WEBVTT - Tech Brings Market Down and Twitter and Covid Misinformation 0:00:13.640 --> 0:00:16.279 I'm Caroline hide A Bloomberg's World headquarters in New York, 0:00:16.640 --> 0:00:19.360 and I made Ludlow in San Francisco. This is Bloomberg 0:00:19.360 --> 0:00:22.040 Technology and tech continues to lead markets lower as the 0:00:22.040 --> 0:00:25.319 downturn hit Silicon Valley harder than most other sectors. We 0:00:25.440 --> 0:00:30.240 talk technicals, then Amazon Web Services CEO discusses Amazon's new 0:00:30.320 --> 0:00:33.880 in house chits and the latest on restructuring, and Twitter 0:00:34.080 --> 0:00:38.320 is no longer policing COVID misinformation that's as content concerns continue, 0:00:38.600 --> 0:00:41.760 while Elon Musque takes in at the app stores. But 0:00:41.880 --> 0:00:45.600 first aid, let's bring in Rob Cantwell. Here's portfolio manager 0:00:45.960 --> 0:00:48.520 Upholdings and Rob, it's great to have you with the show. 0:00:48.680 --> 0:00:51.879 And we actually source a little bit of data ourselves 0:00:51.920 --> 0:00:54.720 nowadays from Twitter. We go out with our daily poll 0:00:54.760 --> 0:00:57.000 and we wanted to ask our audience whether they are 0:00:57.040 --> 0:01:00.560 currently selling big tech, whether the reasons around, whether they're 0:01:00.600 --> 0:01:03.200 blaming the Federal Reserve and rate hikes, whether they're blaming 0:01:03.200 --> 0:01:07.080 the economic slowdown, whether they're blaming political headwinds. And actually, Robbed, 0:01:07.480 --> 0:01:10.440 we've got some British sentiment. They're not selling, they're buying 0:01:10.959 --> 0:01:14.200 in majority roll. Are you buying at this point, Well, 0:01:14.240 --> 0:01:17.000 it's tricky to go on a technology platform and ask 0:01:17.080 --> 0:01:20.160 them if they want to buy more technology. We certainly 0:01:20.160 --> 0:01:23.000 are finding plenty of good deals in the space, but 0:01:23.120 --> 0:01:25.520 it's a it's a it's a fascinating time to be 0:01:25.560 --> 0:01:29.120 an investor in big tech, small tech, medium tech, because 0:01:29.280 --> 0:01:31.800 big tech has gotten so big it's now more than 0:01:32.720 --> 0:01:36.280 the SMP five hundred that it has become intertwined with 0:01:36.560 --> 0:01:39.679 macro economic factors and statistics, and that hasn't been the 0:01:39.720 --> 0:01:41.880 case for the past twenty years. Google hasn't had to 0:01:41.920 --> 0:01:45.760 care about currency headwinds up until about six months ago. 0:01:46.160 --> 0:01:48.400 And so you've now got all these tech analysts that 0:01:48.400 --> 0:01:51.000 have been scrambling because the earnings calls this past quarter 0:01:51.640 --> 0:01:54.120 everybody missed due to currency. So now you've got all 0:01:54.160 --> 0:01:57.080 these tech analysts that have to become currency experts, and 0:01:57.080 --> 0:01:59.480 it's thrown things a little bit upside down. But really, 0:01:59.480 --> 0:02:02.400 what's that done is it has created plenty of opportunities 0:02:02.440 --> 0:02:03.840 for those that are willing to wait some of this 0:02:03.840 --> 0:02:06.520 stuff out, because there's there's obviously you want to be 0:02:06.560 --> 0:02:09.480 buying when when folks are selling. We've been saying this 0:02:09.520 --> 0:02:12.840 line on blue bag technology for weeks now about higher 0:02:12.919 --> 0:02:15.760 rates discount the present value of future profits. Why that's 0:02:15.760 --> 0:02:19.000 why we care about the FED. In the context all 0:02:19.000 --> 0:02:20.560 of the text exit, I'm gonna ask you a slightly 0:02:20.560 --> 0:02:24.239 different question, what is the bigger risk to the technology 0:02:24.280 --> 0:02:29.959 sector the FED or inflation? Well, interest rates actually affect 0:02:30.000 --> 0:02:32.520 a lot of things. Uh. They can push your multiple 0:02:32.560 --> 0:02:35.760 down from the discount factor that you just discussed, it 0:02:35.840 --> 0:02:38.640 also pushes down your growth rate, and a lower growth 0:02:38.720 --> 0:02:41.480 rate also drives the lower multiple. And if you look 0:02:41.520 --> 0:02:44.240 back over long enough periods of time, higher interest rates 0:02:44.280 --> 0:02:47.400 also means lower margins. So you're talking about a triple 0:02:47.480 --> 0:02:51.120 hit here of your discount factor, your margins for the company, 0:02:51.280 --> 0:02:54.000 and the growth rate expectations. And that's why you've seen 0:02:54.040 --> 0:02:57.360 stocks like Meta trade down almost seventy this year. They 0:02:57.400 --> 0:03:00.520 obviously have some other factors as well. So it'sest rates 0:03:01.040 --> 0:03:03.880 where we sit right now. Interest rates are more of 0:03:03.919 --> 0:03:07.240 a risk to the global economy than inflation. Inflation has 0:03:07.280 --> 0:03:09.920 started calming down over the past thirty days or so, 0:03:10.320 --> 0:03:12.760 but we're now in a low growth world and most 0:03:12.800 --> 0:03:15.600 central banks are saying they're not done raising interest rates, 0:03:15.919 --> 0:03:18.240 and so there isn't a single analyst out there that 0:03:18.360 --> 0:03:21.840 is forecasting a re acceleration and growth because until we 0:03:21.919 --> 0:03:25.400 see that interest rates have pause, that that effect that 0:03:25.440 --> 0:03:28.720 interest rates have on growth for the worldwide economy is 0:03:28.720 --> 0:03:31.040 going to continue to be an issue valuing a lot 0:03:31.080 --> 0:03:34.079 of these companies and the impact that raising rates has 0:03:34.120 --> 0:03:36.320 on the labor market in particular, that is the other 0:03:36.320 --> 0:03:38.640 side of the coin and of sacrifice that the federal 0:03:38.680 --> 0:03:41.160 Reserve is willing to swallow. At the moment, we're seeing 0:03:41.280 --> 0:03:43.720 those job layoffs coming thick and fast to the tech 0:03:43.800 --> 0:03:45.960 sector first and foremost. Rob is that the way you 0:03:45.960 --> 0:03:48.400 want to see companies controlling costs, and we likely to 0:03:48.440 --> 0:03:50.680 see them being the canary in the cold mine and 0:03:50.720 --> 0:03:55.480 this sweeping into other sectors. You know, it's job layoffs 0:03:55.480 --> 0:03:58.480 are are a tricky one because you saw the onset 0:03:58.520 --> 0:04:01.760 of COVID In early every company laid off too many 0:04:01.800 --> 0:04:04.360 employees and then six months later they were scrambling to 0:04:04.440 --> 0:04:08.000 rehire again. So you get these strange booming bus cycles 0:04:08.080 --> 0:04:12.520 where companies fire, profit margins start improving, and then they 0:04:12.560 --> 0:04:15.680 start chasing employees all over again. So whether or not 0:04:15.840 --> 0:04:18.680 we've gone recent history tells us that companies are likely 0:04:18.720 --> 0:04:21.400 going too far again in these recent playoffs. This this 0:04:21.680 --> 0:04:26.400 coincidental thtcent layoff number that became the socially accepted average 0:04:26.440 --> 0:04:28.040 for the amount of your workforce you can let go, 0:04:28.560 --> 0:04:30.680 we found to be a little bit peculiar and was 0:04:30.720 --> 0:04:33.119 a bit more reflective of companies just trying to hide 0:04:33.160 --> 0:04:35.320 in the average and not trying to stand up by 0:04:35.400 --> 0:04:37.880 not firing, but also not trying to stand out by 0:04:38.000 --> 0:04:42.400 over firing their their overall workforce. But inaggregate, it's just 0:04:42.680 --> 0:04:46.839 volatility in an economy is a risk because it doesn't 0:04:46.839 --> 0:04:50.440 allow the managers to plan and execute their strategies as 0:04:50.520 --> 0:04:53.360 smoothly as they could if there was less volatility. So 0:04:53.760 --> 0:04:56.520 we're certainly in a very volatile moment, uh, and interesting 0:04:56.520 --> 0:04:58.400 to see what comes out the other side. We we 0:04:58.560 --> 0:05:00.360 know it's been a toughier right You look at it 0:05:00.440 --> 0:05:02.840 as that one hundred with down thirty percent as of 0:05:02.920 --> 0:05:05.360 Tuesday's close, as we know, the worst year since two 0:05:05.400 --> 0:05:08.360 thousand and eight. If they're all green, green sheets or 0:05:08.440 --> 0:05:12.320 bright spots in the technology sector, where are they? Well? 0:05:12.480 --> 0:05:16.000 What what? What's remarkable is that the usage of technology 0:05:16.120 --> 0:05:19.600 remains incredibly strong. You know elon reporting record, you know 0:05:19.760 --> 0:05:22.279 users sign ups and usage of Twitter that's not unique 0:05:22.320 --> 0:05:25.240 to Twitter. That's happening everywhere. That's happening in Instagram, that's 0:05:25.279 --> 0:05:28.120 happening in TikTok. And there's a couple of other technology 0:05:28.160 --> 0:05:31.240 transitions that are happening. The cloud computing one. We think 0:05:31.360 --> 0:05:34.239 Data Dog is an incredibly well positioned company that's already 0:05:34.279 --> 0:05:37.920 making money and is expanding margins and end payments, where 0:05:37.960 --> 0:05:40.800 Stripe as a private company adian as their public competitor. 