Speaker 1: From Mahart.
Speaker 2: We're Innovation, Money and Power Collie in Silicon Vallet NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde.
Speaker 3: And Ed Ludlove.
Speaker 4: Live from New York and San Francisco. This is Bloomberg
Speaker 4: Technology coming up. The US in weighs tougher trade curbs
Speaker 4: on chips for China stocks, tumble.
Speaker 5: Plusy Lommask moves SpaceX and X to Texas, and.
Speaker 6: Will Jdvans be good for business?
Speaker 4: We'll discuss, but first let's check in on these markets
Speaker 4: because we are having the worst day for the NASAC
Speaker 4: and the Nasdaq one hundred since October of twenty twenty three.
Speaker 4: We are pulled lower, in particular on the chip stocks
Speaker 4: of by three point nine percent.
Speaker 6: The key is trade tensions.
Speaker 4: The key is the Biden administration wanting to be limiting
Speaker 4: sales of key AI technolog and chips to China.
Speaker 6: And Ed you have got the details on the micro.
Speaker 5: Yeah, there's two names I'm looking at in particular. They
Speaker 5: are global names. We're absolutely right that it's the chip
Speaker 5: stocks in the US that are really weighing on markets.
Speaker 5: Tokyo Electron down seven point five percent overnight in Japan,
Speaker 5: biggest drop since April of this year, ASML, the Dutch
Speaker 5: chip equipment maker, down ten point eight percent, on track
Speaker 5: for its biggest drop since March of twenty twenty. The
Speaker 5: story that Bloomberg's reporting is that US officials are considering
Speaker 5: tougher curves on the access of the technology made by
Speaker 5: those companies to China buy Chinese companies. Let's get into it,
Speaker 5: Bloombazi and King joins us in San Francisco. Sarah Jacob
Speaker 5: joins us out of ansen Ian. I'm going to start
Speaker 5: with you. We're talking about something called the Foreign Direct
Speaker 5: Product Rule FDPR. Sources tell us this is something that
Speaker 5: US officials are considering using.
Speaker 1: What is it?
Speaker 7: Yeah, I think it's the way to look at it.
Speaker 7: Is is kind of the nuclear option in terms of
Speaker 7: trade action that can be taken. It's basically saying that
Speaker 7: if something had even the tiniest scintilla of US technology
Speaker 7: or US input, then the US can exert control over it.
Speaker 7: And it's borne out of frustration with the impact that
Speaker 7: we've had with the with what's being perceived as a
Speaker 7: sort of lagging reaction by the allies in terms of
Speaker 7: getting on board with the US, and in terms of
Speaker 7: that effect undermining.
Speaker 4: Go to one of those allies now because ASML, Dutch
Speaker 4: company being hit hard. Their earnings were good, Sarah, but
Speaker 4: the impact on their Chinese sales likely to be tough.
Speaker 3: Yes, that's right. Actually a SML reported second quarter bookings
Speaker 3: that beat estimates, and it's been talking about, you know
Speaker 3: how this is being driven by the artificial intelligence boom
Speaker 3: as we know, ASML has a monopoly and making machines
Speaker 3: that you know, produce the most advanced semiconductors. And this
Speaker 3: is also being driven by demand for very high power
Speaker 3: chips that are needed for AI applications. But certainly people
Speaker 3: looked to how much China accounted for in terms of
Speaker 3: the company's sales, and China count for nearly half of
Speaker 3: asm 's second quarter sales, trumains ASML's biggest market, and
Speaker 3: those sort of a sort of increases. These increasing exports
Speaker 3: also sort of you know, show that risks are wrapping
Speaker 3: up and because of diplomatic tensions possibly between the US
Speaker 3: and the Dutch government to push for more export curbs.
Speaker 4: And this is a diplomatic issue, but also this is
Speaker 4: one that is going to be impacting US companies. We
Speaker 4: know Micron, for example, significant sales to China. Is this
Speaker 4: just signaling yet more is to come when it comes
Speaker 4: to revenue.
Speaker 7: Here, it's signaling I think frustration with the way that
Speaker 7: these curbs have been implemented and the impact that they've had,
Speaker 7: and a concern I think that the Chinese companies, these
Speaker 7: upstarts that were supposed to be held back perhaps haven't been.
Speaker 7: That's really what the tension is going on. And there's
Speaker 7: an exploration and a consideration of other measures and how
Speaker 7: we might exit increasing control. Fundamentally, we don't know what's
Speaker 7: going to happen. Obviously, this current administration is going towards
Speaker 7: the end of its term, so we'll see.
Speaker 5: And therein lies the point that's made in the Bloomberg
Speaker 5: reporting this moment in time, we're headed for a US
Speaker 5: presidential election. Earlier today, Bloomberg spoke to Virginia Governor Glenn Youngkin.
Speaker 1: Just listen to this real quick.
Speaker 8: China is not just a rival. They're trying to dominate
Speaker 8: the world, and they're trying to do it at the
Speaker 8: expense of the United States. We need to not only
Speaker 8: protect ourselves against China, but we need to fight back.
Speaker 8: And so the tariffs that President Trump imposed on China
Speaker 8: when he struck the first Chinese deal were critical in
Speaker 8: order to rebalance an unbalanced situation with China.
Speaker 5: The point raised by the Governor Sarah is that this
Speaker 5: approach by the Biden administration and officials might change depends
Speaker 5: on the outcome of the election later this year. In
Speaker 5: the context of China, what is it that the United
Speaker 5: States wants of its allies where you are in Amsterdam
Speaker 5: namingly the Dutch.
Speaker 3: Oh well, basically for what we're hearing, it's about, you know,
Speaker 3: extending those curves and potentially also looking at how they
Speaker 3: can limit the companies in particularly ASML's ability to service
Speaker 3: and you know, repair restricted gear that's already in China.
Speaker 3: As you know, also in the Netherlands we've had a
Speaker 3: new government and new cabinets in place. We haven't really
Speaker 3: heard from the new cabinet what their policy is going
Speaker 3: to be on this, but we'll have to wait and watch.
