Speaker 1: We're from Marhart where Innovation, money and power.
Speaker 2: Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: I'm Caroline Heider Bloomberg's world headquarters in New.
Speaker 4: York, and I'm Ed Lovelow in San Francisco. This is
Speaker 4: Bloomberg Technology.
Speaker 5: And big Tech.
Speaker 3: It's on deck Alphabet, AMD Microsoft, it is time to
Speaker 3: show the impact of AI will get you what you
Speaker 3: need to know.
Speaker 4: Ahead of their earnings, Neuralink puts its brain implant technology
Speaker 4: in its first patient. We have all the details on
Speaker 4: a big step forward for Mus's company that aims to
Speaker 4: let humans control computers with their minds and the.
Speaker 3: Culture of crypto. How FOAM VC Chris Dixon sees the
Speaker 3: current investment environment for the next era of the Internet.
Speaker 4: This is day one of a massive week for the
Speaker 4: megacat Tech earnings.
Speaker 3: Car and We've got the perfect voice to just highlight
Speaker 3: what we are expecting from these results from Alphabet Microsoft,
Speaker 3: in particular, tech chants really, as we say, under pressure
Speaker 3: to live up to that AI hype. Whither the breakdown
Speaker 3: is Jackie devilas over there in Washington and Jackie just
Speaker 3: how much we'd likely to see any sort of revenue
Speaker 3: and profit being driven by this investment.
Speaker 6: Thus far, it's a big show me the money moment,
Speaker 6: and we're nearly a year into this AI boom. They
Speaker 6: have to have some kind of evidence. There's a reason
Speaker 6: it's a bit harder to quantify because AI is embedded
Speaker 6: in so many different parts of the business. But there
Speaker 6: are a few places where we can look to see
Speaker 6: proof that their AI bets are paying off. For Microsoft,
Speaker 6: it's that Office six three sixty five copilot product. They
Speaker 6: made this widely available to more consumers and small businesses
Speaker 6: earlier in January, but even before that, they launched it
Speaker 6: in September and have really been amping up the hype
Speaker 6: around how much it can impact productivity.
Speaker 7: Those subscription figures will be key.
Speaker 6: For Google, it's a little bit more complex because they
Speaker 6: have been a little bit slower to push this out
Speaker 6: into their search tools and their productivity suite. So but
Speaker 6: here we can look at the Google Cloud profit numbers.
Speaker 6: We saw that hit a new product profitability level last
Speaker 6: year on the back of that AI startup business that
Speaker 6: they were capturing. But again, they don't have a clean
Speaker 6: figure like Nvidia has. Their A one hundred Blockbuster chip
Speaker 6: to really point to for that AI evidence.
Speaker 2: You've you've set us up really well.
Speaker 4: In today's Tech Daily, I was looking at the EPs
Speaker 4: forecast right, and it's a pretty big range, like Microsoft
Speaker 4: fifty one percent EPs growth expected in the court gone.
Speaker 4: Then you compare with sorry, nineteen percent of Microsoft fifty
Speaker 4: one percent for Google. Alphabet the parent of Google, and
Speaker 4: so let's shift to that Alphabet story, because we're super excited.
Speaker 4: Caroline's excited, I'm excited, You're excited. Google is an advertising business, that's.
Speaker 6: Right when you think about it, it's their juggernaut. They
Speaker 6: have to be very strategic when it comes to how
Speaker 6: they're deploying some of.
Speaker 7: These AI features.
Speaker 6: Unlike Microsoft, which is more than happy to boost its
Speaker 6: being search engine only has three percent of the market share, it.
Speaker 7: Don't really have much to lose.
Speaker 6: Google here has been looking to kind of take a
Speaker 6: more experimental approach, and now that you have Gemini coming
Speaker 6: out in September, investors are going to want to see
Speaker 6: a plan for how this is making a difference. You're
Speaker 6: also going to be looking at YouTube figures. Are AI
Speaker 6: features yielding any fruit when it comes to you know
Speaker 6: that search advertising and the YouTube engagement levels.
Speaker 7: Is that making a difference, But again.
Speaker 6: It's a little bit early to tell from the Google front.
Speaker 4: All right, in the few hours that remain before those
Speaker 4: companies do post numbers, check out the preview that Jackiedavlos
Speaker 4: wrote in that news letvel bling those JACKI Davelos out
Speaker 4: at DC.
Speaker 2: Thank you. Let's keep it going.
Speaker 4: The conversation next is with Adam Benjamin for their disease
Speaker 4: tech lead, and Adam, let's think about it a bit
Speaker 4: more holistically. You know, if you go to the index
Speaker 4: level S and P five hundred across that magnificent seven
Speaker 4: bucket and let's strip out Tesla because it's been gone,
Speaker 4: we see forty six percent EPs growth. Right, the only
Speaker 4: comparable sector is utilities. So it's it's it is that
Speaker 4: AI story on paper that's driving the gains. But do
Speaker 4: you expect to see real terms contribution from AI products
Speaker 4: this week?
Speaker 8: Hi, good morning, thanks for having me. So look, I
Speaker 8: think AI is obviously a big overarching trend that's going
Speaker 8: to play out over many, many years, and we're really
Speaker 8: early days in this in this evolution. So you know,
Speaker 8: what I would say is clearly for your guests and
Speaker 8: for your audience. You know, everybody's paying attention to what
Speaker 8: this earning season is going to bring. But but this
Speaker 8: is a journey, and what I would say is we're
Speaker 8: at multiple phases of this. And you know how we
Speaker 8: think about this trend, we've been tracking it for many
Speaker 8: many years, is is really we're at sort of the
Speaker 8: picks and shovels phase today in terms of the infrastructure
Speaker 8: and compute that needs to get put in place to
Speaker 8: train these models and eventually put these models in place
Speaker 8: and for production like you mentioned Microsoft Copilot and to
Speaker 8: get that productivity. So I think this is happening, but
Speaker 8: it's taking time, Adam.
