Speaker 1: From Mahart where Innovation, Money and power Collie in Silicon Valley, Nbonn.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlove.
Speaker 3: Live from New York.
Speaker 4: This is Bloomberg Technology coming up, Bitcoin blast past one
Speaker 4: hundred thousand dollars. We dig into the positive sentiment, including
Speaker 4: the sec share announcement.
Speaker 3: Plus it's TikTok for TikTok as.
Speaker 4: A social media joant anxiously awaits the legal decision on
Speaker 4: its upcoming US ban and geopolitical risks across Europe and
Speaker 4: Asia are bound, but US stock stay near records. Can
Speaker 4: tech keep American exceptionalism alive? But first, let's checking on
Speaker 4: these markets, because that exceptionalism just takes a turn to
Speaker 4: the downside, off by two ten percent on the Nasdaq
Speaker 4: one hundred. But look, we are so close to the
Speaker 4: record highs that we saw across benchmarks yesterday. We have
Speaker 4: some nervousness ahead of the non farm pay rolls tomorrow
Speaker 4: as job as claims come in today, and we still
Speaker 4: look at what's happening geopolitically speaking, Chips to the downside,
Speaker 4: Tesla to the upside as it gets basically a bit
Speaker 4: more optimism coming from Bank of America as they go
Speaker 4: to visit that gigafactory, move in on some of the
Speaker 4: other asset classes of choice. Here on the Tech show,
Speaker 4: bitcoin one hundred thousand, we're currently one hundred and one thousand.
Speaker 4: We went past one hundred and three thousand earlier, up
Speaker 4: three point six percent. Why a whole fledge of positive sentiment.
Speaker 4: Maybe it's a little bit to do with FED chair
Speaker 4: J Powell yesterday a deal book saying it's akin to gold.
Speaker 4: We've also got putin saying that he wouldn't be in
Speaker 4: any way restraining crypto. But then you have the all
Speaker 4: important Paul Atkins announcement announcement. Let's go to that with
Speaker 4: Bloomberg's Mike Shephard now because we do have someone from
Speaker 4: the Trump administration future administration SEC chair pick Paul Atkins,
Speaker 4: and just give us his background.
Speaker 3: Why is he seen as crypto friends.
Speaker 1: Well, he has emerged after years of being a well
Speaker 1: known regulator here in Washington. He previously served on the
Speaker 1: SEC as a commissioner during the George W. Bush era,
Speaker 1: so he has the street cred as a regulator. But
Speaker 1: more recently he has emerged as an advocate for digital
Speaker 1: currency and fintech, and so naturally investors around the world
Speaker 1: were so encouraged to see Donald Trump select him as
Speaker 1: the incoming SEC chair. During the presidential campaign, Trump really
Speaker 1: advocated for changes in US policy toward digital currency. He
Speaker 1: wants to make the US a crypto hub, and one
Speaker 1: of the keys to that is making changes at the SEC,
Speaker 1: which under President Joe Biden, has cracked down on this
Speaker 1: market after seeing some excesses we saw during twenty twenty
Speaker 1: two with fraudulent behavior that the current agency chair, Gary Gensler,
Speaker 1: singled out. But Trump has called for a change, and
Speaker 1: the crypto industry investors who supported his candidacy also wanted
Speaker 1: to see a change of the agency, hence their encouragement.
Speaker 4: Now and as you say, someone who has not only
Speaker 4: served on the SEC before as a commissioner, but someone
Speaker 4: who then gone on to advise fintech, in particular crypto companies.
Speaker 4: But just tell us a little bit more other than crypto.
Speaker 4: How else is he going to be facing the financial markets?
Speaker 1: Well, I'm glad you brought that up, Caroline, because he
Speaker 1: is far from a one trick pony. As I said,
Speaker 1: he is a seasoned regulator, one of the analysts that
Speaker 1: our colleagues spoke to yesterday after he was named, referred
Speaker 1: to him as the godfather of conservative capital markets ideology,
Speaker 1: and that is a big statement. But he will be
Speaker 1: coming in there with an agenda to make broader changes
Speaker 1: at the agency which oversees how markets report to investors
Speaker 1: and how companies report to investors in markets, and we
Speaker 1: will be looking possibly for changes and disclosure rules and
Speaker 1: also easing up perhaps of some the heavier fines that
Speaker 1: we've seen the SEC and POST under Gary Gensler. That
Speaker 1: is something that Atkins has singled out in the past,
Speaker 1: and we can look to him to try to target
Speaker 1: that again in the future.
Speaker 4: Mike Shephard, with all the context, we thank you for
Speaker 4: more on the border implications for the crypto market. Katherine
Speaker 4: Dowling's with us bitwise asset Management, General Counselor and chief
Speaker 4: compliance officer. And Catherine, I mean, just first and foremost
Speaker 4: more than one hundred thousand dollars for people who've been
Speaker 4: in crypto for a long time, that must feel extremely vindicating.
Speaker 5: It does, and thanks so much for having me this morning.
Speaker 6: It was fun to watch it go over six digits
Speaker 6: last evening and to see it continue to hold.
Speaker 4: Today when you think of the fund side on one,
Speaker 4: but also then the realities of what perhaps pull Atkins
Speaker 4: could mean. Dig in a little bit to the SEC announcement,
Speaker 4: what you made of it?
Speaker 5: Yeah? Absolutely.
Speaker 6: First off, leading up to this announcement, really all the
Speaker 6: names that were floated were positive.
Speaker 5: So we had that.
Speaker 6: We knew it was going to be better, So there
Speaker 6: was really no wrong answer. But in this choice, it's
Speaker 6: a great choice. Quite simply, you have somebody who can
Speaker 6: hit the ground running. He has been a commissioner before.
Speaker 6: He knows how the commission works. And one really important
Speaker 6: factor that we're hearing about Paul Atkins is he gets
Speaker 6: along with people. You can't underestimate how important that is.
Speaker 6: He needs to be able to work with the industry,
Speaker 6: he needs to be able to work with lawmakers.
Speaker 5: I've been at those.
