brand, as you know, where does this leave 0:02:40.240 --> 0:02:43.760 UK consumers with relation to other products they are on 0:02:43.800 --> 0:02:45.240 the market, Does it mean that they're going to be 0:02:45.280 --> 0:02:47.120 substantially less protected? 0:02:47.560 --> 0:02:49.480 Yeah, I mean end to end encryption is really the 0:02:49.520 --> 0:02:52.440 gold standard. It means that nobody can access that data 0:02:52.520 --> 0:02:55.200 unless you're on what Apple calls those trusted devices. So 0:02:55.280 --> 0:02:58.679 your own Apple ID logged in iPhone, iPad, mac watch, 0:02:58.800 --> 0:03:01.240 other products, You're not going to get that full end 0:03:01.240 --> 0:03:04.560 to end encryption on your text message backups, on your notes, 0:03:04.600 --> 0:03:07.480 on your reminders, things like that, and so that is 0:03:07.600 --> 0:03:10.560 a new privacy concern in the UK. 0:03:11.160 --> 0:03:11.920 But the other. 0:03:11.800 --> 0:03:16.200 Option was removing all protection entirely in building that backdoor 0:03:16.360 --> 0:03:19.399 in for the UK government. So from a compromise standpoint, 0:03:19.400 --> 0:03:22.000 it is a big compromise Apple is making, but it 0:03:22.080 --> 0:03:24.640 is also clear rebuke against the UK government because they 0:03:24.680 --> 0:03:26.000 are not building that back door. 0:03:26.200 --> 0:03:30.239 So they say, give us the historical context here, how 0:03:30.280 --> 0:03:33.120 often does Apple react to this regional manner? 0:03:33.440 --> 0:03:36.200 Well, in terms of regions right in China that is 0:03:36.280 --> 0:03:40.280 the poster child for these compromises. iCloud in China is 0:03:40.360 --> 0:03:44.320 operated by a local provider, right, not Apple servers, And 0:03:44.400 --> 0:03:47.800 there are talks that this local provider in China for iCloud, 0:03:47.840 --> 0:03:50.680 is actually a state backed entity, right, with connections to 0:03:51.360 --> 0:03:53.920 the Communist Party in China. Right, So that means they 0:03:53.920 --> 0:03:57.680 probably have full access, unfettered access to the user data 0:03:57.680 --> 0:04:00.920 there in China. To bring Apple intelligence there, they're essentially 0:04:00.960 --> 0:04:05.480 building what amounts to a censorship engine right in partnership 0:04:05.480 --> 0:04:07.720 with Ali Baba, so they'll be able to go in 0:04:07.760 --> 0:04:11.440 the Chinese government and basically monitor the output of the 0:04:11.480 --> 0:04:14.840 AI on iPhones in China and have via Ali Baba, 0:04:15.040 --> 0:04:16.680 Apple make tweaks to that engine. 0:04:17.360 --> 0:04:19.520 That's Bloomberg's, Markerman, thanks for joining us. 0:04:19.920 --> 0:04:23.119 Meanwhile, President Trump is expected to sign a memorandum today 0:04:23.120 --> 0:04:26.800 that could allow tariffs in response to digital services taxes 0:04:27.080 --> 0:04:31.120 that some countries impose on US giants like Alphabet and Meta. 0:04:31.160 --> 0:04:33.600 That's according to sources. Let's get more with Bloomberg's but 0:04:33.760 --> 0:04:37.800 Mike Shephard, Mike, who does this memorandum direct to do? 0:04:38.120 --> 0:04:39.960 And what could those actions look like? 0:04:41.320 --> 0:04:45.160 So what they're looking for, Jackie, is a way to 0:04:45.279 --> 0:04:49.280 address one of President Donald Trump's and his administration's biggest 0:04:49.320 --> 0:04:51.680 bugaboos over the years. They even took a look at 0:04:51.720 --> 0:04:55.120 this back in twenty fourteen. These digital service taxes that 0:04:55.360 --> 0:04:59.920 hit big American technology companies like