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Speaker 1: From the heart of where innovation, money and power Colli

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Speaker 1: in Silicon Vallet and beyond. This is Bloomberg Technology with

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Speaker 1: Emily jay I remember like Jeck in San Francisco, and

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Speaker 1: this is Bloomberg Technology. Coming up in the next hour,

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Speaker 1: Finance is walking away from buying f t X after

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Speaker 1: looking at its balance sheet. This after Bloomberg broke the

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Speaker 1: news on the US investigation into the ft X liquidity crisis.

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Speaker 1: We're gonna have coverage of the crypto blow up throughout

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Speaker 1: this show. Plus eleven thousand employees at Meta laid off

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Speaker 1: as Mark Zuckerberg admits his Metaverse vision was a mistake.

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Speaker 1: We're going to dig in and Reid Hoffman joins us

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Speaker 1: to talk about the next decade of tech innovation and

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Speaker 1: how big the future is for AI. Plus Gary tan

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Speaker 1: is with us to talk about how he thinks tech

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Speaker 1: and Silicon Valley survive a looming recession. But first, before

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Speaker 1: we get a check of the markets. You may have

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Speaker 1: read that this is my last week coasting bloom Brick

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Speaker 1: Technology after twelve years sitting right here. I'm going to

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Speaker 1: be expanding our coverage with new shows focused on the

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Speaker 1: most important people and issues at the heart of Tech,

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Speaker 1: Business and Culture. I'm not gonna cry. I'm gonna try

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Speaker 1: not to cry yet. Um, but I might tomorrow, which

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Speaker 1: is going to be my last day officially in this chair.

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Speaker 1: So I don't want to linger now, but I do

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Speaker 1: want you to know that every day has been special

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Speaker 1: and there's so much more to come. Meantime, US financial

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Speaker 1: regulators are investigating whether f t X properly handled customer

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Speaker 1: funds as Finance walks away from a deal to save

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Speaker 1: Sam Bankman Freed's exchange bloom Brigs. Katie Greifeld covers the

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Speaker 1: markets with us. Katie, what has happened in the last

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Speaker 1: twenty four hours. You know, almost as quickly as Finance

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Speaker 1: said it was going to come to the rest you,

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Speaker 1: it's already backing away from this deal. And it seems

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Speaker 1: that there's two big concerns here. There's that big financial

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Speaker 1: hole that Finance was looking into when it actually looked

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Speaker 1: at ft X is financing. There's great reporting on the

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Speaker 1: Bloomberg terminal breaking just in the last few minutes that

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Speaker 1: Sam Bateman Freed told investors that f t X was

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Speaker 1: going to need a cash injection or it's going to

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Speaker 1: file for bankruptcy. They SPF told investors that the company

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Speaker 1: faced a shortfall of up to eight billion dollars. That

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Speaker 1: is quite the hole that we're talking about. The other

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Speaker 1: side is what is going on with the customer funds.

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Speaker 1: Another Bloomberg News exclusive today breaking the news that US

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Speaker 1: regulators are looking at that issue, whether f t X

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Speaker 1: improperly handled customer funds. You look at the statement that

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Speaker 1: Finance put out, it seems that both of those issues

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Speaker 1: were top of mind when they were considering whether to

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Speaker 1: actually go through with this takeover. Katie. Brian Armstrong, the

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Speaker 1: CEO coin Base, called into the show yesterday to talk

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Speaker 1: about his take on the deal, and we asked whether

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Speaker 1: coin based had thought about acquiring f t X. Take

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Speaker 1: a listen to what he said. I had a number

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Speaker 1: of conversations with people over the last twenty four hours,

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Speaker 1: and um, there's reasons why that would not make sense,

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Speaker 1: and I're not quite at liberty to share the details

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Speaker 1: right now. I think I'm gonna let other people share

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Speaker 1: that if and when they're ready, or probably all come

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Speaker 1: out eventually. Some foreshadowing there maybe what should we be

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Speaker 1: looking out for going forward? I think the big question,

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Speaker 1: among many big questions is what actually happens to f

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Speaker 1: t X users right now. And also in that interview

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Speaker 1: which I was tuned into, that was a great get.

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Speaker 1: I mean, Brian Armstrong also made the point that if

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Speaker 1: the deal does fall through, then f t X customers

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Speaker 1: would face losses. And that's what's at stake here, because

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Speaker 1: if you think back all the way to yesterday, we

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Speaker 1: got a tweet from SPF saying that all asserts will

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Speaker 1: be covered one to one. This is one of the

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Speaker 1: main reasons why we've asked finance to come. And so

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Speaker 1: without finance there to provide liquidity for those massive withdrawals

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Speaker 1: that FTX is facing, it's unclear what happens here to

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Speaker 1: those actual customers. All right, Bloomberg's Katie Greifeld another one.

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Speaker 1: We're going to continue to watch every twist in turn.

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Speaker 1: Thank you for that update. Meantime, Meta CEO Mark Zuckerberg

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Speaker 1: saying the company will cut more than eleven thousand jobs.

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Speaker 1: This is the first major round of layoffs in the

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Speaker 1: social media giants history. From where I want to bring

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Speaker 1: in Bloomberg's Alex Brinka, Alex, eleven thousand is a lot

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Speaker 1: of people. Where are the what departments are these people

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Speaker 1: coming from? And how were these decisions made? Emily, No

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Speaker 1: team was spared here. Mark Zuckerberg told the organization this

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Speaker 1: morning that every single app, Facebook, Instagram, WhatsApp would be affected,

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Speaker 1: as well as their metaverse efforts which sit in reality labs.

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Speaker 1: But there are two that I want to point out

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Speaker 1: that seemed to have been hit the hardest. That is

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Speaker 1: recruiting as they also have a hiring free still in effect,

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Speaker 1: and some of their business teams that will be restructured now.

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Speaker 1: In a memo that went out to employees that was

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Speaker 1: reviewed by us here at Bloomberg existing employees who are staying,

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Speaker 1: it was said that the highest levels of leadership actually

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Speaker 1: made these decisions and most managers didn't actually find out

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Speaker 1: about it until this morning, of who would be staying

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Speaker 1: on their team and who would actually be departing amongst

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Speaker 1: those eleven thousand employees. Let's talk about Mark Zuckerberg's words

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Speaker 1: here and what he took accountability for. I believed to

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Speaker 1: even used the word sorry. He said, I want to

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Speaker 1: take accountability for these decisions and how we got here.

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Speaker 1: I know this is tough for everyone, and I'm especially

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Speaker 1: sorry to those impacted. How much further did he go

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Speaker 1: in terms of talking about the big metaverse pivot. Yeah,

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Speaker 1: he said frankly. Um, he got it wrong. Not so

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Speaker 1: much about the metaverse pivot, but the bet they're making

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Speaker 1: right now that this big shift to online shopping and

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Speaker 1: spending more time online that we saw during COVID would continue.

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Speaker 1: They staffed up to be ready for that. And not

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Speaker 1: only is that bet, um kind of flailing here, Emily.

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Speaker 1: To your point, they have this massive bet on the

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Speaker 1: metaverse they're now spending too, so a really tough time

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Speaker 1: for them. The shares are down this year, even with

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Speaker 1: that little pop that we saw today. Um, and maybe

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Speaker 1: some questions for where Mark Zuckerberg is guiding both the

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Speaker 1: social media part of the business and this new bet,

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Speaker 1: this decade long bet that will all spend more time

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Speaker 1: potentially in virtual reality in the metaverse. What's the mood

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Speaker 1: like inside Facebook right now? My sources are telling me

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Speaker 1: that seemed a little random in terms of how the

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Speaker 1: decisions were made. Uh, folks weren't necessarily consulted. They found

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Speaker 1: out early this morning. Um, you know, power folks feeling. Yeah,

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Speaker 1: it's pretty gloomy, Emily. If you can imagine, you know,

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Speaker 1: it's hit or miss in terms of who is staying

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Speaker 1: on teams. Also, you know, we're hearing that this restructuring

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Speaker 1: could take some time, so what the company would look

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Speaker 1: like that's not you know, written in stone as of today,

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Speaker 1: on the back of the Twitter news on their big

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Speaker 1: layoff a week ago and tacking on um these additional

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Speaker 1: eleven thousand jobs, that's about fifteen thousand people in social

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Speaker 1: media that are out of a job in the last week.

