WEBVTT - Disney's Board of Directors and Bitcoin Reverses Course 0:00:01.639 --> 0:00:04.800 From Marhart where Innovation, Money and power. 0:00:04.559 --> 0:00:06.920 Collie in Silicon Valley, NBN. 0:00:07.280 --> 0:00:11.280 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.040 --> 0:00:27.560 I'm Caroline Hein of Bloomberg's World headquarters in New York, 0:00:27.920 --> 0:00:29.640 and I'm Ed Ludlow in San Francisco. 0:00:29.760 --> 0:00:31.880 This is Bloomberg Technology. 0:00:31.360 --> 0:00:34.640 Coming up Disney's fight against activist Nelson pelts Well. It 0:00:34.680 --> 0:00:37.159 steps up as it has a win of support of 0:00:37.240 --> 0:00:40.040 Value Act Capital for its board nominees. Will break down 0:00:40.080 --> 0:00:40.879 the latest. 0:00:41.360 --> 0:00:44.680 Plus Bitcoin reversed his course and wipes out gains from 0:00:44.680 --> 0:00:49.120 this year as uncertainty lingers around the SEC's ETF decision. 0:00:49.159 --> 0:00:50.640 More details ahead, and is. 0:00:50.680 --> 0:00:54.640 Twenty twenty four the year US China tensions finally hit Apple. 0:00:55.240 --> 0:00:56.880 Yeah, We're going to dig into that big time later 0:00:56.920 --> 0:00:58.600 in the show. The kind of main story on the 0:00:58.600 --> 0:01:02.480 public equity side is Disney. Disney CEO Bob Iger has 0:01:02.520 --> 0:01:06.280 secured the support of activist Value Act, who will back 0:01:06.400 --> 0:01:09.440 Disney's proposals for the board. At the same time, a 0:01:09.520 --> 0:01:13.759 very small activist head from Blackwell's Capital has some other 0:01:13.840 --> 0:01:17.440 proposals for board nominees, but is in line with bob Iger. 0:01:17.720 --> 0:01:20.840 That support important because Bob Iger is trying to ward 0:01:20.880 --> 0:01:24.640 off Nelson Peltz and Tree and Capital, another activist who 0:01:24.680 --> 0:01:27.840 have not been happy with Disney's business performance over the 0:01:27.880 --> 0:01:30.760 last two years. The stock essentially flat. You can see 0:01:30.760 --> 0:01:33.920 the kind of volatility in trading throughout Wednesday's session. Let's 0:01:33.959 --> 0:01:36.920 get down into detail, bringing Bloomberg's Lucas Shaw, who leads 0:01:36.959 --> 0:01:39.440 our screen time coverage. I guess, Lucas, what is the 0:01:39.560 --> 0:01:43.000 need to know here of this morning's developments and statements. 0:01:43.920 --> 0:01:47.800 Well, it's further proof that I guess, let's start with 0:01:48.000 --> 0:01:51.080 it's a really unusual situation to have a company of 0:01:51.120 --> 0:01:55.120 this magnitude with all these different activists investors swirling and agitating. 0:01:56.400 --> 0:02:00.760 But there's been some questions as to what exactly Nelson 0:02:00.760 --> 0:02:03.520 Pelts wants and what they're seeking from Disney, because it 0:02:03.520 --> 0:02:05.400 seems like Disney has been doing a lot of the 0:02:05.400 --> 0:02:06.120 things that they. 0:02:05.960 --> 0:02:07.200 Have advocated for. 0:02:08.520 --> 0:02:11.840 And then the appearance of Value Act and now this 0:02:12.080 --> 0:02:15.960 third entity gives some ballast to Bob Iger ahead of 0:02:16.000 --> 0:02:18.799 the shareholder meeting later this year and would seem to 0:02:18.800 --> 0:02:23.200 put him in pretty good position. And so I just 0:02:23.240 --> 0:02:26.040 think it gives Iger a vote confidence. 0:02:26.520 --> 0:02:30.160 So remind us Nelson Peltz wants himself on the board 0:02:30.480 --> 0:02:34.839 and a former executive of Disney. Meanwhile, Value Act and 0:02:34.880 --> 0:02:37.280 Disney itself want who exactly. 