WEBVTT - Red Sea Shipping Disruption and Tesla's China Price Cuts 0:00:01.080 --> 0:00:06.360 From Mahard where Innovation, Money and Power Collie in Silicon Valley, NBN. 0:00:06.680 --> 0:00:11.200 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:24.720 --> 0:00:27.560 And Caroline Heiner Bloomberg's world headquarters in New York and 0:00:27.640 --> 0:00:31.120 Amed Lovelow in San Francisco. This is Bloomberg Technology coming up. 0:00:31.240 --> 0:00:32.199 Shipping merchants. 0:00:32.200 --> 0:00:34.760 They hold Red Sea trips after the US and UK 0:00:34.800 --> 0:00:38.199 strike HOUTHI targets adding to disruption in the region already 0:00:38.200 --> 0:00:40.519 it's impacting Tesla for example. We break down what it 0:00:40.520 --> 0:00:43.400 all means for the global supply chain for technology and 0:00:43.440 --> 0:00:45.279 what is being used to navigate around it. 0:00:46.080 --> 0:00:48.720 And Tesla is one of the names hit by that 0:00:48.760 --> 0:00:51.120 in the Red Sea attacks. It's shut down its German 0:00:51.200 --> 0:00:54.720 plant amid the disruption. We will have all of those details. 0:00:54.400 --> 0:00:57.000 As later this hour we sit down with renowned venture 0:00:57.000 --> 0:01:01.240 capitalists Bino Koesler, Keith Raboi and exclusive conversation amid the 0:01:01.280 --> 0:01:04.759 announcement that Keith is returning to Coastal a Ventures. All 0:01:04.800 --> 0:01:07.040 that and so much more coming up. 0:01:07.120 --> 0:01:08.640 There is a lot of tests the news out there. 0:01:08.640 --> 0:01:10.480 We will cover all of it in the program. The 0:01:10.520 --> 0:01:13.720 first piece being that they have cut prices again on 0:01:13.840 --> 0:01:16.679 models in China. We will bring you those details, but 0:01:16.760 --> 0:01:19.840 the bigger news probably was the halt production in Berlin 0:01:20.319 --> 0:01:23.160 because of supply chain impact from the Red Sea situation. 0:01:24.319 --> 0:01:26.319 How does that look? We will go to our Global 0:01:26.360 --> 0:01:30.440 Cars editor in the next block. But Tesla is down significantly. Volvo, 0:01:30.520 --> 0:01:33.880 the European car maker, also following the similar news, halting 0:01:33.920 --> 0:01:36.880 European production because of the impact of what's happening in 0:01:36.920 --> 0:01:39.600 the Red Sea. We've got a brilliant name coming to 0:01:39.720 --> 0:01:42.520 us now, Ryan Peterson, the CEO of Flexport, a leader 0:01:42.760 --> 0:01:45.360 in global supply chain technology. And Ryan, you've been coming 0:01:45.360 --> 0:01:47.680 on with us in recent weeks because you're keeping a 0:01:47.720 --> 0:01:50.760 micro track of the impact of what's playing out in 0:01:50.800 --> 0:01:54.760 the Red Sea. The latest from Flexport's perspective, please. 0:01:56.240 --> 0:01:59.240 Well, you know, the biggest thing here is obviously the 0:01:59.280 --> 0:02:03.120 impact on for customers, for companies shipping cargoes, the impact 0:02:03.160 --> 0:02:07.000 on price transit time as well. You mentioned Tesla having 0:02:07.080 --> 0:02:09.080 issues getting parts to manufacture goods. 0:02:09.600 --> 0:02:11.600 I think you're going to see that across a huge. 0:02:11.360 --> 0:02:14.079 Swath of companies, especially in Europe, but also in the 0:02:14.120 --> 0:02:15.519 East Coast, so there's delays. 0:02:15.560 --> 0:02:16.480 And then two is the price. 0:02:16.520 --> 0:02:19.639 The price of ocean freight has gone from well, it's 0:02:19.639 --> 0:02:22.000 gone up about four x, and not just from Asia 0:02:22.040 --> 0:02:24.280 to Europe, even from Asia to the US on the 0:02:24.280 --> 0:02:26.240 West coast, where you would think it's not, you know, 0:02:26.280 --> 0:02:26.960 from China to. 0:02:26.960 --> 0:02:27.359 The West coast. 