Speaker 1: And Caroline hide up Bloomberg's world head quarters in New York,
Speaker 1: and I made Ludlow in San Francisco. This is Bloomberg
Speaker 1: Technology in Caroline, big tech sounding or warning for three.
Speaker 1: The market seems really calm about what they're seeing, managing
Speaker 1: to shake off some of the chip concern even as
Speaker 1: that isn't just around earnings but about geopolitics as well.
Speaker 1: And we're back here in New York. They're they're in SF.
Speaker 1: But we're both going to be looking at the Nasdaq
Speaker 1: one hundred best week in months. Hey, but not without
Speaker 1: major fluctuations in the semiconductor space after Intel's dismal earnings
Speaker 1: and there's new curbs for China made chips. Then Elon
Speaker 1: Musk faces an SEC probe over his role in misguided
Speaker 1: claims about Tesla's autopilot system the Bloomberg scoop and thousands
Speaker 1: of tech workers got laid off after they came to
Speaker 1: the US on work is what one nonprofits doing about it?
Speaker 1: But first I check in all these markets, and Ed
Speaker 1: was talking about it, the fact that we see resilience,
Speaker 1: even though there's some worrying signs amid a number of
Speaker 1: the earliers that came out this week, and we think
Speaker 1: of the intels and Microsoft of course Texas instruments as well.
Speaker 1: But then as that manages to push on up more
Speaker 1: than a percentage point. In fact, we are really seeing
Speaker 1: this particular index on a role highest in September over
Speaker 1: the last year, four straight weeks of growth that we've
Speaker 1: seen four straight weeks of games. We haven't seen that
Speaker 1: back since August two. Or Country World and Next also
Speaker 1: gets a slight bid today, up about a quarter percent,
Speaker 1: nowhere near the enthusiasm in the US though many focused
Speaker 1: on the Federal Reserve next sweep. Many focused, of course
Speaker 1: on what it means for interest rate path. We're looking
Speaker 1: at Bloomberg Commodity Index. Interesting me thinking ahead of China's
Speaker 1: reopening after the looonar New Year next week, maybe some
Speaker 1: money coming back out of copper for example. Let's look
Speaker 1: it on. Let's look at what is a really for
Speaker 1: out and out technology focus That is the socks. Because
Speaker 1: as much as we saw that enthusiasm around the NASDAC head,
Speaker 1: really the chip sector ruling US lower off by seven
Speaker 1: tenths of ascent for the lived at Philadelphia Semiconductor Index. Yeah, look,
Speaker 1: I'm going to start on the positive here and focus
Speaker 1: straight on Tesla. Really big jump on Friday, continuing the
Speaker 1: momentum for earnings, but the thirty three percent gain on
Speaker 1: the week it's best week going back to May of
Speaker 1: two thousand thirteen. Clearly investors are believing what Elon must
Speaker 1: has to say about momentum. The negative is behind me, right?
Speaker 1: Which is Intel having its worst week since December, It's
Speaker 1: biggest drop on Friday for a single session since September.
Speaker 1: Is this a question about what's happening in a cyclical
Speaker 1: chip sector or is this a question about what is
Speaker 1: happening with Intel specifically? That is the question that I have.
Speaker 1: What is wrong with Intel? So great? We had the
Speaker 1: best person talk with about this, Daniel Flax, Managing director
Speaker 1: senior research analysts covering the technology sector broadly at New
Speaker 1: Burger Berman seven billions of course in assets under management.
Speaker 1: That is the question what is wrong with Intel? Dan? Intel?
Speaker 1: He is going through a multi year transition, and if
Speaker 1: we step back and think about the past decade, the
Speaker 1: company uh lost competitiveness. They weren't making products that were
Speaker 1: as cutting edge as they had previously, and so what's
Speaker 1: changed in the last couple of years is You've had
Speaker 1: CEO Pat Gelsinger come back to the company really reinvest aggressively,
Speaker 1: bringing new people like CFO Dave's inster UH whom we
Speaker 1: think highly of along with Pat and and they are
Speaker 1: working to to UH execute better on the product roadmaps,
Speaker 1: UH deliver value to customers and certainly when we speak
Speaker 1: to the customers, Intel remains strategic and so looking out,
Speaker 1: I think there's a multi year journey still ahead for Intel.
Speaker 1: But if they can make better products, I think UH,
Speaker 1: I think they can deliver value for customers and ultimately
Speaker 1: for shareholders as well, then it's replating this out further.
Speaker 1: How worried about you about the end markets? You know,
Speaker 1: you look at PC, desktop, also servers, and what Intel
Speaker 1: had to say about the first half of this year
Speaker 1: in particular, what does that tell you about what's to
Speaker 1: come for the technology sector. Certainly we're in a period
Speaker 1: where where there's cyclical headwinds. Um If we think back
Speaker 1: over the past couple of years, there was enormous demands
Speaker 1: save for for PCs as one example, during lockdowns during
Speaker 1: during during the worst of COVID, and so there's a
Speaker 1: little bit of digestion of that. So I I expect
Speaker 1: over the next several months the the industry will work
Speaker 1: through UH. Inventories in PCs is one example. The economy
Speaker 1: is slowing, its impacting enterprises as they spend. But if
Speaker 1: we look out till later this year and really further
Speaker 1: into four I think we'll see better growth. And so
Speaker 1: the companies that have the products, that have the solutions UH,
Speaker 1: those can benefit. And if we step back and look
Speaker 1: at some of the secular trends, so for example, artificial
Speaker 1: intelligence UH, the the ability to deliver value in areas
Speaker 1: like drug discovery. Look at a company like in video
Speaker 1: it two faces cyclical headwinds, but they have tremendous growth
Speaker 1: drivers and product cycles in areas like the data center.
Speaker 1: So we still see opportunities. Certainly their near term headwinds though.
Speaker 1: Talk about those headwinds that aren't just perhaps cyclical in nature, Daniel,
Speaker 1: but they're also related to geopolitics, and the video is
Speaker 1: just one of them, which of course has China exposure.