Alphabet Inc. Like Meta 0:05:00.080 --> 0:05:05.200 platforms with fees in Europe and other countries that are 0:05:05.400 --> 0:05:10.600 charging for their services. And the administration has outlined this 0:05:10.920 --> 0:05:14.680 program of possible reciprocal tariffs. It's unclear whether it would 0:05:14.720 --> 0:05:17.800 fit directly into that or be parallel to it, but 0:05:17.880 --> 0:05:21.400 the idea is that Trump and his team see these 0:05:21.960 --> 0:05:27.480 taxes imposed by France and about thirty other countries worldwide 0:05:27.640 --> 0:05:31.520 as unfair to American companies. The timing of this is 0:05:31.720 --> 0:05:35.599 fascinating because we have the French President Emanuel Macron coming 0:05:35.640 --> 0:05:40.280 to Washington already with an intense slate of discussions over Ukraine. 0:05:40.839 --> 0:05:44.800 Precisely, the timing around geopolitics Russia Ukraine, the timing around 0:05:44.839 --> 0:05:48.360 Macron coming to the US. Mike also just push us 0:05:48.360 --> 0:05:51.080 forward in terms of how we see this is what 0:05:51.200 --> 0:05:53.960 Meta had been setting out to do. Reporting just yesterday 0:05:53.960 --> 0:05:56.760 that he was on Capitol Hill, Mark Zuckerberg discussing some 0:05:56.800 --> 0:06:00.440 of his policy wishes. Is this exactly one of them? 0:06:00.800 --> 0:06:03.400 Well, they have made clear for a long time that 0:06:03.440 --> 0:06:06.560 they object to these taxes. They see it as unfair. Now, 0:06:06.600 --> 0:06:09.520 on the other hand, in conversations with European officials, what 0:06:09.600 --> 0:06:13.640 we have heard and with members of other countries that 0:06:13.760 --> 0:06:18.880 charge these taxes. France, for instance, has a goods surplus 0:06:18.920 --> 0:06:22.479 with the US. It's a trade deficit from Donald Trump's perspective, 0:06:22.760 --> 0:06:26.760 but France sees a services deficit with the US, so 0:06:26.800 --> 0:06:30.880 there from their point of view, this digital service tax 0:06:31.120 --> 0:06:34.120 is a way of evening that out and also charging 0:06:34.160 --> 0:06:37.360 for economic activity that they see happening in this country. 0:06:37.560 --> 0:06:40.599 It will make for a complicated round of discussions, and 0:06:40.640 --> 0:06:44.480 the questions out there are many. One is how soon 0:06:44.600 --> 0:06:47.360 could something like this go into effect. We've seen how 0:06:47.440 --> 0:06:49.520 quickly Donald Trump has tried to move with some of 0:06:49.560 --> 0:06:54.279 these other tariff's decisions, and also what level they might 0:06:54.360 --> 0:06:57.240 set and how they would fit into other levees, whether 0:06:57.279 --> 0:07:00.280 they would be stacked on top of other measures, for instance, 0:07:00.480 --> 0:07:02.920 that's another open question, Mike. 0:07:03.000 --> 0:07:06.640 We know that Mark Zuckerberg and other tech executives have 0:07:06.760 --> 0:07:10.000 been getting closer to President Trump. 0:07:10.160 --> 0:07:12.960 Has this been kind of one. 0:07:12.840 --> 0:07:16.640 Of the initiatives that they've been pushing forward? Net Where 0:07:16.680 --> 0:07:18.000 does it leave companies? 