WEBVTT - Silicon Valley Bank and Silvergate's Troubles 0:00:13.000 --> 0:00:15.560 I'm Caroline Hyde of bloom Ugs weld tadquarters in New York, 0:00:16.040 --> 0:00:19.079 and I met Ludlow in San Francisco. This is Bloomberg 0:00:19.079 --> 0:00:22.759 Technology coming up. SVB Silicon Valley Bank. It suffers its 0:00:22.800 --> 0:00:26.439 worst ever intra day drop as a CEO begs clients 0:00:26.480 --> 0:00:29.600 to stay calm. Well, this reflects about startups, about venture 0:00:29.640 --> 0:00:33.839 capital firms and tech focused lenders, and the chat platform. 0:00:33.920 --> 0:00:37.360 Discord turns to you've guessed it? Open AI to look 0:00:37.400 --> 0:00:42.080 at integrating AI into the platform. Will discuss. Then the 0:00:42.120 --> 0:00:46.360 FED creates a crypto oversight team to overlook stable coins. 0:00:46.520 --> 0:00:50.360 We discussed with the co found of DM stable coin program. 0:00:50.479 --> 0:00:53.280 For first, let's check in on the markets, because what 0:00:53.400 --> 0:00:57.000 a down day. What a worry that we're getting surrounding lenders, 0:00:57.080 --> 0:00:59.000 banks in general, and of course a lot of those 0:00:59.120 --> 0:01:01.560 our tech focus and nature NAZAC off by two percent, 0:01:01.840 --> 0:01:04.240 KBW Bank condext I shine a light on this index 0:01:04.240 --> 0:01:06.480 because the banking index is having its worst day since 0:01:06.600 --> 0:01:08.800 June of twenty twenty, off by seven point seven percent, 0:01:09.040 --> 0:01:11.960 and it's all regarding SVB and indeed silver Gate. I 0:01:12.000 --> 0:01:13.880 look at a ten year treasury yield that gets bid. 0:01:14.080 --> 0:01:16.960 This risk of sentiment means money pours back in to 0:01:17.160 --> 0:01:19.400 US treasury is yields stopped by eight basis points. Let's 0:01:19.400 --> 0:01:21.120 move it on. Let's look at the world of crypto, 0:01:21.160 --> 0:01:24.960 because the worry, the contagion, that implications of a silver 0:01:25.040 --> 0:01:27.680 Gate unwinding, and indeed what SVB really talks about in 0:01:27.840 --> 0:01:32.160 terms of risk sentiment around technology, Crypto absolutely being battered 0:01:32.200 --> 0:01:34.800 after the liquidation of Silvergate. We're off by more than 0:01:34.920 --> 0:01:37.000 Rod and Ed. Just dig into that a little bit 0:01:37.000 --> 0:01:41.280 for us, the implications of what now feels traditional finance 0:01:41.400 --> 0:01:46.160 meets decentralized finance looks certainly. Sentiment depressed all day long 0:01:46.200 --> 0:01:48.960 when it comes to bitcoin is an example because of Silvergate. 0:01:49.000 --> 0:01:52.000 There's also some stuff out there about who being coucoin 0:01:52.600 --> 0:01:54.520 and what the New York Attorney General is looking at. 0:01:54.560 --> 0:01:57.720 But here are the concerns right, SVB Financial parent group 0:01:57.720 --> 0:02:01.360 of Silicon Valley Bank down sixty percent, Silvergate capital down 0:02:01.360 --> 0:02:04.840 forty two. The concern here is that the impact of 0:02:04.920 --> 0:02:07.240 higher rates has hit the froffiest corners of the market. 0:02:07.320 --> 0:02:10.520 Where are the froffiest corners of the market, Caroline, crypto 0:02:10.600 --> 0:02:14.680 and technology. The story with SVB in particular is that 0:02:14.760 --> 0:02:19.120 who are their clients clients, technology companies, startups who are 0:02:19.200 --> 0:02:22.079 facing cash burn. They don't need cash in the bank, 0:02:22.360 --> 0:02:27.000 they needed at hands. They're making basically withdrawals deposit outflows, 0:02:27.000 --> 0:02:29.880 and Silicon Valley Bank is having to react in order 0:02:29.880 --> 0:02:32.480 to plug the gap. Just to make the point even further, 0:02:32.560 --> 0:02:34.920 let's look at this terminal chart really quick and just 0:02:34.960 --> 0:02:37.720 look at the drama. Biggest drop on record for this 0:02:37.919 --> 0:02:41.239 stock and is lowest level since September twenty sixteen. Let's 0:02:41.240 --> 0:02:44.120 get more details. Bloomberg Shnali Bassak joining us out of 0:02:44.160 --> 0:02:46.519 New York. A lot of stories to cover, But how 0:02:46.680 --> 0:02:51.200 core is that Silicon Valley Bank client based tech to 0:02:51.280 --> 0:02:53.640 this story? It is a big part of this story. 