Speaker 4: Earlier today we spoke with the chief of Norway's Sovereign
Speaker 4: Wealth Fund and he reflected on what's been with the
Speaker 4: AI contribution in the equities market and what's to come.
Speaker 2: Have a listened to this.
Speaker 9: We've had a huge rally last year and a very
Speaker 9: large proportion of the returns we had in the fund
Speaker 9: were from the top seven companies. Right now, if you
Speaker 9: had just SMP for that, the return was something like
Speaker 9: twelve percent instead of twenty six And you kind of
Speaker 9: have to ask how long that's going to go on
Speaker 9: for now, I'm a diehard believer in AI and the
Speaker 9: effect it's going to have on our operations and the
Speaker 9: world generally. But in terms of valuations of the companies,
Speaker 9: that's a different question.
Speaker 4: So that's Nikolai Tangen, and that's his thesis. Right he
Speaker 4: sees the impact on AI in the real world, but
Speaker 4: right now he's questioning the valuation of those companies that
Speaker 4: are driving the story.
Speaker 2: Are you questioning it?
Speaker 8: I think the way I'm thinking about it is last
Speaker 8: year was pretty much AI basket, right, Everything that had
Speaker 8: some exposure to AI was a winner. You had a
Speaker 8: lot of stocks, especially even in Q four up forty
Speaker 8: some odd percent. I think twenty four is really about differentiation,
Speaker 8: and the fundamentals are going to have to come through
Speaker 8: for certain companies that are really true AI winners, and
Speaker 8: where some will be determined that they really aren't true
Speaker 8: AI beneficiaries. I mean, last week, for example, we saw
Speaker 8: Intel report numbers and guidance and it was, you know,
Speaker 8: pretty disappointing relative to what the street was expecting. And
Speaker 8: that was a stock that was up forty some odd
Speaker 8: percent in Q four of last year alone. So you know,
Speaker 8: I think we're going to are seeing that differentiation as
Speaker 8: you go through earnings, but it won't be just this
Speaker 8: earnings period of be multiple earnings as we go forward
Speaker 8: throughout the year.
Speaker 3: I want to ask about concentration risk, and of course
Speaker 3: you are someone who is really one out on some
Speaker 3: of the allocations. Of course, when you're managing overall funds
Speaker 3: that are of course named things like Fidelity Advisor Technology
Speaker 3: Fund or the VIP Technology Portfolio, Semiconductor's portfolio.
Speaker 5: These are names that have one adam.
Speaker 3: But the quants over at JP Morgan, for example, are
Speaker 3: really getting worried about concentration risk.
Speaker 5: Is that something? Do you think these names.
Speaker 3: Are vulnerable because they've just become so important to overall benchmarks?
Speaker 8: Well, look, I mean I know a lot of people
Speaker 8: focus on the MAG seven and they talk about the
Speaker 8: concentration of technology. I have the benefit of being a
Speaker 8: technology focused investment manager, and so I run, as you mentioned,
Speaker 8: tech funds, just tech and then just semiconductors. So I
Speaker 8: don't really really focus that much of the concentration as
Speaker 8: it relates to tech, how it's concentrating the rest of
Speaker 8: the market. What I would say is, you know, as
Speaker 8: you look at the MAG seven, you know they're companies
Speaker 8: that have a broad exposure. I mean, Tesla is focused
Speaker 8: on the electric vehicle market. You know, Microsoft and AWS
Speaker 8: and Google are overlapping in the cloud computing market, but
Speaker 8: they're all different in terms of their core markets with
Speaker 8: Google and search and so you know, really, I think
Speaker 8: you got to look at them as independent companies that
Speaker 8: have really amazing business models and that the overarching theme
Speaker 8: is that they are benefiting and getting exposed to AI,
Speaker 8: and in terms of how they're using that and how
Speaker 8: they're going to change their businesses is super important. But
Speaker 8: it's not just those companies that are gonna, you know,
Speaker 8: adopt AI. It's everything in tech, and then it's every
Speaker 8: company outside of tech, because if you're not adopting AI
Speaker 8: and making your business more productive over time, you're probably
Speaker 8: going to be a loser in your in market. So
Speaker 8: I think it's it's this is the theme that's going
Speaker 8: to touch all companies across all sub sectors of the market.
Speaker 3: I mean, look just at ups today, twelve thousand jobs going,
Speaker 3: but a real focus on generative AI coming from the
Speaker 3: CEO Adam I'm interested. Therefore, when you're looking and anticipating
Speaker 3: the calls, the analyst cools with CEOs.
Speaker 5: What is it you want to hear?
Speaker 3: Is it more about subscribe growth, is it more about
Speaker 3: number of customers and overall market penetration or is it
Speaker 3: bottom line impact?
Speaker 5: You want to see the numbers.
Speaker 8: Yeah, I mean it depends on the company, so it's
Speaker 8: hard to say definitively. But look, we're looking for you know,
Speaker 8: every ninety days. These are report cards for these companies,
Speaker 8: so it's you know, how are they doing on the
Speaker 8: revenue growth? You know, how are they doing profitability wise?
Speaker 8: Obviously last year was a huge year for efficiency for
Speaker 8: some of these companies in terms of the pull forward
Speaker 8: that they saw during COVID on onbacks. So you know,
Speaker 8: we need to see revenue growth from here. And a
Speaker 8: lot of stocks that we saw significant outperformance was multiple
Speaker 8: expansion in twenty twenty three, So you're going to have
Speaker 8: to see, you know, the true fundamentals actually drive these
Speaker 8: stocks in twenty twenty four, as your guest, you know,
Speaker 8: indicated earlier. So I think that's what I'm looking for,
Speaker 8: and it'll depend on the company. But you know, really,
Speaker 8: you know, report card every ninety days and then you know, we're.
Speaker 2: Long term investors.