Speaker 6: Hearings in Congress where it was antagonistic. Questions weren't being answered,
Speaker 6: eyes were being rolled, and this was the environment in
Speaker 6: which Crypto was trying to achieve regulatory clarity and it
Speaker 6: just wasn't going to happen with that back and forth
Speaker 6: and the tension that was created in the Gensler era.
Speaker 6: So we are very much looking forward to a person
Speaker 6: who can come in, hit the ground running, work with
Speaker 6: the other commissioners, and hopefully also have a dialogue with
Speaker 6: the CFTC and with lawmakers so in the new Congress
Speaker 6: we can get some clarity, we can get some forward
Speaker 6: motion stable coin bill market structure. So, quite simply, this
Speaker 6: is an excellent choice and he's another great ad to
Speaker 6: the you can't fault regardless of your politics, you can't
Speaker 6: fault the economic team that is being put together by
Speaker 6: the transition team here.
Speaker 4: Catherine, I want to just speak to the cynics out there.
Speaker 4: People are now out oh great, crypto's got a pro
Speaker 4: crypto sec chair, or all hell's going to break loose.
Speaker 4: We're going to see yet more fraudulent behavior that they
Speaker 4: believe goes on in space. I want to ask you
Speaker 4: because specifically, yes, you're in the ecosystem, but you're someone
Speaker 4: who comes from a federal prosecutor background. You're someone who's
Speaker 4: worked for US Attorney General offices in California.
Speaker 3: So speak to that concern.
Speaker 4: Here that we're suddenly going to see rip roaring in
Speaker 4: crypto with no holds barred.
Speaker 5: Great, Absolutely, you're going to have that approach.
Speaker 6: You're going to have the folks who are going to say, oh, great,
Speaker 6: there's going to be no regulation. But if you actually
Speaker 6: look the folks in the industry, we aren't asking for
Speaker 6: no regulation. We're asking for clarity for regulation. We're not
Speaker 6: just enforcement actions. And I know we've heard that quite
Speaker 6: a bit. What does that really mean? If you break
Speaker 6: it down, the enforcement actions are expensive, they're limited to
Speaker 6: the case and point. You don't get a broader rule
Speaker 6: that will help businesses who either haven't engaged with the
Speaker 6: industry or trying to engage.
Speaker 5: In the correct way.
Speaker 6: So having been at the attorney's office before and having
Speaker 6: worked very closely with the SEC the light doesn't flip overnight.
Speaker 6: It's not suddenly that all the cases or are going
Speaker 6: to disappear.
Speaker 5: Into the ether.
Speaker 6: It's just that you're going to have a better dialogue,
Speaker 6: you're going to get collaboration, and you're going to have
Speaker 6: a more positive approach.
Speaker 5: To how we get there. It's not we're not getting
Speaker 5: rid of everything. We're just going to.
Speaker 6: Get there in a more collaborative fashion, and that's what
Speaker 6: you need.
Speaker 4: What's interesting is we are seeing actually some of the
Speaker 4: crypto related companies just turning to the downside. A little
Speaker 4: bit a lot of run up into that announcements, so
Speaker 4: perhaps a bit of profit taking going on, Catherine, But
Speaker 4: spell out exactly what some of the you talk about,
Speaker 4: certain laws and regulations that need to be put in place.
Speaker 4: We hear about stable coins being tackled first and foremost.
Speaker 4: Is that the number one line on the agenda.
Speaker 3: From the SEC.
Speaker 4: Where do you think the first rules are going to come?
Speaker 3: Yeah?
Speaker 6: I think stable coin legislation coming from Congress will probably
Speaker 6: be the first one out, just because it's a smaller,
Speaker 6: niche er piece and there's been bipartisan support, So I
Speaker 6: think that's going to be the first, the first mover.
Speaker 6: The market structure legislation are referred to will take a
Speaker 6: little longer.
Speaker 5: But it's a more of a dialogue has to happen.
Speaker 6: That's the definition, that's who is going to be the
Speaker 6: regulator depending on where these assets sit from a definitional
Speaker 6: standpoint along the spectrum. So that'll take a little longer,
Speaker 6: but we'll have some more forward motion on both of
Speaker 6: those fronts.
Speaker 4: Is there any risk here could we see pill Atkins
Speaker 4: not take the role, not be acknowledged for the role.
Speaker 6: Well, there's always risk, but as I said, you know,
Speaker 6: we're hopeful that that goes smoothly. I see no obstacles
Speaker 6: out there that should block it. However, as I mentioned earlier,
Speaker 6: there are a list of other folks, all of whom
Speaker 6: would be great choices. I'm really liking the Pollakin's choice,
Speaker 6: given his involvement with the industry, his understanding, and quite
Speaker 6: frankly before, his demeanor and ability to collaborate and work
Speaker 6: with others, which is quite simply important in having a
Speaker 6: negotiated position with regard to some of this regulatory action.
Speaker 4: Catherine Dowling, great to have you join Bidwise Asset Management.
Speaker 3: We appreciate it.
Speaker 4: Elsewhere on Capitol Hill, Elon Musk is, in fact there
Speaker 4: today stoken congressional enthusiasm. He hopes for his pretty ambitious
Speaker 4: effort to sash at least two.
Speaker 3: Trillion dollars in the federal budget.
Speaker 4: Now, Mosk and his partner in the initiative, former Republican
Speaker 4: presidential candidate Vivit Gramswami, plan to meet with groups of lawmakers,
Speaker 4: followed by a session that all Republican House members have
Speaker 4: been invited to. Coming up, we'll discuss the impact the
Speaker 4: French government TERMOL on the country's businesses. And startup sector
Speaker 4: that's next. This is the Bloomberg technology. I think we're
Speaker 4: just going to hear from the National Rally leader Marine
Speaker 4: la Penn now, who is speaking with Bloomberg earlier today.
Speaker 3: Just take a listen because you need to l DI
Speaker 3: Missions Library.
Speaker 2: What I said was that the president's resignation is a
Speaker 2: personal decision for him and can only take place in
Speaker 2: my view, when a political crisis happens or an institutional
Speaker 2: crisis can no longer have any other solution than the
Speaker 2: resignation of the President of the Republic. What I do wish,
Speaker 2: on the other hand, because for sure there will be
Speaker 2: new legislative elections in the next few months, is that
Speaker 2: we work on a voting system by then that enables
Speaker 2: us to have a real majority, whatever that majority may be.