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Speaker 1: So not only is it gloomy on the inside, but

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Speaker 1: if you spend any time on LinkedIn today, you see

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Speaker 1: folks looking for new prospects, and you've got to think

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Speaker 1: it's a tough world if you're a social media expert

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Speaker 1: in terms of who might hire you once you're out

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Speaker 1: the out the door meta. All right, bloombergs Alex Barnka,

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Speaker 1: thank you so much for that update. We'll continue to

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Speaker 1: watch your reporting on this meantime. Earlier today, President Biden

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Speaker 1: said Elon Musk's ties to other countries are worth looking at,

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Speaker 1: though he declined to say if he felt Elon Musk

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Speaker 1: has been doing anything inappropriate. Uh, We're gonna talk a

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Speaker 1: little bit more about Twitter later in the show. Reid

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Speaker 1: Hoffman will be joining us to talk about that and

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Speaker 1: much more with a wave of tech layoffs, including now

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Speaker 1: met up. What does this all mean for the Silicon

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Speaker 1: Valley ecosystems, from startups to the world of venture capital.

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Speaker 1: I want to bring in Gary Tan now for more

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Speaker 1: on this. He is the founder of Initialized Capital and

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Speaker 1: the incoming chief of the very popular startup accelerator y Combinator. Gary,

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Speaker 1: thank you so much for joining us. As you know,

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Speaker 1: it's a special week for me and for this show,

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Speaker 1: and you know, so much has changed since I started

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Speaker 1: covering Silicon valid I'm just wondering where you were twelve

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Speaker 1: years ago when Bloomberg Tech launched, Oh gus, I was

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Speaker 1: a software engineer working on my startup, Posterous, which was

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Speaker 1: a y C company. I hadn't even become a partner

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Speaker 1: at y C yet, and two thousand and eight we

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Speaker 1: actually closed our seven hundred thousand dollars seed round the

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Speaker 1: day Lehman died. So, you know, for people who are

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Speaker 1: watching right now who might be affected, you know, I

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Speaker 1: really do feel for you because you know, this type

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Speaker 1: of day, it's such a shock. Um. But you know,

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Speaker 1: also two eight two tho nine was such an incredible

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Speaker 1: time to start companies, and you know that you have

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Speaker 1: to take the good with the bad. Eleven thousand people

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Speaker 1: laid off at Meta alone today. How bad does this

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Speaker 1: get in your view? You know, I really feel for

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Speaker 1: those families. I feel for every single person who is

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Speaker 1: going through you know, that type, that magnitude of layoff. UM.

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Speaker 1: But one of the things that I'm sort of excited

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Speaker 1: about that, you know, there there is a silver lining

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Speaker 1: in that these are really smart, really dedicated people. You know,

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Speaker 1: Facebook has an incredible hiring bar, and I think about

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Speaker 1: a lot of human capital, a lot of human heart

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Speaker 1: and minds that now can be applied to Frankly, all

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Speaker 1: of these other problems that you know are sort of

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Speaker 1: facing societ idea and humanity UM. And I'm excited about

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Speaker 1: what gets unlocked here because you know, for the for practically,

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Speaker 1: I don't know, three five years, the number one thing

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Speaker 1: that frankly startups really faced was how do we find

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Speaker 1: people who are as smart as you know, a Facebook

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Speaker 1: engineer or almost any of those roles. And so, you know,

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Speaker 1: on the one hand, this is a sad day. On

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Speaker 1: the other hand, you know, I'm kind of excited to

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Speaker 1: see where all of these people are going to go.

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Speaker 1: And some of those people are going to start new

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Speaker 1: companies that actually become the next Facebook, the next Meta,

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Speaker 1: and uh, you know, I think that that is something

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Speaker 1: that I'm excited to see. There are some people saying

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Speaker 1: Silicon Valley is turning into a waste land at San

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Speaker 1: Francisco is over, and they were saying this, you know,

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Speaker 1: before these layoffs even started to happen as a result

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Speaker 1: of the changes from the pandemic alone. I know you're

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Speaker 1: very steeped in the culture of San Francisco, and I'm

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Speaker 1: guessing you disagree, But what do you think? Yeah, I

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Speaker 1: think San Francisco from time immemorial was a place for

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Speaker 1: dreamers and doers to come and try to you know,

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Speaker 1: try their hand at their own future. But you know,

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Speaker 1: there's something very special about technology in San Francisco, which

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Speaker 1: is we've you know, brought together some of the smartest

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Speaker 1: minds and then they go on to create products and

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Speaker 1: services for a billion people. And um, you know, we

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Speaker 1: might have gone through are a big wave over the

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Speaker 1: last decade, but there's a new wave. You know, I

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Speaker 1: keep meeting new you know, twenty five year olds, thirty

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Speaker 1: year olds like you know, people who are sort of

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Speaker 1: just starting their career um and some of them might

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Speaker 1: be sort of leaving some of these tech giants. And

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Speaker 1: there we're realizing that, hey, we can start a company,

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Speaker 1: we can create a product or service, and it comes

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Speaker 1: from actually solving real problems for customers. Right and so,

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Speaker 1: you know, whether it's crypto or you know, sass software,

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Speaker 1: sort of across the board. You know, even though this

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Speaker 1: is a time of sort of destruction, there is creation

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Speaker 1: and that is growing out of you know, sort of

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Speaker 1: the ground from you know, the wreckage of some of

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Speaker 1: these uh, you know, quite regrettable situations. Right now, you know,

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Speaker 1: the seed uh is in there and it's growing. And

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Speaker 1: you know, meta, the next billion dollar or decacorn company

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Speaker 1: that is sort of starting exactly like you know, a

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Speaker 1: So what does this actually mean for early companies right

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Speaker 1: now and for investors like yourself at the earliest stages.

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Speaker 1: How do you make decisions about where to put your

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Speaker 1: given the way the economy is going. Yeah, I think

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Speaker 1: the very special thing about early stage is that you know,

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Speaker 1: As Paul Graham wrote in his famous essay, a startup

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Speaker 1: equals growth. And when you're small, you can outrun any

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Speaker 1: macro situation. You know, the macro situation might be the

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Speaker 1: And you know that was something that we started saying

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Speaker 1: trying to figure out, like what does this mean and

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Speaker 1: how much lower does it go? But in that in

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Speaker 1: that time or this time, there is the ability for

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Speaker 1: a small team to build a product or service and

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Speaker 1: grow to x four x ten x per year. And

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Speaker 1: so if the mac even if the macro situation goes

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Speaker 1: that it can grow three x, five x ten x,

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Speaker 1: you know, a hundred x over a hundred x over

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Speaker 1: several years like that, that will outrun you know, the worst,

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Speaker 1: even a great depression if you can do it. And

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Speaker 1: the thing is this is impelled by technology. You know,

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Speaker 1: their new problem MS and you know, things like Generative

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Speaker 1: AI right now are just blowing people's minds, and you know,

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Speaker 1: I think that they're the fruit of the next great companies.

