WEBVTT - FTX Fallout Grows and TikTok's Project Texas 0:00:13.480 --> 0:00:16.360 I'm Caroline Hyde at Bloomberg's World headquarters in New York, 0:00:16.800 --> 0:00:20.439 and I'med Lovelow in San Francisco. This is Bloomberg Technology. 0:00:20.680 --> 0:00:23.520 Coming up on today's show, f t X contagion continues, 0:00:23.560 --> 0:00:26.520 while Finance CEO c Z seeks to be the new 0:00:26.640 --> 0:00:29.680 savior of crypto, will reflect on the fallout with one 0:00:29.720 --> 0:00:33.159 of the early f t X investors, Class President Biden 0:00:33.200 --> 0:00:36.320 and China's Jijing Ping have charted a path towards warmer 0:00:36.400 --> 0:00:39.159 ties between the two nations. We can discuss the impact 0:00:39.280 --> 0:00:43.639 on the technology sector, particularly chips and amid crypto concerns. 0:00:43.640 --> 0:00:48.040 Tech laos and geopolitical warriors can start up still raise money. Yes, 0:00:48.240 --> 0:00:50.479 we are going to be speaking with legendary VC investor 0:00:50.560 --> 0:00:54.360 Vinod Kosla, plus an exclusive conversation with Maven Connects CEO 0:00:54.760 --> 0:00:57.840 on its latest funding round. We want to think about 0:00:57.840 --> 0:01:02.720 the long term in investment opportunities right now within well crypto. 0:01:02.880 --> 0:01:05.360 Many people dialing back that particular trade at the moment 0:01:05.360 --> 0:01:07.039 they might still be looking in the metaverse, but maybe 0:01:07.080 --> 0:01:09.840 not f TX. The collapse still being felt, and indeed 0:01:09.959 --> 0:01:14.000 in Bahamas, the Bahamian police and regulators they're saying that 0:01:14.040 --> 0:01:16.959 they're working to investigate whether there was actually criminal misconduct 0:01:17.080 --> 0:01:19.319 ed in the collapse of the crypto empire. This after 0:01:19.360 --> 0:01:22.360 interviewing ft x is co founder sand Bankwun Freed on Saturday, 0:01:22.680 --> 0:01:26.200 Bloomberg's Katanga Johnson is based in Nassau in the Bahamas 0:01:26.240 --> 0:01:28.760 and has been following this story for us in Katanga. 0:01:29.200 --> 0:01:32.920 I mean, give us the latest in terms of the impact, 0:01:33.000 --> 0:01:35.760 particularly on sam bankman Freed at the moment we understand, 0:01:35.760 --> 0:01:37.160 of course he was sat down with the police on 0:01:37.160 --> 0:01:44.000 Saturday here in the Bahamas. Yes, authorities have began investigating 0:01:44.400 --> 0:01:48.680 sam Bankman Freed and f t X, particularly around Friday's 0:01:49.440 --> 0:01:52.840 withdrawals from local investors, who at the same time that 0:01:53.280 --> 0:01:55.440 many local investors were able to withdraw their money from 0:01:55.480 --> 0:01:59.640 the platform, global investors had been shut out. And while 0:01:59.680 --> 0:02:01.400 the company, he said it had gotten a nod from 0:02:01.400 --> 0:02:04.280 the regulator to allow for this, given a key a 0:02:04.320 --> 0:02:07.760 loophole in regulations here, the regulators said it did not 0:02:07.880 --> 0:02:11.640 in any way suggest or approve for FTX to allow 0:02:11.639 --> 0:02:14.440 such withdrawals. This is just one of the touching points 0:02:14.520 --> 0:02:17.480 right now on the ground as regulators, both the Bahama 0:02:17.520 --> 0:02:20.840 Securities Commission as well as the Financial Crimes Unit of 0:02:20.840 --> 0:02:23.640 the police look into this matter. Authorities say they're still 0:02:23.680 --> 0:02:26.200 investigating yet, they haven't come to any sort of conclusion, 0:02:26.520 --> 0:02:28.520 but once they do, they'll make a recommendation to the 0:02:28.560 --> 0:02:33.760 public prosecutor, who have then actually begin a criminal misconduct 0:02:33.760 --> 0:02:36.880 pro Well, that would be my question, Katanga. What kind 0:02:36.919 --> 0:02:40.280 of trouble is Sam Branktan Freed in in the Bahama 0:02:40.320 --> 0:02:42.519 is what kind of rebacussions does he and f t 0:02:42.760 --> 0:02:47.400 X face. It's a little too soon to tell. It 0:02:47.440 --> 0:02:51.160 will depend on whether the findings of these investigations suggests 0:02:51.240 --> 0:02:54.480 that he did engage in criminal misconduct. Uh. Just