Speaker 1: I'm thinking today of the the scoop really coming from
Speaker 1: Bloomberg talking about how the Biden administration is getting closer
Speaker 1: to getting Japan the Netherlands to come on side to
Speaker 1: limit China's access to the semiconductor technology that it so
Speaker 1: wishes to build. How is that help or hindrance to
Speaker 1: some of these US players. I think the geopolitical and
Speaker 1: the trade tension click. Clearly, it's been with US for
Speaker 1: several years and it's continuing to intensify. It is having
Speaker 1: impact on some companies ability to ship the most advanced
Speaker 1: technologies into markets like China. But but I think globally
Speaker 1: demand for these products over the next several years is
Speaker 1: likely to be healthy, and that's driven by by build
Speaker 1: out example of the cloud in really this digital infrastructure.
Speaker 1: And so in the near term the restrictions are going
Speaker 1: to impact companies that that do sell in certain cases
Speaker 1: with certain products into China. But I think ultimately that
Speaker 1: demand UH does grow and those companies like a SM
Speaker 1: Lithography is one example, we will continue to have attractive
Speaker 1: multi year growth prospects. What about the R and D
Speaker 1: that then is still needed as we see the cyclical nature,
Speaker 1: the fall away of PC demand, the fact that we're
Speaker 1: going to see slowing revenues that some analysts just said
Speaker 1: we're what was phenomenal staggering was one of the words used.
Speaker 1: Are we're still going to have to see this sort
Speaker 1: of spend come in that means of seeing these fabs
Speaker 1: come up in the United States and all bringing it
Speaker 1: closer shore. I think the build out in the United States,
Speaker 1: in Europe, in other geographies outside of Asia will continue,
Speaker 1: but but it's a multi year process to build them
Speaker 1: and to equip them, and and of course a modern
Speaker 1: fab could cost around twenty billion dollars, so it's no
Speaker 1: small financial undertaking. I think the the industry will remain cyclical.
Speaker 1: But but if we look out to the middle and
Speaker 1: really the latter part of the decade, demand for silicon
Speaker 1: is likely to continue growing. And that's because it's not
Speaker 1: just in PCs and smartphones. It's really going everywhere. And
Speaker 1: that I think is the bigger story in many ways
Speaker 1: in terms of this transformation of the industrial landscape putting
Speaker 1: intelligence into all sorts of devices. You have companies like
Speaker 1: Qualcom for example, that do that. So there's a lot
Speaker 1: of growth even with cyclicality. Words an I want to
Speaker 1: go to Calcom really quickly. They report next week. The
Speaker 1: story there is about diversifying away from the smartphone. Do
Speaker 1: you think that they'll buck the trend we've seen in
Speaker 1: a limited way so sl far from the chip sector.
Speaker 1: They're they're also going to be impacted by it by
Speaker 1: some of the smartphone industry inventories that have built up.
Speaker 1: But as we look out over the next several months,
Speaker 1: I think what we'll see is that China is beginning
Speaker 1: to open up. China is an enormous market for smartphones
Speaker 1: and other mobile devices, and Quacom will benefit from that
Speaker 1: from that growth rebound. I think the bigger story, though,
Speaker 1: beyond that, is their success in areas like automobiles, where
Speaker 1: they have a thirty billion dollar design wind pipeline, and
Speaker 1: so CEO Christiano amon I think is making the right investments.
Speaker 1: They're diversifying the company and their intellectual property in key
Speaker 1: areas like connectivity and security and automation are powerful and
Speaker 1: valuable to customers. Daniel Gregg's have some time with the
Speaker 1: have a wonderful weekend. Daniel Flax, Managing director, SENI to
Speaker 1: research analyst over a Newberger berm and really going through
Speaker 1: whole host of names in the chip space. We've got
Speaker 1: another one for you, because let's talk about in Vidia.
Speaker 1: It's conserving pretty well of late and the president of
Speaker 1: the CEO, Jensen Kuang, who's been doing particularly well to
Speaker 1: be perhaps building his wealth, largely in part because of
Speaker 1: the sore and popularity of chat GPT. This man has
Speaker 1: seen his fortune climb by three percent this year of
Speaker 1: eighteen billion dollars now is his overall fortune after videos
Speaker 1: become basically a dominant player empowering AI applications, automous cars, robots,
Speaker 1: to crypto, to mining. Of course, and speciality that's made
Speaker 1: at one of Wall Street's top wages for how to
Speaker 1: profit from the rapid business interest in AI. So I
Speaker 1: guess in spite of Intel's fall, in spite of the
Speaker 1: doom and the gloom ed, it feels as though in
Speaker 1: particular there's some hope around chipmakers. Morgan Stanley actually had
Speaker 1: this take on it. We do like some of the
Speaker 1: semiconductors down here that that look like they're starting to
Speaker 1: put encycliculturals in the traditional sense. Some of the software
Speaker 1: services companies nice pivot there from semiconductors to software companies.
Speaker 1: And we can delve into one key software company now
Speaker 1: because Salesforce appointing three new independent directors to its board
Speaker 1: as the pressure builds from activists and mrs. Of course,
Speaker 1: that's talked to be mostly Anna Baker for more on this,
Speaker 1: And really it was the scoop from d Hammond yesterday
Speaker 1: and from your team that we would likely to see
Speaker 1: these caster characters come onto the board, and well it
Speaker 1: occurs to the Anna, So some of the casts of
Speaker 1: characters have come on the board Value Act. Uh you
Speaker 1: know that mystery activist investor. We were trying to figure
Speaker 1: out who else was in there besides Starboard, Elliott and
Speaker 1: Jeff of it. So this is really the start of something.
Speaker 1: Value Acts certainly will have an influence on the board.
Speaker 1: They're very interested in, you know, corporate governance and making changes,
Speaker 1: but in a friendly way with the company. But there's
Speaker 1: still the question of what happened with these other activists
Speaker 1: who are still very much involved. And the shares were
Speaker 1: muted today, so um, you know, the news was received
Speaker 1: okay by the market, but I think there's going to
Speaker 1: be some more action on this one. Leona. Let's stick
Speaker 1: with that kind of main protagonist. Then I suppose for
Speaker 1: one of a better description, who is Mason will fit
Speaker 1: and talk to us about Value Act. They track record
Speaker 1: what it is they come into companies and do well.
Speaker 1: They're based on your part of the world. San Francisco
Speaker 1: may have a A A thirteen billion under management, and Mason
Speaker 1: Morpha is no stranger to tech apology. He sat on
Speaker 1: the Microsoft board for about four years from fourteen to seventeen.