Speaker 4: And thank you Sarah Jacob of course in the Netherlands
Speaker 4: coming on on all things at ASML and ship equipment companies.
Speaker 6: I mean, let's just dwell on this for a moment,
Speaker 6: because I love the.
Speaker 4: Way that you bring in what the Governor Youngkin was
Speaker 4: saying about this is not something that can just be
Speaker 4: thought of as talking tough with Biden, knowing that the
Speaker 4: Trump administration likely to be pushing back on China hard.
Speaker 4: And indeed, there was this really important story out today
Speaker 4: on Business Week talking about how Taiwan is currently being
Speaker 4: something that needs to be considered more that actually had
Speaker 4: a big impact on certain US stocks today.
Speaker 1: Yeah.
Speaker 5: I mean, the point made by former President Donald Trump
Speaker 5: in an interviewer BusinessWeek is that if he was come
Speaker 5: to power, he would look at Taiwan, Taiwan paying for protection,
Speaker 5: and a lot of that has been extrapolated out were
Speaker 5: showing Intel and Global foundry shares there being the exceptions
Speaker 5: to today's trading and moving to the upside. And there
Speaker 5: are some notes out there that are saying this is
Speaker 5: toa the only alternative that if President Trump came to
Speaker 5: power in November and took office next year, then an
Speaker 5: action to be taken on TSMC well in the context
Speaker 5: of global manufacturing and semiconductors Intel would be the only
Speaker 5: alternative for investors to back that kind of move. I
Speaker 5: don't know what you make of that, that sort of
Speaker 5: direct correlation, but that seems to be what the market
Speaker 5: suggesting with its trading this morning.
Speaker 4: And look, the direct correlation is so clear. Let's just
Speaker 4: bring up the stock charts. Let's just show how much
Speaker 4: Global Foundriies is outperforming the rest of the market today.
Speaker 4: Every single chip company in the socks is down apart
Speaker 4: from when you're looking in Global Foundries up more than
Speaker 4: nine percent. It was eclipsing ten percent earlier in the trade.
Speaker 4: Intel up two point eight percent. But it is interesting
Speaker 4: to think about how much this onshoring narrative has been
Speaker 4: one that the Biden administration has also been pushing. Yet
Speaker 4: more money being handed out at the moment when it
Speaker 4: comes to the Chips Act.
Speaker 5: We have seen the Bloomberg reporting, We've been through the market.
Speaker 5: Set's get an investors reaction for more. We're joined by
Speaker 5: Kim Forrest, Boca Capital Partners founder and CIO.
Speaker 1: I think let's start with.
Speaker 5: That most recent point that you know. I think the
Speaker 5: market sees a more likely outcome that Trump becomes president
Speaker 5: and based on the BusinessWeek interview, he may look at
Speaker 5: Taiwan TSMC, may be impact and that may benefit the
Speaker 5: foundry or fab business of Intel. Oh, how would you
Speaker 5: assess that and play that, Kim.
Speaker 9: Well, I think you know, with the Biden administration getting tougher,
Speaker 9: I'm thinking this is a toss up. This is an
Speaker 9: issue for the next four years, regardless of who comes
Speaker 9: into power. And I think that on shoring not just
Speaker 9: in the US but also over in other parts of
Speaker 9: the world like the EU, I think that is more
Speaker 9: of a longer term goal because we all kind of
Speaker 9: see the error in our ways of having one geography
Speaker 9: and even let's forget about that, it is in a
Speaker 9: very seismically active area and they get a lot of
Speaker 9: you know, disruption because of earthquakes, and it's near, you know,
Speaker 9: a rising China. It's sixty eight miles from mainland China,
Speaker 9: so you know there's threats there. But just the basics
Speaker 9: of having one place where all of the chin that
Speaker 9: are the highest technology are made is really kind of ridiculous.
Speaker 9: I just as a risk remediator in my business, I
Speaker 9: don't see how we got here, but here we are.
Speaker 6: Okay.
Speaker 4: So has that been changing the way in which you
Speaker 4: think people should be investing in these names? TSMC has
Speaker 4: been making the most of the Chips Act here in
Speaker 4: the United States, has been trying to expand. Admittedly, there's
Speaker 4: been hiccups and expansion struggles when you think of Arizona.
Speaker 4: But these are companies that are looking to on shore
Speaker 4: to be closer to where their client base is. How
Speaker 4: much should it be knocking the capitalization. I'm looking at TSMC,
Speaker 4: the depository receipts having their worst day since October twenty
Speaker 4: twenty two today.
Speaker 9: Kim, Sure, well, I think they're trying to move in
Speaker 9: that direction, but it's slow, as you noted, and it's
Speaker 9: just the nature of the beast. These are not factories
Speaker 9: that can be thrown up overnight. It takes a very
Speaker 9: long time for even the physical building to go in,
Speaker 9: let alone the equipment, and then that ties into ASML
Speaker 9: that they too are playing into this. You can only
Speaker 9: make this exotic equipment as fast as you can make it,
Speaker 9: and that's part of the dilemma here is how quickly
Speaker 9: can people move And the answer is not very fast.
Speaker 9: And I think that's why stocks are trading lower because
Speaker 9: they see, if you know, the US puts up gates
Speaker 9: to sell this equipment, it's really going to affect these
Speaker 9: companies and the turnaround is not quick.
Speaker 1: Kim.
Speaker 5: On that last observation, I'm looking at the NASDAQ one hundred.
Speaker 5: The biggest percentage decline is of course oral chip makers.
Speaker 5: If we close down two point three percent, that's the
Speaker 5: biggest drop for the NASZAK one hundred.
Speaker 1: Since October of last year, things have changed quite quickly.
Speaker 5: This was a market until last night was looking at
Speaker 5: the election factor and was trading in a positive manner,
Speaker 5: and now things have changed.
Speaker 1: Why why this sudden anxiety do you think?
Speaker 9: Why do you think the geopolitical focus on semiconductors at
Speaker 9: the very smallest equation. We've all been told money makes
Speaker 9: the world go round. Well, semiconductors makes the money go round,
Speaker 9: and you know they're the under underpinning of every business.
