1 00:00:01,480 --> 00:00:05,160 Speaker 1: From Mahard where Innovation of money and power Collie in 2 00:00:05,240 --> 00:00:06,760 Speaker 1: Silicon Valley NBN. 3 00:00:07,080 --> 00:00:10,600 Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed. 4 00:00:10,640 --> 00:00:27,520 Speaker 3: Ludlow Amed Ludlow in San Francisco. Caroline hides off today. 5 00:00:27,560 --> 00:00:30,200 Speaker 3: This is Bloomberg Technology and water show we have for you. 6 00:00:30,320 --> 00:00:33,720 Speaker 3: Disney's capital spending and production costs coming in lower than 7 00:00:33,760 --> 00:00:37,519 Speaker 3: projected and saving three billion dollars for the entertainment company. 8 00:00:37,640 --> 00:00:39,000 Speaker 4: Will bring you all the details. 9 00:00:39,240 --> 00:00:44,159 Speaker 3: Plus, President Biden imposes limits on US investments in China. Meanwhile, 10 00:00:44,159 --> 00:00:47,080 Speaker 3: Ali Baba returns to growth across all the main divisions, 11 00:00:47,320 --> 00:00:49,400 Speaker 3: defying China's economic turbulence. 12 00:00:49,440 --> 00:00:52,040 Speaker 4: What this all means for the Chinese tech. 13 00:00:51,880 --> 00:00:54,680 Speaker 3: Sector Finally, will take a deeper look at the Supreme 14 00:00:54,720 --> 00:00:58,600 Speaker 3: Court ruling in the epic case siding with Apple. At 15 00:00:58,680 --> 00:01:01,760 Speaker 3: least for now, the single day we're watching in the 16 00:01:01,800 --> 00:01:05,720 Speaker 3: earning story is Disney, so many stories within it, raising 17 00:01:05,800 --> 00:01:09,920 Speaker 3: prices for streaming basically really outperforming the loss on the 18 00:01:09,920 --> 00:01:13,360 Speaker 3: streaming business much narrower than forecasts five hundred and twelve million. 19 00:01:13,800 --> 00:01:15,280 Speaker 4: But this is the Eiger effect. 20 00:01:15,920 --> 00:01:19,200 Speaker 3: Cost discipline and cost cutting is work. The headline spending 21 00:01:19,200 --> 00:01:21,680 Speaker 3: this year will be twenty seven billion dollars for content 22 00:01:21,760 --> 00:01:24,840 Speaker 3: principally instead of the thirty billion they normally spend. 23 00:01:25,080 --> 00:01:26,800 Speaker 4: That is something the market reacted to. 24 00:01:26,800 --> 00:01:30,040 Speaker 3: As lot, as well as some of the financial forecasts 25 00:01:30,080 --> 00:01:32,640 Speaker 3: they gave going forward. Let's get to our Media and 26 00:01:32,760 --> 00:01:35,880 Speaker 3: Entertainment editor Chris Powmery, who joins us from La Chris 27 00:01:37,160 --> 00:01:40,360 Speaker 3: Cost Discipline. Iiger the market likes it. What were some 28 00:01:40,360 --> 00:01:42,319 Speaker 3: of the other key takeaways from that Disney print. 29 00:01:44,120 --> 00:01:47,440 Speaker 5: Well, the the big headliners. Yeah, they've implemented as big 30 00:01:47,520 --> 00:01:51,480 Speaker 5: cost cutting effort. It's dovetailing with the writers and actors strike, 31 00:01:51,560 --> 00:01:54,720 Speaker 5: so they're saving money on production there. And you know 32 00:01:54,760 --> 00:01:57,400 Speaker 5: the resistant general feeling on Maaster. These companies were ill 33 00:01:57,440 --> 00:02:02,080 Speaker 5: spending too much on content. The lower than expected losses 34 00:02:02,280 --> 00:02:05,720 Speaker 5: on streaming half a billion dollars, if you can call that, good, 35 00:02:06,080 --> 00:02:09,079 Speaker 5: and dramatic price increases for the Disney plus and Who 36 00:02:09,320 --> 00:02:12,399 Speaker 5: Services twenty seven percent hike as they try to get 37 00:02:12,400 --> 00:02:15,360 Speaker 5: to profitability next year in streaming as they promised. 38 00:02:17,040 --> 00:02:19,200 Speaker 3: You mentioned the lost half a billion dollars five hundred 39 00:02:19,200 --> 00:02:21,760 Speaker 3: and twelve million on the streaming business in the quarter 40 00:02:21,800 --> 00:02:23,960 Speaker 3: a year ago it was one billion, and I think 41 00:02:24,000 --> 00:02:26,560 Speaker 3: the executives have guided us to seven hundred and fifty million. 42 00:02:26,919 --> 00:02:30,399 Speaker 3: We're still obsessed with subscribe account So Disney Plus subscribers 43 00:02:30,440 --> 00:02:33,560 Speaker 3: overall fell seven point four percent right in the course 44 00:02:33,600 --> 00:02:36,600 Speaker 3: had gone. But the main story there is Disney Plus 45 00:02:36,639 --> 00:02:38,720 Speaker 3: hot Star explains to what's what happened? 46 00:02:39,800 --> 00:02:44,120 Speaker 5: Well, they lost the streaming rights to India Premier Cricket League, 47 00:02:44,160 --> 00:02:47,200 Speaker 5: which was a big deal, big source of subscriber growth 48 00:02:47,240 --> 00:02:51,359 Speaker 5: in India and a couple other countries, and so that 49 00:02:51,520 --> 00:02:54,080 Speaker 5: is really you know, you're seeing the impact of that 50 00:02:54,320 --> 00:02:57,000 Speaker 5: now for a few quarters, just a dramatic decrease and 51 00:02:57,400 --> 00:02:58,800 Speaker 5: subscribers locally there. 52 00:03:00,000 --> 00:03:02,560 Speaker 3: Hey, Chris, what did Igo and co say about the 53 00:03:02,840 --> 00:03:05,480 Speaker 3: writers and actors strike and how that's going to impact 54 00:03:05,840 --> 00:03:06,920 Speaker 3: the content s late. 55 00:03:07,840 --> 00:03:11,919 Speaker 5: It was mord into the three billion dollars in content reduction, 56 00:03:12,120 --> 00:03:14,520 Speaker 5: so they didn't specify it how much was due to 57 00:03:14,840 --> 00:03:17,840 Speaker 5: the strikes as opposed to just an overall reduction in 58 00:03:17,919 --> 00:03:21,679 Speaker 5: spending that they've been implementing. But it's a significant enough 59 00:03:21,800 --> 00:03:26,640 Speaker 5: number and we've seen these similar numbers from all the. 60 00:03:25,919 --> 00:03:28,240 Speaker 1: Big media companies in recent weeks. 61 00:03:28,800 --> 00:03:31,960 Speaker 5: Billions of dollars collectively in savings as they don't have 62 00:03:32,040 --> 00:03:36,040 Speaker 5: to make new TV shows and films right now, All. 63 00:03:36,040 --> 00:03:38,880 Speaker 3: Right, Bloomberg's Media entertainment editor, Chris Palmery. The other big 64 00:03:38,880 --> 00:03:41,720 Speaker 3: piece of news is Disney raising streaming prices right there, 65 00:03:41,840 --> 00:03:44,680 Speaker 3: it's a twenty seven percent hike for the ad free 66 00:03:44,760 --> 00:03:47,760 Speaker 3: version of Disney Plus it goes from fourteen to fourteen 67 00:03:47,800 --> 00:03:50,880 Speaker 3: dollars a month from eleven. Really interesting, the story of 68 00:03:50,920 --> 00:03:53,840 Speaker 3: Disney keeping up with Netflix in that sense. Let's keep 69 00:03:53,840 --> 00:03:57,160 Speaker 3: a conversation going ross Gerba, president and CEO and co 70 00:03:57,240 --> 00:04:01,200 Speaker 3: founder of Gerber Kawasaki, an investor in Disney. That's a 71 00:04:01,200 --> 00:04:03,720 Speaker 3: lot to take in, right, It's very rare you see 72 00:04:03,760 --> 00:04:06,320 Speaker 3: four red headlines on the Bloomberg terminal from a single 73 00:04:06,360 --> 00:04:09,320 Speaker 3: earnings report. But what was the main point for you? 74 00:04:09,440 --> 00:04:09,760 Speaker 1: Russ? 75 00:04:11,040 --> 00:04:13,240 Speaker 2: I think the main point is exactly what you guys 76 00:04:13,240 --> 00:04:15,560 Speaker 2: have been focused on, is right sizing the amount of 77 00:04:15,600 --> 00:04:19,400 Speaker 2: spending that's being done in Hollywood with the actual revenue 78 00:04:19,440 --> 00:04:22,600 Speaker 2: coming in from direct to consumer sources. So you know, 79 00:04:22,880 --> 00:04:25,960 Speaker 2: they started out really in a race for subscribers. I'm 80 00:04:26,040 --> 00:04:29,520 Speaker 2: very similar to online gambling. Lots of acquisition costs, and 81 00:04:29,600 --> 00:04:33,520 Speaker 2: now the business has matured and they have you know, well, 82 00:04:33,680 --> 00:04:36,920 Speaker 2: almost two hundred million plus subscribers, you know, and when 83 00:04:36,920 --> 00:04:40,200 Speaker 2: you look at the business, they're very close to profitability. 84 00:04:40,320 --> 00:04:42,000 Speaker 2: So these are the changes that need to be made 85 00:04:42,200 --> 00:04:44,600 Speaker 2: to make streamers profitable like Netflix. So when you look 86 00:04:44,600 --> 00:04:47,680 Speaker 2: at Netflix's profitability with over three and a half billion 87 00:04:47,960 --> 00:04:50,960 Speaker 2: of free cash flow and growing, you know what the 88 00:04:51,000 --> 00:04:55,080 Speaker 2: potential is for Disney, even if they don't add subscribers, 89 00:04:55,440 --> 00:04:58,440 Speaker 2: is to see profits actually come from these streamers in 90 00:04:58,480 --> 00:04:59,120 Speaker 2: the next year. 91 00:05:00,080 --> 00:05:00,359 Speaker 4: Russ. 92 00:05:00,360 --> 00:05:02,080 Speaker 3: Just for the benefit of our audience, I'm looking on 93 00:05:02,080 --> 00:05:05,360 Speaker 3: the Bloomberg terminal. Gerbak Kawasaki has around one hundred and 94 00:05:05,400 --> 00:05:08,680 Speaker 3: fifty thousand Disney shares as of June thirtieth, So. 95 00:05:08,640 --> 00:05:09,720 Speaker 4: You've got skin in the game. 96 00:05:10,040 --> 00:05:14,360 Speaker 3: You're a big EIGA fan, right, has your perception of 97 00:05:14,480 --> 00:05:17,720 Speaker 3: him and his job changed based on what you heard 98 00:05:17,839 --> 00:05:18,520 Speaker 3: last night. 