Speaker 8: We're trying to find companies that are going to be
Speaker 8: the winners over the long term, and those are companies
Speaker 8: that we've been investing in multiple years. We've cited these
Speaker 8: as big trends and we've been there for a while,
Speaker 8: and you know, we'll see where things progress. But this
Speaker 8: is this AI is not going to be you know,
Speaker 8: snap your fingers. It's going to take time, and so
Speaker 8: I think people need to be patient about it and
Speaker 8: see where things are progressing. And as long as they're
Speaker 8: moving in the right direction, I think people will be
Speaker 8: encouraged about this theme.
Speaker 5: See how the.
Speaker 3: Execs can articulate it today, Adam Benjamin, really great to
Speaker 3: have some time with you. We thank you so much.
Speaker 3: Fidelities tech le there, we thank you. Meanwhile, coming up
Speaker 3: look to talk about underlying technology. Neuralink has its first
Speaker 3: ever human patient, bringing must startup that a little bit
Speaker 3: closer to its goal of letting people actually control their
Speaker 3: devices with their minds.
Speaker 5: We'll be back with more in a moment, But ed,
Speaker 5: what have you got.
Speaker 4: Well, just based on what Adam is saying, here's a
Speaker 4: new name for you, potentially super micro computer. Four percent
Speaker 4: right now have been up as much as eleven percent.
Speaker 4: It's a AI server maker think Rack Design, and they've
Speaker 4: significantly updated their sales forecast for this year. But the
Speaker 4: real reason I bring it up is this is a
Speaker 4: stock that's up more than eighty percent in the last
Speaker 4: thirty days, more than six hundred percent year to day
Speaker 4: over or over the last twelve months, massively outperforming in
Speaker 4: video as an example, but we don't really talk about it.
Speaker 4: Twenty nine billion dollar market cap. One of the winners
Speaker 4: of what's happening in the real terms infrastructure play for
Speaker 4: AI this is Bloomberg Musk's Neuralink has given an implant
Speaker 4: to its first ever human patient, bringing his startup a
Speaker 4: step closer to its goal of letting humans control computers
Speaker 4: with their minds. Bloomberg's Lin Don't has the details and
Speaker 4: joins us from New York. I mean, Lynn, this is
Speaker 4: the first step. But it's the step, right. We've been
Speaker 4: waiting for your link to this for a little while.
Speaker 4: What do we know about the procedure, the patient, and
Speaker 4: what the point of this was.
Speaker 10: Yeah, it is the first step for Neuralink. And I
Speaker 10: don't know about you, but at this point in our
Speaker 10: adventures into neuroprosthetics, I'm impressed by any kind of brain
Speaker 10: interface implant. So I'll call this a win. What do
Speaker 10: we know about the procedure. Neuralinks in particular involves a
Speaker 10: robot that funnels its way into a person's head. Sounds
Speaker 10: a bit terrifying, but it uses a robot to implant
Speaker 10: a little chip that's about the size of a quarter,
Speaker 10: and that chip is connected by thousands of wires and
Speaker 10: electrodes to the human brain, and in that way it allows,
Speaker 10: hopefully theoretically, the human brain to be able to control
Speaker 10: electronic devices with just a mere thought.
Speaker 3: And that's why those that have been the patients have
Speaker 3: been recruited are those with qultropriigia, those who suffer from als.
Speaker 3: In fact, Musk wrote on his own social platform x
Speaker 3: about sort of imagine Stephen Hawking being able to well,
Speaker 3: be able to communicate far faster than any.
Speaker 5: Sort of speed type writer. But he's not alone.
Speaker 3: Neuralink isn't alone, and we sort of let it steal
Speaker 3: a lot of the headlines.
Speaker 5: But there are other companies doing.
Speaker 11: This, that's right.
Speaker 10: I was just talking earlier this morning about a company,
Speaker 10: synchron who almost over a year now, announced that they
Speaker 10: had done the first brain interface implant in the United States.
Speaker 10: So certainly Neuralink is not the first company to enter
Speaker 10: into this.
Speaker 11: Era of actual implants.
Speaker 10: Now, what some would argue is that it has more
Speaker 10: advanced technology, that the devices themselves are more complex and
Speaker 10: more capable than some of the others in the space.
Speaker 10: Involves thousands of wires, Like imagine what that thing looks like,
Speaker 10: a spider with thousands of legs versus some of the
Speaker 10: other ones who may not make use of as many wires.
Speaker 3: Once again, we'll see how telepathy as the continues to evolve,
Speaker 3: brilliant as always to have Lindo and joining us Volkswagen VW. Well,
Speaker 3: it's feeling the pressure of a slowing ev market and
Speaker 3: twenty twenty three's dim ipo landscape that's continuing into twenty
Speaker 3: twenty four. They're going to hold off on plans to
Speaker 3: seek outside investors for its battery unit. Now that's also
Speaker 3: say the carmaker worries and we'll be able to make
Speaker 3: its own batteries that the scale and is no longer
Speaker 3: prioritizing stake sales or a potential listing of power COO
Speaker 3: business this.
Speaker 5: Year or indeed next.
Speaker 3: Now this is fresh off Renao's similar decision to Ice
Speaker 3: it's ev arm listing a mid market volatility.
Speaker 5: We're going to have a deep dive on the auto sector.
Speaker 5: That's next end. What have you got.
Speaker 4: Yeah, there's a bigger conversation to have here. In sticking
Speaker 4: with the EV market, Mazda posted its best sales year
Speaker 4: since best sales year and third best year overall. Today
Speaker 4: they announced the release of a new vehicle, c X seventy.
Speaker 4: President and CEO of MUSDA North American Operations Tom Donnelly
Speaker 4: joins us to walk through the results and the latest launch. Tom,
Speaker 4: this is how I think about it. CX seventy brings
Speaker 4: you to the mid size SUV. You have the full
Speaker 4: spectrum of hybrid options. But that's where it's at. It's
Speaker 4: a hybrid option. You're still not there with pure PLAYEV.
