WEBVTT - Apollo's Multibillion Intel Offer, Alex Karp and Wall Street 0:00:01.400 --> 0:00:05.720 From Marhard where Innovation, Money and power Collie in Silicon 0:00:05.800 --> 0:00:06.720 Vallet NBN. 0:00:07.040 --> 0:00:10.560 This is Bloomberg Technology with Caroline Hyde and Ed. 0:00:10.600 --> 0:00:26.640 Ludlove live from New York and San Francisco. This is 0:00:26.680 --> 0:00:30.880 Bloomberg Technology Coming up. Apollo offers a multi billion dollar 0:00:30.920 --> 0:00:34.559 investment in Intel after Qualcomm's takeover approach. 0:00:34.640 --> 0:00:36.440 We discuss the reports. 0:00:36.920 --> 0:00:40.680 More US curbs and more potential trouble for China evs, and. 0:00:40.680 --> 0:00:42.880 A deep dive into the CEO Palenteer and his love 0:00:42.880 --> 0:00:45.040 hate relationship with Wall Street as he enters the S 0:00:45.080 --> 0:00:47.680 and P five hundred. For first, we go straight to 0:00:47.880 --> 0:00:49.960 the key, chip and M and a story ed. 0:00:51.320 --> 0:00:54.360 Apollo is offered to make a multi billion dollar investment 0:00:54.400 --> 0:00:58.680 in Intel, according to sources, with the asset manager indicating 0:00:58.680 --> 0:01:01.120 it would be willing to make an ect like investment 0:01:01.200 --> 0:01:04.000 of as much as five billion dollars. According to one 0:01:04.000 --> 0:01:07.320 of the sources Bloomberg spoke to that follows shock news 0:01:07.360 --> 0:01:10.680 on Friday that Intel have been approached by Qualcomm in 0:01:10.760 --> 0:01:14.839 recent days about a quote friendly takeover. This following Intel 0:01:14.840 --> 0:01:18.760 announcing its own strategic rethink just one week ago. Bloomberg's 0:01:18.760 --> 0:01:21.759 Ian King joins us here in San Francisco. Let's start 0:01:21.760 --> 0:01:26.280 with the latest, which is Apollo considering an equity like investment. 0:01:26.280 --> 0:01:28.880 What do we know about that? And why would Intel 0:01:28.959 --> 0:01:31.560 want capital from an asset manager like Apollo? 0:01:31.720 --> 0:01:34.000 Yeah, I mean Apollo has already we need to point 0:01:34.000 --> 0:01:38.280 out apollow has already invested partially in Intel, taking a 0:01:38.319 --> 0:01:42.120 part of a stake in a factory in Ireland. So 0:01:42.760 --> 0:01:45.600 what Intel has been doing is is this smart capital 0:01:45.959 --> 0:01:48.440 strategy to either that it calls it, which is basically 0:01:48.480 --> 0:01:50.880 bringing in money as co investments to kind of like 0:01:50.960 --> 0:01:53.400 bridge loans for a lot of these investments that it's 0:01:53.440 --> 0:01:56.760 making to build this factory network. So this might be 0:01:56.880 --> 0:01:59.160 kind of an extension of that and an a broader 0:01:59.240 --> 0:02:01.880 sense to sort of sponsor this general turnaround of the. 0:02:01.840 --> 0:02:06.160 Company, a turnaround that has eroded its market capitalization and 0:02:06.200 --> 0:02:09.440 made it a potential target for someone like a Qualcomm 0:02:09.560 --> 0:02:12.960 in extraordinary reporting coming over the weekend, and it would 0:02:12.960 --> 0:02:17.040 be a massive tech deal, it would. 0:02:17.080 --> 0:02:20.200 And you know, there are so many caveats that need 0:02:20.280 --> 0:02:23.320 to be thrown into the mix here. What exactly does 0:02:23.400 --> 0:02:27.920 qual does Qualcom want the whole of Intel? Is it 0:02:27.960 --> 0:02:31.840 an actual firm offer? Is anything on the table yet? 0:02:31.960 --> 0:02:34.280 A lot of these things are unknowns at this point, 0:02:34.800 --> 0:02:39.560 and you've seen already a reaction towards this potential alliance 0:02:39.639 --> 0:02:42.880 saying that regulators would never allow this to happen. It 0:02:42.919 --> 0:02:46.120 doesn't make sense in terms of what Qualcom does, but 0:02:46.800 --> 0:02:49.280 as far as we understand, there is at least a 0:02:49.320 --> 0:02:51.320 consideration of something going on here. 0:02:51.680 --> 0:02:54.000 We called it a friendly