Speaker 1: I met Ludlow in San Francisco. This is Bloomberg Technology,
Speaker 1: Sam bankman Fried speaks, but questions remain. We discussed the
Speaker 1: mystery that still surrounds the missing billions at spfs, bankrupt
Speaker 1: crypto exchange f t X. Then we're turning into a
Speaker 1: buy now, pay later economy, especially this holiday season as
Speaker 1: shoppers try to stretch their dollar. Klaners CEO on its
Speaker 1: fight to reach profitability and how regulation could impact the
Speaker 1: buy now, pay later industry. And Musk takes a break
Speaker 1: from Twitter to talk well brain surgery. The world's richest
Speaker 1: person says Neuralink could start human implants within six months
Speaker 1: and makes big promises for the tech, including cures for
Speaker 1: paralysis and blindness. Welcome, fus, let's gonna check on those
Speaker 1: markets here. It's been Katie Rfield high. Katie High ed Well,
Speaker 1: it was a pretty muted day overall. Remember we had
Speaker 1: a big, big rally yesterday after Pal suggested that maybe
Speaker 1: the FED might start dialing back the pace of rate hikes.
Speaker 1: Then you look today ahead, the big payrolls print tomorrow.
Speaker 1: Not too much movement in the SMP five hundred. The
Speaker 1: NASA one squeaked out a little bit of a game.
Speaker 1: You did see a big drop in the socks, but
Speaker 1: again at the big benchmark level, not too much movement,
Speaker 1: even though we're looking at a pretty big rally in
Speaker 1: the bond market, those tenure treasure yields dropping by about
Speaker 1: ten basis points or so. But this muted volatility that
Speaker 1: we've been seeing in the markets, it's definitely a theme.
Speaker 1: Let's take a look at the volatility index, the VIX,
Speaker 1: if you will. It dropped below twenty. It's has a
Speaker 1: nineteen handle, and as you can see, it's just been
Speaker 1: grinding tighter and tighter in this very narrow range. So,
Speaker 1: even though I don't know, it's felt like a pretty
Speaker 1: volatile year, not too much action at the our market level.
Speaker 1: But I'm dying to talk about crypto. Let's do that
Speaker 1: right now and look at bitcoin, because Bitcoin, even amid
Speaker 1: all of this chaos that we're seeing at the company
Speaker 1: level in the wake of what we saw with f
Speaker 1: t X, bitcoin is actually having a pretty good run.
Speaker 1: It's up about two and a half percent or so
Speaker 1: over the past five days, and I'm going to say
Speaker 1: it's a macro asset. It's doing fine, all right, Let's
Speaker 1: stick with this broader theme, Katie, stay with us. We
Speaker 1: look at the biggest story in crypto right now, the
Speaker 1: ongoing story f t X is collapse and Sam Bank
Speaker 1: and and Freed, who was at one point worth twenty
Speaker 1: six billion dollars he now claims quote that's worth close
Speaker 1: to nothing. Those were his words at the New York
Speaker 1: Times deal Books summit yesterday, and luckily for us, Bloomberg's
Speaker 1: Annie Massa was in the room and joins us now
Speaker 1: for more. Did we solve the mystery, Annie, of the
Speaker 1: missing billions and where they are? I think that would
Speaker 1: be a little bit too easy. We're far from fully
Speaker 1: having solved the mystery. Um, So yes your day. SPF
Speaker 1: did speak at the deal book conference here in New York,
Speaker 1: and I would say he answered a lot of questions,
Speaker 1: but we didn't get a lot of answers. He's kind
Speaker 1: of on an apology tour now, giving his side of
Speaker 1: the story and saying that he's sorry that he screwed
Speaker 1: up um and overextended basically, but he he as far
Speaker 1: as actually offering any explanation of what went wrong. Uh,
Speaker 1: he hasn't given us much and there was some surprise
Speaker 1: that he actually turned up, albeit virtually, you know, he
Speaker 1: joined from the Bahamas. But you were there, there was
Speaker 1: some protests on site against him appearing at the conference,
Speaker 1: weren't there, absolutely So, even to get into the venue,
Speaker 1: which was in Columbus Circle in Manhattan, there were protesters outside,
Speaker 1: kind of these dueling camps of protesters who were protesting
Speaker 1: not just SPF and had pamphlets saying that this guy
Speaker 1: is an embezzler, but they were also protesting others on
Speaker 1: the on the program as well, which was a little
Speaker 1: bit of a surprise to see all their name alongside
Speaker 1: uh Sam Bankman, Freed's, but he was one of the
Speaker 1: people making an appearance there that they were absolutely protesting.
Speaker 1: It was a little bit controversial that he appeared at all.
Speaker 1: He was on this program to appear at the conference
Speaker 1: long before f t x S blow up, and so
Speaker 1: some people were surprised that he got the platform to speak.
Speaker 1: But to their credit, there were some really tough questions
Speaker 1: and SPF tried to wriggle free but didn't really pull
Speaker 1: that off. Well, Anny, to your point, it's just amazing
Speaker 1: that this man keeps talking, and I want to talk
Speaker 1: about where we could see him speak next, because the
Speaker 1: Senate did here held hearing today on the f t
Speaker 1: X collapse. Can we expect to see SPF actually on
Speaker 1: the floor of Congress at any point? I mean, it's
Speaker 1: definitely possible. One thing that came up at the conference was, uh,
Speaker 1: SPF was asked, what do your lawyers make of the
Speaker 1: fact that you're appearing here today virtually? And he kind
Speaker 1: of grumb that they didn't really they weren't too happy
Speaker 1: about it. So he's going about rogue. It would appear, Katie,
Speaker 1: we were glued to our computer screens, as we always are.