0:02:27.400 --> 0:02:30.040 The United States shouldn't be impacted by the Suez on 0:02:30.080 --> 0:02:31.240 the surface, and yet it is. 0:02:31.680 --> 0:02:33.120 Prices have gone up about three x. 0:02:33.280 --> 0:02:35.880 And this is partially because ships have been pulled off 0:02:35.919 --> 0:02:39.120 of that trade lane to provide the extra capacity needed 0:02:39.240 --> 0:02:41.680 to go from Asia to Europe because of the longer 0:02:41.680 --> 0:02:45.000 way around. It's also because all of these trades depend 0:02:45.040 --> 0:02:47.440 on the same asset, which is containers, and if there's 0:02:47.480 --> 0:02:49.000 not enough containers. 0:02:49.800 --> 0:02:51.520 Then you're going to have to pay more to you know, 0:02:51.560 --> 0:02:52.480 for the ones that there are. 0:02:52.600 --> 0:02:54.600 So you've got a supply and demand dynamic that's driving 0:02:54.720 --> 0:02:56.200 up the costs of everything. 0:02:57.240 --> 0:02:59.440 We have a great visual tool here at Bloomberg to 0:02:59.520 --> 0:03:02.520 kind of try the movement of those containers through the ships. 0:03:03.120 --> 0:03:06.280 We talked about Tesla as the example at the top 0:03:06.320 --> 0:03:09.480 of this show, Ryan, but in simple terms, the parts 0:03:09.480 --> 0:03:12.680 and components they need to feed the assembly lines and 0:03:12.760 --> 0:03:16.360 not getting through so they've halted production. Do you have 0:03:16.400 --> 0:03:19.480 any customer examples where something similar has happened, or any 0:03:19.520 --> 0:03:23.120 specific industries that have a micro hit from what's happening 0:03:23.160 --> 0:03:23.840 in the Red Sea. 0:03:24.800 --> 0:03:27.440 Well, it's across the board, you know, anything that's manufacturing 0:03:27.480 --> 0:03:30.160 related where you're really depending on these inbound parts. 0:03:30.200 --> 0:03:32.240 So then run assembly line is going to be hit 0:03:32.280 --> 0:03:32.520 by that. 0:03:32.600 --> 0:03:34.440 And then the thing the other big thing you see 0:03:34.520 --> 0:03:38.160 is manufacturing that's done in ports that are no longer 0:03:38.680 --> 0:03:40.240 getting the same service level. 0:03:40.320 --> 0:03:42.080 So a really good example of this is we. 0:03:42.000 --> 0:03:46.200 Have a company that makes apparel in Jordan, and Jordan's port, 0:03:46.240 --> 0:03:48.640 of course is on the Red Sea at Akaba. In 0:03:49.360 --> 0:03:51.960 those carriers that we often stop there on the way 0:03:51.960 --> 0:03:54.119 through the Suez are not going through there at all, 0:03:54.480 --> 0:03:56.680 and Jordan has lost most. 0:03:56.480 --> 0:03:58.360 Of the ocean capacity that was serving. 0:03:58.720 --> 0:04:00.640 And so with this customer, you know, were scrambling on 0:04:00.640 --> 0:04:03.480 their behalf starting to find alternate routes, whether that's air 0:04:03.480 --> 0:04:05.680 freight or some of it's going to get trucked over 0:04:05.720 --> 0:04:07.240 to Dubai and put on a ship there. 0:04:07.280 --> 0:04:08.720 So all kinds of this kind of. 0:04:08.720 --> 0:04:11.600 Thing happening at a very granular level, because of course, every 0:04:11.600 --> 0:04:15.000 ship that gets rerouted has ten thousand containers, and each 0:04:15.040 --> 0:04:16.680 of those has a journey of its own that needs 0:04:16.720 --> 0:04:19.640 to get replanned and find a new destination and a 0:04:19.640 --> 0:04:20.880 new sailing ron. 0:04:20.960 --> 0:04:23.560 Of course, you're on the very cutting edge of how 0:04:23.560 --> 0:04:26.800 technology is the soul of the solution, the transparency to this. 0:04:27.040 --> 0:04:29.720 But I ask you a more