0:05:41.279 --> 0:05:43.400 Those are two areas where, even though there's been a 0:05:43.480 --> 0:05:46.400 slowdown in growth as a whole, you're still seeing that 0:05:46.520 --> 0:05:50.200 the technology has such an advantage over the incumbents that 0:05:50.279 --> 0:05:52.880 the growth rates of those companies has remained penetrating. So 0:05:53.000 --> 0:05:55.000 those are the areas that were the most focused on 0:05:55.080 --> 0:05:58.560 over the next twelve months or so. Simultimism there. From 0:05:58.640 --> 0:06:02.280 one voice in the investment community, Rob Campbell, portfolio manager 0:06:02.560 --> 0:06:05.640 at Upholdings, thank you. Now. Let's turn to Twitter, which 0:06:05.720 --> 0:06:09.159 scrapped its policy preventing the sharing of false or miss 0:06:09.200 --> 0:06:13.480 leading information about COVID nineteen. That was done quietly announced 0:06:13.480 --> 0:06:16.200 on the company's website over the holiday week last week, 0:06:16.440 --> 0:06:20.760 and it's been effective since November. Bloomberg Sarah Fryer is 0:06:20.839 --> 0:06:24.720 here with more details and Sarah, why was this announced 0:06:24.920 --> 0:06:28.960 so quietly? Well, I think that what we're seeing here 0:06:29.120 --> 0:06:34.000 is this company is not as focused on being proactive 0:06:34.040 --> 0:06:37.000 with his communications except directly through Elon Musk. What we've 0:06:37.040 --> 0:06:40.640 seen is he's the one who's tweeting out what's happened 0:06:40.680 --> 0:06:44.480 with Twitter. He's explaining his spots almost stream of consciousness 0:06:45.200 --> 0:06:47.360 to the public, and then when it comes to these 0:06:47.440 --> 0:06:52.600 policy changes, we might not see abroad announcement or blog 0:06:52.680 --> 0:06:55.120 posts like we would in Twitter past. It just isn't 0:06:55.160 --> 0:06:56.640 They don't know, they're not staff to do it. They 0:06:56.720 --> 0:06:59.840 laid off the entire communications staff. So I think that 0:07:00.000 --> 0:07:01.760 we're just going to see either this is a private 0:07:01.800 --> 0:07:05.120 company right now, we as reporters have to ask questions 0:07:05.800 --> 0:07:09.760 of our sources and keep paying attention to what the 0:07:09.840 --> 0:07:13.520 leadership says dramatically reducing the size of the team devoted 0:07:13.560 --> 0:07:16.840 to tackling child sexual exploitation as well as one of 0:07:16.920 --> 0:07:18.880 the key stories out on the Blue Bow terminal today. 0:07:18.920 --> 0:07:21.600 So and your team driving that home talk to us 0:07:21.640 --> 0:07:24.600 about where he therefore is focused. If he's not focused 0:07:24.640 --> 0:07:26.480 on some of the prs around this, or indeed some 0:07:26.560 --> 0:07:29.360 of the content which many brands are worried about. He 0:07:29.400 --> 0:07:31.440 seems to be more worried about where people are sitting 0:07:31.480 --> 0:07:33.560 in the office and how they're all coming together right. 0:07:34.760 --> 0:07:38.360 I think he's absolutely concerned right now with making sure 0:07:38.440 --> 0:07:41.480 that there is a sense of momentum, a sense of 0:07:41.920 --> 0:07:45.080 of all the engineers together trying to build the next 0:07:45.160 --> 0:07:47.680 iteration of the product. He wants to launch a new 0:07:47.760 --> 0:07:51.440 form of verification on Twitter very soon, and he's crossing 0:07:51.520 --> 0:07:54.080 his fingers that it doesn't cause those kind of public 0:07:54.120 --> 0:07:57.000 disasters we saw the last time it happened. So I 0:07:57.120 --> 0:07:59.680 think I think he's getting a trial by fire in 0:08:00.280 --> 0:08:04.200 understanding how social media businesses work. We saw him talk 0:08:04.400 --> 0:08:06.360 in the last couple of days