Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily jay I rememberly Jack in San Francisco, and this
Speaker 1: is Bloomberg Technology. Coming up in the next hour. Twitter
Speaker 1: is finally about to launch that edit button. To edit
Speaker 1: or not to edit has been one of the longest
Speaker 1: running debates in Twitter's history. Will discuss how the timing
Speaker 1: could effect it's tussle with Elon musk plaus that millions
Speaker 1: of students across the country are using free at tech tools,
Speaker 1: but all that data is at risk. As part of
Speaker 1: our ongoing series, we will chat with the Attorney General
Speaker 1: of New Mexico who's taken on Google over student privacy
Speaker 1: and should you book crypto when you're retired Mint account.
Speaker 1: We'll talk to the head of the Federal Retirement Board
Speaker 1: that oversees eight hundred billion dollars in assets. Twitter launching
Speaker 1: that at a button for the first time after years
Speaker 1: and years and years of debate. Here to tell us
Speaker 1: more bloom works Kurt Wagner. So, Kurt, this is only
Speaker 1: a test right now for paying user subscribers to Twitter Blue.
Speaker 1: How will it work? Yeah, so you get a thirty
Speaker 1: minute timer, right, so once you post your tweet, you'll
Speaker 1: have thirty minutes to go in make edits to it,
Speaker 1: uh and change before it gets kind of locked more permanently. Now,
Speaker 1: other users will be able to see a label that
Speaker 1: shows that that tweet has been edited, that we be
Speaker 1: able to click that to see kind of prior versions, right,
Speaker 1: so there's a bit of a track record of where
Speaker 1: that tweet has been. And to your point, Emily, it's
Speaker 1: only going to be available on Twitter Blue, so you
Speaker 1: will have to currently be a subscriber to Twitter in
Speaker 1: order to get access to this when they roll it
Speaker 1: out at the beginning. That could change in the future,
Speaker 1: of course, but they want to start it with the
Speaker 1: small group of people, and it kind of makes sense
Speaker 1: to start with the people who are the most die
Speaker 1: hard Twitter users, right, and those are the people willing
Speaker 1: to pay The big question is is this going to
Speaker 1: change the nature of Twitter, the dynamic of Twitter? What
Speaker 1: do you think? Well, I'm waiting for when it first
Speaker 1: rolls out to have that moment that first week right
Speaker 1: where it's like people are going to be playing jokes
Speaker 1: and and someone's inevitably gonna, you know, send one version
Speaker 1: of a tweet and change it twenty nine minutes later
Speaker 1: to something offensive, right, and everyone's gonna look silly. I
Speaker 1: do wonder though, in the long term if that's gonna
Speaker 1: die down, right, Maybe we'll have that for a week
Speaker 1: or two, But eventually, you know, that thirty minute timer
Speaker 1: really isn't that long, right, It is long enough to
Speaker 1: fix the type of It is long enough to change
Speaker 1: a link. Um in a case of very very breaking news,
Speaker 1: it could be a big deal, but I think for
Speaker 1: most stuff on Twitter, you know, it's probably not going
Speaker 1: to have a dramatic effect. Now that being said, we
Speaker 1: are heading right into an election, right, and this is
Speaker 1: a really weird time to want to try edited tweets
Speaker 1: because is all we're doing is asking for someone to
Speaker 1: come forward say something about election results or voting or whatever,
Speaker 1: and that goes viral and suddenly we're all going, why
Speaker 1: did we do this? Why do we have edited tweets? Well,
Speaker 1: exactly does this make it harder to moderate misinformation disinformation?
Speaker 1: And what is Twitter's plan, especially heading into the mid terms,
Speaker 1: to be on top of all of this. Well, we
Speaker 1: don't know about their plan for edited tweets again, just
Speaker 1: announced today it's rolling out soon, so we don't really
Speaker 1: have a good plan for how or if they're going
Speaker 1: to fact check that stuff. But Twitter across the board
Speaker 1: has always been a little bit more hands off on
Speaker 1: fact checking than than Facebook, for example, which has tons
Speaker 1: of outside fact checking partners. Twitter has more focused on
Speaker 1: specific topics that they fact check, you know, like election results,
Speaker 1: and only from accounts that are very high profile. That's
Speaker 1: why President Donald Trump's account was constantly flagged, because they
Speaker 1: kind of had that in their crosshairs there, right, And
Speaker 1: so I don't know what this is going to do,
Speaker 1: but I do think it poses an opportunity for people
Speaker 1: who might want to stir up controversy or to cause trouble.
Speaker 1: Let to pay attention to that. But again, you know,
Speaker 1: because it's it's just being tested with this small group
Speaker 1: of people for now, maybe we can avoid sort of
Speaker 1: a big issue ahead of the election. Maybe the roll
Speaker 1: out to more people will happen after that. Well, Elon
Speaker 1: must definitely starred the pot when he did that poll
Speaker 1: at the beginning of this whole Sauda asking users if
Speaker 1: they wanted it at it button or not. What do
Speaker 1: you make of the timing of this doesn't impact. What's
Speaker 1: the ongoing feud between Twitter and Elon Musk While Twitter
Speaker 1: has bent over backwards to try and make sure that
Speaker 1: we all know this was in the works before Ellen
Speaker 1: showed up on the scene. Right, So Twitter actually tweeted
Speaker 1: We're launching an edupon on April one, on April Fool's Day.