Speaker 9: Now energy is important, but semiconductors are now equally important.
Speaker 9: And the more exotic the chips are for AI, which
Speaker 9: everyone seems to believe that that is the thing that
Speaker 9: will bring productivity and is the next big thing. It
Speaker 9: is a major focus. And do we let one area
Speaker 9: of the world be the only maker of it? I'd
Speaker 9: say no, we cannot. And this is all all countries,
Speaker 9: not just the.
Speaker 6: US, kim forest, the global perspective.
Speaker 4: Boca Capital Partners founder in Cio brilliant to have you
Speaker 4: on the show.
Speaker 6: Thank you coming up.
Speaker 4: Look Elo Musk's saying that X and SpaceX are going
Speaker 4: to change their headquarters.
Speaker 6: I'm going to Texas. We'll have all the tells next.
Speaker 6: This is Bloomberg Technology.
Speaker 1: Signed for Talking Tech and First Up.
Speaker 5: Global Wafers wins four hundred million dollars from the US.
Speaker 5: The Taiwan silicon wafer producer was awarded funds through the
Speaker 5: Chips and Science actors. The company radies for projects in
Speaker 5: Texas and Missouri. Global Wafer says it plans to invest
Speaker 5: a total of four billion dollars into the initiative, creating
Speaker 5: twenty five hundred jobs plus. Revolute is in talks with
Speaker 5: Tiger Global to lead an upcoming share sale. Revolute CEO
Speaker 5: Francesca Kalisi spoke earlier on Bloomberg about its prospects.
Speaker 6: These is are bought confidences.
Speaker 10: Every time that new investor comes to board is a
Speaker 10: big sign, and especially when there is also impact evaluation. Right,
Speaker 10: So this is a good measure moment or truth for
Speaker 10: all of us.
Speaker 5: Tiger's involvement would be leading a secondary offering. It can
Speaker 5: now value Revolute of more than forty billion dollars and
Speaker 5: shares of git lab arising today the outfitt Back software
Speaker 5: makers said to be exploring a sale after attracting interest
Speaker 5: from potential bidders. That's according to a report from Reuters.
Speaker 5: The San Francisco based company is working with investment bankers
Speaker 5: and has attracted peers like data Dog Carrot.
Speaker 4: Let's just talk about Elon Musk and what he's just
Speaker 4: been saying on X when it comes to a couple
Speaker 4: of his company's ed the headquarters of X and SpaceX
Speaker 4: will both relocate to Texas with a billionaire citing frustration
Speaker 4: over laws in California, where the companies are currently based.
Speaker 4: Let's break all of this down, and there's Kurt Wagner's
Speaker 4: with us, Max Chafkin. Kurt, I start with you as
Speaker 4: someone who's the lean byline on this story. The frustration
Speaker 4: being a new law recently passing California to do with
Speaker 4: transgender children in public schools politics affecting Elon Musk's view
Speaker 4: on where to base his companies.
Speaker 11: It seems, yeah, absolutely, and I think this is, you know,
Speaker 11: a regression that we've seen for the last couple of years,
Speaker 11: but especially just the last couple of weeks, right, I
Speaker 11: mean he has now come out publicly in support of
Speaker 11: former President Donald Trump and the upcoming election he's donating
Speaker 11: to his campaign. We've seen Elon Musk complain about the
Speaker 11: laws in California, the Liberals in California for years, and so,
Speaker 11: you know, while it feels like a bit of a
Speaker 11: reactive decision right to see this new law and suddenly
Speaker 11: say we're going to move these companies out of the state,
Speaker 11: I think this has been a long time coming. In
Speaker 11: anyone who's followed Elon closely could see that this was
Speaker 11: building and building.
Speaker 5: Max, I think it's really important that the four of
Speaker 5: us talk about the technology and company impact this is
Speaker 5: going to have. SpaceX is critically important as a leader
Speaker 5: in commercial space. But you've been focused on Elon's politics
Speaker 5: as well. In the Elon in pod, I mean, you
Speaker 5: will have seen the back and forth between Governor Newsome,
Speaker 5: who shared an image of a Trump true social post,
Speaker 5: the timing of which we can debate it must have
Speaker 5: been the photo taken during Trump's former period in the
Speaker 5: White House.
Speaker 1: But the point being.
Speaker 5: That that Musk here has changed his politics and it
Speaker 5: has impact to his companies, has impact at a macro level.
Speaker 1: Yeah, I mean, you know.
Speaker 2: Elon Musk identifying himself as a you know, supporter of
Speaker 2: the former president and also likely a major donor, maybe
Speaker 2: the biggest donor. You know, he's he's definitely in the
Speaker 2: middle of this debate, and we're seeing you know, Gavin
Speaker 2: Newsom effectively as a surrogate for for for the Biden administration,
Speaker 2: you know, doing what you would expect from a surrogate,
Speaker 2: which is to sort of point out the obvious, uh,
Speaker 2: the obvious apparent hypocrisy of being at one point opposed
Speaker 2: to president former president and now being an enthusiastic supporter.
Speaker 1: And as Kurt said, long time coming.
Speaker 2: You know, Elon Musk himself already lives in Texas, so
Speaker 2: it's not hugely surprising.
Speaker 1: That he's doing this.
Speaker 2: It does have the feel of a political stunt more
Speaker 2: than anything.
Speaker 5: Not hugely surprising, but important for California and its technology industry.
Speaker 5: Right there with me on SpaceX, they have around thirteen
Speaker 5: thousand employees, many of them are in Hawthorne. Falcon nine
Speaker 5: is built in Hawthorne. They stick it on truck and
Speaker 5: trailer and ship it to Florida.
Speaker 1: And then there's X.
Speaker 5: I think that that company was creeping out of the
Speaker 5: building on Market Street. Anyway, Yeah, but we're talking about
Speaker 5: the footprint of two companies leaving the state.
Speaker 11: Yeah, I mean, I don't think there's any way to
Speaker 11: sugarcoat this in terms of what it looks like for California.
Speaker 12: Right, It certainly looks bad.
