WEBVTT - One Year Since the War in Ukraine and Nasdaq 100 Takes a Hit 0:00:13.440 --> 0:00:16.040 I'm Caroline Hired everyone Imberg's world sad quarters in New York, 0:00:16.520 --> 0:00:19.240 and I'm Ed Ludlow in San Francisco. This is Bloomberg 0:00:19.280 --> 0:00:21.880 Technology coming up. Tech stocks, they take a hit the 0:00:21.960 --> 0:00:25.639 latest inflation print, spooking risk on sentiment, will get the 0:00:25.640 --> 0:00:29.000 sector outlook class, we'll get the outlook for M and A. 0:00:29.000 --> 0:00:32.360 Is the Justice Department eyes Adobe's twenty billion dollars bid 0:00:32.479 --> 0:00:35.479 for Figma. And on the one year mark of Russia's 0:00:35.520 --> 0:00:38.440 invasion of Ukraine, we'll take a look at why cybersecurity 0:00:38.520 --> 0:00:41.080 is more important now than ever. All that and so 0:00:41.159 --> 0:00:44.559 much more coming up broadly invested today. We were shunning 0:00:44.640 --> 0:00:47.640 risk and mid fears of that impact of higher rates. However, 0:00:47.760 --> 0:00:50.199 Kate More of black Rock, speaking earlier today to our 0:00:50.280 --> 0:00:53.280 John Ferries, see some silver lining scarrow for the tech sector. 0:00:54.400 --> 0:00:57.960 There was a decent amount of over hiring across tech 0:00:58.040 --> 0:01:00.760 and in software in parts of Sammy's and we've seen 0:01:00.800 --> 0:01:03.640 those companies get out ahead of the market in terms 0:01:03.640 --> 0:01:07.039 of announcing layoffs. So that's been really productive, and so 0:01:07.319 --> 0:01:10.199 I expect these companies are going to weather this economic 0:01:10.240 --> 0:01:13.720 and policy storm pretty well. What I've been really encouraged 0:01:13.720 --> 0:01:19.440 with is how honest the guidance was during reporting fourth quarter. Okay, 0:01:19.959 --> 0:01:22.960 encouragement with certain moves coming from the tech sector. Let's 0:01:22.959 --> 0:01:25.280 dig in with Nancy Tangla. You know her, of course, 0:01:25.400 --> 0:01:28.760 Lafa Tangla Investments. She would cause heading over there, the 0:01:28.840 --> 0:01:32.240 CEO role, the CIO role, Nancy and as great as 0:01:32.280 --> 0:01:35.240 always to have some time with you. So do you 0:01:35.440 --> 0:01:38.160 agree there with the black Rock view that actually companies 0:01:38.160 --> 0:01:42.280 in technology space are taking the action necessary? I did, 0:01:42.319 --> 0:01:47.240 Thanks for having me, Caroline and Ed loved the new show. Thanks. Yeah, 0:01:47.280 --> 0:01:50.240 I do. I think we felt that way for a while. 0:01:50.280 --> 0:01:52.240 We were arguing in the fourth quarter that it was 0:01:52.280 --> 0:01:55.200 time to start adding risk back into your portfolio, the 0:01:55.280 --> 0:01:59.240 attack and consumer discretionary. And the reason for that is 0:01:59.240 --> 0:02:01.960 that these companies, the ones that we own and like, 0:02:02.240 --> 0:02:06.120 are the ones they're delivering strong beats every quarter of 0:02:06.240 --> 0:02:10.040 last year, raising guidance, and they're still not feeling the 0:02:10.120 --> 0:02:13.640 love from Wall Street. So we like the names that 0:02:13.680 --> 0:02:17.760 are reliable, earning sprowers with strong management teams. And yeah, 0:02:17.800 --> 0:02:21.320 I mean technology and energy are the two most productive 0:02:21.360 --> 0:02:25.160 sectors on a revenue per employee basis, And if you 0:02:25.200 --> 0:02:27.480 just look at it, just use Apple as an example there, 0:02:27.960 --> 0:02:30.680 per employee's five hundred and fifty thousand dollars in revenue 0:02:31.040 --> 0:02:33.400 versus the rest in the market one hundred and forty thousand. 