takeover offer, which I think 0:02:54.000 --> 0:02:57.079 with time we'll learn about. There's a technology story which 0:02:57.160 --> 0:03:00.800 Qualcomm has tried to diversify away from it its legacy business, 0:03:00.800 --> 0:03:03.640 which is smartphone handsets, and it's made some progress in 0:03:03.680 --> 0:03:07.280 the PC market on on based processors. So then you 0:03:07.320 --> 0:03:09.720 look at what would they gain on the product side 0:03:09.760 --> 0:03:14.560 of going after Intel, which a xady six based processor, 0:03:15.400 --> 0:03:19.120 and forget the fab part for one minute. Explain explain 0:03:19.200 --> 0:03:20.880 that technology field to us. 0:03:21.040 --> 0:03:23.560 Yeah, I mean Intel's technology, as we know, has been 0:03:23.600 --> 0:03:27.800 dominant in PCs pretty much since the PC came into existence. 0:03:28.240 --> 0:03:30.720 Quadcom has over the last few years tried to get 0:03:30.760 --> 0:03:34.119 into that with its smartphone technology. Hasn't really happened yet, 0:03:34.120 --> 0:03:37.240 but more recently it's showing more promise, it's showing signs 0:03:37.240 --> 0:03:39.680 of actually making a dent in that. If it were 0:03:39.680 --> 0:03:42.760 to take on Intel's xady six business. It would have 0:03:42.840 --> 0:03:46.280 actively been throwing that business away. There would be mixed signs, 0:03:46.320 --> 0:03:49.360 what's it going to do? Which technology is a fundamental 0:03:49.560 --> 0:03:51.400 one that's going to go forward? Lots and lots of 0:03:51.440 --> 0:03:54.480 questions there, but certainly would be getting hold of still 0:03:54.520 --> 0:03:55.960 the dominant brand in PCs. 0:03:56.680 --> 0:04:00.560 In King reporting this throughout, and we must add companies 0:04:00.560 --> 0:04:02.880 thus far have not commented to us about the story. 0:04:03.520 --> 0:04:06.520 Let's go now to an investor at least in Qualcom. 0:04:06.600 --> 0:04:10.240 Johan Feeney, partner and portfolio manager at Advisors Capital Management. 0:04:10.600 --> 0:04:13.920 You hold shares in Qualcom. If it could possibly go 0:04:14.040 --> 0:04:17.200 through regulators, would it be a good deal from your perspective? 0:04:18.320 --> 0:04:21.080 Well, you know, Carolina, I think, if anything, the interest 0:04:21.160 --> 0:04:23.440 that Qualcom might have an Intel would be strictly on 0:04:23.480 --> 0:04:24.719 the design side, on. 0:04:25.080 --> 0:04:26.919 The chip designs for PCs. 0:04:27.839 --> 0:04:30.799 That's still a huge market and just Intel and AMD 0:04:30.920 --> 0:04:34.599 or players there, and it's likely to remain the dominant 0:04:35.000 --> 0:04:36.520 form of technology. 0:04:36.000 --> 0:04:37.200 For the PCCPU. 0:04:37.760 --> 0:04:39.839 So I mean, I could see Qualcom being interested, but 0:04:39.839 --> 0:04:41.760 I would think that the regulators would have a hard 0:04:41.800 --> 0:04:44.760 time because as Ian just pointed out, it would suggest 0:04:44.800 --> 0:04:47.359 that Qualcom would be ready to throw away its approach 0:04:47.440 --> 0:04:49.960 to PC chips that it's arm based, and that would 0:04:49.960 --> 0:04:51.200 definitely reduce competition. 0:04:52.120 --> 0:04:54.600 But on the other hand, for Intel, if something like 0:04:54.680 --> 0:04:56.520 Qualcom were to buy the design side. 0:04:56.320 --> 0:04:58.800 It would give into a huge infusion of capital which 0:04:58.800 --> 0:05:02.120 it desperately needs to shore up the manufacturing side, to 0:05:02.160 --> 0:05:06.000 give Intel the time it needs to fix the manufacturing process, 0:05:06.240 --> 0:05:08.960 and potentially, and this is a stretch I think, for 0:05:09.120 --> 0:05:11.640 Intel to get into the foundry business, which it ultimately 0:05:11.680 --> 0:05:13.560 would like to do, to diversify. 0:05:14.160 --> 0:05:17.799 On that fab business. That's why the relationship already lies 0:05:18.080 --> 0:05:22.040 with Apollo that they've gone in with a deal in Ireland. 