macro picture question and ultimately, 0:04:30.320 --> 0:04:32.840 is inflation going to be driven up more longer term? 0:04:33.160 --> 0:04:37.280 We've seen the supply chain snow happen before. From your experience, 0:04:37.680 --> 0:04:40.480 is this already going to be filtering in Yeah? 0:04:40.680 --> 0:04:42.240 It also just a question of how long this last, 0:04:42.480 --> 0:04:45.240 but absolutely have to if it lasts for any period 0:04:45.240 --> 0:04:46.320 of time more. 0:04:46.200 --> 0:04:47.039 Than a quarter or two. 0:04:47.080 --> 0:04:48.880 Is what I would guess is that I don't think 0:04:48.880 --> 0:04:50.640 companies want to just immediately change the price of the 0:04:50.680 --> 0:04:51.240 things they sell. 0:04:51.279 --> 0:04:53.680 They kind of set these things on the longer term horizon. 0:04:54.200 --> 0:04:55.720 But if you can believe that this is going to 0:04:55.800 --> 0:04:58.200 last for a few months or a few quarters, you 0:04:58.360 --> 0:04:59.200 only have two choices. 0:04:59.240 --> 0:05:02.680 You either that's the price through to your customer or 0:05:02.839 --> 0:05:03.840 you make less money. 0:05:04.040 --> 0:05:06.239 And I think people know you know what most businesses 0:05:06.279 --> 0:05:08.880 will do if they have the pricing power, They're going 0:05:08.920 --> 0:05:10.599 to raise the prices to customers, and. 0:05:11.560 --> 0:05:12.760 It can be quite significant. 0:05:12.960 --> 0:05:16.960 As we saw during the supply chain congestion of years 0:05:16.960 --> 0:05:19.240 past it can. In that time, we estimated it was 0:05:19.240 --> 0:05:21.680 three or four percent of inflation for goods shipped by 0:05:21.720 --> 0:05:24.799 ocean containers, which is most consumer goods RN. 0:05:25.279 --> 0:05:28.080 What is being stress tested in your technology right now? 0:05:28.200 --> 0:05:30.480 You came on a few weeks ago and was really 0:05:30.480 --> 0:05:31.960 interesting about the fact that a lot of these ships, 0:05:32.000 --> 0:05:34.120 for example, having to turn off their satellites so they 0:05:34.120 --> 0:05:37.080 don't want to be well intercepted by the hoody revels 0:05:37.120 --> 0:05:41.039 when they are indeed still traversing through the Red Sea. Ultimately, 0:05:41.080 --> 0:05:43.960 what are you currently using, what new adoption and technology 0:05:44.040 --> 0:05:45.720 trying to build for these sorts of scenarios. 0:05:46.560 --> 0:05:48.120 Yeah, well, so we've had to go through and you know, 0:05:48.480 --> 0:05:51.640 our technology tracks the ships by satellite, and like you said, 0:05:51.839 --> 0:05:54.440 a lot of these carriers have turned off transponders as 0:05:54.440 --> 0:05:57.240 they get close to make it harder for anybody who's 0:05:57.240 --> 0:06:00.720 trying to attack them to identify them. You also get 0:06:00.760 --> 0:06:04.599 data from the carriers to you know, sailing schedules and 0:06:04.680 --> 0:06:06.000 routes and plans and things like this. 0:06:06.040 --> 0:06:07.440 Well, the problem. 0:06:07.200 --> 0:06:10.120 With all data is that it all comes from the 0:06:10.120 --> 0:06:13.200 same place, which is the past, and when the future 0:06:13.200 --> 0:06:16.160 looks different than the past. These things can rapidly not 0:06:16.360 --> 0:06:18.760 function the way they should. So it actually speaks to 0:06:18.800 --> 0:06:20.719 the approach that we've always taken a flex for, which 0:06:20.760 --> 0:06:23.520 is later on humans who are working hard, you know, 0:06:23.600 --> 0:06:26.720 every day to solve these problems. Track the ships manually, 0:06:26.760 --> 0:06:29.880 we call the carriers we're in there, you know, in 0:06:30.640 --> 0:06:34.400 their editing