0:02:53.680 --> 0:02:56.160 But you can also talk about balance sheet management here 0:02:56.160 --> 0:02:58.200 being an issue when it comes to Silicon Valley Bank. 0:02:58.200 --> 0:03:00.320 When you look at the Wall Street view on what 0:03:00.360 --> 0:03:02.880 has happened here, part of the issues were exacerbated not 0:03:02.960 --> 0:03:05.440 just because of their client base, but because they had 0:03:05.480 --> 0:03:08.520 to sell securities at a loss. That is something we're 0:03:08.520 --> 0:03:10.920 not seeing just unique to Silicon Valley Bank. But I 0:03:10.919 --> 0:03:13.120 will put some contacts here because the point you're making 0:03:13.160 --> 0:03:16.520 here this not so long ago, a year ago, This 0:03:16.600 --> 0:03:19.960 Bank was the envy of the industry of many many banks, 0:03:20.240 --> 0:03:23.919 from Goldman Sachs to JP Morgan. They loved what Silicon 0:03:24.000 --> 0:03:25.840 Valley Bank was doing, to the point the you have 0:03:25.840 --> 0:03:28.800 to wonder, now, is Silicon Valley Bank going to eventually 0:03:28.800 --> 0:03:32.280 become an acquisition target or is there too much weakness 0:03:32.320 --> 0:03:35.280 here to make it so? What happens next, I think 0:03:35.400 --> 0:03:37.240 is the major question that's looming in the market. First 0:03:37.240 --> 0:03:39.040 of all, val and I think some of the threads 0:03:39.040 --> 0:03:40.640 that we're going to weave, and I know way want 0:03:40.680 --> 0:03:44.040 to imply that subs stop drop immediately means that we're 0:03:44.080 --> 0:03:46.640 going to see what happened with silver Gate. But ultimately 0:03:46.760 --> 0:03:50.200 two companies, two banks, are currently facing the headwinds of 0:03:50.240 --> 0:03:53.600 high interest rates, and both got very focused on certain 0:03:53.640 --> 0:03:56.040 parts of the market. Yeah, and that is certainly what 0:03:56.240 --> 0:03:57.880 is in common here. And by the way, there are 0:03:57.920 --> 0:04:01.240 other banks that also have similar worry around them. Think 0:04:01.320 --> 0:04:03.960 Signature Bank, where the deposit base was not so loaded 0:04:03.960 --> 0:04:07.160 to crypto about fifteen percent according to Anile ass estimates 0:04:07.920 --> 0:04:11.000 its deposits. We're kind of tied to the crypto industry 0:04:11.040 --> 0:04:15.440 more broadly, but Signature ninety percent through September. We're really 0:04:15.520 --> 0:04:18.120 tied of its deposits to the crypto industry. To the 0:04:18.160 --> 0:04:20.240 point you're making the issues in crypto are not the 0:04:20.279 --> 0:04:23.440 same as all the issues in technology. But what you're 0:04:23.440 --> 0:04:26.680 seeing here is this exposure to the industry more broadly 0:04:27.200 --> 0:04:30.599 becoming a worry for firms like this. I will say 0:04:30.640 --> 0:04:34.120 one other thing. Remember concurrently they also announced the capital raise. Yes, 0:04:35.080 --> 0:04:37.320 this is a market in which the reasons in which 0:04:37.360 --> 0:04:42.240 you're raising capital are very, very very sensitive. And that 0:04:42.360 --> 0:04:44.560 is another thing that is a concept of dilution and 0:04:44.600 --> 0:04:47.479 why you're raising money is a big warning sign for 0:04:47.520 --> 0:04:51.839 anybody raising money. Ahead suddenly saw that being really shown 0:04:51.839 --> 0:04:55.160 out through the KBW Bank indext performance. Today, we really 0:04:55.160 --> 0:04:57.240 want to function nati bast at the moment for all 0:04:57.360 --> 0:05:00.960 things weaving together what is happening with the likes of SVG, 0:05:01.120 --> 0:05:03.640 but also what happened with Silvigate, and we want to 0:05:03.680 --> 0:05:05.560 dig into Silvigate and crypto a little bit more now 0:05:05.560 --> 0:05:09.120 with ABA Lab's president John Woo, John, we turn to 0:05:09.160 --> 0:05:11.560 you for your expertise because you have announcements to make. 0:05:11.600 --> 0:05:14.040 You are still building in a space, but ultimately you 0:05:14.080 --> 0:05:18.040 are currently a man who is trying to digitize the 0:05:18.360 --> 0:05:23.160 entire and ultimately trying to digitize world's assets for traditional finance, 0:05:23.200 --> 0:05:25.279 for asset managers. How