0:05:22.720 --> 0:05:25.080 What do you think about a capsule infusion, What sort 0:05:25.120 --> 0:05:27.160 of form you'd like that to take if we did 0:05:27.160 --> 0:05:28.640 get one from Apollo into Intel. 0:05:30.279 --> 0:05:33.400 Yeah, I mean five billion dollars would help. It's just 0:05:33.480 --> 0:05:36.680 going to take patients of investors though, because five billion, 0:05:36.720 --> 0:05:38.520 when you look at the cost of a new fab 0:05:39.279 --> 0:05:41.880 is really almost a drop in the bucket. So Intel 0:05:41.920 --> 0:05:44.599 does need a lot more capital to give it the 0:05:44.640 --> 0:05:47.880 time it needs to fix the manufacturing recipe, which has 0:05:47.960 --> 0:05:50.680 really suffered over the last five years, and then to 0:05:50.760 --> 0:05:53.120 be able to build the kind of libraries. It would 0:05:53.200 --> 0:05:56.400 need to become a foundry player like TSMC, and we 0:05:56.480 --> 0:05:59.000 know Intel has tried in the past and failed under 0:05:59.080 --> 0:06:02.880 previous leadership. Now Pat Galsinger has more experience and you know, 0:06:02.920 --> 0:06:05.280 I think as the right person to try to make 0:06:05.320 --> 0:06:05.800 this happen. 0:06:05.839 --> 0:06:08.680 But five billion will help, But it really is. 0:06:08.640 --> 0:06:12.080 Going to take patient investors, potentially more infusion of capital 0:06:12.200 --> 0:06:13.039 get that job done. 0:06:14.600 --> 0:06:17.520 As he points it out, Juan Apollo has an existing 0:06:17.560 --> 0:06:21.119 relationship with Intel, and when we spoke to them earlier 0:06:21.120 --> 0:06:23.480 in the summer, they did hint that there could be 0:06:23.480 --> 0:06:24.320 an expansion of that. 0:06:24.400 --> 0:06:25.799 Listen to this clip from June. 0:06:26.720 --> 0:06:30.240 These type of blue chip large cap companies, they're not 0:06:30.320 --> 0:06:33.080 talking about one hundred million or five hundred million, They're 0:06:33.120 --> 0:06:36.200 talking two billion, five billion, ten billion plus, And so 0:06:36.279 --> 0:06:39.960 the ability to really come up with those creative solutions 0:06:40.160 --> 0:06:42.800 in scale is really really critical. But I think you're 0:06:42.800 --> 0:06:46.599 going to see more and more of this from absolutely 0:06:46.680 --> 0:06:49.800 more from Apollow, but in general, just the need for 0:06:49.839 --> 0:06:51.640 this type of capital is insatiable. 0:06:53.760 --> 0:06:56.520 So based on that from Apollo co President Scott Kleiman, 0:06:56.640 --> 0:06:59.200 not such a surprise that this has come up. On 0:06:59.240 --> 0:07:02.000 the other hand, this is a firm that started as 0:07:02.120 --> 0:07:05.240 a distressed investor in the nineties. When you see a 0:07:05.320 --> 0:07:08.320 name like Apollo circling Intel, given the news headlines of 0:07:08.400 --> 0:07:10.600 late what does that make you think about. 0:07:11.880 --> 0:07:15.120 Well, you think about the difficult situation Intel is in 0:07:15.200 --> 0:07:17.360 and something like Apollo coming in to help. 0:07:17.400 --> 0:07:19.680 It reminds me of how AMD's. 0:07:19.200 --> 0:07:23.400 Manufacturing site was ultimately rescued through investments by Abu Dhabi 0:07:23.440 --> 0:07:27.160 and silver Lake, and that allowed AMD to spin off 0:07:27.200 --> 0:07:29.680 manufacturing and really be able to focus its attentions on 0:07:29.720 --> 0:07:32.400 the design side, which ultimately led to its current successes. 