Speaker 11: It looks like you're taking the best, the brightest, the
Speaker 11: smartest technologists in the industry and moving them somewhere else.
Speaker 11: And so there is definitely an optical issue here. Now,
Speaker 11: the logistics of this are very important because while Elon
Speaker 11: has also moved Tesla to Texas several years ago, there's
Speaker 11: still a huge office here in Palo Alto, as you know,
Speaker 11: for Tesla, And so the question is, are these employees
Speaker 11: actually going to be leaving California, Are the jobs literally
Speaker 11: leaving California or is this more of a logistics thing
Speaker 11: of rebranding the company there now?
Speaker 4: Max, Ultimately, this is quite a personal issue feel or
Speaker 4: musk this current new law coming in in California. One
Speaker 4: of his eldest children, as the Sighter than the Story,
Speaker 4: went to court the day after they turned eighteen and
Speaker 4: twenty twenty two and changed their name, citing gender identity
Speaker 4: and the fact that they no longer live or wish
Speaker 4: to be related to my biological father in any way,
Speaker 4: shape or form. This is personal, but it also makes
Speaker 4: the consumer feel personally about some of the moves that
Speaker 4: Elon Musk is taking. And ultimately, from your Elon Inc.
Speaker 4: Podcasting viewpoint, how much is going to impact the businesses
Speaker 4: that Elon's getting ever more political here?
Speaker 2: Well, I don't think this particular move is going to
Speaker 2: have a huge impact either on the way consumers feel
Speaker 2: about you know, Elon Musk, or about you know, even
Speaker 2: the way that his employees feel. I mean, as Kurt says,
Speaker 2: it's not clear many are even going.
Speaker 1: To have to move. It is the latest sign.
Speaker 2: In a series of signs of Elon Musk becoming this,
Speaker 2: you know, very polarizing figure, and that is a challenge
Speaker 2: for especially for Tesla Right, which has this enormous base
Speaker 2: of customers, many of whom live in suburbs, many of
Speaker 2: whom are not hardcore Donald Trump supporters. So so he
Speaker 2: has but he's sort of made his bet on this
Speaker 2: over the last few years. So in a way, I
Speaker 2: don't think it's going to have a huge impact. It's
Speaker 2: more just a symptom of this ongoing, you know, the
Speaker 2: ongoing politics of being Elon Musk.
Speaker 5: Poomber, Kurt Wagner here in SF Max Chafkin, thank you both.
Speaker 4: Today it's our AI in Action segment and we're joined
Speaker 4: by tech Wolf. It's a company focusing on utilizing artificial
Speaker 4: intelligence in the world of recruiting, actually in retention as
Speaker 4: a tool to manage talent. The company also recently closing
Speaker 4: a forty two million dollar Series B. We want to
Speaker 4: bring in Michael Warner, who's Techwolf co founder and COO.
Speaker 4: Michael Howe is the more targeted large language models that
Speaker 4: you're developing, helping companies identify the talent they already have.
Speaker 13: Yeah, so we use artificial intelligence to help employees flourish
Speaker 13: that work, but also employers to help employers make better,
Speaker 13: smarter workforce decisions, who to train, who to hire, who
Speaker 13: to develop. So instead of saying we need to hire
Speaker 13: a thousand AI engineers, our AI can come in and
Speaker 13: say no, actually you only need to hire five hundreds,
Speaker 13: and the other five hundred can be redeployed, reskill trained
Speaker 13: inside the company And essentially that can save the business
Speaker 13: millions in direct requiitment costs, millions in sovereigns fees and
Speaker 13: millions in anutrition, and so today we have about two
Speaker 13: million skill profiles for employees. We work together with the
Speaker 13: most innovative HR leaders on the planet. I'd say HIBC,
Speaker 13: GFADP ericson United Airlines, MetLife. We're really making all the
Speaker 13: difference here with AI Michael.
Speaker 1: Where in the hiring process does this come in? Right?
Speaker 5: There's already sort of algorithmic filtering of cvs and then
Speaker 5: you basically in the first line have HR people going
Speaker 5: through piles before the hiring manager gets it.
Speaker 1: Where do you come in?
Speaker 13: Yeah, and it's good to take a step back. Skill
Speaker 13: management has been around since the eighties. Trying to understand
Speaker 13: the skills of people inside the company has been around
Speaker 13: for quite a long time. So we come in big company,
Speaker 13: fifty thousand, one hundred thousand employees, and the first thing
Speaker 13: we do is essentially create data, skilled data for everybody.
Speaker 13: And that's the first we're the first company that can
Speaker 13: reliably do this, and then the second step is actually
Speaker 13: using that data to make better decisions. So better data,
Speaker 13: we can typically see that there's a twenty five percent
Speaker 13: skills mismatch. The twenty five percent of employees have not
Speaker 13: the skills to perform in a job. We can demonstrate
Speaker 13: that seventy five percent of vacancies can be filled with
Speaker 13: internal tables. So it's a completely new way of looking
Speaker 13: at the workforce. More than specifically focusing on improvement, it's
Speaker 13: a data platform for HR.
Speaker 4: Michael's interesting as you say, yeah, what's talent identification goes
Speaker 4: back to the eighties. There are some big HR players
Speaker 4: out there, and funnily enough, some of them are actually
Speaker 4: can you you've got some strategic investment Felix Capital leading
Speaker 4: a series BB it's SAP Service now Workday what's your outlook?
Speaker 6: Do you remain independent?
Speaker 13: Of course, and when we talked about the round composition,
Speaker 13: we took a step back and we asked herself the
Speaker 13: question what is needed to build a European generational AAI company.
Speaker 13: And then from like capability lands like three big investor
Speaker 13: groups came up, the HR and HR tech investor that
Speaker 13: we just mentioned. It's the first time work Day SAPs
Speaker 13: Service Now are investing together. But also Felix like potentially
Speaker 13: giving us the opportunity to learn from people who have
Speaker 13: skilled really big businesses before, and then Leslie AI and
Speaker 13: essentially ensuring that we have the best and brightest AI
Speaker 13: brains on our on our cap label. So we have
Speaker 13: people from deep Mind adjoining the AI leader from Hugging
Speaker 13: Clase and Meta to ensure that we can keep our
Speaker 13: AI leads in this space.