0:07:19.480 --> 0:07:22.800 Well, that's a great question on the regulation front. Overall, 0:07:22.840 --> 0:07:26.559 they have been pushing the administration to not only dial 0:07:26.720 --> 0:07:29.880 back rulemaking here in the US it would hit them, 0:07:30.120 --> 0:07:32.280 but they also want the US to be a better 0:07:32.320 --> 0:07:36.000 ambassador for their interests abroad, especially in Europe. And we 0:07:36.080 --> 0:07:40.200 heard jd Vance, Vice President articulating this at the Munich 0:07:40.240 --> 0:07:42.960 Security Conference and at the AI summit in Paris that 0:07:43.000 --> 0:07:47.680 we followed so closely, articulating this vision that regulation is 0:07:47.840 --> 0:07:53.520 really impeding innovation and that levies like the Digital Services Tax, 0:07:53.560 --> 0:07:56.440 which they have long opposed, are just the sort of 0:07:56.440 --> 0:07:58.480 thing that is standing in the way of them making 0:07:58.560 --> 0:08:01.960 breakthroughs and investments in those countries as well. 0:08:02.160 --> 0:08:05.880 Bluemeg's Mike Shephard, we thank you. Look, Tariff's just one 0:08:05.960 --> 0:08:08.200 of the many changes in the political landscape for big 0:08:08.240 --> 0:08:11.640 tech and DEVA startups. Bradley Tusk joins US now to 0:08:11.680 --> 0:08:15.040 discuss how companies should manage this fluid environments. Of course, 0:08:15.280 --> 0:08:18.000 just pivoted his own VC to offer advice in exchange 0:08:18.000 --> 0:08:20.240 for equity instead of cash. Bradley, You've got a wealth 0:08:20.280 --> 0:08:23.520 of political experience. Communications Director Senator Chuck Schumer, a campaign 0:08:23.520 --> 0:08:25.480 and manager, of course, of Michael bloombergs two thousand and 0:08:25.520 --> 0:08:28.520 nine mayoral race. Reminder to our audience. Michael Bloomberg is 0:08:28.520 --> 0:08:30.680 the founder and majority owner of Bloomberg LP, the parent 0:08:30.680 --> 0:08:33.079 company of Bloomberg News. Bradley, I just wanted to put 0:08:33.080 --> 0:08:36.800 to you, like, how does a company you advise manage 0:08:36.840 --> 0:08:39.280 to move and navigate in this ever changing environment? 0:08:39.360 --> 0:08:42.600 Yeah, I mean right now, I think first and foremost, 0:08:42.679 --> 0:08:46.400 there's really a lot of disappointment amongst startups because the 0:08:46.520 --> 0:08:49.000 venture market has been dead for the last four years, 0:08:49.040 --> 0:08:51.320 so it as an absolute dearth of liquidity, both in 0:08:51.400 --> 0:08:55.280 terms of IPOs and MNA activity. And last fall there 0:08:55.320 --> 0:08:58.240 was a tremendous amount of optimism that both between reduced 0:08:58.320 --> 0:09:01.520 interest rates and a change regulators at the federal level, 0:09:01.720 --> 0:09:03.720 that market would really open up and we start to 0:09:03.720 --> 0:09:06.160 see a lot of growth, and all American innovation really 0:09:06.200 --> 0:09:09.240 relies upon that market being free and open, and that 0:09:09.280 --> 0:09:12.320 hasn't happened at all. We have both chairman power signaling 0:09:12.360 --> 0:09:14.480 we might be done with Ray cuts, but I think 0:09:14.480 --> 0:09:18.319 far more important the markets are so much in turmoil. 0:09:18.360 --> 0:09:22.120 There's so much chaos out of Washington that a smooth, 0:09:22.200 --> 0:09:25.160 stable climate that would have paved the way for new 0:09:25.200 --> 0:09:27.680 tech IPOs and there's literally over in one thousand s 0:09:27.760 --> 0:09:30.640 ones file then waiting to go, and new M and 0:09:30.720 --> 0:09:34.240 A just hasn't happened. And so right now I think 0:09:34.320 --> 0:09:37.760 you just have to basically sit tight. But I really 0:09:37.800 --> 0:09:40.439 do think that all the people in the venture community 0:09:40.440 --> 0:09:43.800 that supported President Trump right now are feeling some buyer's remorse. 