some 0:02:54.520 --> 0:02:56.559 of the color on the ground is that many investors 0:02:56.919 --> 0:02:58.880 that we've spoken to and there's been reporting on this, 0:02:59.400 --> 0:03:02.040 just feeling so ways betrayed. Some are trying to make 0:03:02.080 --> 0:03:04.840 sense of the person they knew, who they either worked 0:03:04.840 --> 0:03:07.720 with day to day or came to trust. As he 0:03:07.880 --> 0:03:11.240 was busy building a community center beginning the launch of 0:03:11.480 --> 0:03:14.400 the other FTX headquarters, were standing in front of the 0:03:14.440 --> 0:03:16.440 more current one. They're building a new one that including 0:03:16.480 --> 0:03:18.640 a hotel. Many people felt as if there were so 0:03:18.639 --> 0:03:21.960 many efforts to to advance to the presence of crypto 0:03:22.040 --> 0:03:27.840 in the Bahamas and u SPF reputation certainly ruined that potential. 0:03:27.919 --> 0:03:31.120 Some people have told us, I'm sure a lot of 0:03:31.200 --> 0:03:34.000 emotions where you are right now, Katanga Johnson, of course 0:03:34.000 --> 0:03:35.640 in the Bahamas. We thank you so much for your 0:03:35.640 --> 0:03:38.040 reporting throughout the day. Now let's get back to, of course, 0:03:38.080 --> 0:03:40.520 the wider cryptosphere. Right now, Blue motional basket has been 0:03:40.560 --> 0:03:43.400 all across what is not only a criminal probe for SPF, 0:03:43.600 --> 0:03:46.880 also looking within the SEC as well. But what about 0:03:46.920 --> 0:03:50.080 the impact on the money he's lost for others? What 0:03:50.080 --> 0:03:52.240 are the ripple effects of contagion effects on some big 0:03:52.240 --> 0:03:54.680 money managers here in the US and worldwide. Yeah, let's 0:03:54.680 --> 0:03:56.880 take a look directly at the ones that are reporting 0:03:56.920 --> 0:03:59.200 their exposures. Some of them have a large amount of 0:03:59.200 --> 0:04:02.280 their own capital. Eight up Gallos Capital for example, has 0:04:02.280 --> 0:04:05.320 set up to forty five million dollars worth, a significant amount, 0:04:05.320 --> 0:04:08.320 they say. I guy also says a large majority of 0:04:08.360 --> 0:04:11.320 their capital was tied as well to f t X. 0:04:11.640 --> 0:04:14.640 Galaxy Digital had seventy seven million, Except for that was 0:04:14.720 --> 0:04:17.200 only about four percent of their capital base. They will 0:04:17.240 --> 0:04:19.159 walk away from this just fine with a bruise in 0:04:19.240 --> 0:04:22.200 terms of what they have lost. Genesis of course, we 0:04:22.240 --> 0:04:23.800 know has been working with d c G and they 0:04:23.839 --> 0:04:26.800 have one hundred seventy five million tied to this, So 0:04:27.240 --> 0:04:29.599 this is just starting to emerge. I had a conversation 0:04:29.680 --> 0:04:32.680 late Friday with Michael Novograts of Galaxy Digital, and he 0:04:32.720 --> 0:04:36.360 expects his former estimation of dozens of headge funds failing 0:04:36.360 --> 0:04:40.040 will only start to exacerbate in this type of a market. 0:04:40.560 --> 0:04:42.640 I think Carolina brings us to the next point here, 0:04:42.920 --> 0:04:46.880 which is that c Z trunk Goings out of finance, 0:04:47.040 --> 0:04:50.640 wants to start an industry fund here to rescue firms 0:04:50.680 --> 0:04:54.000 that have exposure to f t X but perhaps are 0:04:54.320 --> 0:04:57.600 good projects to be working with, ones that were honest projects. 0:04:57.920 --> 0:05:01.240 There were a variety of responses to this. He had 0:05:01.240 --> 0:05:04.120 a Twitter spaces asked me anything this morning. But in 0:05:04.240 --> 0:05:07.479 terms of what investors were reacting to to this, you 0:05:07.520 --> 0:05:11.440 have folks like Justin's son saying that a he Tron, 0:05:11.680 --> 0:05:16.920 Poloniacs and Huobe would be very very reticent or not reticent, 0:05:17.160 --> 0:05:19.840 veether they would like to echo the recovery fund here 0:05:19.880 --> 0:05:22.760 and how these builders in a tough time on the 0:05:22.800 --> 0:05:25.840 reticent side. Now is someone like a Peter Schiff who 0:05:25.880 --> 0:05:29.800 says that let's maybe not spend money rescuing