Speaker 5: Michael Wano, Tech, co founder of tech Wolf, thank you
Speaker 5: so much for your time.
Speaker 1: On startups and technology.
Speaker 6: We are certainly among the best experts in the world.
Speaker 4: We think.
Speaker 7: Donald Trump is a better choice sen Joe Biogen on
Speaker 7: these issues.
Speaker 5: That was Ben Horowitz, co founder of the VC firm
Speaker 5: Andreessen Horowitz, explaining why he and co founder Mark in
Speaker 5: Breeson are now backing Donald Trump. The famous VC duo
Speaker 5: is planning to donate a significant amount to his campaign,
Speaker 5: according to a Bloomberg source, though the donations will be
Speaker 5: personal contributions from the two men, not from the firm itself.
Speaker 5: I want to bring in Bloomberg's Zett, Chapman and Lazette.
Speaker 5: You've written brilliantly in the last twenty four to forty
Speaker 5: eight hours about essentially Silicon Valley's reaction to the events
Speaker 5: of the past week, the RNC and JD vance being
Speaker 5: Trump's VP pick. Just summarize the reporting for us, please.
Speaker 14: Right, So, there has been a huge pouring of support
Speaker 14: for Trump and his VP nominee. Vance not only has
Speaker 14: Elon Musk and Mark Andresen and then Horowitz as well
Speaker 14: as David Sachs, Doug Leoni, and Sean maguire from Sequoia Capital.
Speaker 14: All of these tech and venture capital big name, very
Speaker 14: prominent people here in Silicon Valley have all lined up
Speaker 14: to support Trump in recent weeks, with gaining momentum as
Speaker 14: more and more seem to like what he has to
Speaker 14: say about tech policy. Uh Specifically, they.
Speaker 4: Realize in some ways this might be controversial for those
Speaker 4: that are in their family. That's certainly what Ben Howtz
Speaker 4: spoke to that people with then their company Lizette, to
Speaker 4: take such an openly political stance. But what is in
Speaker 4: it for small tech as they call it, because from
Speaker 4: what we understand, well, the VP pick doesn't like big
Speaker 4: tech munch.
Speaker 14: Right, That's right, so on small tech, which is what
Speaker 14: Mark Andrewsen and Ben Horowitz they call it their little
Speaker 14: Tech agenda specifically for startups. There's a couple of areas
Speaker 14: that they're really hoping to bend the ears of Trump
Speaker 14: and Vance on, including potentially opening open sourcing AI, loosening
Speaker 14: crypto regulation, and possibly taking another look at the FTC
Speaker 14: and the anti trust regulations that we've seen come down,
Speaker 14: and one of the reasons for that is because although
Speaker 14: it does target big tech companies by preventing them from
Speaker 14: acquiring smaller startups, it closes down that path as an
Speaker 14: exit for them and they can only i PO, which
Speaker 14: hasn't been a very strong It hasn't been a strong
Speaker 14: in recent years.
Speaker 1: Lazette.
Speaker 5: We made the point on the show, and we can
Speaker 5: illustrate it again with a visual representation of who's come
Speaker 5: out and spoil of Trump. But he it is many
Speaker 5: or some of Silicon Valley. It's not all of Silicon Valley.
Speaker 5: So what have you learned about any remaining support in
Speaker 5: that industry for the Democratic Party or even those that
Speaker 5: have changed position along the way.
Speaker 14: That's an excellent point ed, And again, the reason why
Speaker 14: this is so significant on some ways is because it's
Speaker 14: been a major departure for many people that have longtime
Speaker 14: voted Democrat. But to your point, it's certainly not all
Speaker 14: of Silicon Valley. These are some very prominent names that
Speaker 14: are supporting him, but there's still a large contingent of
Speaker 14: Democratic voters backing Biden. Certainly, you know is Steve Bomber,
Speaker 14: Maurissa Meyer, quite a few others have traditionally supported Democrats,
Speaker 14: and so you know, the conversation is still very mixed.
Speaker 14: It's certainly not all tech, and it's certainly not all
Speaker 14: of Silicon Valley well.
Speaker 4: Bardy, Lizette, Is this likely to get louder as we
Speaker 4: go towards November? Is it just that this is a
Speaker 4: moment in time where people lay their cards out and
Speaker 4: get on board the rest of those that they work with,
Speaker 4: and indeed the portfolio companies understanding their stand I.
Speaker 14: Think it will get increasingly louder, more raucous, and potentially
Speaker 14: more divisive if you look at some of the beef's
Speaker 14: happening right now playing out on the X platform, because
Speaker 14: campaigns and gain steam as we get closer to the
Speaker 14: election date. So I don't anticipate this ratcheting down anytime soon.
Speaker 14: Doesn't mean it won't stay civil. We can, but we
Speaker 14: will look ahead to see how things will progress.
Speaker 4: He is hoping on that civility, Lazette, Chapman, brilliant to
Speaker 4: have you on, Thank you very much. Indeed, we were
Speaker 4: just talking about some of the beef going on on
Speaker 4: social media. But let's just talk about how artificial intelligence
Speaker 4: becomes ever more advanced, there's this greater risk of the
Speaker 4: moment for the technology to be used maliciously, particularly on
Speaker 4: social media. The rise in deep fakes, manipulated media. It's
Speaker 4: proven particularly harmful during this election cycle. Nowlifornia based startup
Speaker 4: get Real Labs build tools to analyze in combat media manipulation.
Speaker 4: I want to talk about how important the role is
Speaker 4: right now and Hanney farred for more and you've basically
Speaker 4: been building this business alongside academia to try and target
Speaker 4: what could be a real election risk, but just ongoing risk.
Speaker 6: Honey, how much do you think that this is.
Speaker 4: Currently something we need to be understanding and worrying about
Speaker 4: in the current context.
Speaker 13: Yeah.
