1 00:00:13,000 --> 00:00:15,560 Speaker 1: I'm Caroline Hyde of bloom Ugs weld tadquarters in New York, 2 00:00:16,040 --> 00:00:19,079 Speaker 1: and I met Ludlow in San Francisco. This is Bloomberg 3 00:00:19,079 --> 00:00:22,759 Speaker 1: Technology coming up. SVB Silicon Valley Bank. It suffers its 4 00:00:22,800 --> 00:00:26,439 Speaker 1: worst ever intra day drop as a CEO begs clients 5 00:00:26,480 --> 00:00:29,600 Speaker 1: to stay calm. Well, this reflects about startups, about venture 6 00:00:29,640 --> 00:00:33,839 Speaker 1: capital firms and tech focused lenders, and the chat platform. 7 00:00:33,920 --> 00:00:37,360 Speaker 1: Discord turns to you've guessed it? Open AI to look 8 00:00:37,400 --> 00:00:42,080 Speaker 1: at integrating AI into the platform. Will discuss. Then the 9 00:00:42,120 --> 00:00:46,360 Speaker 1: FED creates a crypto oversight team to overlook stable coins. 10 00:00:46,520 --> 00:00:50,360 Speaker 1: We discussed with the co found of DM stable coin program. 11 00:00:50,479 --> 00:00:53,280 Speaker 1: For first, let's check in on the markets, because what 12 00:00:53,400 --> 00:00:57,000 Speaker 1: a down day. What a worry that we're getting surrounding lenders, 13 00:00:57,080 --> 00:00:59,000 Speaker 1: banks in general, and of course a lot of those 14 00:00:59,120 --> 00:01:01,560 Speaker 1: our tech focus and nature NAZAC off by two percent, 15 00:01:01,840 --> 00:01:04,240 Speaker 1: KBW Bank condext I shine a light on this index 16 00:01:04,240 --> 00:01:06,480 Speaker 1: because the banking index is having its worst day since 17 00:01:06,600 --> 00:01:08,800 Speaker 1: June of twenty twenty, off by seven point seven percent, 18 00:01:09,040 --> 00:01:11,960 Speaker 1: and it's all regarding SVB and indeed silver Gate. I 19 00:01:12,000 --> 00:01:13,880 Speaker 1: look at a ten year treasury yield that gets bid. 20 00:01:14,080 --> 00:01:16,960 Speaker 1: This risk of sentiment means money pours back in to 21 00:01:17,160 --> 00:01:19,400 Speaker 1: US treasury is yields stopped by eight basis points. Let's 22 00:01:19,400 --> 00:01:21,120 Speaker 1: move it on. Let's look at the world of crypto, 23 00:01:21,160 --> 00:01:24,960 Speaker 1: because the worry, the contagion, that implications of a silver 24 00:01:25,040 --> 00:01:27,680 Speaker 1: Gate unwinding, and indeed what SVB really talks about in 25 00:01:27,840 --> 00:01:32,160 Speaker 1: terms of risk sentiment around technology, Crypto absolutely being battered 26 00:01:32,200 --> 00:01:34,800 Speaker 1: after the liquidation of Silvergate. We're off by more than 27 00:01:34,920 --> 00:01:37,000 Speaker 1: Rod and Ed. Just dig into that a little bit 28 00:01:37,000 --> 00:01:41,280 Speaker 1: for us, the implications of what now feels traditional finance 29 00:01:41,400 --> 00:01:46,160 Speaker 1: meets decentralized finance looks certainly. Sentiment depressed all day long 30 00:01:46,200 --> 00:01:48,960 Speaker 1: when it comes to bitcoin is an example because of Silvergate. 31 00:01:49,000 --> 00:01:52,000 Speaker 1: There's also some stuff out there about who being coucoin 32 00:01:52,600 --> 00:01:54,520 Speaker 1: and what the New York Attorney General is looking at. 33 00:01:54,560 --> 00:01:57,720 Speaker 1: But here are the concerns right, SVB Financial parent group 34 00:01:57,720 --> 00:02:01,360 Speaker 1: of Silicon Valley Bank down sixty percent, Silvergate capital down 35 00:02:01,360 --> 00:02:04,840 Speaker 1: forty two. The concern here is that the impact of 36 00:02:04,920 --> 00:02:07,240 Speaker 1: higher rates has hit the froffiest corners of the market. 37 00:02:07,320 --> 00:02:10,520 Speaker 1: Where are the froffiest corners of the market, Caroline, crypto 38 00:02:10,600 --> 00:02:14,680 Speaker 1: and technology. The story with SVB in particular is that 39 00:02:14,760 --> 00:02:19,120 Speaker 1: who are their clients clients, technology companies, startups who are 40 00:02:19,200 --> 00:02:22,079 Speaker 1: facing cash burn. They don't need cash in the bank, 41 00:02:22,360 --> 00:02:27,000 Speaker 1: they needed at hands. They're making basically withdrawals deposit outflows, 42 00:02:27,000 --> 00:02:29,880 Speaker 1: and Silicon Valley Bank is having to react in order 43 00:02:29,880 --> 00:02:32,480 Speaker 1: to plug the gap. Just to make the point even further, 44 00:02:32,560 --> 00:02:34,920 Speaker 1: let's look at this terminal chart really quick and just 45 00:02:34,960 --> 00:02:37,720 Speaker 1: look at the drama. Biggest drop on record for this 46 00:02:37,919 --> 00:02:41,239 Speaker 1: stock and is lowest level since September twenty sixteen. Let's 47 00:02:41,240 --> 00:02:44,120 Speaker 1: get more details. Bloomberg Shnali Bassak joining us out of 48 00:02:44,160 --> 00:02:46,519 Speaker 1: New York. A lot of stories to cover, But how 49 00:02:46,680 --> 00:02:51,200 Speaker 1: core is that Silicon Valley Bank client based tech to 50 00:02:51,280 --> 00:02:53,640 Speaker 1: this story? It is a big part of this story. 51 00:02:53,680 --> 00:02:56,160 Speaker 1: But you can also talk about balance sheet management here 52 00:02:56,160 --> 00:02:58,200 Speaker 1: being an issue when it comes to Silicon Valley Bank. 53 00:02:58,200 --> 00:03:00,320 Speaker 1: When you look at the Wall Street view on what 54 00:03:00,360 --> 00:03:02,880 Speaker 1: has happened here, part of the issues were exacerbated not 55 00:03:02,960 --> 00:03:05,440 Speaker 1: just because of their client base, but because they had 56 00:03:05,480 --> 00:03:08,520 Speaker 1: to sell securities at a loss. That is something we're 57 00:03:08,520 --> 00:03:10,920 Speaker 1: not seeing just unique to Silicon Valley Bank. But I 58 00:03:10,919 --> 00:03:13,120 Speaker 1: will put some contacts here because the point you're making 59 00:03:13,160 --> 00:03:16,520 Speaker 1: here this not so long ago, a year ago, This 60 00:03:16,600 --> 00:03:19,960 Speaker 1: Bank was the envy of the industry of many many banks, 61 00:03:20,240 --> 00:03:23,919 Speaker 1: from Goldman Sachs to JP Morgan. They loved what Silicon 62 00:03:24,000 --> 00:03:25,840 Speaker 1: Valley Bank was doing, to the point the you have 63 00:03:25,840 --> 00:03:28,800 Speaker 1: to wonder, now, is Silicon Valley Bank going to eventually 64 00:03:28,800 --> 00:03:32,280 Speaker 1: become an acquisition target or is there too much weakness 65 00:03:32,320 --> 00:03:35,280 Speaker 1: here to make it so? What happens next, I think 66 00:03:35,400 --> 00:03:37,240 Speaker 1: is the major question that's looming in the market. First 67 00:03:37,240 --> 00:03:39,040 Speaker 1: of all, val and I think some of the threads 68 00:03:39,040 --> 00:03:40,640 Speaker 1: that we're going to weave, and I know way want 69 00:03:40,680 --> 00:03:44,040 Speaker 1: to imply that subs stop drop immediately means that we're 70 00:03:44,080 --> 00:03:46,640 Speaker 1: going to see what happened with silver Gate. But ultimately 71 00:03:46,760 --> 00:03:50,200 Speaker 1: two companies, two banks, are currently facing the headwinds of 72 00:03:50,240 --> 00:03:53,600 Speaker 1: high interest rates, and both got very focused on certain 73 00:03:53,640 --> 00:03:56,040 Speaker 1: parts of the market. Yeah, and that is certainly what 74 00:03:56,240 --> 00:03:57,880 Speaker 1: is in common here. And by the way, there are 75 00:03:57,920 --> 00:04:01,240 Speaker 1: other banks that also have similar worry around them. Think 76 00:04:01,320 --> 00:04:03,960 Speaker 1: Signature Bank, where the deposit base was not so loaded 77 00:04:03,960 --> 00:04:07,160 Speaker 1: to crypto about fifteen percent according to Anile ass estimates 78 00:04:07,920 --> 00:04:11,000 Speaker 1: its deposits. We're kind of tied to the crypto industry 79 00:04:11,040 --> 00:04:15,440 Speaker 1: more broadly, but Signature ninety percent through September. We're really 80 00:04:15,520 --> 00:04:18,120 Speaker 1: tied of its deposits to the crypto industry. To the 81 00:04:18,160 --> 00:04:20,240 Speaker 1: point you're making the issues in crypto are not the 82 00:04:20,279 --> 00:04:23,440 Speaker 1: same as all the issues in technology. But what you're 83 00:04:23,440 --> 00:04:26,680 Speaker 1: seeing here is this exposure to the industry more broadly 84 00:04:27,200 --> 00:04:30,599 Speaker 1: becoming a worry for firms like this. I will say 85 00:04:30,640 --> 00:04:34,120 Speaker 1: one other thing. Remember concurrently they also announced the capital raise. Yes, 86 00:04:35,080 --> 00:04:37,320 Speaker 1: this is a market in which the reasons in which 87 00:04:37,360 --> 00:04:42,240 Speaker 1: you're raising capital are very, very very sensitive. And that 88 00:04:42,360 --> 00:04:44,560 Speaker 1: is another thing that is a concept of dilution and 89 00:04:44,600 --> 00:04:47,479 Speaker 1: why you're raising money is a big warning sign for 90 00:04:47,520 --> 00:04:51,839 Speaker 1: anybody raising money. Ahead suddenly saw that being really shown 91 00:04:51,839 --> 00:04:55,160 Speaker 1: out through the KBW Bank indext performance. Today, we really 92 00:04:55,160 --> 00:04:57,240 Speaker 1: want to function nati bast at the moment for all 93 00:04:57,360 --> 00:05:00,960 Speaker 1: things weaving together what is happening with the likes of SVG, 94 00:05:01,120 --> 00:05:03,640 Speaker 1: but also what happened with Silvigate, and we want to 95 00:05:03,680 --> 00:05:05,560 Speaker 1: dig