hard is that when we see 0:05:25.320 --> 0:05:29.120 Silvigate having to unwind, or clearly it's going to be 0:05:29.160 --> 0:05:32.600 a lot harder when all the intermediaries and seemingly all 0:05:32.640 --> 0:05:36.600 the intermedioris and the on ramps for institutions and individuals 0:05:36.680 --> 0:05:40.839 into the crypto ecosystem are one by one getting removed 0:05:41.680 --> 0:05:45.000 either through regulation through bad actors or risk management bad 0:05:45.000 --> 0:05:48.880 fundamentals like in silver Gate case. So it's not easy. 0:05:49.400 --> 0:05:52.040 It makes it harder, but you continue to build and 0:05:52.080 --> 0:05:57.800 continue to get partnerships. John, you're operating in an ecosystem, 0:05:57.800 --> 0:06:01.160 in an industry that still wants to build, have access 0:06:01.200 --> 0:06:04.520 to capital, needs banking services. Just very quickly give us 0:06:04.520 --> 0:06:08.200 some insight into the conversations you're having with industry peers 0:06:08.240 --> 0:06:11.240 about silver Gate, about what this industry is going through 0:06:11.320 --> 0:06:16.240 right now. So when things get better, the issue is 0:06:16.320 --> 0:06:19.960 if there are no on ramps, no intermediaries to help 0:06:20.120 --> 0:06:23.839 new institutions come into the space, that'll delay the growth 0:06:23.880 --> 0:06:27.360 of the space. The other problem is even healthy balance 0:06:27.400 --> 0:06:31.160 sheets in this space, they need little things. Banking services 0:06:31.320 --> 0:06:35.520 like crypto is a fintech business and legitimate businesses need 0:06:35.560 --> 0:06:38.320 banking services to pay people to do things that every 0:06:38.320 --> 0:06:41.800 other company does. If we remove the banks that help 0:06:41.880 --> 0:06:46.039 these companies do that, you're removing companies desire to be 0:06:46.200 --> 0:06:49.800 on short and unfortunately, US companies will move offshore for 0:06:50.000 --> 0:06:54.480 banking services and other things that they need to just operate. Caroline, 0:06:54.480 --> 0:06:55.560 I just want to go back to the point you 0:06:55.600 --> 0:06:57.080 and I are making a top of the show, right, 0:06:57.160 --> 0:07:00.239 which is if you put silver Gate side by side 0:07:00.279 --> 0:07:03.120 with SVB, what's they have in common. It's a discussion 0:07:03.120 --> 0:07:05.800 around what the impact of higher rates has been on FROTH, 0:07:06.279 --> 0:07:09.520 whereas the froth it's in crypto and it's in technology 0:07:09.560 --> 0:07:13.200 more broadly, we're just seeing a delayed reaction, it seems, 0:07:13.440 --> 0:07:19.120 and I've seen this, yeah, in my career, my first 0:07:19.120 --> 0:07:22.080 part of my career, as in the financial markets. Every 0:07:22.160 --> 0:07:25.680 time the fed raisers rates, things break, and the first 0:07:25.680 --> 0:07:29.040 things that break are usually the bad actors and the frauds, 0:07:29.520 --> 0:07:32.400 and then at the tail end of that bad risk management, 0:07:32.400 --> 0:07:36.240 bare fundamental and driven company's break. So if there's a 0:07:36.280 --> 0:07:39.720 silver lining here is now we're at layer two, yeah, 0:07:39.760 --> 0:07:42.400 and then when things stabilize, hopefully we go back to 0:07:42.480 --> 0:07:45.240 a stable environment. John R. Regulates turning to you for 0:07:45.280 --> 0:07:49.960 advice they should. I was down in DC and talking 0:07:50.000 --> 0:07:54.160 to senators and talking to other agencies. Are our general 0:07:54.200 --> 0:07:57.280 counsels constantly down there talking. I think we need to 0:07:57.320 --> 0:08:00.760 open up a healthy dialogue. It can't be just one way. 0:08:00.880 --> 0:08:03.080 And if that happens, you'll bring a lot of the 0:08:03.240 --> 0:08:05.840 capital markets back and a lot of the innovation bank. Otherwise, 0:08:05.880 --> 0:08:07.760 like I've been saying, things are going to continue to 0:08:07.800 --> 0:08:10.960 move off short because a certainty in rules and regulations 0:08:11.200 --> 0:08:14.840 is happening in Europe, is happening actually even in Asia. 0:08:15.080 --> 0:08:17.400 What's so fascinating is, of course, at the same time 0:08:17.400 --> 0:08:20.440 as we worry about silver Gates implications, we think