Speaker 15: Yeah, it's hard to look at the last few years
Speaker 15: and generative AI and deep faces and think this is
Speaker 15: not a risk to us as individuals in terms of fraud,
Speaker 15: to institutions in terms of fraud, and in terms of democracies.
Speaker 15: In terms of disan misinformation, we are seeing it here
Speaker 15: in the US, We have seen it Europe, we are
Speaker 15: seeing in India, we are seeing it around the world
Speaker 15: that disin misinformation is being powered now by the latest
Speaker 15: trends in deep fates, and what we are trying to
Speaker 15: do is think really hard about how we can detect
Speaker 15: and stop that type of thread vector.
Speaker 1: Professor fride As already.
Speaker 5: Lets know about your role at the University of California, Berkeley,
Speaker 5: the work you're doing there. But for me, it's a
Speaker 5: technology story in the sense that you have a new
Speaker 5: tool to combat an issue.
Speaker 1: And at the same time, the.
Speaker 5: Proliferation of applications, generative AI applications that create that content
Speaker 5: is also on the right. Do you actually just have
Speaker 5: a phone up some of those companies and say let's
Speaker 5: work together.
Speaker 1: Yes, in fact we do.
Speaker 15: In fact, you can't work in cybersecurity if you're not
Speaker 15: talking to the other side of the aisle. Right, you
Speaker 15: can't do defense if you don't understand O offense. And
Speaker 15: the good news is I think that the open eyes
Speaker 15: and the mid journeys and the stabilities are not bad actors.
Speaker 15: I think they're generating technology that has good uses and
Speaker 15: bad uses. So I think they're generally incentivized to work
Speaker 15: with us to create defenses. We take all the advantage
Speaker 15: of the technology and we mitigate some of the risks,
Speaker 15: and we have to do that together.
Speaker 5: If we just took the presidential election as a case study.
Speaker 5: How would your platform and technology work if there are
Speaker 5: a video a deep fake circulating good.
Speaker 15: So what we want to be able to do is
Speaker 15: any time an image, an audio, or video breaks. And
Speaker 15: you saw that in fact mediating, which is interesting exactly,
Speaker 15: and you saw it this weekend at the shooting, there
Speaker 15: was immediately fake images and fake videos coming out, mudding
Speaker 15: the landscape. So we work with reporters, we work with
Speaker 15: fact checkers, we work with organizations, we work with campaigns.
Speaker 15: As soon as something comes out, you send it to us.
Speaker 15: We run through a battery of tests and we try
Speaker 15: to find as much information as we can so that
Speaker 15: you can make decisions downstream.
Speaker 4: Talk about that decision that a consumer has right now.
Speaker 4: Have we all become some numb that well, we wonder
Speaker 4: whether or anything is real?
Speaker 13: Now?
Speaker 1: Sure, that's always the fear.
Speaker 15: So what I like to tell people is what we
Speaker 15: do I get real is necessary, but not necessarily sufficient.
Speaker 15: So the first thing we have to be able to
Speaker 15: do is tell you what is real and what is fake.
Speaker 15: There is another battle now that we have to get
Speaker 15: out of our echo chambers. We have to stop hating
Speaker 15: the other side of the aisle so much because if
Speaker 15: we can't hear facts, I don't know how we move
Speaker 15: forward as a democracy and as a society.
Speaker 4: I just want to know a bit more about get
Speaker 4: Real Labs and how you came to be inc over
Speaker 4: the past couple of years with Ballistic Ventures, and you
Speaker 4: see Berkeley under yourself really incubating this business.
Speaker 6: What does it look like now? How many people who
Speaker 6: you are tracting?
Speaker 1: Great, it's a great question.
Speaker 15: So first of all, I started working in this field
Speaker 15: twenty five years ago, so this is for me as
Speaker 15: a long academic journey. And about two years ago I
Speaker 15: partnered with the folks at Ballistic Ventures is Ted Schlin
Speaker 15: and Rogers Thornton. They incubated us. Our head count is
Speaker 15: thirty right now and we will quickly be forty to
Speaker 15: fifty by the end of the year. We have a product,
Speaker 15: we are starting to work with customers, and we very
Speaker 15: much expect to have technology out before the election. Per
Speaker 15: the point you were just making.
Speaker 5: At Professor Haney Furry, co founder get Real Labs, really
Speaker 5: interesting and timely conversation.
Speaker 1: Thank you, Caroline.
Speaker 4: We're just going to get back to the broader markets
Speaker 4: right now because they're under pressure.
Speaker 6: We're being hit hard.
Speaker 4: Now's that two point three percent lower worst dates in
Speaker 4: so October, and no, I'll put it into context. We're
Speaker 4: only trading the lowst since July the first, but now
Speaker 4: more than two percent dip is a big and we
Speaker 4: haven't seen it for a long time. We're being dragged
Speaker 4: down by the chip makers, off by four percent on
Speaker 4: the socks on the Chip index. More broadly, why this
Speaker 4: concern that we'll see yet ramped up Biden focus on
Speaker 4: China accessing chip manufacturing, but also that manufacturing equipment coming
Speaker 4: from Europe, from over in Asia as well. In video
Speaker 4: off by more than five percent for a nearly three
Speaker 4: trillion dollar company. That's a big move. ASML off by
Speaker 4: an eleven percent move even though they had strong earnings.
Speaker 4: They are really exposed to China. Intel, though it's up
Speaker 4: one weet eight percent. An incredibly important BusinessWeek story coming
Speaker 4: an interview with former President Trump saying, look, Taiwan, should
Speaker 4: we be protecting it. We're worried about Taiwan ultimately helping Intel.
Speaker 4: We've got a lot coming up head.
Speaker 5: Yeah, and to your point made earlier, many of these
Speaker 5: indicies at their lowest since early July. But they're big
Speaker 5: drops in the moment. Coming up, we're to be joined
Speaker 5: by Menlo Venture's partner Matt Murphy on the firm's exclusive
Speaker 5: partnership with Anthropic and their new fund.
Speaker 1: That's next. This is Spoonberg Technology.
