WEBVTT - Big Tech Earnings Preview, SBF Testifies 0:00:01.400 --> 0:00:05.720 From Mahart where Innovation, Money and Power Collie in Silicon 0:00:05.800 --> 0:00:06.800 Valley n Beyond. 0:00:07.040 --> 0:00:30.360 This is Bloomberg Technology with Caroline Hide and Ed Ludlow. 0:00:25.720 --> 0:00:28.680 Live from Bloomberg's World headquarters in New York. I'm Shanali 0:00:28.720 --> 0:00:31.160 bask In for Caroline Hyde and Ed Ludlow. 0:00:31.320 --> 0:00:34.440 This is Bloomberg Technology. Coming up on this hour, full 0:00:34.479 --> 0:00:35.400 earnings coverage ahead. 0:00:35.440 --> 0:00:37.720 We're going to break down results from Meta and push 0:00:37.760 --> 0:00:41.200 ahead to Amazon and Intel's earnings after the bell, Plus 0:00:41.240 --> 0:00:45.159 Sam Megan Fried's testimony is the latest must see moment in. 0:00:45.120 --> 0:00:46.600 The high profile fraud case. 0:00:46.680 --> 0:00:49.440 Updates this hour, and we'll look at the thorny issues 0:00:49.520 --> 0:00:53.560 over technology between the US and China as President Biden. 0:00:53.280 --> 0:00:55.120 Plans to meet with China's foreign minister. 0:00:55.560 --> 0:00:57.720 Now from Tech Earnings, let's bring in Alison Porter, a 0:00:57.800 --> 0:01:02.360 portfolio manager from Janis Henderson on Global Technology Leader's Team. Alison, 0:01:02.400 --> 0:01:06.640 we talk so much about this magnificent, magnificent seven dynamic. 0:01:07.120 --> 0:01:09.240 When you look at some of the drawdowns, we're saying, 0:01:09.319 --> 0:01:11.480 how do you play what's next? 0:01:12.360 --> 0:01:14.480 I mean, when you look at today, you can see 0:01:14.480 --> 0:01:16.600 that this is the first day in sometime that we've 0:01:16.640 --> 0:01:21.240 actually seen all of those Magnificent seven stocks actually down together, 0:01:21.840 --> 0:01:25.880 and we're definitely seeing some signs of profit taking, and 0:01:25.920 --> 0:01:29.560 I think that's really a reflection of more where the 0:01:29.600 --> 0:01:32.759 market is, where bond yields are, and some profit taking 0:01:32.920 --> 0:01:36.120 than it is on earnings results. You know, when you 0:01:36.160 --> 0:01:39.040 look at Meta's results last night, across the board, they 0:01:39.080 --> 0:01:42.640 were really very strong, and you know, we've seen. 0:01:42.480 --> 0:01:43.880 Expectations to tick up. 0:01:44.000 --> 0:01:48.560 I think the Magnificent seven are very very There's a 0:01:48.760 --> 0:01:53.440 wide dispersion of valuations, and even companies like Meta that 0:01:53.480 --> 0:01:56.240 are trade at a discount to the broader equity market, 0:01:56.240 --> 0:02:00.760 that trade at a discount to other technology stocks are being 0:02:00.880 --> 0:02:02.040 hit hard today. 0:02:02.120 --> 0:02:02.919 So it's not really. 0:02:02.760 --> 0:02:05.800 About valuations, it's not been about earning estimates, but just 0:02:05.840 --> 0:02:06.760 some profit taking. 0:02:07.200 --> 0:02:09.160 I think, given as the market has been. 0:02:09.080 --> 0:02:11.839 So concentrated and we're seeing a bond deals almost top 0:02:11.880 --> 0:02:12.960 five percent. 0:02:12.760 --> 0:02:16.399 When you're looking at the metal warning on economic uncertainty 0:02:16.440 --> 0:02:19.000 and you look across the technology sector, who do you 0:02:19.000 --> 0:02:21.320 think will be most hard to hit in this scenario 0:02:21.360 --> 0:02:23.680 that has not been sold off significantly enough. 0:02:24.560 --> 0:02:27.480 So you know, I don't think Meta warned on the 0:02:27.480 --> 0:02:31.320 macro to be I think, you know, Meta commented that 0:02:31.480 --> 0:02:36.160 you know, after major conflicts, there's sometimes a pause or 0:02:36.200 --> 0:02:41.200 a slowdown, and actually their guidance be forward revenue bracketed. 0:02:40.800 --> 0:02:42.600 Exactly where consensus laws. 0:02:42.680 --> 0:02:46.600 But when we came into twenty twenty three, earnings estimates 0:02:46.639 --> 0:02:50.880 for twenty twenty four for META or for about ten dollars. 