0:02:33.639 --> 0:02:37.280 So they're already very productive companies. And yeah, some of 0:02:37.280 --> 0:02:41.000 them got very fat and they've they've had to shed employees, 0:02:41.000 --> 0:02:43.480 and I think that's a good thing for the bottom line. 0:02:43.480 --> 0:02:46.040 But the two companies that we like the most haven't 0:02:46.040 --> 0:02:48.639 had to do that because they managed through the pandemic 0:02:48.639 --> 0:02:50.880 pretty well. Yeah, Nancy, I want to get some of 0:02:50.919 --> 0:02:54.400 those specific names that I do feel like there's energy 0:02:54.440 --> 0:02:56.760 in this idea around a more hawkish FED, and it's 0:02:56.800 --> 0:03:01.079 really relevant to the technology set. You know. PC Friday 0:03:01.160 --> 0:03:03.640 was the latest of a series of data points and 0:03:03.760 --> 0:03:06.959 FED speak that kind of change the mindset, it seems like, 0:03:07.000 --> 0:03:11.079 at least in the short term. Do you agree with that. Well, 0:03:11.400 --> 0:03:14.079 I've been pretty critical of the FED, and I think 0:03:14.080 --> 0:03:17.640 I understand why the market hasn't believed what they've said. 0:03:18.360 --> 0:03:21.320 These are you know, we've said we thought that inflation 0:03:21.400 --> 0:03:25.280 peaked in June, that it rises mostly symmetrically, and I'm 0:03:25.600 --> 0:03:27.680 the same on the way down, but it's never linear. 0:03:28.080 --> 0:03:30.560 So you know, the market's paying such close attention to 0:03:30.680 --> 0:03:34.120 numbers that ultimately get revised, and they're not looking so 0:03:34.240 --> 0:03:36.480 much at the trends. So I see this as an 0:03:36.520 --> 0:03:39.720 opportunity to step in and continue to buy these names, 0:03:39.760 --> 0:03:43.360 because as soon as the market stops trading on interest 0:03:43.440 --> 0:03:46.680 rate fears and starts trading on the fundamentals, these names 0:03:46.680 --> 0:03:48.640 are going to be You're going to be well positioned 0:03:48.680 --> 0:03:50.440 for the next three to five years, which is our 0:03:50.480 --> 0:03:56.080 investing time. Horizon Nancy, you teased us with two specific 0:03:56.160 --> 0:03:58.160 names that you're excited about. Would you care to share 0:03:58.440 --> 0:04:01.480 a little bit more about what they are? Yeah, so 0:04:01.720 --> 0:04:05.160 I'm I'm actually hiding out it in client village, trying 0:04:05.160 --> 0:04:09.320 to finish my book. But so's a book as well, 0:04:09.560 --> 0:04:14.240 The End of Senses. But yeah, So the two names 0:04:14.240 --> 0:04:16.160 that we liked the most, one just reported and of 0:04:16.240 --> 0:04:18.760 course it has had a nice run from the report. 0:04:18.760 --> 0:04:21.480 But that's Palo Alto Network. So what we have said 0:04:21.520 --> 0:04:24.320 in our portfolios is we want to own old economy 0:04:24.360 --> 0:04:27.560 companies that are embracing the digital and AI revolution and 0:04:27.600 --> 0:04:32.040 then the suppliers of those tools. And so Paaloatto is 0:04:32.040 --> 0:04:35.760 a cloud cybersecurity company. They beat on revs, they beat 0:04:35.760 --> 0:04:40.040 on Bill billings. They their next gen security software is 0:04:40.080 --> 0:04:43.200 at sixty three percent gross margins beat. I mean, there's 0:04:43.279 --> 0:04:46.360 there's nothing not to like about this company and the report. 0:04:46.680 --> 0:04:48.560 So that's one and then the other is a neighbor 0:04:48.920 --> 0:04:51.960 of yours service now Bill McDermott is by far the 0:04:52.000 --> 0:04:55.640 best CEO in corporate America in my view. They turned 0:04:55.680 --> 0:04:59.200 in an excellent quarter. They beat and they raised and 0:04:59.240 --> 0:05:03.400 their margins holding up very nicely. So solution on the cloud, 0:05:03.880 --> 0:05:07.800 paddle out to a cybersecurity solution, and I think both 0:05:07.839 --> 0:05:10.880 those names are members of our twelve Best Ideas portfolio. 0:05:11.240 --> 0:05:13.039 Shout out for a Bill, who's joined this show many 0:05:13.040 --> 0:05:15.640 a time. Talk to us a little bit about the 0:05:15.680 --> 0:05:19.480 AI hype nancy and whether or not you really feel 0:05:19.480 --> 0:05:25.359 it will ultimately change in every industry. I do think so, Caroline. However, 0:05:25.440 --> 0:05:28.080 you know it's we're early innings. One of my colleagues 0:05:28.560 --> 0:05:30.720 chat GPT me and I learned a lot of things 0:05:30.760 --> 0:05:34.240 about myself that I didn't know. So there are problems, right, 0:05:34.279 --> 0:05:36.320 and then there's the creepy factor. But if you look 0:05:36.320 --> 0:05:40.120 at a company like Deer, they are using AI to 0:05:40.160 --> 0:05:46.080 target fertilizing a single seed, and this becomes very important 0:05:46.120 --> 0:05:48.760 as young people don't want to become farmers as we're 0:05:48.800 --> 0:05:52.760 hitting up against a structural labor shortage in this country. 