0:02:37.639 --> 0:02:41.919 Well, yeah, Nelson Peltz wants Jay Rissulo, who was the 0:02:41.960 --> 0:02:46.320 CFO under Bob Iger a long time ago and once 0:02:46.480 --> 0:02:49.520 was thought to be a potential successor. Bob Iger ended 0:02:49.560 --> 0:02:53.160 up sort of anointing Tom Staggs as a successor. Instead, 0:02:53.560 --> 0:02:56.359 Tom Staggs didn't end up succeeding Bob Biker because Bob 0:02:56.400 --> 0:02:59.920 Biker didn't want to go anywhere. But unlike Jay Rasulo, 0:03:00.120 --> 0:03:02.959 who clearly has an act to grind with Eiger Stags 0:03:03.240 --> 0:03:07.720 and his counterpart Kevin Mayer, who has also been you know, 0:03:08.280 --> 0:03:10.120 at one point in time thought he might succeed, have 0:03:10.200 --> 0:03:12.400 been happy to advise Bob a little bit. 0:03:12.760 --> 0:03:13.680 Kevin mayor more. 0:03:13.600 --> 0:03:16.800 So, you know, Bob is basically saying, let me do 0:03:16.919 --> 0:03:19.600 what I'm doing because we have a plan. We've already 0:03:19.639 --> 0:03:23.320 added some board members recently who are sort of or 0:03:23.400 --> 0:03:27.440 are proposing board members who are going to join, and 0:03:27.520 --> 0:03:30.240 so he thinks that his candidates are just fine. That 0:03:30.280 --> 0:03:34.960 includes I believe Gorman from Morgan Stanley and then someone 0:03:35.000 --> 0:03:36.040 who used to run Sky. 0:03:37.160 --> 0:03:39.440 We keep an eye on the cummings and goings. When 0:03:39.440 --> 0:03:42.360 it comes to personal Lucas Shaw does it so brilliantly 0:03:42.360 --> 0:03:42.680 for us. 0:03:42.680 --> 0:03:43.200 We thank him. 0:03:43.240 --> 0:03:46.680 Meanwhile, listen to the intricacies of ultimately what this means 0:03:46.680 --> 0:03:49.320 from a business case, a Disney evaluation case, and I'm 0:03:49.360 --> 0:03:52.360 more broadly how it fits into the consolidation we anticipate 0:03:52.560 --> 0:03:55.480 within media for twenty twenty four. Keithan Raganaffon is with 0:03:55.560 --> 0:03:59.800 us from Lumbag Intelligence and ethern Just already, Lucas made 0:03:59.840 --> 0:04:02.600 that point that a lot of the work that Bobag 0:04:02.680 --> 0:04:04.640 has been doing seems to be in line with where 0:04:04.920 --> 0:04:08.240 activist investors are wanted. What eight thousand jobs eliminated, seven 0:04:08.280 --> 0:04:12.440 and a half billion dollars of costs removed, What more 0:04:12.680 --> 0:04:14.040 could investors want right now? 0:04:15.160 --> 0:04:17.200 Yeah, I mean he has done a lot of the 0:04:17.240 --> 0:04:20.000 things obviously that the activist investors have wanted. And you're 0:04:20.000 --> 0:04:22.640 absolutely right in terms of cost cuts, in terms of 0:04:22.760 --> 0:04:26.400 right sizing content expenses. You know, they've brought down content 0:04:26.440 --> 0:04:29.119 expenses from about thirty billion dollars to twenty seven billion 0:04:29.160 --> 0:04:31.720 to now twenty five billion. And I think the biggest 0:04:31.800 --> 0:04:35.960 takeaway caroline from the latest earnings call was that they're 0:04:36.000 --> 0:04:39.000 getting their free cash flow back to pre pandemic levels, 0:04:39.000 --> 0:04:41.080 so free cash flow for twenty twenty four expected to 0:04:41.120 --> 0:04:44.520 be eight billion dollars. They're also restoring the dividends, so 0:04:44.560 --> 0:04:47.400 there's obviously a lot that they're doing. But I think 0:04:47.400 --> 0:04:51.200 there is still some frustration with Disney's management because we 0:04:51.520 --> 0:04:53.919 do know that Bob Eyeger last year had spoken about 0:04:54.240 --> 0:04:57.120 how the linear TV assets are in secular decline, and 0:04:57.160 --> 0:04:59.400 he had kind of spoken about, you know, how the 0:04:59.400 --> 0:05:01.520 future for those are very bleak, but we've not really 0:05:01.520 --> 0:05:03.680 seen any concrete action from. 0:05:03.560 --> 0:05:05.480 Him in terms of what he's going to. 0:05:05.360 --> 0:05:07.320 Do with those assets, and I think that's leading to 0:05:07.360 --> 0:05:09.680 a little bit of frustration. Plus, of course, you have 0:05:09.760 --> 0:05:13.279 the studio. We've had a whole string of misfires, you know, 0:05:13.320 --> 0:05:16.159 whether it's the latest Marvel's movie, are just not kind 0:05:16.200 --> 0:05:18.919 of living up to what we expect from Disney, and 0:05:18.920 --> 0:05:20.479 so they obviously have to do a lot of work 0:05:20.480 --> 0:05:22.159 on that front as well. But we have to remember, 0:05:22.200 --> 0:05:24.680 I mean, these things are going to take change takes time. 0:05:24.960 --> 0:05:27.400 It's not going to happen overnight. But you're absolutely right, 0:05:27.440 --> 0:05:29.560 bar Biger is definitely I think the right person to 0:05:29.600 --> 0:05:32.039 do it. There's a lot of confidence, but again it 0:05:32.120 --> 0:05:33.000 is going to take a while. 