WEBVTT - Alphabet’s Mega Bond Plans Includes 100-Year Offering 0:00:02.520 --> 0:00:13.280 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a 0:00:13.360 --> 0:00:17.120 live from coast to coast with Caroline Hide in New 0:00:17.200 --> 0:00:19.720 York and Ed Lovelow in San Francisco. 0:00:23.440 --> 0:00:26.160 This is Bloomberg Tech coming up. Alphabet looking to tap 0:00:26.200 --> 0:00:29.040 the debt markets with fifteen billion dollars in US high 0:00:29.040 --> 0:00:33.639 grade and a super rare one hundred year Sterling denominated note. 0:00:33.640 --> 0:00:34.520 We had the details. 0:00:34.640 --> 0:00:37.800 Plus Bitcoin slips back below seventy thousand dollars after a 0:00:37.920 --> 0:00:40.360 roller coaster ride at the end of last week. 0:00:40.560 --> 0:00:41.680 We'll discuss where it can go. 0:00:41.600 --> 0:00:44.720 From here, and Apple set to debut a slew of 0:00:44.760 --> 0:00:47.720 new products in the coming weeks, including a new iPhone 0:00:47.800 --> 0:00:51.159 seventeen E and updated iPads and max A. 0:00:51.240 --> 0:00:53.559 First, we check in on these markets that bounce back 0:00:53.600 --> 0:00:56.400 for a second day. What a Friday close for the 0:00:56.480 --> 0:00:58.280 last that one hundred, and we build on that two 0:00:58.280 --> 0:01:01.160 and a half percent higher with another six tens percent. 0:01:01.000 --> 0:01:02.800 Rebound as we really try to. 0:01:02.760 --> 0:01:05.759 Digest where the risks are in the tech markets, and 0:01:05.880 --> 0:01:07.160 of course, as we look ahead to some of that 0:01:07.240 --> 0:01:09.520 job's data later in the week. I'm looking at crypto 0:01:09.560 --> 0:01:12.440 though rollercoaster if you were training it this weekend we're 0:01:12.480 --> 0:01:15.160 back below seventy thousand, having eclipsed it for a moment 0:01:15.200 --> 0:01:17.280 on the weekend training End'll dig into that a little 0:01:17.280 --> 0:01:19.200 bit later, But you're looking at the equity side of 0:01:19.200 --> 0:01:21.200 the equation and debt. 0:01:21.480 --> 0:01:23.600 Yeah, Alphabet, but actually I'm going to do something a 0:01:23.640 --> 0:01:27.160 little unusual and go to the corporate debt and bomb market. 0:01:27.280 --> 0:01:30.959 Really interesting Alphabet looking to raise fifteen billion dollars from 0:01:30.959 --> 0:01:33.720 a US high grade dollar bond sale. Bloomberg reporting that 0:01:33.800 --> 0:01:36.840 siting sources, but also going to the banks for a 0:01:36.880 --> 0:01:41.199 mandate maybe to look at Swiss frank denominated and then 0:01:41.520 --> 0:01:47.120 a super rare one hundred year note Sterling denominated British pound. 0:01:47.200 --> 0:01:49.720 We haven't seen a one hundred year note since like 0:01:49.920 --> 0:01:53.000 dot com era late nineties. But the bigger picture is 0:01:53.000 --> 0:01:56.640 pretty clear, right Taro, that we've seen big tech companies 0:01:56.720 --> 0:02:01.400 use debt monket markets to fund what's happening in capital expenditures. 0:02:01.440 --> 0:02:02.040 A lot more to. 0:02:02.000 --> 0:02:05.040 Discuss, and a lot more bond sales probably to be digesting. 0:02:05.120 --> 0:02:07.919 Let's do it all with the Robert Schiffman from Bloomberg Intelligence. 0:02:08.400 --> 0:02:12.120 We knew they had to finance the extraordinary amounts of 0:02:12.240 --> 0:02:16.360 AI capital expenditure Is there enough demand to support these 0:02:16.600 --> 0:02:17.680 mega bond sales? 0:02:17.919 --> 0:02:18.119 Yeah? 0:02:18.120 --> 0:02:20.720 I think listen, let's start from the beginning. Do they 0:02:20.760 --> 0:02:23.720 actually need any money? My injurers know. I think they're 0:02:23.720 --> 0:02:26.520 borrowing money because they can, because it's super cheap, and 0:02:26.520 --> 0:02:29.760 that there's a concept that demand for not just AI 0:02:30.120 --> 0:02:32.639 but bonds are so insatiable that they can go out 0:02:32.639 --> 0:02:36.080 and do one hundred year maturity. So yeah, there's tons 0:02:36.120 --> 0:02:38.720 of demand. If Oracle is able to build one hundred 0:02:38.720 --> 0:02:41.280 and thirty billion dollar book, Google can build whatever book 0:02:41.320 --> 0:02:41.760 it wants. 