into Silvigate and crypto a little bit more now 96 00:05:05,560 --> 00:05:09,120 Speaker 1: with ABA Lab's president John Woo, John, we turn to 97 00:05:09,160 --> 00:05:11,560 Speaker 1: you for your expertise because you have announcements to make. 98 00:05:11,600 --> 00:05:14,040 Speaker 1: You are still building in a space, but ultimately you 99 00:05:14,080 --> 00:05:18,040 Speaker 1: are currently a man who is trying to digitize the 100 00:05:18,360 --> 00:05:23,160 Speaker 1: entire and ultimately trying to digitize world's assets for traditional finance, 101 00:05:23,200 --> 00:05:25,279 Speaker 1: for asset managers. How hard is that when we see 102 00:05:25,320 --> 00:05:29,120 Speaker 1: Silvigate having to unwind, or clearly it's going to be 103 00:05:29,160 --> 00:05:32,600 Speaker 1: a lot harder when all the intermediaries and seemingly all 104 00:05:32,640 --> 00:05:36,600 Speaker 1: the intermedioris and the on ramps for institutions and individuals 105 00:05:36,680 --> 00:05:40,839 Speaker 1: into the crypto ecosystem are one by one getting removed 106 00:05:41,680 --> 00:05:45,000 Speaker 1: either through regulation through bad actors or risk management bad 107 00:05:45,000 --> 00:05:48,880 Speaker 1: fundamentals like in silver Gate case. So it's not easy. 108 00:05:49,400 --> 00:05:52,040 Speaker 1: It makes it harder, but you continue to build and 109 00:05:52,080 --> 00:05:57,800 Speaker 1: continue to get partnerships. John, you're operating in an ecosystem, 110 00:05:57,800 --> 00:06:01,160 Speaker 1: in an industry that still wants to build, have access 111 00:06:01,200 --> 00:06:04,520 Speaker 1: to capital, needs banking services. Just very quickly give us 112 00:06:04,520 --> 00:06:08,200 Speaker 1: some insight into the conversations you're having with industry peers 113 00:06:08,240 --> 00:06:11,240 Speaker 1: about silver Gate, about what this industry is going through 114 00:06:11,320 --> 00:06:16,240 Speaker 1: right now. So when things get better, the issue is 115 00:06:16,320 --> 00:06:19,960 Speaker 1: if there are no on ramps, no intermediaries to help 116 00:06:20,120 --> 00:06:23,839 Speaker 1: new institutions come into the space, that'll delay the growth 117 00:06:23,880 --> 00:06:27,360 Speaker 1: of the space. The other problem is even healthy balance 118 00:06:27,400 --> 00:06:31,160 Speaker 1: sheets in this space, they need little things. Banking services 119 00:06:31,320 --> 00:06:35,520 Speaker 1: like crypto is a fintech business and legitimate businesses need 120 00:06:35,560 --> 00:06:38,320 Speaker 1: banking services to pay people to do things that every 121 00:06:38,320 --> 00:06:41,800 Speaker 1: other company does. If we remove the banks that help 122 00:06:41,880 --> 00:06:46,039 Speaker 1: these companies do that, you're removing companies desire to be 123 00:06:46,200 --> 00:06:49,800 Speaker 1: on short and unfortunately, US companies will move offshore for 124 00:06:50,000 --> 00:06:54,480 Speaker 1: banking services and other things that they need to just operate. Caroline, 125 00:06:54,480 --> 00:06:55,560 Speaker 1: I just want to go back to the point you 126 00:06:55,600 --> 00:06:57,080 Speaker 1: and I are making a top of the show, right, 127 00:06:57,160 --> 00:07:00,239 Speaker 1: which is if you put silver Gate side by side 128 00:07:00,279 --> 00:07:03,120 Speaker 1: with SVB, what's they have in common. It's a discussion 129 00:07:03,120 --> 00:07:05,800 Speaker 1: around what the impact of higher rates has been on FROTH, 130 00:07:06,279 --> 00:07:09,520 Speaker 1: whereas the froth it's in crypto and it's in technology 131 00:07:09,560 --> 00:07:13,200 Speaker 1: more broadly, we're just seeing a delayed reaction, it seems, 132 00:07:13,440 --> 00:07:19,120 Speaker 1: and I've seen this, yeah, in my career, my first 133 00:07:19,120 --> 00:07:22,080 Speaker 1: part of my career, as in the financial markets. Every 134 00:07:22,160 --> 00:07:25,680 Speaker 1: time the fed raisers rates, things break, and the first 135 00:07:25,680 --> 00:07:29,040 Speaker 1: things that break are usually the bad actors and the frauds, 136 00:07:29,520 --> 00:07:32,400 Speaker 1: and then at the tail end of that bad risk management, 137 00:07:32,400 --> 00:07:36,240 Speaker 1: bare fundamental and driven company's break. So if there's a 138 00:07:36,280 --> 00:07:39,720 Speaker 1: silver lining here is now we're at layer two, yeah, 139 00:07:39,760 --> 00:07:42,400 Speaker 1: and then when things stabilize, hopefully we go back to 140 00:07:42,480 --> 00:07:45,240 Speaker 1: a stable environment. John R. Regulates turning to you for 141 00:07:45,280 --> 00:07:49,960 Speaker 1: advice they should. I was down in DC and talking 142 00:07:50,000 --> 00:07:54,160 Speaker 1: to senators and talking to other agencies. Are our general 143 00:07:54,200 --> 00:07:57,280 Speaker 1: counsels constantly down there talking. I think we need to 144 00:07:57,320 --> 00:08:00,760 Speaker 1: open up a healthy dialogue. It can't be just one way. 145 00:08:00,880 --> 00:08:03,080 Speaker 1: And if that happens, you'll bring a lot of the 146 00:08:03,240 --> 00:08:05,840 Speaker 1: capital markets back and a lot of the innovation bank. Otherwise, 147 00:08:05,880 --> 00:08:07,760 Speaker 1: like I've been saying, things are going to continue to 148 00:08:07,800 --> 00:08:10,960 Speaker 1: move off short because a certainty in rules and regulations 149 00:08:11,200 --> 00:08:14,840 Speaker 1: is happening in Europe, is happening actually even in Asia. 150 00:08:15,080 --> 00:08:17,400 Speaker 1: What's so fascinating is, of course, at the same time 151 00:08:17,400 --> 00:08:20,440 Speaker 1: as we worry about silver Gates implications, we think about 152 00:08:20,440 --> 00:08:22,880 Speaker 1: what's happening with Silicon Valley Bank at the moment. It's 153 00:08:22,920 --> 00:08:25,920 Speaker 1: exposure to technology to startups. John just want to bring 154 00:08:25,920 --> 00:08:29,280 Speaker 1: our audience and breaking news that interestingly, the Founders Fund, 155 00:08:29,360 --> 00:08:32,880 Speaker 1: which a key VC player, is advising that its own 156 00:08:32,880 --> 00:08:36,640 Speaker 1: companies should withdraw funds from Silicon Valley Bank. Now we 157 00:08:36,720 --> 00:08:39,400 Speaker 1: know the CEO of Silicon Valley Bank has been out 158 00:08:39,440 --> 00:08:41,880 Speaker 1: there trying to reassure clients as to what the stock 159 00:08:41,960 --> 00:08:45,480 Speaker 1: drop means, what the conservation of its capital. At the 160 00:08:45,520 --> 00:08:48,760 Speaker 1: moment is trying to signify, but ultimately we are going 161 00:08:48,800 --> 00:08:51,320 Speaker 1: to see some concerns being built. I founders found R 162 00:08:51,320 --> 00:08:55,079 Speaker 1: indeed advising their own portfolio companies to withdraw funds from SEB. 163 00:08:55,320 --> 00:08:57,480 Speaker 1: Can I ask you, as a founder, John, do you 164 00:08:57,600 --> 00:09:00,079 Speaker 1: have money in traditional finance? Do you have money with 165 00:09:00,160 --> 00:09:04,520 Speaker 1: Silicon Valley Bank? Well, Silicon Valley Bank is one of 166 00:09:04,520 --> 00:09:07,840 Speaker 1: the banks that we use, as well as some of 167 00:09:07,840 --> 00:09:10,120 Speaker 1: the other ones that were mentioned, So I think the 168 00:09:10,200 --> 00:09:13,360 Speaker 1: right thing, the prudent thing we've learned is counterparty risk. 169 00:09:13,480 --> 00:09:16,120 Speaker 1: Once these things start, this is a classic bank run, 170 00:09:16,480 --> 00:09:18,520 Speaker 1: and when the blank run starts, you don't want to 171 00:09:18,559 --> 00:09:22,480 Speaker 1: be the last guy there and wondering what happened. Unfortunately, 172 00:09:22,520 --> 00:09:24,480 Speaker 1: this is the way banks work. They rely on trust. 173 00:09:24,720 --> 00:09:28,360 Speaker 1: When they lose that trust, their things really will happen. 174 00:09:30,000 --> 00:09:32,360 Speaker 1: John S. I know we have so much to discuss 175 00:09:32,720 --> 00:09:35,720 Speaker 1: about AB and what's happening with Avalanche, but but we 176 00:09:35,800 --> 00:09:37,800 Speaker 1: have to stick with this story because it's happening in 177 00:09:37,840 --> 00:09:40,600 Speaker 1: before our eyes. What do you do in this situation? 178 00:09:41,000 --> 00:09:43,280 Speaker 1: Do you follow the advice of names in the valley 179 00:09:43,320 --> 00:09:47,240 Speaker 1: like Founders fund and pull the money? Do you stick 180 00:09:47,280 --> 00:09:50,040 Speaker 1: with it. I mean, I have to just point out 181 00:09:50,320 --> 00:09:52,640 Speaker 1: there were a number of names that Bloomberg cited in 182 00:09:52,679 --> 00:09:55,560 Speaker 1: its reporting that said, what we're seeing in Silicon Valley 183 00:09:55,559 --> 00:09:58,160 Speaker 1: Bank is not the same as silver Gate, and actually, 184 00:09:58,240 --> 00:10:01,000 Speaker 1: long term they have a completely solid future. What would 185 00:10:01,000 --> 00:10:06,000 Speaker 1: you do in this circumstance, Well, hopefully there's enough. What 186 00:10:06,120 --> 00:10:08,400 Speaker 1: I would do is you have to diversify out and 187 00:10:08,480 --> 00:10:12,160 Speaker 1: maybe not pull everything, We'll pull some. We experiened this 188 00:10:12,320 --> 00:10:14,920 Speaker 1: back in the Great Financial Crisis, where you have to 189 00:10:14,960 --> 00:10:18,959 Speaker 1: diversify your prime brokers. Luckily, we have already diversified, so 190 00:10:19,080 --> 00:10:21,800 Speaker 1: we're less exposed and we were literally just a few 191 00:10:22,040 --> 00:10:26,160 Speaker 1: weeks or months ago. Okay, And I think ultimately we're 192 00:10:26,200 --> 00:10:28,800 Speaker 1: going to continue to dig to ask questions. Has it 193 00:10:28,840 --> 00:10:31,559 Speaker 1: been easy to gain that sort of information from Silicon 194 00:10:31,600 --> 00:10:35,280 Speaker 1: Valley Bank at the moment? Or relying on analyst reports 195 00:10:35,280 --> 00:10:37,960 Speaker 1: that we get, and indeed some of the reporting coming 196 00:10:38,000 --> 00:10:42,120 Speaker 1: from our own journalists. You're relying on your own interactions. 