things manually where needed to keep the system 0:06:34.480 --> 0:06:34.840 up to date. 0:06:34.880 --> 0:06:36.680 But this system has performed very well. 0:06:36.960 --> 0:06:39.920 One technology change that we did make was very simple, 0:06:39.920 --> 0:06:42.920 but visualize it so that a customer can see which 0:06:42.960 --> 0:06:46.840 of their containers is being rescheduled, make it very obvious 0:06:46.960 --> 0:06:48.880 which chips are going to be which containers are going 0:06:48.920 --> 0:06:52.120 to be delayed, and then give them action plans. The 0:06:52.160 --> 0:06:53.520 other thing I think I'm really proud of is that 0:06:53.560 --> 0:06:55.920 our team went and updated our carbon calculator. 0:06:56.520 --> 0:06:57.320 You know, it takes a lot. 0:06:57.360 --> 0:06:59.960 It takes about twenty percent longer to go around there 0:07:00.000 --> 0:07:02.640 before you mid twenty percent more carbon. So we've had 0:07:02.640 --> 0:07:04.640 to go through and estimate, you know, change all the 0:07:04.760 --> 0:07:07.360 estimates for how much carbon gets emitted on these ships. 0:07:07.360 --> 0:07:09.560 So a lot of hard work inflex Port. 0:07:09.640 --> 0:07:11.920 We're kind of working overtime, weekend nights and weekends right now, 0:07:11.920 --> 0:07:13.800 to keep our customers informed. 0:07:14.760 --> 0:07:17.480 At Ryan in twenty twenty, I was trying to work 0:07:17.520 --> 0:07:20.600 out what the story with Tesla was and a testa 0:07:20.680 --> 0:07:24.480 executive messaged me and said, get in your car, drive 0:07:24.520 --> 0:07:26.680 from San Francisco to Oakland, and on your way on 0:07:26.760 --> 0:07:29.400 the Bay Bridge, look right out of your window and 0:07:29.440 --> 0:07:32.000 tell me what you see. And he was referring to 0:07:32.040 --> 0:07:36.800 all of the ships parked waiting to unload. That was 0:07:36.840 --> 0:07:40.200 the issue right of the twenty twenty twenty one crisis. 0:07:40.800 --> 0:07:43.880 What is different this time? And I asked you to 0:07:43.880 --> 0:07:46.720 have a crystal ball. How long will it take to 0:07:46.840 --> 0:07:50.440 unwind relative to the months and months of that previous saga. 0:07:51.360 --> 0:07:54.960 Yeah, well, they're really quite different because the twenty twenty 0:07:55.000 --> 0:07:59.440 twenty one crunch was really driven by an increasing demand. 0:07:59.480 --> 0:08:00.840 We ship containers than ever. 0:08:00.880 --> 0:08:03.720 There was a twenty percent increasing containers arriving in the 0:08:03.760 --> 0:08:08.040 United States because customers weren't able to spend money on travel, 0:08:08.200 --> 0:08:12.360 on restaurants, on services, they were shifting that consumption to goods, 0:08:12.400 --> 0:08:14.440 and so we had so much more demand that the 0:08:14.480 --> 0:08:17.880 ports couldn't keep up, and so you had then the 0:08:17.920 --> 0:08:20.600 ports became congested, and you had that resulted in a 0:08:20.640 --> 0:08:23.600 decreasing capacity, so it was really a double whammy in 0:08:24.640 --> 0:08:27.400 twenty twenty one. What you're looking at now is just 0:08:27.440 --> 0:08:30.640 a reduction and supply there's no corresponding increase in demand. 0:08:31.360 --> 0:08:34.120 So it's it's different in that regard, and it's less 0:08:34.120 --> 0:08:37.959 of a traffic jam than it is a detour, and 0:08:38.000 --> 0:08:40.960 that detour runs at the same speed, it just takes longer. 0:08:41.360 --> 0:08:43.360 So I think the world will adapt better than it 0:08:43.400 --> 0:08:45.240 did in twenty twenty and twenty twenty. 