about 0:08:20.440 --> 0:08:22.880 what's happening with Silicon Valley Bank at the moment. It's 0:08:22.920 --> 0:08:25.920 exposure to technology to startups. John just want to bring 0:08:25.920 --> 0:08:29.280 our audience and breaking news that interestingly, the Founders Fund, 0:08:29.360 --> 0:08:32.880 which a key VC player, is advising that its own 0:08:32.880 --> 0:08:36.640 companies should withdraw funds from Silicon Valley Bank. Now we 0:08:36.720 --> 0:08:39.400 know the CEO of Silicon Valley Bank has been out 0:08:39.440 --> 0:08:41.880 there trying to reassure clients as to what the stock 0:08:41.960 --> 0:08:45.480 drop means, what the conservation of its capital. At the 0:08:45.520 --> 0:08:48.760 moment is trying to signify, but ultimately we are going 0:08:48.800 --> 0:08:51.320 to see some concerns being built. I founders found R 0:08:51.320 --> 0:08:55.079 indeed advising their own portfolio companies to withdraw funds from SEB. 0:08:55.320 --> 0:08:57.480 Can I ask you, as a founder, John, do you 0:08:57.600 --> 0:09:00.079 have money in traditional finance? Do you have money with 0:09:00.160 --> 0:09:04.520 Silicon Valley Bank? Well, Silicon Valley Bank is one of 0:09:04.520 --> 0:09:07.840 the banks that we use, as well as some of 0:09:07.840 --> 0:09:10.120 the other ones that were mentioned, So I think the 0:09:10.200 --> 0:09:13.360 right thing, the prudent thing we've learned is counterparty risk. 0:09:13.480 --> 0:09:16.120 Once these things start, this is a classic bank run, 0:09:16.480 --> 0:09:18.520 and when the blank run starts, you don't want to 0:09:18.559 --> 0:09:22.480 be the last guy there and wondering what happened. Unfortunately, 0:09:22.520 --> 0:09:24.480 this is the way banks work. They rely on trust. 0:09:24.720 --> 0:09:28.360 When they lose that trust, their things really will happen. 0:09:30.000 --> 0:09:32.360 John S. I know we have so much to discuss 0:09:32.720 --> 0:09:35.720 about AB and what's happening with Avalanche, but but we 0:09:35.800 --> 0:09:37.800 have to stick with this story because it's happening in 0:09:37.840 --> 0:09:40.600 before our eyes. What do you do in this situation? 0:09:41.000 --> 0:09:43.280 Do you follow the advice of names in the valley 0:09:43.320 --> 0:09:47.240 like Founders fund and pull the money? Do you stick 0:09:47.280 --> 0:09:50.040 with it. I mean, I have to just point out 0:09:50.320 --> 0:09:52.640 there were a number of names that Bloomberg cited in 0:09:52.679 --> 0:09:55.560 its reporting that said, what we're seeing in Silicon Valley 0:09:55.559 --> 0:09:58.160 Bank is not the same as silver Gate, and actually, 0:09:58.240 --> 0:10:01.000 long term they have a completely solid future. What would 0:10:01.000 --> 0:10:06.000 you do in this circumstance, Well, hopefully there's enough. What 0:10:06.120 --> 0:10:08.400 I would do is you have to diversify out and 0:10:08.480 --> 0:10:12.160 maybe not pull everything, We'll pull some. We experiened this 0:10:12.320 --> 0:10:14.920 back in the Great Financial Crisis, where you have to 0:10:14.960 --> 0:10:18.959 diversify your prime brokers. Luckily, we have already diversified, so 0:10:19.080 --> 0:10:21.800 we're less exposed and we were literally just a few 0:10:22.040 --> 0:10:26.160 weeks or months ago. Okay, And I think ultimately we're 0:10:26.200 --> 0:10:28.800 going to continue to dig to ask questions. Has it 0:10:28.840 --> 0:10:31.559 been easy to gain that sort of information from Silicon 0:10:31.600 --> 0:10:35.280 Valley Bank at the moment? Or relying on analyst reports 0:10:35.280 --> 0:10:37.960 that we get, and indeed some of the reporting coming 0:10:38.000 --> 0:10:42.120 from our own journalists. You're relying on your own interactions. 