Speaker 1: SPF not the only speaker, not at least on this topic.
Speaker 1: Janet Yellen, Treasury Secretary, what she's been talking about. You know,
Speaker 1: I'm sorry, I mean, I'll let me take this. I
Speaker 1: want to talk about Janet Yellen because it's interesting trying
Speaker 1: to map the contagion. Obviously, when we talk about contagion,
Speaker 1: there's been a lot of worries about spill over into
Speaker 1: the broader financial system. But Jannet Yell and she did
Speaker 1: say yesterday that if you look for the silver linings,
Speaker 1: basically the good part of this explosion that it hasn't
Speaker 1: really spilled over into the traditional banking sector, and that
Speaker 1: point was actually echoed by Michael bar today, of course,
Speaker 1: the FED Vice Chair for Supervision. He said that the
Speaker 1: crypto risks to the core financial system, they've been muted
Speaker 1: so far, So if you're looking for systemic sort of
Speaker 1: fears here, they really haven't appeared yet. A lot of
Speaker 1: folks have been going in. Annie. We just heard about
Speaker 1: the kind of yelling perspective. Larry Fink, for example, what
Speaker 1: are these voices saying about the f t X situation. Yeah,
Speaker 1: Larry thinks an interesting one. He was also on the
Speaker 1: program at the deal but conference yesterday and he mentioned
Speaker 1: this is known, but black Rock had some exposure to
Speaker 1: f t X. It had made a twenty four million
Speaker 1: dollar investment through a fund of funds. So Fink was
Speaker 1: saying that he thinks that there's definitely a reckoning to
Speaker 1: come and black Rock is not immune from that, nor
Speaker 1: are any number of vcs that invested in f t X.
Speaker 1: Okay Bloombergs, Katie Growfeld and Annie Massa unraveling the unravellable
Speaker 1: thank you. Meanwhile, Apple is ramping up work on its
Speaker 1: long awaited mixed reality headset. The company changed the name
Speaker 1: of the operating system to x r O S. According
Speaker 1: to sources, that's a nod to extended reality, which encompasses
Speaker 1: both augmented and virtual reality. The headset would be its
Speaker 1: first major new product category since the Apple Watch in
Speaker 1: twenty fifteen. Who had the scoop, of course, bloombergs Mark German,
Speaker 1: who joins US now from Los Angeles, mark, x R
Speaker 1: O S. What's the thinking behind it? Yeah, Ed, thank
Speaker 1: you so much for having me so. Originally, when they've
Speaker 1: been working on this mixed reality operating system, which, like
Speaker 1: you said, blend's a R and v R, they were
Speaker 1: calling it reality O S and r OS, but they've
Speaker 1: shifted now to a term called x R O S.
Speaker 1: It's a bit shorter and it's more translatable across many geographies. Right,
Speaker 1: reality is not a word like iPad or iPhone or
Speaker 1: watch or TV that's very universal. Reality is not a
Speaker 1: universal word, so they needed more of a universal term.
Speaker 1: That's why they're leaning towards x R OS. They've also
Speaker 1: trademarked x R O S in several countries internationally, and
Speaker 1: they're fighting for the trademark in the U S as
Speaker 1: well with an unrelated Chinese company who actually coincidentally filed
Speaker 1: for the x r O S name back in March.
Speaker 1: In real terms, this is a market that Meta dominates
Speaker 1: right to the A A VA headset. What's the timeline
Speaker 1: for Apple to bring this product to market. It's still
Speaker 1: a pretty small market, but technically yes, Meta is the
Speaker 1: dominant player there with their Quest headsets, Sony with their PSVR,
Speaker 1: their PlayStation VR. There's a new one coming U soon
Speaker 1: as well. They're a big player there. HTC Lenovo. Samsung
Speaker 1: has played in a little bit with partnerships with back
Speaker 1: in the day what was called Facebook. In terms of Apple,
Speaker 1: is the year of the Apple headset. It's going to
Speaker 1: be called probably the Reality one or the Reality Pro
Speaker 1: headset run x r os. It's going to have mixed
Speaker 1: reality versions of messages, of maps, of FaceTime, games, video watching, TV,
Speaker 1: plus you name it, live sports streaming in virtual reality
Speaker 1: in a three D like environment. This is going to
Speaker 1: be the hot product of This is really gonna be
Speaker 1: Apple's next big thing. It'll be introduced sometime around the
Speaker 1: middle of the year. Most likely. It's going to be
Speaker 1: quite a friendsive. Apple has been looking at price points
Speaker 1: between two and three thousand dollars, certainly going to be
Speaker 1: the most advanced mixed reality headset on the market today
Speaker 1: really going you know, full throttle on both of those technologies.