Speaker 1: Everyone ignored it because we just thought this was like
Speaker 1: a joke from the company. It turns out that was
Speaker 1: the beginning of what they had planned for this long
Speaker 1: running kind of thing. They were going to tweet it
Speaker 1: out on April one. They were gonna unveil it later.
Speaker 1: Ellen showed up and kind of messed that whole thing up.
Speaker 1: But they want everyone to know they started work this
Speaker 1: before the year before, so late last year. And that's important, right,
Speaker 1: because they do not want to create a perception where
Speaker 1: Elon is directing the product strategy at this company. Not
Speaker 1: only did they want to avoid that back when they
Speaker 1: thought he was going to be the owner, but now
Speaker 1: they really want to avoid that when the two sides
Speaker 1: are fighting, uh it is legal battle, so you know,
Speaker 1: the timing is interesting. I have to imagine that Elon
Speaker 1: maybe push the timeline quicker for Twitter, but I don't
Speaker 1: think that he's the reason that they ultimately decided to
Speaker 1: build this thing, all right, Bloomberg's Kurt Wagner, thank you
Speaker 1: for that update. Very anxious to see how the said
Speaker 1: button rolls out. Despite VCS rad raising record amounts of capital,
Speaker 1: start up fundraising is slowing down as fears of recession loom.
Speaker 1: Let's bring an Index Venture's partner Mike Fulby for his
Speaker 1: read on what's happening in the private markets. Might good
Speaker 1: to have you here in the studio, and obviously you've
Speaker 1: seen a lot of psych is in a lot of
Speaker 1: ups and downs. Where are we in this one? Emily,
Speaker 1: great to be back. Yeah. I think we're probably somewhere
Speaker 1: midstream between the downturn and somewhat of a correction and valuations,
Speaker 1: and hopefully sometime next year things will come back, but
Speaker 1: we're right in the middle of it. I would say,
Speaker 1: what does a hawk is fed mean for VC? It's tricky, right.
Speaker 1: Most of the companies that we fund lose money for
Speaker 1: a long period of time and then make money somewhere
Speaker 1: towards the end of the life. And when you have
Speaker 1: money making or positive earnings at the end of the
Speaker 1: life and Hi Hi interest rates, You discount that back
Speaker 1: to today and the value drops a lot, and that's
Speaker 1: really what's causing the downturn in all of the larger
Speaker 1: tech companies and even the private ones. So I think
Speaker 1: a hawk is fed means that we're going to be
Speaker 1: sitting in this stuff for a little while until they
Speaker 1: get inflation under control. We've had guests on the show
Speaker 1: who say they're gonna be millions of layoffs, millions of
Speaker 1: layoffs in tech, that this downturn is going to last
Speaker 1: two to three years, that this isn't going to be
Speaker 1: just a blip. How does that square with what you're projecting.
Speaker 1: I'm not convinced by that. I think when you actually
Speaker 1: look at the US economy in general, it's in a
Speaker 1: pretty healthy state. I think there are something like two
Speaker 1: job openings for every unemployed person in the US. What
Speaker 1: we look at B two B businesses in our portfolio.
Speaker 1: I wouldn't say that they're they're destroying their goals or records,
Speaker 1: but they're doing reasonably well. So overall, the economy is
Speaker 1: not in that bad as shape. Banks are in a
Speaker 1: good condition, good balance sheets and so forth. So we
Speaker 1: definitely got a little out of whack in terms of
Speaker 1: valuations and where their market was, and the consumer is
Speaker 1: definitely being a little careful with their wallet. But overall,
Speaker 1: I think that we're in a in a decent spot
Speaker 1: and I think the recovery is around the corner somewhere now.
Speaker 1: Going into this VCS raised a record amount of money.
Speaker 1: There's a lot of money in those war chests. Is
Speaker 1: it is? It hasn't been hard to find places to
Speaker 1: put the dry powder. I'd say is a very slow summer.
Speaker 1: I got a lot of text messages from my VC
Speaker 1: friends while vacationing in Italy, but but but not calling
Speaker 1: anyone out specifically, but okay, um, it's been a slow summer.
Speaker 1: I would say that we're seeing some green shoots. Uh,
Speaker 1: you know. One of the things that happened over the
Speaker 1: last couple of years. There's a lot of companies that
Speaker 1: have been seated, and those companies are coming up for
Speaker 1: Series A investments. We're seeing some growth companies get term sheets.
Speaker 1: Maybe they're not straight equity and they have some preferred
Speaker 1: structure or some general structure on these term sheets, but
Speaker 1: we're seeing it come out. And I think generally speaking,
Speaker 1: you're right venture capitalists that have capital to deploy aren't
Speaker 1: going to twiddle their sums for for the next two years,
Speaker 1: So I think you're going to see some movement. Does
Speaker 1: that mean that you know what happens for vcs? Then
Speaker 1: as the cycle progresses, will vcs not raise as much
Speaker 1: money over the next couple of years as they have
Speaker 1: over the last couple of years. I think that's the case.
Speaker 1: I think that the LPs that have invested in our
Speaker 1: funds have been drained pretty hard over the last couple
Speaker 1: of years because the I P O market is closed
Speaker 1: and there hasn't been a lot of M and A.