0:05:33.240 --> 0:05:35.760 Blackwell's saying exactly that in the statement. As the statement, 0:05:35.800 --> 0:05:39.440 shareholders deserve the opportunity to continue to really support Disney's 0:05:39.440 --> 0:05:41.640 turnaround and transformation onto Bobiger. 0:05:41.839 --> 0:05:43.360 Meanwhile, though Nelson Pelt. 0:05:43.120 --> 0:05:46.840 Says one of the issues he has is compensation, misalignment, 0:05:47.080 --> 0:05:50.280 governance and succession, which she says have been issues that 0:05:50.360 --> 0:05:51.719 played the company for decades. 0:05:51.880 --> 0:05:55.200 What more could be done on those three? Do you think? Yeah? 0:05:55.240 --> 0:05:57.760 I think you know, succession obviously has been this constant 0:05:57.839 --> 0:06:00.279 pain point for bar Biger, but you know, he's obviously 0:06:00.320 --> 0:06:03.839 he's brought in. The CFO was a lingering issue. They 0:06:03.880 --> 0:06:06.360 obviously have Hugh Johnston now in, and they have a 0:06:06.400 --> 0:06:08.880 whole slew of board members. 0:06:08.480 --> 0:06:11.760 That they just actually brought to the board. 0:06:11.800 --> 0:06:14.720 I mean, Lucas just pointed out Jeremy Derek from Sky 0:06:14.760 --> 0:06:17.360 who has a very rich experience in terms of content distribution, 0:06:17.480 --> 0:06:20.040 content creation. And then of course you have James Gorman, 0:06:20.320 --> 0:06:23.400 who's a real heavyweight, so they obviously can get a 0:06:23.400 --> 0:06:28.080 lot of perspective there. So again I think they have 0:06:28.279 --> 0:06:30.080 all of the things in place. We have to really 0:06:30.120 --> 0:06:33.240 see what they do in terms of strategic direction for 0:06:33.520 --> 0:06:36.400 a few of their assets, especially ESPN and then the 0:06:36.440 --> 0:06:39.000 outstanding ownership issue with Hulu. 0:06:40.480 --> 0:06:44.560 A Gita. This is the value act fsis on Disney. 0:06:44.600 --> 0:06:48.360 They basically state Disney's the world's leading entertainment company. They 0:06:48.400 --> 0:06:51.120 talk about the IP, they talk about the park's business, 0:06:51.120 --> 0:06:53.200 and they say in the state in this morning, as 0:06:53.279 --> 0:06:57.960 legacy technologies transition to digital platforms, we believe Disney can 0:06:58.040 --> 0:07:02.760 lead the media industry forward. Does Bloomberg Intelligence share value 0:07:02.800 --> 0:07:04.279 acts thesis around Disney? 0:07:05.320 --> 0:07:09.880 Absolutely, Disney has the best in class brands. 0:07:09.920 --> 0:07:11.480 There is no doubt about that. 0:07:11.600 --> 0:07:14.200 Yes, we have seen a little bit of underperformances I 0:07:14.280 --> 0:07:17.520 just spoke about in terms of, you know, the studio side, 0:07:17.600 --> 0:07:20.040 but they absolutely have all of the levers in place. 0:07:20.080 --> 0:07:22.360 I mean, you look at the media assets they have, 0:07:22.680 --> 0:07:25.800 you know, fantastic properties, whether it's Marvel, whether it's Pixar, 0:07:26.320 --> 0:07:28.080 you know, whether it's Star Wars. They have all of 0:07:28.080 --> 0:07:30.480 the franchises that people love. And then of course you 0:07:30.520 --> 0:07:33.600 have the parks business, which has been performing extremely well. 0:07:33.640 --> 0:07:35.680 I just don't think they're getting enough credit for it. 0:07:37.240 --> 0:07:42.480 So the question is what happens next right, Blackwells has 0:07:42.560 --> 0:07:47.280 some different board proposals. Value Act is backing Disney's proposals 0:07:47.280 --> 0:07:51.080 for the board. There will be a shareholder meeting. If 0:07:51.120 --> 0:07:55.400 you sort of gain planned and modeled the scenario where 0:07:55.560 --> 0:07:57.880 Nelson Peltz is appeased, I think we said that, well, yeah, 0:07:57.920 --> 0:08:01.400 last year in wee Caroline appeasing. Else does he get 0:08:01.440 --> 0:08:06.160 a peace based on the reporting you've read this morning, Yeah, 0:08:06.200 --> 0:08:06.640 it's going. 