0:05:53.240 --> 0:05:55.560 I really do believe I'm the last baby bone were 0:05:55.720 --> 0:05:59.559 still working. The people that retired are not coming back, 0:05:59.680 --> 0:06:02.479 and so I think we have to solve our problems 0:06:02.480 --> 0:06:05.480 with technology, and many companies are doing it simplistically, like 0:06:05.720 --> 0:06:08.920 a public storage that allows clients to sign up and 0:06:09.040 --> 0:06:13.960 access their storage locker without any human contact, all the 0:06:14.000 --> 0:06:17.920 way to Asylum, which is correcting water infrastructure problems digitally 0:06:17.960 --> 0:06:20.640 from a central area, and that's one and a half 0:06:20.640 --> 0:06:23.719 times more profitable. So I do think it's real. I 0:06:23.760 --> 0:06:28.440 think AI, as I said early in the innings, and 0:06:28.440 --> 0:06:31.120 that's also why we like you know name like Microsoft 0:06:31.160 --> 0:06:33.880 that's also in our twelve Best Ideas portfolio. They sort 0:06:33.880 --> 0:06:36.440 of span the gamut of cloud and AI, and I 0:06:36.480 --> 0:06:40.000 think you have to be exposed. So we're looking for 0:06:40.040 --> 0:06:43.200 opportunities all the time. Now, see always owning your experience, 0:06:43.680 --> 0:06:46.720 not what generation you're born in. Just tell us a 0:06:46.800 --> 0:06:50.159 little bit lastly about where you look now we've all 0:06:50.200 --> 0:06:53.719 been sort of perhaps trading off earnings. We're now looking 0:06:53.760 --> 0:06:58.040 towards you know, Morgins a focus on efficiency. What are 0:06:58.040 --> 0:07:01.919 the next key words, fores or data points you're going 0:07:01.960 --> 0:07:05.359 to be trading off. So I do think inflation is 0:07:05.400 --> 0:07:09.800 still the overriding concern that the market has, that the 0:07:09.880 --> 0:07:12.680 FED let it go for too long. And you know, 0:07:12.800 --> 0:07:15.920 you know this ed being in a Californian you know, 0:07:15.920 --> 0:07:17.920 you get a controlled burn and it can easily turn 0:07:17.960 --> 0:07:20.320 into a wildfire. And that's really what we saw. And 0:07:20.400 --> 0:07:22.480 so now the question is can they can they rain 0:07:22.560 --> 0:07:24.800 it back in? I think the leading indicators that we 0:07:24.960 --> 0:07:28.160 look at indicate they can. I also think the leading 0:07:28.200 --> 0:07:31.160 indicators indicate we're going to go into a mild recession. 0:07:31.200 --> 0:07:33.800 And so those are the key words that the algas 0:07:33.800 --> 0:07:35.280 and the hedge funds are going to be trading off. 0:07:35.320 --> 0:07:38.560 And we're going to use that volatility as an opportunity 0:07:38.560 --> 0:07:41.880 to add to holdings in our portfolio. So smart always 0:07:41.960 --> 0:07:44.400 using tech, whether it's for investment or investing in tech. 0:07:44.520 --> 0:07:47.800 That's a tanglaan leaf. Tangler investments take us some time 0:07:47.840 --> 0:07:52.320 out of writing a bookhead there, Yeah, up in Incline Village, 0:07:52.320 --> 0:07:54.680 of all places, that's one place I'd love to be 0:07:54.720 --> 0:07:57.040 this weekend. But she makes the same point that guests 0:07:57.080 --> 0:07:59.160 a week have made that you want to be positioned 0:07:59.440 --> 0:08:02.120 with those names who are best place to take advantage 0:08:02.320 --> 0:08:05.320 not necessarily around hype with AI, but around the investment 0:08:05.320 --> 0:08:08.520 that succumb when companies need to have access to those tools. 0:08:08.760 --> 0:08:11.320 And it's interesting as to whether we continue to see themes. 0:08:11.360 --> 0:08:13.080 You know, there's been these themes borne out whether you're 0:08:13.080 --> 0:08:14.960 like in Palo Alto, whether you're liking it in video. 