0:09:44.559 --> 0:09:48.559 But if we do see President Trump being able to 0:09:48.600 --> 0:09:51.400 push back against the Digital Services tax, be able to 0:09:51.400 --> 0:09:55.560 push against European overreaches, they see it by fighting fire 0:09:55.600 --> 0:09:57.319 with fire, is that not It. 0:09:57.280 --> 0:10:00.480 Doesn't help, It doesn't help startups, it doesn't help It 0:10:00.559 --> 0:10:03.680 might help meta, it might help you know, Apple or 0:10:03.679 --> 0:10:06.320 someone like that. But the reality is when you have 0:10:06.520 --> 0:10:09.840 companies that are worth anywhere from a million to one 0:10:09.920 --> 0:10:12.280 hundred million or even a billion dollars and have revenue 0:10:12.280 --> 0:10:14.480 from a million to a couple hundred million, they're not 0:10:14.520 --> 0:10:17.040 paying the Digital service tax, right They're usually not even 0:10:17.040 --> 0:10:20.319 profitable at this point. And so and the problem is this, 0:10:20.400 --> 0:10:23.679 which is, you know, innovation ultimately happens because you have 0:10:23.760 --> 0:10:26.360 all of these founders sort of in a garage somewhere 0:10:26.440 --> 0:10:28.640 or the version of it, who come up with crazy 0:10:28.679 --> 0:10:31.120 ideas and most of them fail, but once in a while, 0:10:31.200 --> 0:10:32.880 one of them succeeds, which is what we saw with 0:10:32.960 --> 0:10:36.520 when we mentioned Meta, Mark Zuckerberger, Apple, Steve Jobs. If 0:10:36.520 --> 0:10:39.599 we don't have the new Zuckerbergs and Jobs and Bezoses 0:10:39.640 --> 0:10:42.760 of the world coming up, you know, then eventually we're 0:10:42.760 --> 0:10:45.439 going to have massive stagnation in our economy. And when 0:10:45.440 --> 0:10:48.560 there's no liquidity in the venture market, venture capital funds 0:10:48.600 --> 0:10:52.240 like mine can't really deploy as much. New capital LPs 0:10:52.280 --> 0:10:54.760 can't invest as much in venture funds, and as a result, 0:10:54.800 --> 0:10:57.520 startups either aren't being funded and they're not being created, 0:10:57.840 --> 0:10:59.720 or they're going out of business when they don't necessarily 0:10:59.760 --> 0:11:02.600 have do and so you know, the ripple effect is severe. 0:11:03.800 --> 0:11:07.360 Let's talk about artificial intelligence because that sector has gotten 0:11:07.400 --> 0:11:09.439 a lot of cash from venture capitalists. So I don't 0:11:09.480 --> 0:11:12.679 think those startup founders are actually hanging out in a garage. 0:11:12.880 --> 0:11:15.199 But let's talk about the regulation in the space. 0:11:15.240 --> 0:11:17.800 It's virtually non existent at the federal level, but there 0:11:17.880 --> 0:11:18.920 is movement at. 0:11:18.800 --> 0:11:19.640 The state level. 0:11:19.960 --> 0:11:22.120 How do you see this shaking out and how are 0:11:22.120 --> 0:11:25.079 you advising startups in this space to navigate it? 0:11:25.160 --> 0:11:25.439 Right now? 0:11:25.520 --> 0:11:27.600 Yeah, my advice is really exactly what you just said, 0:11:27.600 --> 0:11:30.040 which is we've really got to pay attention to the states. 0:11:30.120 --> 0:11:32.560 There's all we've seen on the federal level was one 0:11:32.679 --> 0:11:35.960 very kind of tepet executive order from President Biden that's 0:11:36.000 --> 0:11:39.000 already been rescinded by President Trump. But last year over 0:11:39.080 --> 0:11:41.920 eight hundred bills around AI were introduced in state government. 