about the app stores 0:08:06.440 --> 0:08:09.000 for Apple and Google and how he thinks that they're unfair, 0:08:09.120 --> 0:08:13.080 and so I really think that this is um. This 0:08:13.240 --> 0:08:15.640 is a moment where, like the constant moderation stuff we 0:08:15.720 --> 0:08:19.360 will see far by the wayside a bit um as 0:08:19.520 --> 0:08:21.520 he tries to prove that he can grow Twitter. I 0:08:21.600 --> 0:08:23.360 just want to bring you some breaking headlines crossing the 0:08:23.400 --> 0:08:28.520 Bloomberg Caroline oathkeeper leader Rhodes was convicted of the January 0:08:28.600 --> 0:08:32.199 six sedition charge. You'll remember jury has been considering the 0:08:32.320 --> 0:08:35.320 charges against that militia group and its leader five individuals 0:08:35.360 --> 0:08:37.160 for a number of weeks. But that is the headline 0:08:37.320 --> 0:08:41.319 crossing the Bloomberg terminal overkeeper leader Roads convicted of January 0:08:41.400 --> 0:08:45.320 six sedition charge. We'll bring you more as we get that. Interestingly, Sarah, 0:08:45.400 --> 0:08:49.000 some more headlines crossing the Bloomberg. Twitter's former troughs and 0:08:49.120 --> 0:08:52.839 safety boss, yould Wrath speaking publicly saying that he fears 0:08:52.960 --> 0:08:57.520 not enough Twitter employees left to police content. That's coming 0:08:57.600 --> 0:08:59.599 from somebody who knew the trust and safety side of 0:08:59.600 --> 0:09:05.199 the business. Well, uh, well, the way police content on 0:09:05.760 --> 0:09:08.280 and police is a weird way to put it. It's 0:09:08.280 --> 0:09:10.959 really about having the expertise to know where to draw 0:09:11.040 --> 0:09:14.720 the line between something being um, you know, an opinion 0:09:15.000 --> 0:09:17.720 or a necessary thing that they want to they want 0:09:17.720 --> 0:09:20.160 to say to their audience, versus something that could be harmful, 0:09:20.280 --> 0:09:23.440 that could insticate violence, that could that could cause issues. 0:09:23.520 --> 0:09:27.240 And when you don't have subject matter experts in various 0:09:27.360 --> 0:09:29.600 areas of content, you may not be able to make 0:09:29.679 --> 0:09:32.440 that determination. So I think that you know, Twitter by 0:09:32.480 --> 0:09:35.480 cutting a lot of its staff would be recently reported 0:09:35.520 --> 0:09:39.600 today that the the team that works on on child exploitation, 0:09:40.200 --> 0:09:44.720 exploitation content. The highly specific expertise to to be able 0:09:44.760 --> 0:09:48.360 to weed that stuff out effectively has been cut in half. Um, 0:09:48.600 --> 0:09:50.080 you end up, you will end up with a lot 0:09:50.120 --> 0:09:52.760 of trouble on one thing we reported, and in fact 0:09:52.880 --> 0:09:55.760 you helped us report the story out. The team that 0:09:55.880 --> 0:09:59.679 was working with governments, UM, trying to understand what to 0:09:59.760 --> 0:10:04.000 do about about content takedown requests from certain governments or 0:10:04.200 --> 0:10:06.560 asking for data and users. I mean that team has 0:10:06.640 --> 0:10:08.719 been decimated. So I think they are going to be 0:10:08.760 --> 0:10:10.360 in a really tough, smart and a lot of these 0:10:10.960 --> 0:10:15.439 very difficult decisions going forward. Sarah fr we want to 0:10:15.480 --> 0:10:25.880 thank you so much for all of that. Let's get 0:10:26.000 --> 0:10:28.640 to those all important crypto markets said, because worries about 0:10:28.679 --> 0:10:31.520 contagion from the implosion of FDx still hangs over the 0:10:31.600 --> 0:10:35.880 digital asset class. Nevertheless, they're pushing hard on Tuesday. Yeah, 0:10:35.920 --> 0:10:38.080 it's interesting. We found a little bit of momentum across 0:10:38.120 --> 0:10:42.600 a number of cryptocurrencies digital tokens throughout Tuesday's main session. 0:10:42.679 --> 0:10:45.200 We hit five pm East and we spill over into 0:10:45.240 --> 0:10:47.800 the following day. We're finding our feet even so, I 0:10:47.840 --> 0:10:50.880 want to get straight to the Bloomberg Galaxy Crypto Index. 