0:08:15.200 --> 0:08:17.240 There's also been the themes on the downside having it, 0:08:17.320 --> 0:08:19.360 and I feel each earning season brings us whether we 0:08:19.400 --> 0:08:22.480 can just broad brush retail as one sector where we 0:08:22.480 --> 0:08:25.520 can dig into the likes of e commerce players all 0:08:25.600 --> 0:08:27.800 having this sort of sticking point that we've seen this week. 0:08:27.840 --> 0:08:29.760 I mean, let's just reflect for a moment some of 0:08:29.760 --> 0:08:32.520 the earnings coming from the likes eBay, the sell off 0:08:32.520 --> 0:08:36.760 that we saw so painful in wayfare. Etsie actually outperformed 0:08:36.760 --> 0:08:38.920 on the day of its numbers and actually it showed 0:08:38.960 --> 0:08:41.760 some sort of growth, but again there was some concerns 0:08:41.800 --> 0:08:44.439 about its forward looking guidance. And I wonder what we'll 0:08:44.480 --> 0:08:46.760 see from like more the bricks and mortar stores next 0:08:46.800 --> 0:08:49.240 week and where they're managing to lean into digital, whether 0:08:49.280 --> 0:08:52.199 e commerce is just a concern there. Two. Yeah, and 0:08:52.360 --> 0:08:54.400 our colleagues of Bloomberg News have kind of crunched the 0:08:54.440 --> 0:08:57.720 numbers at the index of online retailers about how far 0:08:57.800 --> 0:09:00.280 off we are from the pandemic highs. What those names 0:09:00.280 --> 0:09:03.120 all having common is a drop off in activity. That's 0:09:03.160 --> 0:09:07.960 the concern that actually their end users, consumers have stopped 0:09:08.000 --> 0:09:11.120 spending and the outlooks murky as well. There's really very 0:09:11.160 --> 0:09:14.840 few glimmers of hope. But we all bought too much online. 0:09:14.960 --> 0:09:17.640 We did our spending on weight there. We're still deciding 0:09:17.640 --> 0:09:20.280 that it's about experiences, is about getting on flights as 0:09:20.320 --> 0:09:23.000 going out to moost places in California and visiting you ed. 0:09:24.040 --> 0:09:26.439 Is the pendulum just swinging somewhat? And are we over 0:09:26.440 --> 0:09:38.000 reacting to it? Not so fast? Adobe. The Justice Department 0:09:38.080 --> 0:09:40.679 is preparing a suit to try and block Adobe's twenty 0:09:40.679 --> 0:09:44.160 billion dollar purchase of Figma. According to sources, it could 0:09:44.200 --> 0:09:47.720 come as soon as next month. This is a big deal. Literally. 0:09:48.040 --> 0:09:51.280 You likely know Adobe tools like Photoshop or Premium for 0:09:51.400 --> 0:09:55.240 video editing. Figma is known as software for designing app 0:09:55.440 --> 0:10:00.120 or website interfaces. It's trouts Todobe's competing XD products In 0:10:00.160 --> 0:10:03.120 recent years now, buying Figma is a big bet. Buy Adobe. 0:10:03.240 --> 0:10:05.760 The creative work is going to be important for small 0:10:05.800 --> 0:10:08.679 businesses and everyday users on the web, and that's a 0:10:08.800 --> 0:10:13.000 market Figma's rapidly controlling. Adobe made multiple attempts to buy 0:10:13.040 --> 0:10:15.800 Figma in twenty twenty and twenty twenty one, and ultimately 0:10:15.960 --> 0:10:18.120 they sealed the deal with a price tag that was 0:10:18.240 --> 0:10:22.439 double Figma's then valuation, a pretty premium. Now an antitrust 0:10:22.520 --> 0:10:24.679 suit makes the deal a little more shaky, and it's 0:10:24.679 --> 0:10:28.720 Adobe's most serious spat with antitrust regulators since the nineties. 0:10:28.840 --> 0:10:32.920 One to watch story of the Day, one of the 0:10:32.960 --> 0:10:35.160 stories of the week, Caroline looking at the shares of 0:10:35.320 --> 0:10:38.199 Adobe this Friday as well, down almost eight percent, but 0:10:38.240 --> 0:10:41.640 it was the biggest drop since September. You know, you 0:10:41.679 --> 0:10:43.640 and I've been talking for twenty four hours, right about 0:10:43.679 --> 0:10:47.480 the idea that sort of some regulator somewhere looking at 0:10:47.480 --> 0:10:50.920 this deal wasn't surprising, but how quickly the DOJ moved 0:10:51.440 --> 0:10:53.360 was And certainly when I was reading the cell side 0:10:53.400 --> 0:10:56.720 notes earlier this morning, there's a little bit of jitters 0:10:56.720 --> 0:10:59.600 out there about the risk of Adobe not being able 0:10:59.600 --> 0:11:01.400 to seal a deal with Figma. Yeah, and isn't it 0:11:01.480 --> 0:11:03.920 kind of ironic that the shares of Adobe fell