Speaker 1: They're not getting money back, and so they're gonna be
Speaker 1: reticent to give us more funds. And I think we're
Speaker 1: going to generally slow the pace down until we start
Speaker 1: to see the exit market open up again be able
Speaker 1: to pump some money back to the LP so they
Speaker 1: can come back our way. Now, it's interesting, we actually
Speaker 1: talked to the CEO of Pilot, which is a company
Speaker 1: that Index has invested in. They provide CFO services to startups,
Speaker 1: and they've done some surveys of their companies and found
Speaker 1: it doesn't necessarily look as dire as it sounds. Take
Speaker 1: a listen to what he had to say, two things
Speaker 1: are happening. The first is that there's definitely paying from
Speaker 1: the downturn, but I think it's more specifically and more
Speaker 1: pronacatlee felt by companies that really have nice to have
Speaker 1: offerings as opposed to really need to have offerings. And
Speaker 1: the second is, I think the dynamics and kind of
Speaker 1: the late stage in public markets are very different than
Speaker 1: what you see in the earlier kind of mid stage
Speaker 1: ecosystem for startups. What do you make of that? Yeah,
Speaker 1: I think that's pretty accurate. Um. You know, early stage,
Speaker 1: late stage startups over the last couple of years have
Speaker 1: raised a lot of money, and most of the particularly
Speaker 1: good companies have quite a strong balance sheet, so they
Speaker 1: don't need the capital. They're gonna wait for the markets
Speaker 1: to come back, They're going to paste themselves and so forth.
Speaker 1: I think the earlier stage companies, look, they just don't
Speaker 1: have as much money in their war chest. They're gonna
Speaker 1: have to come back to market. So I think we're
Speaker 1: going to see opportunities in the earlier stages. And overall,
Speaker 1: I think that there have been certain sectors in our
Speaker 1: industry where there's been heavy hype, which a ton of
Speaker 1: capital has gone into and a ton of capital will
Speaker 1: run away from those, whereas more kind of the steady,
Speaker 1: well known sectors I think will continue to perform as expected.
Speaker 1: What do you make of andres in horrow? It's writing
Speaker 1: its biggest check ever to Adam Newman. Look, you know
Speaker 1: Mark and Ben have been contrarian many times in the past. Uh,
Speaker 1: they're contrarian this time. I'd say, you know, the average
Speaker 1: polling in the industry would indicate that this wasn't the
Speaker 1: best idea ever. But you know, we'll wait and see
Speaker 1: the guy as a special guy in every sense of
Speaker 1: the word, and you know it's something that they wanted
Speaker 1: to do. We'll see. So you have and Mark Andreason
Speaker 1: doing that. On one ham, you've got Benchmark staying strong.
Speaker 1: On the other, where is index? What is your strategy
Speaker 1: in a downturn? Yeah, look, I think it's interesting. What
Speaker 1: I find interesting about this industry is that if you
Speaker 1: went back and listen to what people saying six nine
Speaker 1: months ago, you know, there was a sense of like
Speaker 1: all the industry is completely changing. You're going to go
Speaker 1: to these hedge funds that deploy capital at high velocity.
Speaker 1: They're gonna use the tech market like some kind of
Speaker 1: um you know, index market and no pun intended, and
Speaker 1: that all these smaller, more niche firms will go away,
Speaker 1: and it's turned out to not be the case. I
Speaker 1: think that the founders and entrepreneurs that take our capital
Speaker 1: are very diverse. They look for different things from their investors.
Speaker 1: Some look for folks like Benchmark, some looks for folks
Speaker 1: like and reason. Our view, we kind of think of
Speaker 1: it as curated growth. So index. The last fund we
Speaker 1: raised in totality was a little over three billion dollars
Speaker 1: in today's market, that's reasonably large, but definitely not the largest.
Speaker 1: I think that that gives us enough dry powder, enough
Speaker 1: capabilities as a firm to offer the services that our
Speaker 1: founders want. But we're not so small that we have
Speaker 1: to be nichee. So somewhere in the middle of the
Speaker 1: road is our view. If there is a bubble in
Speaker 1: the market private markets, where is that bubble? Is it crypto?
Speaker 1: Is it quote unquote web three. I don't know that
Speaker 1: there's necessarily a bubble right now. Honestly, Emily, I think
Speaker 1: that things have generally well corrected. There was a bubble
Speaker 1: in crypto, for sure. I think it's long gone yesterday,
Speaker 1: I think it was reported that n f T s
Speaker 1: on open open sea. We're down and in three or
Speaker 1: four months, so clearly the heir has come out of
Speaker 1: that one, and I think companies are trading at somewhere
Speaker 1: near realistic values right now in the public markets. You know,
Speaker 1: a lot of what I would say is a lot
Speaker 1: of the growth companies um that our growth stage right
Speaker 1: now are still holding on to the valuations that they
Speaker 1: got from the tail end of and those are probably
Speaker 1: still inflated, but they're not going to raise their next
Speaker 1: round until they can catch back up to those numbers.