99 00:05:20,600 --> 00:05:22,599 Speaker 2: Not that his job has changed. He has a very 100 00:05:22,680 --> 00:05:25,120 Speaker 2: challenging job, but he's got the help that I was 101 00:05:25,520 --> 00:05:28,480 Speaker 2: hoping and praying he would with Kevin Mayer and Tom SAgs. 102 00:05:28,480 --> 00:05:31,120 Speaker 2: You know, I know Kevin Maher and I am always 103 00:05:31,160 --> 00:05:35,520 Speaker 2: impressed by his aggressiveness, his connections, his ability to get 104 00:05:35,560 --> 00:05:36,919 Speaker 2: projects done in Hollywood. 105 00:05:37,120 --> 00:05:39,240 Speaker 1: And I see, you know, Iiger. 106 00:05:39,040 --> 00:05:42,320 Speaker 2: Making a move on Candle Media and bringing these executives 107 00:05:42,320 --> 00:05:46,000 Speaker 2: back in the fold. And the big news about ESPN 108 00:05:46,360 --> 00:05:48,200 Speaker 2: getting into the gambling business. 109 00:05:47,839 --> 00:05:48,600 Speaker 1: With Penn Gaming. 110 00:05:48,880 --> 00:05:50,920 Speaker 2: You know, they kicked port Nooy out and they added 111 00:05:51,200 --> 00:05:54,080 Speaker 2: ESPN and this is a huge win for ESPN, not 112 00:05:54,120 --> 00:05:57,039 Speaker 2: only with new revenue streams, but getting out to the 113 00:05:57,080 --> 00:06:00,760 Speaker 2: consumers in a meaningful way and ultimately building a standalone 114 00:06:00,800 --> 00:06:03,840 Speaker 2: sports app that could rival any app out there. So 115 00:06:04,480 --> 00:06:07,320 Speaker 2: there are some exciting things out there, but ultimately Eiger 116 00:06:07,440 --> 00:06:08,680 Speaker 2: needs to focus on content. 117 00:06:08,920 --> 00:06:12,040 Speaker 1: They need good movies. That really is the fuel of. 118 00:06:12,040 --> 00:06:15,240 Speaker 2: Disney and that's really what I think Iigers really, you know, 119 00:06:15,400 --> 00:06:18,360 Speaker 2: main goal is besides just cutting costs, but improving content. 120 00:06:19,680 --> 00:06:23,000 Speaker 3: There's like two competing forces here where they're trying to 121 00:06:23,000 --> 00:06:27,400 Speaker 3: have cost discipline but you know, and reduce content spending. 122 00:06:27,839 --> 00:06:30,760 Speaker 4: But the content slate is impacted because of the strikes. 123 00:06:30,760 --> 00:06:32,400 Speaker 4: People want good stuff to watch. 124 00:06:32,920 --> 00:06:35,160 Speaker 3: So how does Disney get the balance right making sure 125 00:06:35,160 --> 00:06:38,480 Speaker 3: they've got things that get eyeballs without overspending. 126 00:06:39,800 --> 00:06:42,840 Speaker 2: Well, unfortunately, the movie business is very you know, hit 127 00:06:42,880 --> 00:06:45,920 Speaker 2: and miss and somewhat random, and there's no real formula 128 00:06:46,000 --> 00:06:46,560 Speaker 2: for success. 129 00:06:46,600 --> 00:06:48,080 Speaker 1: As we've seen over the years. 130 00:06:48,080 --> 00:06:51,760 Speaker 2: Disney's had a great run over its long term in 131 00:06:51,839 --> 00:06:55,480 Speaker 2: finding tremendous talent. So what's happening now with the strike, 132 00:06:55,520 --> 00:06:57,560 Speaker 2: And we're hoping that the strike ends at the end 133 00:06:57,560 --> 00:07:00,640 Speaker 2: of summer, once everybody's done with their vacations realize they 134 00:07:00,720 --> 00:07:03,680 Speaker 2: need to make money again. So I do think that 135 00:07:03,680 --> 00:07:05,839 Speaker 2: the strike will end soon and we won't see too 136 00:07:05,920 --> 00:07:09,480 Speaker 2: much of a hiccup. But there's been so much content 137 00:07:09,600 --> 00:07:12,480 Speaker 2: made over the last two years. None of us have 138 00:07:12,680 --> 00:07:15,640 Speaker 2: seen even close to all of it. And this is 139 00:07:15,640 --> 00:07:18,400 Speaker 2: what I think the writers and the actors are miscalculating, 140 00:07:18,600 --> 00:07:20,760 Speaker 2: and maybe there's a short term effect of their strike, 141 00:07:20,840 --> 00:07:23,520 Speaker 2: but there's just so much content in the hopper. 142 00:07:23,760 --> 00:07:25,200 Speaker 1: There's international content. 143 00:07:25,360 --> 00:07:29,000 Speaker 2: They are even green lighting independent projects right now. They're 144 00:07:29,200 --> 00:07:31,600 Speaker 2: over one hundred productions that were green lighted by SAG 145 00:07:31,640 --> 00:07:33,800 Speaker 2: even during the strike, and some of them are for 146 00:07:33,840 --> 00:07:35,200 Speaker 2: big streamers like Apple TV. 147 00:07:35,520 --> 00:07:39,240 Speaker 1: So the strike is really just posturing in the industry. 148 00:07:39,440 --> 00:07:43,360 Speaker 2: After having just an amazingly profitable period of time, now 149 00:07:43,400 --> 00:07:45,440 Speaker 2: these companies need to make money. It's a bad time 150 00:07:45,720 --> 00:07:48,000 Speaker 2: for a strike, and they're going to cut costs into 151 00:07:48,080 --> 00:07:51,000 Speaker 2: what's necessary to right size their businesses. So it's a 152 00:07:51,240 --> 00:07:53,920 Speaker 2: changing time and We're seeing it in technology, and we're 153 00:07:53,920 --> 00:07:55,760 Speaker 2: seeing it now in entertainment. 154 00:07:55,440 --> 00:07:57,680 Speaker 1: As we write size in the post pandemic era. 155 00:07:59,000 --> 00:08:03,000 Speaker 3: Michael Morris, an analyst at Guggenheim who covers the company, 156 00:08:03,440 --> 00:08:07,680 Speaker 3: asked for on the call, what are the chances of 157 00:08:07,760 --> 00:08:12,240 Speaker 3: a big technology company buying Disney? And I said, I'm 158 00:08:12,240 --> 00:08:15,520 Speaker 3: not gonna I'm not gonna comment about that, but the rumor, 159 00:08:15,600 --> 00:08:17,520 Speaker 3: the idea has been there for so long. 160 00:08:17,960 --> 00:08:18,920 Speaker 4: What do you think about that? 161 00:08:19,120 --> 00:08:23,360 Speaker 1: US? Well, I think if Apple had, you know, the 162 00:08:23,560 --> 00:08:23,880 Speaker 1: I didn't. 163 00:08:25,480 --> 00:08:27,040 Speaker 2: Well, I think if they did, they would have bought 164 00:08:27,080 --> 00:08:28,840 Speaker 2: Netflix in the day, they would have bought Tesla in 165 00:08:28,880 --> 00:08:31,400 Speaker 2: the day. And they've had several attempts at Disney, and 166 00:08:31,480 --> 00:08:34,480 Speaker 2: they certainly should take this opportunity right now, but they're 167 00:08:34,480 --> 00:08:37,320 Speaker 2: not going to. So Apple isn't that company, and they're 168 00:08:37,360 --> 00:08:39,720 Speaker 2: wholly focused on Vision pro. I think the one to 169 00:08:39,760 --> 00:08:42,400 Speaker 2: look at is really Amazon and Google. I do think 170 00:08:42,400 --> 00:08:44,480 Speaker 2: the future of entertainment is very much going to be 171 00:08:44,600 --> 00:08:47,800 Speaker 2: led by tech giants, not traditional media companies. 172 00:08:48,040 --> 00:08:49,680 Speaker 1: And so as we see. 173 00:08:49,440 --> 00:08:52,680 Speaker 2: This transition, you know, there's a very high likelihood that 174 00:08:52,760 --> 00:08:56,280 Speaker 2: somebody might bid for all or parts of Disney. That said, 175 00:08:56,400 --> 00:08:58,400 Speaker 2: I think the company is fine the way it is, 176 00:08:58,600 --> 00:09:00,960 Speaker 2: and they just need to you know, fix the problems 177 00:09:01,000 --> 00:09:04,560 Speaker 2: they have, which are fixable, and the stock has tremendous 178 00:09:04,640 --> 00:09:08,840 Speaker 2: value in my mind for long term investors, despite you know, 179 00:09:08,880 --> 00:09:10,640 Speaker 2: it's poor performance over the last two years. 180 00:09:10,679 --> 00:09:12,160 Speaker 1: If you look at the ten years. 181 00:09:11,920 --> 00:09:15,280 Speaker 2: Before it, it's been a phenomenal performer under Eiger. So 182 00:09:16,000 --> 00:09:17,480 Speaker 2: we've had a big step back, but I think it's 183 00:09:17,480 --> 00:09:20,280 Speaker 2: an opportunity for investors. In my fun GK it's a 184 00:09:20,320 --> 00:09:22,720 Speaker 2: top holding for us. It's in the top fifteen holdings 185 00:09:22,720 --> 00:09:25,280 Speaker 2: for US. And I'm you know, a long term investor 186 00:09:25,280 --> 00:09:27,520 Speaker 2: in Disney and I'm not, you know, planning on changing 187 00:09:27,559 --> 00:09:29,120 Speaker 2: that really quick. 188 00:09:29,160 --> 00:09:31,400 Speaker 3: On the tech perspective, Disney was talking about how they 189 00:09:31,440 --> 00:09:35,480 Speaker 3: have the technology to assess password sharing and that you know, 190 00:09:35,640 --> 00:09:37,680 Speaker 3: going into the next fiscal year would be more of 191 00:09:37,679 --> 00:09:40,880 Speaker 3: a priority. That was a factor for Netflix and its earnings. 192 00:09:41,080 --> 00:09:44,360 Speaker 3: How do you think about password sharing in the context 193 00:09:44,360 --> 00:09:46,680 Speaker 3: of Disney plus Well. 194 00:09:46,559 --> 00:09:49,840 Speaker 2: I was surprised how successful Netflix was in getting users 195 00:09:49,840 --> 00:09:53,360 Speaker 2: to sign up in the password sharing and having little backlash, 196 00:09:53,400 --> 00:09:56,079 Speaker 2: as I thought possibly they could have some pretty severe 197 00:09:56,120 --> 00:10:00,760 Speaker 2: backlash and lose subscribers because of it. But in in hindsight. 