Speaker 2: But the country needs a majority. It can't live for
Speaker 2: months and years with three blocks, which in reality can't
Speaker 2: implement a policy.
Speaker 4: That was Marine Lapin of the National Rally commenting on Macron.
Speaker 4: President Macron's position, after, of course, he has been dismissing
Speaker 4: growing calls for his own resignations from politicians across the
Speaker 4: political spectrum, Macron came out saying he will serve out
Speaker 4: his second term in full. He's set to talk further
Speaker 4: at eight pm Local time, that's two pm here in
Speaker 4: New York. But let's just discuss the impact of all
Speaker 4: this political drama on French businesses, on tech companies Bloomberg's benwell,
Speaker 4: butflo does.
Speaker 3: That for us? And how a sentiment at the moment.
Speaker 4: Is there a moment of crisis among executive boards?
Speaker 7: Yes, I mean it's a moment of uncertainty and as
Speaker 7: we know, business leaders don't like uncertainty then like to
Speaker 7: be able to focust their.
Speaker 3: Budget for next year, etc.
Speaker 7: Actually, that uncertainty started this summer in June when Macron
Speaker 7: called the unexpected app election, So that's that's ongoing. Basically, Barnier,
Speaker 7: the Prime Minister, was preparing a budget for next year
Speaker 7: that was actually going to slash some helps for innovative
Speaker 7: startups on R and D, etc. So now there is
Speaker 7: a certainty of it's going to happen, we have there
Speaker 7: is a few weeks left for Macon first to pick
Speaker 7: a new prime minister and then to vote if possible,
Speaker 7: the budget. So yeah, like startup leaders and companies in
Speaker 7: general waiting to see what's going to be in that budget.
Speaker 7: Or if we are going to continue with this year's budget,
Speaker 7: which could be reconducted through next year through special law Benoir.
Speaker 4: It's notable that leaders like Eric Schmidt, course former Google
Speaker 4: CEO and now focused on geopolitics as in particular, has
Speaker 4: come on this show and said France is the standout
Speaker 4: in Europe in terms of getting things done, having a
Speaker 4: really healthy ecosystem where companies like Mistral for ai can thrive.
Speaker 3: Has that been something being questioned late.
Speaker 7: It's not been questioned, but you're right, Like Macrome started
Speaker 7: about seven years ago when it was first elected, a
Speaker 7: sort of push for what he called startup Nation. He
Speaker 7: helped companies to hire foreign scientists, for foreign companies to
Speaker 7: come to France to start their business. He's been doing
Speaker 7: some helps to get visas for foreign tech workers, for example.
Speaker 7: And then the push in AI led by open Ai
Speaker 7: led to new French startups trying to rival with open
Speaker 7: Ai like Mistroll. As you said, Macron is also going
Speaker 7: to be organizing a World summit in February or an AI.
Speaker 7: There certainly is this push that companies hope can continue,
Speaker 7: and obviously the political situation is not the best. Just
Speaker 7: to ensure that this momentum, which is quite fragile, can
Speaker 7: keep going.
Speaker 4: Benwa, It's great to have you. Bernan Bardelo on the
Speaker 4: impact in France at the moment. Sticking with international politics,
Speaker 4: South Korea's main opposition later says it may be difficult
Speaker 4: to get enough support from the ruling party to impeach
Speaker 4: President yunsuk yuil this week after his declaration of martial law,
Speaker 4: but he remains committed to removing the president.
Speaker 3: Democratic Party leader.
Speaker 4: Lee Jim young sat down for an interview with Bloomberg
Speaker 4: earlier today.
Speaker 3: Here's what he had to say. Chung Chung kungu chor Kumnia.
Speaker 8: Ultimately, politics is done by the people, and even if
Speaker 8: the result of the vote may go against the world
Speaker 8: the people in the current situation, the vote result may
Speaker 8: change next time if individual members of the parliament are
Speaker 8: pressured heavily by public opinion. That's what I think important.
Speaker 4: For companies such as Samsung, Skhiinex. Of course tech more broadly,
Speaker 4: let's discuss the impact of all this geopolitical uncertainty on
Speaker 4: tech markets.
Speaker 3: More broadly.
Speaker 4: J Jacobs us head of Thematic Active, BTF and black Rock,
Speaker 4: and thus far J hasn't had much impact that US
Speaker 4: stocks have continued to show their exceptionalism. We've had record
Speaker 4: high's yesterday amid global turmoil.
Speaker 3: What do you make of that?
Speaker 9: Well, actually, the tech sector in the United States is
Speaker 9: one of the most geopolitically exposed sectors out there. About
Speaker 9: sixty percent of the revenue of tech comes from overseas.
Speaker 9: So one of the ways that we've been looking about
Speaker 9: geopolitical fragmentation is can you really tilt your exposures within
Speaker 9: the tech sector to companies that buy in the United States,
Speaker 9: build in the US, cell in the United States really
Speaker 9: to try to isolate some of that geopolitical risk. I
Speaker 9: think it's very present in the tech sector in particular.
Speaker 3: Where would that end.
Speaker 4: Up leading you which companies I mean, first and foremost,
Speaker 4: you might think, well, those that have been benefiting from
Speaker 4: the Chipsact, who've been building here in the United States,
Speaker 4: but then inter hasn't exactly been having the best of
Speaker 4: times of it.
Speaker 9: Well, it's coming from a range of companies, just kind
Speaker 9: of across different industries within technology. I mean, I think
Speaker 9: if we look at artificial intelligence, we see that a
Speaker 9: lot of leadership is with US based companies. For example,
Speaker 9: you could look specifically at data centers and power companies
Speaker 9: as being really important parts of the AI ecosystem but
Speaker 9: are very localized to the United States. You're getting some
Speaker 9: of that isolation from geopolitics. We even brought out an
Speaker 9: entire fund based off of this strategy, I Etc. Which
Speaker 9: is really looking at the tech sector but tilting towards
Speaker 9: those US kind of very domestic focused companies to isolate
Speaker 9: geopolitical risk.