projects that 0:05:29.839 --> 0:05:31.720 shouldn't be saved. He said, it's not a good idea 0:05:31.760 --> 0:05:34.920 to throw good money after bad. So moral hazard has 0:05:34.920 --> 0:05:37.160 been a looming questions since the beginning of these crypto 0:05:37.200 --> 0:05:40.320 industry issues here and now you're really coming to see 0:05:40.320 --> 0:05:42.240 this debate out to play on who gets saved and 0:05:42.320 --> 0:05:46.200 how Sonia were really in a situation now where c 0:05:46.440 --> 0:05:51.159 Z is kind of positioning himself as the industry savior, Well, 0:05:51.160 --> 0:05:53.920 we sure have him coming out with this industry fund. 0:05:54.000 --> 0:05:56.599 I think a question here is again who gets saved 0:05:56.600 --> 0:05:59.520 and who participates in a fund like this? How much 0:05:59.560 --> 0:06:01.920 money is put into a fun like this. It's interesting 0:06:02.279 --> 0:06:04.880 when we were doing all the references add on what 0:06:04.920 --> 0:06:07.400 this looks the most like, was whether it's an n 0:06:07.480 --> 0:06:10.880 F global or if it's an LTCM type moment, an 0:06:10.920 --> 0:06:14.120 idea of an industry wide bailout of sorts has come 0:06:14.200 --> 0:06:16.640 up a lot to rescue projects that might have had 0:06:16.640 --> 0:06:19.760 their money tied up into f t X. Otherwise, who 0:06:19.800 --> 0:06:21.760 would do it at this point? This is not like 0:06:21.800 --> 0:06:25.080 it's an industry that's backed by the government like other 0:06:25.240 --> 0:06:30.159 lending industries are. I would say, what is becoming very 0:06:30.200 --> 0:06:33.279 clear is that others will come into severe financial stress. 0:06:33.680 --> 0:06:36.440 Take Block five, for example, which just today had mentioned 0:06:36.440 --> 0:06:38.760 they hired a financial advisor to sort this. I mean, well, 0:06:38.920 --> 0:06:41.279 this is the irony, right because c Z is now 0:06:41.320 --> 0:06:43.400 trying to be the white Knight. Previously it's been some 0:06:43.560 --> 0:06:46.760 mikemen Free have been the white Knight bailing out Celsius 0:06:46.800 --> 0:06:49.360 voyage of Block five, as you just mentioned block Fire. 0:06:49.400 --> 0:06:52.120 What all these companies that had depended upon ft X 0:06:52.160 --> 0:06:54.760 sources for resilience. And an interesting thing I would point 0:06:54.760 --> 0:06:57.320 out myself this morning is that Alan that asked me 0:06:57.360 --> 0:07:00.080 anything spaces that CZ had health he had mentioned and 0:07:00.320 --> 0:07:02.880 that he was not relying on venture capital money. Yet 0:07:02.960 --> 0:07:04.800 you look at all the venture capitals that had poured 0:07:04.839 --> 0:07:06.840 so much money into the crypto space and have lost 0:07:06.880 --> 0:07:09.200 money on the back of it. They may indeed need 0:07:09.240 --> 0:07:11.560 to also figure out their own ways to figure out 0:07:11.560 --> 0:07:13.880 how to inject more liquidity into some of the companies 0:07:13.880 --> 0:07:18.240 that they had provided funding too, because otherwise they may 0:07:18.280 --> 0:07:21.440 have to take more losses. And so are some of 0:07:21.480 --> 0:07:25.920 these uh saving opportunities coming out of a point of weakness. 0:07:26.400 --> 0:07:29.600 You do hear he did say seasy and this morning 0:07:29.640 --> 0:07:32.160 on that Twitter spaces that for some people this is 0:07:32.200 --> 0:07:35.240 a good opportunity to buy its suppressed prices, and that 0:07:35.440 --> 0:07:38.280 like the past, this might be an opportunity to buy 0:07:38.280 --> 0:07:41.680 things during a point in time that we may not 0:07:41.720 --> 0:07:45.000 remember years later. Although I can't imagine not remember everyone's 0:07:45.000 --> 0:07:48.040 going to remember me for last two weeks. Yeah, well, 0:07:48.080 --> 0:07:49.680 I mean with all the chaos, and I guess my 0:07:49.720 --> 0:07:52.640 mind goes to confusion. You start thinking about regulators, right, 0:07:52.680 --> 0:07:58.240 Shinali CFTC. How empowering is the negative headlines we've seen 0:07:58.520 --> 0:08:01.000 to a regulator and how they act in this industry 0:08:01.000 --> 0:08:03.480 