198 00:10:01,320 --> 00:10:03,680 Speaker 2: If the content's good, people will pay for it. And 199 00:10:03,679 --> 00:10:05,720 Speaker 2: that's the bottom line, you know, sort of the debate 200 00:10:05,760 --> 00:10:08,440 Speaker 2: over you know, will people pay for X and will 201 00:10:08,480 --> 00:10:11,680 Speaker 2: people pay for social media platforms versus paying for entertainment 202 00:10:11,720 --> 00:10:15,920 Speaker 2: platforms like Netflix or Disney Plus. And what we're seeing 203 00:10:15,960 --> 00:10:18,400 Speaker 2: is people will pay and we have the technology to 204 00:10:18,640 --> 00:10:21,440 Speaker 2: you know, hold people accountable. And I think that's you know, 205 00:10:21,520 --> 00:10:24,079 Speaker 2: a win win for all involved. I think giving away 206 00:10:24,480 --> 00:10:27,000 Speaker 2: the product, you know, at the beginning, it's served everybody, 207 00:10:27,000 --> 00:10:27,840 Speaker 2: but now it doesn't. 208 00:10:28,800 --> 00:10:31,920 Speaker 3: All right, ros Gerba, President, CEO and co founder of 209 00:10:31,960 --> 00:10:34,680 Speaker 3: Gerber Kawasaki with the Disney reaction, thank you very much. 210 00:10:34,720 --> 00:10:38,400 Speaker 3: Coming up here on Bloomberg Technology, what President Biden's executive 211 00:10:38,520 --> 00:10:41,840 Speaker 3: order means for China tech and the US tech sector. 212 00:10:41,840 --> 00:10:44,079 Speaker 3: We're going to talk about that and more with Joannetheny 213 00:10:44,160 --> 00:10:45,560 Speaker 3: Advises Capital Management. 214 00:10:45,920 --> 00:10:47,840 Speaker 4: That's coming up next. This is Bloomberg. 215 00:10:59,240 --> 00:11:04,360 Speaker 3: President Joe acted in executive order yesterday placing stringent restrictions 216 00:11:04,679 --> 00:11:09,720 Speaker 3: on specific US investments in China's sensitive tech sectors, for example, Chips, 217 00:11:10,000 --> 00:11:13,400 Speaker 3: quantum Tech, and select AI systems. This is part of 218 00:11:13,400 --> 00:11:17,120 Speaker 3: a push to restrict the company's ability to develop next 219 00:11:17,160 --> 00:11:21,960 Speaker 3: generation military and surveillance technologies that could potentially threaten US 220 00:11:22,040 --> 00:11:22,960 Speaker 3: national security. 221 00:11:23,000 --> 00:11:23,880 Speaker 4: That is the news. 222 00:11:24,280 --> 00:11:27,480 Speaker 3: Let's bring in Joan Fini, partner and portfolio manager at 223 00:11:27,520 --> 00:11:29,040 Speaker 3: Advisor's Capital Management. 224 00:11:29,360 --> 00:11:30,840 Speaker 4: You know you're an investor. 225 00:11:30,360 --> 00:11:32,640 Speaker 3: With a global view, but we also know you as 226 00:11:32,640 --> 00:11:35,840 Speaker 3: somebody with a long history with the chip sector. The 227 00:11:35,960 --> 00:11:39,840 Speaker 3: chip sector a target of this Biden initiatives. What's your 228 00:11:39,840 --> 00:11:42,160 Speaker 3: reaction to the executive order? 229 00:11:42,200 --> 00:11:44,160 Speaker 4: First of all, you. 230 00:11:44,120 --> 00:11:47,679 Speaker 6: Know, this is yet another move by the US government 231 00:11:47,960 --> 00:11:51,920 Speaker 6: over the last many years, spanning administrations, to try to 232 00:11:52,240 --> 00:11:55,000 Speaker 6: limit the flow of technology to China. 233 00:11:55,120 --> 00:11:58,040 Speaker 7: You know, for many years we basically gave our technology 234 00:11:58,080 --> 00:12:01,599 Speaker 7: away by looking the other way when China was acquiring 235 00:12:01,760 --> 00:12:06,160 Speaker 7: technology through dubious means, through trade relations, through manufacturing operations 236 00:12:06,160 --> 00:12:09,440 Speaker 7: in China. And now you know with the previous administration 237 00:12:09,520 --> 00:12:13,200 Speaker 7: in this one, the professionals within those departments are trying 238 00:12:13,200 --> 00:12:14,400 Speaker 7: to curtail that and. 239 00:12:14,360 --> 00:12:15,760 Speaker 8: This is yet another way so by. 240 00:12:15,640 --> 00:12:19,840 Speaker 7: Restricting venture capitalist's ability to make new investments in China 241 00:12:19,880 --> 00:12:22,720 Speaker 7: and private equity ability to make new investments in China. 242 00:12:23,160 --> 00:12:25,480 Speaker 7: The hope isn't so much that the deprivation of that 243 00:12:25,760 --> 00:12:28,440 Speaker 7: bit of capital, that bit of money will really slow 244 00:12:28,720 --> 00:12:35,199 Speaker 7: China innovation. It's more the stopping of those people providing 245 00:12:35,360 --> 00:12:38,080 Speaker 7: help to those companies. So it's really the technology transfer, 246 00:12:38,120 --> 00:12:40,040 Speaker 7: the knowledge transfer that they want to stop. It's not 247 00:12:40,360 --> 00:12:43,400 Speaker 7: really about the money involved, because it's very little as 248 00:12:43,480 --> 00:12:46,280 Speaker 7: the whole of China investment in new technology. 249 00:12:47,320 --> 00:12:49,599 Speaker 3: You make a good point that's so relevant to the 250 00:12:49,640 --> 00:12:52,960 Speaker 3: Bloomberg Technology or audience that this is essentially a restriction 251 00:12:53,080 --> 00:12:57,920 Speaker 3: on private capital investment VC private equity. But as a 252 00:12:57,960 --> 00:13:01,920 Speaker 3: public market investor, does it sound were the attractiveness of 253 00:13:02,000 --> 00:13:05,840 Speaker 3: any of the Chinese ADRs that trade on US exchanges? 254 00:13:07,120 --> 00:13:08,760 Speaker 7: Well, there are a lot of reasons to be concerned 255 00:13:08,760 --> 00:13:11,199 Speaker 7: about specific Chinese ADRs. 256 00:13:12,000 --> 00:13:15,040 Speaker 8: You know, we recognize. 257 00:13:14,400 --> 00:13:16,800 Speaker 7: That the political tension between the US and China is 258 00:13:16,840 --> 00:13:19,720 Speaker 7: not likely to ease anytime soon, and that does help 259 00:13:19,760 --> 00:13:21,960 Speaker 7: to guide the sorts of investments we're willing to make 260 00:13:22,800 --> 00:13:24,480 Speaker 7: in China in other parts of Asia. 261 00:13:25,160 --> 00:13:26,760 Speaker 8: But it doesn't discourage us entirely. 262 00:13:26,840 --> 00:13:30,040 Speaker 7: You know, our international group is on the ground looking 263 00:13:30,080 --> 00:13:31,640 Speaker 7: for ideas there. 264 00:13:31,920 --> 00:13:35,480 Speaker 8: You know, in our balance strategy, which I'm responsible for, we. 265 00:13:35,480 --> 00:13:39,120 Speaker 7: Still like Taiwan semi Conductor despite the political risks that 266 00:13:39,160 --> 00:13:43,400 Speaker 7: we obviously acknowledge are out there because Taiwan Semi serves 267 00:13:43,400 --> 00:13:46,800 Speaker 7: the global demand for semiconductors, and they're at the forefront 268 00:13:46,840 --> 00:13:47,640 Speaker 7: through at the leading. 269 00:13:47,559 --> 00:13:49,600 Speaker 8: Edge of advanced manufacturing, and they. 270 00:13:49,480 --> 00:13:53,400 Speaker 7: Serve so many US designers of chips and they're an 271 00:13:53,400 --> 00:13:55,120 Speaker 7: integral part of that, from Nvidia. 272 00:13:54,760 --> 00:13:57,400 Speaker 8: To A and D to Broadcom and others. 273 00:13:58,559 --> 00:14:00,160 Speaker 3: Yeah, later in the show, we're going to act you 274 00:14:00,160 --> 00:14:02,600 Speaker 3: talk a little bit about Tokyo Electron, which is a 275 00:14:02,679 --> 00:14:06,160 Speaker 3: Japanese chip gear maker equipment maker, but they're getting a 276 00:14:06,160 --> 00:14:08,720 Speaker 3: lot of demand from China because at the same time, 277 00:14:09,360 --> 00:14:11,679 Speaker 3: China is trying to react to this, right, So think 278 00:14:11,720 --> 00:14:14,520 Speaker 3: about some of the names we're interested in. In Vidia 279 00:14:14,880 --> 00:14:19,000 Speaker 3: has circumvented the other US restrictions on technic knowlogy export 280 00:14:19,440 --> 00:14:22,160 Speaker 3: by producing a lower power GPU. 281 00:14:23,160 --> 00:14:23,840 Speaker 4: What is your. 282 00:14:23,720 --> 00:14:27,200 Speaker 3: Perspective on how US technology names who want to do 283 00:14:27,280 --> 00:14:31,480 Speaker 3: business in China can get around some of these executive orders. 284 00:14:33,080 --> 00:14:37,080 Speaker 7: Yeah, so for a while, I think US companies like Nvidia, AMD, 285 00:14:37,840 --> 00:14:40,040 Speaker 7: Cisco and others will continue to be able to sell 286 00:14:40,040 --> 00:14:42,800 Speaker 7: into China. But as Invidia has done, they'll have to 287 00:14:42,880 --> 00:14:46,320 Speaker 7: sell less capable chips than the leading is that they've 288 00:14:46,360 --> 00:14:48,160 Speaker 7: got to sell elsewhere in the world. 289 00:14:48,440 --> 00:14:50,200 Speaker 8: And as you saw not just what. 290 00:14:50,240 --> 00:14:53,760 Speaker 7: Tokyo Electron said about the continued demand for equipment are 291 00:14:53,840 --> 00:14:56,360 Speaker 7: into China, because you know, China is going to want 292 00:14:56,400 --> 00:14:58,400 Speaker 7: to build and it's going to continue to build up 293 00:14:58,400 --> 00:15:03,040 Speaker 7: its own semiconductor manufactur string capabilities, encouraged in part by 294 00:15:03,080 --> 00:15:05,400 Speaker 7: all these restrictions not just from the US but from 295 00:15:05,480 --> 00:15:08,480 Speaker 7: Europe as well the Netherlands. And in addition, we saw 296 00:15:08,560 --> 00:15:12,920 Speaker 7: also that according to the Financial Times in videos receiving 297 00:15:12,960 --> 00:15:16,200 Speaker 7: like five billion dollars worth of orders from Chinese companies 298 00:15:16,240 --> 00:15:19,400 Speaker 7: now because they're afraid that the restrictions are only going 299 00:15:19,440 --> 00:15:24,200 Speaker 7: to get more severe. So China remains an opportunity even 300 00:15:24,240 --> 00:15:26,920 Speaker 7: if they are constrained, because they're going to want to 301 00:15:26,960 --> 00:15:30,960 Speaker 7: get as high level chips and as high level equipment 302 00:15:31,120 --> 00:15:33,480 Speaker 7: in the semiconductor industry as they possibly can. 303 00:15:33,920 --> 00:15:35,840 Speaker 8: And it's pretty clear that China. 