Speaker 4: So in the context of CX seventy, what's the strategy here.
Speaker 12: Yeah, So we're very excited about what CX seventy represents
Speaker 12: for our brand and our portfolio. As you said, we
Speaker 12: had our global reveal today. We look at, let's say
Speaker 12: the electrification market as that of an intentional follower. If
Speaker 12: I look forward through twenty thirty, we're going to have
Speaker 12: a full suite of electrified vehicles, and we have a
Speaker 12: three phased approach to how we're going to introduce plug
Speaker 12: in hybrids and hybrid vehicles. So we talked about CX
Speaker 12: seventy and the introduction today. Last year we introduced c
Speaker 12: X ninety with a plug in hybrid and a mild
Speaker 12: hybrid version, and later this year we're going to introduce
Speaker 12: C fifty with a hybrid version as well. So we
Speaker 12: feel like we've got the right technologies for the marketplace
Speaker 12: today and again by twenty thirty, we'll have a full
Speaker 12: lineup of electrified vehicles.
Speaker 4: Tom One of the questions from our audience on X
Speaker 4: was what happens if long term the consumer just doesn't
Speaker 4: go for EV that they do have a bias towards
Speaker 4: hybrid and how would.
Speaker 2: That impact your strategy.
Speaker 4: I think about the comments from Toyota right where they
Speaker 4: see this thirty percent cap on BEV and a future
Speaker 4: well well into the future, multiple drive train formats.
Speaker 1: Yeah.
Speaker 12: Again, I use the term multi solution approach, and that's
Speaker 12: what we've been working for for a number of years,
Speaker 12: where by having hybrids and plug in hybrids and then
Speaker 12: a full suite of battery electric vehicles as well, we
Speaker 12: think we'll be able to pivot to the market and
Speaker 12: what consumer demands will will gravitate towards. So we feel
Speaker 12: really good about our overall strategy right now. Again, we're
Speaker 12: excited about c X seventy, the mild hybrid and the
Speaker 12: plug in hybrid, what that represents, and it's a new
Speaker 12: segment for us, it's an merging segment in the industry,
Speaker 12: so we're really optimistic about the impact it's going to
Speaker 12: have on our brand.
Speaker 3: I can kind of see why you're optimistic given your
Speaker 3: sales number in December, record numbers.
Speaker 5: I'm really interested as to what you're seeing from a
Speaker 5: consumer right now.
Speaker 3: Tom, We've just heard from Reno, as we're saying VW,
Speaker 3: you've got, of course, GM being more cautious on out
Speaker 3: and out evs.
Speaker 5: What are you.
Speaker 3: Seeing from a consumer adoption and desired to be spending
Speaker 3: on big purchase such as new cars right now?
Speaker 12: Yeah, the market's still as strong overall, I mean, the
Speaker 12: industry is strong. There's definitely been a shift towards more
Speaker 12: let's say affordability. So we've noticed from earlier in let's
Speaker 12: say the calendar year. But you're right, we ended twenty
Speaker 12: twenty three on a really high note of twenty three percent,
Speaker 12: and I would say it's not just the quantity but
Speaker 12: the business quality for US as well. More specifically, we've
Speaker 12: had our best customer experience results ever, our best owner
Speaker 12: loyalty results ever. So while we're growing the brand at
Speaker 12: a pretty impressive rate twenty three percent, this is on
Speaker 12: the heels of again, really strong performance across the breath
Speaker 12: of our business.
Speaker 3: And where is that brand really penetrating at the moment?
Speaker 3: Is it about a US user, a European news and
Speaker 3: more globally thinking about China and decompetition coming from there.
Speaker 12: Well, my focus is primarily in the US market in
Speaker 12: North America, and again we've achieved some really impressive results
Speaker 12: over the last four years. Each of the last four
Speaker 12: years we've gained market share, and obviously a very challenging
Speaker 12: timeframe from COVID to supply chain issues, we've been able
Speaker 12: to really be very nimble and improve our performance year
Speaker 12: over year. And we're really optimistic about what twenty twenty
Speaker 12: four represents. We think, if we execute our plan, we're
Speaker 12: going to have our best year in the US market ever.
Speaker 12: So we're really optimistic about the outlook.
Speaker 5: Oh, we want to Thank you, Tom Donnelly.
Speaker 3: Ending on our optimistic note, MASDA North American Operations President
Speaker 3: and CEO, really seeing traction right here in the United States.
Speaker 3: Welcome back to Bluemogo Technology. I'm Caroline had in New York.
Speaker 2: Ed Ludlow in San Francisco.
Speaker 3: Let's look at what's happening in the world a bitcoin,
Speaker 3: because it has been five straight months, well on nine
Speaker 3: four of gains for this particular asset, like we haven't
Speaker 3: seen that back since the heady days of COVID when
Speaker 3: everyone was plowing in their money. In twenty twenty, we're
Speaker 3: up fifty percent, you'll see over that course of six months,
Speaker 3: and a lot of that is to do with the
Speaker 3: Spot bitcoin ETFs.
Speaker 5: We've had volatility of late.
Speaker 3: Let's talk to Aphilia Snyder for her thoughts on it,
Speaker 3: of course, president of twenty one Shares, which offers crypto
Speaker 3: etfctps for institutional and retail investors, including that recently launched
Speaker 3: spot product. Our twenty one Shares bitcoin ETF developed with
Speaker 3: Kathy wood Ark, and we have overall seen excitement, exuberance,
Speaker 3: perhaps a run up and then a fall as people
Speaker 3: digest what really happens. But what have you seen in
Speaker 3: terms of flows, and are they making you confident?
Speaker 13: Yes, is the extremely short answer to that question. At
Speaker 13: the end of the day, these flows have been really promising.
Speaker 13: It's one of the best ATF launches of all time.
Speaker 13: We've seen north of six hundred million dollars in assets
Speaker 13: come into our product just in the last couple of weeks.