Speaker 3: That's really interesting.
Speaker 4: The infrastructure build out is one that many have turned
Speaker 4: to other than just thinking okay, in Vidia chips and shovels.
Speaker 4: We then think about the next layer down, the energy,
Speaker 4: the companies, But how many people are asking you, well,
Speaker 4: what about application layers?
Speaker 3: What about the next frontier of AI?
Speaker 9: That's really where a lot of the conversations are going.
Speaker 9: I think if we look at the last two years,
Speaker 9: it's been a huge focus on the Magnificent seven, and
Speaker 9: it's been a really concentrated rally within artificial intelligence. We
Speaker 9: think as we enter the third year of what we're
Speaker 9: really calling the build phase of artificial intelligence, this is
Speaker 9: when the markets are going to recognize that this is
Speaker 9: something much bigger that's going to impact a wider range
Speaker 9: of technology stocks. A wider range of semiconductor stocks, the
Speaker 9: power stocks. It could even impact cybersecurity stocks as data
Speaker 9: gets more valuable and needs to be protected. And you
Speaker 9: can even look at adjacent industries in financial services and
Speaker 9: healthcare where AI can really create more productivity and efficiency.
Speaker 9: So I think we're going to see a transition in
Speaker 9: twenty twenty five to really a broadening of that artificial
Speaker 9: intelligence story.
Speaker 4: How much of the story is starting to pick up
Speaker 4: back in crypto for you as.
Speaker 9: Well, Jay, Well, it's significant. You know, of course bitcoin
Speaker 9: passing one hundred thousand is a significant milestone, but really
Speaker 9: you have to take a step back and look at
Speaker 9: the broader picture of why is this happening. You know,
Speaker 9: I think there's certainly some anticipation of more friendly regulatory tellens,
Speaker 9: but also in your previous segment, you're just highlighting some
Speaker 9: of the geopolitical risk around the world in Europe and Asia,
Speaker 9: and in a lot of ways, professional managers which are
Speaker 9: really just starting to access digital assets for the first
Speaker 9: time with our launch of ibit our Bitcoin etp are
Speaker 9: thinking about it as a hedge in their portfolio. Behaves
Speaker 9: very differently from stocks and bonds, and if you see
Speaker 9: more geopolitical risk Bitcoin could really benefit.
Speaker 4: What's interesting about your role is not only thinking about
Speaker 4: strategy or leadership clients, but you're also thinking about the
Speaker 4: international ATF offering as well. And I'm just interested about
Speaker 4: whether anyone is betting on outside of the US.
Speaker 9: They are, but in more targeted ways where we've seen
Speaker 9: some really significant flows in the past year. Specifically looking
Speaker 9: at India is really a play on changing supply chains,
Speaker 9: particularly if you look at a lot of the reshoring
Speaker 9: that's happening in the United States. There's been an effort
Speaker 9: to build more here domestically, but also to diversify supply
Speaker 9: chains geographically, and India has been a major beneficiary. Just
Speaker 9: like we have a Chips Act in the United States,
Speaker 9: they've been focused on building out more chip capacity as
Speaker 9: well as well as building out more tech manufacturing. So
Speaker 9: India has been a big beneficiary Mexico as well as
Speaker 9: you look at nearshoring and the interplay of growing trade
Speaker 9: relations between the US and Mexico.
Speaker 4: Fascinating. J Jacobs, thanks so much for that. US Head
Speaker 4: of Thematic and Active ETF over a black Rock AMD
Speaker 4: CEO Lisa Sue spent the better part of her ten
Speaker 4: year career engineering, one of the biggest turnarounds in Silicon
Speaker 4: Valley history. Now just preparing for a battle against Nvidia,
Speaker 4: Emily Chang sat down in the CEO at MD's headquarters
Speaker 4: in Austin, Texas to discuss the bets she's.
Speaker 3: Making to compete.
Speaker 4: A long view on the global chip supply chain and
Speaker 4: even her distant family link within video CEO just one
Speaker 4: take a listen.
Speaker 10: In Vidia is seen as the dominant force in AI
Speaker 10: right now, and AMD is widely considered the next best option.
Speaker 10: Is that good enough for you?
Speaker 5: Do you like being seen as the underdog?
Speaker 3: I wouldn't call it a like or dislike.
Speaker 11: What I would say is, you know, AMD has had
Speaker 11: a history of doing amazing things, and from that standpoint,
Speaker 11: we've always been in this place where we haven't necessarily
Speaker 11: had same amount of people that you know, other larger
Speaker 11: companies have, but we've certainly punched well above our weight
Speaker 11: in terms of technology capability, in terms of impact on
Speaker 11: the industry.
Speaker 12: This is the most complex highest performance computer.
Speaker 13: People are kind of obsessed with the fact that you
Speaker 13: and Jensen are distant cousins.
Speaker 10: I know that you are competitors, but do you ever treat.
Speaker 11: Notes well, first of all, Jensen is brilliant, so I
Speaker 11: fully admire him for that. We were really distant, so
Speaker 11: we didn't grow up together.
Speaker 10: You know.
Speaker 11: We actually met at an industry event, so it wasn't
Speaker 11: until we were well into our careers.
Speaker 10: So no family dinners.
Speaker 5: Just to put the rumor to rest.
Speaker 11: No family dinners. And it's an interesting coincidence.
Speaker 10: So many of your customers are building their own chips
Speaker 10: hyperscalers like Apple and Meta and Google and Microsoft and Amazon.
Speaker 14: Is that a threat?
Speaker 11: This is a huge market, Emily, There's like more than
Speaker 11: enough chips for everybody to build. And the beauty of
Speaker 11: this is once recognized trips are so important. Yes, so
Speaker 11: it's natural that they're going to have their own capability.
Speaker 10: Has the shakeup of a very established industry. Surprised even you.
Speaker 5: It has a little bit, I have.
Speaker 4: To say, Mdco lis to c there alongside Blue Megsmily Chang.
Speaker 4: Check out the full episode of The Circuit tonight on
Speaker 4: bloom Meg TV ten pm Eastern or stream on Bloomberg
Speaker 4: Originals a pm Eastern.