304 00:15:35,640 --> 00:15:39,120 Speaker 7: Is going to be making its own investments in design capabilities, 305 00:15:39,120 --> 00:15:41,480 Speaker 7: in manufacturing capabilities, and a lot of the people they 306 00:15:41,480 --> 00:15:44,960 Speaker 7: have on staff right at Smith and at other locations 307 00:15:45,000 --> 00:15:47,160 Speaker 7: in the design world as well as manufacturing have been 308 00:15:47,200 --> 00:15:49,480 Speaker 7: trained in the US and have worked for US companies, 309 00:15:49,520 --> 00:15:51,240 Speaker 7: so they have a lot of knowledge. 310 00:15:51,000 --> 00:15:51,600 Speaker 1: To work with. 311 00:15:51,720 --> 00:15:55,400 Speaker 3: Joan All told on any metric or scale you like, 312 00:15:55,960 --> 00:15:59,160 Speaker 3: what is your assessment on the warmthful health of the 313 00:15:59,240 --> 00:16:00,480 Speaker 3: US China relationship. 314 00:16:00,520 --> 00:16:01,200 Speaker 4: Where do we stand? 315 00:16:02,760 --> 00:16:06,120 Speaker 7: Oh, well, on a scale of one to ten, one 316 00:16:06,200 --> 00:16:10,120 Speaker 7: being least healthy, I'd say we're around a three right now. 317 00:16:10,240 --> 00:16:14,480 Speaker 8: I mean, it is not a good place because of 318 00:16:14,520 --> 00:16:16,280 Speaker 8: our goals in the. 319 00:16:16,320 --> 00:16:22,000 Speaker 7: US to prevent China from you know, creating military capabilities 320 00:16:22,000 --> 00:16:24,920 Speaker 7: that would be a threat to US are essentially in 321 00:16:25,000 --> 00:16:27,920 Speaker 7: conflict with China's goals and that level of tension. 322 00:16:28,680 --> 00:16:30,640 Speaker 8: You know, I'm not a military a political. 323 00:16:30,320 --> 00:16:32,600 Speaker 7: Expert, but I don't see that level of tension easy 324 00:16:32,680 --> 00:16:35,160 Speaker 7: from everything I've read, that's not going to really get 325 00:16:35,200 --> 00:16:39,240 Speaker 7: any better. Can we cooperate on fronts outside of those 326 00:16:39,280 --> 00:16:42,320 Speaker 7: sensitive areas, Yes, obviously, and we should, you know, hope 327 00:16:42,320 --> 00:16:44,600 Speaker 7: for the sake of our companies and our consumers, by 328 00:16:44,600 --> 00:16:46,840 Speaker 7: the way, who benefit from getting cheaper goods out of China, 329 00:16:47,400 --> 00:16:51,560 Speaker 7: that the restrictions don't spread beyond those essential areas. 330 00:16:51,280 --> 00:16:54,680 Speaker 8: Where the US finds, you know, it's needed for our security, 331 00:16:55,560 --> 00:16:56,760 Speaker 8: and clearly that's the case. 332 00:16:56,760 --> 00:16:59,120 Speaker 7: I mean, what Nvidia continues to sell, Look at what 333 00:16:59,160 --> 00:17:00,800 Speaker 7: other companies can take you to be able to sell, 334 00:17:00,800 --> 00:17:04,600 Speaker 7: whether it's Tokyo Electron or Applyed Materials or KOA or 335 00:17:04,640 --> 00:17:05,320 Speaker 7: LAMB Research. 336 00:17:05,480 --> 00:17:07,600 Speaker 8: Right, there's still plenty of opportunity in China. 337 00:17:07,720 --> 00:17:10,119 Speaker 7: It's just a bit narrower now, a bit lower margin 338 00:17:10,359 --> 00:17:11,560 Speaker 7: now than it was before. 339 00:17:12,840 --> 00:17:15,320 Speaker 3: The US China relationship on a three out of ten 340 00:17:15,960 --> 00:17:18,840 Speaker 3: on the Juan Feeni Advisors Capital Management Scale. 341 00:17:18,840 --> 00:17:19,840 Speaker 4: Thank you so much for your time. 342 00:17:19,840 --> 00:17:23,760 Speaker 3: Going to catch up here on Bloomberg Technology. 343 00:17:29,880 --> 00:17:30,880 Speaker 4: Time for talking tech. 344 00:17:31,040 --> 00:17:35,080 Speaker 3: Chinese chip makers are speeding up investments in mature semiconductor 345 00:17:35,119 --> 00:17:39,040 Speaker 3: equipment as the US and its allies Titan Export controls to. 346 00:17:39,040 --> 00:17:40,639 Speaker 4: Cut Asia's tech edge. 347 00:17:40,680 --> 00:17:44,960 Speaker 3: Asia's biggest semiconductor gear maker is seeing extremely strong investment 348 00:17:45,000 --> 00:17:47,679 Speaker 3: in China quote and is winning new customers there. That 349 00:17:47,800 --> 00:17:51,240 Speaker 3: all according to the name Tokyo Electron and its CEO. 350 00:17:51,320 --> 00:17:53,000 Speaker 4: And something else we're tracking is Ali. 351 00:17:52,800 --> 00:17:56,600 Speaker 3: Barber returning to growth across all its main divisions, defying 352 00:17:56,680 --> 00:17:59,639 Speaker 3: China's economic turbulence. This a first step forward to a 353 00:17:59,640 --> 00:18:02,440 Speaker 3: long or comeback after more than a year of malaise. 354 00:18:02,720 --> 00:18:06,280 Speaker 3: China's online shopping leader reported a better than expected fourteen 355 00:18:06,359 --> 00:18:09,480 Speaker 3: percent rise in revenues during a quarter when the world's 356 00:18:09,520 --> 00:18:13,040 Speaker 3: number two economy struggle to gain momentum after years of 357 00:18:13,080 --> 00:18:16,359 Speaker 3: COVID zero restriction shares up more than five percent in 358 00:18:16,480 --> 00:18:17,320 Speaker 3: US trading today. 359 00:18:17,359 --> 00:18:21,000 Speaker 4: Those are the US listed ADRs. Let's head to Space 360 00:18:22,440 --> 00:18:25,240 Speaker 4: three two one release release release. 361 00:18:27,720 --> 00:18:31,320 Speaker 3: That's the first set of private tourism passengers embarking on 362 00:18:31,680 --> 00:18:34,439 Speaker 3: the ride of a lifetime two out of space on 363 00:18:34,600 --> 00:18:38,600 Speaker 3: Virgin Galactic's second commercial spaceflight, joining us now. 364 00:18:38,680 --> 00:18:40,360 Speaker 4: Bloomberg News reporter on. 365 00:18:40,359 --> 00:18:46,080 Speaker 3: All Things Space, Lauren grush Hey seventh successful launch. Finally, 366 00:18:46,520 --> 00:18:50,400 Speaker 3: twenty years later, Virgin Galactic gets some tourists into space. 367 00:18:50,440 --> 00:18:51,320 Speaker 4: Give us the details. 368 00:18:52,119 --> 00:18:53,880 Speaker 8: Yeah, I mean, if you think about it, really has 369 00:18:53,960 --> 00:18:54,960 Speaker 8: been leading to this moment. 370 00:18:55,000 --> 00:18:57,120 Speaker 9: I know I probably said that during their last flight, 371 00:18:57,480 --> 00:19:00,359 Speaker 9: but this is the one that sent private pain space 372 00:19:00,440 --> 00:19:04,160 Speaker 9: tourists to space, and that is ultimately why Virgin Galactic 373 00:19:04,240 --> 00:19:07,080 Speaker 9: was founded in the first place, nearly twenty years ago. 374 00:19:07,200 --> 00:19:10,320 Speaker 9: In fact, one of the passengers on today's flight, John Goodwin, 375 00:19:10,640 --> 00:19:13,960 Speaker 9: has been waiting almost two decades, He's had his ticket 376 00:19:14,080 --> 00:19:16,000 Speaker 9: that long, and he finally got to make good on 377 00:19:16,040 --> 00:19:19,040 Speaker 9: that promise that Virgin Galactic made for him all. 378 00:19:18,960 --> 00:19:19,680 Speaker 8: Those years ago. 379 00:19:20,040 --> 00:19:22,359 Speaker 9: So this is why it was such a big moment. 380 00:19:22,400 --> 00:19:25,440 Speaker 9: It's capping off nearly two decades of development for the company, 381 00:19:25,720 --> 00:19:27,879 Speaker 9: and from here on out it's going to be monthly 382 00:19:27,920 --> 00:19:31,520 Speaker 9: flights of these paying space tourists hereafter. 383 00:19:33,400 --> 00:19:35,959 Speaker 3: So there's some things we have to clarify here. Originally 384 00:19:36,000 --> 00:19:38,600 Speaker 3: ticket prices were two hundred and fifty thousand dollars, right, 385 00:19:38,680 --> 00:19:42,800 Speaker 3: they closed them while they basically put a pause on operations. 386 00:19:42,840 --> 00:19:45,360 Speaker 3: When they reopened they rose to four hundred and fifty. 387 00:19:45,080 --> 00:19:46,639 Speaker 4: Thousand on board. 388 00:19:46,720 --> 00:19:51,560 Speaker 3: We had three essentially customer tourist astronauts, but two of 389 00:19:51,600 --> 00:19:52,119 Speaker 3: them were. 390 00:19:52,000 --> 00:19:53,119 Speaker 4: Not paying customers. 391 00:19:53,200 --> 00:19:53,360 Speaker 1: Right. 392 00:19:53,760 --> 00:19:56,120 Speaker 4: They won these tickets in a charity draw. 393 00:19:57,840 --> 00:19:58,719 Speaker 8: Yes, that's correct. 394 00:19:58,880 --> 00:20:01,280 Speaker 9: Only John was really the that was one of the early. 395 00:20:01,119 --> 00:20:05,840 Speaker 3: Ticket holders, and he competed at the nineteen seventy two Olympics. 396 00:20:06,200 --> 00:20:08,000 Speaker 3: The big question is what happens next. What do we 397 00:20:08,040 --> 00:20:10,400 Speaker 3: know about the cadence of launches now the last one 398 00:20:10,440 --> 00:20:11,920 Speaker 3: was in June one today? 399 00:20:12,520 --> 00:20:13,360 Speaker 4: How do they get going? 