so 0:11:04.080 --> 0:11:06.760 hard when we first learned about the deal, people felt 0:11:06.760 --> 0:11:09.120 they were over paying, and now they're worried about the time, 0:11:09.120 --> 0:11:11.520 the investment, the focus that they've given less they get 0:11:11.559 --> 0:11:13.800 into some of maybe the arbitrage that could be played 0:11:13.800 --> 0:11:16.840 in this current environment. Bloom Bag's intelligence chen Fani is 0:11:16.840 --> 0:11:19.640 with us, So it's been on all day, relentlessly bringing 0:11:19.640 --> 0:11:23.600 your analysis to now the probabilities we have to decide 0:11:24.040 --> 0:11:26.520 whether this gets through or not. I suppose we're not 0:11:26.559 --> 0:11:29.760 surprised that the US administration once again is eyeing such 0:11:29.760 --> 0:11:32.319 a deal. You know, that's right. This is the timing 0:11:32.400 --> 0:11:34.520 is really tough for Adobe. You know, we have a 0:11:34.600 --> 0:11:37.319 really aggressive administration right now when it comes to M 0:11:37.360 --> 0:11:40.720 and A and particularly tech companies, and particularly a deal 0:11:40.760 --> 0:11:42.800 like this where you see what looks like in incumbent 0:11:43.120 --> 0:11:46.800 buying a scrappier, newer, kind of nascent startup, really one 0:11:46.840 --> 0:11:50.280 that's really rivaling and could become a bigger competitor in 0:11:50.280 --> 0:11:52.800 the future. So it sort of looks like a defensive 0:11:52.800 --> 0:11:55.040 deal where it's just trying to take competition out of 0:11:55.040 --> 0:11:58.600 the market. And there's particular sensitivity to that. So you know, 0:11:58.600 --> 0:12:01.400 the thing is about probability. It's really hard once the 0:12:01.480 --> 0:12:04.040 DOJ SEUs to really understand what's going to happen in 0:12:04.080 --> 0:12:06.760 that trial. These cases can be hard for the DOJ 0:12:06.880 --> 0:12:09.440 to win, and it hasn't had such a great track record. 0:12:09.520 --> 0:12:11.440 But in this case, we'll have to see how the 0:12:11.480 --> 0:12:14.200 evidence shakes out, because I think at least superficially, it 0:12:14.240 --> 0:12:16.720 looks like the DOJ may have a decent case here. 0:12:16.880 --> 0:12:20.200 But remind us of that track record of late right. Well, 0:12:20.200 --> 0:12:23.319 the thing is, the DOJ and FTC have both decided, look, 0:12:23.320 --> 0:12:25.000 we're going to bring the tough deals. We're going to 0:12:25.120 --> 0:12:27.760 challenge the tough deals. In the past, they really would 0:12:27.800 --> 0:12:30.079 sue those deals where they were pretty sure they could win. 0:12:30.160 --> 0:12:32.560 The evidence is sort of stacked in their favor. They're 0:12:32.559 --> 0:12:33.960 going to go into court and it's going to be 0:12:34.000 --> 0:12:36.360 easy for them. But they've said, look, this hasn't worked. 0:12:36.679 --> 0:12:40.880 We've allowed too much consolidation, particularly big tech companies buying 0:12:40.960 --> 0:12:44.160 up small, scrappy competitors. We regret some of these deals 0:12:44.160 --> 0:12:47.240 we've cleared in the past, like Facebook and Instagram or 0:12:47.640 --> 0:12:51.160 Google YouTube or double Click, and we have to we 0:12:51.200 --> 0:12:53.000 have to be more careful about this, and even we 0:12:53.080 --> 0:12:55.040 have to go take these cases to court even if 0:12:55.040 --> 0:12:57.079 they're tough, and when they do that, they're going to 0:12:57.160 --> 0:13:00.679 lose some. So the DOJ recently law to challenge in 0:13:00.800 --> 0:13:04.400 court to stop United Healthcare from buying Change. That was 0:13:04.440 --> 0:13:06.880 one deal that where had had a tough time. The 0:13:06.960 --> 0:13:09.840 FDC recently lost its challenge to Murder trying to buy 0:13:09.880 --> 0:13:13.319 a small virtual reality company called Within. They have had 0:13:13.360 --> 0:13:17.360 successes not so much in through litigating, but through getting 0:13:17.360 --> 0:13:19.679 the companies to abandon the deal prior to getting to 0:13:19.760 --> 0:13:22.760 that final decision by a judge. I think it's important 0:13:22.760 --> 0:13:25.880 to point out as well, Jennifer Wright, that according to sources, 0:13:26.320 --> 0:13:28.480 you know, this is what the DOJ is considering. One 0:13:28.520 --> 0:13:30.880 source said that this could happen as soon as next month. 