Speaker 3: Now it's time for talking tech.
Speaker 4: First up, all chips TSMC is in talks of the
Speaker 4: Nvidia to produce Blackwell AI chips at TSMC's new plant
Speaker 4: in Arizona. It'scording to Reuter's now TSMC is said to
Speaker 4: be making preparations to start production early next year. Plus,
Speaker 4: Apple's major manufacturing partner, fox Conn, reported a second consecutive
Speaker 4: month of just single digit sales growth, raising concerns that
Speaker 4: demand for AI infrastructure won't be able to offset weak
Speaker 4: iPhone sales. Apples historically accounted abound of fifty percent of
Speaker 4: hon Hui's overall sales, and the EU's new competition chief
Speaker 4: says a potential split of Google's businesses is still under consideration.
Speaker 3: Joyce of Ribeira, who started.
Speaker 4: Her five year term this week, said she aims to
Speaker 4: build on the legacy of her predecessor, mar Great Vestia.
Speaker 4: Welcome back to Blue Meg Technology. I'm Caroline Hide in
Speaker 4: New Yorker. Quick check on these markets because while we're
Speaker 4: teetering around record highs, the NASAC is only off by
Speaker 4: eleven points, and a's that one hundred that is the
Speaker 4: big benchmark for big tech.
Speaker 3: We are being put to the upside.
Speaker 4: By the likes of Tesla, for example, chip stocks. On
Speaker 4: the downside, though we're looking at bitcoin is the real
Speaker 4: punchmark that we're all looking at.
Speaker 3: In the moment. It's now got an ecosystem worth.
Speaker 4: Two trillion dollars, I mean actually smaller than some of
Speaker 4: the biggest tech companies, but still we have run up
Speaker 4: past one hundred thousand dollars, up another three and a
Speaker 4: half percent today. Move on and have a look at
Speaker 4: some of the individual movers within that Nasdaq one hundred
Speaker 4: and some of the benchmarks. Now the biggest points dragged
Speaker 4: to the downsize as Synopsis Integral to chip designed chip
Speaker 4: manufacturing basically to testing your designs and numbers came in
Speaker 4: a little bit weak. We have seen dragged down for
Speaker 4: the Electronic Design Automation Software Company today, first called a
Speaker 4: forecasts weekend, then expected Intel off by three point four percent.
Speaker 4: Maybe some of that moon music around chips pulling it lower.
Speaker 4: There has been some interesting news in terms of its
Speaker 4: board trying to shore it up, and the Microchip CEO
Speaker 4: comes on. So does a former ASML chief executive too,
Speaker 4: so two key experienced operators coming onto the Intel board
Speaker 4: as they seek a new CEO.
Speaker 3: Micro strategy actually just turning.
Speaker 4: To the downside of by one point seven percent, having
Speaker 4: been rising earlier. But we are going to dig deep
Speaker 4: on all things micro Strategy after what has been a
Speaker 4: phenomenal run up in the stock. Why because it's basically
Speaker 4: a bitcoin proxy. We can talk about that. We've both
Speaker 4: us and Chen and Jen. I mean, MicroStrategy has been
Speaker 4: beloved of the retail community, but actually some institutional players
Speaker 4: have been getting in on Michael Saylor's bitcoin base.
Speaker 3: Yeah, exactly.
Speaker 15: So I just published our story today about how micro
Speaker 15: strategy has become the hottest trip right now with war Street.
Speaker 15: If you look hash file, managers stare buy in the
Speaker 15: convertible bonds. That the other instrument because micro Strategy has
Speaker 15: this plan about keep raising capitol right to fund is
Speaker 15: bitcoined buying, and so they have already raised six billion
Speaker 15: convertible bonds and for hatch funds, this is a perfect
Speaker 15: instrument for them to play in market neutral arbitcharge bat
Speaker 15: and this is a complex bet, but the essential part
Speaker 15: of it is to bet on the volatility. So they're
Speaker 15: writing on the volatility of the underlying of micro strategy.
Speaker 3: As we see today, there's.
Speaker 15: A big jump right like at the open MicroStrategy was
Speaker 15: up like almost nine percent when bitcoin hits new record.
Speaker 15: So MicroStrategy move on that lots of price points, and
Speaker 15: they just make the convertible arbitcharge trade much more appealing
Speaker 15: to this headphone group.
Speaker 4: We were talking about how the retail frenzy has been
Speaker 4: there and actually a lot of people playing leverage bets
Speaker 4: on MicroStrategy getting into two x three x the ETF exposure.
Speaker 4: She grew quite a difficulty from a liquidity perspective in
Speaker 4: the market.
Speaker 3: Is there any talk about what.
Speaker 4: Is it this volatility or playing this volatility when you're
Speaker 4: looking at institutional and retail.
Speaker 15: Sure, yeah, I would say micro strategy is just no
Speaker 15: short of volatility, right because it's a bitcoin proxy, so
Speaker 15: you know the volatility rise on the bitcoin pricing, but
Speaker 15: also the premium it's bitcoin holding because it's now training
Speaker 15: on two hundred percent wars and it's the it's like
Speaker 15: the value of bitcoin it holds, and you know those
Speaker 15: things could also move around. And then you have the
Speaker 15: retail that's buying the ETF leveraging ETF two times right
Speaker 15: along two times shots. That's that, and then the institution
Speaker 15: and I think in a way that the company, even
Speaker 15: it's alf told that it's more volatizing any sm P
Speaker 15: five hundred stock. So that's where you know the money
Speaker 15: flow coming from, and people are just riding on the
Speaker 15: volatility and a retail frenzy.
Speaker 4: According to Breenberg, fourteen percent about standing shares are currently shorted.
Speaker 4: But thus why that has been a painful trade. Thank
Speaker 4: you so much, All things MicroStrategy. With the Jinschen, they're
Speaker 4: another story. We're tracking Chinese hackers compromised eight American telecom
Speaker 4: companies as part of a wide ranging espionage effort to
Speaker 4: gather intelligence on prominent US citizens. That's according to Biden
Speaker 4: administration officials. Here for the details, Bloomberg's Kelsey Griffiths and
Speaker 4: kind of absolutely shocking, lady that eight have been compromised
Speaker 4: and we can't seem to get them out.