0:08:06.560 --> 0:08:08.840 To be I think he's going to fight really hard. 0:08:09.280 --> 0:08:10.720 I mean this, this is going to be a really 0:08:10.720 --> 0:08:14.000 contentious fight I think between Pelts and Disney. He obviously 0:08:14.280 --> 0:08:17.280 does definitely want to put himself on the board. He 0:08:17.320 --> 0:08:19.800 definitely wants to see Jay Rizzulu on the board. I 0:08:19.800 --> 0:08:22.680 don't think Disney kind of needs that distraction right now. 0:08:23.200 --> 0:08:26.240 It really is going to come down to what I 0:08:26.280 --> 0:08:28.720 think Bob Eigert. He's obviously been shoring up his defenses 0:08:28.720 --> 0:08:31.040 with the Value Act news, with the Black Worlds news. 0:08:31.240 --> 0:08:32.760 It's going to come down to, you. 0:08:32.720 --> 0:08:36.160 Know, if he can announce something, if there are any 0:08:36.200 --> 0:08:39.040 near term catalysts in terms of strategic initiatives that can 0:08:39.160 --> 0:08:41.680 kind of really appease Nelson Pelts, whether they can come 0:08:41.760 --> 0:08:44.720 up with something on the linear TV side, you know, 0:08:44.800 --> 0:08:47.640 in terms of plans for those linear TV assets, or 0:08:47.679 --> 0:08:50.720 if there is some kind of announcement with respect to ESPN. 0:08:51.320 --> 0:08:53.000 You know, we know that they've been kind of searching 0:08:53.080 --> 0:08:56.040 for that strategic partner, you know, one of the one 0:08:56.040 --> 0:08:58.480 of the big digital players, or maybe even the leagues themselves. 0:08:58.720 --> 0:09:00.640 US talks have really not got anywhere. 0:09:00.679 --> 0:09:02.800 So again, anything comes up on that front, I think 0:09:02.800 --> 0:09:06.439 it really does kind of reintegrate the star price a little. 0:09:06.240 --> 0:09:10.400 Bit, agetha Ang and Nathan with really detailed analysis from 0:09:10.400 --> 0:09:13.679 Bloomberg Intelligence. So what Lucas Shaw called a highly unusual 0:09:14.120 --> 0:09:18.200 situation with activist investors sticking with activist investors and number 0:09:18.240 --> 0:09:21.640 store another story with tracking gambling group en Tain named 0:09:21.640 --> 0:09:25.240 the CEO of activist investor Eminence Capital to its board. 0:09:25.440 --> 0:09:29.280 A shareholder has been pushing to improve the British company's performance. Eminence, 0:09:29.320 --> 0:09:32.120 which holds enchained shares, has been critical of the company's 0:09:32.160 --> 0:09:36.160 deal making approach and suggested they could explore divesting some 0:09:36.320 --> 0:09:38.800 or all of its stake in the US betting joint 0:09:38.880 --> 0:09:42.160 venture bet MGM, which it co owns with MGM Resorts. 0:09:42.320 --> 0:09:45.880 Let's talk about China US because one key American company. 0:09:45.920 --> 0:09:48.679 It's kind of been able to navigate the rocky relationship 0:09:48.679 --> 0:09:51.720 between Washington and Beijing and it's been Apple, but mounting 0:09:51.760 --> 0:09:54.679 tensions between the two superpowers they're making things ever more 0:09:54.720 --> 0:09:57.760 complicated for the company and Bloomberg Businesswee coconomist Max Traffkin 0:09:57.960 --> 0:09:59.440 has a story out just about this. 0:10:00.080 --> 0:10:01.920 Ultimately, what has changed. 0:10:02.000 --> 0:10:04.560 There seems to be two key issues at stake that 0:10:04.559 --> 0:10:05.880 are going to make Apple's life difficult. 0:10:05.960 --> 0:10:09.320 Yeah, absolutely so the two issues. Number one is competition. 