0:11:41.920 --> 0:11:43.760 There will probably be double by the time we're done 0:11:43.760 --> 0:11:46.400 with sessions this year. And some of them are very 0:11:46.400 --> 0:11:48.720 specific around things like deep fakes, but some of them 0:11:48.760 --> 0:11:51.920 are very comprehensive around how you regulate allows, how you 0:11:52.000 --> 0:11:57.000 regulate apps, and so right now, the problem with the 0:11:57.080 --> 0:11:59.520 lack of any sort of federal leadership is we're going 0:11:59.559 --> 0:12:02.280 to end up patchwork of fifty different states with different 0:12:02.280 --> 0:12:04.400 sets of regulation that companies have to try to comply 0:12:04.520 --> 0:12:06.480 with all of them. But at the moment, if you're 0:12:06.520 --> 0:12:09.480 one of my portfolio companies, it's let's focus on the 0:12:09.520 --> 0:12:12.800 states where legislation is the most likely to move. Let's 0:12:12.840 --> 0:12:14.839 focus on where those bills are going and make sure 0:12:14.880 --> 0:12:17.000 we have a seat at the table so that a 0:12:17.440 --> 0:12:20.320 it doesn't destroy us, and be if possible, it can 0:12:20.360 --> 0:12:21.760 help us build a regulatory mode. 0:12:22.679 --> 0:12:24.559 What other sectors are you looking at that, you think 0:12:24.600 --> 0:12:27.800 you can add value when it comes to this regulatory advice. 0:12:27.880 --> 0:12:32.800 I'm thinking autonomous vehicles, cannabis, you know, startups and delivery. 0:12:32.800 --> 0:12:33.439 What are you saying? 0:12:33.559 --> 0:12:33.760 Yep? 0:12:34.000 --> 0:12:36.880 All those for sure. A lot in digital health, especially 0:12:36.920 --> 0:12:41.240 because healthcare is so big, so fragmented, so regulated, and 0:12:41.280 --> 0:12:43.520 quite frankly so screwed up, that there's so much room 0:12:43.559 --> 0:12:47.080 for improvement. That's a really big sector for us. Ed 0:12:47.120 --> 0:12:50.280 tech is another one. I'm excited about nuclear and what's 0:12:50.320 --> 0:12:53.440 happening around that. The gov tech sector has been growing 0:12:53.440 --> 0:12:57.880 a lot lately, so that's become interesting. Transportation gaming, you know. 0:12:58.040 --> 0:13:00.199 The good news for a business like mine, where you're 0:13:00.240 --> 0:13:03.000 investing in and working with startups and regulated industries is 0:13:03.320 --> 0:13:06.440 government's reach for better or worse is very broad, and 0:13:06.480 --> 0:13:08.960 the vast majority of industries are impacted by government one 0:13:09.000 --> 0:13:11.480 way or another, and so that gives us an opportunity 0:13:11.480 --> 0:13:13.000 to add value. 0:13:13.040 --> 0:13:16.200 To add value. Bradley, you have just gone on and 0:13:16.280 --> 0:13:18.840 to say that the moment your industry, the VC industry, 0:13:18.880 --> 0:13:22.120 the startup industry is feeling buyers remorse around Trump, but 0:13:22.520 --> 0:13:25.440 we push back a little bit and say it's only February. Yep, 0:13:25.760 --> 0:13:29.319 and ultimately are we likely to see your advice going 0:13:29.360 --> 0:13:32.320 forward that things will change from a federal perspective and 0:13:32.440 --> 0:13:35.520 things might open up from an IPO perspective, and companies 0:13:35.559 --> 0:13:38.280 can build the next Zuckerber. We can see the next 0:13:38.320 --> 0:13:39.720 billion dollar, trillion dollar. 0:13:39.880 --> 0:13:41.360 I hope so because I have a lot of money 0:13:41.360 --> 0:13:43.839 at stake here as to my live other vcs. 0:13:44.440 --> 0:13:45.320 Look, my hope is. 0:13:45.320 --> 0:13:47.040 And what at least I'm telling myself what I'm up 0:13:47.040 --> 0:13:49.360 at three in the morning is Trump came in with 0:13:49.400 --> 0:13:52.000 a burst of energy. That's who he is. They wanted 0:13:52.000 --> 0:13:55.240 to make a splash. They have, and soon enough things 0:13:55.280 --> 0:13:57.560 will calm down and the markets will sort of feel 0:13:57.559 --> 0:13:58.440 better and we'll start to. 0:13:58.400 --> 0:13:59.880 See as a new record highs. 