0:02:43.040 --> 0:02:46.320 This is why going back to basics is probably a 0:02:46.320 --> 0:02:47.079 good place to start. 0:02:47.120 --> 0:02:47.880 I agree with you. 0:02:48.160 --> 0:02:50.760 People would say, well, why is there a good idea? 0:02:50.880 --> 0:02:52.920 You know, they look at some of the mag seven 0:02:53.000 --> 0:02:55.520 names and they be cash on their balance sheet and say, 0:02:56.040 --> 0:02:58.600 you know why is that a useful mechanism for them? 0:02:59.000 --> 0:02:59.200 Yeah? 0:02:59.440 --> 0:03:01.360 This is what they taught me in math camp, the 0:03:01.440 --> 0:03:06.080 way that average cost of debt capital for all these names, 0:03:06.200 --> 0:03:11.200 whether it's Meta Alphabet, Microsoft, Apple, Amazon, is effectively zero. 0:03:12.440 --> 0:03:14.240 You know, why do you have double A and triple 0:03:14.280 --> 0:03:16.160 A balance sheets if you're not going to use them? 0:03:16.200 --> 0:03:19.639 I think this is extraordinarily visionary. You know, these companies 0:03:19.680 --> 0:03:23.360 have been prepping for years for greater investment opportunities, and 0:03:23.360 --> 0:03:26.320 now they finally see it. I think it's just such 0:03:26.320 --> 0:03:29.240 a bullish sign for this market. And from again the 0:03:29.280 --> 0:03:34.119 bondholder perspective, this is not equity holders being wary about multiples. 0:03:34.280 --> 0:03:36.080 Bondholders I don't think are going to be able to 0:03:36.080 --> 0:03:37.400 get enough, and they're going to be able to do 0:03:37.440 --> 0:03:39.800 it along every single part of the curve. And like 0:03:39.840 --> 0:03:42.200 you said, this isn't just going to be dollars. They're 0:03:42.240 --> 0:03:45.360 going to the Swiss frank market, the pound market. I 0:03:45.360 --> 0:03:48.119 wouldn't be shocked if they went back to the euro 0:03:48.280 --> 0:03:50.320 market or even to issue yen. I think there's going 0:03:50.360 --> 0:03:52.800 to be demand all over the globe for high quality 0:03:52.840 --> 0:03:54.440 Mount Rushmore style credits like this. 0:03:55.600 --> 0:03:57.040 I want to go to whatever in math camp you 0:03:57.040 --> 0:03:59.440 were going to where you're talking about Swiss Yen sterling 0:03:59.520 --> 0:04:03.200 denominate corporate debt. But look, the demand's there. We've seen 0:04:03.280 --> 0:04:06.640 in other parts of the AI sector, Infinian in Europe 0:04:06.640 --> 0:04:10.200 tapping the market. It's a chip maker. We've seen IBM 0:04:10.280 --> 0:04:13.320 come to the market. There's four hundred billion dollars that 0:04:13.360 --> 0:04:16.240 could get done in corporate bonds, just the investment grade 0:04:16.279 --> 0:04:20.479 sector alone JP Morgan forecast for this year. How do 0:04:20.520 --> 0:04:22.359 you think steady will be for the year or do 0:04:22.360 --> 0:04:24.080 you think we're going to be frontloading this? Are we 0:04:24.120 --> 0:04:26.480 awaiting Amazon to come straight out the gates given you've 0:04:26.520 --> 0:04:29.640 just powered a note about there really strong fundamentals. 0:04:29.880 --> 0:04:32.200 Yeah, listen, I think this is the tip of the iceberg. 0:04:32.360 --> 0:04:35.040 I actually think in Bloomberg News is underestimating how much 0:04:35.120 --> 0:04:37.040 hyperscaler spending is going to be this year. They put 0:04:37.080 --> 0:04:39.240 on a number of six hundred and fifty billion dollars 0:04:39.320 --> 0:04:40.039 just for this year alone. 