197 00:10:42,240 --> 00:10:45,200 Speaker 1: The operator always has a better view, you know, the 198 00:10:45,280 --> 00:10:49,680 Speaker 1: cadence of responses and how things are working, the size 199 00:10:49,679 --> 00:10:53,640 Speaker 1: of transactions. All of those little subtle hints is what 200 00:10:53,880 --> 00:10:56,880 Speaker 1: we're relying on. As an operator by the time you 201 00:10:56,920 --> 00:10:59,839 Speaker 1: read it in the news or something. Unfortunately, it's probably 202 00:10:59,840 --> 00:11:03,120 Speaker 1: a little bit late. I just want to ask a 203 00:11:03,200 --> 00:11:06,040 Speaker 1: little bit. Of course, you are there trying to ensure 204 00:11:06,120 --> 00:11:09,640 Speaker 1: that your banking is secure, that where your money is putly, 205 00:11:09,679 --> 00:11:11,720 Speaker 1: your business is on solid footing, and I'm sure you 206 00:11:11,760 --> 00:11:13,920 Speaker 1: have done it. As you said, you've already diversified. You're 207 00:11:13,920 --> 00:11:16,599 Speaker 1: also diversifying your business. And just very briefly, John, we 208 00:11:16,840 --> 00:11:19,200 Speaker 1: bought you on the show because you've done this new deal. 209 00:11:19,280 --> 00:11:22,200 Speaker 1: You're bringing Web three to gaming in particular. How hard 210 00:11:22,280 --> 00:11:25,600 Speaker 1: is that to sign these new sort of documents, get 211 00:11:25,679 --> 00:11:27,800 Speaker 1: on board the likes of TSM and blitz up when 212 00:11:27,800 --> 00:11:32,160 Speaker 1: people are questioning the overall Web three trajectory. Great question, 213 00:11:32,360 --> 00:11:34,880 Speaker 1: and that's the fun part. By the way, no doubt 214 00:11:34,920 --> 00:11:38,439 Speaker 1: it's harder, especially with US companies, but the cadence and 215 00:11:38,559 --> 00:11:42,000 Speaker 1: foreign companies is actually happening in this TSM case. Just 216 00:11:42,040 --> 00:11:45,520 Speaker 1: so people know, this is one of the largest gaming franchises, 217 00:11:45,600 --> 00:11:47,920 Speaker 1: the TSMS equivalent of a esports team. It's like the 218 00:11:48,000 --> 00:11:51,480 Speaker 1: Yankees for esports, and they're going to provide their gamers 219 00:11:51,520 --> 00:11:53,640 Speaker 1: with some of the requests the gamers want, which is 220 00:11:53,679 --> 00:11:57,000 Speaker 1: to get more liquidity for their in game items through 221 00:11:57,200 --> 00:12:01,480 Speaker 1: Avalanche based wallet. Right now, the world works as gamers 222 00:12:01,559 --> 00:12:04,840 Speaker 1: have closed, loose systems where they buy in game assets 223 00:12:04,840 --> 00:12:06,960 Speaker 1: on one place that they can't sell and move to 224 00:12:07,000 --> 00:12:09,560 Speaker 1: another very quickly, or they have to pay large fees 225 00:12:09,600 --> 00:12:12,040 Speaker 1: to convert back to US dollars. So they're going to 226 00:12:12,080 --> 00:12:15,679 Speaker 1: create a wallet on Avalanche where all these different games 227 00:12:15,720 --> 00:12:20,200 Speaker 1: will have interoperability and make their lives better. John will 228 00:12:20,200 --> 00:12:24,959 Speaker 1: continue the conversation on the partnership with blitz TSM going forward. 229 00:12:25,000 --> 00:12:28,240 Speaker 1: There's something happening here right now in Global Silicon Valley, 230 00:12:28,240 --> 00:12:30,280 Speaker 1: and we're grateful for your insight on it, the lads, 231 00:12:30,320 --> 00:12:42,000 Speaker 1: President John will thank you very much. How chat gptwo effect. 232 00:12:42,040 --> 00:12:43,920 Speaker 1: We have this thing called Erica, which is a virtual 233 00:12:44,440 --> 00:12:48,600 Speaker 1: artificial intelligence, virtual assistant natural language processing predictive technology that 234 00:12:48,640 --> 00:12:51,040 Speaker 1: we've been running four or five years and eighty million 235 00:12:51,080 --> 00:12:53,880 Speaker 1: customers use it one hundred forty five hundred fifty million 236 00:12:53,920 --> 00:12:56,280 Speaker 1: times a quarter, so we're used to it, but this 237 00:12:56,360 --> 00:12:58,080 Speaker 1: is now a new one that could change the game 238 00:13:00,080 --> 00:13:03,440 Speaker 1: of America. CEO there Brian moynihan, And well, let's stick 239 00:13:03,480 --> 00:13:07,920 Speaker 1: with CEOs who love all things AI. Because messaging platform 240 00:13:08,040 --> 00:13:11,360 Speaker 1: Discords just announced its expansion of its own AI offerings, 241 00:13:11,360 --> 00:13:16,160 Speaker 1: including guess what open aiyes technology they're incorporating into functions 242 00:13:16,160 --> 00:13:19,520 Speaker 1: like it's chatbot, it's moderation systems, let spring blooms. Cecilia 243 00:13:19,520 --> 00:13:22,560 Speaker 1: at Dnastasio, who has the story at an event, just 244 00:13:22,640 --> 00:13:27,400 Speaker 1: tell us about where they think this will be additive. Sure. So, 245 00:13:27,600 --> 00:13:29,839 Speaker 1: Discord is a chat apps that one hundred and fifty 246 00:13:29,840 --> 00:13:33,640 Speaker 1: million people use every single month to discuss everything from 247 00:13:33,760 --> 00:13:38,080 Speaker 1: video games to anime to classical music. And now Discord 248 00:13:38,160 --> 00:13:43,319 Speaker 1: is integrating open aiyes Chat GPT technology, which creates kind 249 00:13:43,320 --> 00:13:47,960 Speaker 1: of human like conversations using AI, into one of its bots. 250 00:13:48,000 --> 00:13:50,679 Speaker 1: The bat's name is Clyde, and Clyde has existed for 251 00:13:50,720 --> 00:13:53,800 Speaker 1: a long time. It's kind of Discord's mascot. But now 252 00:13:53,920 --> 00:13:56,720 Speaker 1: Clyde will be able to tell users things like the 253 00:13:56,800 --> 00:14:00,040 Speaker 1: weather or time in another country, or even suggest a 254 00:14:00,160 --> 00:14:07,000 Speaker 1: playlist for a Discord server using AI chat technology. All right, Bloomberg, 255 00:14:07,080 --> 00:14:10,200 Speaker 1: Cecilia Dnastasio, thank you so much for your reporting. Caroline. 256 00:14:10,200 --> 00:14:12,360 Speaker 1: I've got to bring you some more breaking news headlines 257 00:14:12,640 --> 00:14:15,720 Speaker 1: crossing the Bloomberg terminal. Our sources now telling us that 258 00:14:15,880 --> 00:14:21,280 Speaker 1: why Combinator is advising its companies in its portfolios to 259 00:14:21,360 --> 00:14:26,000 Speaker 1: limit their exposure to SVB Financial y Combinator. The latest name, 260 00:14:26,040 --> 00:14:29,360 Speaker 1: according to sources follows founders Fun just in the last 261 00:14:29,360 --> 00:14:33,040 Speaker 1: twenty minutes, those after our declines on Silicon Valley Bank 262 00:14:33,400 --> 00:14:37,320 Speaker 1: or SVB Financial Group now really accelerating down six percent 263 00:14:37,440 --> 00:14:40,000 Speaker 1: or so. We'll continue to track the names that are 264 00:14:40,000 --> 00:14:42,520 Speaker 1: adding to this story blow by blow. We're going to 265 00:14:42,600 --> 00:14:44,960 Speaker 1: get back to generative AI though. And let's keep talking 266 00:14:44,960 --> 00:14:47,840 Speaker 1: about this with Dion Nicholas, who's the CEO and co 267 00:14:48,000 --> 00:14:51,960 Speaker 1: founder of four four to generative AI company for customer 268 00:14:52,000 --> 00:14:56,160 Speaker 1: support Automation which guess what carry They also recently announced 269 00:14:56,200 --> 00:14:59,560 Speaker 1: integration of open AI technology with the launch of their 270 00:14:59,600 --> 00:15:04,760 Speaker 1: own polls GPPT platform. I saw you smiling. Absolutely, I'm 271 00:15:04,760 --> 00:15:06,440 Speaker 1: super excited to be here. Let me ask you this, 272 00:15:06,680 --> 00:15:11,560 Speaker 1: why why open AI? Why not your own tech? Yeah? Absolutely? Well, 273 00:15:11,960 --> 00:15:15,080 Speaker 1: to clarify, four thoughts been around for four or five 274 00:15:15,160 --> 00:15:19,000 Speaker 1: years now, applying AI to help customers and help businesses 275 00:15:19,000 --> 00:15:22,520 Speaker 1: serve their customers better, and so with support GPT, we're 276 00:15:22,600 --> 00:15:26,040 Speaker 1: launching today the world's first generative AI platform for customer 277 00:15:26,080 --> 00:15:29,160 Speaker 1: support automation. The real big thing and the real answer 278 00:15:29,200 --> 00:15:33,440 Speaker 1: to why why now is that in November, Chat GPT 279 00:15:33,880 --> 00:15:36,640 Speaker 1: changed the name of the game. For the customer experience 280 00:15:36,880 --> 00:15:40,080 Speaker 1: and for consumer expectations, we've been building for four or 281 00:15:40,120 --> 00:15:43,760 Speaker 1: five years, and we've been very focused on correctness, very 282 00:15:43,760 --> 00:15:46,440 Speaker 1: focused on building a generation of AI that actually can 283 00:15:46,480 --> 00:15:49,360 Speaker 1: help customers solve their problems. And what we're seeing now 284 00:15:49,400 --> 00:15:52,840 Speaker 1: is that it's become mainstream for consumers and that experience, 285 00:15:52,880 --> 00:15:55,840 Speaker 1: that expectation has risen with Chat GPT, and so we've 286 00:15:55,840 --> 00:15:59,080 Speaker 1: combined that and we're building out. We're launching support GPT 287 00:15:59,200 --> 00:16:03,120 Speaker 1: for customer support. So this is not a marketing exercise 288 00:16:03,320 --> 00:16:06,360 Speaker 1: or a PR stunt. No, absolutely not, And that's one 289 00:16:06,360 --> 00:16:09,640 Speaker 1: of the things that we wanted to be sure about. Sure, 290 00:16:09,720 --> 00:16:12,760 Speaker 1: it's about solving problems for our customers. We actually already 291 00:16:12,840 --> 00:16:16,680 Speaker 1: have customers of betaing and using our support GPT platform. 