0:08:45.040 --> 0:08:47.960 One, not to say it's not a big impact, and 0:08:48.080 --> 0:08:53.760 certainly short term it's a pretty big deal. Talking crystal bowl, well, 0:08:53.880 --> 0:08:58.600 the ocean container shipping industry ordered a lot of ships 0:08:58.920 --> 0:09:01.400 in the peak of all the high shipping prices of 0:09:01.440 --> 0:09:04.680 twenty twenty through twenty twenty two. The carriers made a 0:09:04.679 --> 0:09:07.440 lot of money and they reinvested in their fleets, and 0:09:07.480 --> 0:09:09.920 those ships are coming online this year and next year 0:09:09.960 --> 0:09:12.240 and even into the year after that, and so you 0:09:12.400 --> 0:09:16.120 have a lot of capacity coming online that will Although 0:09:16.120 --> 0:09:19.760 we have a decrease in capacity resulting from this rerouting, 0:09:20.040 --> 0:09:22.600 if you're taking long term view or even medium term view, 0:09:22.840 --> 0:09:24.640 you're going to see that made up for by new ship. 0:09:24.679 --> 0:09:25.160 So I don't. 0:09:25.960 --> 0:09:28.360 Yeah, I don't. It can't predict how long this will last. 0:09:28.360 --> 0:09:29.800 But even if it lasts a long time, I think 0:09:29.800 --> 0:09:32.160 you'll see the ocean market kind of stabilized and gets 0:09:32.160 --> 0:09:37.199 to a relatively normal pricing environment versus long term historical averages. 0:09:37.240 --> 0:09:39.559 Of course, it'll be higher than it was going. 0:09:39.320 --> 0:09:42.120 To be if this hadn't happened, but I think the 0:09:42.160 --> 0:09:43.439 world wi will recover. 0:09:43.640 --> 0:09:47.040 A demanded supply side issue for both inflationary. Ryan Peterson 0:09:47.160 --> 0:09:48.760 is so great to catch up with you. Thank you 0:09:48.800 --> 0:09:50.480 for spending some time with us Fexport CEO. 0:09:51.440 --> 0:09:54.880 Tesla cuts prices in China again. The company reduced starting 0:09:54.960 --> 0:09:57.880 prices of the Model three sedan by five point nine 0:09:57.960 --> 0:10:01.520 percent to a little more than thirty four thousand US dollars, 0:10:01.760 --> 0:10:04.840 and mark down the Model why sport utility vehicle by 0:10:04.840 --> 0:10:07.640 two point eight percent. That's to around thirty six thousand 0:10:07.960 --> 0:10:12.040 US dollars that according to the Chinese version of Tesla's website. 0:10:12.040 --> 0:10:15.640 The carmaker also says it's lone European factory near Berlin 0:10:16.000 --> 0:10:18.480 will be disrupted by attacks in the Red Sea and 0:10:18.480 --> 0:10:20.560 there is a halt to production there. That's bring in 0:10:20.559 --> 0:10:25.320 Bloomberg's Global Auto editor Craig Trudel, And let's start with China. 0:10:25.559 --> 0:10:28.040 We gave the numbers, but the context is that this 0:10:28.160 --> 0:10:31.880 is one of several cuts to prices in China over 0:10:31.920 --> 0:10:33.080 the course of the last year. 0:10:34.520 --> 0:10:36.520 Yeah, I mean this really started even I would say 0:10:36.600 --> 0:10:39.000 late in twenty twenty two when we saw you know, 0:10:39.080 --> 0:10:42.360 Tesla sort of open the first salvo of price cutting 0:10:42.360 --> 0:10:45.520 in China. And last year it really was just relentless 0:10:45.520 --> 0:10:48.080 on the part of Tesla and the broader industry. But 0:10:48.480 --> 0:10:51.200 I think, you know, of the two what most stands 0:10:51.200 --> 0:10:53.960 out to me of these cuts, the two models that 0:10:54.000 --> 0:10:56.960 Tesla has is the Model three. I think there was 0:10:57.000 --> 0:11:00.520 some hope that you know, with updating the Sedan and 0:11:00.880 --> 0:11:04.360 kind of you know, giving you know, buyers a reason 0:11:04.480 --> 0:11:07.560 to have a fresh look at that car. You know, 0:11:07.840 --> 0:11:11.280 this is a fairly substantial price cut, only you know, 0:11:11.320 --> 0:11:15.040 a few weeks removed from when Tesla you know, updated 0:11:15.240 --> 0:11:17.880 the Model three. And so this is you know, potentially 0:11:18.240 --> 0:11:20.679 a cause for a concern if if you were kind 0:11:20.679 --> 0:11:23.079 of counting on this idea that refreshing the lineup a 0:11:23.120 --> 0:11:26.440 little bit would lead to pricing you know, essentially bottoming 0:11:26.720 --> 0:11:28.640 and stabilizing. 