0:10:42.240 --> 0:10:45.200 The operator always has a better view, you know, the 0:10:45.280 --> 0:10:49.680 cadence of responses and how things are working, the size 0:10:49.679 --> 0:10:53.640 of transactions. All of those little subtle hints is what 0:10:53.880 --> 0:10:56.880 we're relying on. As an operator by the time you 0:10:56.920 --> 0:10:59.839 read it in the news or something. Unfortunately, it's probably 0:10:59.840 --> 0:11:03.120 a little bit late. I just want to ask a 0:11:03.200 --> 0:11:06.040 little bit. Of course, you are there trying to ensure 0:11:06.120 --> 0:11:09.640 that your banking is secure, that where your money is putly, 0:11:09.679 --> 0:11:11.720 your business is on solid footing, and I'm sure you 0:11:11.760 --> 0:11:13.920 have done it. As you said, you've already diversified. You're 0:11:13.920 --> 0:11:16.599 also diversifying your business. And just very briefly, John, we 0:11:16.840 --> 0:11:19.200 bought you on the show because you've done this new deal. 0:11:19.280 --> 0:11:22.200 You're bringing Web three to gaming in particular. How hard 0:11:22.280 --> 0:11:25.600 is that to sign these new sort of documents, get 0:11:25.679 --> 0:11:27.800 on board the likes of TSM and blitz up when 0:11:27.800 --> 0:11:32.160 people are questioning the overall Web three trajectory. Great question, 0:11:32.360 --> 0:11:34.880 and that's the fun part. By the way, no doubt 0:11:34.920 --> 0:11:38.439 it's harder, especially with US companies, but the cadence and 0:11:38.559 --> 0:11:42.000 foreign companies is actually happening in this TSM case. Just 0:11:42.040 --> 0:11:45.520 so people know, this is one of the largest gaming franchises, 0:11:45.600 --> 0:11:47.920 the TSMS equivalent of a esports team. It's like the 0:11:48.000 --> 0:11:51.480 Yankees for esports, and they're going to provide their gamers 0:11:51.520 --> 0:11:53.640 with some of the requests the gamers want, which is 0:11:53.679 --> 0:11:57.000 to get more liquidity for their in game items through 0:11:57.200 --> 0:12:01.480 Avalanche based wallet. Right now, the world works as gamers 0:12:01.559 --> 0:12:04.840 have closed, loose systems where they buy in game assets 0:12:04.840 --> 0:12:06.960 on one place that they can't sell and move to 0:12:07.000 --> 0:12:09.560 another very quickly, or they have to pay large fees 0:12:09.600 --> 0:12:12.040 to convert back to US dollars. So they're going to 0:12:12.080 --> 0:12:15.679 create a wallet on Avalanche where all these different games 0:12:15.720 --> 0:12:20.200 will have interoperability and make their lives better. John will 0:12:20.200 --> 0:12:24.959 continue the conversation on the partnership with blitz TSM going forward. 0:12:25.000 --> 0:12:28.240 There's something happening here right now in Global Silicon Valley, 0:12:28.240 --> 0:12:30.280 and we're grateful for your insight on it, the lads, 0:12:30.320 --> 0:12:42.000 President John will thank you very much. How chat gptwo effect. 0:12:42.040 --> 0:12:43.920 We have this thing called Erica, which is a virtual 0:12:44.440 --> 0:12:48.600 artificial intelligence, virtual assistant natural language processing predictive technology that 0:12:48.640 --> 0:12:51.040 we've been running four or five years and eighty million 0:12:51.080 --> 0:12:53.880 customers use it one hundred forty five hundred fifty million 0:12:53.920 --> 0:12:56.280 times a quarter, so we're used to it, but this 0:12:56.360 --> 0:12:58.080 is now a new one that could change the game 0:13:00.080 --> 0:13:03.440 of America. CEO there Brian moynihan, And well, let's stick 0:13:03.480 --> 0:13:07.920 with CEOs who love all things AI. Because messaging platform 0:13:08.040 --> 0:13:11.360 Discords just announced its expansion of its own AI offerings, 0:13:11.360 --> 0:13:16.160 including guess what open aiyes technology they're incorporating into functions 0:13:16.160 --> 0:13:19.520 like it's chatbot, it's moderation systems, let spring blooms. Cecilia 0:13:19.520 --> 0:13:22.560 at Dnastasio, who has the story at an event, just 0:13:22.640 --> 0:13:27.400 tell us about where they think this will be additive. Sure. So, 0:13:27.600 --> 0:13:29.839 Discord is a chat apps that one hundred and fifty 0:13:29.840 --> 0:13:33.640 million people use every single month to discuss everything from 0:13:33.760 --> 0:13:38.080 video games to anime to classical music. And now Discord 0:13:38.160 --> 0:13:43.319 is integrating open aiyes Chat GPT technology, which creates kind 0:13:43.320 --> 0:13:47.960 of human like conversations using AI, into one of its bots. 0:13:48.000 --> 0:13:50.679 The bat's name is Clyde, and Clyde has existed for 0:13:50.720 --> 0:13:53.800 a long time. It's kind of Discord's mascot. But now 0:13:53.920 --> 0:13:56.720 Clyde will be able to tell users things like the 0:13:56.800 --> 0:14:00.040 weather or time in another country, or even suggest a 0:14:00.160 --> 0:14:07.000 playlist for a Discord server using AI chat technology. All right, Bloomberg, 0:14:07.080 --> 0:14:10.200 Cecilia Dnastasio, thank you so much for your reporting. Caroline. 