Speaker 1: So you know, we're not going to see that the
Speaker 1: air come out of that balloon frou. And what's your
Speaker 1: advice on those companies that were planning to go public
Speaker 1: this year? Yeah, so there's you have two varieties, right
Speaker 1: You have the ones that don't need capital, in which
Speaker 1: case you just say, hunker down, grow your business and
Speaker 1: wait for the market to come back at some point
Speaker 1: it will. And you have the ones that need capital
Speaker 1: and if they if they need capital, they're going to
Speaker 1: go have to raise it. And you know, right now
Speaker 1: what the market is coming back with is debt. It's
Speaker 1: a structured equity, it's convertible notes and so forth. It's
Speaker 1: hard to come by a term sheet that is clean equity.
Speaker 1: You've got to figure out what the best option is,
Speaker 1: select that one and go for it. But if you
Speaker 1: need the capital, you've got to raise it, and it's
Speaker 1: out there. It's not that it's impossible to raise money
Speaker 1: right now. All right, Mike, Fully, Index Venture is good
Speaker 1: to have you back, Thank you for stopping by in person.
Speaker 1: In the world of cybersecurity, CrowdStrike reporting quarterly results that
Speaker 1: beat expectations. This week, shares fell though after an outlook
Speaker 1: scene conservative by some investors. Let's talk about all that
Speaker 1: and more with Crowdstrikes CEO George Kurtz. So, George, and
Speaker 1: light of the numbers, what do you make of the
Speaker 1: reaction with the shares here? Well, I think you have
Speaker 1: to look at the macro environment and just what's happening
Speaker 1: with interest rates and a lot of the uncertainties. So um,
Speaker 1: those are factors that are out of our control. And
Speaker 1: as I've said many times on your program over the years,
Speaker 1: you know, we can only focus on what we can control,
Speaker 1: and we posted stellar numbers. We've noted that we were
Speaker 1: the second fastest company ever to reach two billion dollars
Speaker 1: of air are and if you look at the growth rates,
Speaker 1: even you know our rule of fort it's just astounding
Speaker 1: at the scale that we're operating at. Is cybersecurity recession
Speaker 1: proof or could it be on to a threat? If companies,
Speaker 1: you know, they're deciding where to pull back and cyber
Speaker 1: is one of them, I think it's going to be
Speaker 1: difficult for companies to really pull back on cyber. They
Speaker 1: might delay some purchases, there might be more scrutiny, which
Speaker 1: is one of the things that we talked about. But
Speaker 1: at the end of the day, there's just too many
Speaker 1: drivers at the board level all the way down. Cyber
Speaker 1: is the number one risk that most boards are talking about.
Speaker 1: And then when you combine that with some of the
Speaker 1: regulatory pressures, like the SEC is coming out with some
Speaker 1: guidance around disclosing breaches, disclosing if you had to pay
Speaker 1: ransom payments. So at the end of the day, it's
Speaker 1: something that it's going to be very difficult to make
Speaker 1: it a nice to have and it really is a
Speaker 1: must have for most companies, and I think that's what
Speaker 1: we've seen so um, you know, we'll see how it
Speaker 1: plays out over time. That's our thesis, and I think
Speaker 1: we're in a great spot to consolidate a lot of
Speaker 1: spend in our in our sector. Let's talk about your
Speaker 1: assessment of the threat landscape right now. How concerned are
Speaker 1: you about China specifically upping you know, the groundwork for
Speaker 1: launching more cyber attacks against the West, given rising tensions
Speaker 1: with Taiwan. You always have to be concerned about China
Speaker 1: and other nations states. But China certainly is prolific in
Speaker 1: its attacks. It has great capabilities and it continues to
Speaker 1: be active in many, many different areas. So as as
Speaker 1: we've seen before, as the geo political environment changes, uh,
Speaker 1: the attacks change. They may focus on different groups and
Speaker 1: gathering information. Uh, they may target uh you know, chip manufacturers, etcetera.
Speaker 1: I mean these are these are all areas that are
Speaker 1: of concern to many, uh, you know, executives in the
Speaker 1: marketplace right now, and when the geopolitical winds change, you
Speaker 1: have to be prepared to make sure that your systems
Speaker 1: are protected. Chris Crabs, the former director of SISA, suggested
Speaker 1: these attacks would come on the supply chain. I mean
Speaker 1: you mentioned chip pack trees. Um you know how vulnerable
Speaker 1: do you think the supply chain is well. Supply chain
Speaker 1: attacks are a grave concern for many companies, and getting
Speaker 1: back to the board of directors, it's it is a
Speaker 1: huge risk. We've seen some of the large attacks over
Speaker 1: the past couple of years, and whether that's in the
Speaker 1: software supply chain or even uh you know, there's software
Speaker 1: that goes into the code of these chips. Obviously that
Speaker 1: can be problematic, so UM it's one of those areas.
Speaker 1: It's very very difficult to identify these. They do have
Speaker 1: a long tail and it's something that companies and governments
Speaker 1: need to be really vigilant about. We're preparing for a
Speaker 1: suite of new regulations coming from CSA, the f TC,
Speaker 1: the f d A, the Department of Energy and Transportation.
Speaker 1: What are you specifically preparing for it when it comes
Speaker 1: to regulation, well, I think you have to look at
Speaker 1: the regulation itself, and there's a lot of regulation that's
Speaker 1: that has the best of intentions, but then you have
Speaker 1: to look at how these are implemented and what's important.