going forward. I wouldn't get so excited about the power 0:08:03.480 --> 0:08:05.840 of regulators to move forward so quickly. Ed if you 0:08:05.840 --> 0:08:08.000 think about it. F t X itself f t XS, 0:08:08.120 --> 0:08:10.440 U S s r U, s ARM had a proposal 0:08:10.720 --> 0:08:15.320 to change some rules regarding clearinghouse intermediate intermediation in the 0:08:15.320 --> 0:08:19.840 crypto industry with the CFTC, so clearly the f t 0:08:20.120 --> 0:08:24.200 X was working with regulators here. Regulators might not be 0:08:24.360 --> 0:08:28.080 so quickly to move on certain proposals here with that 0:08:28.160 --> 0:08:31.520 type of mistrust looming in the industry and being so 0:08:31.560 --> 0:08:33.880 close to the brink of changing rules from one of 0:08:33.880 --> 0:08:37.000 the major players. That is the poster child now of 0:08:37.040 --> 0:08:40.320 the crypto collapse of two. On the other hand, people 0:08:40.360 --> 0:08:44.520 have lost money at scale here. So it's not just 0:08:44.559 --> 0:08:47.560 a CFTC but the SEC and other regulators that might 0:08:47.600 --> 0:08:50.880 move faster in order to protect consumer funds as they 0:08:50.920 --> 0:08:53.360 pertain to the United States and where those funds are 0:08:53.400 --> 0:08:56.120 kept at the end of the day, and how importantly here, 0:08:56.400 --> 0:09:00.120 how they are classified. Because no matter what, you can 0:09:00.200 --> 0:09:02.959 you put as many protections as you want in retrospect. 0:09:03.240 --> 0:09:06.280 Until the industry and the CFTC and SEC can put 0:09:06.320 --> 0:09:10.040 definitions on some of these things, which is clearly still 0:09:10.160 --> 0:09:12.800 an issue out play here, it's hard to imagine the 0:09:12.840 --> 0:09:17.480 regulators moving forward in any meaningful way. Al Right, Glamductionati Basset, 0:09:17.480 --> 0:09:19.480 thank you. It's this a story that has many days 0:09:19.480 --> 0:09:30.920 to run. I'm sure the economy does not look great 0:09:31.000 --> 0:09:34.040 right now. Things are slowing down. You're seeing layoffs in 0:09:34.280 --> 0:09:39.079 many many sectors of the economy. People are are slowing down. Um, 0:09:39.120 --> 0:09:41.920 the probabilities say, if we're not in a recession right now, 0:09:42.040 --> 0:09:44.800 we're likely to be in one very soon. So my 0:09:44.840 --> 0:09:49.760 advice to people, whether they're small business owners or you know, is, uh, 0:09:50.400 --> 0:09:53.840 take some risk off the table Amazon found to Jeff 0:09:53.840 --> 0:09:57.160 Bezos there on CNN earlier talking what about the layoffs, 0:09:57.200 --> 0:09:59.640 and of course then we learned that Amazon itself is 0:09:59.640 --> 0:10:03.439 planning for its largest ever round of layoffs, cutting well 0:10:03.679 --> 0:10:07.080 to potentially ten employees according to sources, we wouldn't dive 0:10:07.080 --> 0:10:10.480 into the current pullback and tech hiring the valuations when 0:10:10.480 --> 0:10:12.640 none other than a silicon value venture capitalists you know 0:10:12.679 --> 0:10:15.240 well phone Cosla founder. Cosla Venture is one of the 0:10:15.320 --> 0:10:17.959 largest global venture firms with approximately fifteen billion dollars in 0:10:18.000 --> 0:10:21.400 assets on the management. It is times like this we 0:10:21.480 --> 0:10:24.400 turn to you and your experience, your expertise. More layoffs 0:10:24.440 --> 0:10:27.559 to become more more reticence to invest, even from a 0:10:27.640 --> 0:10:32.079 VC perspective, do you think. I don't think there's rest 0:10:32.440 --> 0:10:36.440 rediscence to invest from a VC perspective, but there will 0:10:36.480 --> 0:10:40.000 be more layoffs to come. I think the error of 0:10:40.040 --> 0:10:43.600 exuberance cause companies to take on a lot of fat. 0:10:44.000 --> 0:10:48.199 Good margins, good cash flows, allow people to be sloppy 0:10:48.280 --> 0:10:53.600 about expense control and what really matters. Everything is okay 0:10:53.720 --> 0:10:56.679 to do because one can afford it. I think now 0:10:56.760 --> 0:10:59.480 it's a very good time to do that reckoning and 0:10:59.679 --> 0:11:03.520 fix