Speaker 5: Melo Ventures just announced the Anthology Fund, a one hundred
Speaker 5: million dollar initiative created through an exclusive partnership with AI
Speaker 5: company Anthropic. The goal to partner with innovative founders to
Speaker 5: build unique AI first applications and infrastructure solutions that leverage
Speaker 5: Anthropics technology and its AI models. Are going to bring
Speaker 5: in Meno Ventures partner Matt Murphy for more on this mechanically.
Speaker 1: How does it work?
Speaker 5: So you see something on your desk, an opportunity, and
Speaker 5: you phone up somebody at Anthropic and say we should
Speaker 5: do a deal here, we should co invest and we
Speaker 5: can help.
Speaker 12: Well, it's a little deeper than that.
Speaker 16: It's really a collaborative initiative with them, where we've got
Speaker 16: a whole program built for entrepreneurs. So we've got quarterly media,
Speaker 16: we've got biannual demo days, we've got a lot of
Speaker 16: back and forth interaction between the two companies, and you know,
Speaker 16: really we expect a tremendous amount of the deal flow
Speaker 16: to come from them, things that they're interested in, that
Speaker 16: they see that they'd like to see kind of as
Speaker 16: lighthouse examples of AI. So there's a lot of alignment
Speaker 16: around basically kind of this first wave of AI has
Speaker 16: happened so quickly and been the biggest kind of technology
Speaker 16: wave and curve we've ever seen, but it's still a
Speaker 16: bit of the wild West, and developers are on their
Speaker 16: own and everybody's doing things a little bit differently and
Speaker 16: trying to figure it out.
Speaker 12: There's an immature ecosystems.
Speaker 16: The idea here is to really bring together the best developers,
Speaker 16: the best AI technology platform in Anthropic, and a leading
Speaker 16: venture firm like Menlo to really build community and push
Speaker 16: the boundaries together, to learn together, to mature that ecosystem,
Speaker 16: and to really think about some special areas that really
Speaker 16: haven't been conquered yet.
Speaker 12: So super excited about it.
Speaker 4: I mean, Matt, this isn't kind of the first time
Speaker 4: you've done one of these innovative kind of partnerships. I
Speaker 4: think back of the ipund that you helped launch back
Speaker 4: in two thousand and eight that was about being collaborative
Speaker 4: with Apple defining apps applications on their operating system.
Speaker 6: Can you tell us a little.
Speaker 4: Bit about how much skin in the game ultimately Anthropic
Speaker 4: will have or is it more about just bringing about Claude,
Speaker 4: the adoption of it, and well then perhaps funding a
Speaker 4: bit of use of their own applications.
Speaker 16: Yeah, well it's it's Menlo's capital, but it's really Anthropics sponsorship, advice, mentoring,
Speaker 16: getting closer to these developers. So I think it's really
Speaker 16: a win win for everybody. Anthropic as a cohort of
Speaker 16: developers that a that will have recommended a number of them,
Speaker 16: but be there'll really be kind of involved in helping
Speaker 16: them if those developers are stuck. They'll be able to
Speaker 16: understand what kind of needs developers have and you know,
Speaker 16: and kind of really make sure that we've got very
Speaker 16: specific areas that we're both interested in seeing applications.
Speaker 12: Exist that we kind of help fund those.
Speaker 16: And I think for entrepreneurs is again given it's a
Speaker 16: bit of the wild West, they now kind of know
Speaker 16: there's a place to come where you can get support
Speaker 16: from Anthropic. Every developer developing something should be looking at
Speaker 16: Nthropic because it's absolutely the best model right now and
Speaker 16: we have great confidence that it's also the best team
Speaker 16: and will continue to kind of pace that race. So
Speaker 16: Anthropics really trying to get closer to the developer community.
Speaker 16: That's what we do on a daily basis, and developers
Speaker 16: can really take advantage.
Speaker 1: Of it, MATT support or compute.
Speaker 5: There's a lot of discussion right now about venture firms
Speaker 5: who are you know, kind of advertising that they've built
Speaker 5: up their own cluster of h one hundreds.
Speaker 1: I think Andresen is an example of.
Speaker 5: That, right, but in reality, you know, it's probably through AWS,
Speaker 5: Andthropic has a great relationship with AWS GCP as well.
Speaker 5: You kind of market it that way where you say
Speaker 5: to potential portfolio companies, this is the support operationally we
Speaker 5: can give you through a compute lens.
Speaker 12: Yeah, I mean, I.
Speaker 16: Think this is more about creating a community of founders
Speaker 16: that can learn from each other and talk to each
Speaker 16: other about how they're solving certain problems, get advice from
Speaker 16: Anthropic on their roadmap, early access to certain things, and
Speaker 16: really just kind of more of almost like a batphone
Speaker 16: or a hotline to talk to them if they've got
Speaker 16: any issues. So I think the whole notion of building
Speaker 16: out a cluster and capability of capacity for them is
Speaker 16: not really part of this program, no order, I think
Speaker 16: it's necessary. I mean, they get free credits and things
Speaker 16: like that, so there will be capacity on Anthropic. But
Speaker 16: I was actually with Jensen last night and I have
Speaker 16: high confidence that Nvidia will continue to solve the capacity
Speaker 16: problem and the big cloud providers like Anthropics partners, Aws
Speaker 16: and Google will provide that need over the time. So
Speaker 16: you might have a little bit of a short term
Speaker 16: capacity constraint, but I'm not too worried about it over
Speaker 16: the long haul.
Speaker 4: Matt, I'm a founder wanting to get more use out
Speaker 4: of Anthropic, and I've got an idea what problems you
Speaker 4: want to see solved, because there are a lot of
Speaker 4: areas that allocation and well value can be attributed to
Speaker 4: in the supply chain right now of AI.
Speaker 12: Yeah, I mean, I think there's certain areas that you know,
Speaker 12: we've called out.