0:04:40.080 --> 0:04:41.200 I think just the four. 0:04:41.080 --> 0:04:42.680 Right, I think it's going to be closer to seven 0:04:42.839 --> 0:04:45.800 fifty when you include names like Oracle and Core Week 0:04:46.000 --> 0:04:48.560 And if you think about culatively how much spending has 0:04:48.600 --> 0:04:51.280 gone up. In the beginning of last year, we estimated 0:04:51.440 --> 0:04:54.840 twenty twenty five to twenty through twenty thirty where you're 0:04:54.839 --> 0:04:57.520 going to see two trillion dollars of cumulative spending. We 0:04:57.600 --> 0:04:59.760 rose that, we brought that number to three trillion in 0:04:59.800 --> 0:05:02.159 the all the year, and now we're up above four 0:05:02.240 --> 0:05:05.479 trillion dollars. So these numbers are astronomical. What do you 0:05:05.520 --> 0:05:06.960 do on the back end of that? You're going to 0:05:06.960 --> 0:05:09.320 see a lot of bond deals. Why not borrow when 0:05:09.360 --> 0:05:11.840 your cost of capital is so low. So I think 0:05:11.880 --> 0:05:14.240 you're going to see Amazon, You're going to see Microsoft, 0:05:14.440 --> 0:05:16.800 and even though Apple is not in this hyperscaler game, 0:05:16.839 --> 0:05:18.240 you're going to see them come back as well. 0:05:19.560 --> 0:05:23.920 Robert Schiffman on the credit Corporate Corporate Credit Watch, Mathcamp, 0:05:24.279 --> 0:05:29.000 Bloomberg Intelligence CV love It. Another movie today is Oracle shares. 0:05:29.080 --> 0:05:31.240 We're on a bit of a tear. This comes after 0:05:31.680 --> 0:05:34.080 a tear up nine percent. This comes after DA Davison 0:05:34.080 --> 0:05:37.680 released the note saying improvements from open ai would lift 0:05:37.720 --> 0:05:41.400 the shares of public companies in the chat GPT Baker's Orbit, 0:05:41.560 --> 0:05:45.679 particularly Oracle. Let's bring in DA Davidson Managing director Gil Luria. 0:05:45.720 --> 0:05:47.960 We're just showing the kind of top line of your research, 0:05:48.080 --> 0:05:50.880 and clearly you know that there's some read through right 0:05:50.920 --> 0:05:54.040 in the move we've seen in Oracle this morning. Why 0:05:54.200 --> 0:05:57.880 is Oracle such a key beneficiary if open ai is 0:05:57.920 --> 0:06:02.360 basically able to monetize better, offer more products, and particularly 0:06:02.400 --> 0:06:03.880 strengthen its enterprise business. 0:06:05.800 --> 0:06:10.480 Yeah, most of Oracle's backlog is open ai. So they're 0:06:10.480 --> 0:06:13.800 building up their whole infrastructure now for open ai. And 0:06:13.839 --> 0:06:16.599 the reason the stock has performed so poorly over the 0:06:16.640 --> 0:06:19.359 last few months is that there was a concern that 0:06:19.400 --> 0:06:22.120 open ai wouldn't be able to pay for it, and 0:06:22.160 --> 0:06:25.320 now things have changed. We got to a point last 0:06:25.400 --> 0:06:28.640 week where the market decided that Google was the only 0:06:28.720 --> 0:06:30.880 winner in AI, and you can see that by the 0:06:30.920 --> 0:06:34.920 relative performance of Google versus the open ai complex, which 0:06:34.960 --> 0:06:39.120 is Microsoft and Video, Oracle and core Weave. And it 0:06:39.200 --> 0:06:44.160 got to be too the pendulum swung too far. What's 0:06:44.200 --> 0:06:46.760 happened is open ai has now become more focused on 0:06:46.839 --> 0:06:50.360 chid GPT. It's going to start monetizing more through ads 0:06:51.240 --> 0:06:53.320 within the next couple of weeks. It's going to introduce 0:06:53.320 --> 0:06:56.080 a much better model that will become state of the 0:06:56.200 --> 0:07:01.840 art again, will overtake Google's Gemini and accordantly, because it 0:07:01.880 --> 0:07:05.719 now looks like Google is going to win, that created 0:07:05.760 --> 0:07:09.920 a panic at Microsoft, Amazon and Nvidia, who are now 0:07:09.960 --> 0:07:12.760 going to invest one hundred billion dollars in open Ai 0:07:13.480 --> 0:07:18.400 so they can keep a counterbalance to Google. So with 0:07:18.520 --> 0:07:20.600 that investment, open eye is going to have one hundred, 0:07:20.600 --> 0:07:24.120 one hundred and forty billion dollars of cash. They'll be 0:07:24.160 --> 0:07:27.520 able to pay Microsoft, and then they'll have money to 0:07:27.560 --> 0:07:31.800 pay Oracle which again has the biggest exposure to open Ai. 0:07:32.360 --> 0:07:33.800 That's why we're upgrading today. 