Speaker 1: It will have the best cameras on the market for
Speaker 1: a R, but it will also have the best displays
Speaker 1: on the market for VR in The real magic of
Speaker 1: this headset is how Apple is going to be able
Speaker 1: to blend the two in a way that you haven't
Speaker 1: seen Meta or others do so far. Alright, three year
Speaker 1: if the Apple Virtual Reality headset. You heard it here
Speaker 1: first bloom bogs Mark, German, thank you. Black Friday has
Speaker 1: been boom time for by Now Pay Later products. It's
Speaker 1: a financial product that lets you pay in installments, and
Speaker 1: its use has skyrocketed during the holiday shopping extravaganza. Adobe
Speaker 1: says that it's use climbed compared to pre a day,
Speaker 1: and one provider after Pay said it's use actually rose
Speaker 1: compared to the pre holiday season. But does this all
Speaker 1: mean we're actually setting ourselves up for a debt headache
Speaker 1: in the future. They do promise interest free payments only
Speaker 1: free if you follow the rules, so check the small print,
Speaker 1: because if when you're a longer term monthly by Now
Speaker 1: Pay Later plan, you could be up to thirty in
Speaker 1: terms of interest costs. Maybe if you do a late
Speaker 1: fee or have to reschedule a payment, that could cost
Speaker 1: you from one to ten dollars. Ago, roughly eleven of
Speaker 1: all borrowers using by Now pay Later fell behind schedule
Speaker 1: in their payments, and if you're years old, that lumber
Speaker 1: grows to almost h That was, of course, Bloomberg's Caroline
Speaker 1: hide there on by Now Pay Later trends in the
Speaker 1: holiday shopping season. We also took to Twitter to ask
Speaker 1: our audience about this, and while b MPL is gaining ground,
Speaker 1: it does seem, based on our phole, that the credit
Speaker 1: card is still king when it comes to the preferred
Speaker 1: means of spending. I want to bring in Claner CEO
Speaker 1: Sebastian Shimmy Atkovski for more on this. We're going to
Speaker 1: talk about your earnings. But first by Now pay Later.
Speaker 1: I bet you've got a pretty interesting take on the
Speaker 1: clan of you for buy now pay Later. Well sure,
Speaker 1: I mean, first of all, we actually think of ourselves
Speaker 1: as a payment network, a third party payment network, you know,
Speaker 1: VI sell master Card kind of thing, and so of
Speaker 1: our volumes debitum. We're obviously associated with credit, but just
Speaker 1: worth highlighting that fact. With that set, I do think
Speaker 1: by an alpulator is a better formulated credit product than
Speaker 1: a credit card, right, So it doesn't push you into revolving,
Speaker 1: it doesn't. It's not borrowing against all of your spending.
Speaker 1: It's only for single transactions, and it has a fixed
Speaker 1: installment period and it's no interest. Right. So we think
Speaker 1: genuinely speaking, if more consumers ten years from now have
Speaker 1: debit cards in use by alpulated for occasional purchases versus
Speaker 1: everyone having credit cards, we are going to see that's
Speaker 1: a better world. And losses on our portfolios are about
Speaker 1: below crey card industry standards, so I think that's also
Speaker 1: kind of some indications of this being in healthier form
Speaker 1: of credit, but it is still credit, right, let's just
Speaker 1: be here about her. So, Bacily, you just posted earnings
Speaker 1: third quarter earnings two one million dollar operating loss and
Speaker 1: improvement quarter on quarter but year on year, slightly worrying,
Speaker 1: and yet you still have this goal to push to profitability.
Speaker 1: How do you re ensure your reassure your investors that
Speaker 1: you are on that path to profitability? Well, actually, because
Speaker 1: exactly of that, right, So when um, you know last
Speaker 1: year Obviously, investor sentiment looked very differently than it does
Speaker 1: this year, and so everyone was asking us to lean
Speaker 1: entirely into the future and was rewarding us right and
Speaker 1: as much as looking back now, you know, if you
Speaker 1: think about at that point of time the investment trade,
Speaker 1: you grab it was consuming about two and dilution on
Speaker 1: an annual basis, so it wasn't crazy from that perspective.
Speaker 1: But obviously invest sentimis has change. People want you to
Speaker 1: focus on proftability and we have the benefit here Clona.
Speaker 1: We were profitable up until eight nineteen when we started
Speaker 1: investing heavily into the US market, so we know how
Speaker 1: to make money. Our European business makes about a billion
Speaker 1: dollars in gross profit annually UM. So we decided, you know,
Speaker 1: we had to take the top decisions. We actually started
Speaker 1: being a little bit more conservative on our underwriting already
Speaker 1: in January, and then increased that conservatism in May in
Speaker 1: combination with you know, reducing our investment into the long
Speaker 1: term future. And they presented a plan. So obviously a
Speaker 1: year year comparison right now isn't really relevant because the
Speaker 1: plan came into effect in May June, and so far
Speaker 1: already this quarter versus previous quarter. We reduced our are
Speaker 1: you know, quary lost by fort so you know our
Speaker 1: invest is looking at that feel confident, like, Okay. The
Speaker 1: ambition that we set out when we raised money in
Speaker 1: May June to reach profitability again somewhere a month by
Speaker 1: month basis after summer next year is entirely achievable and
Speaker 1: we're on target to to to be back at that.
Speaker 1: The US is an interesting one, isn't it. I think
Speaker 1: you hit thirty one million customers in the US in
Speaker 1: the third quarter, just gone, what did you learn about
Speaker 1: this market? And then what does the expansion look like
Speaker 1: going forward for you? Super super excited by the US.