0:10:50.960 --> 0:10:54.160 It's an interesting index because it trades very similar to 0:10:54.280 --> 0:10:57.200 the equity markets and inequity index that it has an 0:10:57.280 --> 0:11:01.160 opening and closing point, and it's waited based on the 0:11:01.640 --> 0:11:07.600 biggest digital tokens by market value, so largely bitcoin, ether tether. 0:11:08.000 --> 0:11:11.280 But you can see since that tweet, that original tweet 0:11:11.400 --> 0:11:15.120 from cz where we first had those concerns or revelations 0:11:15.400 --> 0:11:17.600 as he called them, raised about f t X, we're 0:11:17.640 --> 0:11:22.400 down now more than across the basket of cryptocurrencies that 0:11:22.480 --> 0:11:25.920 the Boomberg Galaxy Crypto Index is tracking. The question posed 0:11:25.960 --> 0:11:28.360 in the story today is that is more and more 0:11:28.400 --> 0:11:32.440 of the fallout kind of becomes unveiled, in which direction 0:11:32.559 --> 0:11:36.280 does this index go. It's still has some downward momentum, 0:11:36.640 --> 0:11:38.320 and it looks like we're gonna have to have something 0:11:38.440 --> 0:11:42.040 very serious to snap out of this fundamental downward trend 0:11:42.120 --> 0:11:45.079 we're seeing in this broad basket of cryptocarac Yeah, and 0:11:45.160 --> 0:11:47.599 let's get a little bit more into the ft X 0:11:47.679 --> 0:11:49.520 collapse right here, right now too. As you give us 0:11:49.559 --> 0:11:50.959 the macro, let's go in a little bit more on 0:11:51.000 --> 0:11:53.600 the micro because there's been much handwringing about or whether 0:11:53.800 --> 0:11:56.080 it's got a wider impact on the growth of crypto 0:11:56.160 --> 0:11:58.760 at large. Many have tried to highlight that actually ft 0:11:58.920 --> 0:12:02.760 X is demise actually underpins the reason that decentralized finance 0:12:03.160 --> 0:12:06.720 is needed because ft X was too centralized. Just take 0:12:06.760 --> 0:12:08.839 a listen to Tim Draper of Draper Associates. What do 0:12:08.880 --> 0:12:12.000 you have to say about it. F t X was 0:12:12.160 --> 0:12:16.680 very centralized. It was all centered around this one guy. 0:12:17.440 --> 0:12:22.280 And when you centralize anything, bad things can happen. Let's 0:12:22.320 --> 0:12:24.240 now talk about all of this with our next guest, 0:12:24.760 --> 0:12:27.200 Va Saidath. She is the co founder of the Collective 0:12:27.200 --> 0:12:31.679 Intelligence Project. Unlike Tim Draper, don't think centralization is inherently bad. 0:12:31.760 --> 0:12:33.319 But I first and foremost want to make clear to 0:12:33.400 --> 0:12:36.400 our audience that in your own funding for your project, 0:12:36.520 --> 0:12:39.280 you did take some re granted funds from f t 0:12:39.520 --> 0:12:41.680 X Future Fund. It's widely known that they've given money 0:12:41.720 --> 0:12:45.720 to an awful lot of organizations. You're an experimental research organization. 0:12:45.800 --> 0:12:47.400 Just tell us a little bit why the Future Fund 0:12:47.600 --> 0:12:50.239 would have had interest in getting to grips with democratic 0:12:50.320 --> 0:12:54.319 effective governance that you study. Yeah, I think there's actually 0:12:54.320 --> 0:12:56.360 a lot of it relaxed between that question and the 0:12:56.440 --> 0:12:59.679 one about centralization and decentralization, because a lot of the 0:13:00.040 --> 0:13:02.880 posit promise of crypto on the decentralized side was to 0:13:03.000 --> 0:13:06.480 say there is something about democratic, effective governance and self 0:13:06.520 --> 0:13:09.880 determination that is enabled by these technologies, right, Um, that 0:13:10.040 --> 0:13:14.520 we are able to do more decentralized, less intervention oriented 0:13:14.600 --> 0:13:18.679 institutional structures. Uh. And we were experimenting with democracy and 0:13:18.760 --> 0:13:21.800 technology and so got some regranted funds from ft X 0:13:21.840 --> 0:13:24.920 in that process. But I think it speaks to also 0:13:25.040 --> 0:13:27.720 this question around whether centralization is good or bad, because 0:13:27.760 --> 0:13:30.520 in my point of view, accountability is really a big 0:13:30.600 --> 0:13:33.719 part of the goal of both decentralization and centralization, and 0:13:33.800 --> 0:13:37.240 the ecosystem is often much more focused on the kind 0:13:37.360 --> 0:13:39.920 or the degree of decentralization as opposed to the type 0:13:39.920 --> 0:13:43.160 of