0:14:00.320 --> 0:14:03.679 Yeah, but it is not. It's so far not resulting 0:14:03.840 --> 0:14:07.480 in tech company sort of listing IPOs. So that's what 0:14:07.520 --> 0:14:09.920 we need to get to. And on one hand, it 0:14:10.000 --> 0:14:12.120 is possible because Trump, by the way, to his credit, 0:14:12.160 --> 0:14:14.000 just in terms of the work put in, had so 0:14:14.160 --> 0:14:16.520 much activity on opening day and in the first week 0:14:16.559 --> 0:14:18.600 that that there was a lot. But as a result 0:14:18.600 --> 0:14:20.320 they've also done a lot too, so there might not 0:14:20.400 --> 0:14:22.800 be as much to keep doing going forward. On the 0:14:22.840 --> 0:14:26.680 other hand, he operates in chaos, right, that is how 0:14:27.080 --> 0:14:31.600 he functions, and that's not necessarily what you want if 0:14:31.640 --> 0:14:34.160 you are trying to take you know, young tech startups 0:14:34.400 --> 0:14:36.880 and either sell them to bigger companies or take them public. 0:14:37.680 --> 0:14:40.760 That's Tusk Venture CEO Bradley Task. Thanks so much for 0:14:40.840 --> 0:14:41.280 joining us. 0:14:41.320 --> 0:14:41.600 Thank you. 0:14:41.720 --> 0:14:43.160 Coming up next, Ali. 0:14:43.000 --> 0:14:46.240 Baba regains its spot is the number two company in China. 0:14:46.560 --> 0:14:48.560 More in that. Next, this is Bloomberg. 0:15:02.080 --> 0:15:04.960 Let's talk about Alibaba stock rally. It has catapulted the 0:15:05.040 --> 0:15:08.040 Chinese tech darling back to the number two spot in 0:15:08.080 --> 0:15:10.760 the country. For more bloombergs Henry Ren joins us on 0:15:10.800 --> 0:15:15.000 this rally sustainability and indeed the breadth of the buying 0:15:15.040 --> 0:15:18.280 of China tech. Henry just, why are we seeing this 0:15:18.320 --> 0:15:20.800 sort of rally in Alibaba and can it sustain this number? 0:15:22.240 --> 0:15:22.480 Yeah? 0:15:22.520 --> 0:15:25.320 So, Ali Baba is part of the China tech rally 0:15:25.360 --> 0:15:27.800 that we have been seeing for the past few weeks 0:15:27.840 --> 0:15:32.040 since Deep seeks Ai breakthrough, and the whole theasis is 0:15:32.080 --> 0:15:35.680 basically based on the optimism over the country's tech advancement 0:15:36.120 --> 0:15:38.720 as evidenced by Deep Seek of course, and then in 0:15:38.760 --> 0:15:41.080 the past few weeks we have been seeing signs of 0:15:41.120 --> 0:15:44.440 more supportive stands toward the private sector by Beijing as 0:15:44.480 --> 0:15:49.680 well evidence by Chijin being present embracing all those important 0:15:49.720 --> 0:15:53.080 tech leaders in a rear meeting in Beijing. And basically 0:15:53.120 --> 0:15:55.720 the supported stands toward the private sector as well as 0:15:55.720 --> 0:15:59.000 the tech breakthrough are all supporting the stocks. And most 0:15:59.040 --> 0:16:03.000 importantly recent we have been having some companies reporting earnings, 0:16:03.040 --> 0:16:07.360 including Ali Baba yesterday reporting some recovery in its core 0:16:07.400 --> 0:16:10.320 business of domestic e commerce as well as a growing 0:16:10.400 --> 0:16:13.880 croc cloud business. So all those factors putting together are 0:16:15.120 --> 0:16:18.040 supporting China techs raally in the past few weeks. 0:16:19.000 --> 0:16:21.960 Henry, what does this tell us about beijing stands on 0:16:22.480 --> 0:16:25.640 regulation in a sector that really saw it it. 0:16:25.720 --> 0:16:27.160 Suffer from a crackdown. 