0:10:09.559 --> 0:10:13.000 So Huawei, which you know, the big Chinese telecom manufacturer 0:10:13.000 --> 0:10:16.600 for years, was hobbled by these export controls instituted under 0:10:16.600 --> 0:10:20.240 Donald Trump, maintained by Joe Biden. And early last year, 0:10:20.559 --> 0:10:22.120 you know, they came out with a new phone, the 0:10:22.120 --> 0:10:24.880 Mate sixty Pro, which has a chip that is pretty 0:10:24.880 --> 0:10:26.280 close to the state of the art. It's really the 0:10:26.360 --> 0:10:28.880 first phone in a couple of years that's come close 0:10:28.920 --> 0:10:31.679 to the iPhone, you know, potentially competitive. And then the 0:10:31.760 --> 0:10:34.000 other hand, you have restrictions, so you have the government 0:10:34.280 --> 0:10:38.040 preventing people in China from bringing phones into the workplaces 0:10:38.040 --> 0:10:41.199 of state back companies, and these two things together are 0:10:41.200 --> 0:10:43.400 a real problem for Apple because you have the government 0:10:43.440 --> 0:10:45.079 telling people not to use it, and then all of 0:10:45.120 --> 0:10:48.640 a sudden, some real genuine competition presenting itself. 0:10:49.960 --> 0:10:52.360 Max. This is a chart that shows the sort of 0:10:52.360 --> 0:10:55.520 breakdown of revenues by geography on a course lee basis, 0:10:55.559 --> 0:10:58.319 and I think back to November on the Earnings School, 0:10:58.920 --> 0:11:03.880 where China rule was soft and the narrative from executives 0:11:04.160 --> 0:11:06.640 was this was simply to do with Mac and iPad 0:11:06.679 --> 0:11:10.160 because there were no new macs or iPads. But the 0:11:10.200 --> 0:11:13.200 caveat that Apple tried to put in there, that green 0:11:13.240 --> 0:11:15.600 bar on the right hand side being propped up by 0:11:15.600 --> 0:11:20.240 a record for iPhone sales in Greater China in your piece, 0:11:20.280 --> 0:11:22.120 which you tied to win twenty twenty four, the year 0:11:22.240 --> 0:11:25.760 US China tensions finally trip up Apple. Is it the 0:11:25.800 --> 0:11:29.800 iPhone specifically that is the battleground here or is it 0:11:29.840 --> 0:11:32.760 the whole business over in China? I mean, certainly the 0:11:32.800 --> 0:11:33.360 whole business. 0:11:33.440 --> 0:11:35.360 And we should just take a few steps back and say, 0:11:35.400 --> 0:11:38.600 you know, Apple is completely intertwined with China. You know, 0:11:38.800 --> 0:11:41.400 it relies on China for its supply chain, and it's 0:11:41.440 --> 0:11:44.640 also as that chart you're showing shows a substantial part 0:11:44.679 --> 0:11:46.800 of the sort of consumer facing business the growth of 0:11:46.840 --> 0:11:49.400 the Chinese market has been very good to Apple. But 0:11:49.440 --> 0:11:52.000 we're talking about Apple, you know, the iPhone dominates and 0:11:52.080 --> 0:11:55.120 it matters a lot here and again these are sort 0:11:55.160 --> 0:11:58.400 of faint signals that we started to see last year. 0:11:58.480 --> 0:12:01.480 But we tried to analysts the first of all, growth 0:12:01.559 --> 0:12:05.920 in Huawei's sales, and they're expecting at least some pain 0:12:06.200 --> 0:12:08.520 for Apple and China. But again it's not clear how much, 0:12:08.559 --> 0:12:11.920 because Chinese consumers still you know, love this company, still 0:12:11.920 --> 0:12:14.560 love the iPhone and have still been buying it. I mean, 0:12:14.640 --> 0:12:16.040 as we wrote in the story, there were you know, 0:12:16.120 --> 0:12:19.959 lines at Apple stores in December even as these restrictions 0:12:20.000 --> 0:12:22.160 were being reported by Bloomberg and others. 0:12:22.520 --> 0:12:24.959 It's an interesting test of Tim Cook in particular, right 0:12:25.040 --> 0:12:27.720 because he was the supply chain guy before he became 0:12:27.760 --> 0:12:31.160 the CEO. And in many ways, yeah, they're eyeing India, 0:12:31.200 --> 0:12:32.920 but they haven't stepped away from China. 