0:11:28.000 --> 0:11:32.720 Here and for that context, it feels that investors fill Similarly, 0:11:32.840 --> 0:11:35.000 the stock is off by almost four percent on the day. 0:11:35.000 --> 0:11:37.760 In fact, it's had a pretty awful week of run 0:11:37.800 --> 0:11:40.360 of it because within this worry about China and the 0:11:40.400 --> 0:11:43.600 price competition, and we also add to the context byd 0:11:43.840 --> 0:11:46.719 suddenly becoming well basically a challenger when it comes to 0:11:46.840 --> 0:11:50.960 numbers of EV's being sold, and one more broadly, it 0:11:50.960 --> 0:11:54.160 feels as though Tesla is having to come up against 0:11:54.400 --> 0:11:57.840 growing concern about EV demand broadly, I think a Cox 0:11:57.880 --> 0:11:59.000 automotive for example. 0:12:00.120 --> 0:12:03.480 Yeah, I think the Hurts story yesterday is something we 0:12:03.520 --> 0:12:05.679 can't forget here as well. I think, you know, when 0:12:05.679 --> 0:12:08.160 we think about Tesla, we think about China and the 0:12:08.240 --> 0:12:11.440 US being really important to them, in particular in the 0:12:11.559 --> 0:12:15.160 US for you know, a big customer and Hurts too. 0:12:15.679 --> 0:12:18.280 You know, it's really an incredible story to me when 0:12:18.320 --> 0:12:20.920 we think back to when it was announced that Hurts 0:12:21.000 --> 0:12:22.679 was going to buy a lot of Tesla's that was 0:12:22.720 --> 0:12:26.960 what made Tesla trillion dollar company, and you know, wow, 0:12:27.000 --> 0:12:29.400 has that really sort of ended in tears for Hurts 0:12:30.000 --> 0:12:32.760 for them to make this you know, real sharp U 0:12:32.800 --> 0:12:37.320 turn from a big investment in electrifying their fleet that 0:12:37.320 --> 0:12:42.120 that is not a particularly positive development for Tesla, to 0:12:42.160 --> 0:12:44.480 say the least. And I think the fact that you're 0:12:44.520 --> 0:12:47.439 now seeing hurts, you know, launch a sort of fire 0:12:47.520 --> 0:12:51.160 sale of Tesla's is not good for the resale values 0:12:51.240 --> 0:12:55.640 of Tesla's and and you know, potentially could hurt you know, 0:12:55.720 --> 0:12:58.240 demand for new Tesla's in the sense that you know, 0:12:58.280 --> 0:13:00.800 there's a whole lot of supply of U Teslas now 0:13:00.800 --> 0:13:02.959 on the market for people to take a look at 0:13:03.080 --> 0:13:04.559 rather than look at new. 0:13:05.920 --> 0:13:08.800 Craig Todell, we thank you so much, giving all of 0:13:08.840 --> 0:13:11.600 what was a pretty horrible, very bad week for Tesla 0:13:11.840 --> 0:13:13.240 ed to. 0:13:13.240 --> 0:13:16.400 A big interview for US. European anti trust regulators say 0:13:16.640 --> 0:13:19.760 the relationship between Microsoft and open Ai is one they're 0:13:19.800 --> 0:13:23.360 monitoring closely. I sat down with European Commissioned Executive Vice 0:13:23.400 --> 0:13:27.400 President Margareta Vesta for an exclusive interview about big tech 0:13:27.640 --> 0:13:29.160 and the competitive market. Listen. 