0:02:51.520 --> 0:02:56.320 Now as we're exiting this year, estimates are for seventeen dollars, 0:02:56.320 --> 0:02:59.880 So we've seen that seventy percent increase in expectations already. 0:03:00.120 --> 0:03:03.200 Maybe some disappointment that those aren't continuing to go up, 0:03:03.240 --> 0:03:05.880 but I think, you know, given where bondis are, given 0:03:05.919 --> 0:03:11.600 the macro uncertainty, not raising guidance has caused some profit taking. 0:03:12.320 --> 0:03:14.160 Obviously with bond deals where they. 0:03:14.040 --> 0:03:18.679 Are, there's concern about the consumer the stronger dollar in Europe. 0:03:18.919 --> 0:03:21.400 But you know, we think most of the pressure that 0:03:21.400 --> 0:03:25.000 we've seen has not been on retail spend on smaller items, 0:03:25.000 --> 0:03:28.280 but on items where the consumer has to actually borrow. 0:03:28.560 --> 0:03:31.640 So that's not really been an advertising sprind or smaller 0:03:31.680 --> 0:03:37.480 cap or purchases, but more in terms of where consumers 0:03:37.480 --> 0:03:40.880 have had to borrow, like autos, where we're definitely seeing 0:03:40.880 --> 0:03:42.280 a bit of a slowdown. 0:03:42.000 --> 0:03:43.960 You know, talking about bond yield a little more. You 0:03:44.040 --> 0:03:47.000 do see a cooling today, but they have been extraordinarily 0:03:47.280 --> 0:03:50.120 all at all. How do you think that this will 0:03:50.160 --> 0:03:52.880 continue into this story When you're thinking about how tech 0:03:52.920 --> 0:03:55.120 response to rates. 0:03:54.880 --> 0:03:58.040 Well, you know, we think that in twenty twenty, which 0:03:58.040 --> 0:04:02.760 obviously was a huge year for for technology, money was free. 0:04:02.960 --> 0:04:05.200 Interest rates were almost at zero, and it caused some 0:04:05.760 --> 0:04:10.600 irrational buying of stocks which are perennially unprofitable. But that 0:04:10.840 --> 0:04:14.320 higher cost of capital now is really causing investors. It's 0:04:14.360 --> 0:04:18.400 a great environment for active investors, actually, because investors have 0:04:18.480 --> 0:04:20.719 got to really get back to fundamentals and focus on 0:04:20.760 --> 0:04:22.040 those companies. 0:04:21.520 --> 0:04:24.200 That actually have the strongest balance sheets. 0:04:24.240 --> 0:04:28.000 And actually the technology sector has best balance sheet across 0:04:28.080 --> 0:04:31.040 all of equities. You know, Meta has over twenty five 0:04:31.120 --> 0:04:34.359 billion in net cash, Alphabet is over ninety billion in 0:04:34.400 --> 0:04:37.680 net cash. And that means that those companies can not 0:04:37.720 --> 0:04:41.040 only continue to reinvest in new areas such as artificial 0:04:41.040 --> 0:04:45.200 intelligence and driving more innovation and earning scains, but it 0:04:45.279 --> 0:04:48.000 also means that they can buy back stock and they 0:04:48.000 --> 0:04:50.680 can start to really return money to shareholders. And we 0:04:50.680 --> 0:04:54.160 saw that with Metal last quarter, buying over three billion 0:04:54.200 --> 0:04:58.039 and stock back and Alphabet also continuing on that journey 0:04:58.040 --> 0:05:01.240 of shareholder return, which we think is really strong long 0:05:01.320 --> 0:05:04.840 term support for these companies and for shareholders. 0:05:05.200 --> 0:05:08.240 Are you seeing any buying moments right now or do 0:05:08.320 --> 0:05:10.320 you think that it's just too volerable and the sell 0:05:10.360 --> 0:05:11.680 off as yet to come still. 0:05:12.200 --> 0:05:15.520 Now, we think this is a great environment for active investors, 0:05:16.040 --> 0:05:19.240 and we do think that valuation discipline is more important 0:05:19.240 --> 0:05:23.280 than ever in this market given the pace of innovation 0:05:23.600 --> 0:05:25.360 on artificial intelligence. 