Speaker 16: That's exactly right, Caroline. What we do know, and the
Speaker 16: details are pretty scarce on the ground right now, is
Speaker 16: that multiple US telecoms have been breached in this seemingly
Speaker 16: very wide and broad campaign to burrow into our telecommunication
Speaker 16: networks and glean really important and valuable details about public
Speaker 16: officials and about life.
Speaker 3: In the US.
Speaker 4: We also know there's worries about both incoming president and
Speaker 4: vice president in terms of being compromised on their communications.
Speaker 4: Just talk to us about what the CEOs have been saying.
Speaker 4: We understand that Ateen TCEO has been speaking with other
Speaker 4: law makers who has.
Speaker 3: Come out and sort of talked about this publicly.
Speaker 16: Though that's right, there haven't been a lot of companies
Speaker 16: that have so far come out publicly and talked about this.
Speaker 16: T Mobile last week became the first carrier to publicly
Speaker 16: share details about what they had seen on their networks
Speaker 16: and sort of some of the markers of that threat,
Speaker 16: and they spoke with me about that exclusively. They also
Speaker 16: put out a blog post last week that details some
Speaker 16: of those threats. So I think that you know, what
Speaker 16: we're seeing as a really sophisticated attempt and T Mobile
Speaker 16: caught it early, but some of the other carriers, it seems,
Speaker 16: weren't so lucky.
Speaker 4: Kelsey fascinating reporting and I think Senator Marco Rubio, who's eventually,
Speaker 4: of course meant to be sexual mistate talking about how
Speaker 4: this is a as it gets Kelsey Griffiths on all
Speaker 4: things hacking coming up, does.
Speaker 3: The unicorn status need to be reevaluated?
Speaker 4: And we're discussing that with Rebecca Line of co founder
Speaker 4: and general partners of Canvas Ventures.
Speaker 3: That's next This is Bloomberg Technology.
Speaker 4: In the last year, more than fourteen hundred startups were
Speaker 4: valued at more than one billion dollars, but actually only
Speaker 4: fifteen percent claim profitability. That's how our next guess is
Speaker 4: measuring well the fact that these numbers don't seem to
Speaker 4: be a measure of real success anymore, unicon status, how
Speaker 4: do we reevaluated? And one of the new markers for
Speaker 4: that success, Rebecca Linn' pleas to say, co founder and
Speaker 4: general partner of Canvas Ventures, we steal all your great statistics, Rebecca,
Speaker 4: but their statistics are shocking, and I'm interested as to
Speaker 4: what you think the new benchmark is and how many
Speaker 4: of those fourteen hundred actually still vindicate a one billion
Speaker 4: dollar valuation.
Speaker 14: Yeah. I think the number I've heard is it would
Speaker 14: take about twenty years for all of those unicorns to
Speaker 14: actually make it to the public market, and only fifteen
Speaker 14: percent are profitable. And on top of that, a lot
Speaker 14: of them have been around, you know, for over twelve years,
Speaker 14: so just way too long to really hit their stride
Speaker 14: and hit profitability. I think with Jeni now, a lot
Speaker 14: of the metrics we'd seen in the past aren't really
Speaker 14: the metrics, you know, we're looking forward in the future
Speaker 14: for success, you know, Unicorn status. I think people have
Speaker 14: said that we need a new beast. I think that's
Speaker 14: absolutely true, and they're you know, getting to that billion
Speaker 14: dollar valuation is not realy not meaningful anymore. And then
Speaker 14: on top of that, what we're seeing with GENAAI is
Speaker 14: an incredible opportunity to generate revenue quickly. We're seeing this
Speaker 14: in the statistics about how quickly companies can get to
Speaker 14: a million dollars of revenue. It used to take companies
Speaker 14: quite a lot longer. Right now with Jeni, the median
Speaker 14: is like a less in months, right and we actually
Speaker 14: saw a company the other day that got to a
Speaker 14: million dollars of ARR in two weeks.
Speaker 3: But it's insoluable, Like is that something it's not? None, No,
Speaker 3: I don't think so.
Speaker 14: I think what's happened. I don't think it's sustainable. And
Speaker 14: so what we really are looking for are companies that
Speaker 14: have sort of a unique insight and very deep industry
Speaker 14: knowledge in the area that they're going into. We think
Speaker 14: that's more important than it ever was before. And I
Speaker 14: think this, you know, ar the ar ramp we're seeing
Speaker 14: which so many vcs cold were hanging their hats on
Speaker 14: for so long. Is really ephemeral. And so you know
Speaker 14: what's happening is, you know, these big enterprise companies and
Speaker 14: consumers too are signing up and they're paying money to really,
Speaker 14: you know, really pilot you know the technology. And at
Speaker 14: the same time we're seeing massive you know enterprise companies
Speaker 14: like Salesforce, you know, highre fourteen hundred new salespeople to
Speaker 14: capture that opportunity.
Speaker 3: How many SOI agents Rebecca on not know Salesforce?
Speaker 4: How many Asian AI companies are you being hit within
Speaker 4: the moment?
Speaker 14: Oh my gosh, dozens a day, dozens a day. And
Speaker 14: I think those are features. Those are features of you know,
Speaker 14: large enterprise companies in the future.
Speaker 4: The feature is, so what is the reality? What companies
Speaker 4: do you want to see being built? What problems are
Speaker 4: you wanting to see being sold? That is unique right now?
Speaker 14: I love that question, Thank you. Yeah, it's so exciting
Speaker 14: right now to be an venture. There are so many
Speaker 14: thesis out there that we have wanted to invest in
Speaker 14: for a very long time, and there are companies that
Speaker 14: tried to do it, but the technology just wasn't there yet.