0:16:27.240 --> 0:16:30.440 Does it mean that this pressure to scrutiny is over? 0:16:32.000 --> 0:16:32.480 Yeah? 0:16:32.560 --> 0:16:34.640 Interesting question. I felt. 0:16:36.360 --> 0:16:40.520 The fact that President Hijingpin himself inviting all those tech 0:16:40.640 --> 0:16:43.920 leaders to Beijing for a PAP talk this sign is 0:16:44.000 --> 0:16:46.560 pretty telling, isn't it, Because in the past two or 0:16:46.600 --> 0:16:49.080 three years, all the headlines, the top headlines we've been 0:16:49.080 --> 0:16:52.760 seeing about more scrutiny into all those companies, not just 0:16:52.800 --> 0:16:55.840 about those tech giants, but also the right heading companies 0:16:55.880 --> 0:16:59.000 of d D but also the food delivery company of Maiitwan. 0:16:59.480 --> 0:17:04.000 But this is important. This is a clear sign of pivot. However, 0:17:04.040 --> 0:17:06.240 we still need to caution a little bit here because 0:17:06.280 --> 0:17:10.920 the expectations is this scrutiny on those tech firms will continue, 0:17:11.080 --> 0:17:14.160 and the priority of Beijing is pretty clear as well, 0:17:14.200 --> 0:17:17.080 because if you see the seat map of that meeting, 0:17:17.440 --> 0:17:20.879 Jack Ma the co founder of Ali Baba and Ponima 0:17:21.200 --> 0:17:24.399 the CEO of Tencent, they're not sitting at the front 0:17:24.640 --> 0:17:28.520 row of facing President cheating Pin. The tech darlings from 0:17:28.560 --> 0:17:32.440 Beijing size are still about the heart tech, including Huawei 0:17:32.480 --> 0:17:35.240 as well as the EV maker Buid, So we have 0:17:35.320 --> 0:17:36.240 to keep that in mind. 0:17:36.640 --> 0:17:39.320 Henry in just thirty seconds, it's interesting who's been buying 0:17:39.400 --> 0:17:42.320 some of these Chinese ADRs, Ryan Cohen, as reported by 0:17:42.359 --> 0:17:44.000 the Wall Street Journal, who else has been winning? 0:17:45.200 --> 0:17:48.320 Yeah, So lots of heats from training activities these days, 0:17:48.640 --> 0:17:52.840 and apart from Ryan Cohen, also billionaire investor David Tapper 0:17:52.920 --> 0:17:56.800 as well, famous for his by Everything China coll we're 0:17:56.840 --> 0:18:00.520 seeing more training activities among on shore mainland traders as 0:18:00.520 --> 0:18:03.719 swallowed these days. So all those factors boosting Johnny Stocks. 0:18:04.560 --> 0:18:16.280 That's Bloomberg's Henry Wren. Thanks for joining US. Investors are 0:18:16.280 --> 0:18:19.840 showing their renewed enthusiasm for quantum computing off the back 0:18:19.840 --> 0:18:23.520 of breakthroughs that indicate commercial applications for the technology could 0:18:23.560 --> 0:18:24.000 just be a. 0:18:24.000 --> 0:18:24.960 Few years away. 0:18:25.480 --> 0:18:28.880 Startup Querra has raised two hundred and thirty million dollars 0:18:28.920 --> 0:18:32.880 from backers including Google and SoftBank's Vision Fund. The company's 0:18:32.920 --> 0:18:35.960 interim CEO, Andy Or, joins us now for more. 0:18:36.119 --> 0:18:38.120 Andy, we just had Microsoft on the show this. 0:18:38.080 --> 0:18:40.879 Week unveiling their quantum computing chip, and it just feels 0:18:40.880 --> 0:18:43.359 like the field went from like an episode of Star 0:18:43.480 --> 0:18:46.840 Trek to all of a sudden, real world applications. You 0:18:46.960 --> 0:18:49.840 pulled together this funding fairly quickly. Talk to us about 0:18:49.880 --> 0:18:52.560 what happened over the last couple months that allowed this 0:18:52.720 --> 0:18:53.560 breakthrough to happen. 