0:07:34.560 --> 0:07:38.400 Okay, I appreciate that math on what's changed about the 0:07:38.440 --> 0:07:41.120 situation open ai being good for it? You know that's 0:07:41.160 --> 0:07:43.120 been a question for a long time. You just heard 0:07:43.160 --> 0:07:46.440 bloon Bag Intelligence is Robert Schiffman, Right. Oracle has been 0:07:46.480 --> 0:07:50.400 at the heart of this question on debt versus payoff. 0:07:50.440 --> 0:07:52.600 They've had a lot of demand when they've gone to 0:07:52.640 --> 0:07:55.240 the market, but we are worried. Right they've swung to 0:07:55.280 --> 0:07:58.080 negative free cash flow. They are taking on a lot 0:07:58.080 --> 0:08:00.600 of burden. You seem sang win about that. 0:08:02.840 --> 0:08:03.760 It's still risky. 0:08:03.960 --> 0:08:07.200 To be clear, Oracle really painted themselves in a corner 0:08:07.280 --> 0:08:09.960 when they took on this much business from open Ai, 0:08:10.080 --> 0:08:11.200 and there were two risks. 0:08:11.600 --> 0:08:14.760 One is would Oracle be able to get the capital. 0:08:14.440 --> 0:08:17.520 To start the build out and the second risk was 0:08:17.560 --> 0:08:21.280 would open Ai have the capital and the wherewithal to 0:08:21.480 --> 0:08:25.960 pay Oracle for those services. It now looks like Oracle 0:08:26.120 --> 0:08:30.640 will be successful in the fundrais it'll cause it'll stretch them, 0:08:30.960 --> 0:08:33.920 but it looks like they'll be successful. And now it 0:08:33.960 --> 0:08:36.600 looks like open Ai will also be successful in their 0:08:36.640 --> 0:08:37.400 own fundraise. 0:08:37.800 --> 0:08:39.240 So they'll be able to pay for it. 0:08:39.320 --> 0:08:42.600 So those two risks that we've had up until really 0:08:42.640 --> 0:08:45.400 a few weeks ago, up until a couple of weeks ago, 0:08:45.559 --> 0:08:48.720 really are now looked like they're going to go away, 0:08:49.160 --> 0:08:51.760 and Oracle will be able to build the facilities and 0:08:51.880 --> 0:08:53.520 open ai I will be able to pay for them. 0:08:54.640 --> 0:08:55.679 Who else. 0:08:56.880 --> 0:09:00.360 Benefits in the scenario because I'm saying notes out today 0:09:00.480 --> 0:09:04.000 saying actually, they don't like in video, they don't like AMD, 0:09:04.040 --> 0:09:06.760 I'm talking about link secuities, for example, because they are 0:09:06.840 --> 0:09:09.040 worried that open ai isn't going to be there with 0:09:09.120 --> 0:09:11.760 a better update with enough conviction to be able to 0:09:11.760 --> 0:09:13.640 be perched in the chips that go inside the Oracle 0:09:13.679 --> 0:09:14.360 data sendagil. 0:09:15.679 --> 0:09:15.880 Well. 0:09:15.920 --> 0:09:18.120 So now it looks like open i will remain in 0:09:18.160 --> 0:09:21.760 the race for at least the foreseeable future. And the 0:09:21.760 --> 0:09:26.040 two biggest beneficiars by far are Microsoft and in Vidia. Right, 0:09:26.120 --> 0:09:29.520 Oracle is a marginal play on open AI because of 0:09:29.600 --> 0:09:32.400 how much of it is of their exposure. But really, 0:09:32.440 --> 0:09:34.560 if you look at the stock performance of Google versus 0:09:34.640 --> 0:09:38.120 Nvidia and Microsoft, that diversion over the last few months 0:09:38.520 --> 0:09:40.960 is a result of the market deciding Google's. 0:09:40.559 --> 0:09:43.320 One and open AI is lost. That is not the case. 0:09:43.559 --> 0:09:47.760 The race is still on, which means that that open 0:09:47.880 --> 0:09:50.280 I will spend the two hundred and fifty billion dollars 0:09:50.280 --> 0:09:54.520 on Microsoft, which now has by far the biggest backlog 0:09:54.600 --> 0:09:59.560 in AI compute, and then Microsoft, Amazon, Google and others 0:09:59.600 --> 0:10:01.400 will turn around and spend. 