0:05:25.600 --> 0:05:27.080 I think if you're trying to look. 0:05:26.880 --> 0:05:30.039 Out for ten or twenty years and pick winners in 0:05:30.240 --> 0:05:34.080 ten or fifteen years time, and you're willing to look 0:05:34.160 --> 0:05:37.840 at losses every year, that's a very difficult environment. That's 0:05:37.880 --> 0:05:40.520 not what we look for. We look for companies have 0:05:40.600 --> 0:05:45.000 strong balance sheets, strong positive free cash flow, who can 0:05:45.040 --> 0:05:49.040 continue to reinvest, and we do see some really attractive 0:05:49.120 --> 0:05:53.920 valuations which are at a discount to the broader equity 0:05:53.960 --> 0:05:57.560 market for actually what is much stronger long term growth? 0:05:58.640 --> 0:06:00.760 How are you looking at this earning in as well? 0:06:00.800 --> 0:06:03.919 We're looking forward to a host of more companies Intel, Amazon, 0:06:04.200 --> 0:06:05.040 What are you going to. 0:06:04.960 --> 0:06:05.680 Be looking for. 0:06:07.760 --> 0:06:10.159 Look at You know, when you look at metas earnings, 0:06:10.279 --> 0:06:12.400 some of the key factors that came out of. 0:06:12.360 --> 0:06:14.000 Meta's earnings, where you know. 0:06:14.000 --> 0:06:18.680 The strength of engagement, that's the user engagement user how 0:06:18.839 --> 0:06:21.839 users react to the platform and the products that you serve, 0:06:22.760 --> 0:06:25.560 and efficiency, a focus on capital allocation. 0:06:25.720 --> 0:06:27.440 So when we look we hear. 0:06:27.440 --> 0:06:30.400 Amazon's results tonight, again that's going to be key. 0:06:30.760 --> 0:06:32.640 You know, what are prime members. 0:06:32.320 --> 0:06:36.200 Doing, how are they responding to investments in their regionalization, 0:06:36.800 --> 0:06:39.560 And then we'll look at AWS and I think the 0:06:39.600 --> 0:06:41.719 growth in AWS is going to be a key driver 0:06:42.560 --> 0:06:46.800 out of Amazon Web. Amazon's results tonight, expectations have come 0:06:46.839 --> 0:06:50.000 down somewhat from sixteen percent growth. 0:06:49.800 --> 0:06:51.800 Down closer to. 0:06:51.360 --> 0:06:53.760 Twelve percent that people are looking for and I think 0:06:53.800 --> 0:06:56.839 we're just looking for a stabilization in some of that 0:06:56.960 --> 0:07:01.599 those optimization trends. After the strength that myso soul in 0:07:01.640 --> 0:07:05.359 its cloud division, Investors want to see that Amazon is 0:07:05.440 --> 0:07:09.400 ticket is also seeing some benefits all of that's investments 0:07:09.440 --> 0:07:13.640 in artificial intelligence as well, that they are seeing some 0:07:13.920 --> 0:07:19.000 stabilization and the optimization that they've seen from customers over 0:07:19.040 --> 0:07:19.800 the last year. 0:07:20.760 --> 0:07:23.640 Alice Importer of Janis Henderson, we thank you for your time. 0:07:24.040 --> 0:07:26.560 Let's hone in now on the digital advertising space for 0:07:26.600 --> 0:07:29.280 these companies and bring in. Rachel Tippograph, the founder and 0:07:29.400 --> 0:07:32.800 CEO of Micmac and e commerce marketing platform for multi 0:07:32.840 --> 0:07:33.640 channel brands. 0:07:33.720 --> 0:07:35.400 Rachel, when you look at. 0:07:35.320 --> 0:07:38.040 Meta itself, what did you take away? 0:07:38.920 --> 0:07:41.800 I was super excited to see metas earnings because what 0:07:41.880 --> 0:07:46.720 it demonstrated is that advertising is active in market and 0:07:46.840 --> 0:07:49.360 Meta has made their ads more efficient. 0:07:49.760 --> 0:07:51.960 And how have they done that with focus? 0:07:52.480 --> 0:07:56.000 Meta stop focusing on the metaverse, Meta stop focusing on 0:07:56.080 --> 0:07:57.400 trying to build native. 