Speaker 14: I mean a prime example you know was of a
Speaker 14: company that was impacted by Jenai was case Texts. Case
Speaker 14: text was doing really well, they had ten thousand customers,
Speaker 14: but they couldn't fulfill the last part of their promise,
Speaker 14: which was really to truly stand in the shoes of
Speaker 14: a legal counsel. And when Jenai came along, they could
Speaker 14: do that and that was a huge unlock and why
Speaker 14: they were purchased very quickly by Thompson Reuters. Another one
Speaker 14: that we've wanted to see for a very long time
Speaker 14: is voice and I think that is the most exciting
Speaker 14: thing about Jenai right now. And so when we were
Speaker 14: in doc Simity for many years, I just thought, you know,
Speaker 14: we should be taking the entire patient call volume, both
Speaker 14: inbound and outbound, off the shoulders of the physician's office.
Speaker 14: That should just happen. And the tech just wasn't there yet.
Speaker 14: You know, we've been looking for this tech ever since,
Speaker 14: you know, we led Siri many moons ago, right and
Speaker 14: with Jennai, it suddenly is there. So we invested in
Speaker 14: and a company pretty recently called Parakeet, with a founder
Speaker 14: with super deep technical knowledge on the medical space, and
Speaker 14: they're doing just that. They're taking the call volume the
Speaker 14: inbound and outbound call volume off the shoulders of a
Speaker 14: doctor's practice, and that to me is really really exciting.
Speaker 4: We listen to you because of the amount of times
Speaker 4: you're on to my dismissed the amount of times are
Speaker 4: called one of the top of vcs, but also because
Speaker 4: of the exits that you have seen a new call
Speaker 4: out case text versus M and A. We're also seen
Speaker 4: as you just mentioned, well Numena for example, which which
Speaker 4: actually managed to do the public kind of route. How
Speaker 4: are you anticipating some of your portfolio going public come
Speaker 4: tent in twenty five.
Speaker 14: Yeah, I mean I think there the window is starting
Speaker 14: to open. There are so many companies that are that
Speaker 14: are ready. I think the market's ready. I think with
Speaker 14: the new administration, people are ready for the unlock. And
Speaker 14: I do think I we'll see the public markets start
Speaker 14: to open up. Maybe I'm too optimistic, I don't know,
Speaker 14: but I do think that that's a very viable option
Speaker 14: for people going forward. The other thing is I think
Speaker 14: M and A. I mean, I actually prefer M and
Speaker 14: A every single time because it's a much it's just
Speaker 14: a much you know, more linear exit for founders often
Speaker 14: and so I think founders should always keep both options
Speaker 14: in mind. My most successful companies have had it very
Speaker 14: exciting IPO path, but have also dual tracked with an
Speaker 14: M and A path at the same time.
Speaker 4: Rebecca Lynn, we thank you for pushing head to next
Speaker 4: c co founder, general partner of Canvas Ventures.
Speaker 3: We hope to see you in that new year.
Speaker 4: Meanwhile, let's talk about a company that's part of one
Speaker 4: of the most valuable startups out there, Bike Dances.
Speaker 3: TikTok.
Speaker 4: It's tripled its US shopping sales to over one hundred
Speaker 4: million dollars. The social media platform says it's app drew
Speaker 4: in one hundred and sixty five percent annual increase in
Speaker 4: shoppers for the two days between Black Friday and Cyber Monday.
Speaker 4: This comes as the app faces, of course, potential shutdown
Speaker 4: in January, as regulators fear its parent company, Bike Dance,
Speaker 4: poses a national security threat. Let's dig into that TikTok
Speaker 4: on TikTok and Dexandra Levigne is with us.
Speaker 3: It could come tomorrow.
Speaker 4: I mean, we've been here all week thinking that we'll
Speaker 4: get a ruling on whether or not the case can continue.
Speaker 3: That US would ban TikTok come January nineteen.
Speaker 13: Yeah, it is finally here. We are expecting a decision
Speaker 13: probably out of Washington tomorrow morning. And it's a really
Speaker 13: consequential moment.
Speaker 3: It feels like it's been.
Speaker 13: A very long time, but this is actually a hugely
Speaker 13: consequential moment, probably the biggest deal for TikTok since Biden
Speaker 13: actually signed the divestor band law back in April.
Speaker 3: And part of the.
Speaker 13: Reason this is such a huge deal is because if
Speaker 13: this comes to pass, this will be the first time
Speaker 13: that a foreign owned social media app has ever been
Speaker 13: banned in this country. And so and by the way,
Speaker 13: it's not just a social media app. It is a
Speaker 13: social media app used by half of the American population.
Speaker 13: And there are more people on TikTok in America than
Speaker 13: voted in our last selection.
Speaker 4: The future administration. The head of it is on TikTok.
Speaker 3: Many of us are on TikTok.
Speaker 4: And I feel like the anxiety around whether it is
Speaker 4: going to be banned has just dampened away as time's
Speaker 4: gone on. But I mean, are we feeling that the
Speaker 4: US Court is going to let this continue or could
Speaker 4: they take it off the table?
Speaker 13: You know, no one knows for certain. I think reading
Speaker 13: the tea leaves. It seems likely that the court is
Speaker 13: going to uphold this law that would potentially see TikTok
Speaker 13: shut down next month. But that doesn't mean that that's
Speaker 13: sort of the end of the line for TikTok. I
Speaker 13: think that it's probably not going to disappear off of
Speaker 13: our phones in January. In all likelihood, if TikTok loses tomorrow,
Speaker 13: they are probably going to somehow appeal the decision, either
Speaker 13: asking the DC Circuit to take it up and hear
Speaker 13: it again, or potentially taking it to the Supreme Court.
Speaker 4: How has TikTok been just countering this little being behind
Speaker 4: the scenes, because we haven't heard much publicly.
Speaker 13: Well, I think a huge, a huge piece of this
Speaker 13: is actually American investors, and it's also a hugely overlooked piece.
Speaker 13: I think that you know, American investors have so much
Speaker 13: money tied up with ByteDance, which is TikTok's par and company.
Speaker 13: They have collectively billions, and so it's not just a
Speaker 13: decision tomorrow that will affect millions of people. It's also
Speaker 13: a decision that will affect billions of dollars. And I
Speaker 13: think one really big question I've had about What's been
Speaker 13: going on behind the scenes is how will Trump's tie
Speaker 13: to some of these investors. We know that there's at
Speaker 13: least one big Republican mega donor, Jeffyass who Trump is
Speaker 13: you know, has a good relationship with big question is
Speaker 13: how are these American investors behind the scene is potentially
Speaker 13: going to affect the outcome for the app's future here.