0:10:01.120 --> 0:10:02.680 That on Nvidia chips. 0:10:03.360 --> 0:10:06.000 And so we have Nvidia and Microsoft with the best 0:10:06.080 --> 0:10:09.040 business they've ever had. For Microsoft maybe in twenty five years, 0:10:09.040 --> 0:10:12.800 for Nvidia forever. They're both trading in the low twenties 0:10:12.800 --> 0:10:16.880 on earnings which are historically low multiples. So it's a 0:10:17.080 --> 0:10:21.160 historic opportunity in Nvidia and Microsoft precisely because Opening Eye 0:10:21.200 --> 0:10:22.080 will stay in the race. 0:10:22.520 --> 0:10:25.040 What's interesting is that we've heard a lot about the 0:10:25.080 --> 0:10:29.000 potential of open AI having their own chips. Why not 0:10:29.120 --> 0:10:31.480 more of a broadcom win? Why do they even stay 0:10:31.480 --> 0:10:32.240 with video here? 0:10:34.280 --> 0:10:36.000 Everybody still needs Nvidia. 0:10:36.040 --> 0:10:40.840 All this AI compute will overwhelmingly be built on Nvidia chips. 0:10:41.200 --> 0:10:44.240 There will be some other chips because all these customers 0:10:44.240 --> 0:10:47.960 of Nvidia want desperately to diversify, but they can't do 0:10:48.080 --> 0:10:50.760 it right now because they're building out their capacity so quickly. 0:10:51.120 --> 0:10:56.360 In Vidia has the best chip, has the capacity it works. 0:10:55.559 --> 0:11:00.120 It's available, everybody else will start their own chips, but 0:11:00.160 --> 0:11:03.400 the only company that really has made any significant progress 0:11:03.440 --> 0:11:06.040 on their own ships is Google, and that's because they 0:11:06.040 --> 0:11:08.960 started ten years ago. That's how long it takes to 0:11:09.000 --> 0:11:11.840 have a good chip. Ask Amazon, they're five years and 0:11:11.880 --> 0:11:13.880 then their chip is just starting. 0:11:13.400 --> 0:11:13.960 To get good. 0:11:14.000 --> 0:11:16.520 Didn't look too bad at the Meta. 0:11:17.200 --> 0:11:20.120 Microsoft Meta and opening I can start building their own ships, 0:11:20.120 --> 0:11:23.520 but they're very far away from those being any significant 0:11:23.559 --> 0:11:24.920 portion of their compute. 0:11:25.000 --> 0:11:27.720 It's going to be overwhelmingly in video Gilia. 0:11:27.760 --> 0:11:29.880 It's always great to have you on the show. Yay Davison, 0:11:30.000 --> 0:11:32.440 thanks for ringing us the latest on your research. Mean 0:11:32.440 --> 0:11:35.880 while coming up, we're going to discuss bitcoin slump's future 0:11:35.920 --> 0:11:40.120 in the macroeconomic environment. Would you elect Toberputra from Future 0:11:40.240 --> 0:11:41.040 perfect Mentures? 0:11:41.080 --> 0:11:42.559 That's next us is Bloomberg Tech. 0:11:51.920 --> 0:11:54.800 Bitcoin when it's slipped back below seventy thousand, as you 0:11:54.800 --> 0:11:57.760 can see on the day following a pretty rollercoaster ride 0:11:57.760 --> 0:11:59.719 at the end of last week, a slump from a 0:11:59.760 --> 0:12:02.320 peak of one hundred and twenty six thousand dollars in 0:12:02.360 --> 0:12:05.440 October last year, remember, which comes in spite of crypto 0:12:05.440 --> 0:12:08.240 friendly White House surging institutional adoption. Let's just set the 0:12:08.240 --> 0:12:11.400 scene mobly. Most cross asset reporter Isabelle. Often on the 0:12:11.400 --> 0:12:14.280 weekend there's thinner liquidity, so we see bigger moves and it. 0:12:14.240 --> 0:12:17.000 Seemed to be to the upside, it could be too upset, 0:12:17.040 --> 0:12:18.920 but to the downside as well. But now we saw 0:12:18.960 --> 0:12:21.000 bitcoin kind of studying, which is great because it's now 0:12:21.080 --> 0:12:23.800 hovering around sixty nine thousand, which is a big side 0:12:23.800 --> 0:12:26.000 of relief. Last week it did below as much as 0:12:26.080 --> 0:12:29.680 sixty thousand dollars and that's sixteen percent decline was a 0:12:29.679 --> 0:12:33.520 lot because there's a there's a gage of implied volatility index. 