0:13:32.000 --> 0:13:35.920 I think we all followed, almost hour by hour, the 0:13:36.000 --> 0:13:40.760 situation of the leadership of open Ai, the back and forth, 0:13:41.320 --> 0:13:44.320 how it was first very opaque and then became more 0:13:44.360 --> 0:13:47.840 and more clear. And what is interesting for us, of course, 0:13:48.000 --> 0:13:50.880 is what is the real relationship between open Ai and 0:13:50.960 --> 0:13:55.800 Microsoft When it comes to control of the business in question. 0:13:56.800 --> 0:14:01.000 This is very preliminary, but it is part of a 0:14:01.160 --> 0:14:04.800 sort of a larger endeavor to understand how AI will 0:14:05.480 --> 0:14:09.599 affect our marketplaces because what we have seen with technology 0:14:09.640 --> 0:14:13.280 over the last two decades, it is completely upended how 0:14:13.320 --> 0:14:15.760 a number of markets are working, both the digital markets 0:14:15.760 --> 0:14:19.320 themselves but also other markets. Now, when we put in 0:14:19.440 --> 0:14:23.240 AI to that game, of course, we see that this 0:14:23.280 --> 0:14:27.400 may accelerate some of the behaviors that we have seen 0:14:27.440 --> 0:14:29.280 and some of the things that we've been concerned about. 0:14:29.800 --> 0:14:35.040 So we've just launched a probe for market participants, for businesses, 0:14:35.520 --> 0:14:39.240 for lawyers, for academics to participate and. 0:14:39.160 --> 0:14:41.880 To give us feedback as to how will AI. 0:14:42.480 --> 0:14:45.960 Influence competitive competitivity in the. 0:14:45.920 --> 0:14:49.640 Market, incisure that extends the hardware. Nvidia disclosed that you 0:14:49.720 --> 0:14:53.880 were looking informally at its behavior within the graphics card market. 0:14:54.600 --> 0:14:57.520 Again the similar question, but what were your concerns that 0:14:57.560 --> 0:14:59.280 prompted you to look. 0:15:00.600 --> 0:15:04.960 Well, our concerns are it may sound very trivial, but 0:15:05.000 --> 0:15:07.480 it is always the same thing that is driving us 0:15:07.760 --> 0:15:10.840 to make sure that the market is truly open and competitive. 0:15:11.720 --> 0:15:14.120 And when it comes to everything digital, we're in a 0:15:14.160 --> 0:15:20.440 situation where network effects, where scale really matters. That goes 0:15:20.520 --> 0:15:23.440 for both some of the hardware companies and goes indeed 0:15:23.480 --> 0:15:28.520 for software. So we are driven by sort of what 0:15:28.560 --> 0:15:32.000 we have seen over the last ten years that you 0:15:32.120 --> 0:15:35.480 really need to be on the point before market's tip 0:15:35.720 --> 0:15:39.480 if you want to make sure that smaller business competitors 0:15:39.720 --> 0:15:44.200 actually can build, innovate, but also scale in this environment. 0:15:45.240 --> 0:15:47.600 I want to go back to a period of time 0:15:47.880 --> 0:15:50.200 before you took a leave of absence to pursue the 0:15:50.240 --> 0:15:53.040 IB role, which we can discuss. One of the last 0:15:53.080 --> 0:15:56.880 things you did was order on a prelim basis that 0:15:57.040 --> 0:16:00.560 Google break up its ad tech business and done, you've 0:16:00.600 --> 0:16:03.040 kind of followed the steps of the DOJ. Is that 0:16:03.160 --> 0:16:05.800 kind of a template or model of some action you 0:16:05.840 --> 0:16:08.680 could take in your remaining year in this role. 0:16:09.640 --> 0:16:13.320 Well, it all depends on the cases, which cases no, 0:16:13.520 --> 0:16:18.360 but we in order to ask or suggest something as 0:16:18.400 --> 0:16:21.600 far reaching as a breakup, of course that has to 0:16:21.640 --> 0:16:22.520 be the only solution. 0:16:32.800 --> 0:16:37.120 Let's talk about those eleven newly allowed bitcoin exchange traded funds. 0:16:37.280 --> 0:16:40.720 Many investors are actually discovering that approved doesn't always mean available. 