0:07:32.840 --> 0:07:34.760 So, you know, we could see more. 0:07:34.680 --> 0:07:37.320 Of private capital coming into Intel, and that would really help. 0:07:37.360 --> 0:07:40.600 There's a huge potential there obviously, but they have some 0:07:40.720 --> 0:07:43.440 work to do to fix that manufacturing recipe. So I 0:07:43.520 --> 0:07:46.560 think it's a positive sign for the ultimate recovery of 0:07:46.600 --> 0:07:49.560 Intel that we're seeing this kind of investment being potentially 0:07:49.600 --> 0:07:52.480 made by Apollo, and I suspect it wouldn't surprise me 0:07:52.560 --> 0:07:53.840 if others came in as well. 0:07:55.600 --> 0:07:59.280 Joanne at a dinner the other night with another semiconductor 0:07:59.400 --> 0:08:04.440 CEO was not Intel. This person said that Intel is 0:08:04.480 --> 0:08:08.400 too big to fail in the context of its footprint 0:08:08.400 --> 0:08:12.240 in the United States, is that sort of territory we're 0:08:12.240 --> 0:08:13.280 talking about right now. 0:08:15.200 --> 0:08:17.160 You know, that's an interesting take, and I think that's 0:08:17.160 --> 0:08:19.200 a fair way to look at it. Clearly, you know, 0:08:19.240 --> 0:08:22.440 the US government is interested in making sure that we 0:08:22.560 --> 0:08:26.000 have manufacturing capabilities for the most advanced chips in this 0:08:26.160 --> 0:08:30.400 country for obvious reasons. The vulnerability to the political up people, 0:08:30.800 --> 0:08:32.480 you know, that might be possible. 0:08:32.120 --> 0:08:34.440 Down the line. So I think that that's a fair 0:08:35.160 --> 0:08:35.880 view of things. 0:08:35.880 --> 0:08:38.000 And so that's why I think Intel has a better 0:08:38.120 --> 0:08:40.640 chance of recovering then if we weren't in this kind 0:08:40.679 --> 0:08:43.640 of a world where geopolitical risks were becoming more prominent. 0:08:44.400 --> 0:08:46.640 And of course this is why it's American names that 0:08:47.240 --> 0:08:51.640 I an American company, giants such as Intel. Meanwhile, we 0:08:51.920 --> 0:08:55.440 think about who else could potentially have skin in the game. 0:08:55.480 --> 0:08:58.120 There was a report that Broadcom will not be following 0:08:58.600 --> 0:09:02.320 Qualcom in terms of eyeing a bid. What of other 0:09:02.400 --> 0:09:05.280 companies you think could look at parts of Intel? 0:09:07.080 --> 0:09:10.120 Yeah, you know, Caroline, I think when you look at 0:09:10.120 --> 0:09:13.000 a company like Broadcom, they've been really careful about the 0:09:13.040 --> 0:09:16.360 sorts of acquisitions they make. Companies that already have a 0:09:16.440 --> 0:09:20.520 leadership position that are succeeding that perhaps need some fine 0:09:20.559 --> 0:09:23.520 tuning where they can extract, you know, remove costs and 0:09:23.559 --> 0:09:26.240 make them even more profitable. So I can see why 0:09:26.240 --> 0:09:29.119 Broadcom would not be interested in this kind of a situation. 0:09:29.520 --> 0:09:30.480 You know, other companies. 0:09:30.679 --> 0:09:33.760 I think you just have to think about the regulatory challenges. Yes, 0:09:33.800 --> 0:09:36.240 it has to be an American company. I think Qualcomm 0:09:36.320 --> 0:09:39.840 is probably the most likely suitor. But again I think 0:09:40.000 --> 0:09:42.240 just for the design side. I think the manufacturing side 0:09:42.280 --> 0:09:45.000 would probably in this kind of a situation be spun off, 0:09:45.440 --> 0:09:48.559 and that cash infusion from a Qualcom could really help 0:09:49.360 --> 0:09:52.040 lead to more success down the line for Intel. 0:09:52.840 --> 0:09:56.560 And again, neither Intel nor Qualcom has commented on any 0:09:56.600 --> 0:09:59.199 of the reporting at this stage. Joann Feenie, partner of 0:09:59.240 --> 0:10:02.880 portfolio manager Duradvisors Capital Management, someone that's covered this industry 0:10:02.880 --> 0:10:05.640 for a very long time as well. There's another story 0:10:05.679 --> 0:10:10.040 re tracking meanwhile, TSMC and sam Sum have discussed building 0:10:10.040 --> 0:10:12.959 major new factories in the UAE in the coming years 0:10:13.160 --> 0:10:16.920 to help satisfy soaring demand for AI computing. That's according 0:10:16.960 --> 0:10:19.800 to a report in the Wall Street Journal, citing sources. 