292 00:16:16,960 --> 00:16:20,680 Speaker 1: Folks like upwork, the world's largest talent marketplace, are already 293 00:16:20,760 --> 00:16:24,080 Speaker 1: leveraging this technology in production. Carol, We as we do 294 00:16:24,160 --> 00:16:26,440 Speaker 1: every day, we asked our audience what they think about 295 00:16:26,720 --> 00:16:31,320 Speaker 1: just endless announcements of partnerships between tech companies and open AI. 296 00:16:31,800 --> 00:16:33,880 Speaker 1: You know the results as well as I do, Caroline, 297 00:16:35,080 --> 00:16:38,080 Speaker 1: respondents think this is a pr stunt broadly what we're 298 00:16:38,080 --> 00:16:41,200 Speaker 1: seeing right now in the industry. Yeah. And meanwhile, don 299 00:16:41,320 --> 00:16:44,240 Speaker 1: you say, look, this isn't this is about servicing your clients. 300 00:16:44,720 --> 00:16:47,680 Speaker 1: I'm just really interested in help me understand here. You're 301 00:16:47,680 --> 00:16:51,960 Speaker 1: already a leading generative AI company. You're already building your 302 00:16:52,000 --> 00:16:55,920 Speaker 1: own large language model. What was it that open ai has. Ultimately, 303 00:16:55,960 --> 00:17:01,360 Speaker 1: you couldn't build a house. So most customers when they 304 00:17:01,400 --> 00:17:04,520 Speaker 1: interact with customer support, they don't necessarily want a chit chat. 305 00:17:04,680 --> 00:17:07,480 Speaker 1: They want their problems solved first and foremost. And that 306 00:17:07,640 --> 00:17:10,040 Speaker 1: was the premise that we launched forethought on all of 307 00:17:10,040 --> 00:17:12,840 Speaker 1: those years ago, was to use AI to help people 308 00:17:12,840 --> 00:17:15,919 Speaker 1: to solve their problems. One of the things that people 309 00:17:16,119 --> 00:17:19,040 Speaker 1: have seen with chat chypt, hundreds of millions of people 310 00:17:19,080 --> 00:17:24,040 Speaker 1: have used it, from writers to bakers, to friends, family, everything. 311 00:17:24,440 --> 00:17:27,359 Speaker 1: They have now seen what it's like to interact with 312 00:17:27,400 --> 00:17:30,680 Speaker 1: a chatbot that's empathetic, that's human like. That really raises 313 00:17:30,720 --> 00:17:34,719 Speaker 1: the game and raises the name for customer experience. And 314 00:17:34,760 --> 00:17:36,439 Speaker 1: that was one of the things that we saw and 315 00:17:36,560 --> 00:17:39,720 Speaker 1: our customers saw. We actually I started getting texts from 316 00:17:39,760 --> 00:17:42,959 Speaker 1: heads of customer support saying, hey, our customers want this 317 00:17:43,080 --> 00:17:46,000 Speaker 1: kind of experience, and we're betting on forethought, and that 318 00:17:46,040 --> 00:17:48,920 Speaker 1: was actually the spark that actually helped us to realize, hey, 319 00:17:49,160 --> 00:17:51,600 Speaker 1: there is actually something new here. There is not It 320 00:17:51,640 --> 00:17:53,760 Speaker 1: is not just a publicity son, It is not just 321 00:17:54,080 --> 00:17:56,720 Speaker 1: you know, the next fad. It is technology. And we 322 00:17:56,800 --> 00:18:00,000 Speaker 1: ad forethought, have been all in on AI since day one, 323 00:18:00,600 --> 00:18:03,440 Speaker 1: and so we are staying we've always been on the forefront. 324 00:18:03,680 --> 00:18:07,520 Speaker 1: The expectations from customers have risen and we're rising, and 325 00:18:07,520 --> 00:18:10,720 Speaker 1: we're launching support GPT to go and meet those expectations 326 00:18:10,720 --> 00:18:14,160 Speaker 1: and bring customers that next level of customer support. Oh 327 00:18:14,240 --> 00:18:17,680 Speaker 1: is your competition, ben Dion, because we're seeing other key 328 00:18:17,680 --> 00:18:22,200 Speaker 1: companies that are very close to supporting sales people, supporting 329 00:18:22,400 --> 00:18:27,560 Speaker 1: other areas of client facing individuals, and they're also using 330 00:18:27,760 --> 00:18:33,360 Speaker 1: open Ai. Yeah, the big competitor for us, quite frankly, 331 00:18:33,520 --> 00:18:36,720 Speaker 1: is the legacy chaplot. There have been hundreds, if not thousands, 332 00:18:36,760 --> 00:18:40,080 Speaker 1: of legacy chaplots that have cropped up over the last 333 00:18:40,280 --> 00:18:44,680 Speaker 1: decade or so of innovation. And one of the things 334 00:18:44,720 --> 00:18:47,200 Speaker 1: that you notice about chapblots is that one we've all 335 00:18:47,320 --> 00:18:50,119 Speaker 1: experienced them, and we've all found that they are super 336 00:18:50,160 --> 00:18:53,080 Speaker 1: clunky right, their manual, their decision tree base, and they're 337 00:18:53,119 --> 00:18:56,200 Speaker 1: more artificial than they are intelligent. And so we've set 338 00:18:56,240 --> 00:19:00,560 Speaker 1: out to actually really transform the way customer s has done. 339 00:19:00,640 --> 00:19:03,399 Speaker 1: And it's really that host of chap our companies that 340 00:19:03,400 --> 00:19:06,040 Speaker 1: we're trying to out innovate and that we've been out 341 00:19:06,080 --> 00:19:11,280 Speaker 1: innovating over the past few years. Yeah, we've got to 342 00:19:11,480 --> 00:19:13,640 Speaker 1: go to some more of this breaking news right around 343 00:19:13,640 --> 00:19:16,120 Speaker 1: Silicon Valley Bank. Can I just for our audience ask 344 00:19:16,200 --> 00:19:19,880 Speaker 1: are you a customer or client of Silicon Valley Bank? Yeah, 345 00:19:19,920 --> 00:19:22,600 Speaker 1: it's interesting. Silicon Valley Bank is one of the banks 346 00:19:22,600 --> 00:19:24,520 Speaker 1: we actually use here at for though we obviously work 347 00:19:24,600 --> 00:19:28,920 Speaker 1: with a few banks. So it's interesting hearing the news 348 00:19:28,960 --> 00:19:32,520 Speaker 1: go out live these days, so really interesting. Thanks. We 349 00:19:32,520 --> 00:19:34,040 Speaker 1: don't want to put you on the spot, but I 350 00:19:34,040 --> 00:19:36,159 Speaker 1: think you appreciate why we have to ask those questions, 351 00:19:36,240 --> 00:19:39,400 Speaker 1: right Caroline, that this is happening before our eyes. Yeah, 352 00:19:39,400 --> 00:19:42,080 Speaker 1: and ultimately I have to ask you more on the spot. Therefore, Dion, 353 00:19:42,160 --> 00:19:45,639 Speaker 1: are you going to be thinking about your relationship with SPB. 354 00:19:45,840 --> 00:19:48,320 Speaker 1: We're seeing that the shares are extending their postmarket to 355 00:19:48,359 --> 00:19:50,359 Speaker 1: climb down why more than ten percent at the moment 356 00:19:50,359 --> 00:19:52,600 Speaker 1: and a lot of venture capitalists and I know you're 357 00:19:52,640 --> 00:19:58,639 Speaker 1: back by VC asking their portfolio companies to cut their ties. Well, 358 00:19:58,720 --> 00:20:03,400 Speaker 1: it's a really dynamic situation. We're definitely evolving and adapting 359 00:20:03,440 --> 00:20:07,000 Speaker 1: as we go. But what I can say is, you know, again, 360 00:20:07,119 --> 00:20:10,480 Speaker 1: we work with multiple banks here at Forethought, and our 361 00:20:10,520 --> 00:20:11,720 Speaker 1: goal at the end of the day is to best 362 00:20:11,720 --> 00:20:14,000 Speaker 1: serve our customers, which is again why we're launching this 363 00:20:14,240 --> 00:20:17,720 Speaker 1: support GPT. But again, there's a lot happening in the space, 364 00:20:17,800 --> 00:20:22,480 Speaker 1: and yeah, we're excited and watching what's going on, excited 365 00:20:22,520 --> 00:20:24,879 Speaker 1: for AI, watching what's going on with SVB. We'll let 366 00:20:24,920 --> 00:20:27,560 Speaker 1: you go and get attention to both of those things. 367 00:20:27,680 --> 00:20:30,639 Speaker 1: Dean Nicholas, we thank you, CEO and co founder of 368 00:20:30,720 --> 00:20:33,760 Speaker 1: Forethought and all things AI and indeed Silicon Valley Bank. 369 00:20:33,800 --> 00:20:36,239 Speaker 1: Let's bring you where the market is currently telling. The 370 00:20:36,280 --> 00:20:39,240 Speaker 1: concern is AD and it's in Silicon Valley Banks parent company. 