Speaker 13: That's really exciting cause it's coming from a diversified base.
Speaker 13: And so while yes, you're seeing some turn through legacy products,
Speaker 13: you're seeing movement towards new product in the market that
Speaker 13: actually has a lot of really critical features towards welcoming
Speaker 13: advisors into the community, which is ultimately, I think how
Speaker 13: we're going to start to see the crypto ecosystem evolve
Speaker 13: from here.
Speaker 3: Of course, twenty one shares is crypt native, and you've
Speaker 3: been doing a lot of the futures offerings already. You've
Speaker 3: been bringing the first ever ETPs related to these sort
Speaker 3: of ethan bitcoin futures, and now of course the sport
Speaker 3: bitcoin what therefore of new sport products across other ELK coins.
Speaker 13: So we've actually been doing this for more than five years.
Speaker 13: So we brought the first physically backed spot products to
Speaker 13: market in Europe about five years ago now, and we
Speaker 13: cover a very wide range of assets through that platform,
Speaker 13: and we run about forty products outside of the US,
Speaker 13: so it's quite a big cohort, and there's a lot
Speaker 13: of technical infrastructure that goes into supporting that, which we're
Speaker 13: really excited about bringing to the US. I think in
Speaker 13: the US it's going to take a little bit more time,
Speaker 13: and we have some ethereum applications that are out there.
Speaker 11: In terms of new ETFs coming.
Speaker 5: To market the SEC, I'll go with that.
Speaker 11: I think it's really hard to say at this stage.
Speaker 13: It's going to come down to how the arguments that
Speaker 13: were made in support of a spot pitcoin product actually
Speaker 13: translate into ethereum and what the maturity of that market
Speaker 13: looks like. We're obviously really optimistic about it, and we're
Speaker 13: you know, looking forward to engaging with regulators on these topics.
Speaker 11: But I do think it's after sharing in a.
Speaker 13: New age of clarity which we seen in other markets
Speaker 13: around what these regulations look like and what that means
Speaker 13: for the development of crypto markets. And I think, you know,
Speaker 13: as we've seen over the last five years while we've
Speaker 13: been doing this, there's typically a process here where once
Speaker 13: things start moving, it becomes much easier to have that ongoing.
Speaker 2: Dialogue, Ophelia.
Speaker 4: There's a lot of data at our disposal to judge
Speaker 4: how is this going. You know, Bloomberg Crunch the numbers
Speaker 4: and across the ten ETFs that are out in the market,
Speaker 4: they attracted net one billion dollars.
Speaker 1: But to me, that.
Speaker 2: Doesn't seem like that much.
Speaker 4: You know, after all the hype of recent weeks and
Speaker 4: months and all the investors around the world that weighed
Speaker 4: in and said, you know, we're looking at it is
Speaker 4: a billion dollars a lot. What does it tell you
Speaker 4: about current demand or appetite to get into this.
Speaker 11: So what it tells me is it's very early.
Speaker 13: I think one of the pieces that's often missing in
Speaker 13: these narratives around these ETFs is actually there's an adoption cycle.
Speaker 13: Just because the product exists doesn't mean everybody has access
Speaker 13: to it. It takes a certain amount of time for these
Speaker 13: products to be added to platforms, for advisors to get
Speaker 13: them through.
Speaker 11: Compliance and due diligence.
Speaker 13: Really boring on paper, the reality is that's when they're
Speaker 13: going to be looking under the hood and making sure
Speaker 13: these products actually behave properly.
Speaker 11: That's where you're really going to see.
Speaker 13: Operational excellence and expertise like hours come to the forefront
Speaker 13: and have those discussions as we bring these products.
Speaker 11: Onto advisor platforms.
Speaker 13: So for where we're standing today, the majority of the
Speaker 13: sort of intermediated assets in the United States don't have
Speaker 13: access yet. What you're seeing in that net a billion
Speaker 13: dollars in just a couple of weeks is primarily being
Speaker 13: driven by either independent platforms or quite a bit of retail,
Speaker 13: quite a bit of self directed We haven't yet gotten
Speaker 13: to the place where you're really seeing advisors or models
Speaker 13: begin to include these types of assets.
Speaker 11: You have to get through that diligent process.
Speaker 13: They need to sort of batt'll test them and make
Speaker 13: sure that you're bringing best in class infrastructure to these products,
Speaker 13: and I think that's when you're going to actually see
Speaker 13: that shift.
Speaker 11: That process takes about three months.
Speaker 2: Philly.
Speaker 4: You wrote in your most recent newsletter about a bitcoin
Speaker 4: dominated news cycle what happens next to another bitcoin dominated
Speaker 4: news cycle?
Speaker 13: So historically you see waves we're coming to we're sort
Speaker 13: of midway through a bitcoin dominated news cycle that having
Speaker 13: hasn't happened yet, That having being obviously when block rewards
Speaker 13: to minors reduced by half, which is expected in April.
Speaker 13: I think through that cycle you're typically going to see
Speaker 13: a lot of focus on Bitcoin, or on what we
Speaker 13: would call blue chips. You've seen quite a bit of
Speaker 13: focus on things like Ethereum in Solana in the last
Speaker 13: couple of months, both from the cryptonative community as well
Speaker 13: as from advisors and investors outside of the United States
Speaker 13: who have access to these investment vehicles, So I think
Speaker 13: that's been very interesting. I will likely see that typically
Speaker 13: you start to see more interest in alts, especially initially
Speaker 13: the larger ones, but eventually down that longer chain as
Speaker 13: you get further into a more positive cycle for crypto assets.
Speaker 13: So I do think we'll likely stay in bitcoin for
Speaker 13: a little while longer, but that will likely.
Speaker 11: Expand from there.
Speaker 4: Ophelia Snyder, president of twenty one Shares, warning us for
Speaker 4: only halfway through a bitcoin dom dominated news cycle. More
Speaker 4: to come, thank you very much. Now, coming up on
Speaker 4: this program, we're going to dive even deeper into that
Speaker 4: news cycle and into the crypto investing landscape with Chris Dixon,
Speaker 4: founder of the ac A sixteen Z crypto practice.
