WEBVTT - Tech Selloff and Apple's Game Plan 0:00:02.240 --> 0:00:05.600 From the heart of where innovation, money and power live, 0:00:06.360 --> 0:00:10.879 in Silicon Valley and beyond. This is Bloomberg technology with 0:00:10.960 --> 0:00:27.040 Emily Jay. I'm at Ludlow in New York in Emily Chang. 0:00:27.080 --> 0:00:30.040 This is Bloomberg Technology. Coming up in the next hour. 0:00:30.160 --> 0:00:33.160 A major sell off hits tech and the markets at large, 0:00:33.400 --> 0:00:37.200 nearing two lows. Will have the latest in a moment. Plus, 0:00:37.560 --> 0:00:40.400 apple is jumping into the sports industry, from the Super 0:00:40.440 --> 0:00:44.640 Bowl halftime show and NFL Sunday ticket to tonight's potentially 0:00:44.720 --> 0:00:48.080 historic Major League baseball broadcast. We're talking about how the 0:00:48.120 --> 0:00:52.600 company is eating away at traditional TV's most coveted assets. 0:00:53.320 --> 0:00:55.960 and NASA hopes to launch the Artemis Mission to the 0:00:56.000 --> 0:00:59.200 moon next week. We'll get the latest from our space reporter, 0:00:59.680 --> 0:01:02.320 Laura Grush. We'll get to that in a moment, but 0:01:02.400 --> 0:01:05.759 first let's talk markets. Friday was rough a sell off, 0:01:05.760 --> 0:01:08.640 and risk your assets deepened as spheres of a global 0:01:08.680 --> 0:01:12.040 recession intensified. Tech was not spared, with the NASDAC on 0:01:12.600 --> 0:01:16.080 falling to its lowest level since June, the SMP touching 0:01:16.120 --> 0:01:20.200 two year lows and wall streets fear gauge soaring toward 0:01:20.240 --> 0:01:22.440 a three month high, joining me to go over this 0:01:22.680 --> 0:01:25.399 less than happy and to the week. Who else but 0:01:25.480 --> 0:01:28.560 bloom bows, Casey Gray felt? I'll ask you again, how 0:01:28.600 --> 0:01:31.839 are you? I'm all tired. It was an intense day 0:01:31.920 --> 0:01:34.200 to an intense week. I remember there was a fed 0:01:34.319 --> 0:01:35.840 meeting all the way back on Wednesday. It feels like 0:01:35.880 --> 0:01:37.720 a year ago. Let's go back to basics. There was 0:01:37.720 --> 0:01:40.160 a fed meeting on Wednesday. The Fed raised rates by 0:01:40.160 --> 0:01:43.800 seventy five basis points and the dot plot, the four 0:01:43.920 --> 0:01:46.920 court cast, showed four point four percent rates by the 0:01:46.959 --> 0:01:50.480 end of the year, four point six rates further out, 0:01:51.440 --> 0:01:54.520 the terminal rate. Exactly? Why have markets reacted like this? Well, 0:01:54.600 --> 0:01:57.240 Jeron power is pretty clear on Wednesday that this wouldn't 0:01:57.280 --> 0:02:00.560 be a painless process. That big, aggressive vision up in 0:02:00.600 --> 0:02:04.080 the dark plot. That's going to cause pain for the economy. 0:02:04.120 --> 0:02:07.120 That's causing pain for the market. But today was especially 0:02:07.200 --> 0:02:10.600 dramatic because it actually started over in England, and you 0:02:10.639 --> 0:02:14.080 would liz trust's government unvel, I believe, the biggest tax 0:02:14.120 --> 0:02:19.760 const since two this is into a economy that's already 0:02:19.800 --> 0:02:22.720 dealing with ultra hot inflation. You have a very aggressive 0:02:22.760 --> 0:02:25.000 Bank of England and again, if you think about the 0:02:25.000 --> 0:02:28.440 global tightening that's going on. This is just another crank 0:02:28.639 --> 0:02:33.120 tighter and that fear was definitely present across global assets. 0:02:33.160 --> 0:02:36.120 So there was just another thing to add anxiety to 0:02:36.120 --> 0:02:37.840 the market. So I'M gonna look at this chart on 0:02:37.880 --> 0:02:41.240 the Bloomberg terminal, which shows the kind of decline we've 0:02:41.240 --> 0:02:44.120 seen in tech stocks in particular, but also the push 0:02:44.200 --> 0:02:47.360 higher in real yields. And we keep talking about the Fed. 0:02:47.480 --> 0:02:49.600 Every week I'm here with Emily Chang, I'm talking about 0:02:49.639 --> 0:02:52.920 the Fed. We talk about it because higher rates discount 0:02:52.960 --> 0:02:56.440 the present value of future profits for tech stocks. But 0:02:56.520 --> 0:02:59.520 it seems like a one to punch for the audience. 