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Speaker 1: It really comes from that technology and from the builders

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Speaker 1: who are being unlocked right now. Well, speaking of building

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Speaker 1: and disrupting, Elon Musk taking over Twitter, you're a Twitter

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Speaker 1: power user. I'm curious what you think of what he's

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Speaker 1: done so far and what the plan seems to be,

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Speaker 1: and maybe if as a power user, you have any

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Speaker 1: advice for Elon Musk. That's a great question. I mean,

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Speaker 1: I love Twitter, and you know, I think the number

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Speaker 1: one thing is I'm also feeling for my friends over there,

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Speaker 1: who are you know, sort of sleeping under their desks,

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Speaker 1: you know, working through it. So all I can say is,

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Speaker 1: you know, take care of your people, and you know,

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Speaker 1: take care of us as users. And you know, I

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Speaker 1: know that he's uh much maligned by certain people right now,

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Speaker 1: but you know, I'm rooting for them. I'm rooting for

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Speaker 1: Twitter as a come company and as a user. I've

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Speaker 1: spoke with Representative Rocanna earlier. You're going to hear part

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Speaker 1: of that conversation in a moment, but he called for

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Speaker 1: more regulation of big tech, which may be more unlikely

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Speaker 1: depending on how the votes shake out. I know you're

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Speaker 1: heading to the White House next week with one of

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Speaker 1: your portfolio companies. What do you think the role of

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Speaker 1: Washington should be in the next generation of tech innovation

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Speaker 1: and perhaps not repeating some of the mistakes or lack

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Speaker 1: of action that we've seen in the past. Yeah, so

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Speaker 1: I'm headed to d C with Beeper. It's one of

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Speaker 1: our initialized companies that's creating a universal chat app, and

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Speaker 1: one of the things they really want to do is

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Speaker 1: sort of take away the green bubble blue bubble problem

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Speaker 1: and that you know, that's just kind of a silly

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Speaker 1: example in one sense, in one sense, but it is

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Speaker 1: actually uh emblematic of a much bigger problem. And those

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Speaker 1: are things that we hope to solve with the Innovation

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Speaker 1: and Choice Act Online and the Open App Markets Act,

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Speaker 1: which frankly, we really hope Senators Humor will actually bring

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Speaker 1: to the floor. You know, he's claimed that the votes

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Speaker 1: aren't there, but we're pretty sure there are more than

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Speaker 1: enough votes. And you know, for me, when I look

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Speaker 1: at early stage, it's really about making sure there's a

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Speaker 1: fair and level playing field, and it's really clear to

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Speaker 1: me that we don't have that right now. Apple and

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Speaker 1: Google certainly mean well, but they're still looking out for

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Speaker 1: their main interests, and we want choice and freedom and

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Speaker 1: we need to protect the ability of founders, you know,

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Speaker 1: perhaps in the garage in San Francisco and Mountain View,

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Speaker 1: wherever they are in the world. Even we want them

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Speaker 1: to be able to create something that touches a billion people.

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Speaker 1: And you know, that's really what we want with these

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Speaker 1: two bills. We want a fair and open dialogue and

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Speaker 1: a way for consumers to actually win. I have a

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Speaker 1: minute left, Gary, and I'd love to get your advice now.

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Speaker 1: For the folks who are let go today, what would

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Speaker 1: you say to them? I mean, go home and hug

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Speaker 1: your kids, you know, if you got them. Um. But

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Speaker 1: at the same time, you know, maybe if you've been

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Speaker 1: playing it safe like this whole time in your career, um,

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Speaker 1: it might be time to go out and find you know,

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Speaker 1: some frontier tech, something that you're interested in, and um,

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Speaker 1: you know, research the startups, research what you think might

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Speaker 1: change the world. And you know you don't have to,

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Speaker 1: you know, take a job offer, but interviewed a bunch

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Speaker 1: of them and figure out, you know, is there a

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Speaker 1: fit is this place right for me? And um, you know,

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Speaker 1: building equity and helping build new things that have never

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Speaker 1: existed before. It is the most exhilarating experience that I've

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Speaker 1: ever had professionally. UM, and I just really hope you know,

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Speaker 1: I think that it's just a hard moment right now. Um,

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Speaker 1: and you know, the future is a little bit uncertain

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Speaker 1: in terms of you know, what might whether there's a

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Speaker 1: recession or not. You know, the macro picture doesn't look

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Speaker 1: that great. But I just want people to remember that

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Speaker 1: that there new technology is still being built and are

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Speaker 1: companies big and small that are still you know, fighting

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Speaker 1: that fight, and uh, you know they need your help.

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Speaker 1: So you know, dust yourself off, and you know we're

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Speaker 1: going to go build the future. Build indeed, Gary Tan,

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Speaker 1: thank you so much for joining us and sharing all

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Speaker 1: of that on a on a hard day. And of

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Speaker 1: course we're also excited about your next chapter two, founder

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Speaker 1: and partner at Initialized Capital, and of course incoming head

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Speaker 1: of y Combinator, thanks for having me coming up. Thank

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Speaker 1: you my discussion with California Representative Rocana about the outcome

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Speaker 1: of the mid terms and Elon Musk his thoughts next

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Speaker 1: this is Bloomberg back to the mid terms and what

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Speaker 1: impact it will have on the future of big tech

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Speaker 1: regulation in Congress. Representative Rocana was with us earlier. Take

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Speaker 1: a listen. First, it's just on a human level. I'm

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Speaker 1: sad and concerned about the layoffs. I as you know,

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Speaker 1: represent the district of the Bay Area and so many

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Speaker 1: of those people and their families are in my district.

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Speaker 1: But more broadly, we're gonna need more investment in uh,

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Speaker 1: content moderation that respects the First Amendment, but that is

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Speaker 1: not allowing speech that incites violence or that is spreading

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Speaker 1: blatant conspiracies and lies just to get more attention. And

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Speaker 1: that's something that Congress needs to regulate. We haven't uh,

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Speaker 1: and we need to regulate on privacy. But otherwise those

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Speaker 1: uh social media platforms are spewing often uh, real poison

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Speaker 1: into our democratic discourse. You've got a new label on

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Speaker 1: your Twitter profile identifying you as a US representative. Some

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Speaker 1: accounts are already be being labeled official. What's your opinion

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Speaker 1: on the approach Elon Musk is taking a Twitter so

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Speaker 1: far and the difference between the right to free speech

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Speaker 1: and the right to amplification of free speech. Well, look,

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Speaker 1: I know Elon Musk, and I will give him the

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Speaker 1: same advice privately as I do publicly, which is he

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Speaker 1: shouldn't be running Twitter, just like Jeff Bezos doesn't run

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Speaker 1: the Washington Post, and people who own CNN don't run CNN. Uh,

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Speaker 1: and Michael Bloomberg doesn't sit there running Bloomberg Television. I

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Speaker 1: think he should appoint an independent board of people who

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Speaker 1: will make the day to day decisions. Some of the

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Speaker 1: ideas of getting rid of bots, those are good ideas.

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Speaker 1: I mean, the bots are responsible for some of the

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Speaker 1: worst algorithmic amplification. But I don't think Ellen wants to

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Speaker 1: be sitting there making a decision about which tweet should

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Speaker 1: be on and which tweet should be off. Full interview

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Speaker 1: with representative Kanna at Bloomberg dot com and of course

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Speaker 1: we'd like to know. Mike Bloomberg is the founder and

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Speaker 1: majority owner of Bloomberg LP and the parent company of

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Speaker 1: Bloomberg News. Welcome back to Bloomberg Technology. I'm Emily Chang

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Speaker 1: in San Francisco. Computers are now creating never before seen

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Speaker 1: the images in seconds, think apps like Dolly or Crayon.

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Speaker 1: It's called generative artificial intelligence and Silicon Valley investors are

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Speaker 1: betting big on the future of this emerging technology. Reid

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Speaker 1: Hoffman is one of them. The Lincoln co founder and

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Speaker 1: partner at Greylock Partners recently sold a collection of his

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Speaker 1: own AI art for charity, and he joins me now

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Speaker 1: and read, thank you so much for joining us. You've

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Speaker 1: been such a huge part of this show for the

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Speaker 1: last twelve years, and for that I am very grateful, Um.