400 00:20:14,200 --> 00:20:17,600 Speaker 9: So the ideal goal is to do monthly launches from. 401 00:20:17,400 --> 00:20:18,080 Speaker 8: Here on out. 402 00:20:19,080 --> 00:20:22,159 Speaker 9: So we should see one of these flights with you know, 403 00:20:22,280 --> 00:20:26,639 Speaker 9: six passengers on board, two pilots for passengers go into space. 404 00:20:26,720 --> 00:20:29,679 Speaker 9: I think for the foreseeable future, Virgin Galactic wants to 405 00:20:29,720 --> 00:20:32,320 Speaker 9: have a support astronaut on board, so someone from within 406 00:20:32,359 --> 00:20:35,560 Speaker 9: the company to kind of guide the passengers along. But 407 00:20:36,080 --> 00:20:38,520 Speaker 9: you know, if on these flights we should should see 408 00:20:38,560 --> 00:20:42,879 Speaker 9: about three ticket holders, you know, get to finally fulfill 409 00:20:42,920 --> 00:20:44,119 Speaker 9: their dream of seeing space. 410 00:20:44,320 --> 00:20:45,920 Speaker 8: And that's a big deal because. 411 00:20:45,880 --> 00:20:48,480 Speaker 9: As far as we're aware, the company has a backlog 412 00:20:48,520 --> 00:20:51,439 Speaker 9: of eight hundred customers that have been holding onto tickets, 413 00:20:51,480 --> 00:20:52,879 Speaker 9: some for many years. 414 00:20:53,880 --> 00:21:05,160 Speaker 3: Bloomberg Space Correspondent Lauren Grush, thank you very much. Welcome 415 00:21:05,160 --> 00:21:07,800 Speaker 3: back to Bloomberg Technology. Ed Ludlow here in San Francisco. 416 00:21:07,880 --> 00:21:10,600 Speaker 3: Apple is a key name that we're watching in the markets. 417 00:21:10,640 --> 00:21:13,280 Speaker 3: We're actually basically treading water now completely flat on the 418 00:21:13,320 --> 00:21:15,840 Speaker 3: stock it did fall twenty four hours ago. And you'll 419 00:21:15,880 --> 00:21:19,800 Speaker 3: remember the headline broke during Bloomberg Technology that in the 420 00:21:19,840 --> 00:21:23,119 Speaker 3: context of Apple, the US Supreme Court is allowing the 421 00:21:23,160 --> 00:21:26,560 Speaker 3: iPhone maker to keep its app store payment rules in 422 00:21:26,640 --> 00:21:29,760 Speaker 3: place for the time being. This is dismissing a request 423 00:21:30,000 --> 00:21:34,040 Speaker 3: from Epic Games that would have let developers direct iPhone 424 00:21:34,119 --> 00:21:37,920 Speaker 3: users to other lower priced alternative stores online. 425 00:21:38,000 --> 00:21:39,280 Speaker 4: Remember the context here. 426 00:21:39,600 --> 00:21:42,720 Speaker 3: The ninth US Circuit Court of Appeals had sided with 427 00:21:42,840 --> 00:21:48,040 Speaker 3: Epic and said that Apple's app store rules contravened California 428 00:21:48,119 --> 00:21:52,640 Speaker 3: competition law. What the Supreme Court is doing simply here 429 00:21:52,960 --> 00:21:56,840 Speaker 3: is intervening, saying for the time being, Epic's request, which 430 00:21:56,920 --> 00:22:00,720 Speaker 3: was to immediately allow users to be redirected other stores, 431 00:22:00,880 --> 00:22:01,840 Speaker 3: has been rejected. 432 00:22:02,240 --> 00:22:04,359 Speaker 4: Apple is expected. 433 00:22:03,760 --> 00:22:07,000 Speaker 3: To appeal the original decision later in the year, but 434 00:22:07,080 --> 00:22:09,840 Speaker 3: if the judges won't hear it, then then it's size 435 00:22:09,880 --> 00:22:12,560 Speaker 3: of Epic. Anyway, We've got to discuss what this means 436 00:22:12,560 --> 00:22:15,600 Speaker 3: for epics prospects of enforcing the original rule. And bring 437 00:22:15,640 --> 00:22:18,440 Speaker 3: in Sarah o'lamb. She's a senior fellow at the Tech 438 00:22:18,480 --> 00:22:19,720 Speaker 3: Policy Institute. 439 00:22:20,280 --> 00:22:20,920 Speaker 4: That was a lot. 440 00:22:21,280 --> 00:22:24,119 Speaker 3: It's a difficult one to explain, Sarah. But at a 441 00:22:24,200 --> 00:22:27,560 Speaker 3: high level, what does the Supreme Court intervention mean at 442 00:22:27,560 --> 00:22:29,000 Speaker 3: this stage? 443 00:22:29,400 --> 00:22:29,640 Speaker 1: Sure? 444 00:22:29,760 --> 00:22:33,879 Speaker 10: So, Justice Kagan denied an application by Epic to overturn 445 00:22:33,920 --> 00:22:38,160 Speaker 10: the Ninth Circuit stay on the District Court's order, pending 446 00:22:38,200 --> 00:22:41,320 Speaker 10: Apple's petition for Sercchi orri to the Supreme Court this fall. 447 00:22:41,880 --> 00:22:45,520 Speaker 10: As you said, so, basically, the Federal Appellate Court said 448 00:22:45,520 --> 00:22:49,960 Speaker 10: that Apple doesn't need to lift yet it's anti steering provisions. Basically, 449 00:22:50,520 --> 00:22:53,879 Speaker 10: the buttons, external leans or other calls to action that 450 00:22:54,000 --> 00:22:59,080 Speaker 10: direct customers to alternative purchasing mechanisms in their app store. 451 00:22:59,480 --> 00:23:06,639 Speaker 10: They don't need to lift that restriction. Yet Epic charges developers' 452 00:23:06,640 --> 00:23:09,280 Speaker 10: lower fees on their own app store, and so they 453 00:23:09,320 --> 00:23:12,080 Speaker 10: want a way to tell folks that, oh, you can 454 00:23:12,080 --> 00:23:15,400 Speaker 10: click this button to go to our store. So that's 455 00:23:15,400 --> 00:23:16,440 Speaker 10: what's that issue here. 456 00:23:17,720 --> 00:23:21,919 Speaker 3: So just to remind our audience, the Appeals Court has 457 00:23:21,960 --> 00:23:25,080 Speaker 3: put its decision on hold so that Apple has time 458 00:23:25,119 --> 00:23:27,920 Speaker 3: to file a Supreme Court appeal later in the year. 459 00:23:28,480 --> 00:23:29,919 Speaker 4: But the ruling only. 460 00:23:29,720 --> 00:23:33,760 Speaker 3: Kicks in if the Justices refuse to hear the case. 461 00:23:33,800 --> 00:23:34,679 Speaker 4: So it's complicated. 462 00:23:34,920 --> 00:23:37,560 Speaker 3: What is the Tech Policy Institute's kind of big picture 463 00:23:37,640 --> 00:23:40,960 Speaker 3: stance on this battle and the idea at the heart 464 00:23:41,000 --> 00:23:41,280 Speaker 3: of it. 465 00:23:42,640 --> 00:23:46,680 Speaker 10: Well, what's interesting is that it's about this state law, 466 00:23:46,840 --> 00:23:51,080 Speaker 10: California's unfair competition law, and it's focused only on the 467 00:23:51,160 --> 00:23:56,200 Speaker 10: anti steering provisions. Basically, can other app stores put links 468 00:23:56,200 --> 00:24:00,679 Speaker 10: and buttons in Apple's app store to say, user, you 469 00:24:00,680 --> 00:24:03,280 Speaker 10: can click this link to go to another store to 470 00:24:03,359 --> 00:24:07,000 Speaker 10: buyer in app purchases. That's what we're talking about here. 471 00:24:07,560 --> 00:24:11,800 Speaker 10: There are other items that are in Actually another trial 472 00:24:11,960 --> 00:24:15,520 Speaker 10: with Epic versus Google coming up this fall, and so 473 00:24:15,600 --> 00:24:19,600 Speaker 10: that'll be interesting to watch as well. What's interesting to 474 00:24:19,720 --> 00:24:24,680 Speaker 10: me also is looking at Epic and Fortnite. So Epic 475 00:24:24,880 --> 00:24:28,280 Speaker 10: it has three different lines of business itself. It's a 476 00:24:28,359 --> 00:24:31,399 Speaker 10: multi billion dollar company that is a game developer but 477 00:24:31,520 --> 00:24:35,040 Speaker 10: also an app store and also a distributor. And so 478 00:24:35,200 --> 00:24:37,840 Speaker 10: what's really interesting is to see how these two app 479 00:24:37,880 --> 00:24:40,479 Speaker 10: stores are competing in the courts. 480 00:24:43,280 --> 00:24:48,560 Speaker 3: The technology story here is about developers and the app store. 481 00:24:50,920 --> 00:24:53,040 Speaker 3: Do you see any merit in kind of Apple's argument, 482 00:24:53,040 --> 00:24:58,040 Speaker 3: which in summary essentially is that it is a relief 483 00:24:58,119 --> 00:25:01,199 Speaker 3: to developers. You know, Apple feel like they're giving a 484 00:25:01,200 --> 00:25:07,080 Speaker 3: lot of business and visibility opportunity with the rules such 485 00:25:07,160 --> 00:25:07,720 Speaker 3: as they are. 486 00:25:09,119 --> 00:25:11,840 Speaker 10: Yes, well, I think, I mean personally, I think it 487 00:25:11,880 --> 00:25:14,720 Speaker 10: makes sense that Apple would say on their own app 488 00:25:14,720 --> 00:25:17,680 Speaker 10: store that we don't want links to other app stores 489 00:25:17,720 --> 00:25:21,320 Speaker 10: that are competing with us, and so on that point, 490 00:25:22,240 --> 00:25:26,280 Speaker 10: it makes sense that a store wouldn't want to be 491 00:25:26,359 --> 00:25:29,720 Speaker 10: able to promote other stores in their own store. So 492 00:25:29,760 --> 00:25:33,080 Speaker 10: that's what it is that issue here. There are other 493 00:25:33,200 --> 00:25:37,440 Speaker 10: claims in other lawsuits, and actually there are the two 494 00:25:37,480 --> 00:25:41,879 Speaker 10: other claims that Epic made at trial were denied were failed. 495 00:25:42,640 --> 00:25:46,400 Speaker 10: So what's really at issue here is that disclosure rule, 496 00:25:46,440 --> 00:25:51,520 Speaker 10: the anti steering rule, and California's unfair competition law. And 497 00:25:51,560 --> 00:25:54,520 Speaker 10: so you know, there was a sixteen day bench trial. 