Speaker 1: UM and we do a lot of breach responses. We're
Speaker 1: you know, one of the top two breach response firms
Speaker 1: in the world. UM and in the middle of a breach.
Speaker 1: It's it's very difficult to be talking about all the disclosures.
Speaker 1: So I think it's really important to understand the time
Speaker 1: frame and not to be able to compromise an investigation.
Speaker 1: And then what are the parameters around that, What is material,
Speaker 1: what are what should be disclosed, and how do you
Speaker 1: disclose it. I think there's a lot of complexity around that.
Speaker 1: We're at the table trying to work through that with
Speaker 1: many organizations. But what's important is that people have visibility
Speaker 1: because you can't just say you didn't know about it, right.
Speaker 1: You have to take measures to be able to instrument
Speaker 1: your systems like what CrowdStrike does, to be able to
Speaker 1: identify and prevent against these potential breaches. All right, George
Speaker 1: Kurt's CEO of crowd Strike. Always good to have George,
Speaker 1: Thank you for stopping by. Welcome back to Bloomberg Technology.
Speaker 1: I'm Emily changing San Francisco, continuing our coverage of education
Speaker 1: technology this week. New Mexico has been at the forefront
Speaker 1: of child privacy. The state sued Google just before the
Speaker 1: pandemic over the collection of personal information about children without
Speaker 1: proper parental consent. New Mexico school districts, especially those with
Speaker 1: fewer resources, use Google's free education tools, but the state
Speaker 1: says the company improperly used student data. Joining us now
Speaker 1: one of the most proactive prosecutors in the country when
Speaker 1: it comes to kids, tech and privacy. Hector Balderis, Attorney
Speaker 1: General of New Mexico. Attorney General Balderis, thank you so
Speaker 1: much for joining us. Glad to be with you. So
Speaker 1: this suit back in of Google, which was before the
Speaker 1: pandemic even hit. At that time, you you said your
Speaker 1: investigation revealed that Google tracks children across the Internet, across
Speaker 1: devices in their homes, and well outside the educational sphere,
Speaker 1: all without obtaining verifile parental consent. What concerns you so
Speaker 1: much about what you saw that you believed Google was
Speaker 1: doing with student data. Well, there are three areas of
Speaker 1: risk that was very concerned with. And the reason I
Speaker 1: did bring the investigation in the lawsuit first is that
Speaker 1: our nation, our congress, members of law enforcement have been
Speaker 1: primarily primarily asleep at the wheel when it comes to
Speaker 1: data privacy. In other words, banks are not protected, our
Speaker 1: personal information as adults is not very well protected. And
Speaker 1: so I already knew the environment was very difficult Number two, Uh,
Speaker 1: these are children and miners, and so when we already
Speaker 1: have an inadequate environment that exploits consumerism and privacy, I
Speaker 1: was very concerned that from a safety perspective, these technology
Speaker 1: companies were tracking, marketing and really monetizing on the backs
Speaker 1: of children. And then finally, number three, it's a violation
Speaker 1: of federal law. There was already a prohibition built into
Speaker 1: the law that says that technology companies cannot market and
Speaker 1: profitier and gather data of miners without the consent of parents.
Speaker 1: And so it was really three tiers of risk. And
Speaker 1: ultimately I thought it was very important to to try
Speaker 1: to change uh this course because these miners are so innocent, small,
Speaker 1: and really unaware that this practice is being imposed on
Speaker 1: them because they just want to play video games or
Speaker 1: go to school and use this technology in a positive way.
Speaker 1: You settled with Google back in December. The company agreed
Speaker 1: to set up a privacy and online safety initiative for
Speaker 1: kids in New Mexico. Some folks looked at this as
Speaker 1: a victory for Google. Would you have wanted more, you know, absolutely,
Speaker 1: But I was strategic. I'm one of the few ages
Speaker 1: in the country that understands that this is a risk.
Speaker 1: Most members in Congress are barely struggling to use their
Speaker 1: iPhones as we speak today, and so our nation is
Speaker 1: very very behind, decades and generations behind and really holding
Speaker 1: tech technology companies accountable. So I was more focused, not
Speaker 1: necessarily the monetary victory. I was trying to change the
Speaker 1: way Google does business and Google does business and schools,
Speaker 1: and we were successful in that. But the ultimate mission
Speaker 1: of this lawsuit is also to be a learning tool
Speaker 1: for other attorneys general, other consumer advocates to make sure
Speaker 1: that we keep an eye on our schools and make
Speaker 1: sure that we safeguard technology and how we use those
Speaker 1: uh those services in our school districts. Well, now, because
Speaker 1: of the pandemic, you've got more tech, more computers, more software,
Speaker 1: more apps in the classroom and being used outside the classroom.
Speaker 1: What are your biggest concerns now two years later, Well,
Speaker 1: I think there has to be a shift at some
Speaker 1: point both in our school districts. There has to be
Speaker 1: a greater emphasis on privacy and security. We're starting to
Speaker 1: now see hacking and basically these type of scams that
Speaker 1: are really bringing pain and hardship to our school districts.