things. Cut off the extra fat, get back to 0:11:03.600 --> 0:11:08.600 the basics. I do think I do think we'll see 0:11:08.640 --> 0:11:13.920 the best investing in the next decade. Technogal you have 0:11:14.000 --> 0:11:17.480 been in this industry for thirty six years, and respectfully, 0:11:18.080 --> 0:11:21.160 you've seen a few recessions, and we keep hearing that 0:11:21.240 --> 0:11:24.599 we're destined for recession. But some of the best companies 0:11:24.640 --> 0:11:27.920 are born out of recession. Do you agree with that? 0:11:29.160 --> 0:11:32.720 I absolutely agree with that. You know, when when Google 0:11:32.760 --> 0:11:36.439 and Amazon and Facebook are cutting off their most advanced 0:11:36.480 --> 0:11:41.720 projects and their best, most radical projects, those are the 0:11:41.840 --> 0:11:45.520 very people who do great startups, they will be leaving 0:11:45.679 --> 0:11:48.839 and starting new companies, and that those will show up 0:11:49.160 --> 0:11:52.960 on your radar screen five years from now, but our 0:11:53.440 --> 0:11:57.040 radar screen very soon. The talk to us a little 0:11:57.040 --> 0:12:00.000 bit about the area of crypto, the ripple effects at 0:12:00.040 --> 0:12:02.720 ups had, and indeed what we're learning in terms of 0:12:02.760 --> 0:12:07.120 the legacy of a founder. When you've invested money within people, 0:12:07.200 --> 0:12:10.520 of course you keep on believing in that individual. How 0:12:10.600 --> 0:12:11.839 do you know when it's the right time to pull 0:12:11.840 --> 0:12:16.000 the plug? Well, that's why every week venture capitalists to 0:12:16.120 --> 0:12:19.080 decide for themselves. And venture capitalists are big boys, so 0:12:19.160 --> 0:12:22.280 we don't need to worry about venture capitalists. There's a 0:12:22.280 --> 0:12:25.320 lot of other people, consumers that get hurt in this 0:12:25.600 --> 0:12:29.480 that we need to worry about. I'm actually optimistic with 0:12:29.559 --> 0:12:35.040 the SPX fiasco that the regulators will step up and 0:12:35.120 --> 0:12:38.520 be much more aggressive. I was a little bit optimistic 0:12:38.600 --> 0:12:42.240 when they've imposed a fine on Kim kardation. I think 0:12:42.880 --> 0:12:47.120 way more enforcement, way more clarity on what the regulations are, 0:12:47.520 --> 0:12:51.920 less fighting between the various agencies doing regulation. I think 0:12:51.960 --> 0:12:55.760 this is a real opportunity to enable crypto for the 0:12:55.800 --> 0:12:59.440 real world of business, not the crypto world alone. I 0:12:59.480 --> 0:13:03.360 separate crypto as crypto for crypto world and crypto for 0:13:03.440 --> 0:13:07.320 the real world building real businesses that impact what we 0:13:07.400 --> 0:13:10.719 know as businesses today. And I think if the regulators 0:13:11.120 --> 0:13:14.080 step up, as I hope they will, this will really 0:13:14.240 --> 0:13:17.760 enable that. I mean much of this. The blame can 0:13:17.800 --> 0:13:20.920 be laid on the sec and others who haven't stepped 0:13:21.000 --> 0:13:24.320 up and provided clarity on what is possible, what's the token, 0:13:24.720 --> 0:13:28.240 what's the security, what can you do, and what can't 0:13:28.240 --> 0:13:31.000 you do. I think it's a real opportunity, and I 0:13:31.040 --> 0:13:37.600 hope the crumbling off ft X provides pressure to do 0:13:37.679 --> 0:13:42.520 this on the regulators. Then a cryptocurrency meltdown has kind 0:13:42.520 --> 0:13:47.160 of dominated headlines. So as President Biden's meeting ping. You 0:13:47.280 --> 0:13:50.680 told us in June that the US and China were 0:13:50.679 --> 0:13:55.960 headed for a techno economic war. Were you right, Well, 0:13:56.080 --> 0:13:58.439 I've always believed that, and I think this is a 0:13:58.559 --> 0:14:03.320 twenty thirty year perspective. They're not one year perspective. I 0:14:03.480 --> 0:14:06.679 totally believe that, and it will continue to be the case. 0:14:07.679 --> 0:14:11.080 But we can compete in a more civilized manner with 0:14:11.120 --> 0:14:15.880 a clearer setup rules of what is acceptable behavior in 0:14:15.960 --> 0:14:22.200 this For example, cyber spin espionage is not acceptable. Um. 0:14:23.280 --> 0:14:26.600 I think it will help to talk, and it will, 0:14:26.720 --> 0:14:29.520 but we will still be in this battle, and frankly, 0:14:29.560 --> 0:14:31.800 the world will be better off if two people are 0:14:31.840 --> 0:14:35.680 competing with the good set of well defined rules for technology. 