Speaker 1: I mean in despite the fact that we've been a
Speaker 1: little bit you know, we've tied up credit underwriting due
Speaker 1: to the macro environment. We're also obviously in generally commerced
Speaker 1: right now, everyone is not really comparing apples and apples
Speaker 1: is all apple and bananas because you know, a year
Speaker 1: ago I was in San Francisco and there was nobody
Speaker 1: in the streets. You know, there was impossible to get
Speaker 1: a meeting because there was COVID restrictions all over the place. Right,
Speaker 1: So the comparisons are still not entirely there for you, commus,
Speaker 1: but we're seeing n growth you know, ye versus last
Speaker 1: year and seeing tremendous I mean, I just think more
Speaker 1: and more consumers in the US are dead tired of
Speaker 1: credit cards of you know, just go to Netflix and
Speaker 1: watch cred Card Explains, and you see all the dirty
Speaker 1: tactics that the industry has applied against the best interests
Speaker 1: of its customers. This is a healthy model. You're seeing
Speaker 1: that shift, right, and your seven eight percent in your
Speaker 1: Twitter poll is indicating that. But at the beginning, it's
Speaker 1: still the beginning. You gotta remember in the Nordics, where
Speaker 1: were active plan up processes more than half of all
Speaker 1: e commerce payments, right, So it tells you something on
Speaker 1: how effective and successful this mall can be once it's
Speaker 1: what It takes a little bit time to get there,
Speaker 1: sebasting very quickly. I know you stayed late for us
Speaker 1: out there in Sweden. Layoffs in this industry, layoffs for you, well,
Speaker 1: we we obviously unfortunately have to take that tough decision.
Speaker 1: We did it back in May. It was a little
Speaker 1: bit earlier than a lot of other companies. And and
Speaker 1: but because you know, I have the benefit of the noon.
Speaker 1: This for seventeen years. So I was part of Plana
Speaker 1: back in the financial press of seven and eight and
Speaker 1: and we at least try to. Our ambition was to
Speaker 1: take the tough decision that we unfortunately have to do,
Speaker 1: to the shift investor sentiment and make those changes. So
Speaker 1: we we hope that we've done what we what we
Speaker 1: need to done, and consider if the market Maclaconna environment
Speaker 1: stats the same, we think that we've done what we
Speaker 1: need to do. Okay, klan A CEO, Sebasti and Schimyatkovski,
Speaker 1: thank you. Now. Chip maker TSMC will now offer advanced
Speaker 1: four nanome to chips when it's new twelve billion dollar
Speaker 1: plant in Arizona opens in this after US customers like
Speaker 1: Apple pushed the company to do so. According to sources,
Speaker 1: Bloomberg's Debbie We reported that Bloomberg scoop Debbie, what will
Speaker 1: they be doing them when they open this plant? So,
Speaker 1: like you said, add the t SMC will well announced
Speaker 1: next Tuesday that they will start making an advanced for
Speaker 1: nelometer chips in Arizon now when the plan comes in
Speaker 1: light in two and this is an upgrade from their
Speaker 1: original plan. After our customers, including an Apple, uh A
Speaker 1: and d and and media urged them to make more
Speaker 1: advanced chips in America. So, uh this comes at the
Speaker 1: time that trade tensions and also a supply chain disruptions
Speaker 1: over the past care years have sort of pushed the
Speaker 1: balmuzation to help bring more chip manufacturing back to America
Speaker 1: and to make sure that the more advanced chips are
Speaker 1: made on US oil tabby. My understanding is t SMC
Speaker 1: are gonna be holding a pretty big party when they
Speaker 1: unveil this plan, and that the President will be going.
Speaker 1: What are the details? Yes, So President Biden and Secretary
Speaker 1: of Commerce Jena Ramondo will be attending the so called
Speaker 1: toy in ceremony next two day in Arizona. And this
Speaker 1: ceremony is to celebrate a key construction milestone or for
Speaker 1: t smc s first advanced plant in the US, and
Speaker 1: in attendance will also be uh ND CEO or Lisa
Speaker 1: su and and media chief Jensen Huang and Apple's chief
Speaker 1: executive Tim Cook. Uh is also a schedule to attend
Speaker 1: the event next Tuesday. For nanometer technology, let's dig into
Speaker 1: the technology. Why do we care if it's five nanometer
Speaker 1: or four nanime? So why is that important for t
Speaker 1: SMCS customers. Actually, it is also whatha important for the
Speaker 1: administration because with the fifty Building and Chips Act, the
Speaker 1: administration is hoping that the latest, the most cutting edge
Speaker 1: chips will be made in the US eventually. So right
Speaker 1: now the US is sort of like falling behind Asia
Speaker 1: one generational, two generations at least when it comes to
Speaker 1: a chip manifacting technologies. But the Bandministration in the hope
Speaker 1: to uh prevent future disruptions and to make sure that
Speaker 1: the America will stay ahead in this competition with China
Speaker 1: and the technology FUNCD So eventually, I mean, what kind
Speaker 1: of technology is that the chip makers will be able
Speaker 1: to offer us? Soil is so from uh most importance
Speaker 1: for the government, not and not just for American companies.