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Speaker 1: And I'm just so curious to hear your thoughts on

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Speaker 1: what is going to find to define the next decade

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Speaker 1: of innovation and technology. If it was networks for the

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Speaker 1: last decade, is it AI for the next it is

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Speaker 1: I think actually is as hot as it seems this year,

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Speaker 1: even next year it's even gonna be hotter. Um. I

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Speaker 1: think the question about having essentially the equivalent of professional

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Speaker 1: aid like Microsoft product called Copilot for engineers, I think

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Speaker 1: that will be within five years present for every profession.

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Speaker 1: It'll be for journalists, for dcs, you know, for uh,

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Speaker 1: you know, journals like you know, just doctors, lawyers, the

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Speaker 1: whole thing and those tools will start and they will

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Speaker 1: be central to how we we've been doing. In Senate,

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Speaker 1: Greylock We've been investing this for years because we've seen

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Speaker 1: this coming, um you know. So we have adept in

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Speaker 1: Crest and Snorkel, and of course I co founded Inflection

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Speaker 1: with Mustafa. But I think this will be a trend

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Speaker 1: of human amplification through these artificial intelligence technologies which we've

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Speaker 1: never seen its like before in human history. The question

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Speaker 1: is how do we maintain the human So, for example,

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Speaker 1: how do our everyday lives are, everyday working lives intersect

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Speaker 1: with a future of work and AI. Well, this is

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Speaker 1: one of the reasons when open ai launched. Dolly I

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Speaker 1: wrote this essay that was on LinkedIn because the natural

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Speaker 1: thing to worry is that, oh, it will take the

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Speaker 1: jobs from graphic designers and like graphic designers will be

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Speaker 1: out of work. And actually, what I realized by having

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Speaker 1: the time to play with it is that whether whatever

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Speaker 1: your graphic skills were between none, a little, a lot,

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Speaker 1: it's an amplifier. Now what you'll have to do is

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Speaker 1: you'll have to learn it. It'll be like learning Adobe

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Speaker 1: Photoshop or Figma. It's it's I need to have now

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Speaker 1: have this as part of my professional tool for how

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Speaker 1: I'm operating. And that's what's going to be true for

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Speaker 1: all of it. So there will be changes and it

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Speaker 1: will be you know, like transitions, you have to learn

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Speaker 1: a new tool, and one of the things that you know,

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Speaker 1: when you're an older professional like me, learning a new

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Speaker 1: tool can be a little stressful and challenging, but but

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Speaker 1: it's doable. And you know, currently it goes by the

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Speaker 1: geek name prompt engineering. Um, hopefully we'll have a better

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Speaker 1: term than that. I mean, we're not so good at

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Speaker 1: marketing and you know that guy to communication generally speaking

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Speaker 1: within the tech industry. But I think those tools will

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Speaker 1: then amplify all of us. And I think that's actually

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Speaker 1: what's coming across everything. You know, doctors and lawyers and

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Speaker 1: and and graphic designers and coders and writers and journalists

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Speaker 1: and research channel lists and dcs. Generator of it AI

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Speaker 1: specifically is getting so much attention, and you've been talking

430
00:24:24,920 --> 00:24:28,119
Speaker 1: about it for a long time. Just how big is

431
00:24:28,160 --> 00:24:30,160
Speaker 1: this going to be and how much money is there

432
00:24:30,200 --> 00:24:33,720
Speaker 1: to be made? Is this where the next Facebook or

433
00:24:33,840 --> 00:24:38,240
Speaker 1: Google is going to come from? Well, we certainly hope.

434
00:24:38,280 --> 00:24:40,440
Speaker 1: So that's part of the reason why, you know, grey

435
00:24:40,520 --> 00:24:43,160
Speaker 1: luck we made all these investments and you know, it's

436
00:24:43,280 --> 00:24:45,919
Speaker 1: you know, everything from a dept to inflection and others.

437
00:24:46,800 --> 00:24:48,919
Speaker 1: And um, you know what I think it is is

438
00:24:49,080 --> 00:24:51,639
Speaker 1: it'll be it'll it's kind of like this, it'll be

439
00:24:51,720 --> 00:24:54,560
Speaker 1: even more of an amplifier. I think in terms of

440
00:24:54,560 --> 00:24:59,000
Speaker 1: what you've seen from everything from Microsoft Office and the Internet. Um,

441
00:24:59,040 --> 00:25:01,520
Speaker 1: I think that because is when you think about you

442
00:25:01,560 --> 00:25:04,800
Speaker 1: take a LinkedIn definition of what the breadth of professional is,

443
00:25:04,840 --> 00:25:07,640
Speaker 1: which is you can get better at your job and

444
00:25:07,760 --> 00:25:11,119
Speaker 1: you kind of output some thinking and decisions and information.

445
00:25:11,680 --> 00:25:15,720
Speaker 1: AI will be helpful across all events. Now, there's a

446
00:25:15,720 --> 00:25:17,240
Speaker 1: lot of work to go on to make it happen.

447
00:25:17,320 --> 00:25:19,919
Speaker 1: It will take years for adoption. It'll take you know,

448
00:25:20,000 --> 00:25:21,840
Speaker 1: kind of crafting it to make sure that it's the

449
00:25:21,920 --> 00:25:25,679
Speaker 1: right kind of human application versus you know, potentially you know,

450
00:25:25,680 --> 00:25:31,000
Speaker 1: destructive effects. Um, but I'm fully optimistic on the human

451
00:25:31,000 --> 00:25:37,520
Speaker 1: amplification part of it. Let's talk about amplification. We've just

452
00:25:37,600 --> 00:25:41,360
Speaker 1: gone through a midterm elections. You yourself have said that

453
00:25:41,520 --> 00:25:46,200
Speaker 1: mid terms often signify major turning points in American politics,

454
00:25:46,200 --> 00:25:49,520
Speaker 1: And I'm curious what the turning point you think is

455
00:25:50,119 --> 00:25:55,560
Speaker 1: that's happening now. We saw candidates who amplified the big

456
00:25:55,640 --> 00:25:59,480
Speaker 1: lie get more engagement we saw social media platforms then

457
00:26:00,240 --> 00:26:06,160
Speaker 1: profit from that engagement. How dangerous could this get? Well,

458
00:26:06,240 --> 00:26:08,520
Speaker 1: it's super dangerous, which is one of the reasons why

459
00:26:08,560 --> 00:26:11,240
Speaker 1: the protection of democracy is I think the most important thing.

460
00:26:11,240 --> 00:26:13,280
Speaker 1: It's part of the reason why I've been engaging in

461
00:26:13,320 --> 00:26:15,679
Speaker 1: a little bit of a you know, kind of saying

462
00:26:15,680 --> 00:26:18,240
Speaker 1: this is an important issue for business people on LinkedIn

463
00:26:18,280 --> 00:26:20,359
Speaker 1: because LinkedIn is kind of about business and kind of

464
00:26:20,640 --> 00:26:24,080
Speaker 1: amplifying that. I do think the results of the midterms

465
00:26:24,080 --> 00:26:27,240
Speaker 1: have been good. They've been generally bad for the election deniers,

466
00:26:27,520 --> 00:26:30,399
Speaker 1: for the proponents of the Big Lie, it's generally been bad.