Speaker 1: I heard the stock in that time doubled, So he
Speaker 1: will definitely bring that experience public board experience with him.
Speaker 1: Uh and you know they're they're known for making changes,
Speaker 1: as I mentioned in a friendly way with the company,
Speaker 1: So it'll be good to have some sort of uh
Speaker 1: investor viewpoint on the board to help because the shares
Speaker 1: are trading so great for Salesforce bloom Bosleyana Baker leading
Speaker 1: a big week for our deal's team out of New York,
Speaker 1: Thank you so much. Meanwhile, back here in San Francisco,
Speaker 1: regulators investigating Elon Musk's role in shaping Tesla's self driving
Speaker 1: car claims. The review is part of an ongoing SEC
Speaker 1: probe of the company's statements about its autopilot driver autopilot
Speaker 1: driver assistant system that, according to a Bloomberg surce, officials
Speaker 1: awaghing whether Mosque specifically may have inappropriately made forward looking
Speaker 1: statements and carry this this story, this reporting hot on
Speaker 1: the heels of that other scoot from Danna Hole in
Speaker 1: Sean o'caine earlier this month about the video right the
Speaker 1: emails where Elon Musk is directing the language used behind
Speaker 1: how they described Autopilot in those nation stages, and the
Speaker 1: SEC is just hot in his heels, isn't it? In
Speaker 1: every sort of direction of this. But ultimately it all
Speaker 1: comes down to the fact, and it's almost reminiscent of
Speaker 1: what he's just been in court trying to explain around
Speaker 1: his tweet of funding secured. Is when you're a CEO,
Speaker 1: the leader of a business, the visionary, when you say
Speaker 1: certain things, people believe them and they end up being
Speaker 1: forward looking guidance basically whether or not he wants them
Speaker 1: to be. Yeah, and Boomberg's source pointing out this is
Speaker 1: an extension of the existing SEC probe, which was originally
Speaker 1: reported by a number of media outlets back in October.
Speaker 1: It's Today's Bloomberg Big Take Daiy Albert Kurt Wagner taking
Speaker 1: a deep dive into one of Elon Musk's most faithful supporters.
Speaker 1: She Twitter's head of trust and safety and seems willing
Speaker 1: to overlook protocol to appease her new boss. Those cut
Speaker 1: Wagner joins us now on it. So, first and foremost,
Speaker 1: who is Yeah, so Ella is the head of Trust
Speaker 1: and Safety at Twitter. So she's essentially in charge of
Speaker 1: a lot of the teams that work on you know,
Speaker 1: keeping Twitter safe. Right. They used to fight misinformation, they
Speaker 1: used to take down hate speech. Um. You know, this
Speaker 1: is the same group that, for example, was responsible for
Speaker 1: suspending President Donald Trump a few years ago. Right. And
Speaker 1: so this is a pretty high profile job. A lot
Speaker 1: of these decisions we've seen be very controversial over the years.
Speaker 1: So the person who kind of runs trust and safety
Speaker 1: at Twitter has always been a high profile role in
Speaker 1: that regard because the decisions that are made are so
Speaker 1: important to free speech on the internet. Right. And so
Speaker 1: she stepped into a very senior position under Elon in
Speaker 1: just the last couple of months. But that was what
Speaker 1: I found so interesting about this. You and I have
Speaker 1: done a lot of reportings together over recent months and
Speaker 1: more than recent months, honestly, and that was the name
Speaker 1: I didn't recognize. You know, we we documented on a
Speaker 1: day by day basis the people leaving Twitter those that
Speaker 1: chose to stay. So now my question is what is
Speaker 1: it that she's doing? You know, what is the crux
Speaker 1: of your big tape story that you've learned about her
Speaker 1: role within the building. Yeah, well you probably aren't familiar
Speaker 1: with her name because she really just joined Twitter over
Speaker 1: the summer, just a few months before Elon Musk took over, Right,
Speaker 1: So she was not necessarily a senior leader in the
Speaker 1: way that a lot of employees were, someone who a
Speaker 1: lot of employees were familiar with by the time that
Speaker 1: the deal closed. Right. But what we you know, pointed
Speaker 1: out in our big take and why I think this
Speaker 1: is an interesting story is that, you know, they're kind
Speaker 1: of bucking a lot of the trends of of of
Speaker 1: trust and safety over at Twitter these days. Right. I mean,
Speaker 1: this is a this is an organization that exists at
Speaker 1: Facebook and YouTube and all the other social players, and
Speaker 1: you know, the last couple of years, we've seen these
Speaker 1: groups get really refined. Right. They have tons of policies,
Speaker 1: they have tons of procedures. Um, there's a there's kind
Speaker 1: of a standard way of doing some of this stuff, right,
Speaker 1: and under Elon, a lot of that has gotten thrown
Speaker 1: out the window. And so we've seen, um, you know,
Speaker 1: for example, they're just got rid of their COVID misinformation policies.