498 00:25:54,600 --> 00:25:59,160 Speaker 10: There were dozens of witnesses, nine hundred exhibits in September 499 00:25:59,200 --> 00:26:02,600 Speaker 10: twenty twenty one, and so they thoroughly went through all 500 00:26:02,600 --> 00:26:05,879 Speaker 10: the different claims. The only one that survived, which is 501 00:26:05,920 --> 00:26:09,080 Speaker 10: that issue here is are those buttons or the links 502 00:26:09,960 --> 00:26:14,679 Speaker 10: to other stores? And that seems you know, that's a 503 00:26:14,840 --> 00:26:19,360 Speaker 10: very contained question. What's interesting as well is the appeal 504 00:26:19,400 --> 00:26:23,040 Speaker 10: that Apple might file or will file with the Supreme 505 00:26:23,080 --> 00:26:27,679 Speaker 10: Court raises some interesting federalism issues, and so that'll be 506 00:26:27,800 --> 00:26:28,480 Speaker 10: good to watch. 507 00:26:28,960 --> 00:26:30,520 Speaker 3: Well, that's what I want to ask you next. You know, 508 00:26:30,680 --> 00:26:32,359 Speaker 3: we love having you on the show, Sarah. You have 509 00:26:32,400 --> 00:26:34,960 Speaker 3: such a deep knowledge in the area. But I appreciate 510 00:26:35,040 --> 00:26:37,119 Speaker 3: you don't have a crystal ball, right, But what do 511 00:26:37,200 --> 00:26:40,679 Speaker 3: you think will be the outcome if the Justices choose 512 00:26:40,720 --> 00:26:44,320 Speaker 3: not to hear the Supreme appeal? What are the other 513 00:26:44,720 --> 00:26:46,840 Speaker 3: avenues that either party can go down? 514 00:26:48,880 --> 00:26:51,800 Speaker 10: Well, so it's sounded like we'll have to wait and 515 00:26:51,840 --> 00:26:57,359 Speaker 10: see what Apple files in their serciari appeal, But it 516 00:26:57,840 --> 00:27:01,719 Speaker 10: sounded like they they will raise questions about, you know, 517 00:27:01,840 --> 00:27:07,760 Speaker 10: ken a ruling on a state law effect by a 518 00:27:07,800 --> 00:27:14,360 Speaker 10: federal court affect broadly parties outside of the lawsuit. So 519 00:27:14,440 --> 00:27:17,200 Speaker 10: that'll be an interesting question to ask when it comes 520 00:27:17,240 --> 00:27:22,199 Speaker 10: to the ecosystem of game gaming. I think there are 521 00:27:22,200 --> 00:27:26,480 Speaker 10: a lot of questions about antitrust theory and about competition 522 00:27:26,560 --> 00:27:30,960 Speaker 10: in the marketplace that are unanswered and that are good 523 00:27:31,000 --> 00:27:35,280 Speaker 10: to go through discovery and litigation to actually look at 524 00:27:35,320 --> 00:27:39,960 Speaker 10: the numbers the market shares. So we'll we'll be watching 525 00:27:40,000 --> 00:27:43,879 Speaker 10: the Epic versus Google trial as well to see, you know, 526 00:27:44,359 --> 00:27:47,920 Speaker 10: how much competition is there in this marketplace. And yeah, 527 00:27:48,119 --> 00:27:53,040 Speaker 10: it makes sense for gaming platforms to have have rules. 528 00:27:54,080 --> 00:27:57,280 Speaker 3: Sarah, this is epics response to the Supreme decision twenty 529 00:27:57,320 --> 00:28:00,280 Speaker 3: four hours ago. The result will be to inge not 530 00:28:00,480 --> 00:28:05,119 Speaker 3: only Epic, but innumerable consumers and other app developers for 531 00:28:05,200 --> 00:28:07,679 Speaker 3: a significant period of time. Just very quickly, in the 532 00:28:07,720 --> 00:28:11,560 Speaker 3: thirty seconds we have left. What do your response I 533 00:28:11,600 --> 00:28:15,480 Speaker 3: suppose to Epic's position on this, Well. 534 00:28:15,200 --> 00:28:18,200 Speaker 10: My question for them would be, you know, how can 535 00:28:18,240 --> 00:28:22,800 Speaker 10: you measure injury? And so they have to prove losses 536 00:28:23,600 --> 00:28:24,919 Speaker 10: and that's a counterfactual. 537 00:28:25,800 --> 00:28:26,720 Speaker 8: It's not clear to. 538 00:28:26,680 --> 00:28:30,680 Speaker 10: Me that there would be a lot of losses. I mean, 539 00:28:30,720 --> 00:28:34,200 Speaker 10: people know that they can go outside of different stores 540 00:28:34,240 --> 00:28:38,840 Speaker 10: to reach Fortnite and Epic content. They can go to 541 00:28:38,920 --> 00:28:43,680 Speaker 10: Epics app store themselves, and so it's a matter of 542 00:28:43,760 --> 00:28:48,600 Speaker 10: discovering what that number is, having experts weigh in, and 543 00:28:48,680 --> 00:28:50,440 Speaker 10: doing some economic analysis. 544 00:28:51,520 --> 00:28:54,440 Speaker 3: Sarah Olam, Senior fellow at the Tech Policy Institute, thank 545 00:28:54,480 --> 00:28:57,040 Speaker 3: you for coming here on Bloomberg Technology, reacting what's been 546 00:28:57,080 --> 00:29:00,280 Speaker 3: a big story in the last twenty four hours. Alright, 547 00:29:00,360 --> 00:29:02,600 Speaker 3: coming up here on Bloomberg Technology. Is it a good 548 00:29:02,600 --> 00:29:06,080 Speaker 3: time to expand your investments outside of the US. That 549 00:29:06,160 --> 00:29:08,680 Speaker 3: has been the question of this program. We're going to 550 00:29:08,720 --> 00:29:11,720 Speaker 3: talk all things from the venture capital perspective in the domestic, 551 00:29:11,840 --> 00:29:15,800 Speaker 3: US and abroad with Christine Zi, CEO of five hundred Global. 552 00:29:15,840 --> 00:29:17,440 Speaker 4: That's coming up next. This is Bloomberg. 553 00:29:29,880 --> 00:29:32,000 Speaker 3: You know, amid the flood of big tech layoffs, it's 554 00:29:32,000 --> 00:29:35,440 Speaker 3: becoming harder than ever to try and enter y Combinator, 555 00:29:35,480 --> 00:29:39,680 Speaker 3: the famous Silicon Valley startup accelerator where Airbnb, Coinbase, and 556 00:29:39,800 --> 00:29:43,440 Speaker 3: Reddit all got their start. Bloomberg Original's host and executive 557 00:29:43,480 --> 00:29:47,280 Speaker 3: producer Emily Chang sat down with y Combinator CEO Gary 558 00:29:47,320 --> 00:29:50,080 Speaker 3: tan to talk about the state of tech markets and 559 00:29:50,160 --> 00:29:51,560 Speaker 3: venture capital have listened. 560 00:29:52,960 --> 00:29:56,000 Speaker 11: We're seeing tens of thousands of people getting laid off 561 00:29:56,160 --> 00:29:57,080 Speaker 11: from tech companies. 562 00:29:57,080 --> 00:29:58,040 Speaker 4: How does this play out? 563 00:29:58,560 --> 00:30:01,880 Speaker 12: I think a lot of large companies started treating their 564 00:30:01,920 --> 00:30:05,200 Speaker 12: employee base almost as a place to park resources and 565 00:30:05,280 --> 00:30:09,120 Speaker 12: almost as a competitive moat versus the other giants. And 566 00:30:09,680 --> 00:30:11,760 Speaker 12: when I think about the amount of talent that was 567 00:30:11,800 --> 00:30:15,840 Speaker 12: sort of locked up in cushy jobs that you could 568 00:30:15,840 --> 00:30:20,000 Speaker 12: have been actually out there in the market making new technology, 569 00:30:20,000 --> 00:30:23,000 Speaker 12: pushing things forward. I'm hoping a lot of them actually 570 00:30:23,000 --> 00:30:25,720 Speaker 12: come over to startups and they realize, oh, this is 571 00:30:25,760 --> 00:30:27,320 Speaker 12: what it's like to run fast again. 572 00:30:27,520 --> 00:30:30,240 Speaker 11: What's your advice for these workers who are getting laid off. 573 00:30:30,280 --> 00:30:32,480 Speaker 11: It does sound a little trite to just say it's 574 00:30:32,520 --> 00:30:34,520 Speaker 11: time to build, right it Sure it does. 575 00:30:35,480 --> 00:30:36,920 Speaker 12: I mean I think some of it is like a 576 00:30:37,000 --> 00:30:40,080 Speaker 12: take stock right, Like getting much more connected to the 577 00:30:40,120 --> 00:30:43,280 Speaker 12: problems out there, I think will lead to just a 578 00:30:43,320 --> 00:30:47,840 Speaker 12: lot more direct access to I mean, building equity, building 579 00:30:47,880 --> 00:30:49,160 Speaker 12: businesses that really matter. 580 00:30:49,520 --> 00:30:52,200 Speaker 11: Well, speaking of equity, for years, tech workers have been 581 00:30:52,200 --> 00:30:54,440 Speaker 11: paid in stock and that was sort of you know, 582 00:30:54,520 --> 00:30:57,160 Speaker 11: the ticket, You're taking a risk on this company. It 583 00:30:57,200 --> 00:30:59,440 Speaker 11: could be worth ero or it could you know, be 584 00:30:59,520 --> 00:31:02,720 Speaker 11: worth millions. Right, we're seeing kind of the dark side 585 00:31:03,280 --> 00:31:06,160 Speaker 11: of RSUs are getting paid in stock. 586 00:31:06,240 --> 00:31:06,520 Speaker 7: Now. 587 00:31:07,240 --> 00:31:10,320 Speaker 11: Do you think that's still the way it should work. 588 00:31:10,280 --> 00:31:11,240 Speaker 4: In Silicon Valley? 589 00:31:11,560 --> 00:31:14,080 Speaker 12: I mean that's some of the magic of startups. I 590 00:31:14,160 --> 00:31:19,080 Speaker 12: think this is about labor being able to access actual capital, 591 00:31:19,280 --> 00:31:21,239 Speaker 12: and this is like one of the most direct and 592 00:31:21,400 --> 00:31:24,160 Speaker 12: most awesome versions of it. Some of the bad behavior 593 00:31:24,240 --> 00:31:27,680 Speaker 12: we saw from startup founders was trying to reach for 594 00:31:27,840 --> 00:31:32,400 Speaker 12: that billion dollar valuation because they wanted the headline out 595 00:31:32,400 --> 00:31:35,560 Speaker 12: there saying that they're a unicorn now. But that comes 596 00:31:35,560 --> 00:31:38,440 Speaker 12: at a cost, right, the focus on valuation and getting 597 00:31:38,440 --> 00:31:41,720 Speaker 12: that next notch of valuation above all else. That comes 598 00:31:41,760 --> 00:31:44,959 Speaker 12: at both a great personal cost to the founders themselves 599 00:31:45,360 --> 00:31:47,040 Speaker 12: but also to the employees. 600 00:31:47,720 --> 00:31:49,400 Speaker 11: So what do you think needs to change? 