Speaker 1: Even schools are having trouble safeguarding their own data. So
Speaker 1: I'm hopefully going to see the conversation shift to more
Speaker 1: safety based. And then secondly, we have to have a
Speaker 1: moral debate in the halls of Congress and in our
Speaker 1: legislative bodies, not just about protecting data and protecting school children,
Speaker 1: but really who should own this data. I don't think
Speaker 1: it's fair that we are allowed to track adults and
Speaker 1: children utilizing these products, and then technology companies are the
Speaker 1: ones that profit here and monetize this behavior. I think
Speaker 1: there's gonna be a longer conversation about really imposing more safeguards.
Speaker 1: But is it fair shouldn't I make a dollar off
Speaker 1: of the data that I generate using these technology services.
Speaker 1: I think that's a debate that has to go on
Speaker 1: both in our school districts but also in the halls
Speaker 1: of Congress. How much of a problem do you think
Speaker 1: it is that a lot of this stuff is free,
Speaker 1: free for these schools, kids, parents to use. And when
Speaker 1: it's free, um, you've got more under resourced districts utilizing it. Well.
Speaker 1: I'm a big proponent in technology. I think technology is
Speaker 1: a great equalizer in terms of education outcomes, But we
Speaker 1: are not regulating these companies, and we are not regulating
Speaker 1: safety and these safeguards within these technology products. And so
Speaker 1: I think that when they say these things are free,
Speaker 1: we really need a question. Why is it that that
Speaker 1: is the nature of the deal. Nothing is free. Um,
Speaker 1: what we're signing up as parents and as educator and
Speaker 1: as lawmakers is his technology primarily benefits students. But what
Speaker 1: the Google is not telling our teachers and our administrators
Speaker 1: is that they're tracking valuable day behavioral data of these
Speaker 1: students and then where they're using it to sell this
Speaker 1: valuable data to other companies. And I think I think
Speaker 1: that's the immoral question that needs to happen. You know,
Speaker 1: when I'm an old man, so when I used to
Speaker 1: play Atari and I used to play video games, my
Speaker 1: expectation was not that they were tracking me and then
Speaker 1: going to go sell my data to other companies. That's
Speaker 1: a question that I think lawmakers have failed to grapple. So,
Speaker 1: you know, easy to say there needs to be regulation,
Speaker 1: but the bigger question is how I'm curious what you
Speaker 1: think of the American Innovation and Choice Online Act, which
Speaker 1: is waiting for a vote in the Senate. You mentioned
Speaker 1: earlier that a lot of lawmakers are just having trouble
Speaker 1: trying to figure out how to use their iPhones. Do
Speaker 1: you agree with how lawmakers are looking at regulating big
Speaker 1: tech right now? Is there agreement between Congress and prosecutors
Speaker 1: across the country? You know there is not. Um there's
Speaker 1: consequential debates always going on between prosecutors and members of
Speaker 1: Congress who should own the data, who regulates, and who
Speaker 1: really should profit? I ultimately think that this all these
Speaker 1: complex questions need to be shifted over to a much
Speaker 1: simpler question. We are a nation where we all own property.
Speaker 1: I own my automobile, I own my home, I pay
Speaker 1: my taxes. The real question technology companies and member of
Speaker 1: Congress and prosecutors need to to really come to the
Speaker 1: table with is should I um make a profit or
Speaker 1: be monetizing my own data? Why is it that I'm
Speaker 1: using these technology services but I don't benefit in any
Speaker 1: way financially? We are a great capitalist system. I think
Speaker 1: a lot will be worked out once we figure out
Speaker 1: who really should own the data. Right now, we don't
Speaker 1: own any of the data that these companies are securing,
Speaker 1: and I think ultimately that capitalist model will be one
Speaker 1: that really is what it's going to set the own
Speaker 1: for regulation and policy in the future. So back to education,
Speaker 1: post pandemic, big concern about learning laws and the learning
Speaker 1: gap over the last couple of years. A new report
Speaker 1: shows that there was the largest ever drop in reading
Speaker 1: score since the first ever drop in math. New Mexico,
Speaker 1: in particular, according to US News and World Report, is
Speaker 1: in last place for education quality. Why do you think
Speaker 1: that is, what can be done about it? And how
Speaker 1: do you think tech can hopefully help? You know, traditionally
Speaker 1: there's been a disconnect with educators have not been really
Speaker 1: at this innovation conversation with technology. We've been consumers of it,
Speaker 1: we've been fans, and we utilize these products, but we
Speaker 1: really need to redesign education where technology is a tool,
Speaker 1: but ultimately it's used as a great equalizer. And I
Speaker 1: have hope that technology can improve reading, math, science scores.
Speaker 1: But there's been a disconnect. UM. Technology companies are driven
Speaker 1: by profits and innovation. They've really not been at the
Speaker 1: forefront in terms of the design of educational services and
Speaker 1: curriculum and so UM I think, you know, bringing all
Speaker 1: of these parties together, I think we can make a
Speaker 1: more efficient, streamline and affordable education system. But quite frankly,
Speaker 1: we've been operating all in silos. All right, Attorney General
Speaker 1: Hector Paul Daris of New Mexico, thank you for joining
Speaker 1: us and sharing your perspective as a prosecutor to you,
Speaker 1: I appreciate it. We may be just two years away
Speaker 1: from the next big explosion in bitcoin prices. The bitcoin
Speaker 1: supply model is nothing if not ingenious. If Satosha no Kamoto,
Speaker 1: the mysterious creator of the original cryptocurrency, got anything right,
Speaker 1: it's his model of ultimately fixed supply delivered at a
Speaker 1: slowing tapering rate. Let me explain. One thing that makes
Speaker 1: Bitcoin different from the average Ponsi scheme is that supply
Speaker 1: is fixed. At the outset. There will only ever be
Speaker 1: twenty one million bitcoin. That much is specified in the
Speaker 1: original white paper and coded in the algorithm, and without
Speaker 1: broad community consent, something that game theory suggests would be
Speaker 1: hard to win. It can't be changed. But not only that,
Speaker 1: the rate at which bitcoin approaches this cap is slashed
Speaker 1: in half every four years or more accurately, the reward
Speaker 1: paid to miners fermenting new bitcoin is cut in its infancy.