Speaker 4: Soakoya, General Atlantic, Susquehanna International, you name a lot of them.
Speaker 4: In a great piece today, Go and check out the
Speaker 4: Tech Daily with Alexandra Lumine and stay tuned for that decision.
Speaker 4: Open AI it's partnering with Defense Tech Company andrel on
Speaker 4: anti drone Systems. Infari has inside track and this is
Speaker 4: more of a push was seeing from open Ai to
Speaker 4: be something that serves US defense, the government particularly.
Speaker 3: That's right.
Speaker 12: So the company has said that they want to prioritize
Speaker 12: supporting the US government and its democratic allies in adopting AI,
Speaker 12: and a big part of that is increasing their defense partnerships.
Speaker 12: So they have also done a partnership with the US
Speaker 12: Air Force Research Lab, They are working with Los Alamos,
Speaker 12: and they've hired a former top Pentagon official to head
Speaker 12: up their policy in that area, and also added the
Speaker 12: former head of the NSA to their board recently, so
Speaker 12: we're seeing a lot of movement in that direction.
Speaker 4: How do employees feel about it, because it can sometimes
Speaker 4: do controversial this kind of work.
Speaker 12: Yeah, absolutely, you know, historically in the past, for example,
Speaker 12: in twenty eighteen, when Google was starting to partner with
Speaker 12: the Pentagon in what was called Project Maven, it was
Speaker 12: hugely controversial. Employees protested the partnership ended up not working
Speaker 12: out at that time. However, now we're seeing I would say,
Speaker 12: less resistance from employees generally. Of course that could change,
Speaker 12: but so far we haven't seen much pushback.
Speaker 3: And it's not just open Ai opening eyes.
Speaker 12: Competitor Anthropic recently did a big partnership with Palanteer and Amazon,
Speaker 12: and Meta has also been doing some work in this area.
Speaker 12: So I think this is a trend we're continuing to.
Speaker 4: Secrow and very briefly, Like Sam Altman was at the
Speaker 4: Deal Book event yesterday talking about his optimism that you know,
Speaker 4: Musk is in agoby to vindictive when close to Donald Trump.
Speaker 4: Do you think that this could be in any way
Speaker 4: an issue.
Speaker 3: I think it's really too soon to say.
Speaker 12: What is going to happen in terms of AI policy
Speaker 12: and exactly how or if Elon will be involved. We know,
Speaker 12: of course he's leading dog, but so far there's still
Speaker 12: a lot that's being decided about who and how AI.
Speaker 3: Policy is going to shake out. So I would say
Speaker 3: it's too soon to say, sharenk if I brilliant to
Speaker 3: have you, thank you.
Speaker 4: Meanwhile, President link Trump, as we're just talking about, has
Speaker 4: now nominated fintech billionaire and SpaceX astronaut Joed Eisigman to lead.
Speaker 3: NASA for more but most Lauren Grush joins us.
Speaker 4: And look, he has been busy going up and doing
Speaker 4: space walks with SpaceX and now he's going to be
Speaker 4: leaving his CEO role.
Speaker 17: Yes, absolutely.
Speaker 18: I mean, if there's one thing that most people can
Speaker 18: say about Jared is he's very passionate about space. He
Speaker 18: really kind of bursts onto the scene in twenty twenty
Speaker 18: one when he announced that he had booked the first
Speaker 18: all civilian astronaut crew trip to space on SpaceX, and
Speaker 18: ever since then he's only become more of more of.
Speaker 17: A central figure at SpaceX.
Speaker 18: So it's certainly a very interesting pick, and I think
Speaker 18: it's going to open up a lot of questions about,
Speaker 18: you know, his relationship with SpaceX. I mean, you have
Speaker 18: to understand NASA. NASA and SpaceX are very big partners,
Speaker 18: and SpaceX is maybe the biggest contractor that NASA has
Speaker 18: right now. So it's definitely a very unique pick for
Speaker 18: the agency that I don't think we've seen really before.
Speaker 3: Yeah, so we're pricing Bill Nelson.
Speaker 4: How are there ways in which they have protections in
Speaker 4: place to not have these blurred lines as to someone
Speaker 4: who ultimately doesn't work for SpaceX but has plowed an
Speaker 4: awful lot of his personal fortune into riots using SpaceX.
Speaker 3: And I'm sure has a personal relationship across the board.
Speaker 18: Absolutely, I do believe there are some areas where he
Speaker 18: might have to reaccuse himself. For instance, he has an
Speaker 18: investment in SpaceX where he holds shares, It's possible he
Speaker 18: might have to divest those If there are major decisions
Speaker 18: that are being made about future contracting, you know, it's
Speaker 18: possible he might have to recuse himself from making those decisions.
Speaker 17: A lot of the times NASA administrators don't get into
Speaker 17: those nitty gritty details. But again it's it's a lot
Speaker 17: of open questions.
Speaker 18: I think a lot of people will be asking because
Speaker 18: anytime NASA makes a decision on a major NASA contract,
Speaker 18: you know, those can get quite contentious.
Speaker 17: We saw that when they put out bids for their
Speaker 17: human landing system.
Speaker 18: SpaceX won that, but Blue Origin ended up suing NASA
Speaker 18: and the federal government over that decision.
Speaker 17: So those things, those decisions can get quite contentious.
Speaker 18: And I think his selection will only add fuel to
Speaker 18: those fires.
Speaker 4: And there's pictures of Jaredisman doing that spacewalk quite a
Speaker 4: few months ago. Interesting that stallin Coles is a customer,
Speaker 4: all shift, full payments, so plenty of inte linking going on.
Speaker 4: We thank you bringing us the latest Bloomberg's Law and
Speaker 4: grush on the latest from Trump administration picks. That does
Speaker 4: it for this edition of Bloomberg Technology. You don't want
Speaker 4: to forget to check out the podcast.
Speaker 3: You'll find it.
Speaker 4: On the terminal as well as on Apple, on Spotify,
Speaker 4: and on iHeart. From New York with stocks near record highs,
Speaker 4: this is a Bloomberg Technology