Speaker 1: One example, you may remember ed a few weeks ago
Speaker 1: they just started suspending journalists, uh, sort of without a
Speaker 1: great explanation, right, And so what we've seen is just
Speaker 1: kind of like this playbook that I think a lot
Speaker 1: of folks are familiar with get tossed out. And that's
Speaker 1: why we find it interesting. Well, give us some some
Speaker 1: sort of granularity around the decisions or actions that she
Speaker 1: is carrying out I suppose on a month behalf. Yeah, Well,
Speaker 1: typically these types of things would go through a strict process, right,
Speaker 1: you know, they might go through multiple teams, multiple layers,
Speaker 1: certainly multiple levels of review. And what we've seen, and
Speaker 1: what we mentioned in our story was that, you know,
Speaker 1: we've seen screenshots of things like, hey, we want this
Speaker 1: account suspended on the order of Elon, or want to
Speaker 1: suspend it on the order of Ella, right, and these
Speaker 1: are just again not the way that usually these checks
Speaker 1: and balances tend to work. And so there's a lot
Speaker 1: of people in the world of trust and safety who
Speaker 1: are worried that there's simply just too much power being
Speaker 1: held by one or two people here in this instance,
Speaker 1: and that you know, if they're not following a lot
Speaker 1: of these checks and balances that were used to you know,
Speaker 1: you don't know exactly where where that's going to end up, right,
Speaker 1: And again, these journalists being sort of suspended out of
Speaker 1: the blue is just one example, but you can imagine
Speaker 1: that being extrapolated to a bunch of different accounts. Her
Speaker 1: rise or indeed her remaining. How have people talked about
Speaker 1: that and the way in which she's navigated her career
Speaker 1: with Twitter? Sure? Well, I mean I think the issue
Speaker 1: is not at all that Ella is is I'm incompetent
Speaker 1: or anything like that. I mean, she's had a bunch
Speaker 1: of really strong roles at tech companies before. She's described
Speaker 1: to us as an incredible operator, someone who's very organized,
Speaker 1: he's very passionate, who who's very um, you know, emotional
Speaker 1: about the things that that she cares about. But I
Speaker 1: don't think she had much experience doing uh, you know,
Speaker 1: speech policy, right, Like a lot of times will see
Speaker 1: with trust and safety, their their academics or their lawyers,
Speaker 1: or the people who have maybe spent their whole life
Speaker 1: thinking about things like affection two thirty. That does not
Speaker 1: that is not Ella's background, right, And so I think
Speaker 1: there's a little bit of concern Again, from people who
Speaker 1: were within Twitter's trust and safety, but even just like
Speaker 1: the broader industry that you know, she's now in a
Speaker 1: role that requires that type of nuance, and you know,
Speaker 1: it's something that you build over time, and I'm just
Speaker 1: not sure that she's been in that role long enough,
Speaker 1: especially with Ellen and how he operates that it's instilling
Speaker 1: a lot of confidence in people right now. Bloom bes
Speaker 1: Kurt wagging a great report saying keeping us posted on
Speaker 1: what's happening inside the bird's nest. We'll get more from
Speaker 1: you next week, Thank you very much. Meanwhile, the information
Speaker 1: says Apple plans to develop software to help users of
Speaker 1: its mixed reality headset build their own acts. The company's
Speaker 1: working on its own are content for its three thousand
Speaker 1: dollar headset. According to the report, Apple hopes that even
Speaker 1: people who don't know computer code can use the software
Speaker 1: to tell the headset via Syrie to build an a
Speaker 1: r app. That application would then be available on its
Speaker 1: app store for others to download. Carrol, you reckon you
Speaker 1: can be an app developer through the headset? Is that
Speaker 1: within your skill set? Most definitely probably through chat GPT rank.
Speaker 1: I mean we've played around with the headsets I can't
Speaker 1: imagine going as far as sort of coding within it
Speaker 1: or making a command to beyond video games. It's interesting
Speaker 1: use case. Yeah, I mean, I'm going to leave it
Speaker 1: to the professionals, But I mean, who knows how creative
Speaker 1: we can become when left to war own devices. I
Speaker 1: first need the three thousand dollars you can give me
Speaker 1: that why I can then start doing it. Yeah, I mean,
Speaker 1: this story about the headsets just not going to go away?
Speaker 1: Is it? Anyway? Coming up? More pain for Indian tycoon
Speaker 1: Galton at Danney's Corporate Empire will tell you the extent
Speaker 1: of the damages caused by that short sells report. That's next.
Speaker 1: This is bloom Buck Who are Hindenberg Research? The u
Speaker 1: S investment firm says it specializes in forensic financial research
Speaker 1: and publishing short sellers reports. Hindenberg's in the news again
Speaker 1: with wide ranging allegations against conglomerates owned by galtam Adani,
Speaker 1: Asia's richest person. Founded by a guy called Nate Anderson,
Speaker 1: the firm's named after the seven Hindenburg disaster. Hindenberg says
Speaker 1: it looks for similar man made disasters that may be
Speaker 1: floating around the market and aims to shed light on them.
Speaker 1: Hindenberg says it seeks results around covering hard to find
Speaker 1: information from quote atypical sources, but warns investors, opinions and
Speaker 1: investigative commentary are his own readers advised. The use of
Speaker 1: its material is at your own risk. The firm really
Speaker 1: hit the headlines in targeting electric truck making the killer,
Speaker 1: and it's founded Trevor Milton. They claimed Milton deceived investors.
Speaker 1: Ultimately Milton resigned. There was a criminal investigation and trial
Speaker 1: and Milton was found guilty of securities and Wye fraud.
Speaker 1: Now that you know what Hindenberg does, here's a little
Speaker 1: bit more about why you heard about them this week.
Speaker 1: It issued a report on Tuesday detailing wide ranging allegations
Speaker 1: of corporate malpractice at A Darni Enterprises following a two
Speaker 1: year investigation. The market route that followed a raised more
Speaker 1: than fifty one billion dollars of value this week across
Speaker 1: the Empire, which is owned by Gautamer Danny, Asia's richest man.
Speaker 1: The Darney Group, the main listed part of the conglomerate,
Speaker 1: disputed Hindenberg's allegations Thursday, but it's stopped just kept plunging.
Speaker 1: The firm lost almost on Friday, biggest drop Carrow since
Speaker 1: seen an issue as he wants to raise funds. An
Speaker 1: issue is well, because tell us why this is a
Speaker 1: technology story. What is it in the conglomerate that in
Speaker 1: our industry? Two reasons One a on he's moved into
Speaker 1: media companies. But to the thesis from Hindenburg is that
Speaker 1: even his cement companies trade, they have multiples like text stocks,
Speaker 1: and that for them was a worrying side. And Hindenberg,
Speaker 1: again a short seller, take a caution what they say,
Speaker 1: but they see potential downside drop from where they think
Speaker 1: these assets are really valued. Well, that's certainly made their
Speaker 1: impact from a monetary value perspective over there in India.