371 00:20:39,280 --> 00:20:41,399 Speaker 1: We're currently off by more than ten percent after hours 372 00:20:41,400 --> 00:20:44,400 Speaker 1: as you break the news that we are seeing yet 373 00:20:44,440 --> 00:20:48,159 Speaker 1: further moves coming from why Combinator advising its companies to 374 00:20:48,240 --> 00:20:51,080 Speaker 1: limit SVB exposure at the moment, and indeed, we'd already 375 00:20:51,119 --> 00:20:53,080 Speaker 1: heard it from the Founders Fund advising its companies to 376 00:20:53,119 --> 00:20:56,800 Speaker 1: withdraw funds. SUV we remind of you as they currently 377 00:20:56,840 --> 00:21:00,720 Speaker 1: bank about forty percent of all US VC backed companies, 378 00:21:00,760 --> 00:21:03,760 Speaker 1: according to its own website from New York. From San Francisco, 379 00:21:03,880 --> 00:21:20,560 Speaker 1: this is Bloomberg. It does business with nearly half of 380 00:21:20,600 --> 00:21:23,880 Speaker 1: all venture backed companies in the United States, said Silicon 381 00:21:23,960 --> 00:21:27,280 Speaker 1: Valley Bank, the parent company, falling further after hours after 382 00:21:27,320 --> 00:21:30,199 Speaker 1: of course, it worn the market earlier today that it's 383 00:21:30,240 --> 00:21:32,680 Speaker 1: hame to shore up its own capital, selling off assets, 384 00:21:32,720 --> 00:21:37,720 Speaker 1: doing a share sale, and ultimately, now seeing this talk 385 00:21:37,760 --> 00:21:41,760 Speaker 1: of confidence, the ultimate depositor is moving away from them. 386 00:21:41,800 --> 00:21:45,800 Speaker 1: VCS are advising their portfolio companies to cut ties. Yeah. Look, 387 00:21:45,960 --> 00:21:49,320 Speaker 1: look this is really accelerating after hours with down seventeen percent. 388 00:21:49,359 --> 00:21:51,800 Speaker 1: Now we haven't even got to the reporting that. According 389 00:21:51,840 --> 00:21:54,280 Speaker 1: to a source, Greg Becker, the CEO of the bank, 390 00:21:54,359 --> 00:21:58,159 Speaker 1: held a call with VCS earlier today basically saying keep calm. 391 00:21:58,600 --> 00:22:01,040 Speaker 1: A lot more to come with this story thus far 392 00:22:01,240 --> 00:22:04,359 Speaker 1: not keeping calm. We currently see course Founders Fund and 393 00:22:04,440 --> 00:22:09,280 Speaker 1: Why Combinator advising their portfolio companies to consider ending their 394 00:22:09,320 --> 00:22:12,040 Speaker 1: relationships with Silicon Valley Bank. So much more on this story, 395 00:22:12,080 --> 00:22:24,560 Speaker 1: there's a Blomberg. I want to know how tough it 396 00:22:24,600 --> 00:22:27,280 Speaker 1: is out there for startups. Look no further than Silicon 397 00:22:27,400 --> 00:22:30,000 Speaker 1: Valley Bank that, as the name might suggest, it's a 398 00:22:30,119 --> 00:22:34,200 Speaker 1: lender to venture backed startups. And well it's just announced 399 00:22:34,200 --> 00:22:36,560 Speaker 1: the trouble that it's in. Its shares have plummeted the 400 00:22:36,560 --> 00:22:39,800 Speaker 1: parent company of it the most since nineteen ninety eight. 401 00:22:40,000 --> 00:22:43,719 Speaker 1: Why is it struggling, Well, because the companies that it banks, 402 00:22:43,760 --> 00:22:46,840 Speaker 1: those startups currently are struggling to get new funding. They 403 00:22:46,840 --> 00:22:49,440 Speaker 1: are burning through cash and therefore they're having to withdraw 404 00:22:49,520 --> 00:22:53,040 Speaker 1: some of their deposits. So q SVB having to sell 405 00:22:53,119 --> 00:22:56,359 Speaker 1: more shares, having to sell off some of its asset portfolio, 406 00:22:56,440 --> 00:22:59,520 Speaker 1: and ultimately trying to shore up in some own capital position. 407 00:23:00,000 --> 00:23:03,119 Speaker 1: This just comes one day after the crypto focused lender 408 00:23:03,320 --> 00:23:06,000 Speaker 1: silver Gate announced that it was winding down, that it 409 00:23:06,080 --> 00:23:10,200 Speaker 1: was liquidating after its own customers had to withdraw deposits 410 00:23:10,280 --> 00:23:14,080 Speaker 1: because crypto prices tumbled. Look what is to blame here? 411 00:23:14,560 --> 00:23:18,960 Speaker 1: Interest rates? They're rising as the Federal Reserve raises interest 412 00:23:19,040 --> 00:23:23,439 Speaker 1: rates to tackle inflation. Suddenly, boring old safe US government 413 00:23:23,480 --> 00:23:27,200 Speaker 1: bonds are pretty appetizing. They actually give you some yield, 414 00:23:27,520 --> 00:23:30,840 Speaker 1: So why take a riskier bet on a crypto company 415 00:23:30,920 --> 00:23:34,160 Speaker 1: or a startup that may or may not pay off. 416 00:23:34,760 --> 00:23:37,960 Speaker 1: This ultimately is the end of free money. It means 417 00:23:37,960 --> 00:23:41,560 Speaker 1: that valuations are sinking and it's hurting certain lenders in 418 00:23:41,600 --> 00:23:45,080 Speaker 1: companies that bet everything on these tech and crypto sectors. 419 00:23:46,680 --> 00:23:49,919 Speaker 1: Let's get more into this unraveling story. As the shares 420 00:23:49,960 --> 00:23:52,800 Speaker 1: continue to drop after hours for Silicon Valley Bank, We've 421 00:23:52,840 --> 00:23:55,200 Speaker 1: got putting bogs, Max Rays, who's been across this story 422 00:23:55,320 --> 00:23:57,800 Speaker 1: and just talk to us. Ultimately, now it seems to 423 00:23:57,800 --> 00:24:01,440 Speaker 1: be the venchure capitalists who we're getting the cools from 424 00:24:01,440 --> 00:24:03,800 Speaker 1: the CEO all of the slicon Valley Bank to calm 425 00:24:03,800 --> 00:24:06,399 Speaker 1: and stay calm. And now I'm not saying Colm in 426 00:24:06,440 --> 00:24:10,359 Speaker 1: tending their portfolio companies to cut ties. Yeah, I think 427 00:24:10,400 --> 00:24:12,320 Speaker 1: that's a great way of putting it. I think again, 428 00:24:12,359 --> 00:24:14,160 Speaker 1: the thing to keep in mind is what the interest 429 00:24:14,200 --> 00:24:16,440 Speaker 1: rate environment is doing to these banks that I've decided 430 00:24:16,480 --> 00:24:21,199 Speaker 1: to really push into particular sectors. Silicon Valley Bank and 431 00:24:21,240 --> 00:24:25,120 Speaker 1: Silvergate have a lot of differences. Obviously, Silicon Valley Bank 432 00:24:25,160 --> 00:24:28,400 Speaker 1: has been building out the specific franchise for decades, while 433 00:24:28,520 --> 00:24:32,439 Speaker 1: Silver Gates pushing to crypto. It's relatively more recent, but 434 00:24:32,560 --> 00:24:35,520 Speaker 1: the similarity is that they took a bet on a 435 00:24:35,680 --> 00:24:40,160 Speaker 1: very very specific sector of the US economy, and as 436 00:24:40,400 --> 00:24:45,080 Speaker 1: interest rates continue to climb, as you know, they're the 437 00:24:45,119 --> 00:24:47,920 Speaker 1: areas that they focused on their backyards as it were 438 00:24:48,400 --> 00:24:52,800 Speaker 1: sort of dried up, they've been forced to reckon with that. Obviously, 439 00:24:52,880 --> 00:24:55,880 Speaker 1: that led to Silvergate to make some decision to wind down. 440 00:24:56,400 --> 00:24:58,560 Speaker 1: We're still seeing how this is playing out for Silicon 441 00:24:58,680 --> 00:25:02,280 Speaker 1: Valley Bank right but clearly client and investors are worried 442 00:25:03,480 --> 00:25:07,359 Speaker 1: max to recap the reporting twenty one billion dollars off 443 00:25:07,400 --> 00:25:10,560 Speaker 1: their securities portfolio. They're selling at a loss. According to 444 00:25:10,600 --> 00:25:15,399 Speaker 1: a source, Greg Becker met with venture capitalists and clients 445 00:25:15,400 --> 00:25:17,080 Speaker 1: to kind of reassure them what's going on. I do 446 00:25:17,119 --> 00:25:19,680 Speaker 1: want to show what Greg Becker had to say today 447 00:25:19,720 --> 00:25:22,600 Speaker 1: about the actions that Silicon Valley Bank has taken. We're 448 00:25:22,600 --> 00:25:25,920 Speaker 1: taking these actions because we expect to continue higher interest rates, 449 00:25:26,080 --> 00:25:29,080 Speaker 1: pressured public and private markets, and the elevated cash burn 450 00:25:29,160 --> 00:25:32,720 Speaker 1: levels from our clients as they invest in their business. 451 00:25:33,040 --> 00:25:36,280 Speaker 1: You reported that actually in the market, many do not 452 00:25:36,480 --> 00:25:40,399 Speaker 1: believe that this situation with Silicon Valley Bank is the 453 00:25:40,480 --> 00:25:44,240 Speaker 1: same as with Silvergate, explain that to us correct, and 454 00:25:44,280 --> 00:25:46,600 Speaker 1: again it goes back to the idea of the franchisees 455 00:25:46,720 --> 00:25:49,080 Speaker 1: being different in terms of their value and in terms 456 00:25:49,080 --> 00:25:52,439 Speaker 1: of what happening. Right, I would say that folks expect 457 00:25:52,560 --> 00:25:57,240 Speaker 1: Silicon Valley Bank to have more kind of more strength 458 00:25:57,280 --> 00:26:00,360 Speaker 1: in its franchise because they've been doing the longer. They 459 00:26:00,400 --> 00:26:04,320 Speaker 1: have more capabilities as a bank, while silver Gate wasn't 460 00:26:04,359 --> 00:26:08,040 Speaker 1: really interested in being a bank by any traditional sense. Right, 461 00:26:08,320 --> 00:26:10,800 Speaker 1: Silvergate's value was that it was a willing to touch 462 00:26:10,840 --> 00:26:14,560 Speaker 1: crypto or at least Fiat currency from cryptoclients, and that 463 00:26:14,560 --> 00:26:17,240 Speaker 1: I was giving them a way to exchange with those 464 00:26:17,240 --> 00:26:19,720 Speaker 1: funds with each other as part of their trading activity, 465 00:26:20,000 --> 00:26:22,240 Speaker 1: which is not really, you know something, the normal course 466 00:26:22,240 --> 00:26:25,480 Speaker 1: of banking. While Silicon Valley Bank, even though it likewise 467 00:26:25,520 --> 00:26:29,000 Speaker 1: took a very narrow approach, does use both sides as 468 00:26:29,040 --> 00:26:32,280 Speaker 1: its boundary. You know, it does lending, it does deposit taking. 