0:07:57.120 --> 0:08:00.880 Commerce, and they went all in on improved their core business, 0:08:00.920 --> 0:08:03.720 which is advertising. And a huge part of that is. 0:08:03.680 --> 0:08:07.000 The investments that they one have made to combat changes 0:08:07.320 --> 0:08:10.560 with Apple's iOS privacy changes where all of a sudden 0:08:10.640 --> 0:08:15.040 the world moved from automatically opt in to now automatically 0:08:15.080 --> 0:08:19.120 opt out, as well as AI. What AI is allowing 0:08:19.480 --> 0:08:22.320 to happen within the advertising ecosystem is it's lowering the 0:08:22.320 --> 0:08:25.480 barrier to entry. It's making it easier to buy ads 0:08:25.520 --> 0:08:28.560 than ever before because one of the first areas that 0:08:28.640 --> 0:08:31.280 Meta has invested in is on the creative side, and 0:08:31.400 --> 0:08:35.239 creative has typically been a huge barrier to buying ads. 0:08:35.720 --> 0:08:38.360 Rachel, when you think about the potential slow down the 0:08:38.400 --> 0:08:42.080 economy could face, how much are you concerned that this 0:08:42.160 --> 0:08:45.079 is going to eat into advertising dollars and who is 0:08:45.360 --> 0:08:48.720 the kind of worst off here if things slow down materially. 0:08:50.640 --> 0:08:54.960 I think the outlooking to four on advertising is shaky, 0:08:55.040 --> 0:08:57.920 and the reason being is that the biggest brands in 0:08:57.960 --> 0:09:00.760 the world are under an enormous amount of pressure. 0:09:01.320 --> 0:09:03.319 Their margins are really compressed. 0:09:03.640 --> 0:09:06.800 It's more expensive than ever before to bring goods to market, 0:09:07.160 --> 0:09:10.200 to bring them to a retailer, and then negotiate those 0:09:10.240 --> 0:09:11.520 relationships with retailers. 0:09:11.520 --> 0:09:13.720 That's really where the margin compression is happening. 0:09:14.280 --> 0:09:16.720 And so in order for them to meet Wall Street's numbers, 0:09:17.160 --> 0:09:19.160 typically one of the first places that they. 0:09:19.040 --> 0:09:21.319 Cut budget is in advertising. 0:09:22.440 --> 0:09:25.800 That being said, we are entering the holiday season, so 0:09:25.920 --> 0:09:29.680 typically you'll see brands allocate upwards seventy five percent of 0:09:29.679 --> 0:09:30.439 their media. 0:09:30.200 --> 0:09:31.840 Budget two Q four. 0:09:32.400 --> 0:09:34.320 But I think that they're going to be really choosy 0:09:34.320 --> 0:09:36.600 with their dollars and they're going to invest it in 0:09:36.720 --> 0:09:41.800 platforms where there's consistent ROI Meta is one of those platforms. 0:09:42.080 --> 0:09:45.679 At Nickmac, around eighty five percent of the paid brand. 0:09:45.400 --> 0:09:48.920 Impressions that we see go through Meta. That's how significant 0:09:48.920 --> 0:09:51.880 they are. But the other big area is retail media. 0:09:52.400 --> 0:09:57.640 Meta's competition isn't just Snap and Pinterest and TikTok, it's Amazon, 0:09:57.760 --> 0:10:00.200 it's Target, it's Walmart. And we'll see how that is 0:10:00.200 --> 0:10:01.800 out in Amazon's earnings leader. 0:10:01.679 --> 0:10:04.440 Today, Rachel, can the holiday season save these companies? 0:10:06.480 --> 0:10:08.880 I don't think so. I think that the holiday season 0:10:08.960 --> 0:10:11.520 is going to be really tough. What we have seen 0:10:11.559 --> 0:10:14.640 in micmacs data this year is that there's been. 0:10:14.520 --> 0:10:19.000 A seventeen percent decline in the average vasket size, and 0:10:19.040 --> 0:10:23.320 that really has to do with inflation. Consumers are spending, 0:10:23.400 --> 0:10:25.680 but they're being more selected and. 0:10:25.600 --> 0:10:27.760 They're willing to trade down right now. 0:10:28.720 --> 0:10:31.920 I believe that that's going to translate into the holiday season. 0:10:33.320 --> 0:10:36.720 Rachel Tipograph of micmac, thank you for your time. Coming up, 0:10:36.760 --> 0:10:39.600 we have more to expect on Amazon's earnings and preview 0:10:39.800 --> 0:10:43.240 for Intel's earnings after the valve. And speaking of chips, 0:10:43.240 --> 0:10:46.600 as we had to break watching shares of sk Heinex, 0:10:46.880 --> 0:10:49.320 the South Korean memory chip maker, following the most in 0:10:49.360 --> 0:10:52.640 the year after reporting a larger than expected loss. 0:10:52.960 --> 0:11:12.160 More earnings coverage ahead. This is Bloomberg Technology. Now let's 0:11:12.200 --> 0:11:13.240 get back to earnings. 