0:14:36.240 --> 0:14:40.920 But if the Western world wins the technology battle, they'll 0:14:40.960 --> 0:14:45.760 win the political and economic battle too. In another area 0:14:45.840 --> 0:14:49.200 you're focused on is climate tech. Our latest data from 0:14:49.240 --> 0:14:53.440 Bloomberg New Energy Finance showed the third straight quarter drop 0:14:53.640 --> 0:14:56.600 in VC and private equity investment into climate tech. You 0:14:56.640 --> 0:14:59.120 wrote in the op ed in The Economist that we 0:14:59.200 --> 0:15:02.640 are too focused on twenty thirty climate goals and we 0:15:02.680 --> 0:15:05.040 need to be more focused on the longer term twenty 0:15:05.120 --> 0:15:09.000 fifty climate goals. How does that drive your investment decisions? 0:15:09.120 --> 0:15:11.440 The startups that you are or are not putting money 0:15:11.440 --> 0:15:17.280 into in that sector. So our job is to invest early, 0:15:17.920 --> 0:15:20.480 you know, when people are requiring five or ten million 0:15:20.520 --> 0:15:24.680 dollars to do something. The bulk of the deployment comes 0:15:24.680 --> 0:15:29.600 in mature technologies, and that's not our business. But what 0:15:29.800 --> 0:15:33.480 we invest in should be a prototype or proven technology 0:15:33.520 --> 0:15:37.680 by twenty and deployed by twenty forty and hopefully fully 0:15:37.720 --> 0:15:41.480 deployed by That's sort of the perspective we keep in mind. 0:15:42.520 --> 0:15:45.200 Nothing we invest in gets to liquid it in less 0:15:45.240 --> 0:15:49.240 than five to ten years, and so with that in mind, 0:15:49.560 --> 0:15:55.320 the current perturbations up and down don't matter as much 0:15:55.520 --> 0:15:58.920 except to keep these companies funded, which is what we 0:15:59.000 --> 0:16:02.760 worry about by being more or less conservative, depending upon 0:16:02.840 --> 0:16:06.360 what the markets are doing. But of course you've written 0:16:06.480 --> 0:16:07.960 about the thing that you need to be if your 0:16:07.960 --> 0:16:12.360 a VC is optimistic. So let's finish on an optimistic moment, 0:16:12.400 --> 0:16:15.360 where are you thinking of allocating money? Which are the 0:16:15.440 --> 0:16:17.640 areas that you think will be the diamonds in the 0:16:17.680 --> 0:16:20.440 rough at this particular market where we are worried about 0:16:20.440 --> 0:16:22.920 an economic dial back. We are worried about the amount 0:16:22.960 --> 0:16:26.440 of money being put to work. Well, the largest investment 0:16:26.560 --> 0:16:30.240 we've ever made was an opening, so AI is definitely 0:16:30.400 --> 0:16:36.200 more transformative than most people imagine. We did that five 0:16:36.280 --> 0:16:41.239 years ago, and I'd say that world has accelerated dramatically 0:16:41.400 --> 0:16:44.680 over the last five years. So I'm very happy with that. 0:16:44.800 --> 0:16:47.000 I think it will be a very very rich area. 0:16:47.360 --> 0:16:52.360 It will be more disruptive to incumbents than most people realize, uh, 0:16:52.400 --> 0:16:54.880 and that is something we do need to both take 0:16:54.920 --> 0:17:00.480 advantage of as the disruptors and mostly on the disruptive inside, 0:17:00.520 --> 0:17:04.080 but also in how to partner with the right incumbents 0:17:04.119 --> 0:17:07.800 to cause lt change to happen. Climate will continue to 0:17:07.840 --> 0:17:11.000 be a big area, and I think the application of 0:17:11.080 --> 0:17:14.240 AI to healthcare will be very very important. I've talked 0:17:14.240 --> 0:17:17.680 a lot about that. I'm much more confident that that 0:17:18.160 --> 0:17:21.280 will be disrupted in the way people can't imagine today 0:17:21.600 --> 0:17:25.560 in in the next decade or so. So lots of 0:17:25.640 --> 0:17:29.640 areas and lots of technology enablers, whether it's AI, three 0:17:29.720 --> 0:17:35.800 D printing, UM computational techniques in general, all leading to 0:17:37.040 --> 0:17:42.240 very very promising areas for tech based investing. All right, then, 0:17:42.240 --> 0:17:45.240 a Coastler, founder of Coast la Vengeres. Thank you. What 0:17:45.280 --> 0:17:47.760 an honor is to have you on the show this Monday. 