decentralization. So you ran this quote of Tim Draper, 0:13:43.240 --> 0:13:46.160 for example, who was saying t X is too centralized, 0:13:46.440 --> 0:13:49.040 but comparing that to banks, which haven't failed in quite 0:13:49.040 --> 0:13:51.360 a while, are very centralized entities in some sense and 0:13:51.400 --> 0:13:53.920 are regulated as such. Right And so I think it's 0:13:54.000 --> 0:13:57.119 quite complicated to call something as a whole purely centralized 0:13:57.160 --> 0:13:59.880 and say all of its faults are down to that. Dave, 0:14:00.120 --> 0:14:04.200 We've had this debate over centralized decentralized. You've introduced us 0:14:04.240 --> 0:14:11.319 to a third term, poly centralism or polycentrism. What is that? Yeah, 0:14:11.360 --> 0:14:13.439 it's a bit of an academic term. Um, but I 0:14:13.520 --> 0:14:17.320 find myself often saying we don't want either decentralization or centralization. 0:14:17.400 --> 0:14:20.040 What we want is polycentrism. Uh. And the term is 0:14:20.080 --> 0:14:22.640 a bit what it sounds like. So having many centers, 0:14:23.000 --> 0:14:25.520 and I think the problem is, you know, decentralized systems 0:14:25.600 --> 0:14:28.160 often carry a grain of centralization within them. A great 0:14:28.200 --> 0:14:30.640 example of this is the Internet. And so the t 0:14:30.800 --> 0:14:33.080 c P I P protocol that underpins a lot of 0:14:33.120 --> 0:14:37.520 the communication capabilities and packet switching of the Internet is decentralized, 0:14:37.520 --> 0:14:40.360 and it has successfully been decentralized, right, But the way 0:14:40.440 --> 0:14:44.160 that that happened is actually through this complex polycentric having 0:14:44.240 --> 0:14:48.280 many systems, sorry, many centers, a standard setting, organizations and 0:14:48.360 --> 0:14:51.200 regulatory agencies and private companies that kind of sprung up 0:14:51.240 --> 0:14:55.280 around it that allowed for that decentralization to stay in place. However, 0:14:55.720 --> 0:14:57.760 you know, the Internet as we know it now is 0:14:57.800 --> 0:14:59.800 not decentralized. Most of us spend our time on the 0:15:00.000 --> 0:15:02.200 and then on five websites. And why did that happen 0:15:02.520 --> 0:15:05.080 because many of the layers of the stack under over 0:15:05.200 --> 0:15:09.000 that decentralized protocol centralized because there was no kind of 0:15:09.120 --> 0:15:14.200 clear polycentric structure keeping them decentralized. And you know, decentralization 0:15:14.600 --> 0:15:17.520 tends to centralize without some checks and balances. So I 0:15:17.600 --> 0:15:20.680 think that's where this idea of polycentrism comes from. Instead 0:15:20.720 --> 0:15:24.960 of just allowing chaotic centralization from chaotic decentralization, can you 0:15:25.040 --> 0:15:27.280 intentionally allow checks and balances? And by the way, this 0:15:27.440 --> 0:15:30.280 is basically the principle that underpins federalism and the U. 0:15:30.400 --> 0:15:32.360 S Government and all of these kinds of things that 0:15:32.480 --> 0:15:35.400 say there should be something between the local and the 0:15:35.760 --> 0:15:39.120 federal to that end of you Therefore, is it regulation 0:15:39.520 --> 0:15:43.760 that helps with transparency, the checks and the balances within 0:15:43.880 --> 0:15:46.920 inevitably centralized parts. How do you get to the utopia 0:15:47.040 --> 0:15:50.440 of polycentrism. Does it become organic or do you need 0:15:50.520 --> 0:15:54.720 actually real fundamental rules in place to drive back. I 0:15:54.760 --> 0:15:57.040 think it's a great question. I mean, I think regulation 0:15:57.160 --> 0:15:59.360 is one thing, and regulating harms is always important, but 0:15:59.440 --> 0:16:01.960 many of six feessibule polycentric systems. Whether we think about 0:16:01.960 --> 0:16:04.960 it as federal agencies, wikipedia as a polycentric system, and 0:16:05.000 --> 0:16:07.760 many open source code repositories on this way. Uh. And 0:16:07.880 --> 0:16:10.320 the word actually comes from Eleanor Ostrom, who's a Nobel 0:16:10.360 --> 0:16:13.160 Prize winner, and she looks at self governing systems, not 0:16:13.320 --> 0:16:15.760 regulation at all, not state run systems at all. And 0:16:15.840 --> 0:16:17.680 so I think a lot of this is not just rules, 0:16:17.800 --> 0:16:20.760 but can you have different kinds of institutions. Can you 0:16:20.840 --> 0:16:23.520 have public input and private input in civil society input? 