Speaker 1: So we're going to keep all over that sort of
Speaker 1: a story. Welcome back to Bloomberg Technology. I'm Karen Hyde
Speaker 1: back in New York, San Francisco based Ed Ludlow. You're there,
Speaker 1: and and actually both of us took a keen eye
Speaker 1: on what's happening in terms of earnings, particularly credit card
Speaker 1: giant American Express today right because their shares absolutely spiraling
Speaker 1: higher up ten and it's because the company gave a
Speaker 1: pretty upbeat revenue forecast. They had record number of new
Speaker 1: cardholders two and I actually got to have a quick
Speaker 1: chat with the CEO CT Scurry earlier this morning. He's
Speaker 1: talking about as resilient customer base, of course a pretty
Speaker 1: premium customer ed, but he also has some really interesting
Speaker 1: takes some technology, particularly when it comes to small businesses,
Speaker 1: because he was saying, look, I've noticed that digital advertising
Speaker 1: spenders down for those small businesses that I serve, And
Speaker 1: he said, to quote him, I don't know if that's
Speaker 1: a function of the economy or a function of confusion.
Speaker 1: And he's talking about the fact that at the moment
Speaker 1: TikTok Twitter, where you're looking at meta at Google, the
Speaker 1: regulatory implications, some of the political implications of societal he's saying,
Speaker 1: that's a lot to deal with to try and digest
Speaker 1: as a small business as to whether you want to
Speaker 1: be putting your money to work there. Well, he's interesting
Speaker 1: on the other side, the consumer side as well, because
Speaker 1: you know, I scroll my phone often, see a product
Speaker 1: I like on social jump jump into it. That's part
Speaker 1: of the e commerce ecosystem for me. What jumped out
Speaker 1: a company giving guidance for the year incidents, and I
Speaker 1: think it is a technology right because it's payment, it's
Speaker 1: people facilitating transactions, and great job getting on the phone
Speaker 1: because we need to know what's going on. Yeah, he
Speaker 1: was really saying, I've got clarity out and I've got
Speaker 1: confidence to four Who else can say that and I can.
Speaker 1: I can tell you not many people in perhaps the
Speaker 1: crypto world. I've got that sort of level of foresight
Speaker 1: right now. And let's just go to that now. Because
Speaker 1: Anthony Scaramucci Skybridge Capital, we know the kind of pain
Speaker 1: that that's been in. It's lost in fact, and its
Speaker 1: biggest funds after some pretty wrong way bets, whether it's
Speaker 1: crypto that they invested with or of course they now
Speaker 1: bankrupt FTX relationship. Let's bring in the one and only
Speaker 1: Shanali Bassak, who's about to head out to Miami to
Speaker 1: meet a few crypto players as well as hedge fund Glitterati.
Speaker 1: Talk to us about scar Mucci and how much he's
Speaker 1: been burned by the space Listen. He has been pivoting
Speaker 1: Skybridge to focus more and more on crypto the last
Speaker 1: couple of years. And remember this is not just buy encryptocurrencies.
Speaker 1: He had a stake in f t X in various
Speaker 1: rounds of the financing, so he was really hurt in
Speaker 1: November when FTX filed for bankruptcy. We also know there's
Speaker 1: another issue here that f t X Ventures had taken
Speaker 1: a stake here in Skybridge, and so that had come
Speaker 1: up for a question and when they filed for bankruptcy
Speaker 1: on whether he'd be able to buy his steak back. Now,
Speaker 1: the big issue here is Skybridge tumbled thirty nine percent
Speaker 1: last year. It is significantly tumbled. A big question here
Speaker 1: because they have limited withdrawals when it comes to Skybridge.
Speaker 1: What I know about Skybridge is a lot of the bitcoin,
Speaker 1: for example, that they bought was that about eighteen thousand
Speaker 1: dollars on average. So to some extent that they could
Speaker 1: see some rebound this year, it would be hugely helpful
Speaker 1: because of the route that they're facing. Because remember Skybridge
Speaker 1: is not just invested in cryptocurrencies and crypto kind of
Speaker 1: venture here. They're also invested in a lot of hedge funds.
Speaker 1: And while some hedge funds have had a tough year,
Speaker 1: there are a couple that did a little better last
Speaker 1: year too. So taking the good with the bad in
Speaker 1: a tough year for Anthony Scaramuchi. I hope the audience
Speaker 1: got the audible gasp from Caroline in the background because
Speaker 1: I gave a similar one there. I guess, I guess
Speaker 1: my question right. You're you're a fund. I think on
Speaker 1: the crypto side, they're looking a lot at private companies.
Speaker 1: As you said, they also invest in some hedge funds.
Speaker 1: That was how did they get them selves out that
Speaker 1: and back on the right track. Yeah, you know, I
Speaker 1: can't help but talk already about this big Miami trip
Speaker 1: that many hedge fund managers are making into this weekend
Speaker 1: into next week, because starting Sunday night, starting Monday, you
Speaker 1: have the Managed Funds Association, a big hedge fund community,
Speaker 1: starting off with a series of events on restoring faith
Speaker 1: in crypto at a reception also that's sponsored by coin Base.
Speaker 1: So you do have the crypto community really pushing here
Speaker 1: to restore that faith. You have Mike Novograt speaking at
Speaker 1: a separate conference Eye Connections, also in Miami to start
Speaker 1: restoring faith in crypto. You have a lot of fund
Speaker 1: managers alongside traditional fund managers talking to the same big
Speaker 1: investors to bring people back in. In my own conversations,
Speaker 1: what I'll tell you is that there are a lot
Speaker 1: of people out there that still say, listen, bitcoin didn't
Speaker 1: fail last year, even though so much of the market did.
Speaker 1: There's a lot of conversation among traditional asset managers that
Speaker 1: will be down there next week about whether they buy
Speaker 1: some of these claims out of bankruptcy. And there is
Speaker 1: a lot of question around how to invest as a
Speaker 1: traditional investor. But again there are still a lot of
Speaker 1: people who have felt a lot of pain from last year.
Speaker 1: Head Well, the big headline this Friday is the bloombergtion.
Speaker 1: Ali Basso because off to Miami, So Miami watch out,
Speaker 1: and I'm sure we'll get a lot of headlines from her,
Speaker 1: not just have crypt over the world of fintech as well,
Speaker 1: and staying on fintech, Fidelity again slashing its valuation. This
Speaker 1: is interesting of ants group. According to filings, Fidelity cut
Speaker 1: its estimate for ant by about nine percent to sixty
Speaker 1: three point eight billion dollars as at the end of November.