0:02:59.560 --> 0:03:01.640 I just did a one too and it looks great 0:03:01.760 --> 0:03:04.919 and you're exactly right. So you're using some C F 0:03:05.000 --> 0:03:07.680 A terms here, but they're really important, and that real yield, 0:03:07.720 --> 0:03:10.280 the fact that real yields have screened high again, the 0:03:10.360 --> 0:03:14.240 yield that you get on bonds after accounting for inflation. 0:03:14.639 --> 0:03:19.119 That is sort of the basis for valuing other assets, 0:03:19.200 --> 0:03:21.440 and the fact that you are seeing those really yield 0:03:21.520 --> 0:03:25.160 scream higher. That has a lot of implications for duration 0:03:25.280 --> 0:03:28.680 heavy stocks such as tech stocks, those growth stocks, where 0:03:28.720 --> 0:03:31.160 a lot of those cash flows are expected in the future. 0:03:31.560 --> 0:03:34.440 They're worth less when you have that discount raycle and 0:03:34.480 --> 0:03:38.320 speaking about growth, the fear is about slow down in 0:03:38.360 --> 0:03:41.280 global growth. That's almost the other punch right that the 0:03:41.280 --> 0:03:43.440 other consequences of the Fed is that actually, even if 0:03:43.480 --> 0:03:45.640 you're a megacap tech stock like an apple and Amazon, 0:03:45.640 --> 0:03:48.640 we've seen declines in those that the world's a different 0:03:48.640 --> 0:03:51.800 place now, the economy slowing down and they might suffer 0:03:52.160 --> 0:03:55.120 the other fear, so to speak, the fear games fear 0:03:55.240 --> 0:03:57.480 here vix. Talk to me about the Vicks. We don't 0:03:57.520 --> 0:03:59.600 cover it as much on the tech show, but briefly 0:03:59.600 --> 0:04:01.800 explain what it is and what that is. So the VIX. 0:04:01.840 --> 0:04:05.440 It's looking at expectations for volatility for the next thirty 0:04:05.520 --> 0:04:08.200 days and it's been a bit of a frusting, frustrating 0:04:08.240 --> 0:04:10.680 indicator to watch because if you look at the Vix, 0:04:10.760 --> 0:04:15.120 it's been relattively low. I mean it was getting back 0:04:15.160 --> 0:04:18.560 to thirties today, but it's been very low relative to 0:04:18.600 --> 0:04:21.120 some of the levels that we saw during the pandemic 0:04:21.520 --> 0:04:24.279 during the past two years. And you compare that to 0:04:24.320 --> 0:04:26.320 what we've actually seen in the equity market, it doesn't 0:04:26.320 --> 0:04:28.839 feel like it's matched the reality on the ground. But 0:04:28.880 --> 0:04:30.800 you are starting to see some movement in the vix. 0:04:30.839 --> 0:04:33.360 Today it got to a three month high, so some 0:04:33.440 --> 0:04:35.279 of that fear is starting to show up in the 0:04:35.320 --> 0:04:37.839 vix and what's been a very orderly sell off thus far. 0:04:38.240 --> 0:04:41.840 It's the weekend. You can take a rest. The Fed 0:04:41.920 --> 0:04:45.400 speak to come. Fed speak to come. My sources tell me, 0:04:45.520 --> 0:04:49.760 Romaine postic specifically, that there's thirteen unique fed speakers next week. 0:04:49.800 --> 0:04:51.680 This is going to be important to watch. Even if 0:04:51.720 --> 0:04:54.040 you're a tech investor, you should keep an eye on 0:04:54.080 --> 0:04:56.160 the Fed speak because it's going to be interesting to 0:04:56.200 --> 0:04:58.960 see what any sort of message, any sort of crumbs, 0:04:58.960 --> 0:05:01.799 they leave about how they feel about this market reaction. 0:05:01.839 --> 0:05:05.760 If you go back to after Jackson Hole, this speech 0:05:05.800 --> 0:05:08.719 that Jeron Powell gave, markets puked in the aftermath of 0:05:08.760 --> 0:05:11.159 that and then you actually had minneapolis fed President Neil 0:05:11.240 --> 0:05:13.919 Kash cary say that he was happy to see that 0:05:14.080 --> 0:05:16.000 market reaction. I don't know if we're going to get 0:05:16.000 --> 0:05:19.159 anything as explicit as that, but any sort of hints 0:05:19.200 --> 0:05:23.159 along that line, that line would be very interesting. Puke, 0:05:23.760 --> 0:05:26.600 what a happy way to end the week. Bloomberg's Katie Greifeld, 0:05:27.080 --> 0:05:38.920 thank you very much. Apple has become a serious threat 0:05:39.120 --> 0:05:42.840 to traditional cable providers propped up by