0:16:23.560 --> 0:16:25.960 And that's how the standard setting process of the Internet 0:16:26.000 --> 0:16:28.920 currently runs. And so polycentrism won't work if it's just 0:16:29.120 --> 0:16:32.880 rules top down. It's this ecosystem of different centers that's necessary. 0:16:33.200 --> 0:16:35.560 And I do think you know, the crypto industry where 0:16:35.680 --> 0:16:39.200 where it goes next is unclear, but to succeed it 0:16:39.240 --> 0:16:41.720 will need to develop this kind of polycentric ability to 0:16:41.840 --> 0:16:44.880 not just invite in certain forms of regulation, but actually 0:16:44.920 --> 0:16:47.720 have different groups at the table because otherwise a lot 0:16:47.800 --> 0:16:53.360 of these you know, uh, tend towards either centralization or plutocracy. Okay, 0:16:53.520 --> 0:16:57.240 Debious ad Off, co founder of the Collective Intelligence Projects, 0:16:57.320 --> 0:16:59.720 thank you. Coming up, we'll bring you the latest venture 0:16:59.800 --> 0:17:02.400 can a round up from around the world. This is 0:17:02.440 --> 0:17:15.679 Bloomberg time for talking tech in today. A venture capital 0:17:15.800 --> 0:17:19.399 round up starting with farm robots. That's what Cleveland Avenue, 0:17:19.440 --> 0:17:22.879 the VC firm founded by a former McDonald CEO, is 0:17:22.960 --> 0:17:25.879 investing in, leading a forty six point five million dollars 0:17:25.960 --> 0:17:30.160 Series A funding round for the agriculture tech startup Verdant Robotics. 0:17:30.440 --> 0:17:34.560 This as farmers increasingly rely on technology to produce enough 0:17:34.600 --> 0:17:38.000 food for a growing population, while also facing a shortage 0:17:38.040 --> 0:17:41.480 of workers and pressure to reduce their environmental impact. And 0:17:41.560 --> 0:17:43.840 while the venture market is in the middle of a downturn, 0:17:43.960 --> 0:17:47.320 there are still plenty of emerging players. Seed Stars has 0:17:47.400 --> 0:17:50.280 launched a platform called seed Stars Capital along with the 0:17:50.359 --> 0:17:54.159 Swiss based investment holding company x Multiplied, the goal to 0:17:54.320 --> 0:17:57.520 fund as much as five million dollars of new funding 0:17:57.800 --> 0:18:01.960 into emerging and diverse VC managers in Africa, Asia, the 0:18:02.040 --> 0:18:05.320 Middle East, Latin America, and Central and Eastern Europe. And 0:18:05.480 --> 0:18:08.640 staying in the world of global vcs, Evolution Equity Partners 0:18:08.800 --> 0:18:12.400 is betting on cyber security and scouting for more investors 0:18:12.480 --> 0:18:14.720 from Asia and the Middle East for its latest fund. 0:18:14.800 --> 0:18:17.200 The firm has raised five million dollars for this fund 0:18:17.280 --> 0:18:20.359 so far, with a target of seven and fifty million 0:18:20.440 --> 0:18:24.040 dollars expected to close in the first quarter of three Carol, 0:18:24.640 --> 0:18:27.520 and loving how you follow the money. Meanwhile, coming up 0:18:27.680 --> 0:18:31.640 a WS CEO Adam Slipsky discussing layoffs, discussing the chip 0:18:31.720 --> 0:18:45.280 sector and growing competition. This is Bloomberg. Welcome back to 0:18:45.320 --> 0:18:48.440 Bloomberg Technology. I'm Caroline hard in New York. Now Amazon's 0:18:48.640 --> 0:18:51.560 Reinvent Carl Computing conferences underway in Las Vegas, and the 0:18:51.600 --> 0:18:53.760 company announcing it will build its own chips for a 0:18:53.920 --> 0:18:57.320 WS customers looking for high performance computers pleased to say 0:18:57.320 --> 0:19:01.800 Bloomberg examily changs in fact San Francisco joining well, Thank 0:19:01.920 --> 0:19:05.359 you Caroline and joining us now from Reinvent in Las Vegas. 0:19:05.480 --> 0:19:09.320 Is AWS CEO Adam Selipsky. Conference off to a good start. Adam, 0:19:09.359 --> 0:19:13.160 thank you for joining us. You've got a pronounced economic 0:19:13.240 --> 0:19:16.760 downturn happening. You've got layoffs happening across the board, including 0:19:17.160 --> 0:19:21.320 at Amazon, but still record Cyber Monday sales against that backdrop. 