0:12:33.760 --> 0:12:36.040 It jumped to ninety seven percent, which is the highest 0:12:36.240 --> 0:12:39.560 since the Sandbagman freed FTX days in twenty twenty two. 0:12:39.600 --> 0:12:41.520 But beyond the price movement, I think it's really just 0:12:41.559 --> 0:12:42.360 about a reckoning. 0:12:42.679 --> 0:12:43.480 What is bitcoin? 0:12:43.559 --> 0:12:46.319 Is it a hedge against inflation, hedge against centralized government, 0:12:46.640 --> 0:12:48.960 against a hedge against a dollar? And I feel like 0:12:49.160 --> 0:12:50.640 a lot of people are feeling confused. 0:12:51.559 --> 0:12:54.440 Is about what's the flows data? The most recent flows 0:12:54.520 --> 0:12:55.680 data telling us. 0:12:56.000 --> 0:12:58.480 We are seeing some inflows, at least with US Bitcoin 0:12:58.520 --> 0:13:00.720 ETF they recorded an inflow of two undred twenty one 0:13:00.800 --> 0:13:03.960 million on February six, So you could think of that 0:13:04.040 --> 0:13:06.920 as maybe optimism again or maybe just dip buying. But 0:13:06.920 --> 0:13:09.400 then still it's really kind of at least to the 0:13:09.440 --> 0:13:11.160 people I talk to, they're like, what is this. 0:13:11.200 --> 0:13:12.600 It's a structural. 0:13:12.160 --> 0:13:14.679 Change, it's a philosophical change. I want to dip more 0:13:14.679 --> 0:13:17.760 into the structural because we know that bitcoin is kind 0:13:17.760 --> 0:13:20.640 of being institutionalized, and this may in itself be the 0:13:20.679 --> 0:13:23.560 problem because on October ten, fondly known as ten ten, 0:13:23.760 --> 0:13:27.000 that's when we saw billions of dollars liquidated because of 0:13:27.480 --> 0:13:30.760 leverage and derivative traits. And last week we also saw 0:13:30.800 --> 0:13:34.079 the same two point five billion dollars in forced liquidations 0:13:34.080 --> 0:13:36.640 according to coin Glass, So maybe bitcoin is also kind 0:13:36.679 --> 0:13:39.280 of possibly becoming a victim of its own success. 0:13:40.600 --> 0:13:43.880 Bloombergs is welly, terrific reporting. Thank you very much. Let's 0:13:43.920 --> 0:13:47.160 keep the discussion going. Which a Lacavamputra founder and managing 0:13:47.200 --> 0:13:51.160 partner of Future Perfect Ventures, early stage VC firm focused 0:13:51.160 --> 0:13:56.600 on cryptocurrency and blockchain technology. Something identified in the Bloomberg 0:13:56.679 --> 0:13:59.680 story that Isabelle was just discussing is that all of 0:13:59.720 --> 0:14:02.880 this has been happening in an environment where we have 0:14:02.960 --> 0:14:07.480 an administration and policy makers who are perceived to be 0:14:07.600 --> 0:14:11.880 more supportive of the underlying technology and the industry than 0:14:11.920 --> 0:14:16.680 prior administrations. Why would this movement and this market action 0:14:16.840 --> 0:14:18.680 happen therefore in that environment. 0:14:20.840 --> 0:14:25.960 Well, isabel pointed to the maturation of bitcoin, and while 0:14:26.320 --> 0:14:29.520 we have a very friendly administration, a lot of that 0:14:29.640 --> 0:14:33.160 was priced into that run up that we saw to 0:14:33.280 --> 0:14:36.160 the one hundred and twenty six thousand, and we're really 0:14:36.200 --> 0:14:40.600 seeing bitcoin act more like a risk asset these days 0:14:40.720 --> 0:14:44.040 rather than that digital goal narrative that we saw in 0:14:44.080 --> 0:14:48.200 the earlier days of bitcoin. And I'd also point to 0:14:48.360 --> 0:14:52.080 there's a market structure bill previously known as a Clarity 0:14:52.120 --> 0:14:56.240 Act that is still under consideration in the Senate, so 0:14:56.280 --> 0:14:58.800 that has not moved as quickly as those of us 0:14:58.880 --> 0:15:02.480 in the industry had, and I think that's causing a 0:15:02.480 --> 0:15:07.240 little uncertainty around what the guardrails around bitcoin and other 0:15:07.280 --> 0:15:08.600 crypto assets