601 00:31:49,680 --> 00:31:51,960 Speaker 12: I think some of it is already happening, right. You know, 602 00:31:52,040 --> 00:31:55,120 Speaker 12: the revaluation of startups right now is starting and it 603 00:31:55,160 --> 00:31:57,640 Speaker 12: will continue. People are going to be a lot more 604 00:31:57,680 --> 00:32:00,720 Speaker 12: mindful about do I really need to do that fifty 605 00:32:00,760 --> 00:32:02,560 Speaker 12: to two hundred million dollar rays. 606 00:32:03,320 --> 00:32:06,680 Speaker 3: That was why Combinator CEO Gary Tam watch more of 607 00:32:06,760 --> 00:32:10,200 Speaker 3: the circuit with Emily Chang tonight ten pm Eastern Time 608 00:32:10,200 --> 00:32:13,000 Speaker 3: on Bloomberg Television, or if you're a modern day person, 609 00:32:13,120 --> 00:32:17,120 Speaker 3: stream it at eight pm Eastern on Bloomberg Originals. Let's 610 00:32:17,120 --> 00:32:19,360 Speaker 3: stick with the venture capital story now, and for today's 611 00:32:19,440 --> 00:32:22,440 Speaker 3: VC Spotlight, let's bring in Christine's side. She's the founding 612 00:32:22,480 --> 00:32:25,760 Speaker 3: partner and CEO of five hundred Global, a multi stage 613 00:32:25,840 --> 00:32:29,400 Speaker 3: venture capital firm two point five billion dollars in assets 614 00:32:29,600 --> 00:32:32,400 Speaker 3: under management. The big story of the show has been 615 00:32:32,720 --> 00:32:38,000 Speaker 3: President Biden's executive order on limiting US investment privately VC 616 00:32:38,400 --> 00:32:41,480 Speaker 3: or PE into mainland China. Now I don't think five 617 00:32:41,520 --> 00:32:44,320 Speaker 3: hundred Global does invest into mainland China, But what is 618 00:32:44,360 --> 00:32:47,160 Speaker 3: your reaction to that executive order? 619 00:32:47,760 --> 00:32:49,960 Speaker 13: Well, thanks so much Ed for having me, and it 620 00:32:50,040 --> 00:32:52,880 Speaker 13: really makes me reflect back to the early days of 621 00:32:52,920 --> 00:32:55,920 Speaker 13: five hundred. We just celebrated our thirteenth anniversary a couple 622 00:32:55,960 --> 00:32:59,600 Speaker 13: of weeks ago, so go back to twenty ten, very 623 00:32:59,600 --> 00:33:03,240 Speaker 13: different era in Silicon Valley and technology and venture capital. 624 00:33:04,280 --> 00:33:07,840 Speaker 13: What has really evolved over the last thirteen years that 625 00:33:07,920 --> 00:33:12,320 Speaker 13: five hundred has been investing globally is certainly huge growth 626 00:33:12,360 --> 00:33:17,320 Speaker 13: in venture funding tech penetration worldwide, but also and particularly 627 00:33:17,360 --> 00:33:21,120 Speaker 13: in the US this intersection between tech, venture and policy, 628 00:33:21,480 --> 00:33:24,520 Speaker 13: so I think this will only increase. As you mentioned 629 00:33:24,520 --> 00:33:27,520 Speaker 13: five hundred global we aren't active in China. 630 00:33:27,600 --> 00:33:28,400 Speaker 4: Our focus has. 631 00:33:28,360 --> 00:33:31,400 Speaker 13: Largely been investing US and globally, and for US that 632 00:33:31,440 --> 00:33:35,040 Speaker 13: really means what we've actually referred to as the rise economies, 633 00:33:35,120 --> 00:33:37,600 Speaker 13: So twenty five of what we see as the largest 634 00:33:37,640 --> 00:33:42,520 Speaker 13: fastest growing economies in markets like Indonesia, Malaysia, Turkey, Mexico, 635 00:33:42,640 --> 00:33:45,240 Speaker 13: and so forth, and we've seen great opportunities there. 636 00:33:45,600 --> 00:33:49,280 Speaker 3: At the heart of the Biden story, though, is the 637 00:33:49,360 --> 00:33:53,080 Speaker 3: merits and benefits of investing in US tech versus international markets. 638 00:33:53,080 --> 00:33:55,560 Speaker 3: So some of those countries you listed, what is it 639 00:33:55,640 --> 00:33:59,920 Speaker 3: about them that makes them as attractive as a venture back, 640 00:34:00,120 --> 00:34:03,640 Speaker 3: investment into a founder or even a largest startups you're 641 00:34:03,640 --> 00:34:05,520 Speaker 3: at multi stage right, yes. 642 00:34:05,600 --> 00:34:09,399 Speaker 13: Well, early on we began investing both in the US 643 00:34:09,440 --> 00:34:12,359 Speaker 13: Silicon Valley but outside of the US. Since twenty ten 644 00:34:12,960 --> 00:34:17,000 Speaker 13: and today our portfolio is more than twenty eight hundred companies, 645 00:34:17,000 --> 00:34:20,239 Speaker 13: about half of that portfolio is non US, specifically in 646 00:34:20,320 --> 00:34:24,040 Speaker 13: those rise economies that I mentioned, like in Indonesia or 647 00:34:24,239 --> 00:34:27,560 Speaker 13: Mexico or Turkey or so forth. What we have seen 648 00:34:27,719 --> 00:34:31,120 Speaker 13: early on is that these are very large economies, fast 649 00:34:31,160 --> 00:34:34,960 Speaker 13: growing from both population growth as well as GDB growth. 650 00:34:35,200 --> 00:34:38,160 Speaker 13: And we took a bet very early on that because 651 00:34:38,200 --> 00:34:40,719 Speaker 13: of the many trends that we were seeing in technology. 652 00:34:40,880 --> 00:34:43,440 Speaker 13: If you remember twenty ten, costs to start a company 653 00:34:43,440 --> 00:34:50,520 Speaker 13: were coming down dramatically online platforms like a Google Meta previously, Facebook, Twitter, 654 00:34:51,000 --> 00:34:53,960 Speaker 13: Mobile was really taking off in terms of Apple and Android, 655 00:34:54,200 --> 00:34:57,040 Speaker 13: that all of this would make it just much more 656 00:34:57,400 --> 00:35:00,399 Speaker 13: cost effective and the barrier to start a company would down. 657 00:35:00,440 --> 00:35:02,719 Speaker 13: So as a result, we would start seeing a lot 658 00:35:02,760 --> 00:35:06,640 Speaker 13: of big opportunities from founders building all around the world. 659 00:35:06,760 --> 00:35:09,360 Speaker 13: And so that is really our belief. It continues to 660 00:35:09,440 --> 00:35:12,120 Speaker 13: hold true and for us, I think we're going to 661 00:35:12,200 --> 00:35:15,120 Speaker 13: just continue to deepen that exposure. 662 00:35:15,360 --> 00:35:18,200 Speaker 3: Christine, you sound very busy, I mean, and I mean 663 00:35:18,239 --> 00:35:20,960 Speaker 3: that kindly. Here on VC Spotlight, you know, we have 664 00:35:21,320 --> 00:35:24,320 Speaker 3: a number of vcs that are sort of narrowly focused 665 00:35:24,360 --> 00:35:26,960 Speaker 3: on early stage or growth stage, or the firm might 666 00:35:27,000 --> 00:35:29,440 Speaker 3: have one early stage fund, one growth stage fund, but 667 00:35:29,520 --> 00:35:34,400 Speaker 3: within geographic narrow focus twenty eight hundred portfolio companies, eighty countries, 668 00:35:34,480 --> 00:35:37,680 Speaker 3: multi stage just from an industry respective, how do you 669 00:35:37,719 --> 00:35:40,840 Speaker 3: manage that as a firm well. 670 00:35:40,560 --> 00:35:42,120 Speaker 13: You know, from the early days, a lot of that 671 00:35:42,200 --> 00:35:46,640 Speaker 13: vision was really to find great opportunities great founders in 672 00:35:46,680 --> 00:35:48,840 Speaker 13: all corners of the world. Because of that bet we took, 673 00:35:48,880 --> 00:35:51,600 Speaker 13: and our roots are certainly in early stage, and that 674 00:35:51,640 --> 00:35:54,680 Speaker 13: continues to be an area we're very active in. However, 675 00:35:54,719 --> 00:35:57,360 Speaker 13: a lot of the opportunity we saw was that a 676 00:35:57,400 --> 00:35:58,960 Speaker 13: lot of these markets that we took a bet on 677 00:35:59,040 --> 00:36:03,200 Speaker 13: early coming online have now generated a number of big 678 00:36:03,239 --> 00:36:07,640 Speaker 13: outcomes either regional or global category leaders, and we've had 679 00:36:07,640 --> 00:36:11,360 Speaker 13: a great opportunity because of the early relationships we've established 680 00:36:11,360 --> 00:36:14,959 Speaker 13: with founders from you know, early on as either one 681 00:36:15,000 --> 00:36:18,759 Speaker 13: of or the first institutional backer to really follow the 682 00:36:18,800 --> 00:36:21,120 Speaker 13: founder's journey and help back them from pre seed to 683 00:36:21,160 --> 00:36:23,440 Speaker 13: pre IPO. So for us, it's really in line with 684 00:36:23,560 --> 00:36:26,960 Speaker 13: our certainly the original vision and thesis. But you know, 685 00:36:27,000 --> 00:36:30,280 Speaker 13: we're excited to keep supporting the founders in all corners 686 00:36:30,400 --> 00:36:32,520 Speaker 13: of the world where they may actually need it more 687 00:36:32,520 --> 00:36:35,719 Speaker 13: In terms of the development of venture the venture ecosystem, we. 688 00:36:35,680 --> 00:36:38,160 Speaker 3: Showed some of your port photo companies a moment Ago, Canva, 689 00:36:38,239 --> 00:36:40,600 Speaker 3: get Lab, Credit, Calm, and the names that jump out. 690 00:36:40,840 --> 00:36:42,600 Speaker 3: The story of twenty twenty three, though, has been ours 691 00:36:42,640 --> 00:36:46,960 Speaker 3: ficial intelligence. Are you focused on AI native companies or 692 00:36:47,000 --> 00:36:49,640 Speaker 3: more AI adjacent startups that kind of want to jump 693 00:36:49,640 --> 00:36:54,600 Speaker 3: in and gain benefit from the tool of generative AI 694 00:36:54,680 --> 00:36:55,760 Speaker 3: or a large language model. 