live sports. Three 0:05:42.839 --> 0:05:45.680 major storylines are playing out that could make apple a 0:05:45.720 --> 0:05:49.599 real player in sports broadcasting. Apple TV has only aired 0:05:49.720 --> 0:05:52.640 MLB Games for a few months, but tonight it could 0:05:52.640 --> 0:05:56.080 have record viewership, with Aaron Judge One home run away 0:05:56.400 --> 0:06:00.560 from MLB history. Apple Music will become the title sponsor 0:06:00.800 --> 0:06:03.960 of the Super Bowl halftime show, taking over from Pepsi, 0:06:04.240 --> 0:06:06.840 and Apple is in talks with the NFL to take 0:06:06.920 --> 0:06:10.320 the AAL assets Sunday ticket package from direct TV and 0:06:10.360 --> 0:06:14.000 a deal that could top two point five billion dollars. 0:06:14.240 --> 0:06:16.440 Here's how crucial this could be for apple. A recent 0:06:16.520 --> 0:06:20.880 survey of NFL fans found that forty percent of them 0:06:20.920 --> 0:06:24.960 definitely will or are likely to subscribe to Sunday ticket 0:06:24.960 --> 0:06:28.159 went offered by a major streaming provider. Here to discuss 0:06:28.240 --> 0:06:31.600 is Bloomberg's apple reporter, Mark German, and Bloomberg business of 0:06:31.640 --> 0:06:35.200 sports reporter Brandon Sapienza. Brandon, I'm gonna Start with you. 0:06:35.520 --> 0:06:39.039 Big Game Friday night and it matters for a guy 0:06:39.080 --> 0:06:42.880 called Aaron judge and it matters for Apple TV. Set 0:06:42.880 --> 0:06:44.960 the stage for us. Why do we care? Well, I 0:06:45.000 --> 0:06:47.440 mean Aaron Judge Could Tai Roger Marris with the sixty 0:06:47.480 --> 0:06:50.240 one time run. Obviously that's really big news. Yankee fans 0:06:50.240 --> 0:06:52.479 have been waiting a long season to see that happen, 0:06:52.920 --> 0:06:54.719 but they might not get I'll get the chance to 0:06:54.720 --> 0:06:56.880 do that tonight. So a lot of them are really upset. 0:06:56.920 --> 0:06:59.480 They've personally attest to that they might not get the 0:06:59.560 --> 0:07:01.960 chance to do the mock. Give us the specifics. Hey, 0:07:02.080 --> 0:07:04.799 what is the deal that apple has with Major League Baseball? 0:07:06.000 --> 0:07:07.760 So for the past few weeks, as you said, or 0:07:07.760 --> 0:07:09.760 a few months I should say, through the Apple TV 0:07:09.840 --> 0:07:12.640 APP on all of the supported devices, apple has aired 0:07:12.640 --> 0:07:15.880 two MLB Games every Friday night. They put the schedules 0:07:15.880 --> 0:07:18.440 out a few weeks in advance. It just so happens 0:07:18.440 --> 0:07:21.760 that this agreed upon game featuring the Yankees and Aaron 0:07:21.840 --> 0:07:24.480 judge tonight. That's the game that everyone in New York 0:07:24.520 --> 0:07:27.000 wants to see and because of that agreement it won't 0:07:27.040 --> 0:07:29.520 be aired on the Y S network. That's the local 0:07:29.560 --> 0:07:32.440 network in New York. So if Brandon wants to watch that, 0:07:32.520 --> 0:07:34.240 he won't be able to unless he signs up for 0:07:34.240 --> 0:07:38.080 Apple TV. Now the positive year is that this goes 0:07:38.080 --> 0:07:40.520 against some speculation I've seen, you don't actually have to 0:07:40.520 --> 0:07:42.480 pay for it right. Some people thought you had to 0:07:42.520 --> 0:07:44.720 pay the four day nine per month for Apple TV 0:07:44.800 --> 0:07:47.560 plus to actually view it. That's not the case. Still, 0:07:47.800 --> 0:07:50.520 the MLB deal is free. At some point, though, I 0:07:50.560 --> 0:07:52.880 think they'll charge for it. But for tonight you really 0:07:52.920 --> 0:07:55.000 just need an apple TV APP or access to the 0:07:55.000 --> 0:07:57.200 APP in order to watch the game. Jens, I wanted 0:07:57.280 --> 0:07:59.960 to get the mood music out there across New York. 0:08:00.000 --> 0:08:01.840 So what did I do? I took to twitter and 0:08:01.920 --> 0:08:05.239 I did a twitter poll and I asked Yankees Fans, 0:08:05.520 --> 0:08:09.560 Major League baseball fans, WHO's watching the game tonight on 0:08:09.640 --> 0:08:12.640 Apple TV plus? That's the results. Now, okay, Pinch your 0:08:12.680 --> 0:08:17.400 salt here. It's not exactly scientific. Around six votes, but no, 0:08:18.000 --> 0:08:20.160 forty three point five PC. I guess a lot of 0:08:20.160 --> 0:08:22.920 people are going to go and see it themselves in person. 