0:19:21.400 --> 0:19:23.680 What has been made message you want customers to take 0:19:23.720 --> 0:19:28.280 away from Reinvent this year. It's great to see you, Emily, 0:19:28.400 --> 0:19:31.160 Thanks so much. We are so excited to be here 0:19:31.240 --> 0:19:34.479 in Las Vegas at our eleventh Reinvent with over fifty 0:19:34.560 --> 0:19:37.760 thou customers and partners live here, as well as over 0:19:37.840 --> 0:19:41.080 three hundred thousand registered around the world for the for 0:19:41.160 --> 0:19:44.480 the virtual part of the event, I think they're the 0:19:44.520 --> 0:19:47.480 big Probably the biggest message here to reinvent is that 0:19:48.000 --> 0:19:52.800 companies and all sorts of organizations continue to transform themselves 0:19:52.920 --> 0:19:56.800 using the cloud, that particularly in times of economic concertainty, 0:19:57.240 --> 0:20:00.159 that that's the best time to lean in big as 0:20:00.200 --> 0:20:03.159 the cloud is the most efficient place to be running 0:20:03.760 --> 0:20:08.600 cost savings, at least for most enterprises who move work 0:20:08.600 --> 0:20:12.080 close to the cloud. Clouds also the place to be flexible. 0:20:12.600 --> 0:20:15.520 You can grow and shrink your capacity at will, and 0:20:15.640 --> 0:20:17.960 it's a place to to innovate where you can do 0:20:18.119 --> 0:20:21.880 more with fewer resources. So precisely because of the economic 0:20:22.000 --> 0:20:24.600 uncertainty and not despite it, we see a lot of 0:20:24.640 --> 0:20:28.320 companies leaning in. Now, Amazon in a way has already 0:20:28.359 --> 0:20:32.400 reinvented cloud technology. What is the next era of reinvention 0:20:32.560 --> 0:20:36.600 actually look like. Well, I think we're still very early 0:20:36.800 --> 0:20:40.560 in cloud adoption Emily, despite the fact that AWS is 0:20:40.640 --> 0:20:44.879 the significant leader UH in the cloud space, and as 0:20:44.960 --> 0:20:48.200 you said, did did a pioneer starting in two thousand 0:20:48.280 --> 0:20:51.640 and six. Probably depending what study you look at maybe 0:20:51.680 --> 0:20:54.240 ten of i T workloads have moved to the cloud, 0:20:54.760 --> 0:20:57.080 and that's a lot of That's a lot of dollars 0:20:57.200 --> 0:20:58.920 because there's a lot of I T in the world, 0:20:59.040 --> 0:21:01.919 but it's still only a small percentage, and we firmly 0:21:02.000 --> 0:21:04.440 believe that in the fullness of time, most i T 0:21:04.680 --> 0:21:07.960 will move to the clouds. So I think that we're 0:21:08.000 --> 0:21:12.399 seeing companies leaning in. A lot of acceleration happening, tremendous 0:21:12.480 --> 0:21:16.320 interest in our continuing to improve price performance for customers, 0:21:16.760 --> 0:21:20.520 interest in data and machine learning and analytics, and interest 0:21:20.840 --> 0:21:24.760 in specialized purpose boat solutions for different vertical industries and 0:21:24.840 --> 0:21:28.840 horizontal business functions. Now, if indeed this is a recession, 0:21:29.119 --> 0:21:31.840 it's a first for AWS as a sort of company 0:21:32.119 --> 0:21:36.159 within a company. Amazon has seen this before, but AWS hasn't. 0:21:36.680 --> 0:21:38.879 You know. Now you've got big company sales but also 0:21:39.440 --> 0:21:42.960 big company problems. What are you cutting in? Where? Where 0:21:43.000 --> 0:21:48.040 are you pausing? And why? Well, Emily, actually AWS was 0:21:48.119 --> 0:21:51.560 founded in well, launched in two thousand and six, and 0:21:51.720 --> 0:21:54.960 so we're already in business for the Great Recession and 0:21:55.280 --> 0:21:57.560 two thousand and two thousand and nine, and it was 0:21:57.640 --> 0:22:00.520 really interesting. We didn't know then if that would would 0:22:00.600 --> 0:22:03.120 help US or hurt US quite frankly, and it turned 0:22:03.160 --> 0:22:05.520 out I I think it was actually a significant tail 0:22:05.560 --> 0:22:07.960 wind because a lot of companies who didn't have the 0:22:08.000 --> 0:22:11.000 money for capital expenditure were easily able to move to 0:22:11.040 --> 0:22:13.720 the cloud and get moving quickly on AWS really with 0:22:14.000 --> 0:22:16.920 with just operating expense and being able to turn capacity 0:22:17.000 --> 0:22:18.879