Speaker 1: The reward for recording a unit of information on the
Speaker 1: blockchain was fifty bitcoin, by that number had fallen to
Speaker 1: six point two five, and Ino will be down to
Speaker 1: three point one to five. And given that the rate
Speaker 1: at which blocks on Mind is specified in advance at
Speaker 1: a rate of about one every ten minutes, it's clear
Speaker 1: to see that freshly mind bitcoin into circulation at a
Speaker 1: diminishing rate. What's more, every supply Harvey cycle has been
Speaker 1: met with parabolic rallies that started around the same time.
Speaker 1: In the twelve months after the last event, prices rallied
Speaker 1: as much as we're now about midway through the cycle,
Speaker 1: and that's typically been a period when prices go soft,
Speaker 1: and historically speaking, that's been a great time to buy.
Speaker 1: I'm Middie vander Walt. This is the crypto. Cryptocurrencies and
Speaker 1: blockchain technology have been pitched as an inevitable part of
Speaker 1: our future. But are these highly volatile tokens a safe
Speaker 1: bet for your retirement account. Let's ask one of the
Speaker 1: most respected people in retirement investing, tech and policy, that
Speaker 1: is Stacy Olivar. She's a member of the Federal Retirement
Speaker 1: Thrift Investment Board, a senator proof position for a fund
Speaker 1: that handled some eight hundred billion dollars in assets on
Speaker 1: behalf of six and a half million people, and our
Speaker 1: crypto contributortional I Bossi as well. So Stacy, should we
Speaker 1: be putting bitcoin in our four oh one case? I
Speaker 1: think we should be thinking about watching very seriously. And
Speaker 1: I think of blockchain as an infrastructure technology, almost like
Speaker 1: our freeway system, and cryptocurrency as the individual cars. As
Speaker 1: our population grows and our data needs become more complex,
Speaker 1: we are going to need a more robust infrastructure, and
Speaker 1: that's where blockchain comes in. So investing in the underlying
Speaker 1: technology can be very compelling. Now they're about ten thousand
Speaker 1: different cryptocurencies, so I don't want to lump them altogether.
Speaker 1: But at this time, when life expectancy is increasing and
Speaker 1: we're seeing high inflation and really poor returns in the market,
Speaker 1: we do need to look for alpha in other places.
Speaker 1: I'm not saying this is ideal for a pension, because
Speaker 1: overall there's a lot of volatility in the cryptocurrency space,
Speaker 1: but I do think we need to look very seriously
Speaker 1: a blockchain. I do want to talk more about the
Speaker 1: tokens themselves, because you look at bitcoin, you look at ethereum,
Speaker 1: and as long as I've been on this beat. There's
Speaker 1: been a lot of asset managers courting pension funds to
Speaker 1: really get them into the space, but we have not
Speaker 1: seen that movement yet. So what would it take to
Speaker 1: make pensions retirement systems comfortable with adding bitcoin or etherorum
Speaker 1: if you just even narrow down to the two largest.
Speaker 1: There would need to be clarity with accounting regulations. Right now,
Speaker 1: it's unclear how to account for cryptocurrency and that creates
Speaker 1: a lot of complication. They would also need to be
Speaker 1: transparency in terms of they're reporting out to holders, out
Speaker 1: to investors. That would need to be robust security. So
Speaker 1: bitcoin has proven quite secure to date, other cryptocurrencies not
Speaker 1: as much. We would also need clarity from the federal
Speaker 1: government on how it's going to be regulated. Right now,
Speaker 1: there's a build um in California's Assembly. I think it
Speaker 1: just passed and it's on the governor's desk for signature.
Speaker 1: You know, it's interesting because you do see more people
Speaker 1: in Congress warming up to the idea of crypto. You
Speaker 1: see a lot of money floating into Congress for the
Speaker 1: idea of getting members of Congress comfortable with cryptocurrency. Do
Speaker 1: you think that this is going to move the needle more.
Speaker 1: Do you think the next election cycles when we're going
Speaker 1: to see more movement in terms of that comfort that
Speaker 1: people would really need to get more comfortable with all
Speaker 1: the things. You're saying that longer term savings type money
Speaker 1: into crypto, I don't know about that. I think that
Speaker 1: crypto so right now has been uncorrelated from the election cycles,
Speaker 1: although it is more correlated with overall capital markets. Now,
Speaker 1: crypto tends to follow geopolitical events so much more global
Speaker 1: nature rather than domestic US or local to for example,
Speaker 1: to a state. So we've seen spikes in crypto as
Speaker 1: it relates to what happened in Ukraine and money being
Speaker 1: transferred UH to Ukrainians for aid when there have been
Speaker 1: other issues geopolitically, for example, say there happens to be
Speaker 1: some type of disaster, we'll see crypto being used there,
Speaker 1: so we know about its use there. We know that
Speaker 1: many people are adopting crypto all of the world and
Speaker 1: is becoming a standard. It is not that yet the standard,
Speaker 1: and I don't know that our election cycles are going
Speaker 1: to affect that. How is the crypto crash impacted pension
Speaker 1: funds more broadly, not as much as one would think.