0:08:23.320 --> 0:08:25.760 But if you are a Yankees fan or you're a 0:08:25.800 --> 0:08:30.800 baseball fan, brandon, it's a complicated season. Yeah, what do 0:08:30.840 --> 0:08:33.360 you need to do across the season if you live 0:08:33.360 --> 0:08:35.160 in the state, in New York to Actually Watch a game? 0:08:35.320 --> 0:08:36.719 So if you live in the city of New York, 0:08:36.720 --> 0:08:39.800 you're actually for services to get you a Yankee game. 0:08:39.920 --> 0:08:42.200 So either you need one of to view one of 0:08:42.200 --> 0:08:45.280 the PEACR Games. Need Peacock, then you need Amazon TV, 0:08:45.480 --> 0:08:48.560 Amazon prime. They needed a cable network or something that 0:08:48.600 --> 0:08:51.160 has access to the yes network, which I think is 0:08:51.200 --> 0:08:54.679 only direct TV stream in the case of if you 0:08:54.720 --> 0:08:57.079 want to stream if you're unplugged from cable. And then 0:08:57.120 --> 0:08:59.520 obviously you need apple TV, which I know, as Mark said, 0:08:59.520 --> 0:09:01.640 it is free, but for a lot of fans it's 0:09:01.640 --> 0:09:03.360 a lot of services and a lot of money that 0:09:03.400 --> 0:09:05.520 may need to be laid out and it's it's obviously 0:09:05.600 --> 0:09:10.800 not ideal in this inflationary environment. Mark, what is Apple's 0:09:11.640 --> 0:09:15.280 play here? What is their strategy with sports more broadly, 0:09:15.280 --> 0:09:18.440 because it's not just baseball. So you heard that problem, 0:09:18.440 --> 0:09:20.800 the brandon outline where you need four different services to 0:09:20.840 --> 0:09:24.800 catch all your Nikee Games? Right, that's not alone for MLB. Right, 0:09:24.840 --> 0:09:27.720 I'm an NBA Fan. Sometimes you need lead pass. Sometimes 0:09:27.760 --> 0:09:30.360 for the Lakers you need spectrum sports net, sometimes you 0:09:30.400 --> 0:09:33.800 need ESPN. Right. And so apple's ideal world is you 0:09:33.840 --> 0:09:36.160 throw all that away, right, you subscribe for one price 0:09:36.160 --> 0:09:38.679 every month and you get every game you want across 0:09:38.760 --> 0:09:41.719 every different sports league and they're gradually heading there. Right 0:09:41.760 --> 0:09:44.880 this MLB partnership just the beginning. You mentioned the talks 0:09:44.880 --> 0:09:47.640 to the NFL for Sunday ticket, just the beginning. The 0:09:47.760 --> 0:09:50.240 MLS deal. It's a ten year deal. That's a component 0:09:50.240 --> 0:09:53.280 of it. I think they'll eventually go after the NBA, college, 0:09:53.559 --> 0:09:56.600 Maybe High School Sports, who knows? They want everything. They 0:09:56.640 --> 0:09:59.319 want one single monthly price. Build your own all the 0:09:59.400 --> 0:10:01.920 card system them where you can pay, you know, x 0:10:01.960 --> 0:10:05.560 amount for M MLB, NBA, NFL. Pay a different price 0:10:05.600 --> 0:10:08.960 for this. Build your own packages as standalone apple originals, 0:10:08.960 --> 0:10:12.280 non sports package. They want to own everything right and 0:10:12.280 --> 0:10:14.319 this has been a big week for them. Those talks 0:10:14.320 --> 0:10:17.400 are ongoing. You mentioned that deal for about fifty million 0:10:17.679 --> 0:10:20.280 where they're going to be replacing Pepsi right as a 0:10:20.320 --> 0:10:23.959 sponsor for the, you know, halftime game right at the 0:10:24.000 --> 0:10:26.720 Super Bowl. That's a big way to get apple's brand 0:10:26.720 --> 0:10:29.360 out there, make more sports fans familiar with the apple brand, 0:10:29.559 --> 0:10:32.920 apple music, apple TV, etcetera. And of course the situation 0:10:32.920 --> 0:10:35.199 that brandon outline tonight. That's going to get the apple 0:10:35.280 --> 0:10:38.679 name out there for a lot more people. And obviously 0:10:38.720 --> 0:10:41.719 this Aeron Joe Situation is perfect marketing for apple and 0:10:41.760 --> 0:10:44.400 apples are going to give in and let yes, Co 0:10:44.600 --> 0:10:47.240 stream the game, that chart you see on your screen. 