0:11:13.320 --> 0:11:16.080 Amazon do out after the bell today and Bloomberg Spencer 0:11:16.160 --> 0:11:17.199 Soper is joining us. 0:11:17.400 --> 0:11:18.880 Now, when you look. 0:11:18.679 --> 0:11:21.319 At what has already happened in the big tech industry, 0:11:21.360 --> 0:11:24.400 are you concerned that or are investors concerned rather that 0:11:24.440 --> 0:11:27.760 Amazon could be facing a greater slowdown ahead in any fashion. 0:11:27.880 --> 0:11:29.680 Yeah, this is going to be very telling because you 0:11:29.720 --> 0:11:34.679 see the market already reacted to Alphabet's earnings on cloud sales, 0:11:34.720 --> 0:11:38.360 and so they're already kind of expecting, you know, a 0:11:38.400 --> 0:11:41.760 similar trajectory with Amazon. Let's from our Amazon last quarter, 0:11:42.679 --> 0:11:45.400 it's cloud computing sales growth was the lowest it has 0:11:45.400 --> 0:11:48.560 ever been, and investors are really hoping to see that 0:11:48.559 --> 0:11:51.040 that's the bottom of the troth and we're and we're 0:11:51.080 --> 0:11:54.679 moving back upward. So yeah, there's definitely concern around the 0:11:55.000 --> 0:11:58.880 cloud market, and also concern on advertising sales, like your 0:11:58.960 --> 0:12:02.280 previous guest was talking about the Facebook market, and Amazon 0:12:02.880 --> 0:12:06.080 advertising is something that definitely contributes to its profit margin. 0:12:06.920 --> 0:12:09.200 And then if people are pulling back there, investors are 0:12:09.240 --> 0:12:10.719 going to be interested to see what that means for 0:12:11.120 --> 0:12:11.839 Amazon's results. 0:12:11.880 --> 0:12:13.040 So we're talking about a truck. 0:12:12.840 --> 0:12:14.640 And a key business. Do you think that there's any 0:12:14.640 --> 0:12:16.040 signs of turnaround? 0:12:16.360 --> 0:12:19.439 Well, Microsoft, there's mixed messages, right, because Microsoft had a 0:12:20.200 --> 0:12:25.880 good print and Alphabet didn't. So yet it will be 0:12:25.240 --> 0:12:28.800 interesting to see where Amazon differentiates. And one thing I 0:12:28.800 --> 0:12:31.240 think where investors are concerned about is maybe Amazon getting 0:12:31.240 --> 0:12:34.599 a little bit quite a little flat footed on artificial intelligence. 0:12:35.120 --> 0:12:37.360 Bloomberg Spencer so for thank you so much for your 0:12:37.360 --> 0:12:39.040 time and out today after the bell. 0:12:39.160 --> 0:12:39.880 Also is Intel. 0:12:39.960 --> 0:12:42.920 The quarterly report will update investors on progress to turn 0:12:42.960 --> 0:12:46.839 around its fortunes and regain lost sales. Bloomberg cy and 0:12:46.880 --> 0:12:49.400 King joins us now from San Francisco. What do you 0:12:49.440 --> 0:12:52.280 think the future looks like for Intel, particularly in this 0:12:52.559 --> 0:12:56.199 very heated competitive space that they're walking into further. 0:12:57.240 --> 0:12:59.120 Yeah, I mean there are two things that play here. 0:13:01.000 --> 0:13:03.920 Analysts are saying basically, look, the PC market is through, 0:13:04.000 --> 0:13:07.160 it's worse. That's the big volume segment for Intel. So 0:13:07.200 --> 0:13:09.880 we're going to get some kind of an improvement going forward. 0:13:09.920 --> 0:13:13.040 But they are still concerned about, you know, what spencers 0:13:13.080 --> 0:13:16.800 companies are doing, what Amazon is spending on servers, what 0:13:17.040 --> 0:13:19.760 Google is spending on servers, and whether they're shifting away 0:13:19.800 --> 0:13:24.080 from Intel technology and pouring more money into accelerators that 0:13:24.080 --> 0:13:25.240 they're getting from in video. 0:13:25.800 --> 0:13:28.040 Well, is there a sense that in PCs that the 0:13:28.080 --> 0:13:30.120 worst is over in terms of any potential slump. 