Speaker 1: That's down from two hundred and thirty five billion just
Speaker 1: before ants i Po was halted in November, has been
Speaker 1: overhauling its business to comply with Chinese government demands. As
Speaker 1: we have been discussing Caroline about the situation in mainland
Speaker 1: China for some time now, I would have broader broaden
Speaker 1: out this discussion around valuations, particularly from the venture capital perspective,
Speaker 1: and bring in Blouziberry general part at Lucks Capital. Interesting
Speaker 1: what we've just heard. There are lots of threads valuations
Speaker 1: in China. But I just actually want to go with
Speaker 1: the week that was this. This has been a really
Speaker 1: volatile week, not just in terms of markets but headlines
Speaker 1: markets to the upside. As a VC that's just heard
Speaker 1: all of that from our program and sat through a
Speaker 1: week like this, what's your experience of the week been.
Speaker 1: What's your takeaway from this week's news cycle? I mean,
Speaker 1: you know, Nazdak is up about ten percent this year, right,
Speaker 1: so in some sense this is good news. But at
Speaker 1: the end of the day, vcs we invest in early
Speaker 1: stage technology companies for us at Lux Capital specifically, we
Speaker 1: invest in the intersection of technology and sciences, and this
Speaker 1: is a great time to be building those companies. Great
Speaker 1: talent is becoming available. They're starting companies to solve real
Speaker 1: world problems. You know, think about physical security, think about
Speaker 1: saving lives all the shootings and gun detection technology for example,
Speaker 1: that We've invested in drug discovery companies, automation, autonomy, bringing
Speaker 1: manufacturing back to the US. So regardless of what sector
Speaker 1: you look at right now, there's interesting companies that are
Speaker 1: getting founded and invested in. And the good thing is
Speaker 1: that nobody's looking at exits, you know, for these companies
Speaker 1: in the next year or two. We're just making sure
Speaker 1: these companies are fully funded and are able to create
Speaker 1: great products and take them to market. Butw Caroline and
Speaker 1: I were reflecting on our weekly Twitter spaces earlier that
Speaker 1: the headlines on layoffs came right at the beginning of
Speaker 1: this week, and you there's been so many stories from
Speaker 1: the world of technology that you forget. Actually throughout it
Speaker 1: have been some some pretty negative headlines, especially those around layoffs,
Speaker 1: IBM Spotify being examples. Does that represent an opportunity for
Speaker 1: a venture captists like you? Are you kind of putting
Speaker 1: pressure on your portfolio founders to say, hey, go out
Speaker 1: there and hire these people. They're on the market. My
Speaker 1: inbox is filled with the regimes that have come in
Speaker 1: from people who have been laid off from these companies,
Speaker 1: and I'm absolutely working hard to get them, you know, hired.
Speaker 1: It's some of the best talent hired into our portfolio companies.
Speaker 1: This is two years ago that we told our portfolio
Speaker 1: companies to raise capital because we sort of knew in
Speaker 1: some ways that the peak had arrived. We obviously didn't
Speaker 1: know exactly when, but we wanted them to raise as
Speaker 1: much capital as they're good to be able to survive
Speaker 1: the long term. And these companies that are sitting on
Speaker 1: that capital now is not only able to hire these candidates,
Speaker 1: but also able to acquire some other companies along the
Speaker 1: way to bring more technology into the mix and and
Speaker 1: bring it to their customers. Let's talk about hype or
Speaker 1: not therefore, because amid some of the concerns and the
Speaker 1: and the worries about the technology pulling back valuations, putting
Speaker 1: back people being like, go, there feels like there's another
Speaker 1: sort of n f T crypto vibe around AI. Can
Speaker 1: you tell us about what you're feeling there? But as
Speaker 1: to whether you're getting that exuberance, what are we at
Speaker 1: the dawn of a new Internet stage? Uh? I think
Speaker 1: there's something called the Gardner's hype cycle. So every new
Speaker 1: technology it comes with its own hype and you just
Speaker 1: have to sort of live through it and know that
Speaker 1: there will be ups and downs along the way, and
Speaker 1: that's okay. Um, there is a lot of noise around AI,
Speaker 1: but AI is also real. I think, you know, there's
Speaker 1: something unique that happens with these you know, chat bots
Speaker 1: and LM and other things that have happened that when
Speaker 1: you have very large parameters we're talking about twenty billion
Speaker 1: parameters or more, you start to see very interesting results.
Speaker 1: And I think people are now starting to figure out
Speaker 1: how to utilize them to solve real world problems. So
Speaker 1: we're seeing you know, the applications of AI in new
Speaker 1: industries like healthcare, like education, like in construction, in autonomy
Speaker 1: and and and automation, and I think there's going to
Speaker 1: be a real companies built. We're super excited about that.
Speaker 1: At the same time, you know, just like any other industry,
Speaker 1: I wouldn't just say that for f t X, for crypto.
Speaker 1: This same thing happened in the world of drones and
Speaker 1: b R a R. You have to be just very
Speaker 1: careful that you build real world companies that are solving
Speaker 1: problems and creating real value for the customers at the end. Yeah,
Speaker 1: and real value is something that's now being questioned. For example,
Speaker 1: for a public company like Tesla, which a lot of
Speaker 1: it's big focus long term value is about automated driving.
Speaker 1: I know that's a narrative expertise for you. I know
Speaker 1: that's somewhere that you've been investing in with some of
Speaker 1: your portfolio companies and leading that for Lux Capital. Where
Speaker 1: are we in that overall hype cycle that we're just
Speaker 1: talking through. I mean, look, there's some level of autonomy
Speaker 1: available to all of us. You know, if you can
Speaker 1: buy a car now, it will do self driving, it
Speaker 1: will do lane keeping, you will update, uh, you know,
Speaker 1: new software will update more frequently. But obviously Tesla is
Speaker 1: further advanced than most of the other automotive o EM's
Speaker 1: out there. But I think automotive and autonomous technologies here.
Speaker 1: But I also want to add that AI m L
Speaker 1: similar technology platforms such as um fontomous driving is being
Speaker 1: applied to other industries as well. Right distributed sensor sensors
Speaker 1: are being used to detect guns and weapons that entrances
Speaker 1: to buildings. A I m L is being applied to
Speaker 1: looking for threats in those systems. Completely different industry, you know,
Speaker 1: a company like Evolved Technologies focused on that, completely different
Speaker 1: than autonomous technology. But using the same paradigms and using
Speaker 1: some of the same technologies, and in some ways we
Speaker 1: call it the peace dividend of the autonomous wars, that
Speaker 1: all the technology that's getting developed from autonomous cars are
Speaker 1: going to be used in many other industries and create
Speaker 1: value elsewhere as well. Fascinating. I've got to get you back.