0:10:20.080 --> 0:10:22.720 The journal says the discussions are in early phases and 0:10:22.760 --> 0:10:25.520 the projects might not pan out, given the array of 0:10:25.600 --> 0:10:28.400 technical and other hurdles that they face. 0:10:28.559 --> 0:10:32.520 Caroen so much coming up ed for one, more curbs 0:10:32.559 --> 0:10:35.040 could be on the way for China's auto tech. What 0:10:35.120 --> 0:10:38.360 this means the EV sector and well beyond that. Meanwhile, 0:10:38.400 --> 0:10:40.040 look we've got to just check in on these markets 0:10:40.040 --> 0:10:42.400 more broadly. We are having another positive day after two 0:10:42.400 --> 0:10:44.960 positive weeks on the now's that one hundred were opera 0:10:44.960 --> 0:10:47.360 only about a quarter of percent, But we know some 0:10:47.440 --> 0:10:49.560 of the chip naykers that are on the move today. 0:10:50.280 --> 0:11:03.800 This is Bloomberg technology. Now more potential trouble for China evs. 0:11:04.080 --> 0:11:07.000 US officials are set to unveil a proposal to bam 0:11:07.120 --> 0:11:11.239 the use, the importing, the testing of Chinese and Russian technology, 0:11:11.240 --> 0:11:15.160 in fact in automated driving and vehicle communication systems. It's 0:11:15.160 --> 0:11:18.120 according to sources or please to welcome very late from 0:11:18.120 --> 0:11:20.600 Hong Kong one Danny Lee who has been reporting this 0:11:20.760 --> 0:11:23.640 out and it feels as though this is getting ever 0:11:23.720 --> 0:11:27.200 more expansive, not just the hardware but the software as well. 0:11:28.720 --> 0:11:32.000 Yeah. Absolutely, I mean after we saw this quadrupling on 0:11:32.120 --> 0:11:35.280 tariffs on Chinese evs to over one hundred percent, now 0:11:35.400 --> 0:11:39.280 is the targeting of the China and Russian made kind 0:11:39.280 --> 0:11:43.839 of software and hardware that's tied to these kind of connected, autonomous, 0:11:43.920 --> 0:11:47.040 driverless kind of systems. We will hear more from US 0:11:47.080 --> 0:11:49.480 officials and particularly the Commerce Department, But all of this 0:11:49.559 --> 0:11:52.480 is just to try and defend and strength in the 0:11:52.600 --> 0:11:55.960 US auto industry, which has really struggled against the Chinese 0:11:55.960 --> 0:11:58.280 EV makers. And it's just fascinating when you look at 0:11:58.360 --> 0:12:01.040 China's biggest EV maker right now. Now it has a 0:12:01.040 --> 0:12:05.120 market cap that is combining the size of Forward and 0:12:05.240 --> 0:12:08.240 General Motors, and so you see just how much in 0:12:08.320 --> 0:12:11.440 terms of leaps and bounds these Chinese eed makers have 0:12:11.520 --> 0:12:13.760 come on, and so how the US have had to 0:12:13.800 --> 0:12:16.360 try and kind of step in here. And you know, 0:12:16.440 --> 0:12:18.880 when we do see the US taking action, there is 0:12:19.000 --> 0:12:23.040 legitimate concern when it comes to data privacy, data management, 0:12:23.160 --> 0:12:26.679 transferring of data, and also hacking. But this really does 0:12:26.720 --> 0:12:29.840 set the stage for more kind of tensions in this 0:12:29.960 --> 0:12:33.439 kind of strained US China geopolitical relationship. 0:12:34.679 --> 0:12:38.480 This is interesting because for our Bliembo technology audience around 0:12:38.520 --> 0:12:42.000 the world, tariffs on a physical product like an electric 0:12:42.080 --> 0:12:45.720 vehicle are hard to are easier to understand. What's harder 0:12:45.720 --> 0:12:49.320 to understand, Danny is what is a software curve. What 0:12:49.360 --> 0:12:50.840 would that mechanism look like. 0:12:52.559 --> 0:12:55.960 Yeah, I think it's more the software that's contained inside 0:12:56.600 --> 0:13:01.120 some of these products and making these systems runs particularly 0:13:01.120 --> 0:13:04.120 around the cars and ticket as we see a bigger 0:13:04.160 --> 0:13:10.200 proliferation of electric vehicles, for example, which are preinstalled Chinese 0:13:10.200 --> 0:13:14.440 software and particularly hardware, even for example, Lieder a key 0:13:14.520 --> 0:13:19.760 part of this autonomous drivers systems. And so we are 0:13:19.800 --> 0:13:22.440 seeing that, you know, there is this this kind of 0:13:22.480 --> 0:13:25.520 reaction that we will wait and see for what China 0:13:25.679 --> 0:13:28.720 says and once these plans are laid out by Washington. 