0:13:31.440 --> 0:13:33.920 Yeah, I mean, that's what a lot of analysts have 0:13:33.960 --> 0:13:36.440 been saying. That's what kind of Intel has indicated that 0:13:36.559 --> 0:13:40.079 this mountain of inventory that we've been working through for 0:13:40.160 --> 0:13:43.840 the last few quarters has perhaps been used up and 0:13:43.840 --> 0:13:47.560 we're back to whatever normal shipments are. But again, there's 0:13:47.559 --> 0:13:50.720 still a question of what our consumers and companies spending 0:13:50.760 --> 0:13:53.680 on PCs and what level is the real normal for 0:13:53.720 --> 0:13:56.280 the PC market, whether we go back to that pandemic 0:13:56.520 --> 0:13:59.440 level of over three hundred million units or whether we're 0:13:59.480 --> 0:14:04.120 somewhere in two hundred million units and that's the future now, Ian. 0:14:03.960 --> 0:14:08.199 What do you think about the Nvidia Intel combine here? 0:14:08.280 --> 0:14:09.800 Is there any sense that they're going to do a 0:14:09.800 --> 0:14:11.400 better job taking back some share. 0:14:13.720 --> 0:14:15.960 We'll really have to see what they say later today. 0:14:16.000 --> 0:14:19.000 But the problem that everybody has, and not just Intel 0:14:19.040 --> 0:14:21.680 has right now is in video are so far ahead 0:14:21.760 --> 0:14:25.280 with these new products, and that Intel, AMD and anybody 0:14:25.320 --> 0:14:27.680 else who's really going to try and make a dent 0:14:27.760 --> 0:14:30.720 in what Invidia has done has to have new products, 0:14:31.040 --> 0:14:33.640 really strong products with all of the software that backs 0:14:33.640 --> 0:14:36.600 them up in the market right now, and frankly, they don't. 0:14:36.680 --> 0:14:39.040 They're just at the beginnings of these efforts. They're just 0:14:39.080 --> 0:14:42.120 at the beginnings of trying to get the Amazons the 0:14:42.160 --> 0:14:44.880 Googles to buy their stuff and to sign off on 0:14:45.320 --> 0:14:48.120 that because right now the solid bet is on video 0:14:48.200 --> 0:14:50.760 because they have things in the market that people trust them. 0:14:50.760 --> 0:14:50.840 Know. 0:14:51.360 --> 0:14:53.840 You take a look at Intel still year to date, 0:14:53.880 --> 0:14:56.520 it's still up more than twenty percent, further draw down 0:14:56.560 --> 0:14:59.880 as of late. But do you think that valuation here 0:15:00.200 --> 0:15:02.760 justifies kind of where the PC market is today? 0:15:03.680 --> 0:15:07.280 Yeah, I mean the valuation really is what the market sets. 0:15:07.320 --> 0:15:10.640 That isn't something we can sort of focus on too tightly. 0:15:10.680 --> 0:15:14.080 What really matters, I think in terms of investors right 0:15:14.120 --> 0:15:17.120 now is the momentum. The last couple of quarters, things 0:15:17.160 --> 0:15:19.800 have not got worse and that's been a positive for 0:15:19.840 --> 0:15:23.480 Intel because before that it was getting worse. 0:15:23.280 --> 0:15:24.880 At a horrible rate. 0:15:25.520 --> 0:15:28.440 The bet now is we are approaching the bottom or 0:15:28.480 --> 0:15:32.000 are through the bottom. And really what Intel needs to 0:15:32.000 --> 0:15:35.920 do today is show another example of Hey, things didn't 0:15:35.920 --> 0:15:39.720 get worse, they got incrementally better. But as the CEO, 0:15:39.880 --> 0:15:42.040 Pat Gelsing has said over and over again, they've got 0:15:42.080 --> 0:15:44.760 a long way to go. They're still twenty five billion 0:15:44.800 --> 0:15:47.560 dollars south on an annual basis of where they were 0:15:47.600 --> 0:15:49.239 at their peak in terms of revenue. 0:15:49.680 --> 0:15:50.920 I thank you for your coverage. 0:15:50.920 --> 0:16:01.800 We look forward to your coverage after earning today as well. 0:16:01.920 --> 0:16:04.840 Sam Bigmanfried is testifying today in a New York court 0:16:04.880 --> 0:16:07.640 room in a high profile fraud trial over the collapse 0:16:07.680 --> 0:16:10.680 of his FTX crypto exchange. And for more on this, 0:16:10.720 --> 0:16:13.240 we're going to bring in Bloomberg's Max Chafkin, who's been 0:16:13.240 --> 0:16:14.720 following this trial very closely. 