Speaker 2: This is Bloomberg Technology.
Speaker 3: We're just talking about the dominance of bitcoin and the
Speaker 3: lexicon and crypto recently, but what about the broader Web
Speaker 3: three space where is the investing happening at the moment?
Speaker 3: Got the perfect voice Chris Dixon, founder and managing partner
Speaker 3: of a sixteen z crypto. It's the VC Fund out
Speaker 3: in Dresen and Horowitz that is founded in twenty eighteen
Speaker 3: seven billion dollars in committed capital, dedicator to crypto two
Speaker 3: Web three technologies. But also on the author of a
Speaker 3: new book exploring the impact of blockchains on the future
Speaker 3: of the Internet. It's called Read, Write, Own Building the
Speaker 3: Next Era of the Internet. It's out today because it's
Speaker 3: a joy to have you on and congratulations sir.
Speaker 5: I'm sure a labor of love.
Speaker 3: Yeah, that labor of love is trying to talk about
Speaker 3: some of, shall we say, the cultures within crypto. Thus far,
Speaker 3: bitcoin crypto more.
Speaker 5: Broadly has felt like a culture. As you put it,
Speaker 5: is like maybe the casino.
Speaker 3: It's more about investing, it's more about speculation. When does
Speaker 3: it become about usability utility?
Speaker 14: Yeah, And so that's what my book is about. It's
Speaker 14: about the productive side of blockchains, not the sort of
Speaker 14: specultive side that you see so much attention focused on.
Speaker 14: I believe that blockchains can be the foundation of a
Speaker 14: new era of the Internet, so that the Internet has
Speaker 14: become increasingly consolidated's insolidated. The top five tech companies account
Speaker 14: for fifty percent of the NAZEC market cap n as
Speaker 14: like one on a market cap up double from what
Speaker 14: it was a decade ago. The Google and Apple have
Speaker 14: a duopoly am mobile operating systems, the top one percent
Speaker 14: of social networks accunt for ninety five percent of social
Speaker 14: networking traffic, and so forth. I think blockchains are the
Speaker 14: only credible technology for countering that consolidation and returning the
Speaker 14: Internet to its original ideals as an open and democratic network.
Speaker 14: So that's what my book's about, not the kind of
Speaker 14: speculative side, but the productive side. And that's why the
Speaker 14: entrepreneurs I work with are excited about the space. That's
Speaker 14: why we're investing in the space. And so I wanted
Speaker 14: to tell that side of the story because I didn't
Speaker 14: feel like it had been heard.
Speaker 3: Enough, because I mean, you come from both sides. You
Speaker 3: made your name with great bets on Kickstarter, on Pinterest,
Speaker 3: but then you really started to double down in the
Speaker 3: areas of coinba Solana. I mean the list goes on
Speaker 3: of some of the exposure your portfolio has now uniswap
Speaker 3: where is the energy going and how much is that
Speaker 3: dare I say, starting to dovetail with the new explosion
Speaker 3: of AI, for.
Speaker 14: Example, Yeah, so we're you know, we're I view blockchains
Speaker 14: as an expansive technology where you can build games, social networks.
Speaker 14: A lot of interesting stuff is happening around new ways
Speaker 14: for creative people to make new income streams. So for example,
Speaker 14: by selling digital collectibles to their audiences, make music, which
Speaker 14: is yeah, like music, which is particularly important I think
Speaker 14: in an age of AI, because AI, I think we'll
Speaker 14: put downward generative AI lets you create content very cheaply,
Speaker 14: and therefore we'll put downward pressure on a lot of
Speaker 14: creative people's business models. And so I think it's a
Speaker 14: very important time to create new business models. Another example
Speaker 14: of AI are things like deep fakes. Right, so we're
Speaker 14: seeing the internet, you know, more and more deep fakes.
Speaker 14: I think you're gon see more and more sophisticated things
Speaker 14: like phishing attacks. And in that world, having a system
Speaker 14: where you can have one of the things that blockchain
Speaker 14: is very good at is keeping sort of the provenance
Speaker 14: of a video, so you can say this video came
Speaker 14: from Bloomberg and you can cryptographically prove that, and that
Speaker 14: can be very important in a world where you know,
Speaker 14: what was once ground truth video now becomes unreliable. So
Speaker 14: and by the way, I'm very pro AI. I think
Speaker 14: it's very exciting. But I do think it's important to
Speaker 14: have counterbalancing technologies, and I believe blockchains are counterbalancing technology
Speaker 14: to AI, Chris.
Speaker 4: I want to go back to kind of the origin
Speaker 4: of the rationale behind blockchain. Right, So if I apply
Speaker 4: this blanket term DeFi to everything that we've just talked about,
Speaker 4: what's the conclusion you reach in the book about your
Speaker 4: own attitude towards the promise of DeFi.
Speaker 14: Yeah, I mean so DeFi that you know, of course,
Speaker 14: refers to the centralized finance, which has been an interesting area.
Speaker 14: You know, I think, like with finance in particular, is
Speaker 14: a highly regulated area. And so I think, you know,
Speaker 14: we've been working very you know, very hard on sort
Speaker 14: of policy matters and trying to put forth proposals, and
Speaker 14: so I think for DeFi, I think there's a lot
Speaker 14: of really innovative stuff that happened in DeFi, and I
Speaker 14: think people underestimate how successful in a lot of ways
Speaker 14: it was. So for example, with all of the market
Speaker 14: volatility the last couple of years, these DeFi protocols like
Speaker 14: UNISWAP and compound and others performed perfectly, did not have issues.
Speaker 14: That said, I think to sort of realize it's true potential,
Speaker 14: we have.
Speaker 1: To figure out ways for DeFi to.