Speaker 1: Really always loved speaking with the VC community at the
Speaker 1: moment about where there is they really focused to be
Speaker 1: getting the value below. We thank you so much, of
Speaker 1: course below it's so very hears of course, the Black's capital.
Speaker 1: Let's check in though on some of the public side
Speaker 1: of the equation. We're just talking about Tessa and some
Speaker 1: of the other discussions. But I mean, chip stocks have
Speaker 1: really been taking it hard, right then, Yeah, and I
Speaker 1: want to go back to Intel because at one point
Speaker 1: on Friday, the stocks down the most since October one.
Speaker 1: It paired some of its declines. I think we had
Speaker 1: our biggest drops since September, the worst week for this
Speaker 1: stock in about five weeks. But you know, this kind
Speaker 1: of killed the momentum, right, I know, then, has that
Speaker 1: one d pushed higher Friday? The Philadelphia Semiconductor Index or
Speaker 1: socks did react negatively but again paired some of its losses.
Speaker 1: What was astonishing for the market is that expectations for
Speaker 1: Intel were already pretty low, and this was even worse
Speaker 1: than that the forecast for the first quarter and outlook
Speaker 1: for the rest of the year, and with so many
Speaker 1: chip names still to report next week and particularly get
Speaker 1: Qualcom right, Caroline, I think now we're probably bracing a
Speaker 1: little bit. You know, we're probably a bit concerned about
Speaker 1: the outlook, particularly for consumer electronics for the rest of
Speaker 1: Some of the turns of phrase being used by the analysts,
Speaker 1: Bernstein calling it astonishingly bad and stunning. So um, I mean,
Speaker 1: just we hope, well, I suppose for many we hope
Speaker 1: that it's not going to replicated next week were coming
Speaker 1: up d Well, maybe next week we'll hear more of
Speaker 1: this as well. Tech layoffs. Look, it's impacting workers on
Speaker 1: temporary visas too. There is no one nonprofit that's trying
Speaker 1: to learn a hand in all of that. We talk
Speaker 1: about it time and time again at tech companies cutting costs,
Speaker 1: looking at the future that perhaps as a bit bleaker
Speaker 1: and in particular it's affecting the workers, isn't it. In particular?
Speaker 1: H one b visa holders whose status in the US
Speaker 1: is directly tied to their employment, and so you and
Speaker 1: I we took to our audience. We got on overall
Speaker 1: the focus on Twitter because some companies like Spotify Day
Speaker 1: at the beginning of the week when they announced layoffs,
Speaker 1: said they're going to be helping out the employees who
Speaker 1: were on visas. And interestingly, when we asked our audience,
Speaker 1: should this be standard, said yeah, yeah, they should be. Yeah,
Speaker 1: you know, you know, and I'm not surprised by that. Caroline.
Speaker 1: Think about where I am in San Francisco, the Bay Area,
Speaker 1: even where you are on the East Coast, not just
Speaker 1: New York, with cities like Chicago, other cities. Many of
Speaker 1: these workers are here in this sector technology, whether they're
Speaker 1: on the s West Side or otherwise on visas. You know,
Speaker 1: it's just an incredibly difficult situation for them. We've got
Speaker 1: a perfect guest to talk about this, Brad Henderson, CEO
Speaker 1: of P thirty three. This is a not for profit
Speaker 1: in Chicago which is basically trying to directly help with this.
Speaker 1: Right Brad, You're basically saying, let's take what is an
Speaker 1: available portion of the workforce and find a solution here
Speaker 1: talk us through what you're trying to achieve. Sure, we're
Speaker 1: really trying to respond at this moment in time where
Speaker 1: so many people are being laid off, and if you
Speaker 1: think about our workforce in the technical field, it is
Speaker 1: far and born. Many of these individuals have sixty days
Speaker 1: right now to find a job or leave the country
Speaker 1: with their families. And so what excites us in Chicago
Speaker 1: is we're just stock full of these companies that do
Speaker 1: real things in the real economy and read people's lives,
Speaker 1: and we're actually have tons of open positions, a hundred
Speaker 1: and sixty thou jobs in technical fields open in Chicago.
Speaker 1: Go today and really just to reach out to the
Speaker 1: thousands of people around the country who are in dire
Speaker 1: straits but highly skilled, and say, if you've got sixty
Speaker 1: days and you want to find a great opportunity to
Speaker 1: have an impact on a business that matters, go to
Speaker 1: our website, apply to a job, and contribute to our economy,
Speaker 1: and talk to us about the fact that actually that
Speaker 1: adds in many ways to diversity. When I think of
Speaker 1: h one b vs is, I think of all my
Speaker 1: husband was on one until we're lucky enough to get
Speaker 1: our green cards. But there's also an awful lot of
Speaker 1: people coming from India in particular, this is people of color.
Speaker 1: That is this going to add diversity of thought as well?
Speaker 1: Over in Chicago. Sure, if you think about the long
Speaker 1: term trajectory for tech, we are short in our country,
Speaker 1: hundreds and hundreds of thousands of jobs, talented people. I've
Speaker 1: apologized to have thousands of people. How where do you
Speaker 1: find those folks? You're gonna have to find new channels.