0:13:29.559 --> 0:13:32.320 But it's interesting that, you know, the first time we 0:13:32.400 --> 0:13:37.240 saw these tariffs being hyped by the US, even US 0:13:37.320 --> 0:13:41.920 Secretary Treasury Secretary Janet Yellen was hopeful that China wouldn't retaliate. 0:13:41.960 --> 0:13:44.720 But they're clearly that expectation that China would and some 0:13:44.800 --> 0:13:47.440 analysts we had oken to today, I think that this 0:13:47.679 --> 0:13:50.559 raises the likelihood that this could be the case. But 0:13:50.800 --> 0:13:53.880 it is also fascinating because and Tesla is in the 0:13:53.880 --> 0:13:56.800 middle of this. They need China to approve its drivers 0:13:56.840 --> 0:13:59.760 SYS system to be rolled out and be approved by 0:13:59.800 --> 0:14:03.440 net and it seems like if Chinese software and hardware 0:14:03.520 --> 0:14:05.440 is blocked from. 0:14:05.400 --> 0:14:06.240 The US market. 0:14:06.760 --> 0:14:09.160 US tech could benefit in somewhere like China. 0:14:10.360 --> 0:14:13.920 Bloomberg's Danny Lee terrific reporting from Hong Kong, Thank you 0:14:14.040 --> 0:14:17.240 very much. Sticking with evs, a new trend is gaining 0:14:17.360 --> 0:14:22.960 steam among thieves hunting for copper, vandalizing EV chargers. Charging 0:14:23.000 --> 0:14:26.680 companies are catching more and more people on camera, cutting 0:14:26.800 --> 0:14:31.479 cords across the entire stations, typically to strip out the copper. 0:14:31.320 --> 0:14:32.360 And sell it for a profit. 0:14:32.400 --> 0:14:35.600 This year, through June, nearly one in five US public 0:14:35.680 --> 0:14:39.840 charging attempts ended in failure. According to Jdpower, roughly ten 0:14:39.880 --> 0:14:43.400 percent of those aborted sessions were due to a damaged 0:14:43.680 --> 0:14:46.680 or even missing cable garrot extraordinary. 0:14:47.600 --> 0:14:50.480 Meanwhile, we go back to the political discussion right now, 0:14:50.480 --> 0:14:53.920 because Vice President Harris says that she will help grow 0:14:54.000 --> 0:14:58.600 investment into official intelligence and digital assets, her first comment 0:14:58.960 --> 0:15:02.200 on the crypto space since running for president. Let's discussed 0:15:02.200 --> 0:15:05.440 all of this a Boomberg's Mike Shephard in DC. Finally 0:15:06.040 --> 0:15:08.080 she starts to talk of crypto. 0:15:08.120 --> 0:15:12.240 It feels like, well, you're right, this is in some 0:15:12.280 --> 0:15:16.600 ways an olive branch from Kamala Harris, a Democratic nominee 0:15:16.800 --> 0:15:19.640 who will be facing off against Donald Trump in November 0:15:20.240 --> 0:15:23.360 for the presidency. This is an olive branch to an 0:15:23.400 --> 0:15:26.160 industry that has been highly skeptical and critical of the 0:15:26.200 --> 0:15:30.560 Biden administration, which they see as taking a much more 0:15:30.680 --> 0:15:34.880 burdensome approach when it comes to regulation and to oversight. 0:15:35.240 --> 0:15:38.280 And this is a sentiment that Donald Trump has seized 0:15:38.360 --> 0:15:43.160 on in trying to court some of these depocketed crypto investors, 0:15:43.240 --> 0:15:45.640 a number of whom hail from Silicon Valley. 0:15:47.040 --> 0:15:49.560 What I find interesting about this, Mike is it was 0:15:49.600 --> 0:15:52.960 in the context of a fundraiser, kind of a calendar 0:15:53.040 --> 0:15:55.720 date on the campaign trail. Do we know who was 0:15:55.760 --> 0:15:58.000 in the room who she was appealing to with the 0:15:58.000 --> 0:16:00.160 AI crypto message. 