are going to be. 0:15:10.200 --> 0:15:12.840 The words that Isabelle Lee just outline are ringing in 0:15:12.880 --> 0:15:17.280 my head. What is this? Is this structural or is 0:15:17.360 --> 0:15:20.760 this philosophical? That is one of the great soundbites. Good 0:15:20.840 --> 0:15:23.240 job as well, but it is a question that comes 0:15:23.320 --> 0:15:25.640 up a lot. Maybe we should phone David Sachs and 0:15:25.720 --> 0:15:28.200 ask him to your point about the progress of this bill. 0:15:28.480 --> 0:15:30.800 But again you mentioned the structural part. What is the 0:15:30.800 --> 0:15:32.960 philosophical part, Isabelle was alluding to. 0:15:33.760 --> 0:15:37.560 Well, the philosophical part, and I've been invested in the 0:15:37.600 --> 0:15:41.040 sector since twenty thirteen is in the early days, you 0:15:41.400 --> 0:15:44.239 had a lot of long term holders, people who believed 0:15:44.400 --> 0:15:48.120 in the self sovereign currency, the self sovereign asset that 0:15:48.200 --> 0:15:49.280 was not controlled by. 0:15:49.160 --> 0:15:50.560 Any government and. 0:15:52.600 --> 0:15:56.760 Was particularly useful to those people in hyperinflationary environment. So 0:15:56.800 --> 0:15:58.800 that's where that digital goal narrative came. 0:15:58.840 --> 0:15:59.360 Where it was. 0:16:02.160 --> 0:16:05.760 And what we've seen now and as Isabelle said, it 0:16:05.800 --> 0:16:07.920 could be a victim of its own success. I don't 0:16:08.000 --> 0:16:12.160 quite say it's a victim quite yet. But we're seeing 0:16:12.200 --> 0:16:16.640 more institutional holding, and so the institutions have determined that 0:16:16.680 --> 0:16:19.160 this will be more of a risk asset. It will 0:16:19.280 --> 0:16:23.920 trade more in tune with assets like the text stocks, 0:16:24.200 --> 0:16:29.080 not commodities, and so that's where that philosophical divide has happened. 0:16:29.760 --> 0:16:33.120 You know, it's great that we have more institutions, we 0:16:33.160 --> 0:16:36.560 have more acceptance of the sector of bitcoin as an 0:16:36.640 --> 0:16:39.920 asset class, but it may not hold as that digital 0:16:39.960 --> 0:16:42.160 goal and narrative or it may hold. Is that narrative 0:16:42.200 --> 0:16:44.840 in emerging markets and not in developed markets? 0:16:45.480 --> 0:16:47.120 Does that matter to your investments? 0:16:47.400 --> 0:16:51.040 Will you building on bitcoin as the OG and as 0:16:51.160 --> 0:16:54.120 rails to future infrastructure? Are you broader thinking, Actually, we 0:16:54.160 --> 0:16:58.120 don't need bitcoin in and of itself to remain a 0:16:58.160 --> 0:17:01.280 buy and hold asset. I'm more interested in the underlying technology. 0:17:01.360 --> 0:17:03.320 To use an overuse phrase, I'm more interested in the 0:17:03.360 --> 0:17:04.840 stable coin side of the equation. 0:17:06.480 --> 0:17:10.120 Right when I first saw bitcoin, I was really interested 0:17:10.160 --> 0:17:14.240 in it as a self sovereign currency, having been raised 0:17:14.400 --> 0:17:18.160 in emerging markets. However, I was even more excited by 0:17:18.320 --> 0:17:23.720 blotching technology. So this concept of having data or assets 0:17:23.840 --> 0:17:30.640 on chain, that could create more efficiency in the trading 0:17:30.720 --> 0:17:33.159 of data. So if you're going to step away and look. 0:17:33.000 --> 0:17:35.040 At AI and we look at AI. 0:17:34.920 --> 0:17:38.560 Agents and for them to communicate and transact with each other, 0:17:38.600 --> 0:17:41.320 it's much more efficient if they can do it in 0:17:41.359 --> 0:17:44.480 an on chain environment. Now that's much further in the future. 0:17:44.840 --> 0:17:48.840 We're starting to see tokenized securities. We're starting to see 0:17:48.920 --> 0:17:53.000 real world assets, so private credit going on chain. We're 0:17:53.000 --> 0:17:57.160 seeing money market funds go on chain, and we're going 0:17:57.160 --> 0:18:02.639 to continue to see already regulated assets moving on chain. 