469 00:26:32,640 --> 00:26:34,679 Speaker 1: It's not just trying to gain one side of it 470 00:26:34,800 --> 00:26:37,480 Speaker 1: or the other. So that's why folks are kind of 471 00:26:37,520 --> 00:26:39,399 Speaker 1: rooting for them and expecting them to pull through this 472 00:26:39,800 --> 00:26:43,600 Speaker 1: with more confidence than they did silver Gate. Let's therefore, 473 00:26:43,680 --> 00:26:46,560 Speaker 1: talk about next step smax. What do you look for 474 00:26:47,160 --> 00:26:52,360 Speaker 1: to ensure that Silicon Valley Bank can whether this current storm. 475 00:26:52,560 --> 00:26:54,880 Speaker 1: The fundamental question going forward is going to be how 476 00:26:54,920 --> 00:26:59,760 Speaker 1: many more of these clients ought to pull their deposits 477 00:26:59,760 --> 00:27:02,600 Speaker 1: come more withdrawals we see, and how that affects the 478 00:27:02,640 --> 00:27:07,280 Speaker 1: bank capitalization. What ended up killing Silvergate, right, but the 479 00:27:07,320 --> 00:27:11,159 Speaker 1: fact that even though it could honor the withdrawals that 480 00:27:11,200 --> 00:27:14,239 Speaker 1: we're seeing, it was no longer as capitalized as well 481 00:27:14,280 --> 00:27:16,880 Speaker 1: as it had been due to that, right, and there 482 00:27:16,880 --> 00:27:18,960 Speaker 1: are various ratio of capital ratios and the one we 483 00:27:19,080 --> 00:27:22,800 Speaker 1: need to satisfy as a regulated financial institution. So that 484 00:27:22,880 --> 00:27:26,400 Speaker 1: was one of the key sort of issues affecting silver Gate. 485 00:27:26,440 --> 00:27:30,280 Speaker 1: Going into it again, investors, people who watch the market 486 00:27:30,560 --> 00:27:34,040 Speaker 1: see key differences between Silvergate and Silicon Valley Bank, But 487 00:27:34,160 --> 00:27:36,680 Speaker 1: that is what people will be looking for. How will 488 00:27:36,720 --> 00:27:42,560 Speaker 1: the franchise fair as its continued max rays tterriffic reporting. 489 00:27:42,560 --> 00:27:44,480 Speaker 1: I think it's probably just the start of this story. 490 00:27:44,520 --> 00:27:47,400 Speaker 1: We'll track it in the days to come. Now let's 491 00:27:47,400 --> 00:27:49,320 Speaker 1: get to the world of crypto kind of more broadly. 492 00:27:49,359 --> 00:27:53,000 Speaker 1: Today the FED announced plans to form a crypto oversight team. 493 00:27:53,080 --> 00:27:56,840 Speaker 1: This has FED Vice chair for supervision. Michael Barr discuss 494 00:27:56,880 --> 00:28:00,399 Speaker 1: the impact of stable coins on the financial system, listening 495 00:28:01,640 --> 00:28:04,600 Speaker 1: consider their consequences if a stable coin not subject to 496 00:28:04,680 --> 00:28:08,200 Speaker 1: appropriate supervision and regulation were to be adopted as a 497 00:28:08,240 --> 00:28:12,120 Speaker 1: widespread means of payment, which some stable coin developers state 498 00:28:12,240 --> 00:28:15,600 Speaker 1: as a goal. Stable coins have the potential to scale 499 00:28:15,680 --> 00:28:20,920 Speaker 1: quickly because of network effects. An unregulated, unsupervised deposit like 500 00:28:21,119 --> 00:28:26,800 Speaker 1: acid could create tremendous disruptions, not just for financial institutions, 501 00:28:26,840 --> 00:28:29,080 Speaker 1: but for people who might rely on the coin if 502 00:28:29,080 --> 00:28:33,240 Speaker 1: it were to get wide adoption. Let's talk about the 503 00:28:33,320 --> 00:28:36,560 Speaker 1: network effects as stable coins with Morgan Bella. She's the 504 00:28:36,600 --> 00:28:40,520 Speaker 1: co founder of Facebook's DM stable coin program, but also 505 00:28:40,600 --> 00:28:44,400 Speaker 1: partner at NFX, a VC focused on network effects. One 506 00:28:44,440 --> 00:28:47,960 Speaker 1: point one billion dollars of deployed capital assets under management. 507 00:28:48,360 --> 00:28:51,280 Speaker 1: You heard there what the fed vice share had to say. 508 00:28:51,840 --> 00:28:55,600 Speaker 1: Are you convinced by it? Thank you so much for 509 00:28:55,680 --> 00:28:58,560 Speaker 1: having me And yes. At NFX, which stands for Network 510 00:28:58,600 --> 00:29:02,800 Speaker 1: effects on the board, we are believers in network effects. 511 00:29:02,840 --> 00:29:05,760 Speaker 1: There's a creator of DM unbeliever in stable coins. So 512 00:29:06,200 --> 00:29:10,280 Speaker 1: hearing Michael Barr acknowledge stable coins in that way, I'm 513 00:29:10,320 --> 00:29:14,600 Speaker 1: trying to stay net optimistic, but I am admittedly a 514 00:29:14,640 --> 00:29:19,520 Speaker 1: bit nervous that oversight could maybe go too far. I 515 00:29:19,560 --> 00:29:24,160 Speaker 1: don't necessarily see network effects and these assets taking off 516 00:29:24,200 --> 00:29:26,640 Speaker 1: quickly as a bad thing, which definitely feels like he's 517 00:29:26,640 --> 00:29:29,640 Speaker 1: coming at it with a negative tone. And of course 518 00:29:30,000 --> 00:29:32,360 Speaker 1: that was the ultimate demise of DM when it had 519 00:29:32,360 --> 00:29:35,880 Speaker 1: to sell itself, I have to say, ended up selling 520 00:29:35,960 --> 00:29:40,080 Speaker 1: itself to the likes of Silvigate Bank in and of itself, 521 00:29:40,120 --> 00:29:42,000 Speaker 1: some of the assets because they had to be and 522 00:29:42,040 --> 00:29:44,160 Speaker 1: went on into unwine because ultimately the didn't feel the 523 00:29:44,200 --> 00:29:47,520 Speaker 1: regulatory environment was ready for that. What are you hoping 524 00:29:47,560 --> 00:29:51,520 Speaker 1: to hear from regulators that they do indeed recognize ultimately 525 00:29:51,520 --> 00:29:53,560 Speaker 1: the importance of stable coins because you've written an essay 526 00:29:53,600 --> 00:29:56,360 Speaker 1: on this. I did write an essay on this. Thank 527 00:29:56,400 --> 00:29:59,520 Speaker 1: you for reading it or commenting on it. I'm hoping 528 00:29:59,560 --> 00:30:03,800 Speaker 1: to hear that the US government recognizes that stable coins 529 00:30:03,880 --> 00:30:08,120 Speaker 1: are a huge asset. So dollarization is an effort that 530 00:30:08,320 --> 00:30:10,600 Speaker 1: the US government has been trying to push for over 531 00:30:10,640 --> 00:30:13,959 Speaker 1: two hundred years, and not necessarily in scalable ways, like 532 00:30:13,960 --> 00:30:17,200 Speaker 1: the US government to this day backs up physical trucks 533 00:30:17,240 --> 00:30:20,880 Speaker 1: of cash into villages around the world. If you believe 534 00:30:20,960 --> 00:30:23,280 Speaker 1: that the future of money is more digital than it 535 00:30:23,400 --> 00:30:27,040 Speaker 1: is physical. Stable coins are a real tool to further 536 00:30:27,120 --> 00:30:30,920 Speaker 1: push dollarization, which as an American is pretty awesome. And 537 00:30:31,000 --> 00:30:34,200 Speaker 1: not all stable coins are created equally. I've said there's 538 00:30:34,480 --> 00:30:37,680 Speaker 1: fifty shades of stable coins, but there are what we 539 00:30:38,000 --> 00:30:42,840 Speaker 1: coined as safe stable coins, which we define as assets 540 00:30:42,840 --> 00:30:46,080 Speaker 1: with digital representations of actual dollars. So let's say a 541 00:30:46,200 --> 00:30:49,800 Speaker 1: safe digital US dollar has a physical US dollar in 542 00:30:49,800 --> 00:30:52,960 Speaker 1: a bank account somewhere, and the US government should see 543 00:30:52,960 --> 00:30:56,880 Speaker 1: that as a great tool. So I'm hoping that the 544 00:30:57,000 --> 00:31:00,840 Speaker 1: US government realizes that stable coins are really not an 545 00:31:00,840 --> 00:31:03,479 Speaker 1: issue or a matter of crypto first, It's really an 546 00:31:03,480 --> 00:31:07,760 Speaker 1: issue and matter of dollarization and US hegemony first. Yeah, 547 00:31:07,840 --> 00:31:10,400 Speaker 1: financial works is second, and crypto is just kind of 548 00:31:10,400 --> 00:31:12,480 Speaker 1: the infrastructure of which is built. But when you have 549 00:31:12,720 --> 00:31:16,680 Speaker 1: of course, bas saying they scale quickly due to network effects, 550 00:31:16,720 --> 00:31:19,440 Speaker 1: and he warned that therefore if they go unchecked, ultimately 551 00:31:19,480 --> 00:31:21,800 Speaker 1: there's a risk they're a tremendous risk. Is the risk 552 00:31:21,840 --> 00:31:25,520 Speaker 1: really ultimately for him? That well, it gets bigger than 553 00:31:26,320 --> 00:31:30,360 Speaker 1: non digital cryptocurrency. I really just want to shake him. 554 00:31:30,560 --> 00:31:33,840 Speaker 1: If he's listening, I'd love to shake you. So we'll 555 00:31:33,920 --> 00:31:37,600 Speaker 1: message him. The risk, yes, thank you. The risk where 556 00:31:37,640 --> 00:31:40,480 Speaker 1: I will admit and see your risk is that there 557 00:31:40,520 --> 00:31:42,719 Speaker 1: are fifty shades of stable coins, as I mentioned, and 558 00:31:42,760 --> 00:31:46,320 Speaker 1: they're not all quote safe in that people are using 559 00:31:46,360 --> 00:31:49,880 Speaker 1: the three letters USD and tacking it onto various assets 560 00:31:49,920 --> 00:31:53,120 Speaker 1: which could be misleading to consumers. And the onus is 561 00:31:53,160 --> 00:31:55,960 Speaker 1: on the consumer to do the homework on their own 562 00:31:56,000 --> 00:31:58,959 Speaker 1: to decide if you know this version of digital USD 563 00:31:59,760 --> 00:32:05,320 Speaker 1: is is this one not etc. But if they are 564 00:32:05,440 --> 00:32:08,000 Speaker 1: regulated for which there are some issuers for which there 565 00:32:08,000 --> 00:32:10,600 Speaker 1: are actual physical dollars, like at least one in a 566 00:32:10,600 --> 00:32:13,640 Speaker 1: bank account for every digital version, Like if that takes 567 00:32:13,680 --> 00:32:15,840 Speaker 1: off quickly, like I don't, that could be a good thing. 