0:14:10.200 --> 0:14:12.360 I've got to bring you some more breaking news headlines 0:14:12.640 --> 0:14:15.720 crossing the Bloomberg terminal. Our sources now telling us that 0:14:15.880 --> 0:14:21.280 why Combinator is advising its companies in its portfolios to 0:14:21.360 --> 0:14:26.000 limit their exposure to SVB Financial y Combinator. The latest name, 0:14:26.040 --> 0:14:29.360 according to sources follows founders Fun just in the last 0:14:29.360 --> 0:14:33.040 twenty minutes, those after our declines on Silicon Valley Bank 0:14:33.400 --> 0:14:37.320 or SVB Financial Group now really accelerating down six percent 0:14:37.440 --> 0:14:40.000 or so. We'll continue to track the names that are 0:14:40.000 --> 0:14:42.520 adding to this story blow by blow. We're going to 0:14:42.600 --> 0:14:44.960 get back to generative AI though. And let's keep talking 0:14:44.960 --> 0:14:47.840 about this with Dion Nicholas, who's the CEO and co 0:14:48.000 --> 0:14:51.960 founder of four four to generative AI company for customer 0:14:52.000 --> 0:14:56.160 support Automation which guess what carry They also recently announced 0:14:56.200 --> 0:14:59.560 integration of open AI technology with the launch of their 0:14:59.600 --> 0:15:04.760 own polls GPPT platform. I saw you smiling. Absolutely, I'm 0:15:04.760 --> 0:15:06.440 super excited to be here. Let me ask you this, 0:15:06.680 --> 0:15:11.560 why why open AI? Why not your own tech? Yeah? Absolutely? Well, 0:15:11.960 --> 0:15:15.080 to clarify, four thoughts been around for four or five 0:15:15.160 --> 0:15:19.000 years now, applying AI to help customers and help businesses 0:15:19.000 --> 0:15:22.520 serve their customers better, and so with support GPT, we're 0:15:22.600 --> 0:15:26.040 launching today the world's first generative AI platform for customer 0:15:26.080 --> 0:15:29.160 support automation. The real big thing and the real answer 0:15:29.200 --> 0:15:33.440 to why why now is that in November, Chat GPT 0:15:33.880 --> 0:15:36.640 changed the name of the game. For the customer experience 0:15:36.880 --> 0:15:40.080 and for consumer expectations, we've been building for four or 0:15:40.120 --> 0:15:43.760 five years, and we've been very focused on correctness, very 0:15:43.760 --> 0:15:46.440 focused on building a generation of AI that actually can 0:15:46.480 --> 0:15:49.360 help customers solve their problems. And what we're seeing now 0:15:49.400 --> 0:15:52.840 is that it's become mainstream for consumers and that experience, 0:15:52.880 --> 0:15:55.840 that expectation has risen with Chat GPT, and so we've 0:15:55.840 --> 0:15:59.080 combined that and we're building out. We're launching support GPT 0:15:59.200 --> 0:16:03.120 for customer support. So this is not a marketing exercise 0:16:03.320 --> 0:16:06.360 or a PR stunt. No, absolutely not, And that's one 0:16:06.360 --> 0:16:09.640 of the things that we wanted to be sure about. Sure, 0:16:09.720 --> 0:16:12.760 it's about solving problems for our customers. We actually already 0:16:12.840 --> 0:16:16.680 have customers of betaing and using our support GPT platform. 0:16:16.960 --> 0:16:20.680 Folks like upwork, the world's largest talent marketplace, are already 0:16:20.760 --> 0:16:24.080 leveraging this technology in production. Carol, We as we do 0:16:24.160 --> 0:16:26.440 every day, we asked our audience what they think about 0:16:26.720 --> 0:16:31.320 just endless announcements of partnerships between tech companies and open AI. 0:16:31.800 --> 0:16:33.880 You know the results as well as I do, Caroline, 0:16:35.080 --> 0:16:38.080 respondents think this is a pr stunt broadly what we're 0:16:38.080 --> 0:16:41.200 seeing right now in the industry. Yeah. And meanwhile, don 0:16:41.320 --> 0:16:44.240 you say, look, this isn't this is about servicing your clients. 