Speaker 1: This whole story is about expanding manufacturing capacity in the
Speaker 1: United States right on shoring. Who are some of the
Speaker 1: biggest names in the world of semiconductors that rely on
Speaker 1: t SMC. So companies that rely on t SMC in
Speaker 1: the US include the Apple and d N Media and
Speaker 1: also a Qualcom and Alison Timer Intel Whila it makes
Speaker 1: its own chips. Also, what relies on our t SMC
Speaker 1: on some of its production, so t s m C
Speaker 1: actually will also announced next Tuesday that it is committed
Speaker 1: to build a second plant in Arizona to make even
Speaker 1: more advanced three nelometer chips to help American companies. Okay,
Speaker 1: Bloomberg's deady, we're great reporting, Thank you very much. Time
Speaker 1: now for talking tech layoffs in the tech industry still
Speaker 1: in the headline. Serious XM is the latest to announce
Speaker 1: job cuts in response to faltering revenue growth. Sales at
Speaker 1: Serious grew three point seven in the third quarter, but
Speaker 1: analysts now forecast more modest growth, just one percent in
Speaker 1: the current period. All this comes as consultancy firm Challenger
Speaker 1: Gray and Christmas says. While job cuts are announced across
Speaker 1: the US, the tech sector was hit particularly hard. Of
Speaker 1: the nearly seventy seven thousand jobs that announced to be
Speaker 1: cut in November, around fifty three thousand came from tech
Speaker 1: no surprise therefore, the West Coast was hit especially hard.
Speaker 1: But that's not just in the US. This is a
Speaker 1: global story. Over in Ireland, for instance, tech companies ranging
Speaker 1: from Twitter, Intel, Stripe or Meta have all been acting jobs.
Speaker 1: Such layoffs, of course, have raised concerns with the European
Speaker 1: Commission about tech companies and what they plan to do next,
Speaker 1: particularly those that are caught up in the narrative around
Speaker 1: privacy rule. Definitely one to watch. Go forward now stick
Speaker 1: with us. Coming up on the show, we're going to
Speaker 1: speak to the CFO of Visa. Important spending, spending, spending,
Speaker 1: credit cards. This is not one that you're going to
Speaker 1: want to miss. Why holiday season and we want to
Speaker 1: lend into what's going on that's fast and probably the
Speaker 1: Visa CFO. Coming up next, this is Bloomberg Welcome back
Speaker 1: to Bloomberg Chnology. I'm at loveloaw in San Francisco. Now.
Speaker 1: Online spending is up nine percent this year compared to
Speaker 1: one and Cyber Monday's record eleven point three billion dollars
Speaker 1: in sales per Adobe show signs the consumer remains resilient
Speaker 1: in an economic downturn. I've got just the guests for this.
Speaker 1: Let's discussed with Visa's chief financial officer of Vascent, probably
Speaker 1: Vass and thank you for coming on the program. It's
Speaker 1: good to see you. Your assessment. Where do things stand?
Speaker 1: You know we're entering kind of the backstages of this
Speaker 1: holiday shopping period. What signs of visa seeing about consumer activity. Thanks. Yeah, Yes,
Speaker 1: you use the word resilient, and I'd say that's the
Speaker 1: that's probably the best adjective to use to describe the
Speaker 1: state of the U. S consumer. You know, you've seen
Speaker 1: consumer spending state remarkably stable all year. You know, we
Speaker 1: like to compare things to pandemic to get a clean look,
Speaker 1: and it's amazing how stable spending. Husband, we're about forty
Speaker 1: five forty ahead almost on a day by day, week
Speaker 1: by week basis, And in fact, we just released numbers
Speaker 1: through the twenty one November, and in the first three
Speaker 1: weeks in November, just leading into the holiday period, we
Speaker 1: were up roughly that from up about nine over last year,
Speaker 1: and then holiday week twenty one to seven was roughly
Speaker 1: in line on a ear over year basis, also high
Speaker 1: single digits. We can't yet compared to because Thanksgiving was
Speaker 1: later in so remarkable stability, remarkable resilience. I think that's
Speaker 1: the best way to describe the US consumer right now.
Speaker 1: We were a bit concerned with credit. We're talking out
Speaker 1: of course, about the the impact of higher rates on
Speaker 1: the consumer, and we're also talking a lot about buy now,
Speaker 1: pay later. Do you have any sense of the split
Speaker 1: on consumer spend between debit credit. What risks are the
Speaker 1: consumer taking right now? Well, you know, it's been roughly
Speaker 1: the same most of the year. Debt has been very
Speaker 1: strong relative to even in November, devitt was up almost
Speaker 1: fifty over which is well about the pre COVID trend line.
Speaker 1: So debt has been very resilient and credit has come
Speaker 1: back in a very nice way. Credit was up thirty
Speaker 1: percent or thirty eight percent over twenty nineteen. Both were
Speaker 1: up high single digits over last year. So essentially, you know,
Speaker 1: there's no sense of any consumer stress on the credit side.
Speaker 1: Um debt has real stayed resilient, even has credit has
Speaker 1: come back. All in all, you know, consumer spending has
Speaker 1: stayed generally the same. It's changed a lot below the surface.
Speaker 1: People are buying different things. People have adjusted to inflation
Speaker 1: and so on. People are buying more services than goods,
Speaker 1: more experiences, you know, than products, and there have been
Speaker 1: some changes in what people buy as a result of inflation.
Speaker 1: But the aggregate level of spending, whether it's debit or credit,
Speaker 1: remains very healthy. We maybe don't think of Visa as
Speaker 1: a technology company, but if you think about it, visas
Speaker 1: very much a technology company. My understanding is you have
Speaker 1: a new boss, how is that going? What is what
Speaker 1: is the three version of VISA look like? Well, hopefully
Speaker 1: more of the same. We've had a good run, um.