467
00:26:30,560 --> 00:26:34,080
Speaker 1: Like it's it's generally a pro to Santist, anti Trump, uh,

468
00:26:34,119 --> 00:26:36,639
Speaker 1: you know, kind of spread within the Republican Party. I

469
00:26:36,640 --> 00:26:40,320
Speaker 1: think it's maybe the best uh you know kind of

470
00:26:41,040 --> 00:26:43,879
Speaker 1: result for a midterm result for a president in the

471
00:26:43,960 --> 00:26:46,760
Speaker 1: last twenty years, so, you know, as normally it's really

472
00:26:46,800 --> 00:26:48,840
Speaker 1: bad for the sitting president of their party, and the

473
00:26:48,840 --> 00:26:50,720
Speaker 1: fact that it's actually the best in the last twenty years,

474
00:26:50,760 --> 00:26:54,320
Speaker 1: I think is a positive endorsement of Biden. Uh. And

475
00:26:54,359 --> 00:26:58,000
Speaker 1: I think the general view is to be uh, like,

476
00:26:58,160 --> 00:27:02,000
Speaker 1: democracy matters, piece whole transition of power matters, rule of

477
00:27:02,080 --> 00:27:04,760
Speaker 1: law matters. Uh, And in the fact that we have

478
00:27:04,800 --> 00:27:07,399
Speaker 1: a democracy by which we vote for who our election

479
00:27:07,440 --> 00:27:11,080
Speaker 1: representatives are, and we should not encourage insurrections or acts

480
00:27:11,119 --> 00:27:14,840
Speaker 1: of violence like January six. That's bad, and all of

481
00:27:14,960 --> 00:27:17,320
Speaker 1: us as Americans, all of us as leaders, all of

482
00:27:17,359 --> 00:27:20,000
Speaker 1: us as business people, need to firmly get behind it.

483
00:27:20,119 --> 00:27:23,960
Speaker 1: I think we're seeing that, you know, broadly through the elections.

484
00:27:24,000 --> 00:27:26,560
Speaker 1: Obviously there's this this in that election, which I still

485
00:27:26,600 --> 00:27:28,960
Speaker 1: have problems, but I think it's been a general good

486
00:27:29,000 --> 00:27:34,680
Speaker 1: referendum in these bed terms. You and Elon Musk go

487
00:27:35,200 --> 00:27:39,639
Speaker 1: way back, and I know you haven't commented publicly yet

488
00:27:39,840 --> 00:27:42,840
Speaker 1: on his takeover of Twitter, so I have to ask,

489
00:27:43,160 --> 00:27:45,639
Speaker 1: what do you think? What do you think of what

490
00:27:45,760 --> 00:27:49,720
Speaker 1: he's done so far? Well, Ellen, which is no surprise,

491
00:27:49,840 --> 00:27:52,560
Speaker 1: is one of the amazing entrepreneurs of our generation. I mean,

492
00:27:52,760 --> 00:27:56,800
Speaker 1: revolutionizing multiple industries and doing so against people like me

493
00:27:56,880 --> 00:27:58,240
Speaker 1: saying I don't think you know, I don't think it

494
00:27:58,320 --> 00:28:00,320
Speaker 1: wouta work like Space X. I think I was second

495
00:28:00,359 --> 00:28:02,159
Speaker 1: or third birthity pitched too, and I was like, ah,

496
00:28:02,320 --> 00:28:06,240
Speaker 1: that's like a deep difficult Adam Space governed subsidy industry,

497
00:28:06,280 --> 00:28:08,800
Speaker 1: and he revolutionized and create a new one with satellites,

498
00:28:09,160 --> 00:28:14,560
Speaker 1: revolutionizes electric vehicles so amazing entrepreneur strong vision, you know,

499
00:28:14,680 --> 00:28:17,399
Speaker 1: drives through brick walls or through multiple brick walls, and

500
00:28:17,440 --> 00:28:20,320
Speaker 1: all of these industries. Now, I wouldn't have handled Twitter

501
00:28:20,440 --> 00:28:23,080
Speaker 1: at all the way he's doing it. I think the

502
00:28:22,840 --> 00:28:26,000
Speaker 1: the chaos of it, I think the suddenness of the

503
00:28:26,080 --> 00:28:28,639
Speaker 1: layoffs and a bunch of other things. Obviously have a

504
00:28:28,640 --> 00:28:31,000
Speaker 1: different kind of view on the politics of it. I

505
00:28:31,040 --> 00:28:34,119
Speaker 1: disagree with his vote Republican. I would say, vote anti

506
00:28:34,160 --> 00:28:36,480
Speaker 1: MAGA or anti election de nine. That would be the

507
00:28:36,480 --> 00:28:37,760
Speaker 1: thing and the thing I would say, And it's whether

508
00:28:37,800 --> 00:28:42,640
Speaker 1: it's democratic republican, is you know, relative to your specific race? Um?

509
00:28:42,720 --> 00:28:44,400
Speaker 1: And so I think, you know, I think he's got

510
00:28:44,400 --> 00:28:46,840
Speaker 1: a hard challenge in front of him. Um we I

511
00:28:46,920 --> 00:28:49,880
Speaker 1: think we all want him to succeed. Uh. And I

512
00:28:49,920 --> 00:28:52,160
Speaker 1: think that even though I wouldn't do Twitter the way

513
00:28:52,200 --> 00:28:55,280
Speaker 1: he's doing it. Uh, you know, he's he's proven me

514
00:28:55,320 --> 00:28:59,200
Speaker 1: wrong before by the kind of the the sheer, you know,

515
00:29:00,360 --> 00:29:03,600
Speaker 1: and determination and vision. Uh. And I always respect that

516
00:29:03,640 --> 00:29:06,040
Speaker 1: about him. And I think we want a public square

517
00:29:06,080 --> 00:29:09,440
Speaker 1: that's healthy, that has you know, an emphasis on the

518
00:29:09,480 --> 00:29:13,600
Speaker 1: human and anti bots. And everything else Where do you

519
00:29:13,680 --> 00:29:16,040
Speaker 1: draw the line between the right to free speech and

520
00:29:16,080 --> 00:29:20,120
Speaker 1: the right to the amplification of free speech. And I'm

521
00:29:20,160 --> 00:29:23,800
Speaker 1: so curious if you've talked to him at all about

522
00:29:23,840 --> 00:29:26,800
Speaker 1: this or or any part of it and how he's responded.

523
00:29:27,800 --> 00:29:31,080
Speaker 1: So I haven't, so I don't have any inside uh information.

524
00:29:31,120 --> 00:29:34,520
Speaker 1: I'm obviously Elon's a friend. I'm always uh delighted to

525
00:29:34,560 --> 00:29:37,479
Speaker 1: help with you were to call um. But the I

526
00:29:37,520 --> 00:29:40,120
Speaker 1: think the key thing is is, look, there is a

527
00:29:40,200 --> 00:29:42,160
Speaker 1: right to freedom of speech within the political arena, which

528
00:29:42,200 --> 00:29:44,560
Speaker 1: is the government cannot quell you, and we do that

529
00:29:44,600 --> 00:29:46,840
Speaker 1: so that we have an ability to not have our

530
00:29:47,320 --> 00:29:49,920
Speaker 1: best ideas and emms quelled by the government or by

531
00:29:50,160 --> 00:29:54,080
Speaker 1: political institutions and power. It's slightly different for business, ecosystems

532
00:29:54,120 --> 00:29:55,960
Speaker 1: and all the rest of this, and so the whole

533
00:29:55,960 --> 00:29:57,640
Speaker 1: like or all freedom of speech is a little bit

534
00:29:57,640 --> 00:29:59,280
Speaker 1: different between the business side, which is part of the

535
00:29:59,320 --> 00:30:01,440
Speaker 1: reason why we have a clean, well wiped place and

536
00:30:01,480 --> 00:30:04,160
Speaker 1: LinkedIn with a clear design for it and all the

537
00:30:04,200 --> 00:30:07,520
Speaker 1: rest um. And you know, if you look at LinkedIn,

538
00:30:07,600 --> 00:30:09,160
Speaker 1: you get part of how I think that these things

539
00:30:09,200 --> 00:30:12,480
Speaker 1: should be designed, which is like, yes, you should maximize

540
00:30:12,520 --> 00:30:17,000
Speaker 1: a bunch of of of kind of expression from individuals,

541
00:30:17,040 --> 00:30:19,440
Speaker 1: but you should also think about the health of the

542
00:30:19,480 --> 00:30:22,200
Speaker 1: group and the health of the ecosystem. And like, for example,