0:16:15.960 --> 0:16:18.120 What is the defense even bringing forward. 0:16:17.800 --> 0:16:20.080 At this point in terms of how they could prove 0:16:20.160 --> 0:16:21.240 him to be not guilty. 0:16:21.480 --> 0:16:23.360 Well, I mean, the most important thing to remember is 0:16:23.400 --> 0:16:27.000 the defense doesn't have to tell a story. All they 0:16:27.040 --> 0:16:29.200 have to do is poke some holes in the prosecution story. 0:16:29.600 --> 0:16:32.000 The problem is that the prosecution story has been very, 0:16:32.200 --> 0:16:33.640 very convincing. 0:16:33.760 --> 0:16:34.880 I mean, again, it's hard to know. 0:16:35.680 --> 0:16:37.960 We're not on the jury, we're not seeing exactly what 0:16:38.000 --> 0:16:41.040 they're seeing. But we've seen witness after witness some of 0:16:41.160 --> 0:16:45.320 Sam bankman Fried's closest friends, his employees, his confidants, including 0:16:45.320 --> 0:16:49.200 his ex girlfriend Caroline Ellison, essentially put a lot of 0:16:49.200 --> 0:16:50.760 the blame for this on him, show that he was 0:16:50.800 --> 0:16:56.160 involved very detailed ways in the alleged misappropriation of a 0:16:56.280 --> 0:17:00.600 huge amount of user money. The prosecution rested case. The 0:17:00.640 --> 0:17:04.920 defense has called two expert witnesses. One is a lawyer 0:17:04.960 --> 0:17:09.960 from Bahamas, the other is a tech like basically a tech. 0:17:09.760 --> 0:17:12.160 Consultant, and then we're going to see Sam Bankman freed. 0:17:12.359 --> 0:17:15.760 We got a signal earlier yet last night basically sent 0:17:15.960 --> 0:17:18.800 saying that what he's going to talk about are advice 0:17:18.840 --> 0:17:20.520 from his lawyers, sort of blaming this on his lawyer, 0:17:20.520 --> 0:17:24.040 saying his lawyers told him was okay and industry practices, 0:17:24.200 --> 0:17:26.480 essentially arguing that he didn't do anything wrong. 0:17:26.600 --> 0:17:28.359 He thought this was okay all along. 0:17:28.520 --> 0:17:29.600 Do you think that's convincing? 0:17:30.320 --> 0:17:34.399 Again, the prosecution's case has been strong and very detailed, 0:17:34.560 --> 0:17:39.760 and unfortunately for Sam Bankman freed. Again, we're seeing many witnesses, 0:17:39.800 --> 0:17:43.400 basically everyone who is close to him except for his parents, frankly, 0:17:45.200 --> 0:17:47.920 saying very damning things about him, and not just saying 0:17:47.960 --> 0:17:50.240 damning things about him, but backing it up with kind 0:17:50.240 --> 0:17:52.719 of documentary evidence that they've been showing the jury. 0:17:52.800 --> 0:17:55.359 Why do you think he wants to testify? Typically, in 0:17:55.400 --> 0:17:59.080 cases like this, their advice by their lawyers not to testify. 0:17:59.320 --> 0:18:01.600 You've talked to him, you've covered him. Well, what's in 0:18:01.600 --> 0:18:02.080 his mind? 0:18:02.320 --> 0:18:06.040 Well, I think anyone who's traditional criminal defendants do not 0:18:06.080 --> 0:18:08.399 testify in their own defense, especially not in cases like this. 0:18:08.520 --> 0:18:09.399 It's not in their interest. 0:18:09.640 --> 0:18:13.080 Sam bangman Fried is not a traditional criminal defendant. He 0:18:13.200 --> 0:18:15.520 is somebody who loves to talk. I think, you know, 0:18:15.560 --> 0:18:17.080 loves to hear the sound of his own voice and 0:18:17.160 --> 0:18:18.239 is very effective at it. 0:18:18.280 --> 0:18:20.000 He's a good talker, a good persuader. 