0:12:33.040 --> 0:12:33.199 Well. 0:12:33.240 --> 0:12:35.400 Part of the problem that Apple has here is they 0:12:35.400 --> 0:12:37.640 are a major employer in China, so this is this 0:12:37.720 --> 0:12:39.960 is a political issue in China. China does not want 0:12:40.000 --> 0:12:43.280 them to necessarily diversify their supply chain, while Apple at 0:12:43.320 --> 0:12:45.480 the same time, you know, would very much like to 0:12:45.520 --> 0:12:48.400 not be totally dependent on this on a country, where 0:12:48.520 --> 0:12:51.679 as we saw during COVID as well as the demonstrations 0:12:51.679 --> 0:12:54.680 in front of these iPhone factories in twenty twenty two, 0:12:54.920 --> 0:12:56.880 you know that comes with risks, so you sort of 0:12:56.880 --> 0:12:59.199 have a push and pull, and some people have seen 0:12:59.559 --> 0:13:02.720 these restrictions that the government has been putting on iPhones 0:13:02.880 --> 0:13:04.840 as sort of a message from China saying, you know, 0:13:05.080 --> 0:13:06.680 don't you know, you don't want to move out of 0:13:06.679 --> 0:13:09.600 this country too much because because that could create problems 0:13:09.600 --> 0:13:10.440 for the local markets. 0:13:10.520 --> 0:13:12.680 So it's kind of a delicate balance. 0:13:12.720 --> 0:13:14.480 But the one thing that Apple has going for it 0:13:14.520 --> 0:13:17.280 again are these devices that even though even if they 0:13:17.280 --> 0:13:21.480 have competition, they are still genuinely loved by consumers, and 0:13:21.520 --> 0:13:23.920 when you look at the chips and so on, you know, 0:13:24.080 --> 0:13:26.960 still ahead of what the domestic manufacturers are producing. 0:13:27.679 --> 0:13:30.200 All right. Thanks to Bloomberg's Max Chafkin, who's latest in 0:13:30.240 --> 0:13:32.040 Business Week is a must read, check it out on 0:13:32.080 --> 0:13:35.000 the year ahead for Apple in China. Sticking with China. 0:13:35.520 --> 0:13:37.640 In an effort to take a softer tone on the 0:13:37.679 --> 0:13:42.560 gaming industry, China has reportedly fired the top official of 0:13:42.640 --> 0:13:45.840 the gaming watchdog agency Bloomberg's Henry Ren is in London 0:13:45.880 --> 0:13:49.240 with more. This happened overnight US time, and it's kind 0:13:49.280 --> 0:13:52.920 of a walk back on what were strong regulations that 0:13:53.080 --> 0:13:54.960 rocked equity markets at the time. 0:13:56.240 --> 0:13:59.840 Yes, indeed, so two media reports in the cay that's 0:14:00.080 --> 0:14:05.360 so fund shooting, who's heads of the China's publishing unit 0:14:05.480 --> 0:14:10.040 of the Publicity Department would depart from his role. So 0:14:10.320 --> 0:14:13.920 just to cavet here because there's no official Chinese government 0:14:13.960 --> 0:14:17.320 statement saying that from Shushing would depart or being fired 0:14:17.360 --> 0:14:20.920 from his role. However, this does seem that the China's 0:14:21.080 --> 0:14:25.320 gaming regulator is softening it stands toward the video game sector. 0:14:25.440 --> 0:14:29.280 Just remember in late December, the gaming regulator published a 0:14:29.360 --> 0:14:33.040 sweeping set of curbs limiting Chinese players playing time as 0:14:33.120 --> 0:14:36.040 well as spending on video games and those who were 0:14:36.400 --> 0:14:39.120 badly received by the market. We've been seeing a drop 0:14:39.480 --> 0:14:42.600 in industry build weathers such as Tansen as well as Natti's, 0:14:42.920 --> 0:14:46.040 as well as other smaller video games stocks in China 0:14:46.320 --> 0:14:47.200 in late December. 0:14:47.760 --> 0:14:50.680 Whiplash, I think is the takeaway for now, Henry Reren, 0:14:50.720 --> 0:14:52.840 We thank you so much for the latest done what 0:14:53.040 --> 0:14:55.680 seems to be a changing of sentiment when it comes 0:14:55.720 --> 0:14:57.840 to gaming, at least for the interest. Meanwhile, coming up, 0:14:58.600 --> 0:15:01.880 we're good to all things A and cybersecurity or how 0:15:01.960 --> 0:15:04.280 strike CEOs go for joining us Storgekat stick with us 0:15:04.280 --> 0:15:10.920 for it as somebody meg technology. 