543
00:30:22,240 --> 00:30:25,560
Speaker 1: let's take something less charged than you know, partisan issues

544
00:30:26,000 --> 00:30:30,440
Speaker 1: like vaccine deniers, you know, enormously bad for for the

545
00:30:30,480 --> 00:30:34,040
Speaker 1: health of a society, for the health of of of

546
00:30:34,040 --> 00:30:37,120
Speaker 1: of of not just the country, but the world. And

547
00:30:37,200 --> 00:30:41,840
Speaker 1: you go, okay, then, and there's clear medical expertise against that, Well,

548
00:30:42,000 --> 00:30:44,960
Speaker 1: that should not be given reach. Someone should be able

549
00:30:44,960 --> 00:30:46,600
Speaker 1: to come out and say, well, I think vaccines were

550
00:30:46,600 --> 00:30:50,040
Speaker 1: invented by Martians and they're here to try to control us. Fine,

551
00:30:50,480 --> 00:30:53,920
Speaker 1: beyond your little soapbox say that, but actually, in fact,

552
00:30:54,160 --> 00:30:56,480
Speaker 1: the medical side of it is part of what allows

553
00:30:56,520 --> 00:31:00,640
Speaker 1: our society reorder functions successfully. It's part of flu vaccines

554
00:31:00,680 --> 00:31:03,479
Speaker 1: and a bunch of other things proven through you know,

555
00:31:03,800 --> 00:31:06,880
Speaker 1: centuries of work, and so that kind of thing. You

556
00:31:06,880 --> 00:31:09,560
Speaker 1: have to distinguish between freedom of speech and freedom of reach,

557
00:31:09,920 --> 00:31:13,600
Speaker 1: and you do so with a very broad view of

558
00:31:13,760 --> 00:31:16,720
Speaker 1: also the health of society, the health of the network

559
00:31:17,200 --> 00:31:19,320
Speaker 1: in it. And I think that's you have to do both.

560
00:31:19,360 --> 00:31:22,400
Speaker 1: It's not just individuals, it's not just network and society

561
00:31:22,720 --> 00:31:24,640
Speaker 1: it's both and you have to you have to be

562
00:31:24,800 --> 00:31:28,440
Speaker 1: good stewards of that. So let's talk about the health

563
00:31:28,480 --> 00:31:32,440
Speaker 1: of Silicon Valley. Eleven thousand people just laid off at

564
00:31:32,520 --> 00:31:35,960
Speaker 1: met Up, thousands of people laid off at Twitter, Hiring

565
00:31:36,040 --> 00:31:40,400
Speaker 1: freezes at Apple and Alphabet, layoffs happening in a lot

566
00:31:40,440 --> 00:31:44,400
Speaker 1: of places. You have seen so much, uh of Silicon

567
00:31:44,480 --> 00:31:47,920
Speaker 1: Valley history. How does how does the valley survive this?

568
00:31:48,080 --> 00:31:50,360
Speaker 1: What does it look like on the other side, and

569
00:31:50,400 --> 00:31:53,600
Speaker 1: how bad does it get before we get there? Well,

570
00:31:53,800 --> 00:31:58,160
Speaker 1: I think it'll certainly continue bad for at least six months,

571
00:31:58,440 --> 00:32:02,160
Speaker 1: you know, could go you know, a year plus. Um.

572
00:32:02,200 --> 00:32:04,720
Speaker 1: The value has gone through multiple recessions actually, in fact,

573
00:32:04,880 --> 00:32:08,040
Speaker 1: some contractions, just like what makes business efficient is good

574
00:32:08,040 --> 00:32:11,200
Speaker 1: for refocusing, you know, for kind of saying, look this,

575
00:32:11,440 --> 00:32:13,160
Speaker 1: this is what our business is fundamentally about. This is

576
00:32:13,200 --> 00:32:16,000
Speaker 1: how we do it. I think it's a good thing.

577
00:32:16,480 --> 00:32:20,840
Speaker 1: Obviously painful for families and and and and and this

578
00:32:20,920 --> 00:32:23,160
Speaker 1: kind of changes. On the other hand, I think Silicon

579
00:32:23,200 --> 00:32:25,800
Speaker 1: value will continue to thrive. There's a lot of capital

580
00:32:25,920 --> 00:32:28,080
Speaker 1: investing in the future. I think a lot of these

581
00:32:28,120 --> 00:32:32,120
Speaker 1: folks will be able to find other jobs reasonably soon

582
00:32:32,760 --> 00:32:36,840
Speaker 1: because I think there's still lots of companies being created Greylock.

583
00:32:36,920 --> 00:32:38,880
Speaker 1: We've been investing in them, not just AI companies, but

584
00:32:38,920 --> 00:32:43,600
Speaker 1: also enterprise companies, security companies, a whole range of approaches,

585
00:32:43,600 --> 00:32:45,560
Speaker 1: and other venture firms are also doing the same. And

586
00:32:45,600 --> 00:32:48,600
Speaker 1: so I think it's it's the ability to to go

587
00:32:48,920 --> 00:32:51,040
Speaker 1: and still create the future is still there, and it's

588
00:32:51,040 --> 00:32:53,000
Speaker 1: one of the things that I think silicon value has

589
00:32:53,040 --> 00:32:58,080
Speaker 1: gone through multiple, multiple recessions, and it's it's a crucible,

590
00:32:58,120 --> 00:33:00,719
Speaker 1: it's a it's like a it's a temp bring function

591
00:33:01,520 --> 00:33:04,000
Speaker 1: because you need to also be efficient and effective and

592
00:33:04,000 --> 00:33:05,959
Speaker 1: not just oh, everything always works. It's like no, no,

593
00:33:06,000 --> 00:33:07,920
Speaker 1: you have to be like, how is this good for

594
00:33:07,920 --> 00:33:10,400
Speaker 1: your customers, how is this good for employees? How is

595
00:33:10,400 --> 00:33:13,520
Speaker 1: this good for society? And be focused on doing a

596
00:33:13,560 --> 00:33:15,400
Speaker 1: few things and doing a few things well. And I

597
00:33:15,440 --> 00:33:17,560
Speaker 1: think that's that's the period we're going through. But I

598
00:33:17,640 --> 00:33:21,280
Speaker 1: think that's while as painful as it is, a downturn

599
00:33:21,600 --> 00:33:24,840
Speaker 1: is just another phases business as usual. So it sounds

600
00:33:24,880 --> 00:33:28,800
Speaker 1: like you are long San Francisco, a long silicon valley um,

601
00:33:28,840 --> 00:33:31,760
Speaker 1: which is what I expected. Read always appreciate you joining

602
00:33:31,840 --> 00:33:36,120
Speaker 1: us and your optimism read Hoffman Greylock partner, founder of LinkedIn.

603
00:33:36,320 --> 00:33:39,120
Speaker 1: Thank you all right, coming up Cracking, Jesse Powell talks

604
00:33:39,160 --> 00:33:42,880
Speaker 1: about the importance of having reserves in the wake of

605
00:33:42,920 --> 00:33:46,520
Speaker 1: the latest crypto blow up. He joins us next, this

606
00:33:46,800 --> 00:34:03,200
Speaker 1: is Bloomberg. We're seeing this in real time. How this

607
00:34:03,280 --> 00:34:06,200
Speaker 1: is unfolding is in real time, but we saw it

608
00:34:06,440 --> 00:34:11,799
Speaker 1: in the spring as well, in real time that UM

609
00:34:11,920 --> 00:34:17,479
Speaker 1: investors are getting hurt, lack of disclosure, opacity. We've seen

610
00:34:17,760 --> 00:34:20,800
Speaker 1: the use of other people's money and trading ahead and

611
00:34:21,080 --> 00:34:25,399
Speaker 1: and and using other people's money, but we've also seen

612
00:34:25,440 --> 00:34:30,600
Speaker 1: the use of leverage. A SEC chair Gary Ginsler there

613
00:34:30,600 --> 00:34:34,680
Speaker 1: in the wake of crypto turmoil, cryptocurrencies tumbling after Finance

614
00:34:34,719 --> 00:34:37,399
Speaker 1: backed out of the f t X acquisition, CEO Chung

615
00:34:37,440 --> 00:34:40,640
Speaker 1: Pung Joo saying Finance will start sharing proof of reserves

616
00:34:41,320 --> 00:34:44,520
Speaker 1: to garner trust within the crypto community. Now the US

617
00:34:44,800 --> 00:34:48,000
Speaker 1: is investigating f t X. Jesse Pal is the co

618
00:34:48,239 --> 00:34:51,319
Speaker 1: founder and outgoing CEO of the crypto exchange Kracking, which

619
00:34:51,320 --> 00:34:57,600
Speaker 1: has been transparent about proof of reserves. Jesse, what just happened?