Speaker 14: Expand beyond kind of the you know, the Internet culture
Speaker 14: into the broader world. And I think that raises you know,
Speaker 14: that's in that case, it's very important to work with regulators,
Speaker 14: to work with existing institutions, to work with you know,
Speaker 14: exchanges and all the other kind of participants in the
Speaker 14: broader financial ecosystem.
Speaker 4: Chris, what happened to the ecosystem of startups?
Speaker 2: Then? Last year?
Speaker 4: Caroline, and I look at all the backward looking data
Speaker 4: shows that if you look at it from a venture back,
Speaker 4: deal count or dollar perspective, twenty twenty three was a.
Speaker 2: More difficult year.
Speaker 4: How did your funds perform and what were the lessons
Speaker 4: you learned through that?
Speaker 14: Yeah, we're regulated ATRIA, so I'm not allowed to speak
Speaker 14: about our own returns.
Speaker 1: But I will say that that.
Speaker 14: You know, my view if you look back kind of
Speaker 14: at the history of technology is the innovation and financial
Speaker 14: markets are pretty independent. And so for example, you know,
Speaker 14: Facebook and YouTube were started in the sort of post
Speaker 14: dot com after the dot com bubble, in the crash.
Speaker 14: You know, Microsoft was started an Apple and the seventies
Speaker 14: and a very high interest rate environment. So you know,
Speaker 14: if you just kind of look at GET, what we
Speaker 14: do mostly early stage investing, and we think that we
Speaker 14: really look for technology trends and how they're moving and
Speaker 14: less sort of the day to day.
Speaker 1: Movements of the financial markets.
Speaker 14: So we've been a very active We've been continuing very
Speaker 14: consistently to deploy capital we find great entrepreneurs. I'm very
Speaker 14: excited by the entrepreneurs that we see in the space.
Speaker 14: That's what I try to talk about in the book
Speaker 14: is just all of the new and exciting ideas. I
Speaker 14: really feel like that some of that story hasn't been
Speaker 14: fully told, and so I wanted to represent that and
Speaker 14: show kind of all the new things that can be
Speaker 14: built using this technology.
Speaker 3: So when you are thinking of how much you've deployed already,
Speaker 3: are you able to give us an update of whether
Speaker 3: that cadence is growing at the moment, whether you've deployed most,
Speaker 3: whether LPs are like, yeah, we love it, We're going
Speaker 3: to commit more.
Speaker 14: Well, we have I don't know what exactly we've a
Speaker 14: close from a regulatory point of view, but we have
Speaker 14: plenty of you know, we're well capitalized and we're excited
Speaker 14: by Like the way I look at it is if
Speaker 14: great entrepreneurs walk in the door, you know, we have
Speaker 14: capital and we will give them capital, but we don't
Speaker 14: try we don't have sort of a pace and try
Speaker 14: to put money out out to work if we don't
Speaker 14: find great people and great ideas. But we've I think
Speaker 14: lately especially you know, there was sort of obviously like
Speaker 14: FTX and a lot of you know, sort of negative
Speaker 14: things that happen. I see a real kind of renaissance
Speaker 14: beginning in the at the early stage with innovation and
Speaker 14: just new ideas.
Speaker 1: So I would expect that we would you.
Speaker 14: Know, we have been, and I expect we continue to
Speaker 14: remain very active in the in the early stage venture,
Speaker 14: you know, in the activity.
Speaker 2: Chris, it's an election year and.
Speaker 4: Policy, future regulation, future legislation has been a discussion for
Speaker 4: your for your industry for some time. How do you
Speaker 4: approach your lobbying efforts this year or your communication with
Speaker 4: both sides of this election race to build a long term.
Speaker 14: Yeah, you know, I started going to DC a few
Speaker 14: years ago to so talked to policymakers about these topics.
Speaker 14: And one of my realizations is a big tech, big banks,
Speaker 14: lots of other kinds of parts of the economy are
Speaker 14: well represented in d C. We felt that small tech,
Speaker 14: that startups did not have proper representation. So we as
Speaker 14: a firm have decided that we, you know, we are
Speaker 14: an institution that can help with that, and so we've
Speaker 14: decided to get more active in politics. We're taking a
Speaker 14: bipartisan approach. We you know, are our stances pro tech,
Speaker 14: pro startup. You know, I think that a lot of
Speaker 14: su particularly around blockchains and crypto, is playing out in courts.
Speaker 14: And the problem with courts is it takes many, many years,
Speaker 14: and that creates uncertainty, and uncertainty is you know, deters
Speaker 14: good actors and attracts bad actors.
Speaker 1: So, you know, I would.
Speaker 14: Argue that the right way to sort of approach tech
Speaker 14: policy is to look at a technology holistically. Every technology
Speaker 14: has bad things and good things about it. AI does
Speaker 14: you know, crypto does and the right policy you know,
Speaker 14: sort of is crafted to maximize the good and minimize
Speaker 14: the bad, and so that's what we advocate for.
Speaker 3: I'm interested in ultimately where you're seeing this renaissance coming
Speaker 3: coming from and happening.
Speaker 5: But it's very nature.
Speaker 3: Often those that are building in crypto are decentralized as well,
Speaker 3: and the application they're off. I think of sky Mavis
Speaker 3: and how Axioinfinity just blew up, and Asia in particular.
Speaker 5: Where is the excitement right now and where do you invest?
Speaker 3: Is it always in equity that token investments you still
Speaker 3: want to make?
Speaker 14: Yeah, we do both. We do so we do equity
Speaker 14: and token investments. In terms of the location, in New
Speaker 14: York is actually I would say in the US is
Speaker 14: sort of the hub for this for blockchain activity, but
Speaker 14: it's really a global movement. It's happening all over the place.