568 00:32:15,880 --> 00:32:18,480 Speaker 1: Like again, the US government has been trying to push 569 00:32:18,560 --> 00:32:21,880 Speaker 1: dollar hegimony for two hundred years and not quick and 570 00:32:22,560 --> 00:32:25,360 Speaker 1: scalable ways, and this could really really be a great 571 00:32:25,400 --> 00:32:32,080 Speaker 1: tool for that. Morgan DM the association's assets sold to Silvigate. 572 00:32:32,160 --> 00:32:36,160 Speaker 1: You a co founder of DM, What is your reaction 573 00:32:36,200 --> 00:32:40,520 Speaker 1: to what you're seeing happen with silvi Gate. It's all 574 00:32:40,600 --> 00:32:44,520 Speaker 1: kind of disbelief. So I was not at DM for 575 00:32:45,000 --> 00:32:48,440 Speaker 1: I left right around when that's it was being negotiated 576 00:32:48,480 --> 00:32:50,600 Speaker 1: so I wasn't there for that, but I will say 577 00:32:50,640 --> 00:32:54,520 Speaker 1: that I was. Even though DM did not take off 578 00:32:54,960 --> 00:32:57,120 Speaker 1: or succeed in the ways that we had hoped and dreamed, 579 00:32:57,160 --> 00:32:59,880 Speaker 1: I was excited to see the assets live on with 580 00:33:00,040 --> 00:33:04,680 Speaker 1: the hope that another entity, not Facebook, would potentially help 581 00:33:04,720 --> 00:33:07,840 Speaker 1: bring these ideas to life. So it is a bummer 582 00:33:07,880 --> 00:33:10,640 Speaker 1: to see that not be the case with silver Gate. 583 00:33:11,600 --> 00:33:14,560 Speaker 1: But yes, a great partner at the time, and they like, 584 00:33:14,600 --> 00:33:16,640 Speaker 1: we were happy to find the home. But it's all 585 00:33:16,680 --> 00:33:20,040 Speaker 1: kind of surreal, Morgan. We have to ask as well. 586 00:33:20,120 --> 00:33:23,200 Speaker 1: The other big piece of breaking news is SVB Financial 587 00:33:23,240 --> 00:33:27,520 Speaker 1: Silicon Valley Bank. Are you a deposit client of that bank? 588 00:33:27,520 --> 00:33:30,080 Speaker 1: We're showing a chart on the screen, biggest drop on 589 00:33:30,200 --> 00:33:36,760 Speaker 1: record this Thursday. I have a friend visiting who got 590 00:33:36,800 --> 00:33:38,440 Speaker 1: to the office today and was like, you didn't tell 591 00:33:38,480 --> 00:33:40,200 Speaker 1: me this guy would be falling. And I thought he 592 00:33:40,240 --> 00:33:43,200 Speaker 1: was referencing a reigning in San Francisco, but he was 593 00:33:43,280 --> 00:33:47,880 Speaker 1: referencing Silicon Valley Bank. So definitely still in shock and awe. 594 00:33:48,080 --> 00:33:52,320 Speaker 1: Their NFX is a client of SVB. To be honest, 595 00:33:52,320 --> 00:33:54,000 Speaker 1: they've been a great partner to us, as they've been 596 00:33:54,040 --> 00:33:56,520 Speaker 1: a great partner to everyone else. In Silicon Valley, in 597 00:33:56,560 --> 00:33:59,920 Speaker 1: the broader tech world, and they've really been a pillar 598 00:34:00,120 --> 00:34:03,000 Speaker 1: of industry in a really positive way to date. So 599 00:34:03,040 --> 00:34:07,000 Speaker 1: this is deeply upsetting to see we don't know much. 600 00:34:07,040 --> 00:34:10,520 Speaker 1: We're watching it like everyone else is watching it, and 601 00:34:10,680 --> 00:34:15,640 Speaker 1: as information unfolds, advising both the portfolio and ourselves accordingly, 602 00:34:15,680 --> 00:34:19,520 Speaker 1: but more good enough. Will you have to ultimately advise 603 00:34:19,600 --> 00:34:22,120 Speaker 1: your portfolio clients, even if they are a great partner, 604 00:34:22,640 --> 00:34:26,120 Speaker 1: to set their links to pull their deposits. Then that's 605 00:34:26,160 --> 00:34:30,040 Speaker 1: like the multi billion eller question of the day. If 606 00:34:30,080 --> 00:34:32,120 Speaker 1: we do feel that it is unsafe and puts our 607 00:34:32,120 --> 00:34:35,920 Speaker 1: companies at risk, we will do so. But we will 608 00:34:36,040 --> 00:34:38,400 Speaker 1: tell for that what would be the signal that you 609 00:34:38,520 --> 00:34:46,160 Speaker 1: then think it's unsafe. The biggest question that we're asking 610 00:34:46,360 --> 00:34:50,719 Speaker 1: is how will this impact our portfolio companies from operating 611 00:34:51,239 --> 00:34:54,759 Speaker 1: their businesses in the day to day. And I don't 612 00:34:54,760 --> 00:35:00,640 Speaker 1: think we're worried about everything vanishing, you know, overnight, but 613 00:35:00,680 --> 00:35:03,160 Speaker 1: we are worried about our companies being able to access 614 00:35:03,200 --> 00:35:06,040 Speaker 1: working capital that they need to run their businesses today, 615 00:35:06,080 --> 00:35:08,960 Speaker 1: tomorrow and over the next few months. So it's unclear 616 00:35:09,040 --> 00:35:11,360 Speaker 1: exactly what the objective sign is that we are looking 617 00:35:11,360 --> 00:35:15,240 Speaker 1: for but that's kind of the question we're looking to answer. Morgan, 618 00:35:15,800 --> 00:35:18,759 Speaker 1: thank you so much for coming on for talking all 619 00:35:18,840 --> 00:35:22,279 Speaker 1: things crypto, all things traditional finance, and make so clear 620 00:35:22,320 --> 00:35:28,440 Speaker 1: with us. We appreciate it. ANFX partner, Morgan Bella coming up. Walmart, Well, 621 00:35:28,480 --> 00:35:32,240 Speaker 1: it's narrowing the gap with Amazon for wealthier online shoppers. 622 00:35:32,520 --> 00:35:49,000 Speaker 1: We'll dig into it next. This is Bloomberg. Walmart Plus 623 00:35:49,320 --> 00:35:52,120 Speaker 1: launched in twenty twenty, and it's beginning to creep into 624 00:35:52,160 --> 00:35:56,920 Speaker 1: the crucial demographic dominated by Amazon Prime, wealthy shoppers. New 625 00:35:57,000 --> 00:35:59,400 Speaker 1: data shows that the share of Walmart Plus subscribers with 626 00:35:59,440 --> 00:36:01,480 Speaker 1: an income of above one hundred and fifty thousand dollars 627 00:36:01,560 --> 00:36:04,120 Speaker 1: actually rose thirteen percent in the past year alone. But 628 00:36:04,160 --> 00:36:06,520 Speaker 1: it's a long way to catch up to Amazon Prime 629 00:36:06,560 --> 00:36:09,319 Speaker 1: seventy seven percent control of the demographic. Let's get to 630 00:36:09,320 --> 00:36:11,680 Speaker 1: spend the SOAPA who covers all things e commerce for us, 631 00:36:11,680 --> 00:36:16,399 Speaker 1: and ultimately there is a flywheel effect going on here. Yeah. 632 00:36:16,440 --> 00:36:20,760 Speaker 1: So Walmart Plus launched in twenty twenty and it's starting 633 00:36:20,760 --> 00:36:22,680 Speaker 1: to pick up some steam. And what we are seeing 634 00:36:22,800 --> 00:36:26,080 Speaker 1: is just like Amazon early on back in two thousand 635 00:36:26,120 --> 00:36:28,880 Speaker 1: and five, minutes to launched Prime, the whole prospect there was, 636 00:36:28,920 --> 00:36:31,239 Speaker 1: let's offer a really good selection, really good prices, bringing 637 00:36:31,320 --> 00:36:34,399 Speaker 1: more customers, and it all feeds on itself, and we're 638 00:36:34,440 --> 00:36:37,480 Speaker 1: starting to see some of that with Walmart. But the 639 00:36:37,520 --> 00:36:40,520 Speaker 1: real interesting thing was these more affluence shoppers that they're 640 00:36:40,560 --> 00:36:43,320 Speaker 1: getting more people in that one hundred and fifty thousand 641 00:36:43,400 --> 00:36:47,360 Speaker 1: plus a year annual income area that you normally associate 642 00:36:47,400 --> 00:36:49,759 Speaker 1: with Amazon, and we're starting to see Walmart get more 643 00:36:49,800 --> 00:36:54,520 Speaker 1: of them. All right, Bloomberg Spencer, SOAPA Triffic Rapporting, Thank 644 00:36:54,560 --> 00:37:06,480 Speaker 1: you very much. South Korea is pushing to be a 645 00:37:06,560 --> 00:37:10,040 Speaker 1: major player in space exploration by twenty forty five. With 646 00:37:10,239 --> 00:37:14,680 Speaker 1: treaties that are limiting tech capabilities. South Korea's rocket scientists 647 00:37:14,680 --> 00:37:18,279 Speaker 1: turned to the Internet to find an engine that they 648 00:37:18,280 --> 00:37:22,080 Speaker 1: could mimic. Chief North Asia correspondent Stephen Engel got exclusive 649 00:37:22,120 --> 00:37:25,120 Speaker 1: access to South Korea's rocket launch program. Have a listen. 