620
00:34:57,760 --> 00:35:03,480
Speaker 1: It was happening and suddenly now it's not. Yeah, So

621
00:35:03,560 --> 00:35:05,520
Speaker 1: it seems like there was a deal between two of

622
00:35:05,560 --> 00:35:10,440
Speaker 1: the largest exchanges finance to acquire what might remain of

623
00:35:10,440 --> 00:35:13,120
Speaker 1: of f t X, which from the outside looks like

624
00:35:13,200 --> 00:35:16,320
Speaker 1: mostly a pretty big crater, uh, you know, and I

625
00:35:16,400 --> 00:35:18,200
Speaker 1: think they took a look at it and just decided

626
00:35:18,239 --> 00:35:20,719
Speaker 1: this was a whole too big to fill, uh, you know,

627
00:35:20,880 --> 00:35:26,440
Speaker 1: with too much kind of radioactive regulatory scrutiny around it, um,

628
00:35:26,719 --> 00:35:28,160
Speaker 1: which looks like it might have been a pretty big

629
00:35:28,160 --> 00:35:32,080
Speaker 1: headache to deal with. So unfortunately, right now it looks

630
00:35:32,120 --> 00:35:35,160
Speaker 1: like ft X might be heading into a bankruptcy process

631
00:35:35,280 --> 00:35:40,480
Speaker 1: the likes of which you know, we've we've seen frequently recently, unfortunately. Um.

632
00:35:40,520 --> 00:35:43,000
Speaker 1: And you know, for some like the clients of Voyager,

633
00:35:43,600 --> 00:35:45,880
Speaker 1: you know, you might be aware that f t X

634
00:35:46,000 --> 00:35:48,920
Speaker 1: was just appointed the sort of trustee to manage the

635
00:35:49,000 --> 00:35:54,040
Speaker 1: voyage or payout process who acquired those accounts, um, you know.

636
00:35:54,040 --> 00:35:56,319
Speaker 1: So it's history repeating itself here with crypto. I mean,

637
00:35:56,360 --> 00:35:58,400
Speaker 1: we saw a similar situation with mount Gox back in

638
00:36:00,320 --> 00:36:03,760
Speaker 1: when another trustee had deposited funds from Big Coin into

639
00:36:03,760 --> 00:36:07,719
Speaker 1: mountain Ox, which subsequently got hacked and clients got a

640
00:36:07,760 --> 00:36:10,640
Speaker 1: double penalty there still waiting ten years later to be

641
00:36:10,719 --> 00:36:14,360
Speaker 1: paid out. So hopefully it doesn't take that long here. Um.

642
00:36:14,400 --> 00:36:18,799
Speaker 1: But yet, unfortunately, another black eye on the industry, and

643
00:36:19,080 --> 00:36:21,719
Speaker 1: it's gonna be really tough times for for the consumers

644
00:36:21,719 --> 00:36:25,520
Speaker 1: and the clients of that exchange. I asked coin by

645
00:36:25,560 --> 00:36:28,000
Speaker 1: c O'Brien Armstrong the same thing I'm gonna ask you,

646
00:36:28,280 --> 00:36:30,799
Speaker 1: would crack and be interested in buying f t X.

647
00:36:32,640 --> 00:36:35,240
Speaker 1: I'm sure they have some assets that that are interesting,

648
00:36:35,400 --> 00:36:38,279
Speaker 1: that that have some value. Um. You know, we we've

649
00:36:38,280 --> 00:36:40,719
Speaker 1: already got quite a bit of the same infrastructure. You know,

650
00:36:40,719 --> 00:36:43,120
Speaker 1: there's a lot of redundancy between exchanges, so you know,

651
00:36:43,160 --> 00:36:46,319
Speaker 1: maybe we're talking about user accounts, maybe they have some

652
00:36:46,320 --> 00:36:48,960
Speaker 1: subsidiaries to do specific things we'd be interested in, or

653
00:36:49,000 --> 00:36:52,200
Speaker 1: possibly some licenses. Um. But you know, I don't think

654
00:36:52,200 --> 00:36:54,919
Speaker 1: there's going to be value there anything close to what

655
00:36:55,120 --> 00:36:58,480
Speaker 1: the whole seems to be. So, you know, I think

656
00:36:58,480 --> 00:37:01,560
Speaker 1: the process is likely going to go into to bankruptcy.

657
00:37:01,719 --> 00:37:03,840
Speaker 1: You know, there's going to be an organized maybe auction

658
00:37:03,920 --> 00:37:06,680
Speaker 1: for these assets. At this point, you know, I'm not

659
00:37:06,680 --> 00:37:09,440
Speaker 1: sure whether they even would be allowed to sell these assets,

660
00:37:09,480 --> 00:37:11,759
Speaker 1: you know, which which might belong to the creditors. At

661
00:37:11,760 --> 00:37:18,240
Speaker 1: this point, has f t X approached cracking at all. Um.

662
00:37:18,320 --> 00:37:20,680
Speaker 1: We yea, sir, we we have. We have spoken to

663
00:37:20,719 --> 00:37:23,360
Speaker 1: them about this and you know we're we're in the

664
00:37:23,400 --> 00:37:25,360
Speaker 1: loop and um, you know we're looking to get more

665
00:37:25,400 --> 00:37:30,239
Speaker 1: information at this point. Okay, does cracking do you have

666
00:37:30,320 --> 00:37:34,000
Speaker 1: any exposure to f t X or Alameda and if so,

667
00:37:34,040 --> 00:37:37,680
Speaker 1: how much? No, we don't. You know, we steered clear

668
00:37:37,880 --> 00:37:40,080
Speaker 1: of the f t T token. Um. You know, we

669
00:37:40,080 --> 00:37:42,800
Speaker 1: haven't lent them any money. We don't trade f t

670
00:37:42,920 --> 00:37:46,520
Speaker 1: T on on the spot exchange or the futures exchange. So, um,

671
00:37:46,600 --> 00:37:49,480
Speaker 1: we we're in the clear on this one fortunately. Um.

672
00:37:49,480 --> 00:37:52,399
Speaker 1: You know, we're very conservative business in terms of our operations.

673
00:37:52,520 --> 00:37:54,600
Speaker 1: You know, we don't operate hedge fund on the side.

674
00:37:54,640 --> 00:37:57,520
Speaker 1: There are no uh you know, strange relationships like that.

675
00:37:57,560 --> 00:38:00,319
Speaker 1: We're not trading with clients funds. We're not lending outcience

676
00:38:00,360 --> 00:38:03,120
Speaker 1: funds you know, and they don't know about it. Um.