Speaker 1: You know, we we had a good year in fiscal
Speaker 1: year twenty two. Our revenues were up well over twenty
Speaker 1: our profits are up well over You know, Ryan McNerney,
Speaker 1: our new CEO, has been here a decade. He and
Speaker 1: I I've worked together for a very long time. We're
Speaker 1: all very sad to see our level was beloved within
Speaker 1: the company. UM, but this was all very planned and expected. UM,
Speaker 1: and our strategy remains the same. We have great momentum
Speaker 1: on multiple fronts. We have tremendous growth in our core
Speaker 1: consumer payments business. We have some significant opportunities in two
Speaker 1: new vectors of growth, what we call new flows that
Speaker 1: gets us into new use cases, UM, you know, like
Speaker 1: person to person peter p like cross border remittances, like
Speaker 1: businesses paying consumers, as well as in value added services.
Speaker 1: So I think you should expect to see more to
Speaker 1: the same, and we feel very good about you know
Speaker 1: what's ahead of us and your new boss. Um, you
Speaker 1: should have a mom one of these days and and
Speaker 1: and see for yourself. Ryan is uh, you know, a
Speaker 1: great guy. He is a you know, smart strategic He's
Speaker 1: deeply knowledgeable about the business. He's very well known to
Speaker 1: our clients around the world. Um, I think you know
Speaker 1: we won't miss a beat, and of course Ryan will
Speaker 1: set a new agenda for the future. I've got to
Speaker 1: ask you about f t X and the historic relate
Speaker 1: and ship between Visa and f t X. You had
Speaker 1: a debit card partnership. My understanding is you've severed all
Speaker 1: ties with f t X in any affiliation with sanbanger
Speaker 1: Free and f t X. But could you explain to
Speaker 1: us where that stands to clarify, But also how did
Speaker 1: f t X get to that stage of relationship with
Speaker 1: you given what we know now? Well, you know, we
Speaker 1: we do business with a lot of partners. We do
Speaker 1: the best we can to make sure we understand, you know,
Speaker 1: how they're doing business. Like a lot of other people
Speaker 1: looking at ft X from the outside, we certainly didn't
Speaker 1: have the knowledge we now have about what was going on.
Speaker 1: You know, our viewers, we don't have a position on
Speaker 1: cryptocurrencies per se, whether they're a good thing or a
Speaker 1: bad thing or how much bitcoin should be worth or not.
Speaker 1: Our job is to facilitate what people want to buy,
Speaker 1: as long as it's legal and as long as it's
Speaker 1: in compliance with the regulation, and all indications were that
Speaker 1: fd X was in compliance and all regulations. Buying bitcoin
Speaker 1: or other cryptocurrencies is legal. We will enable people to
Speaker 1: do things that are both legal and in compliance and regulations. Clearly,
Speaker 1: we are as surprised as everybody else has been about
Speaker 1: what was really going on in ft X. We no
Speaker 1: longer have a relationship with them. We really had no
Speaker 1: financial exposure to them. We were primarily enabling people to
Speaker 1: buy and sell uh, you know, cryptocurrencies if they wanted to,
Speaker 1: you know, buy things on ft X, much alike we
Speaker 1: would do with any other exchange. UM. In any case,
Speaker 1: you know, clearly this has been an eye opener for everybody.
Speaker 1: We will all step up our diligence uh and and
Speaker 1: hopefully there will be further regular tary actions that make
Speaker 1: this all safer for all involved. Quickly, bass and broadly,
Speaker 1: how has the crypto contagion or what we've seen in
Speaker 1: the markets impacted visa well, our exposure to cryptos rather limited. Um,
Speaker 1: you know, we have more sleep facilitators for people wanting
Speaker 1: to buy cryptocurrencies, and that's a small part of our business. Uh.
Speaker 1: You know, we have you know, some amount of card
Speaker 1: issuance by crypto partners, some of whom may not survive,
Speaker 1: some of whom may may slow down some of their activities.
Speaker 1: So it might slow things down in general. But all
Speaker 1: in all, our exposure directly to the whole crypto I
Speaker 1: guess economy is fairly limited. Now. We are long term,
Speaker 1: you know, remain of the view that blockchain is a
Speaker 1: significant technology. There will be things happening. We will remain
Speaker 1: engaged with blockchains, with stable coins like us DC and others.
Speaker 1: Or we will obviously monitor the situation very closely, but
Speaker 1: you know, I wouldn't say it has much impact on
Speaker 1: us UM at this point in time. Visus CFO best
Speaker 1: and probably thank you very much. Thank you. Meanwhile, shares
Speaker 1: of Salesforce down Thursday after the company gave and now look,
Speaker 1: the analyst says, reflects a weak economic environment. It also
Speaker 1: announced the exit of co CEO Brett Taylor next month,
Speaker 1: leaving Mark Benioff at the helm. Blame Bug's Brady Force
Speaker 1: covers sales Force. Brody A pretty simple question to start.
Speaker 1: This is the second time a co CEO has left
Speaker 1: Sales Force in recent history. Why that's the million dollar
Speaker 1: question right now? Right, I mean, Mirke Berniop has been
Speaker 1: in control of this company for a very long time.
Speaker 1: There have been multiple moments where it appears that he
Speaker 1: had found his successor. He has had multiple mentees that
Speaker 1: were very public, very personal, um, and they have gone.
Speaker 1: I mean, it's difficult to run a company, it's difficult
Speaker 1: to find a successor, but specifically here it's been an issue, right,
Speaker 1: I mean, this is the second co CEO to depart
Speaker 1: in about three years. UM. So right now there are
Speaker 1: a lot of questions about what this means for you know,
Speaker 1: a company that looking for a successor eventually, not this
Speaker 1: second but in the in the future. What's interesting, I
Speaker 1: guess is now the forward looking question what does this
Speaker 1: mean for Salesforce and what does it mean for Benniff.