0:10:47.280 --> 0:10:50.760 So a global audience seems so important, right. Apple's budget 0:10:50.800 --> 0:10:56.160 six billion for streaming in prime video, fifteen billion brandon. 0:10:56.280 --> 0:11:01.560 Isn't just inevitable the Apple Amazon streaming giants come to 0:11:01.640 --> 0:11:06.240 dominate sports television? Absolutely. I mean, when you think about 0:11:06.280 --> 0:11:10.000 who owns all these products, who owns an apple product? 0:11:10.080 --> 0:11:12.640 Who owns a subscription to Amazon prime, you're talking about 0:11:12.640 --> 0:11:14.560 a lot of people, with tens of millions of people, 0:11:14.960 --> 0:11:17.640 and all of these people are also motivated by more 0:11:17.800 --> 0:11:20.760 and more quality content, turning to streaming, turning off from 0:11:20.800 --> 0:11:23.400 cable and just focusing all their attention and their money there. 0:11:23.679 --> 0:11:27.680 So it is inevitable. Let's talk about apple mark and 0:11:27.720 --> 0:11:31.360 its efforts around the NFL and halftime show for the 0:11:31.400 --> 0:11:34.680 Super Bowl. Right. This is not a play for the broadcasting, 0:11:35.360 --> 0:11:39.200 this is a play for advertising. This is a pure 0:11:39.200 --> 0:11:42.280 advertising way, pure way to get their brand out there. 0:11:42.360 --> 0:11:45.240 This is a five year deal. Obviously, anyone who watches 0:11:45.280 --> 0:11:47.560 the Super Bowl knows that Pepsi has sponsored them for 0:11:47.600 --> 0:11:49.880 many years now. Apple is going to be the forefront 0:11:49.920 --> 0:11:52.640 of that and you can just probably imagine that Tim Cook, 0:11:53.080 --> 0:11:55.280 Eddie Que, their head of services, you know, a lot 0:11:55.320 --> 0:11:57.080 of their team will probably be there. You'll see them 0:11:57.120 --> 0:12:00.360 on camera there. They'll see their brand plasted everywhere. They'll 0:12:00.360 --> 0:12:02.640 make a whole big deal about it. I'm interested to 0:12:02.640 --> 0:12:04.040 see if they're going to get back in the game 0:12:04.040 --> 0:12:07.080 of making commercials right for the Super Bowl, something they 0:12:07.080 --> 0:12:10.440 did many, many years ago, obviously with the original MC 0:12:10.720 --> 0:12:12.559 but they haven't really done much of that since then. 0:12:12.960 --> 0:12:15.400 So I think this is a big branding opportunity for apple. 0:12:15.480 --> 0:12:17.960 And despite all the cash they have on hand right 0:12:18.200 --> 0:12:21.240 a hundred billion plus. You know, fifty million dollars still 0:12:21.240 --> 0:12:23.760 fifty million dollars. So I think they see this as 0:12:23.880 --> 0:12:26.280 a significant way to put their foot down and say hey, 0:12:26.280 --> 0:12:29.000 we're here too for sports. Uh. And I think Brandon's 0:12:29.040 --> 0:12:31.760 point about all these other services is also pretty interesting. 0:12:32.240 --> 0:12:34.280 And what's really cool about Apple TV is they have 0:12:34.320 --> 0:12:37.079 a feature called Apple TV channels. Right, so, let's say 0:12:37.120 --> 0:12:41.040 Amazon or another provider, Peacock Brandon mentioned, they get some 0:12:41.280 --> 0:12:44.480 really cool deal with one of the major sports leagues. Potentially, 0:12:44.480 --> 0:12:47.000 maybe that could be tapped through in Apple TV. So 0:12:47.040 --> 0:12:49.600 the Apple TV APP you can access to apple services, 0:12:49.640 --> 0:12:53.079 apple partnerships, but maybe those from NBC and Amazon and 0:12:53.120 --> 0:12:55.600 the likes of those as well. Mark, you've got your 0:12:55.600 --> 0:12:57.440 finger on the Pulic of Apple, not just in the 0:12:57.480 --> 0:13:00.600 product perspective, but it kind of brewed a strategy. So 0:13:00.679 --> 0:13:03.839 talk to me about Sunday ticket in NFL. Is Tim 0:13:03.920 --> 0:13:07.320 Cook and Co really willing to just keep spending that 0:13:07.400 --> 0:13:11.160 cash because they got cash to burn? They have a 0:13:11.200 --> 0:13:13.199 lot of cash and they want to use that cash 0:13:13.240 --> 0:13:15.400 to make even more cash, right and so right now 0:13:15.440 --> 0:13:18.959 they're making about twenty billion dollars a quarter right on services, 0:13:19.080 --> 0:13:22.839 about eighty billion dollars per year. Imagine that investment, that 0:13:22.920 --> 0:13:25.240 two and a half billion dollar investment, what that will 0:13:25.280 --> 0:13:27.920 do for apple's bottom line. Right. Maybe one day we'll 0:13:27.960 --> 0:13:32.000 be talking about nine billion or hundred billion dollar annual 0:13:32.040 --> 0:13:35.199 income from services, with NFL just the beginning of that. 0:13:35.200 --> 0:13:37.360 That's a big deal. And, as we all know, NFL 0:13:37.400 --> 0:13:39.920 Sunday games. That's the Holy Grail, not only of the 0:13:40.080 --> 0:13:42.880 NFL for football, but the holy grail of all of sports. 