0:15:18.320 --> 0:15:20.360 Okay, it's time for talking tech and first st up. 0:15:20.480 --> 0:15:24.360 Samsung is leaning into AI is the key to unlocking 0:15:24.480 --> 0:15:27.480 greater sales this year. The smartphone maker plans to launch 0:15:27.520 --> 0:15:31.440 its next flagship device on January seventeenth, and the teaser 0:15:31.480 --> 0:15:35.880 to the launch promises that quote Galaxy AI is coming. 0:15:36.680 --> 0:15:40.760 And SpaceX launched its first six satellites capable of offering 0:15:40.800 --> 0:15:44.440 mobile phone services, with t Mobile operating like a cell 0:15:44.520 --> 0:15:49.520 tower in space. The Starlink satellites work with users existing phones, 0:15:49.640 --> 0:15:55.120 rather than using specialized equipment to bring connectivity to remote areas. Plus, 0:15:55.280 --> 0:15:58.160 Atos is in talks to sell it's big data and 0:15:58.200 --> 0:16:01.440 cybersecurity business to Airbus for as much as one point 0:16:01.440 --> 0:16:04.560 eight billion euros that's about two billion US dollars. This 0:16:04.640 --> 0:16:08.240 is the French tech company faces hefty debt repayments at 0:16:08.240 --> 0:16:10.640 our shares fell following the news Carrott. 0:16:10.800 --> 0:16:11.920 Yeah, let's stick. 0:16:11.680 --> 0:16:15.320 On the area of cybersecurity and really what it means 0:16:15.320 --> 0:16:17.560 for twenty twenty four, some of the risks, maybe some 0:16:17.600 --> 0:16:20.320 of the reads. CrowdStrike CEO George Kurtz joins us now 0:16:20.360 --> 0:16:22.840 to really spell out what you're seeing on the ground 0:16:22.880 --> 0:16:25.320 at the moment. George, we were all thinking about artificial 0:16:25.360 --> 0:16:28.960 intelligence as not only a threat in terms of cyber 0:16:29.000 --> 0:16:32.240 but also defense too. How are you seeing generative AI 0:16:32.680 --> 0:16:34.800 come into your playbook at CrowdStrike. 0:16:36.120 --> 0:16:37.280 Well, well, we think about AI. 0:16:37.400 --> 0:16:40.040 That certainly was the hot topic of twenty twenty three, 0:16:40.440 --> 0:16:43.800 and as you mentioned, it certainly is and can and 0:16:43.840 --> 0:16:47.720 will be used for the farest purposes by the adversaries. 0:16:47.760 --> 0:16:50.600 But when you think about companies like CrowdStrike, it really 0:16:50.640 --> 0:16:51.480 is a key. 0:16:51.360 --> 0:16:53.920 Part of our success Going forwards. 0:16:54.000 --> 0:16:55.680 We spend a lot of time on something we called 0:16:55.680 --> 0:16:59.200 Sharovit ai, which is our generative AI play in terms 0:16:59.240 --> 0:17:04.160 of help customers really protect themselves and leverage the collective 0:17:04.160 --> 0:17:07.400 knowledge of CrowdStrike. But more than just a chatbot, actually 0:17:07.400 --> 0:17:11.360 do work on behalf of our customers using our technology. 0:17:11.520 --> 0:17:14.680 So we think it's a game changer, something that can 0:17:14.680 --> 0:17:16.680 take eight hours of work and turn it into ten 0:17:16.720 --> 0:17:19.240 minutes and work for a security analyst, and we think 0:17:19.240 --> 0:17:21.280 we're going to get better outcomes for our customers. So 0:17:21.320 --> 0:17:23.040 we're really excited about it and it's a big part 0:17:23.040 --> 0:17:24.480 of our playbook going forward. 0:17:24.600 --> 0:17:26.560 And keeping humans in the loop. When it comes to 0:17:26.680 --> 0:17:30.240 Charlotte AI, I'm interested in whether you can pinpoint any 0:17:30.320 --> 0:17:33.880 real areas where generative AI has made a real impact 0:17:33.920 --> 0:17:35.159 in terms of cyber threats. 0:17:35.200 --> 0:17:36.240 What have you actually seen. 0:17:38.560 --> 0:17:40.760 Well, there is this concept of dark AI, and that 0:17:40.960 --> 0:17:44.959 is you can think about using something like chat GBT 0:17:45.080 --> 0:17:49.879 without rails right fraud GBT as an example, is some 0:17:49.960 --> 0:17:53.800 technologies that are out there where you can essentially leverage 0:17:54.560 --> 0:17:59.000 AI to create things like phishing emails, to research vulnerabilities, 0:17:59.040 --> 0:18:05.760 to meet sort of the creation of cyber crime campaigns. 