0:16:44.720 --> 0:16:47.680 I'm just really interested in help me understand here. You're 0:16:47.680 --> 0:16:51.960 already a leading generative AI company. You're already building your 0:16:52.000 --> 0:16:55.920 own large language model. What was it that open ai has. Ultimately, 0:16:55.960 --> 0:17:01.360 you couldn't build a house. So most customers when they 0:17:01.400 --> 0:17:04.520 interact with customer support, they don't necessarily want a chit chat. 0:17:04.680 --> 0:17:07.480 They want their problems solved first and foremost. And that 0:17:07.640 --> 0:17:10.040 was the premise that we launched forethought on all of 0:17:10.040 --> 0:17:12.840 those years ago, was to use AI to help people 0:17:12.840 --> 0:17:15.919 to solve their problems. One of the things that people 0:17:16.119 --> 0:17:19.040 have seen with chat chypt, hundreds of millions of people 0:17:19.080 --> 0:17:24.040 have used it, from writers to bakers, to friends, family, everything. 0:17:24.440 --> 0:17:27.359 They have now seen what it's like to interact with 0:17:27.400 --> 0:17:30.680 a chatbot that's empathetic, that's human like. That really raises 0:17:30.720 --> 0:17:34.719 the game and raises the name for customer experience. And 0:17:34.760 --> 0:17:36.439 that was one of the things that we saw and 0:17:36.560 --> 0:17:39.720 our customers saw. We actually I started getting texts from 0:17:39.760 --> 0:17:42.959 heads of customer support saying, hey, our customers want this 0:17:43.080 --> 0:17:46.000 kind of experience, and we're betting on forethought, and that 0:17:46.040 --> 0:17:48.920 was actually the spark that actually helped us to realize, hey, 0:17:49.160 --> 0:17:51.600 there is actually something new here. There is not It 0:17:51.640 --> 0:17:53.760 is not just a publicity son, It is not just 0:17:54.080 --> 0:17:56.720 you know, the next fad. It is technology. And we 0:17:56.800 --> 0:18:00.000 ad forethought, have been all in on AI since day one, 0:18:00.600 --> 0:18:03.440 and so we are staying we've always been on the forefront. 0:18:03.680 --> 0:18:07.520 The expectations from customers have risen and we're rising, and 0:18:07.520 --> 0:18:10.720 we're launching support GPT to go and meet those expectations 0:18:10.720 --> 0:18:14.160 and bring customers that next level of customer support. Oh 0:18:14.240 --> 0:18:17.680 is your competition, ben Dion, because we're seeing other key 0:18:17.680 --> 0:18:22.200 companies that are very close to supporting sales people, supporting 0:18:22.400 --> 0:18:27.560 other areas of client facing individuals, and they're also using 0:18:27.760 --> 0:18:33.360 open Ai. Yeah, the big competitor for us, quite frankly, 0:18:33.520 --> 0:18:36.720 is the legacy chaplot. There have been hundreds, if not thousands, 0:18:36.760 --> 0:18:40.080 of legacy chaplots that have cropped up over the last 0:18:40.280 --> 0:18:44.680 decade or so of innovation. And one of the things 0:18:44.720 --> 0:18:47.200 that you notice about chapblots is that one we've all 0:18:47.320 --> 0:18:50.119 experienced them, and we've all found that they are super 0:18:50.160 --> 0:18:53.080 clunky right, their manual, their decision tree base, and they're 0:18:53.119 --> 0:18:56.200 more artificial than they are intelligent. And so we've set 0:18:56.240 --> 0:19:00.560 out to actually really transform the way customer s has done. 0:19:00.640 --> 0:19:03.399 And it's really that host of chap our companies that 0:19:03.400 --> 0:19:06.040 we're trying to out innovate and that we've been out 0:19:06.080 --> 0:19:11.280 innovating over the past few years. Yeah, we've got to 0:19:11.480 --> 0:19:13.640 go to some more of this breaking news right around 0:19:13.640 --> 0:19:16.120 Silicon Valley Bank. Can I just for our audience ask 0:19:16.200 --> 0:19:19.880 are you a customer or client of Silicon Valley Bank? Yeah, 0:19:19.920 --> 0:19:22.600 it's interesting. Silicon Valley Bank is one of the banks 0:19:22.600 --> 0:19:24.520 we actually use here at for though we obviously work 0:19:24.600 --> 0:19:28.920 with a few banks. So it's interesting hearing the news 0:19:28.960 --> 0:19:32.520 go out live these days, so really interesting. Thanks. We 0:19:32.520 --> 0:19:34.040 don't want to put you on the spot, but I 0:19:34.040 --> 0:19:36.159 think you appreciate why we have to ask those questions, 0:19:36.240 --> 0:19:39.400 right Caroline, that this is happening