0:13:43.160 --> 0:13:45.760 Right even the NBA doesn't want to broadcast their games 0:13:45.960 --> 0:13:48.560 to go up against Sunday games from the NFL. So 0:13:48.640 --> 0:13:51.320 I think that would be pretty, pretty big for the company. Hey, 0:13:51.360 --> 0:13:54.280 how often does it come down to cash on cash, 0:13:54.880 --> 0:13:58.199 on cash? Boom bugs, malt gum and and Brandon Sapienza. 0:13:58.640 --> 0:14:00.520 Thanks to you both, and be sure order to catch 0:14:00.600 --> 0:14:03.319 the lineup tonight at seven pm New York time. It's 0:14:03.320 --> 0:14:06.760 our new show focused on the sports betting industry. Tonight, 0:14:06.800 --> 0:14:10.880 former Dallas Cowboys Dez Bryant joins the program coming up, 0:14:10.880 --> 0:14:13.640 we'll take a look at the resurgence in climate focused 0:14:13.679 --> 0:14:17.720 investing as companies and governments doubled down on lightening their 0:14:17.720 --> 0:14:22.320 carbon footprints. Our discussion with climate focus firm voyage a ventures. Next, 0:14:22.760 --> 0:14:39.960 this is Bloomberg. This Week is climate week in New York, 0:14:39.960 --> 0:14:43.200 with the summit bringing together international leaders from business, government 0:14:43.240 --> 0:14:47.240 and civil society to showcase global climate action. So let's 0:14:47.240 --> 0:14:49.720 wrap the week up with voyage adventures, a new firm 0:14:49.760 --> 0:14:52.080 that's raised a hundred million dollars for its first fund, 0:14:52.120 --> 0:14:56.880 backing tech startups working on things like decarbonizing transportation, energy 0:14:56.960 --> 0:15:00.840 systems and foods and materials production, to own name a few. 0:15:00.920 --> 0:15:03.360 Let's say all about this with the CO founders and 0:15:03.360 --> 0:15:07.400 managing partners, Sierra Peterson and Sarah's classic, joining me now. 0:15:07.800 --> 0:15:11.120 Sarah I'll start with you. Climate Week. A whole week 0:15:11.240 --> 0:15:17.200 the world is watching to events like this really induced change. Yeah, 0:15:17.280 --> 0:15:20.040 I mean climate week is, I think, a good illustration 0:15:20.120 --> 0:15:23.480 of the unparalleled momentum we've seen in this past year 0:15:24.000 --> 0:15:28.160 in recognizing the opportunity in addressing climate change and climate 0:15:28.160 --> 0:15:32.400 stabilization through investment and the policy that has shown up 0:15:32.400 --> 0:15:34.840 in a major way in the United States to do so. 0:15:34.840 --> 0:15:38.160 So every week it's climate week in some way. Sarah, 0:15:38.200 --> 0:15:41.240 I think what I find so fascinating, especially in private markets, 0:15:41.280 --> 0:15:45.000 venture capital, you're putting money in a portfolio of companies. 0:15:45.000 --> 0:15:46.880 Some of them will make it, some of them won't, 0:15:47.200 --> 0:15:49.080 and a lot of these ideas they always seem a 0:15:49.080 --> 0:15:52.640 bit nascent, right. They always seem like things with great promise. 0:15:52.720 --> 0:15:57.800 How do you decide to where you deploy capital? Yeah, 0:15:57.800 --> 0:16:00.840 so we invest in companies building product and services that 0:16:00.920 --> 0:16:04.240 are positioned to decarbonize some aspect of the global economy. 0:16:04.640 --> 0:16:07.880 And these are the world's biggest markets for talking about energy, 0:16:08.000 --> 0:16:12.000 food and materials, production, transportation. And what we recognized, and 0:16:12.080 --> 0:16:14.520 part of the reason that we started voyager now when 0:16:14.560 --> 0:16:19.280 we did, is that many of these foundational technologies are 0:16:19.320 --> 0:16:22.880 reaching the point where they are cheaper and better performing 0:16:22.920 --> 0:16:25.320 than their fossil field incumbents. Sore, of course, seeing this 0:16:25.800 --> 0:16:27.840 in the area of electric vehicles, where the total cost 0:16:27.840 --> 0:16:30.640 of ownership of light duty vehicle is less than that 0:16:31.080 --> 0:16:33.680 of a combustion engine vehicle and the performance is better. 