0:18:06.440 --> 0:18:08.600 So what it really does, though. 0:18:08.359 --> 0:18:10.840 And if you think about generative AI and what it's 0:18:10.840 --> 0:18:13.879 done for everyone else, is it takes this collective knowledge 0:18:13.880 --> 0:18:16.479 and sort of makes it available to the masses. So 0:18:16.800 --> 0:18:20.160 the challenging part that we have now is it makes 0:18:21.240 --> 0:18:25.320 cyber attacks even more available to maybe folks who don't 0:18:25.359 --> 0:18:27.679 have all of the knowledge book can actually ask a 0:18:27.760 --> 0:18:30.760 generative AI technology to do something on its behalf. So 0:18:30.840 --> 0:18:32.879 cybercram is going to be even more and more prevalent 0:18:32.920 --> 0:18:35.480 than it is today, George. 0:18:35.560 --> 0:18:38.119 Twelve months ago, almost to the day, you and I 0:18:38.160 --> 0:18:42.080 sat down in Las Vegas at CES and what transpired 0:18:42.160 --> 0:18:46.600 over the course of twenty twenty three were large scale attacks. 0:18:46.760 --> 0:18:49.760 I think you guys call them big game hunting in 0:18:49.800 --> 0:18:52.520 your tracking of these kind of scales of attacks and 0:18:53.080 --> 0:18:56.439 going into twenty twenty four, that's continued. What are the 0:18:56.480 --> 0:19:00.359 reasons behind that? Why are you seeing a research and 0:19:00.400 --> 0:19:03.200 continuation of the wide scale attack. 0:19:04.960 --> 0:19:06.639 Well, it's j old adage. You know, you can go 0:19:06.640 --> 0:19:08.560 where the money is, right, there's a lot of money 0:19:08.560 --> 0:19:12.160 in these cyber attacks because the adversaries have been so 0:19:12.160 --> 0:19:16.640 successful in being able to ransom and get paid. And 0:19:16.680 --> 0:19:19.040 when we think about what we saw over the last year, 0:19:19.240 --> 0:19:21.280 and you and I talked about a year ago, you're 0:19:21.320 --> 0:19:24.800 spot on at CES. It was really the fact that 0:19:25.240 --> 0:19:28.000 we saw this this sort of double extortion, which was 0:19:28.440 --> 0:19:31.680 the adversary could encrypt all the data and basically pay 0:19:31.720 --> 0:19:35.200 it on encrypted or if organizations which they have gotten 0:19:35.240 --> 0:19:36.920 better and they backed up their data and. 0:19:36.920 --> 0:19:39.159 Restored it, they would take a copy of it and 0:19:39.240 --> 0:19:41.119 then they would then leak at that. 0:19:41.200 --> 0:19:43.840 So that was the extortion piece, right, So we saw 0:19:43.880 --> 0:19:46.959 a lot of that in twenty twenty three, and now 0:19:47.720 --> 0:19:50.240 I think it's the triple threat we're seeing now the 0:19:50.280 --> 0:19:53.840 SEC rules coming in, and in fact we've seen adversaries 0:19:54.280 --> 0:19:58.920 not only encrypt but also go to the SEC as 0:19:58.960 --> 0:20:02.800 a way to get companies to pay quicker because of 0:20:02.840 --> 0:20:04.880 the four day rule they have in terms of reporting. 0:20:05.080 --> 0:20:09.560 So now it really opens up the aperture for the adversaries. 0:20:10.680 --> 0:20:13.800 CrowdStrike CEO George Kurtz, It's a great way to kick 0:20:13.840 --> 0:20:17.040 off twenty twenty four, though I would say the conversation 0:20:17.240 --> 0:20:19.800 around cyber and the threat hasn't stopped at any point. 0:20:20.160 --> 0:20:21.920 Karen and I two days into the new year. Thank 0:20:21.960 --> 0:20:24.520 you so much for your time. Caroline did a great job. 0:20:24.560 --> 0:20:25.840 At the top of the show. You're also talking about 0:20:25.880 --> 0:20:29.680 bitcoin volatility in the session. It would be foolish to 0:20:29.720 --> 0:20:33.480 say there is a clear causal link or catalyst, because 0:20:33.520 --> 0:20:36.000 there is a lot of news reports out there. All told, Cara, 0:20:36.119 --> 0:20:40.240 I think what we're doing is taking stock of where 0:20:40.320 --> 0:20:43.960