0:18:54.480 --> 0:18:57.399 Well, it's an overnight success that takes about seven or 0:18:57.440 --> 0:19:00.879 eight years. It's just that everything's coming to ruition at once, 0:19:00.960 --> 0:19:03.879 and so from the investor point of view, you're seeing 0:19:03.880 --> 0:19:07.440 all these exciting activities and you're thinking it's all happening now, 0:19:07.520 --> 0:19:09.920 but it's been going on for a long time. We're 0:19:09.920 --> 0:19:12.880 all just now reaching the surface. Where people can see us. 0:19:13.320 --> 0:19:15.800 You know, we've been for about seven years, probably use 0:19:15.880 --> 0:19:18.639 fifty sixty seventy million dollars to get to where we 0:19:18.720 --> 0:19:22.000 are and now having sold quantum machines and pushing the 0:19:22.000 --> 0:19:25.320 boundaries of the technology. We're three to five years away 0:19:25.320 --> 0:19:29.080 from useful quantum computing as an industry as a society 0:19:29.240 --> 0:19:31.760 in my opinion, and I think that we're going to 0:19:31.760 --> 0:19:34.119 be one of a small handful of companies that are 0:19:34.119 --> 0:19:37.840 going to demonstrate and deliver useful quantum computers and that 0:19:38.000 --> 0:19:39.360 is going to be transformational. 0:19:39.720 --> 0:19:43.960 How much does the retail investor, the institutional investor need 0:19:44.000 --> 0:19:47.880 to understand the differences in methodology here because people are 0:19:47.880 --> 0:19:50.080 doing it a willow is different from what we've just 0:19:50.080 --> 0:19:51.040 seen for Microsoft. 0:19:51.760 --> 0:19:55.160 Yes, so we call them modalities, but they're really approaches. 0:19:55.200 --> 0:19:59.200 They're underlying technological differences. Microsoft just announced a new one. 0:20:00.200 --> 0:20:03.560 Say there's five different modalities or technological approaches that people 0:20:03.600 --> 0:20:07.280 are using to create a quantum computer. There's neutral atoms, 0:20:07.280 --> 0:20:11.560 there's superconducting, there's ions, there's photons, and there's the Microsoft, 0:20:12.280 --> 0:20:16.880 the Microsoft Topological cubit. I think that you're probably going 0:20:16.920 --> 0:20:21.280 to see several different modalities focus on specific use cases initially, 0:20:21.640 --> 0:20:23.400 and so I don't think you're going to see one 0:20:23.440 --> 0:20:26.240 that's going to reign supreme. If I had to guess, 0:20:26.480 --> 0:20:29.320 I happen to think the neutral atom quantum supercomputing that 0:20:29.359 --> 0:20:32.600 we're building is likely the ticket that is going to win. 0:20:33.040 --> 0:20:36.120 But I think you want to see Yeah, well, it's 0:20:36.119 --> 0:20:39.800 funny how you like we are. But you know, it's 0:20:39.880 --> 0:20:43.440 not just building the underlying quantum computer. It's the algorithms 0:20:43.480 --> 0:20:45.880 that are required so that you can do something useful 0:20:45.920 --> 0:20:46.280 with them. 0:20:46.440 --> 0:20:49.359 Yeah, so tell us about the usefulness here, Andy, because 0:20:49.440 --> 0:20:51.960 we had a great discussion with Microsoft really talking about 0:20:52.000 --> 0:20:55.439 how we could end forever chemicals for example. Where are 0:20:55.480 --> 0:20:57.920 your applications about to work and that three to five 0:20:58.000 --> 0:21:00.240 year time frame you talk of, Yeah. 0:21:00.160 --> 0:21:02.679 Well it's going to be baby steps. I mean, you know, 0:21:02.720 --> 0:21:04.879 one way to think about it are things like life science, 0:21:04.960 --> 0:21:11.239 material science, drug discovery, new materials, super conducting materials at 0:21:11.280 --> 0:21:15.560