Speaker 1: Those channels exist for talented people in countries like India
Speaker 1: and countries in Africa and Europe, etcetera. And they exist
Speaker 1: in other forms of diversity neighborhoods in Chicago that I
Speaker 1: haven't always had access to jobs like this. In order
Speaker 1: for us to meet the challenge of the technical age,
Speaker 1: we need to find talent wherever we can find it,
Speaker 1: and diversity ends up being a huge strength and meeting
Speaker 1: those objectives. Brad was showing a graphic on the screen
Speaker 1: which outlines how severe some of the cuts have been
Speaker 1: at names like Meta, Sales Force, Alphabet, Microsoft, IBM. Are
Speaker 1: these the names where these workers that are reaching out
Speaker 1: to you coming from Are you literally getting interest in
Speaker 1: inquiry from the technology sector. It's been two days since
Speaker 1: their job board is up, We've had sixteen thousand unique
Speaker 1: visitors from all across the country. From the very names
Speaker 1: that you're describing, we're getting to engage with people who
Speaker 1: may have been focused on engineering tweets, who now bet
Speaker 1: an opportunity to look at a company like Walgreens, which
Speaker 1: is a Chicago based company who's using a digital technology
Speaker 1: to transform healthcare UH and and really access those people
Speaker 1: who had jobs in big tech on tweets and social
Speaker 1: media projects can put them to work companies like Walgreens
Speaker 1: solving critical healthcare challenges. We're seeing folks from all over
Speaker 1: the country respond to that how easy or difficult is
Speaker 1: it to transfer an H one B visa? How much
Speaker 1: is it going to have to be an uphill battle
Speaker 1: for some of these companies like a Walgreen space where
Speaker 1: you are, who want to have this talent. This is
Speaker 1: the best part about what we're trying to do here
Speaker 1: is if you think about the broader question of reforming
Speaker 1: the U. S. Immigration system, that's really hard and going
Speaker 1: to take a very long time. This program, there's actually
Speaker 1: quite a misnomer that it's cumbersome or particularly costly. All
Speaker 1: the companies we're working with our companies that already go
Speaker 1: through this process, that already have budget to support these
Speaker 1: workers transfers. So the jobs are just sitting there waiting.
Speaker 1: And what we've done on our job board, I think
Speaker 1: one of the things that's really made it so the
Speaker 1: workers around the country have responded to what we're doing
Speaker 1: is all the jobs we posted, it's thousands of jobs
Speaker 1: available at this site are ones that are H one
Speaker 1: B VISA eligible. And so the reality is this one
Speaker 1: is actually pretty straightforward. They do this, it's affordable. They've
Speaker 1: got a process of aguaring and out every time someone applies,
Speaker 1: and so for this particular program, it's just a matter
Speaker 1: of doing the right thing and connecting the dots. Brad Henderson,
Speaker 1: fixing a real problem right here right now for many
Speaker 1: we thank you and indeed their families. It's the CEO
Speaker 1: of P thirty three. And what an interesting way to
Speaker 1: actually be looking at what is in many ways just
Speaker 1: a market inefficiency. There there's the people who want the work,
Speaker 1: who need it very swiftly, and it's just trying to
Speaker 1: find the right way to line them up. Yeah, I
Speaker 1: cannot believe what he's just told us that their ports
Speaker 1: or their board has been open for two days. Sixteen
Speaker 1: thousand people have inquired and the majority of them all
Speaker 1: you know, many of them is he put it from
Speaker 1: the technology sector. You know. It shows what's happening in
Speaker 1: real times in this economy and how quickly it's moving.
Speaker 1: It's happening. We have a new stock marketing session and
Speaker 1: it's artificial intelligence Q and umber of stocks and investors
Speaker 1: destintly trying to get in on the AI tech trend
Speaker 1: the way they do it, or maybe they buy into
Speaker 1: a small cat name like C three AI and makes
Speaker 1: enterprise AI applications. It's stock on a record month so
Speaker 1: far and getting like a buzz feed, its shared price
Speaker 1: spiking three on the week because it announces a deal
Speaker 1: with open ai to be using it within its content creation.
Speaker 1: We've also had little known voice AI makers like SoundHound
Speaker 1: AI also on the upside. We're getting in video. The
Speaker 1: chip maker which has its chips used by AI surfaces,
Speaker 1: also getting bit up some on the month. This all
Speaker 1: feels pretty reminiscent of the past. Quite recently, everyone was
Speaker 1: trying to have an n f T kind of part
Speaker 1: of their business. Maybe back in seen you remember when
Speaker 1: Long Island iced tea rebranded its company name as long Blockchain,
Speaker 1: and therefore we also go back to the n nineties
Speaker 1: when suddenly every company had an Internet strategy or changed
Speaker 1: its name to dot com. These sort of fads do
Speaker 1: come and go. The question is, as a one got
Speaker 1: staying power, what do you think in fad or here
Speaker 1: to stay? So it's a case by case basis right
Speaker 1: on on all of these things, what the AI does,
Speaker 1: and the valuations, the money behind it. The buzz Feed story, Um,
Speaker 1: I'm a journalist, you're a journalist being replaced by I.
Speaker 1: But I get the business case. You know, buzz Feed's
Speaker 1: got to feed the content on its site and you
Speaker 1: look at the market response, all yeah, thankfully, I think
Speaker 1: that's it's going to be. It's games and it's quizz as.
Speaker 1: We hope that it's going to be really putting those
Speaker 1: AI applications towards. But what warriores me is it suddenly
Speaker 1: becomes a scavenger hunt for the right ticker symbol, right
Speaker 1: the acronym that you're using when it comes when you
Speaker 1: summarize what your business does on a Bloomberg for example,
Speaker 1: and what C three AIY s A R go like
Speaker 1: no wonder, it's getting a load of interest. Yeah, and
Speaker 1: look there's real momentum behind this dog. I think the
Speaker 1: Friday rally was looking at a jump of around over
Speaker 1: a few months basis. But the month to date performance
Speaker 1: the stocks up six so far in January. And I
Speaker 1: go to analyst recommendations on the Bloomberg only one by
Speaker 1: on this three cells only, and there's seven holds. Like
Speaker 1: the analysts looking at the stock aren't thinking that it
Speaker 1: should have this sort of a price level at moment.
Speaker 1: The overall price targets the next twelve months is sixty three.
Speaker 1: It's more the euphoria on round. It feels a little
Speaker 1: bit mini. Yeah, no fundamentals here. And then we spoke
Speaker 1: about Jensen and the video earlier in the show. Right,
Speaker 1: this is driving wealth and is driving valuation, Yeah, stonishing.
Speaker 1: Next week we're going to have a lot more on
Speaker 1: the driving wealth and valuations when it comes to earnings. Right,
Speaker 1: But for so far, that does it for this additional
Speaker 1: bloom bleg technology. Don't forget lots of earnings to come
Speaker 1: next week and catch our podcast wherever you get it.
Speaker 1: This is Bloomberg