0:17:47.760 --> 0:17:50.840 Coming up Apples working on its next major product and 0:17:50.920 --> 0:17:54.520 mixed reality headset. We'll talk about metaverse, composition and more. 0:17:54.640 --> 0:18:11.119 Next this is Bloomberg time for talking tech. Apples mixed 0:18:11.119 --> 0:18:14.159 reality headset maybe a year away. But we've been asking 0:18:14.160 --> 0:18:16.720 you in the audience which company you think wins out 0:18:16.880 --> 0:18:20.760 in the race to the metaverse. Most people responded Apple, 0:18:20.920 --> 0:18:24.359 even though Meta, the parent company of Facebook, already dominates 0:18:24.400 --> 0:18:28.520 the market for virtual reality. It's an interesting one because 0:18:28.600 --> 0:18:30.840 Meta has such a big head start. But you out 0:18:30.840 --> 0:18:33.679 there think that it's Apple that's gonna win in the 0:18:33.720 --> 0:18:35.560 long run, and we have some clues about what they'll do. 0:18:35.640 --> 0:18:38.000 We think that will have a three D virtual world, 0:18:38.119 --> 0:18:41.800 according to job postings on Apple's site and Bloomberg's reporting, 0:18:41.960 --> 0:18:44.959 and a video service is going to be a key feature. 0:18:45.280 --> 0:18:49.080 Keep watching. Sticking with virtual and the metaverse, Nike announcing 0:18:49.080 --> 0:18:53.800 an online store for trading and purchase of virtual sneakers. 0:18:53.840 --> 0:18:56.640 Bear with me on this one. This is dot swoosh, 0:18:56.760 --> 0:18:58.680 where you can go to the platform and it's the 0:18:58.800 --> 0:19:02.600 latest bet from a Key's management on the metaverse all 0:19:02.640 --> 0:19:07.960 for a marketplace on digital sneakers. That's your talking tech Caroline. 0:19:08.440 --> 0:19:11.680 Someone somewhere still caring about that metaverse, but caring about 0:19:11.680 --> 0:19:13.119 those n f T s that are related to it 0:19:13.160 --> 0:19:15.560 and Nike among them, Top Swoosh, I love it ed, 0:19:25.640 --> 0:19:28.399 this is a bloom meg Technology and Ludlow there in 0:19:28.400 --> 0:19:32.040 San Francisco. I'm Caroline Hyde in New York and before 0:19:32.040 --> 0:19:33.800 we go out to you, we want to be discussing 0:19:33.840 --> 0:19:37.399 how geopolitic politics front and center this week, G twenty 0:19:37.520 --> 0:19:40.639 upon us. It appears that the US and China relationship 0:19:41.040 --> 0:19:43.720 it's kind of warming up. Is that what you're watching? Yeah, 0:19:43.760 --> 0:19:45.840 we're trying to read the markets because the on camera 0:19:45.880 --> 0:19:48.560 relationship between Biden and g might be a little different 0:19:48.560 --> 0:19:51.360 to what we're hearing from inside China and Chinese officials. 0:19:51.440 --> 0:19:53.200 You look at the technology sector a lot of red 0:19:53.200 --> 0:19:55.080 on the board to start the week, but it was 0:19:55.119 --> 0:19:58.040 actually the US listed China a d r s that 0:19:58.160 --> 0:20:00.800 did better outperform. Looking at the NAZ that Golden Dragon 0:20:01.119 --> 0:20:05.200 China index on camera, there's a warming of relationships going 0:20:05.200 --> 0:20:07.960 into this meeting. We were super focused on semiconductors. The 0:20:07.960 --> 0:20:10.959 socks actually closing down one percent because a lot of 0:20:11.000 --> 0:20:13.720 what policy action from the US has focused on is 0:20:13.800 --> 0:20:18.840 curving technology exports chip exports to China. Now that's on camera. 