695 00:36:56,520 --> 00:36:59,239 Speaker 13: It's definitely not never a dull moment, especially as it 696 00:36:59,239 --> 00:37:02,400 Speaker 13: relates to AI and against the stark backdrop of the 697 00:37:02,440 --> 00:37:06,719 Speaker 13: macro markets and valuations falling and funding dropping. But for us, 698 00:37:06,880 --> 00:37:10,960 Speaker 13: because we have our roots in investing in a larger 699 00:37:11,040 --> 00:37:14,239 Speaker 13: number of companies across a number of sectors, one of 700 00:37:14,239 --> 00:37:17,239 Speaker 13: the big benefits of that, and really an advantage for us, 701 00:37:17,360 --> 00:37:19,560 Speaker 13: is to be able to spot what we see our 702 00:37:19,600 --> 00:37:23,040 Speaker 13: emerging innovation not just in the US, but in all 703 00:37:23,080 --> 00:37:26,440 Speaker 13: corners of the world. So as it relates specifically to AI, 704 00:37:27,040 --> 00:37:29,680 Speaker 13: we have been investing in companies in the AI space 705 00:37:29,800 --> 00:37:32,120 Speaker 13: for a number of years, and I think as we 706 00:37:32,200 --> 00:37:36,440 Speaker 13: see the uptick in terms of companies building either like 707 00:37:36,800 --> 00:37:39,280 Speaker 13: you said, they're going after the AI tech stack itself 708 00:37:39,400 --> 00:37:42,799 Speaker 13: or kind of AI adjacent or really going after existing 709 00:37:42,880 --> 00:37:46,440 Speaker 13: sectors from kind of an AI perspective, we definitely are 710 00:37:46,520 --> 00:37:48,799 Speaker 13: leaning in and looking at all of those opportunities and 711 00:37:48,840 --> 00:37:52,400 Speaker 13: then writing investments. And I think what's quite unique again 712 00:37:52,440 --> 00:37:55,919 Speaker 13: from our perspective is that this is not just a Silicon. 713 00:37:55,640 --> 00:37:57,359 Speaker 8: Valley story or just a US story. 714 00:37:57,360 --> 00:37:58,680 Speaker 4: It's really a global story. 715 00:37:59,400 --> 00:38:01,600 Speaker 13: Oftentimes, what we've seen in the early days is that 716 00:38:01,640 --> 00:38:04,400 Speaker 13: certain business models will start in the US and then 717 00:38:05,000 --> 00:38:07,240 Speaker 13: we see them happen in other parts of the world. 718 00:38:07,280 --> 00:38:10,640 Speaker 13: But for AI, it really is happening in parallel in 719 00:38:10,680 --> 00:38:11,759 Speaker 13: many different markets. 720 00:38:11,880 --> 00:38:15,040 Speaker 3: Christine si Founding Partners, CEO of five hundred global twenty 721 00:38:15,040 --> 00:38:18,680 Speaker 3: eight hundred portfolio companies in eighty countries. That is global 722 00:38:18,719 --> 00:38:29,480 Speaker 3: reach here on VC Spotlight. So look, online dating can 723 00:38:29,520 --> 00:38:32,520 Speaker 3: be just as tough as dating in person, from ghosting 724 00:38:32,600 --> 00:38:35,640 Speaker 3: and harassment to chats that don't lead to dates. Now 725 00:38:35,680 --> 00:38:38,799 Speaker 3: AI chatbots could help solve that issue, at least that's 726 00:38:38,800 --> 00:38:40,759 Speaker 3: what a number of these startups are saying. 727 00:38:40,800 --> 00:38:40,960 Speaker 1: Here. 728 00:38:41,000 --> 00:38:43,799 Speaker 3: To unpack more is Bloomberg's ear Nakano and you've been 729 00:38:43,800 --> 00:38:47,920 Speaker 3: reporting on this and specific apps that are tool to 730 00:38:48,000 --> 00:38:50,200 Speaker 3: help in dating, But what's the big picture story here? 731 00:38:50,239 --> 00:38:52,640 Speaker 3: What are the apps purporting to be able to do? 732 00:38:53,040 --> 00:38:55,920 Speaker 14: Yeah, so my colleague Kiln Punder and I we downloaded 733 00:38:55,920 --> 00:38:59,440 Speaker 14: three relatively new apps that are marketed to be AI driven. 734 00:38:59,560 --> 00:39:02,200 Speaker 14: So this is beyond the machine learning that you see 735 00:39:02,239 --> 00:39:05,600 Speaker 14: in traditional dating apps like Tinder and Hinge, and these 736 00:39:05,640 --> 00:39:09,200 Speaker 14: apps are marketed to rid the inefficiencies that you see 737 00:39:09,239 --> 00:39:12,600 Speaker 14: in the dating world. These are things like ghosting and ghosting, 738 00:39:12,640 --> 00:39:16,280 Speaker 14: which is when your matches ignore you, and inefficient matches 739 00:39:16,280 --> 00:39:16,799 Speaker 14: that are just. 740 00:39:16,800 --> 00:39:18,120 Speaker 4: Not they're not good. 741 00:39:18,360 --> 00:39:20,399 Speaker 3: Right, So I actually met my wife on a dating app, 742 00:39:20,400 --> 00:39:23,040 Speaker 3: but it was me doing the work the conversation. 743 00:39:23,360 --> 00:39:23,600 Speaker 4: Right. 744 00:39:23,719 --> 00:39:26,520 Speaker 3: Some of the functionality of the technology is to mimic 745 00:39:26,640 --> 00:39:29,240 Speaker 3: you or to do things on your behalf. Just explain 746 00:39:29,280 --> 00:39:31,160 Speaker 3: how it works and you actually tested it out. 747 00:39:31,440 --> 00:39:34,399 Speaker 14: Yeah, absolutely so. Teaser AI, which is the app that 748 00:39:34,480 --> 00:39:38,080 Speaker 14: gets rid of the small talk, essentially jumps to the 749 00:39:38,080 --> 00:39:41,000 Speaker 14: part where your chatbot talks to your match, so they 750 00:39:41,200 --> 00:39:44,399 Speaker 14: have full license over your conversations and they will break 751 00:39:44,400 --> 00:39:47,319 Speaker 14: the ice with quirky conversations. But to our extent, we 752 00:39:47,360 --> 00:39:49,880 Speaker 14: found out that a lot of them were false facts 753 00:39:49,880 --> 00:39:50,680 Speaker 14: about ourselves. 754 00:39:50,880 --> 00:39:53,680 Speaker 3: One debate for the industry broadly is the cost of 755 00:39:53,760 --> 00:39:55,200 Speaker 3: dating apps. You know, it was the one that I 756 00:39:55,280 --> 00:39:58,040 Speaker 3: used was free, but there's a premium element as well. 757 00:39:58,080 --> 00:40:02,160 Speaker 3: Do these AI driven apps cost What are the fees involved? 758 00:40:02,239 --> 00:40:05,160 Speaker 14: Yeah, so they're free for the most part, but like 759 00:40:05,200 --> 00:40:07,920 Speaker 14: other traditional dating apps, there's a free subscription and the 760 00:40:07,960 --> 00:40:12,600 Speaker 14: premium subscription, and the premium features include things like better matches, 761 00:40:12,880 --> 00:40:15,799 Speaker 14: more matches, or finding out why people didn't like you, 762 00:40:16,400 --> 00:40:18,719 Speaker 14: which is a mystery to a lot of people. And 763 00:40:19,040 --> 00:40:21,280 Speaker 14: these range from four to sixty dollars a month. 764 00:40:21,840 --> 00:40:23,319 Speaker 3: I think that the bit that we got hung up 765 00:40:23,320 --> 00:40:25,879 Speaker 3: on is the mimicking and flirting bit. 766 00:40:26,440 --> 00:40:27,359 Speaker 4: Is it realistic? 767 00:40:27,480 --> 00:40:30,759 Speaker 3: The experience that the AI generated content does it come 768 00:40:30,800 --> 00:40:31,680 Speaker 3: across as a human. 769 00:40:32,080 --> 00:40:35,120 Speaker 14: So we found that they were very very awkward. Sometimes 770 00:40:35,160 --> 00:40:38,160 Speaker 14: the a I would send pictures avatar pictures of themselves 771 00:40:38,160 --> 00:40:41,359 Speaker 14: which are very awkwardly posed, so I wouldn't think that 772 00:40:41,400 --> 00:40:43,520 Speaker 14: they were you know, there was a human behind it. 773 00:40:43,560 --> 00:40:46,600 Speaker 14: But some people seem to really like it. And there's 774 00:40:46,640 --> 00:40:49,160 Speaker 14: also a breakup Buddy app which will help you guide 775 00:40:49,160 --> 00:40:53,640 Speaker 14: through your heel and self journey when a robot breaks 776 00:40:53,640 --> 00:40:53,960 Speaker 14: your heart. 777 00:40:54,120 --> 00:40:57,279 Speaker 4: All right, Bloomberg's Area and Nikano, this is AI irl 778 00:40:57,400 --> 00:40:58,120 Speaker 4: right here. 779 00:40:58,160 --> 00:41:01,439 Speaker 3: On Bloomberg Technology. Unfortunately, that does it for this edition 780 00:41:01,760 --> 00:41:02,880 Speaker 3: of Bloombog Technology. 781 00:41:02,880 --> 00:41:03,920 Speaker 4: Tune in Friday tomorrow. 782 00:41:03,960 --> 00:41:06,160 Speaker 3: We're going to be joined by Kyle Vott, the CEO 783 00:41:06,200 --> 00:41:09,239 Speaker 3: of driverless car company Cruise. A lot of news coming 784 00:41:09,239 --> 00:41:12,080 Speaker 3: out in the self driving space in recent weeks new markets. 785 00:41:12,320 --> 00:41:14,480 Speaker 3: We're still kind of waiting for the real deal, something 786 00:41:14,480 --> 00:41:17,520 Speaker 3: we've talked about here on this program. It has been 787 00:41:17,520 --> 00:41:19,680 Speaker 3: a mega week. We're just four days in. Earnings have 788 00:41:19,719 --> 00:41:21,960 Speaker 3: been a big part of the story, so don't forget that. 789 00:41:22,080 --> 00:41:24,279 Speaker 3: You can recap everything we've talked about on the show, 790 00:41:24,280 --> 00:41:27,879 Speaker 3: a big emphasis on Biden's executive order when it comes 791 00:41:27,880 --> 00:41:30,400 Speaker 3: to investment in China. Check out the podcast wherever you 792 00:41:30,480 --> 00:41:33,600 Speaker 3: get your podcasts. We're on Apple, we're on Spotify, and 793 00:41:33,640 --> 00:41:36,759 Speaker 3: we're on iHeart, and of course the podcast also on 794 00:41:37,200 --> 00:41:40,000 Speaker 3: the Bloomberg platforms. Four days in, Guys, one day to 795 00:41:40,040 --> 00:41:41,400 Speaker 3: go from San Francisco. 796 00:41:42,000 --> 00:41:45,680 Speaker 4: This is Bloomberg Technology