Speaker 1: So pension funds are subject to ARISKA, so they are
Speaker 1: regulated on how they invest, and part of that tenant
Speaker 1: of ARISSA is the prudent person rule. So the fiduciaries
Speaker 1: of pension funds and of defined contribution funds have to
Speaker 1: invest like a prudent person, which means they have to
Speaker 1: consider the permanence of the fund, the amounts paid to beneficiaries,
Speaker 1: and the duration of those payments, as well as risk mitigation.
Speaker 1: There needs to be an optimization of return at a
Speaker 1: time when the markets aren't performing. So there have been
Speaker 1: some pensions who have invested in crypto, but they've invested
Speaker 1: a very small percentage. In fact, I haven't seen a
Speaker 1: pension that's invested in excess of one percent. And typically
Speaker 1: when they invest it's in publicly traded companies that mind
Speaker 1: crypto or hold crypto, so there's an additional layer of
Speaker 1: reporting that they can review. It's interesting because you mentioned
Speaker 1: that blockchain technologies where a lot of the investment needs
Speaker 1: to happen. But I'm really curious about what you mean
Speaker 1: by that, because on one hand, it's not like a
Speaker 1: pension can sit there unload up on a lot of
Speaker 1: venture capital wagers. But on the other hand, you do
Speaker 1: see a lot of big companies taking blockchain and really
Speaker 1: looking at ways to significantly change the existing markets as
Speaker 1: we know it. The bond markets, the stock markets, mortgage markets,
Speaker 1: all places that pensions invest very heavily in. So which
Speaker 1: side of that equation do you think the most movement
Speaker 1: is really going to be So, I think it will
Speaker 1: be on their systems. Insurance companies going back to started
Speaker 1: to invest in blockchain technology. I remember some insurers doing
Speaker 1: paper and pencil claims processing, very expensive, very error prone.
Speaker 1: There are private, permissioned block chains and several insurers started
Speaker 1: to adopt those so that way they could see the
Speaker 1: entire claims process on the chain, make sure it was immutable,
Speaker 1: and get the payment processed more quickly with few, if
Speaker 1: no errors. So there's that type of infrastructure available. When
Speaker 1: it comes to pensions again, they might have millions of members,
Speaker 1: many different changes to address to payments, and if there
Speaker 1: was a robust blockchain technology underlying that process, I think
Speaker 1: it would be more efficient and less costly. Alright, fascinating stuff. Uh.
Speaker 1: Stacy LaVar's Federal Retirement Thrift Investment Board member, along with
Speaker 1: our own Chili BOSSI Thank you both. Apple set to
Speaker 1: announce the iPhone fourteen and new Apple Watches at its
Speaker 1: far Out event, all sharing in major upgrades to its
Speaker 1: smartphone and smart watch lines ahead of a very important
Speaker 1: holiday shopping season. The iPhone fourteen will continue to come
Speaker 1: in four models, too regular and two pro. Both versions
Speaker 1: will come in six point one in six point seven
Speaker 1: inch sizes and differentiate in terms of performance, screen technology, materials,
Speaker 1: and cameras. All the new phones will look similar to
Speaker 1: the iPhone thirteen, including aluminum sides on the entry models
Speaker 1: in stainless steel on the more premium versions. The only
Speaker 1: real design changes will come to the pro models. Those
Speaker 1: phones will see the notch replaced with smaller cutouts or
Speaker 1: face I D and the front facing camera system. The
Speaker 1: pro phones will also gain a new fort at megapixel
Speaker 1: wide angle camera on the back, in addition to a
Speaker 1: faster A sixteen processor. In contrast, their regular phones won't
Speaker 1: see as significant camera changes and will continue to use
Speaker 1: the A fifteen chip from last year's iPhone thirteen. The
Speaker 1: iPhone fourteen Pro line will also get a new always
Speaker 1: on display for lock screen widgets, gaining a standard feature
Speaker 1: found on many Android devices for the Apple Watch, Apple's
Speaker 1: planning a new Apple Watch sc with a faster processor,
Speaker 1: and Apple Watch Series eight that looks mostly like the
Speaker 1: Series seven that will add a new body temperature sensor,
Speaker 1: as well as the company's first Apple Watch Pro, the
Speaker 1: new high End Wall, which we'll ad a bigger display,
Speaker 1: better battery life in a new design complete with a
Speaker 1: rugged aluminum case. I'm Mark Erman. This is power On
Speaker 1: and you can subscribe to Mark's weekly power On newsletter
Speaker 1: at Bloomberg dot com. We will be live from Apple
Speaker 1: Park next Wednesday four that iPhone launch and bring you
Speaker 1: all the news you need to know throughout the day.
Speaker 1: And that does it for the sedition of Bloomberg Technology