0:13:31.040 --> 0:13:35.200 Meetings between the DOJ and Adobe have been taking place. 0:13:35.200 --> 0:13:38.680 Adobe issued US this statement, we are engaged in constructive 0:13:38.720 --> 0:13:43.080 and cooperative discussions with regulators in the US, UK and EU. 0:13:43.160 --> 0:13:45.520 I wanted to bring that up because actually not just 0:13:45.600 --> 0:13:48.040 to get Adobe side of the story across, but it 0:13:48.160 --> 0:13:50.640 raises a point that actually globally they're going to have 0:13:50.679 --> 0:13:53.280 to pass a number of tests anyway. I wonder could 0:13:53.280 --> 0:13:56.320 you distill for our audience what that test is likely 0:13:56.400 --> 0:14:00.199 to be. It seems to center around XD, Adobe's kind 0:14:00.200 --> 0:14:03.600 of existing offering, that's right. I mean, XD looks like 0:14:03.640 --> 0:14:06.280 it's a competitor to Figma's offering, and in fact, you know, 0:14:06.400 --> 0:14:08.080 there's been a lot of news about the fact that 0:14:08.120 --> 0:14:12.360 Figma's taking customers from Adobe, and that's pure competition in 0:14:12.400 --> 0:14:16.839 the market right now. The regulators tend to be really coordinated, 0:14:16.880 --> 0:14:20.160 so there's a lot of discussion between the Federal Trade Commission, 0:14:20.280 --> 0:14:23.240 the European Commission, the regulators in the UK, and they 0:14:23.280 --> 0:14:26.200 tend to be pretty aligned about being aggressive with big tech. 0:14:26.440 --> 0:14:28.720 So to the extent that Adobe can work out some 0:14:28.760 --> 0:14:32.160 sort of settlement or compromise that would allow this deal 0:14:32.200 --> 0:14:34.160 to clear, it's going to have to get all three 0:14:34.200 --> 0:14:36.520 of those regulators to come together to agree to that. 0:14:36.760 --> 0:14:40.760 Maybe it would be the divestment of Adobe XD. You know, 0:14:40.800 --> 0:14:43.320 possibly that would fix the issue, but I'm not so 0:14:43.360 --> 0:14:46.400 sure that that will be enough, particularly for the US 0:14:46.560 --> 0:14:50.440 and for the UK regulators who might also be concerned 0:14:50.440 --> 0:14:53.160 about the possibility that Figma could grow into a bigger 0:14:53.200 --> 0:14:57.640 competitor to Adobe in the future. Beyond just the XD product. 0:14:58.240 --> 0:15:01.960 The other dailway tracking of course moment is Microsoft Activision. 0:15:02.120 --> 0:15:07.120 You're our senior analyst for antitrust litigation. Could you draw 0:15:07.160 --> 0:15:10.280 in your experience for us? How is this environment compared 0:15:10.320 --> 0:15:13.200 to those you've seen in the past. It seems really 0:15:13.840 --> 0:15:16.000 tough to pull off a big piece of tech M 0:15:16.040 --> 0:15:18.960 and A right now. It is really tough. I mean, 0:15:19.040 --> 0:15:20.600 all of these tech deals are going to get a 0:15:20.680 --> 0:15:23.360 lot of scrutiny by the FTC and DJ and the 0:15:23.400 --> 0:15:26.400 Microsoft Activision deal is just a perfect example of how 0:15:26.400 --> 0:15:28.760 things have changed. I mean, five or ten years ago. 0:15:28.840 --> 0:15:31.040 That deal, which we call a vertical deal because the 0:15:31.040 --> 0:15:34.080 companies don't really compete head on, they're just at different 0:15:34.160 --> 0:15:37.320 levels of the supply chain. For a video game making 0:15:37.440 --> 0:15:40.200 creation and for video game distribution, which would be the 0:15:40.200 --> 0:15:44.000 Microsoft piece with its consoles and its subscription service. That 0:15:44.120 --> 0:15:46.680 kind of deal years ago was pretty much a shoe in. 0:15:47.400 --> 0:15:50.720 Sometimes the companies would have to agree to behavioral conditions 0:15:50.760 --> 0:15:52.680 to get the deal to clear, but it was pretty 0:15:52.720 --> 0:15:54.360 much a given that that's the route it was going 0:15:54.400 --> 0:15:57.640 to go. Today, we have this challenge by the FEC 0:15:57.800 --> 0:16:00.640 already and possibly by the UK and Europe as well. 0:16:01.920 --> 0:16:04.800 Bloomberg Intelligence is