0:16:00.440 --> 0:16:03.920 Well, there is obviously the investor message of the people 0:16:03.960 --> 0:16:05.880 who would be in the room, but she is trying 0:16:05.920 --> 0:16:09.880 to signal this more broadly. There are reporters attending all 0:16:09.920 --> 0:16:13.600 of these fundraiser events, so the remarks are calculated from 0:16:13.640 --> 0:16:15.720 more than just who is in the room. She is 0:16:15.760 --> 0:16:19.120 trying to signal that and this hearkens back to her roots, 0:16:20.120 --> 0:16:23.480 going back to her youth in the Bay Area. I mean, 0:16:23.520 --> 0:16:27.160 she is from California. She is somebody who understands and 0:16:27.240 --> 0:16:31.680 embraces the tech culture. She is trying to signal that 0:16:31.720 --> 0:16:34.960 she is much more open to innovation and all that 0:16:35.000 --> 0:16:38.160 would need to go into it. Of course, is not 0:16:38.640 --> 0:16:42.320 walking away from any call for safeguards on industries like 0:16:42.440 --> 0:16:46.600 artificial intelligence or cryptocurrency and digital assets, but she is 0:16:46.640 --> 0:16:49.120 at the same time trying to signal that, hey, we 0:16:49.200 --> 0:16:50.960 want to work with you, we would like to do 0:16:51.040 --> 0:16:53.360 business with you, and not stifle innovation. 0:16:55.040 --> 0:16:57.720 Meg's Mike Sheppet out of Washington, d C. Thank you 0:16:57.960 --> 0:16:58.440 very much. 0:17:05.760 --> 0:17:08.920 Today cloud Flare has announced a first of its kind 0:17:09.040 --> 0:17:12.399 way to help websites analyze and control how their content 0:17:12.480 --> 0:17:15.280 is used by AI companies. Now it's also offering a 0:17:15.320 --> 0:17:20.000 marketplace for pricing content mined by large language models. Let's 0:17:20.000 --> 0:17:22.960 discuss all with this with cloud Flair CEO Matthew Prints. 0:17:23.440 --> 0:17:26.119 Just set the scene for us for a moment. The 0:17:26.160 --> 0:17:29.760 Bloomberg website, any website, how often are we find its 0:17:29.800 --> 0:17:34.879 content is being touched on, used mined by large language 0:17:34.880 --> 0:17:36.040 models on a daily basis? 0:17:36.680 --> 0:17:39.840 Yeah, so for the average website, about half of the 0:17:39.920 --> 0:17:43.000 traffic that it receives is from some sort of automated 0:17:43.040 --> 0:17:45.840 bot and the large language models, the AI bots are 0:17:45.880 --> 0:17:48.760 growing like crazy. They're about twenty five percent of the 0:17:48.840 --> 0:17:49.760 total bot traffic. 0:17:49.880 --> 0:17:50.880 So if you're putting. 0:17:50.560 --> 0:17:54.240 Content online, it's getting scraped as being included these lms. 0:17:54.640 --> 0:17:57.119 And up until cloud Flow launched what we did today, 0:17:57.440 --> 0:17:58.720 you didn't have any control over that. 0:17:59.480 --> 0:18:03.119 And now how technically do you have control over it? 0:18:03.160 --> 0:18:05.000 What are you doing behind the scenes to make sure 0:18:05.000 --> 0:18:06.920 that it's either stopped or at least monitored. 0:18:07.800 --> 0:18:10.520 Yeah, So Klettler has been from its earliest days the 0:18:10.560 --> 0:18:13.960 best in the world at identifying what's a human visitor 0:18:14.000 --> 0:18:16.960 to a site and what's an automated or a bot 0:18:17.040 --> 0:18:19.200 visitor to a site. So what we've done is taken 0:18:19.240 --> 0:18:22.720 that same technology and then classified all of the bots 0:18:22.720 --> 0:18:26.400 that are being used by these AI companies. And then 0:18:26.680 --> 0:18:30.159 the first step is giving anyone with a website, anyone 0:18:30.160 --> 0:18:34.040 with content, visibility into how their content is being. 0:18:33.920 --> 0:18:35.320 Accessed by these bots. 0:18:35.840 --> 0:18:38.000 The second thing we do is we let you pick 0:18:38.040 --> 0:18:41.080 and choose either I don't want any of these bots 0:18:41.119 --> 0:18:43.600 to access my site, or maybe I don't want certain 0:18:43.680 --> 0:18:45.480 of these bots acts at the site. 0:18:45.640 --> 0:18:46.640 Once those two things are. 0:18:46.560 --> 0:18:49.399 In place, the last step, which we've announced today but 0:18:49.480 --> 0:18:51.480 are going to be rolling out over the months ahead, 0:18:51.720 --> 0:18:54.720 especially a content marketplace where we can return the quid 0:18:54.760 --> 0:18:58.159 pro quo, where content creators can get actually paid for 0:18:58.200 --> 0:18:59.880 the content they're creating. 