0:20:18.960 --> 0:20:21.560 Off camera, we actually got a pretty blunt state from 0:20:21.640 --> 0:20:24.960 from the Chinese Foreign Ministry that pointed out, referring to 0:20:25.200 --> 0:20:29.320 existing US policy, that starting a trade war or technology 0:20:29.359 --> 0:20:31.760 war is not what China wants to be doing right now. 0:20:31.760 --> 0:20:34.120 They're talking about it not being in the best interests 0:20:34.160 --> 0:20:36.080 of the economy. So even though we had a very 0:20:36.119 --> 0:20:38.680 sort of public show of affection between the two nations, 0:20:38.840 --> 0:20:41.320 there's a lot of concern here about what the US 0:20:41.440 --> 0:20:45.080 is doing to curb technology exports to China, and China's 0:20:45.080 --> 0:20:47.679 tech sector has been here it's a clear global laggage. 0:20:47.720 --> 0:20:50.040 You look at the Hang Seng Tech Index for example, 0:20:50.040 --> 0:20:53.200 those are Hong Kong listed Chinese tech stocks. It's really 0:20:53.280 --> 0:20:56.359 lags behind tech stocks, not just in the United States, 0:20:56.400 --> 0:20:59.280 but in Europe as well. November has been better. We've 0:20:59.320 --> 0:21:01.920 seen a recover very in that sector in China, big 0:21:01.960 --> 0:21:04.680 part of that being the easing of COVID zero policy 0:21:05.000 --> 0:21:10.199 in China. But the issue around US curbing chip technology 0:21:10.200 --> 0:21:12.680 exports to United States still kind of top of mind 0:21:12.920 --> 0:21:15.679 when it comes to the relationship between the two nations, 0:21:15.720 --> 0:21:19.600 even if the macro or the economic picture is improving slightly. Yeah, 0:21:19.640 --> 0:21:22.080 and really well put, and let's just go even more 0:21:22.160 --> 0:21:25.600 broad with that relationship. Because President Biden Jijing paying of course, 0:21:25.640 --> 0:21:28.440 did meet for about three hours we understand in Bali, Indonesia, 0:21:28.480 --> 0:21:30.560 and look, they did agree on a series of good 0:21:30.560 --> 0:21:33.400 will gestures, but there were still some areas of disagreement. 0:21:33.440 --> 0:21:38.680 To take a listen, I've made it clear to President 0:21:38.840 --> 0:21:42.840 Jijimping that I thought they had an obligational attempt to 0:21:43.280 --> 0:21:46.439 make it clear to North Korea that they should not 0:21:46.560 --> 0:21:49.960 engage and long range nuclear tests. And I made it 0:21:50.000 --> 0:21:53.840 clear as well that if they did, they meaning North Korea, 0:21:54.400 --> 0:21:56.600 that we would have to take certain actions that would 0:21:56.640 --> 0:21:59.639 be more defensive on our behalf, and it would not 0:21:59.680 --> 0:22:02.840 be directed against North Korea. I'm assuming we're not being 0:22:02.880 --> 0:22:05.679 directed against China, but it will be to send him 0:22:05.680 --> 0:22:09.359 a clear message to North Korea. Concerns about North Korea, 0:22:09.480 --> 0:22:12.879 concerns about of course Russia, Ukraine, and then the ongoing 0:22:12.960 --> 0:22:16.000 concerns about economic ties. Let's go back into the whole 0:22:16.040 --> 0:22:18.360 chip sector. Now, a blue bags Debbie Wou, who typically 0:22:18.359 --> 0:22:21.199 is in Taipei. She's visiting US right now. She's in 0:22:21.200 --> 0:22:25.320 San Francisco. And Debbie go back to what seemed to 0:22:25.359 --> 0:22:28.439 be a real effort from both the Biden camp and 0:22:28.480 --> 0:22:31.720 Sejing Things camp to try and warm up relations to 0:22:31.760 --> 0:22:34.560 at least start ties once again, relationships to be a 0:22:34.600 --> 0:22:36.840 little bit better and progressive. Is that going to help 0:22:36.880 --> 0:22:41.720 the chip sector a little? Perhaps so? Prot Biden said 0:22:41.760 --> 0:22:44.400 today that he didn't see the need for a year 0:22:45.240 --> 0:22:48.640 new court war after a meeting with Chinese Theaterial City 0:22:48.720 --> 0:22:52.320 Team ping. But what we have seen over past a 0:22:52.359 --> 0:22:55.920 few months, it's also a little bit worrying because US 0:22:56.080 --> 0:23:00.399 US veiled sweeping restrictions in early Act all bird to 0:23:00.720 --> 0:23:06.680 restrict China's access to UH chip technologies, and Washington also 0:23:06.800 --> 0:23:09.679 wants allies including the Netherlands and Japan to come on 0:23:09.800 --> 0:23:15.880 board to help suppress China's development of a domestic chip 0:23:16.000 --> 0:23:19.159 industry at home. And as to how this will well 0:23:19.480 --> 0:23:21.440