0:16:34.080 --> 0:16:36.920 And so we look for opportunities in these expanding markets 0:16:36.920 --> 0:16:43.360 where foundational technologies are positioned to Outcompete, in the near term, 0:16:43.440 --> 0:16:45.880 in the next few years or even today, their fossil 0:16:45.920 --> 0:16:48.920 field incumbents. And I think it's important to recognize these 0:16:48.920 --> 0:16:54.040 technologies will continue to get better over time and the 0:16:54.080 --> 0:16:57.320 fossil fuel based incumbents will continue to be ever more 0:16:57.400 --> 0:17:00.320 or less competitive. Sarah, let me as see that question 0:17:00.360 --> 0:17:04.159 in reverse. Where are you not investing? Where do you 0:17:04.240 --> 0:17:10.160 not put your money within climate carbon reduction? And why? Yeah, 0:17:10.200 --> 0:17:13.960 certainly so. We are an early stage venture capital firm. 0:17:14.040 --> 0:17:17.439 So as a venture capital firm, we seek investments that 0:17:17.560 --> 0:17:21.560 have a venture scale return profile. There are plenty of 0:17:21.600 --> 0:17:26.040 opportunities for investing in the overall transition away from an 0:17:26.080 --> 0:17:31.400 unsustainable and carbon intensive economy around the world. There are 0:17:31.480 --> 0:17:36.280 infrastructure investments to be made. There are certainly interesting opportunities 0:17:36.320 --> 0:17:39.280 to invest in the carbon markets themselves. We are investing 0:17:39.280 --> 0:17:43.080 in early stage technology companies that hold, as I said, 0:17:43.480 --> 0:17:47.000 an interesting and venture scale return profile. Out of fund one, 0:17:47.080 --> 0:17:50.240 for example, we look for companies that we believe, through 0:17:50.280 --> 0:17:52.920 a single investment, can return the entire hundred million dollar 0:17:53.000 --> 0:17:57.520 fund through that investment. So you both raise around hundred 0:17:57.520 --> 0:18:00.600 million in April, I believe. I want just take a 0:18:00.640 --> 0:18:03.800 look on the screen at some of those backing you guys, 0:18:03.840 --> 0:18:09.280 some of your lps, really interesting names from industry, for example. 0:18:09.600 --> 0:18:12.000 You know one being Jeff M Ol of GE, Long 0:18:12.119 --> 0:18:16.240 Time at G, one of these great big American companies, 0:18:16.440 --> 0:18:18.560 and we talked in the intro about how climate week 0:18:18.840 --> 0:18:24.000 brings together policymakers business. When you look across corporate America 0:18:24.240 --> 0:18:27.240 at a General Electric for example, do you think that 0:18:27.280 --> 0:18:31.399 they are a doing enough, Sarah, but be doing the 0:18:31.520 --> 0:18:38.080 right things with their investment? Yeah, many companies are recognizing 0:18:38.119 --> 0:18:41.120 the opportunity in the transition and they're seizing the opportunity. 0:18:41.280 --> 0:18:45.679 I think certainly not every company is and all companies 0:18:45.720 --> 0:18:48.960 could be doing more. What it's difficult to recognize is 0:18:49.000 --> 0:18:52.520 that once technology is hit in flection points where they 0:18:52.600 --> 0:18:56.399 are better performing and less expensive than the technology paradigm 0:18:56.440 --> 0:18:59.320 they're replacing, they continue to get better and they can 0:18:59.359 --> 0:19:01.720 continue to get are at a faster rate, and so 0:19:01.800 --> 0:19:05.480 we think these transitions will happen linearly. In reality, they 0:19:05.520 --> 0:19:08.159 actually can happen much, much faster than that, and so 0:19:08.320 --> 0:19:11.240 timelines and inflection points that feel like they might be 0:19:11.320 --> 0:19:15.840 twenty years out in decarbonization, in the transition from combustion 0:19:16.000 --> 0:19:19.920 to clean electricity, might actually be happening in ten years 0:19:20.000 --> 0:19:23.080 or five years. And corporations that