Speaker 16: It's a big interest for Anthropic two around things like
Speaker 16: digital health. You know how messed up that system is
Speaker 16: and all the capabilities to automate do better diagnosis, accelerate
Speaker 16: cure programs, things like that. The legal vertical has already
Speaker 16: been one of the first movers here. I think helping
Speaker 16: people optimize trust in safety, because trust in safety can
Speaker 16: be a real barrier to adoption if people feel like
Speaker 16: the models will hallucinate or you know, produce results that
Speaker 16: aren't consistent with their brand message. I think there's a
Speaker 16: lot of infrastructure. A model is one part of it,
Speaker 16: but really for any developer ecosystem to thrive, you need
Speaker 16: a whole developer experience. So there's a bunch of things
Speaker 16: like that that we'll be working on together that will
Speaker 16: be really exciting.
Speaker 5: Top story this week on our show has been jd Vance.
Speaker 5: Probably you were quoted in a Bloomberg story weighing in
Speaker 5: as part of a very broad Silicon Valley reaction. I
Speaker 5: just wondered if you'd extrapolate a bit more and explain
Speaker 5: your view on a former Silicon Valley name potentially going
Speaker 5: to the White House in November.
Speaker 12: Yeah.
Speaker 16: My real point was, irrespective of party, I think the
Speaker 16: more that we have people in the White House or
Speaker 16: around Washington who really understand tech, it's the biggest driver
Speaker 16: of innovation and job growth in our economy, and we
Speaker 16: need people who understand it. And having somebody who's been
Speaker 16: as part of a fund who's seen the way innovation
Speaker 16: works back company has been on a board things like that.
Speaker 16: I think it's kind of a unique experience and opportunity
Speaker 16: that can be helpful. You know, we have some resistance
Speaker 16: right now around the M and a market and antitrust
Speaker 16: that's been blocking some important deals.
Speaker 12: And the way that the venture economy can.
Speaker 16: Really flourish is where strategic buyers can purchased the companies
Speaker 16: that may not be able to get all the way
Speaker 16: to the IPO on their own. We have other exopaths
Speaker 16: like p firms and things like that, but really and
Speaker 16: obviously IPOs, but it's super important that there's a vibrant
Speaker 16: M and A environment and I think anyone who's leading
Speaker 16: in Washington should be very conscious of that to enhance
Speaker 16: and continue this job growth that's spent an amazing growth
Speaker 16: into the for the firm, the country.
Speaker 4: Matt, thanks for coming on talking anthology fund and a
Speaker 4: little bit of politics of Meno ventues. We appreciate it.
Speaker 6: The good, the bad, and the ugly.
Speaker 4: That could be one way summarising the last twenty four
Speaker 4: hours over at Amazon, because Prime Day is getting off
Speaker 4: to a fast start, sales jumping look twelve thirteen percent
Speaker 4: within the first six hours of the event yesterday, but
Speaker 4: you fast forward to Tuesday night, the company's advertising portal
Speaker 4: it crashes, leaving brands in the dark, flung blind with
Speaker 4: their out spending for more than two hours. Felt a
Speaker 4: bit of a soad and sour are ending to the
Speaker 4: first day of Prime Day, certainly weighing on the shares
Speaker 4: this morning. Let's bring in Spencer Sofa, who has the
Speaker 4: inside track. You watched as people were left baffled and frustrated.
Speaker 6: I'm sure.
Speaker 17: Yeah, there was a lot of panic last evening and
Speaker 17: we started working on the story when there were signs
Speaker 17: of trouble and right about the time we got the
Speaker 17: story out that Amazon's advertising portal was down. And this
Speaker 17: is kind of a critical tool that people who sell
Speaker 17: things on Amazon and added brains on Amazon used to
Speaker 17: manage their and spending. Look for which keywords are hot,
Speaker 17: so they've been adjusted the marketing spend reporting when it
Speaker 17: just went dark for a lot of these sellers. And
Speaker 17: so yeah, we were reporting into that last evening and
Speaker 17: the perfect with Amazon, but it did seem to be
Speaker 17: short lived, which is good. That's the trouble with these
Speaker 17: glitches and don't know when they're going to just keep
Speaker 17: spiraling out of control and what they're going to be
Speaker 17: be contained and this one does seem like it was
Speaker 17: contained without creative easy about it damage.
Speaker 1: That's kind of the bad and the ugly.
Speaker 5: I guess the good spentra One way look at it
Speaker 5: is it's kind of like money left on the table
Speaker 5: for Amazon because it seems like growth for Prime Day.
Speaker 5: It was a good showcase for the e commerce platform.
Speaker 17: Yeah, all other indicators of the find Bay's doing buying
Speaker 17: and even the glitch doesn't necessarily hurt Amazon. It more
Speaker 17: hurts people who sell on Amazon who are monitoring in
Speaker 17: real time and wanted to make adjustments. They kind of
Speaker 17: got hamstrung for a bit there, but a lot of
Speaker 17: the ad spending stuff is automated, so they just weren't
Speaker 17: able to make changes. So, yeah, Amazon is Prime Day
Speaker 17: self bartnering quite well, tracking at about eleven percent growth
Speaker 17: from the same event last year, and that's Adobe's prediction,
Speaker 17: and that's everything seems to be on track with that
Speaker 17: at est.
Speaker 18: And another thing is that fine day, it's we really
Speaker 18: see a surge in the initial hours, like that first day,
Speaker 18: the morning of that first day when all of the
Speaker 18: spending occurs. So it was fortunate that the advertising bliteme
Speaker 18: the evening on the first day because spending consumers aren't
Speaker 18: quite busy on Amazon Prime Day at that time.
Speaker 4: Spencer, we appreciate it, all things Amazon Prime Day. Thank you,
Speaker 4: Spesca Sofa. Look, let's just check in on this market again.
Speaker 4: Ed extraordinary day. Chip stocks down ASML having its worst
Speaker 4: day since March twenty twenty. Its earnings were good ed,
Speaker 4: but not good enough to asset the geopolitical risks.
Speaker 5: Yeah, vast majority of names on Nasdaq one hundred in
Speaker 5: the red. Bit that the chip stocks where the pains
Speaker 5: most felt.
Speaker 6: That does it for this edition of Bloomberg Technology.
Speaker 1: Check out the pod. You know where to find it.
Speaker 1: It's this Bloomberg