0:18:03.600 --> 0:18:06.639 ICE from the New York Stock Exchange has talked about 0:18:06.680 --> 0:18:11.919 their initiatives around tokenized equities. So that's all happening regardless 0:18:11.960 --> 0:18:14.639 of what happens to the bitcoin price. So we're really 0:18:14.680 --> 0:18:20.120 seeing the financial infrastructure being rebuilt by blockchain technology, which 0:18:20.160 --> 0:18:24.199 also powers bitcoin. I don't think either is going away. 0:18:24.480 --> 0:18:27.040 I think we just have to separate the two and 0:18:27.240 --> 0:18:34.440 of note stable coins which are run on chain. Those 0:18:34.520 --> 0:18:37.640 were regulated by the Genius Act which passed last year, 0:18:37.680 --> 0:18:41.959 and then we've seen a proliferation of activity in that sector. 0:18:42.160 --> 0:18:43.920 So not because of that regulation. 0:18:44.040 --> 0:18:47.760 Do you continue to call yourself crypto first VC briefly 0:18:47.960 --> 0:18:49.200 or do you become an AI VC. 0:18:50.760 --> 0:18:54.480 Well, our thesis has always been around the intersection of blockchain, 0:18:54.520 --> 0:18:58.919 crypto assets, and AI forming the basis of the next Internet. 0:19:00.080 --> 0:19:03.840 We've seen the development of these different areas at different times. 0:19:03.880 --> 0:19:06.760 I think they're all very important to our future. I 0:19:06.800 --> 0:19:10.480 think that cryptoside may take a bit longer to really, 0:19:10.640 --> 0:19:14.639 you know, form or validate itself. 0:19:14.280 --> 0:19:15.080 In that narrative. 0:19:15.720 --> 0:19:19.280 Jilac Jowin Putcher of Future Perfect Ventures, we appreciate it. 0:19:19.320 --> 0:19:19.719 Thank you. 0:19:20.440 --> 0:19:23.520 Now coming up, Apple prepares for an update to its iPhone. 0:19:23.520 --> 0:19:26.359 It's iPads, it's Max. More on that next. This is 0:19:26.400 --> 0:19:27.160 Bloomberg Tech. 0:19:36.400 --> 0:19:38.800 Apple is set to debut a slew of new products 0:19:38.800 --> 0:19:41.840 in the coming weeks, including a new iPhone seventeen E 0:19:42.400 --> 0:19:45.639 and updated iPads and Max. Here with the breakdown Bloomberg's 0:19:45.640 --> 0:19:48.439 Apple and consumer tech editor Mark German the power on 0:19:48.520 --> 0:19:52.280 drop Sunday, and you basically give us the products release 0:19:52.440 --> 0:19:55.760 roadmap for the early part of this year. What do 0:19:55.800 --> 0:19:56.320 we need to know? 0:19:57.600 --> 0:19:59.600 Yes, there's a new eyes some one coming pretty eminently 0:19:59.640 --> 0:20:00.520 in the next few weeks. 0:20:00.520 --> 0:20:02.120 It's the iPhone seventeen E. 0:20:02.240 --> 0:20:04.760 It's a successor to the sixteen E that launched about 0:20:04.760 --> 0:20:08.239 a year ago last year. This new version is going 0:20:08.280 --> 0:20:10.560 to have the same chip as the iPhone seventeen, so 0:20:10.600 --> 0:20:13.560 moving from the A eighteen to the A nineteen. And 0:20:13.600 --> 0:20:15.840 it addresses one of the quirks of the first model, 0:20:15.880 --> 0:20:18.760 which was the lack of MagSafe, which means no magnetic 0:20:18.800 --> 0:20:22.000 wireless charging within Apple's mag Safe ecosystem. 0:20:22.040 --> 0:20:24.480 So that's coming as well. 0:20:24.560 --> 0:20:27.760 Also an updated in housemodem, an updated in house wireless 0:20:27.840 --> 0:20:32.080 chip to match the iPhone Air from September. You're also 0:20:32.119 --> 0:20:34.960 going to see some new iPads in the next month 0:20:35.040 --> 0:20:38.360 or so. That includes a new version of the iPad 0:20:38.440 --> 0:20:40.479 AIR with the M four chip, so a bet if 0:20:40.520 --> 0:20:44.560 the faster processor there, matching the iPad pro sew from 0:20:44.680 --> 0:20:48.200 twenty twenty four. And then you're also going to see 0:20:48.240 --> 0:20:51.480 a new entry level iPad moving to the A eighteen chip. 0:20:51.520 --> 0:20:52.719