don't prepare for that 0:19:23.680 --> 0:19:26.639 UH and then, are not ready for what is potentially 0:19:26.680 --> 0:19:29.879 the most rapid transition of economic activity the world has 0:19:29.880 --> 0:19:32.080 ever seen, are not only going to be at risk 0:19:32.160 --> 0:19:33.840 for their business, but they're also going to miss out 0:19:33.920 --> 0:19:36.840 on a fifty trillion dollar opportunity. Sarah, it's been a 0:19:36.840 --> 0:19:40.480 really interestingly digging into the actual technologies, the things that 0:19:41.000 --> 0:19:43.960 the founders are trying to improve. Talk to me about 0:19:44.000 --> 0:19:46.840 some of your portfolio companies, the areas and the technologies 0:19:46.840 --> 0:19:50.639 that you're most excited about. Yeah, so we invest in 0:19:50.840 --> 0:19:55.000 foundational decarbonization, that is, the technologies that are poised to 0:19:55.040 --> 0:19:59.680 de carbonized big swaws to the global economy. These are mobility, 0:20:00.320 --> 0:20:05.560 energy itself, food materials production, the built environment. We are 0:20:05.640 --> 0:20:09.840 backing companies that are poised to, should they succeed in 0:20:09.880 --> 0:20:13.639 these markets, really address emissions at scale across the global economy, 0:20:13.680 --> 0:20:17.360 and I put fully reflects that. We invest in software companies, 0:20:17.480 --> 0:20:21.359 we invest in deep technology companies, we invest in biotechnology 0:20:21.400 --> 0:20:25.639 companies and all our positioned to compete with the fast 0:20:25.760 --> 0:20:30.960 field paradigms of prior technology based on price and performance, 0:20:31.000 --> 0:20:35.280 belong right. Voyager Co founders and managing partners, Sierra Peterson 0:20:35.600 --> 0:20:39.439 and Sarah's classic. Thank you very much. Now Nicola, founded 0:20:39.480 --> 0:20:42.520 Trevor Milton, had an odd reaction when shares plummeted on 0:20:42.560 --> 0:20:46.760 their NASDAC debut. Back in Milton was, quote, hyper focused 0:20:46.760 --> 0:20:48.880 on the company's stock price, so much so that when 0:20:48.920 --> 0:20:52.760 the shares fell five on their first trading day of June, 0:20:52.840 --> 0:20:55.480 he thought something was wrong with the NASDAK. Durors his 0:20:55.560 --> 0:20:59.280 criminal fraud trial were told CFO can brady testified that 0:20:59.359 --> 0:21:03.440 he explained to Milton the decline was simply supply and demand, 0:21:03.520 --> 0:21:07.440 but Milton insisted brady contact the exchange. Brady told jurors 0:21:07.520 --> 0:21:10.080 that it was a constant battle to get Milton, the 0:21:10.119 --> 0:21:13.359 company's biggest shareholder, to focus on building long term value 0:21:13.480 --> 0:21:18.280 rather than obsess over retail investors and stock price fluctuations. 0:21:18.960 --> 0:21:21.920 And Ford has begun the largest factory project in its 0:21:21.920 --> 0:21:25.399 one hundred and nineteen year history. The automaker has started 0:21:25.400 --> 0:21:28.840 construction of its five point six billion dollar electric vehicle 0:21:28.920 --> 0:21:33.560 manufacturing complex in western Tennessee. It's known as Blue Oval City. 0:21:33.600 --> 0:21:37.680 By six thousand workers were expected to be building electric 0:21:37.720 --> 0:21:40.280 pickup trucks and the batteries that power them in a 0:21:40.400 --> 0:21:52.920 joint venture with South Korea's SK innovation. Now market loads 0:21:52.960 --> 0:21:55.199 for the year are in sight after this week's sell off. 0:21:55.240 --> 0:21:58.000 All three major indices dropped this week after the Fed 0:21:58.080 --> 0:22:01.760 seventy five basis point hike and signaled higher rates will remain. 0:22:01.880 --> 0:22:05.440 Tech was not spared. Our next guest says there could 0:22:05.440 --> 0:22:08.920 be some bright spots along with challenges for everyone from 0:22:08.960 --> 0:22:12.960 startup founders to chief executives. David Crawford is partner at 0:22:13.000 --> 0:22:16.440 Bain and company as well as its global head of technology. 0:22:17.200 --> 0:22:19.280 David the week that was what do you make of 0:22:19.320 --> 0:22:23.560 what's going on in the world? Well, good question, I think. Um, 0:22:24.359 --> 0:22:27.520