0:18:20.359 --> 0:18:22.840 Used it allowed him to kind of grow the valuation 0:18:22.880 --> 0:18:25.920 of FTX to these crazy heights, to grow his own 0:18:25.960 --> 0:18:28.119 net worth to something like thirty billion dollars. And I 0:18:28.160 --> 0:18:30.040 think the plan here is to sort of talk his 0:18:30.119 --> 0:18:33.480 way through this, which you know, not necessarily the most 0:18:33.560 --> 0:18:35.760 legally sound strategy. I think if you talk to most 0:18:35.920 --> 0:18:36.760 criminal lawyers. 0:18:36.880 --> 0:18:38.280 But again, he is in trouble. 0:18:38.400 --> 0:18:41.240 There have been a lot of very compelling witnesses for 0:18:41.240 --> 0:18:44.040 the prosecution. This may be his only outlet, so I 0:18:44.040 --> 0:18:48.399 think it's a high risk maneuver. I think the chances 0:18:48.440 --> 0:18:50.560 of success are not necessarily super high. But I'm not 0:18:50.560 --> 0:18:51.760 sure what his other options are. 0:18:51.840 --> 0:18:54.680 Well, what about the idea here of the sentence, because 0:18:54.720 --> 0:18:56.080 if he were to be found guilty. 0:18:56.119 --> 0:18:57.640 He's facing a number of charges. 0:18:57.720 --> 0:19:00.760 Do you think that by testifying he can lighten the 0:19:00.800 --> 0:19:01.720 load for himself. 0:19:01.920 --> 0:19:04.040 Well, I think for sure if he's able to somehow 0:19:04.080 --> 0:19:06.919 complicate the story. It's just not clear that what he 0:19:06.960 --> 0:19:09.639 has to offer is going to complicate that story. His 0:19:09.880 --> 0:19:13.320 basic defense has been that he was relying on advice 0:19:13.320 --> 0:19:15.960 of his lawyers and that FTX actually had a lot 0:19:16.000 --> 0:19:18.480 of money that customers will eventually be made whole. That 0:19:18.680 --> 0:19:21.959 second part very relevant to FTX creditors. They are going 0:19:22.000 --> 0:19:23.879 to be super excited to hear that if it's true, 0:19:23.920 --> 0:19:26.760 which again huge questions. Sam Bank mcfree doesn't necessarily have 0:19:26.760 --> 0:19:29.359 the best track record at the moment. That'll mean a 0:19:29.359 --> 0:19:31.359 lot to people who lost money on this thing. It 0:19:31.440 --> 0:19:34.879 doesn't mean anything for the legal case, right, he's accused 0:19:34.880 --> 0:19:37.640 of fraud, he's accused of taking the money and gambling it. 0:19:37.720 --> 0:19:40.600 The fact that he won potentially maybe if you believe 0:19:40.600 --> 0:19:43.680 what he's saying is legally irrelevant, and I don't think 0:19:43.720 --> 0:19:45.280 we'll have a huge impact on. 0:19:45.200 --> 0:19:47.160 His sentence, you know, quickly here last night we were 0:19:47.160 --> 0:19:50.280 together watching the new Ruined documentary that Bloomberg Originals had 0:19:50.320 --> 0:19:54.119 come out, with and you made this extremely strong case 0:19:54.160 --> 0:19:57.840 against effective altruism. And I'm wondering you think with this 0:19:57.960 --> 0:20:00.239 case that so many of the ideals that' say big 0:20:00.320 --> 0:20:02.320 Bean freed and brought forward, do they just die off? 0:20:02.480 --> 0:20:05.920 I think the effect of ultruous community is really struggling. 0:20:06.000 --> 0:20:08.760 This is the charity that Sam Bangmfried was involved with. 0:20:09.119 --> 0:20:12.680 He's so closely associated with it. You know, hundreds of 0:20:12.680 --> 0:20:17.479 billions of dollars from FTX ostensibly profits, although at some 0:20:17.640 --> 0:20:19.280 you know, you sort of wonder how much that money 0:20:19.320 --> 0:20:22.280 may have come from customers. It's all tied up with this. 0:20:22.320 --> 0:20:23.840 So it's going to really hurt the movement. It's going 0:20:23.920 --> 0:20:26.120 to be hard to recruit new followers. 0:20:26.480 --> 0:20:28.280 Bloomberg's Max Chack, can we thank you so much for 0:20:28.320 --> 0:20:39.520 your time. Welcome back to Bloomberg Technology. I'm Chanelli Bassett 0:20:39.520 --> 0:20:42.760 in New York. Now moving to a big meeting for 0:20:42.800 --> 0:20:45.200 President Biden. He said to meet with China's foreign minister 0:20:45.240 --> 0:20:48.320 tomorrow and Washington, potentially laying the groundwork for a leaders 0:20:48.359 --> 0:20:50.600