650 00:37:28,840 --> 00:37:32,320 Speaker 1: South Korea has lofty goals for its fledgling space program 651 00:37:32,400 --> 00:37:35,280 Speaker 1: that needed one giant leap of faith in a search 652 00:37:35,320 --> 00:37:39,560 Speaker 1: engine to get it off the ground. Treaties between established 653 00:37:39,600 --> 00:37:43,120 Speaker 1: space powers like the US, Russia, and France prohibits certain 654 00:37:43,160 --> 00:37:47,120 Speaker 1: tech transfers to aspiring space club nations like South Korea, 655 00:37:47,600 --> 00:37:51,480 Speaker 1: leaving its small team of pioneering rocket scientists discour the 656 00:37:51,560 --> 00:37:56,400 Speaker 1: web for ideas. We looked up on the internet to 657 00:37:56,520 --> 00:38:01,040 Speaker 1: compare and find a suitable launch vehicle. La I was 658 00:38:01,080 --> 00:38:05,480 Speaker 1: a SpaceX Falcon Merlin engine. We developed Nuri looking at 659 00:38:05,520 --> 00:38:07,920 Speaker 1: the picture and using it as a point of reference 660 00:38:07,920 --> 00:38:12,520 Speaker 1: to design. Carol Sin is a fuel tanker. This is 661 00:38:12,600 --> 00:38:16,160 Speaker 1: an actual Nuri three stage launch vehicle, not a replica. 662 00:38:16,239 --> 00:38:20,080 Speaker 1: And Bloomberg News got an exclusive and unprecedented tour of 663 00:38:20,160 --> 00:38:23,239 Speaker 1: the entire Naro Space Center where the first two Nouri 664 00:38:23,400 --> 00:38:27,680 Speaker 1: rockets were launched, including the first successful test mission last year. 665 00:38:27,960 --> 00:38:30,680 Speaker 1: What did you feel when it launched for the first time? 666 00:38:31,600 --> 00:38:39,440 Speaker 1: My Harneyson feeding festive and praying please. The next launched, 667 00:38:39,520 --> 00:38:42,480 Speaker 1: perhaps by as early as this may, will deploy actual 668 00:38:42,480 --> 00:38:47,000 Speaker 1: commercial satellites powered into orbit by those SpaceX inspired but 669 00:38:47,440 --> 00:38:51,000 Speaker 1: locally made engines, and they're nearly three hundred tons of thrust. 670 00:38:51,280 --> 00:38:57,000 Speaker 1: We're trying to build a SpaceX like company. It's a 671 00:38:57,040 --> 00:39:01,200 Speaker 1: model that Mary's elon must cost efficiency with South Korea's 672 00:39:01,239 --> 00:39:05,120 Speaker 1: prowess in advanced chips. At present, the Nuri costs about 673 00:39:05,120 --> 00:39:08,960 Speaker 1: eighty million US dollars per launch, compared to sixty seven 674 00:39:08,960 --> 00:39:12,719 Speaker 1: million for the more powerful, larger payload Falcon nine. That's 675 00:39:12,800 --> 00:39:16,240 Speaker 1: largely why later this year, South Korea's government run Kari 676 00:39:16,560 --> 00:39:20,280 Speaker 1: will transfer its commercial rocket launching to a private company 677 00:39:20,719 --> 00:39:25,120 Speaker 1: rocket engine maker, Hanwa Aerospace. We're seeking to see if 678 00:39:25,200 --> 00:39:28,719 Speaker 1: Karnach can make the Neuri rocket profitable, but it's a 679 00:39:28,840 --> 00:39:33,520 Speaker 1: very hard task. Elam must have made a very type 680 00:39:33,520 --> 00:39:36,960 Speaker 1: market for other companies. This is South Korea's main launch 681 00:39:37,040 --> 00:39:40,080 Speaker 1: center and launch pad for the last two Nuri rockets 682 00:39:40,239 --> 00:39:42,959 Speaker 1: and the next one that will be launched sometime later 683 00:39:43,200 --> 00:39:45,759 Speaker 1: in twenty twenty three. But over here they're going to 684 00:39:45,800 --> 00:39:51,720 Speaker 1: expand it because they have larger ambitions for destinations further afield, 685 00:39:51,840 --> 00:39:56,480 Speaker 1: including the Moon and beyond and liftoff of Artist one. 686 00:39:56,680 --> 00:40:00,680 Speaker 1: Namely participation in the NASA led Artemis program to return 687 00:40:00,760 --> 00:40:04,960 Speaker 1: man and payloads to the mood. National security too will 688 00:40:05,000 --> 00:40:07,560 Speaker 1: be a key driver at a time when North Korea 689 00:40:07,680 --> 00:40:11,680 Speaker 1: is improving its rocket capabilities and the sanctioned Russia means 690 00:40:11,800 --> 00:40:17,480 Speaker 1: one less rocket launch provider available to South Korea. It's 691 00:40:17,520 --> 00:40:21,040 Speaker 1: important to find cheap launch vehicles from a business perspective, 692 00:40:21,480 --> 00:40:23,880 Speaker 1: but I think it is very important for the country 693 00:40:23,920 --> 00:40:26,160 Speaker 1: to have the ability to put satellites or things like 694 00:40:26,239 --> 00:40:29,880 Speaker 1: this into space when we want to to get into 695 00:40:29,920 --> 00:40:34,720 Speaker 1: the once fairly exclusive but now increasingly crowded global space club. 696 00:40:35,000 --> 00:40:39,760 Speaker 1: South Korea may emulate another American accomplishment, the Kennedy Space Center, 697 00:40:40,040 --> 00:40:43,479 Speaker 1: to transform these sleepy islands in the nation's south into 698 00:40:43,520 --> 00:40:47,400 Speaker 1: an aerospace industry epicenter. Stephen Angel Bloomberg News at the 699 00:40:47,520 --> 00:40:53,440 Speaker 1: Narospace Center, go Hoong, South Korea. From South Korea and 700 00:40:53,520 --> 00:40:55,200 Speaker 1: space to the here and now on the ground. When 701 00:40:55,239 --> 00:40:57,520 Speaker 1: it comes to financials, let's look at Silicon Valley Bank 702 00:40:57,600 --> 00:41:01,040 Speaker 1: still tumbling after hours after of course says concern about 703 00:41:01,400 --> 00:41:03,799 Speaker 1: companies starting to pull their deposits. Yet further from this 704 00:41:03,880 --> 00:41:06,200 Speaker 1: particular lender, Hannah Miller is with us and of course 705 00:41:06,239 --> 00:41:10,120 Speaker 1: a key component of lending too VC back to US companies. 706 00:41:10,120 --> 00:41:12,359 Speaker 1: But down now, Wollman twenty percent. What are you hearing 707 00:41:12,400 --> 00:41:15,600 Speaker 1: from some of the venture capital companies. Yeah, so we 708 00:41:15,640 --> 00:41:18,200 Speaker 1: know that there's a lot of concern among venture capitalists. 709 00:41:18,320 --> 00:41:21,160 Speaker 1: We know firms are pulling funds from Silvergate and advising 710 00:41:21,200 --> 00:41:26,120 Speaker 1: their portfolio companies to do the same from SVBS from SVB, Yes, 711 00:41:26,200 --> 00:41:28,960 Speaker 1: that's correct. We know that there is a call this 712 00:41:29,000 --> 00:41:34,320 Speaker 1: morning where sbb CEO advised the clients, which included venture capitalists, 713 00:41:34,320 --> 00:41:38,200 Speaker 1: to remain calm. He said this multiple times. But still 714 00:41:38,239 --> 00:41:41,239 Speaker 1: there's a lot of concern here, and this is a 715 00:41:41,239 --> 00:41:43,719 Speaker 1: developing story that we're keeping closehauts on. Just give us 716 00:41:43,719 --> 00:41:46,560 Speaker 1: a sense of size and scope. Basically, most of Silicon 717 00:41:46,640 --> 00:41:49,279 Speaker 1: Valley uses this as their banking of choice. Yes, this 718 00:41:49,440 --> 00:41:52,319 Speaker 1: is a key component in Silicon Valley. We know venture 719 00:41:52,360 --> 00:41:55,640 Speaker 1: capitalists gravity towards this bank. We have big names connected 720 00:41:55,760 --> 00:41:59,120 Speaker 1: to Silicon Valley Bank and ultimately Hannah, we're hearing, you know, 721 00:41:59,160 --> 00:42:02,200 Speaker 1: the Greg Becker. This CEO is saying, you know, stay calm, 722 00:42:02,360 --> 00:42:05,080 Speaker 1: but when you've got founders fund of course, confounded by 723 00:42:05,120 --> 00:42:07,480 Speaker 1: Peter Teal saying that there's no downside to removing your 724 00:42:07,520 --> 00:42:10,800 Speaker 1: deposits when you've got why Combinator perhaps advising their companies 725 00:42:10,800 --> 00:42:12,400 Speaker 1: to do the same. Feels like this is going to 726 00:42:12,440 --> 00:42:16,400 Speaker 1: be a crescendo effect. Yes, that's what we're keeping tabs on. 727 00:42:16,520 --> 00:42:19,839 Speaker 1: People are nervous. Yes they're being told to stay calm, 728 00:42:19,880 --> 00:42:24,200 Speaker 1: but that seems to be sparking even more anxiety among investors. 729 00:42:24,200 --> 00:42:27,120 Speaker 1: So we have portfolio companies on edge. We have vcs 730 00:42:27,160 --> 00:42:30,520 Speaker 1: on edge. This is a very intend of story, very 731 00:42:30,600 --> 00:42:32,759 Speaker 1: very quickly. What do we not know? What's still to 732 00:42:32,760 --> 00:42:36,400 Speaker 1: find out? We need? We are certain that more people 733 00:42:36,520 --> 00:42:40,120 Speaker 1: are pulling funds from SVP. We don't know what's going 734 00:42:40,160 --> 00:42:42,759 Speaker 1: to happen here. In terms of getting them know right 735 00:42:42,760 --> 00:42:47,399 Speaker 1: side up, we of course put out our feelers and 736 00:42:47,440 --> 00:42:49,719 Speaker 1: we are in constant conversation with Silicon Valley Bank. We'll 737 00:42:49,719 --> 00:42:52,800 Speaker 1: bring you any up to date information from that particular lender. 738 00:42:52,840 --> 00:42:55,239 Speaker 1: But Hannah Miller, we thank you so much. And that 739 00:42:55,280 --> 00:42:57,520 Speaker 1: does it. From this edition of a very breaking news 740 00:42:57,520 --> 00:43:01,640 Speaker 1: heavy bloom Bag Technology. Yeah tomorrow, Twitter spaces twelve Eastern 741 00:43:01,719 --> 00:43:03,600 Speaker 1: nine MS. I know what you and I are going 742 00:43:03,640 --> 00:43:06,920 Speaker 1: to be talking about. This is erupted into a huge 743 00:43:06,960 --> 00:43:10,120 Speaker 1: story around Silicon Valley Bank. This is Bloomberg