Speaker 1: Does Mark Benioff become soul CEO again? For example? Currently, Yeah,
Speaker 1: the planet is that it becomes Soul CEO. A lot
Speaker 1: of folks have asked him, so do you now look
Speaker 1: for another successor? He didn't quite answer that question directly,
Speaker 1: But what we do know this comes at a difficult
Speaker 1: time for Salesforce. I mean, their growth is at the
Speaker 1: slowest it's been since I p o UM. They're under
Speaker 1: pressure from activist investors to improve profitability, and they're experiencing
Speaker 1: the same difficult market everybody in the industry is. And
Speaker 1: I mean Bratt was seen as a very even hand,
Speaker 1: someone that kind of helped the company be more efficient,
Speaker 1: kind of operate in a good way, and so losing
Speaker 1: him it's it's a bad time. Most people would say,
Speaker 1: all right, blame bugs, Brady Forward, thank you. This is
Speaker 1: a setback for crypto. But there's an inevitability that digital
Speaker 1: assets are gonna be part of our future, and we're
Speaker 1: going to make that better. We are going to lean
Speaker 1: into the opportunity set that we see. There are a
Speaker 1: lot of cheap assets right now, there'll be a lot
Speaker 1: of distressed assets. We're going to build for where they
Speaker 1: think we think the puck will be in two years.
Speaker 1: That was Galaxy Digital's Mike Novegrats earlier on bloom Doug
Speaker 1: TV as Sam Bank and Freed's work to create trust
Speaker 1: in the crypto ecosystem has been hurt for f t X,
Speaker 1: but also for his rivals let's bring in d Y
Speaker 1: d X founder and CEO Antonio Giuliano, your derivatives exchange,
Speaker 1: so its activity triple in the wake of the f
Speaker 1: t X implosion, right, I guess the question to start
Speaker 1: with is this people shorting crypto? What is the behavior there?
Speaker 1: So I think the biggest thing is somewhat of a
Speaker 1: migration from centralized exchanges like an apt x to decentralized
Speaker 1: exchanges like d I d X, unit slap and others.
Speaker 1: At d I d X, we're proud to be one
Speaker 1: of the leading decentralized exchanges. Decentralized exchanges have become a
Speaker 1: pretty significant part of the ecosystem over the past few years.
Speaker 1: Currently over a billion dollars a day is traded on
Speaker 1: d I d X. That's still a relatively small piece
Speaker 1: of the pie in terms of the crypto markets overall.
Speaker 1: But d I d X and other decentralized exchanges there's
Speaker 1: something that's really new and I think have been growing
Speaker 1: a lot in the past couple of years, and I
Speaker 1: think what's recently happened with f t X just underscores
Speaker 1: the need for what we're building. I think volumes have
Speaker 1: been growing immensely in your space, right, but it's still
Speaker 1: a frank a fraction of what's being put through centralized platforms.
Speaker 1: When does that equation change, I think it's going to
Speaker 1: take a long time. UM. Right now, decentralized exchanges like
Speaker 1: d I, d X, unit, SLAP and others are roughly
Speaker 1: five percent of the fire market when it comes to
Speaker 1: overall crypto trading volume. And I think the thing we
Speaker 1: have to remember about decentralized exchanges is they're very new.
Speaker 1: They were just invented about five years ago or so,
Speaker 1: and only in the past two years or so have
Speaker 1: they become a significant portion of the crypto volume at all.
Speaker 1: I think if you're asking the question, when do you
Speaker 1: decentralized exchanges become bigger in terms of trading volume than
Speaker 1: centralized exchanges on crypto, I think it's certainly a longer
Speaker 1: term play. I like to tell my team UM and
Speaker 1: everyone else, I think it will be about five to
Speaker 1: ten years from now, UM, But it's certainly something that
Speaker 1: we're building towards, and I think it's certainly in the
Speaker 1: cars for the future. We started this segment talking about
Speaker 1: Sam Bankman Freed and how he's been speaking publicly. You know,
Speaker 1: he was trying to build trust in f t X,
Speaker 1: that trust is damaged. I guess my question is you're
Speaker 1: seeing more business, right, but why should anyone trust you
Speaker 1: any more than trusting Sam Bankman Freed. I think the
Speaker 1: beauty of it is you don't have to trust me um,
Speaker 1: you can just trust the code. Really, how d Y
Speaker 1: d X and other decentralized exchanges work is they're based
Speaker 1: on code, not humans or intermediaries, and that's kind of
Speaker 1: the magic of what we're building. You can look at
Speaker 1: our open source smart contracts on ether scan, you can
Speaker 1: read our audit reports, and you only have to trust those.
Speaker 1: You don't have to trust me um. I don't even
Speaker 1: have access to any of the funds, So something like
Speaker 1: what happened on ft X is literally impossible to happen
Speaker 1: on the well functioning decentralized exchange like d I d X.
Speaker 1: One of the reasons that defile more specifically decentralized exchanges
Speaker 1: a kind of not more mainstream for bigger players is
Speaker 1: because of the compliance risks. Right, there's always a risk
Speaker 1: of potential money laundering. How do you circumvent that issue?
Speaker 1: So we run automated compliance checks on the protocol using
Speaker 1: a lot of data that exists on the blockchain, and
Speaker 1: we do this in partnership with third party vendor UM.