0:19:00.200 --> 0:19:03.600 That's helping train these large language models, Matthew. 0:19:03.680 --> 0:19:06.320 In the first instance, who's signed up for this list, 0:19:06.400 --> 0:19:09.040 who the early customers are well. 0:19:08.920 --> 0:19:12.280 So this is available for free for every single cloud 0:19:12.320 --> 0:19:14.200 Floer customer, and cloud flow sits in front of more 0:19:14.240 --> 0:19:17.560 than twenty percent of the web, so a huge percentage 0:19:17.600 --> 0:19:19.280 of the web is using this. 0:19:19.400 --> 0:19:20.320 What we've heard. 0:19:20.119 --> 0:19:23.600 Though, is from our largest customers, large media companies that 0:19:24.119 --> 0:19:27.159 are creating a large amounts of content that they can't 0:19:27.320 --> 0:19:30.600 keep up with these AI bots, and so cloud Flower 0:19:30.640 --> 0:19:33.679 is in a unique position to be able to say, listen, 0:19:33.720 --> 0:19:36.400 if you're scraping this content, if you're getting value from 0:19:36.400 --> 0:19:39.200 this content, as an AI company, you should be compensating 0:19:39.240 --> 0:19:40.080 the content creators. 0:19:40.080 --> 0:19:42.640 And yes, the large companies like Reddit. 0:19:42.440 --> 0:19:44.320 Are able to get these deals done, but we want 0:19:44.359 --> 0:19:47.280 to bring that to anyone who's creating content anywhere on 0:19:47.320 --> 0:19:47.680 the web. 0:19:48.840 --> 0:19:50.440 Matthew, I want to go to the recent use of 0:19:50.520 --> 0:19:52.840 last week, we covered it from the ground in Brazil 0:19:53.040 --> 0:19:56.880 that X, the platform formerly known as Twitter, used your 0:19:57.080 --> 0:20:01.720 technology to briefly make the service accessible again in that country. 0:20:02.040 --> 0:20:05.760 My specific question is Brazilian authorities have said that cloud Flare, 0:20:06.200 --> 0:20:09.800 your company, have worked with the government to understand how 0:20:09.800 --> 0:20:12.320 they did it. Why did you work with the Brazilian 0:20:12.359 --> 0:20:13.919 authorities and what did that look like. 0:20:14.880 --> 0:20:16.960 To be honest, I don't know what the Brazilian authorities 0:20:17.000 --> 0:20:19.879 are talking about because we didn't specifically work with them 0:20:20.160 --> 0:20:24.480 to block X or to make X available in Brazil. 0:20:24.840 --> 0:20:27.399 What I would analogize this too, is everything that's on 0:20:27.840 --> 0:20:29.879 the web at the end of the day has a 0:20:29.960 --> 0:20:32.200 number associated with it, which is the IP address. 0:20:32.240 --> 0:20:33.720 It's sort of like your telephone number. 0:20:33.880 --> 0:20:36.000 And you can imagine in the days before you could 0:20:36.040 --> 0:20:38.480 port your telephone number. If you switch from one cell 0:20:38.520 --> 0:20:42.159 phone provider to another cell phone provider, your number would switch. 0:20:42.359 --> 0:20:44.359 Same thing happened with X. We want to deal with 0:20:44.400 --> 0:20:45.000 them where they. 0:20:45.000 --> 0:20:47.960 Started using our service, stop using a competitor of ours, 0:20:48.240 --> 0:20:50.760 and in the process the IP address switched. 0:20:51.000 --> 0:20:52.760 Brazil was simply blocking. 0:20:52.320 --> 0:20:56.400 The old IP address that made them temporarily available. Brazil 0:20:56.480 --> 0:20:58.800 was then able to block the new IP address, which 0:20:58.880 --> 0:21:02.080 was accessible. There was nothing that Cloudfler did to facilitate that. 0:21:02.359 --> 0:21:04.320 There was nothing that X did to make that harder 0:21:04.359 --> 0:21:07.080 on Brazil. It was simply a coincidence of us winning 0:21:07.240 --> 0:21:08.360 an enterprise customer. 0:21:08.600 --> 0:21:11.800