Genuary. Thank you so much for joining 0:16:04.840 --> 0:16:07.400 us late on a Friday top top story this week, 0:16:07.440 --> 0:16:10.080 We're grateful for your analysis and Caroline, as we always do, 0:16:10.160 --> 0:16:11.800 we went to our audience and said, what do you 0:16:11.840 --> 0:16:13.400 make of this? What do you make of M and 0:16:13.440 --> 0:16:15.640 A right now for tech in You know, the answers 0:16:15.680 --> 0:16:18.000 are kind of consistent with what we've heard the clamp 0:16:18.040 --> 0:16:21.840 down underway, I mean front and center. We know that 0:16:21.880 --> 0:16:24.120 this isn't as we're just saying, a US theme. This 0:16:24.240 --> 0:16:26.400 is a European theme, this is a UK theme. This 0:16:26.600 --> 0:16:29.840 is across the spectrum, whether it's Microsoft, Activision, Blizzard, whether 0:16:29.880 --> 0:16:32.800 it's Adobe, and it feels as though our audience are 0:16:32.840 --> 0:16:35.760 pretty much well aware of it. It's just one step 0:16:35.840 --> 0:16:39.040 in a multi step process and we'll continue to track it. Now. 0:16:39.080 --> 0:16:41.760 Coming up, what's new in the world of AI? A 0:16:41.880 --> 0:16:45.480 clamp down on chat GPT from China to Wall Street. 0:16:45.560 --> 0:16:48.480 That's all in our Talking Tech Next. This is Bloomberg 0:16:59.640 --> 0:17:02.680 time out for Talking teg China will introduce rules to 0:17:02.720 --> 0:17:05.560 govern the use of AI across a swath of industries 0:17:05.600 --> 0:17:10.000 in an effort to regulate emergencepheres as chat GPT fever 0:17:10.080 --> 0:17:13.320 sweeps the world's second largest economy. The government says it 0:17:13.359 --> 0:17:17.359 will push for the safe and controllable application of AI services, 0:17:17.359 --> 0:17:21.040 which it considers a strategic industry, and will continue to 0:17:21.119 --> 0:17:23.639 monitor its evolution over the longer term to gain a 0:17:23.640 --> 0:17:27.800 better understanding of the ethical concerns around AI and sticking 0:17:27.800 --> 0:17:31.639 with AI, Meta just introduce a research tool for building 0:17:31.680 --> 0:17:34.679 AI based chatbots and other products, seeking to create a 0:17:34.680 --> 0:17:38.560 buzz for its own technology and compete with Google and Microsoft. 0:17:38.600 --> 0:17:41.919 The tool, Lama Believe It or Not, is Meta's latest 0:17:42.040 --> 0:17:44.800 entry into the realm of large language models, which CEO 0:17:44.880 --> 0:17:47.480 Mark Zuckerberg says quote have shown a lot of promise 0:17:47.680 --> 0:17:52.120 in generating text, hamming conversations, summarizing written material, and more 0:17:52.160 --> 0:17:56.119 complicated tasks like solving math theorems or predicting protein structures 0:17:56.520 --> 0:17:58.919 and back. In the US, a growing amount of global 0:17:58.960 --> 0:18:03.359 investment banks aping down on chat GPT, particularly on Wall Street. 0:18:03.400 --> 0:18:06.400 Bank of America, City Group, Deutsche Bank, Goldman, sax Group, 0:18:06.440 --> 0:18:09.480 and Wells Fargo are among lenders that have recently banned 0:18:09.600 --> 0:18:12.320 use of the chat bot, with Bank of America telling 0:18:12.320 --> 0:18:16.640 employees that chat GPT and open AI tools are prohibited 0:18:16.920 --> 0:18:20.040 from business use, that according to sources. This follows earlier 0:18:20.080 --> 0:18:24.160 reports that JP Morgan had implemented equivalent measures this week. 0:18:24.320 --> 0:18:26.600 And I find this so interesting, Caroline. It goes back 0:18:26.600 --> 0:18:29.960 to what Nvidia CEO Jensen Huang told Ari and King 0:18:30.000 --> 0:18:33.159 earlier this week, which is basically, chat GPT is great. 