Speaker 1: And I think the thing that's interesting about cryptocurrencies is
Speaker 1: they're both in some ways more private and in some
Speaker 1: ways more public than traditional finance. One of the beauties
Speaker 1: of d I d X and a d centralized exchanges
Speaker 1: is that everything that's going on is transparent, so you
Speaker 1: can see the history of funds that every address has
Speaker 1: used UM, and that's all data that can go into
Speaker 1: creating a robust compliance solution, and that's one of the
Speaker 1: things we're also pushing forwards. All right, d Y d
Speaker 1: X founder and CEO Antonio Giuliano, thank you. Now coming up,
Speaker 1: Elon Musk's lofty promises with human implant technology goes viral.
Speaker 1: This is Bloomberg now going viral today. A big promise
Speaker 1: as well hopes from Elon Musk, set out at Wednesday's
Speaker 1: newer Link event. Musk says neural Links ready to start
Speaker 1: putting its brain implant into human patients within six months.
Speaker 1: The brain computer interface aims are allowing a person with
Speaker 1: a debilitating condition to communicate via their thoughts. Musque said
Speaker 1: that Neuralink is also developing implants that can go into
Speaker 1: the spinal cord to possibly restore movement from paralysis. Bloomberg
Speaker 1: Sarah McBride covered the event for US. The event exciting
Speaker 1: a classic Elon Musk on stage affair. That's a good one.
Speaker 1: What were the big takeaways? Well, for me, I thought
Speaker 1: it was very interesting that while the rest of us
Speaker 1: are still trying to just wrap our minds around implants
Speaker 1: in the brain, he's already thinking about upgrades. He spent
Speaker 1: a lot of time talking about how you wouldn't want
Speaker 1: just an iPhone one if you could have the latest version,
Speaker 1: and they're already thinking about if the first one doesn't
Speaker 1: work as well, get another one, get a third, get
Speaker 1: a fourth. I thought that was pretty We should point
Speaker 1: out I guess that Elon Musk has a track record
Speaker 1: of stating timelines and goals and predicted dates that he
Speaker 1: doesn't meet. And actually, in the case of NEURALNK, that's
Speaker 1: already true. Yes, it is. In fact, when he first
Speaker 1: started talking about NEURALNK, he thought it would be in
Speaker 1: humans by now. He gave an interview in two thousand
Speaker 1: seventeen and said that by one would be in patients.
Speaker 1: You know, wide adoption, and so that deadline has obviously slept,
Speaker 1: and each year almost he gives another deadline that slept,
Speaker 1: which is probably motivating to his staff. There was a
Speaker 1: demonstration of a monkey essentially that was the recipient of
Speaker 1: a neuralink implant, and they sort of demonstrated the use
Speaker 1: of thoughts to translate that thought into a digital signal,
Speaker 1: and Uh, it's astounding what they can do. The technology
Speaker 1: seems to be there. The biggest block to it being
Speaker 1: real appears to be the FDA. Let's say that's fair
Speaker 1: because other similar less advanced implants have gone into people
Speaker 1: in the past to treat things like epilepsy and Parkinson's.
Speaker 1: The FDA obviously really wants to make sure that these
Speaker 1: are safe, that they won't degrade over time in the brains.
Speaker 1: So they have a lot of questions and he seemed
Speaker 1: realistic about that. He did say the FDA had asked
Speaker 1: some tough questions and that talks were progressing well. Yes,
Speaker 1: is neural link on its own in this field? I
Speaker 1: mean other people trying to do something similar right. Actually,
Speaker 1: there are a lot of companies that are working on
Speaker 1: different variations of this technology, including many founders from Neuralink
Speaker 1: who have gone on to start I think they've left
Speaker 1: the company, and exactly there was a big founding team.
Speaker 1: Since the company several years old, many of those people
Speaker 1: have moved on. They've started different companies. One founder, Max
Speaker 1: hodak as this company Science that relies on the optical
Speaker 1: nerve for implants. There's another one, Precision Neuroscience in New York.
Speaker 1: And then there are some that don't have ties to
Speaker 1: neural links, such as synchrome, which uses your blood vessels together.
Speaker 1: And am I right in thinking very quickly? Elon Musk
Speaker 1: said that he would get an implant himself. He said
Speaker 1: that he also said he would be happy to put
Speaker 1: one in one of his children. Okay, interesting, Well, this
Speaker 1: is also the man that said he wouldn't get on
Speaker 1: a SpaceX rocket until he was sure that he wouldn't
Speaker 1: die on impact on his way to Mars. Bloomberg Sarah McBride,
Speaker 1: thank you very much. That does it for this edition
Speaker 1: of Bloomberg Technology. Don't forget to check out our podcasts.
Speaker 1: You can find it on the terminal as well as
Speaker 1: online on Apple, Spotify and also on my Heart. It
Speaker 1: has been a crazy week so far in the markets.
Speaker 1: In crypto for Apple, for Elon Musk and his many,
Speaker 1: many companies. Going into the end of the week, we're
Speaker 1: expecting some pretty big news out of Twitter on progress
Speaker 1: with verification. Is Twitter Blue coming? We're not quite sure,
Speaker 1: but tune in either way. There's where you can find
Speaker 1: the podcast, and of course you can find us on
Speaker 1: all of our fantastic social media platforms, from here in
Speaker 1: San Francisco to New York to around the world. This
Speaker 1: is Bloomberg Technology. This is Bloomberg