before our eyes. Yeah, 0:19:39.400 --> 0:19:42.080 and ultimately I have to ask you more on the spot. Therefore, Dion, 0:19:42.160 --> 0:19:45.639 are you going to be thinking about your relationship with SPB. 0:19:45.840 --> 0:19:48.320 We're seeing that the shares are extending their postmarket to 0:19:48.359 --> 0:19:50.359 climb down why more than ten percent at the moment 0:19:50.359 --> 0:19:52.600 and a lot of venture capitalists and I know you're 0:19:52.640 --> 0:19:58.639 back by VC asking their portfolio companies to cut their ties. Well, 0:19:58.720 --> 0:20:03.400 it's a really dynamic situation. We're definitely evolving and adapting 0:20:03.440 --> 0:20:07.000 as we go. But what I can say is, you know, again, 0:20:07.119 --> 0:20:10.480 we work with multiple banks here at Forethought, and our 0:20:10.520 --> 0:20:11.720 goal at the end of the day is to best 0:20:11.720 --> 0:20:14.000 serve our customers, which is again why we're launching this 0:20:14.240 --> 0:20:17.720 support GPT. But again, there's a lot happening in the space, 0:20:17.800 --> 0:20:22.480 and yeah, we're excited and watching what's going on, excited 0:20:22.520 --> 0:20:24.879 for AI, watching what's going on with SVB. We'll let 0:20:24.920 --> 0:20:27.560 you go and get attention to both of those things. 0:20:27.680 --> 0:20:30.639 Dean Nicholas, we thank you, CEO and co founder of 0:20:30.720 --> 0:20:33.760 Forethought and all things AI and indeed Silicon Valley Bank. 0:20:33.800 --> 0:20:36.239 Let's bring you where the market is currently telling. The 0:20:36.280 --> 0:20:39.240 concern is AD and it's in Silicon Valley Banks parent company. 0:20:39.280 --> 0:20:41.399 We're currently off by more than ten percent after hours 0:20:41.400 --> 0:20:44.400 as you break the news that we are seeing yet 0:20:44.440 --> 0:20:48.159 further moves coming from why Combinator advising its companies to 0:20:48.240 --> 0:20:51.080 limit SVB exposure at the moment, and indeed, we'd already 0:20:51.119 --> 0:20:53.080 heard it from the Founders Fund advising its companies to 0:20:53.119 --> 0:20:56.800 withdraw funds. SUV we remind of you as they currently 0:20:56.840 --> 0:21:00.720 bank about forty percent of all US VC backed companies, 0:21:00.760 --> 0:21:03.760 according to its own website from New York. From San Francisco, 0:21:03.880 --> 0:21:20.560 this is Bloomberg. It does business with nearly half of 0:21:20.600 --> 0:21:23.880 all venture backed companies in the United States, said Silicon 0:21:23.960 --> 0:21:27.280 Valley Bank, the parent company, falling further after hours after 0:21:27.320 --> 0:21:30.199 of course, it worn the market earlier today that it's 0:21:30.240 --> 0:21:32.680 hame to shore up its own capital, selling off assets, 0:21:32.720 --> 0:21:37.720 doing a share sale, and ultimately, now seeing this talk 0:21:37.760 --> 0:21:41.760 of confidence, the ultimate depositor is moving away from them. 0:21:41.800 --> 0:21:45.800 VCS are advising their portfolio companies to cut ties. Yeah. Look, 0:21:45.960 --> 0:21:49.320 look this is really accelerating after hours with down seventeen percent. 0:21:49.359 --> 0:21:51.800 Now we haven't even got to the reporting that. According 0:21:51.840 --> 0:21:54.280 to a source, Greg Becker, the CEO of the bank, 0:21:54.359 --> 0:21:58.159 held a call with VCS earlier today basically saying keep calm. 0:21:58.600 --> 0:22:01.040 A lot more to come with this story thus far 0:22:01.240 --> 0:22:04.359 not keeping calm. We currently see course Founders Fund and 0:22:04.440 --> 0:22:09.280 Why Combinator advising their portfolio companies to consider ending their 0:22:09.320 --> 0:22:12.040 relationships with Silicon Valley Bank. So much more on this story, 0:22:12.080 --> 0:22:24.560 there's a Blomberg. I want to know how tough it 0:22:24.600 --> 0:22:27.280 is out there for startups. Look no further than Silicon 0:22:27.400 --> 0:22:30.000 Valley Bank that, as the name might suggest, it's a 0:22:30.119 --> 0:22:34.200 lender to venture backed startups. And well it's just announced 0:22:34.200 --> 0:22:36.560 the trouble that it's in. Its shares have plummeted the 0:22:36.560 --> 0:22:39.800 parent company of it the most since nineteen ninety eight. 0:22:40.000 --> 0:22:43.719