0:18:33.520 --> 0:18:36.359 The momentum around it is great. But when business needs 0:18:36.359 --> 0:18:40.120 a tool, they don't need chat GPT. They need something appropriate, 0:18:40.400 --> 0:18:43.280 something that is customed for them, and they also don't 0:18:43.320 --> 0:18:46.760 need the risk of people sharing internal information that then 0:18:46.800 --> 0:18:50.040 suddenly gets spit up. In another inquiry down the line, 0:18:50.040 --> 0:18:53.720 there was reporting from other news sources that Amazon had 0:18:53.760 --> 0:18:56.920 taken a very similar view. Some of the general counsels 0:18:56.960 --> 0:18:59.760 they're worried about the fact that certain terms of phrases, 0:19:00.240 --> 0:19:05.880 certain types of conversation looked remarkably like relatively sensitive information 0:19:05.880 --> 0:19:07.840 of theirs. So I'm sure that there is trying to 0:19:07.840 --> 0:19:10.040 be this clamping down on this software. And we've talked 0:19:10.040 --> 0:19:12.200 about it, haven't we. The cyber risk that has built 0:19:12.200 --> 0:19:15.920 into this large language models, this generative AI. It's always exciting, 0:19:15.960 --> 0:19:18.600 but I'm sure companies want to keep herain on it. Yeah, 0:19:18.600 --> 0:19:21.359 and the content risk as well. We've reported about the 0:19:21.400 --> 0:19:25.160 inaccuracies that some of these AI tools are generating. Think 0:19:25.160 --> 0:19:28.480 about Bard's launch week, right, and then how difficult that 0:19:28.560 --> 0:19:31.440 was for for bet shares because of an inaccuracy which 0:19:31.520 --> 0:19:33.679 was brought to light. So it's a real risk on 0:19:33.720 --> 0:19:43.880 the content side as well. Welcome back to the MED technology. 0:19:43.880 --> 0:19:46.399 I'm Carline Hide in New York and La Medlove Low 0:19:46.480 --> 0:19:48.679 in San Francisco, and carry this bits me because I 0:19:48.680 --> 0:19:51.520 want to take a look at cryptocurrencies. Right. It's been 0:19:51.520 --> 0:19:54.720 an interesting week for risk assets in particular, and the 0:19:54.760 --> 0:19:56.320 point I would make here is these are the four 0:19:56.440 --> 0:20:00.760 biggest tokens by market value globally, right, And what we 0:20:00.840 --> 0:20:03.800 see actually, particularly in Bitcoin's case, is a relatively high 0:20:03.840 --> 0:20:06.760 degree of correlation between, for example, than as that one 0:20:06.800 --> 0:20:10.360 hundred in bitcoin. And you know on the week relatively 0:20:10.400 --> 0:20:14.840 substantive declines on bitcoin ether binance. And you know what 0:20:14.880 --> 0:20:17.840 we're reading on the Bloomberg terminal, particularly good piece from Vildana, 0:20:17.880 --> 0:20:20.520 our colleague on the Cross Asset team, about a bit 0:20:20.520 --> 0:20:23.560 of a liquidity crunch at times of crisis. That's what 0:20:23.640 --> 0:20:26.159 the market's starting to see now. And as you and 0:20:26.200 --> 0:20:28.760 I discussed on Twitter spaces earlier, right, the key thing 0:20:28.800 --> 0:20:33.080 about the SBFFTX developments. While nothing to do with market mechanics, 0:20:33.280 --> 0:20:35.560 is still impacts the psychology of this market. So I 0:20:35.560 --> 0:20:37.880 thought that was really interesting to look at how these 0:20:37.880 --> 0:20:40.280 crypto currencies have behaved in a week where risk assets 0:20:40.280 --> 0:20:42.720 are taking on board the future outlook for the FED, 0:20:42.960 --> 0:20:45.159 and maybe we can try to draw some kind of 0:20:45.160 --> 0:20:48.920 conclusion going forward. Let's draw more conclusions with Jill Gunta, 0:20:49.000 --> 0:20:51.680 Espresso Systems chief strategy officer and dig in there a 0:20:51.720 --> 0:20:54.800 little bit about the correlations, because actually we've started to 0:20:54.840 --> 0:20:58.160 see maybe a movement away the fact that crypto had 0:20:58.160 --> 0:21:01.320 been relatively well bid. While textox has still been under 0:21:01.320 --> 0:21:07.239 some pressure, Crypto has actually performed very robustly over the 0:21:07.240 --> 0:21:10.520 course of the year so far. This week notwithstanding, perhaps 0:21:11.160 --> 0:21:13.440 I think it's taken a lot of people in the industry, 0:21:13.560 --> 0:21:17.600 both asset allocators and also builders by surprise and sort 0:21:17.600 --> 0:21:19.840 of a running joke in the industry has become what 0:21:20.040 --> 0:21:23.600 bear market, you know, it almost feels like we deserved 0:21:23.720 --> 0:21:26.280 much worse in terms of price action. So yeah, I 0:21:26.320 --> 0:21:29.080 would say overall, I think crypto has been very well 0:21:29.160 --> 0:21:31.960 bid over the course of the start of this year, 0:21:32.320 --> 0:21:36.800