677
00:38:03,200 --> 00:38:06,480
Speaker 1: So we're a relatively conservative business. You know, we've we've

678
00:38:06,480 --> 00:38:10,560
Speaker 1: been around for eleven plus years. So you know, I think, um,

679
00:38:10,640 --> 00:38:12,319
Speaker 1: people should really look at this space, you know, when

680
00:38:12,360 --> 00:38:14,920
Speaker 1: they're looking at a new venue to trade at, you know,

681
00:38:14,920 --> 00:38:17,640
Speaker 1: look at that history, look at whether they've done something

682
00:38:17,680 --> 00:38:19,839
Speaker 1: like proof of reserves, you know, which cracking is done

683
00:38:19,880 --> 00:38:23,080
Speaker 1: twice in the last year. Look at their longevity in

684
00:38:23,080 --> 00:38:25,560
Speaker 1: the space. You know. I think the bear market is

685
00:38:25,600 --> 00:38:29,040
Speaker 1: really the tide going out, and you see who's swimming

686
00:38:29,120 --> 00:38:31,760
Speaker 1: naked when that happens. And some of these newer venues

687
00:38:32,360 --> 00:38:34,560
Speaker 1: they're seeing their first bear market for the first time,

688
00:38:34,600 --> 00:38:37,840
Speaker 1: and they're getting called out and it's become very apparent.

689
00:38:37,920 --> 00:38:43,560
Speaker 1: You know, who's swimming naked. So who is swimming naked?

690
00:38:43,920 --> 00:38:49,360
Speaker 1: Are crypto funds next hedge funds for example? You know,

691
00:38:49,400 --> 00:38:51,719
Speaker 1: there's a lot of leverage out there. I don't think

692
00:38:51,800 --> 00:38:53,479
Speaker 1: we've seen the end of it. I think there could

693
00:38:53,480 --> 00:38:58,200
Speaker 1: still be some some other quote unquote liquidity crises to come.

694
00:38:58,760 --> 00:39:00,680
Speaker 1: You know, I think there's are I think that's a

695
00:39:00,760 --> 00:39:04,560
Speaker 1: euphemism for, you know, sort of an insolvency. I think

696
00:39:04,600 --> 00:39:07,319
Speaker 1: that um. You know, people are marking some of these

697
00:39:07,320 --> 00:39:11,759
Speaker 1: really liquid assets like FTT for example, which are highly centraled,

698
00:39:11,760 --> 00:39:16,920
Speaker 1: centrally owned and controlled. Um, they're marking at them value,

699
00:39:17,000 --> 00:39:18,719
Speaker 1: you know, when when the reality is maybe they should

700
00:39:18,760 --> 00:39:22,600
Speaker 1: be marked at the value because the market is so

701
00:39:22,680 --> 00:39:24,960
Speaker 1: thin you couldn't sell all that if you had to,

702
00:39:25,600 --> 00:39:28,319
Speaker 1: you know, it's heavily centralized in the control um, so

703
00:39:28,360 --> 00:39:30,239
Speaker 1: there's an extreme risk here, you know. And what we

704
00:39:30,280 --> 00:39:32,600
Speaker 1: saw in this case with Binance and ft X was

705
00:39:32,640 --> 00:39:34,960
Speaker 1: that Binance, a competitor of f t X, owned a

706
00:39:35,000 --> 00:39:37,920
Speaker 1: huge supply of this token that m f t X

707
00:39:37,960 --> 00:39:42,120
Speaker 1: was using as collateral to borrow against and U. When

708
00:39:42,120 --> 00:39:45,000
Speaker 1: that when that asset started declining in value, you know,

709
00:39:45,080 --> 00:39:49,400
Speaker 1: I'm sure they started getting margin calls, and you know,

710
00:39:49,400 --> 00:39:52,280
Speaker 1: it turns out that they just didn't have the money,

711
00:39:52,360 --> 00:39:54,040
Speaker 1: you know, I think to to make good on those loans.

712
00:39:56,000 --> 00:39:59,360
Speaker 1: Al Right, Well, the situation continuing to unfold. Really appreciate

713
00:39:59,400 --> 00:40:02,440
Speaker 1: you joining us to share your perspective on it. Crack

714
00:40:02,520 --> 00:40:15,360
Speaker 1: and co founder outgoing CEO Jesse Powell, thank you. Some

715
00:40:15,440 --> 00:40:18,760
Speaker 1: other stories were following. In China, the world's largest iPhone

716
00:40:18,800 --> 00:40:22,399
Speaker 1: factory will still face some tough COVID restrictions. The city

717
00:40:22,400 --> 00:40:25,000
Speaker 1: of Jung Joe ended a lockdown in the district where

718
00:40:25,000 --> 00:40:28,000
Speaker 1: the plant is located, but some areas are still considered

719
00:40:28,160 --> 00:40:31,400
Speaker 1: high risk, including one where the Fox con factory is.

720
00:40:31,800 --> 00:40:35,160
Speaker 1: The restrictions have led Apple to warn Little Ship fewer

721
00:40:35,200 --> 00:40:40,600
Speaker 1: iPhones than anticipated in the US, the likelihood of a

722
00:40:40,600 --> 00:40:44,960
Speaker 1: prolonged housing slowdown is rippling through the industry. Redfin is

723
00:40:44,960 --> 00:40:47,200
Speaker 1: shutting down its home flipping business and laying off more

724
00:40:47,200 --> 00:40:51,000
Speaker 1: than six workers. That's about of the staff. Since the

725
00:40:51,080 --> 00:40:54,040
Speaker 1: end of April, the company has reduced his workforce by

726
00:40:55,160 --> 00:40:57,480
Speaker 1: Here's what CEO Glenn Kellman told me back in August

727
00:40:57,560 --> 00:41:02,560
Speaker 1: about that first wave of layoff. Back then, we laid

728
00:41:02,560 --> 00:41:06,799
Speaker 1: off six percent of our workforce and I'm the one

729
00:41:06,840 --> 00:41:10,200
Speaker 1: accountable for that. I feel so ashamed about it. I

730
00:41:10,280 --> 00:41:13,279
Speaker 1: was so blue. I still am, but it's what we

731
00:41:13,360 --> 00:41:17,120
Speaker 1: had to do to run a profitable business. And now

732
00:41:17,160 --> 00:41:20,440
Speaker 1: I think we feel more optimistic about the future, but

733
00:41:20,520 --> 00:41:26,160
Speaker 1: we're still running on an ice edge. And Tesla CEO

734
00:41:26,239 --> 00:41:29,400
Speaker 1: Elon Musk sold more than three point nine billion dollars

735
00:41:29,400 --> 00:41:32,160
Speaker 1: worth of shares in the electric car maker just days

736
00:41:32,600 --> 00:41:36,040
Speaker 1: after closing his buyout of Twitter. He's now unloaded about

737
00:41:36,080 --> 00:41:38,560
Speaker 1: thirty six billion dollars worth of shares in the company

738
00:41:38,560 --> 00:41:41,080
Speaker 1: in the last year. According to Gen Munster of Luke

739
00:41:41,160 --> 00:41:45,080
Speaker 1: Venture's quote, he's preparing for Twitter to be a money

740
00:41:45,160 --> 00:41:49,360
Speaker 1: hold and that does it. For this edition of bloom

741
00:41:49,360 --> 00:41:53,280
Speaker 1: Brick Technology Thursday, we've got a very special lineup AMD

742
00:41:53,320 --> 00:41:57,520
Speaker 1: CEO Lisa Sue will be joining us A Lee Lee

743
00:41:57,680 --> 00:42:02,040
Speaker 1: and Jenny left Court, some of the most prolific venture

744
00:42:02,120 --> 00:42:05,080
Speaker 1: capitalist It's going to be a very special special show

745
00:42:05,120 --> 00:42:07,279
Speaker 1: for me, and I'm gonna try my best to get

746
00:42:07,280 --> 00:42:09,520
Speaker 1: through it um and I hope you all will watch.

747
00:42:10,160 --> 00:42:12,480
Speaker 1: Thank you so much for tuning into this edition of

748
00:42:12,520 --> 00:42:15,759
Speaker 1: Bloomberg Technology. I'm Emily Changing in San Francisco. This is

749
00:42:15,760 --> 00:42:16,320
Speaker 1: Bloomberg