Speaker 14: You know, China's doing a lot in Hong Kong, so
Speaker 14: a lot of Asia is very active, Korea, Japan, we
Speaker 14: just opened the UK office. There's a lot of things
Speaker 14: in Europe. So it's a very global movement, I think,
Speaker 14: more so than most technologies. And I think that also
Speaker 14: maybe skews some of the perspective in the US because
Speaker 14: like a lot of the technology, for example, stable coins,
Speaker 14: which are basically digital dollars, are very popular. There are
Speaker 14: six hundred billion in transactions last month alone, and a
Speaker 14: lot of that happens around the world, and we don't
Speaker 14: see it as much here because we have you know,
Speaker 14: you have your your credit card, you have your fat
Speaker 14: and your credit cards. You know, the financial the payment
Speaker 14: systems work quite well here and as you know, we
Speaker 14: obviously have access to the dollar. But that's a very
Speaker 14: popular product around the world, so it really is a
Speaker 14: global movement.
Speaker 4: Chris, we have ten seconds. Do you hold bitcoin or
Speaker 4: any other digital tokens personally?
Speaker 1: Gosh, like, I'm very bullish, and you know, I do
Speaker 1: have a lot.
Speaker 14: I don't know, I'm not supposed to talk about my
Speaker 14: particular holdings, but I am very I do have a
Speaker 14: lot of crypto.
Speaker 4: Yeah, all right, Christison, founder, managing partner over at A
Speaker 4: sixteen Z crypto with a book out today. Great to
Speaker 4: have you on the program.
Speaker 1: Thank you, Thank.
Speaker 4: You time now for talking tech. And first up, IBM
Speaker 4: is giving its US managers who are still working remotely
Speaker 4: and ultimatum either moved to a location near the office
Speaker 4: or leave the company. This, according to an internal memo
Speaker 4: seen by Bloomberg, managers must live within fifty miles of
Speaker 4: an IBM.
Speaker 2: Office by the start of August.
Speaker 4: And social media platform X is reactivating searches related to
Speaker 4: musician Taylor Swift. Searches for her name were temporarily disabled
Speaker 4: after explicit AI generated images of Swift made the rounds
Speaker 4: on X. Other public figures have recently become targets of
Speaker 4: deep fakes, and that includes President Joe Biden. Plus TikTok
Speaker 4: is testing a new feature that were made video posts shoppable.
Speaker 4: The feature will use technology that can identify objects in
Speaker 4: a video and encourage views to find similar items on
Speaker 4: TikTok shop. The spokesperson confirmed the feature is in an
Speaker 4: early test.
Speaker 3: Karen, let's get more on that from the person who's
Speaker 3: been writing all about it, Bloomberg's Alex Brinka.
Speaker 5: And before we.
Speaker 3: Delve into some of the focus of Washington in social
Speaker 3: media land right now, focus on where they're trying to evolve.
Speaker 5: I mean, so, what any any.
Speaker 3: Post that I put on TikTok they can hunt maybe
Speaker 3: the makeup that's behind me or whatever I might be wearing.
Speaker 7: In theory, that's what this test would do.
Speaker 15: TikTok technology basically looks at the post and they'll see, hey,
Speaker 15: you're trying on a lipstick or you're walking your dog
Speaker 15: with a leash, and link you to a shopping page
Speaker 15: filled with items that are tagged with quote similar to
Speaker 15: the video. Now, this is really interesting and a departure
Speaker 15: from how shopping works on TikTok right now. Right now, currently,
Speaker 15: brands and creators and influencers who are approved actually go
Speaker 15: on and tag products to their video. And while that's
Speaker 15: got a lot of people to purchase on the app,
Speaker 15: it's also got some users complaining these influencers and brands
Speaker 15: are obviously incentivized they want to drive revenue or make
Speaker 15: commission in the influencer's perspective, So there is some complaints
Speaker 15: there Layering on this technology, though, Will kind of ensure
Speaker 15: that these videos are not just people trying to sell
Speaker 15: you something you could actually shop from, something that is
Speaker 15: not making a sales pitch, but just a video of
Speaker 15: interesting rocks that a geologist is sharing on the internet.
Speaker 4: The user sort of response is interesting because there's the
Speaker 4: items themselves, some of them are not legit and then
Speaker 4: in some cases, according to your reporting, the tech isn't
Speaker 4: working one hundred percent.
Speaker 7: Yeah, exactly.
Speaker 15: There have been issues with both counterfeits and copycat items
Speaker 15: that we've written about, particularly in the beauty space, people
Speaker 15: purporting to sell brands like Charlotte Tilbray when it is
Speaker 15: not in fact a brand like Charlotte Tilbray, or there
Speaker 15: are examples like the one I saw before I wrote
Speaker 15: this story where I mentioned a geologist showing off rocks. Well,
Speaker 15: the technology tagged a bunch of nail products and rings
Speaker 15: to that particular video. So if you're somebody who enjoys
Speaker 15: pressish gems, I don't know if nail polish is the
Speaker 15: right product for you. So it does seem to be
Speaker 15: that this is going to be an evolving process. As
Speaker 15: you mentioned, this is a test for them, But what
Speaker 15: this would certainly do is kind of super charge their
Speaker 15: e commerce push. I've been told by people familiar with
Speaker 15: the matter that internally at the company, commerce, particularly in
Speaker 15: the US, is top priority. So it seems like they're
Speaker 15: trying to pull out all the stops to get people
Speaker 15: purchasing off those entertaining videos on TikTok.
Speaker 3: And of course we wait to see what the leaders
Speaker 3: of these businesses, not just TikTok, but x and Instagram
Speaker 3: Meta more broadly, what they have to say on Capitol
Speaker 3: Hill tomorrow. I'm sure we'll be checking in with you then,
Speaker 3: Alex Birinka, we thank you so much. Meanwhile, and that
Speaker 3: does it for this edition of B New Me Technology.
Speaker 4: And yeah, thank you to everyone this week that told
Speaker 4: us you listen to the shows a podcasts. I find
Speaker 4: that so interesting, Caro, keep messaging us, tell us where
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Speaker 2: This is Bloomberg Technology.