0:16:40.800 --> 0:16:43.520 Vanguard's brokerage on, for example, will not offer training in 0:16:43.560 --> 0:16:46.680 these ETFs that invest directly in spot bitcoin. According to 0:16:46.720 --> 0:16:49.640 a spokesperson, Meryl Edge is still evaluating whether to provide 0:16:49.640 --> 0:16:52.680 the service or not. Still Mark founder, our managing partner, 0:16:52.720 --> 0:16:55.560 Elease Colleen is with us because she has been backing 0:16:55.560 --> 0:16:59.320 these startups, these bitcoin enabled businesses have founders since twenty 0:16:59.360 --> 0:17:01.040 thirteen and want to get your take a lease on 0:17:01.080 --> 0:17:03.680 what seems to be some good fun flow coming in. 0:17:04.119 --> 0:17:07.639 Perhaps some still difficulty getting access if you're perhaps a 0:17:07.960 --> 0:17:11.000 brokering with Vanguard. But what does this mean for your space? 0:17:12.560 --> 0:17:15.360 Well, it was a blockbuster day one for the Bitcoin 0:17:15.440 --> 0:17:20.119 Spot ETF class. We saw about a protected six hundred 0:17:20.119 --> 0:17:23.840 and twenty five million in flows, with Bitwise, Blackrock, and 0:17:23.880 --> 0:17:27.760 Fidelity leading the class. What's important for my space in 0:17:27.800 --> 0:17:31.800 the private markets is that the financialization of bitcoin is 0:17:31.840 --> 0:17:35.720 proceeding at a rapid pace. We see that now reflected 0:17:35.760 --> 0:17:41.080 in this mainstream financed financial acceptance and adoption of bitcoin 0:17:41.320 --> 0:17:44.720 through the Bitcoin Spot ETF. But on the private side, 0:17:44.800 --> 0:17:49.120 innovation is happening as well that further advances bitcoin as 0:17:50.200 --> 0:17:52.160 an asset and as a currency. 0:17:52.320 --> 0:17:55.880 What sort of solutions and indeed what problems are they 0:17:55.880 --> 0:17:59.000 trying to solve because ultimately I'm wondering whether there's any 0:17:59.040 --> 0:18:01.240 cannibalization by the fact that now you don't need to 0:18:01.280 --> 0:18:03.560 go and open up wallllets go and invest in bitcoin directly. 0:18:03.760 --> 0:18:06.360 You can gain exposure through an ETF. It's so much easier. 0:18:07.520 --> 0:18:10.320 Well, this is what's important about the introduction of the 0:18:10.359 --> 0:18:15.280 spot ETF is that it's an easy access product for 0:18:15.480 --> 0:18:18.960 retail investors and institutions that may feel more confident in 0:18:19.080 --> 0:18:24.240 first accessing bitcoin through a regulated product like the ETF. 0:18:24.960 --> 0:18:27.720 And on top of that, the marketing that has gone 0:18:28.000 --> 0:18:30.800 into the launch of these products and that supports their 0:18:31.240 --> 0:18:36.159 continued adoption is consistent with bitcoin's core principles, which is 0:18:36.200 --> 0:18:40.680 that bitcoin allows investors to hedge against risk of inflation 0:18:41.320 --> 0:18:46.119 or monetary debasement that have been global concerns, including for 0:18:46.440 --> 0:18:47.680 developed markets. 0:18:47.320 --> 0:18:48.000 Like the US. 0:18:48.440 --> 0:18:51.560 What we expect to see from the spot ETF is 0:18:51.600 --> 0:18:56.679 an adoption of bitcoin will increase because investors now have 0:18:56.920 --> 0:19:00.919 a familiar and easy way to access it. But I 0:19:01.000 --> 0:19:03.320 expect to see in the longer term or in the 0:19:03.359 --> 0:19:07.479 mid term even is that accessing bitcoin and holding bitcoin 0:19:07.520 --> 0:19:11.119 through a spot ETF, holding exposure to bitcoin will allow 0:19:11.240 --> 0:19:14.919 people the motivation to continue to learn about bitcoin and 0:19:14.960 --> 0:19:18.800 will could lead to people's derisk access and purchase of 0:19:18.880 --> 0:19:20.560 bitcoin or related products. 0:19:21.560 --> 0:19:25.280 At least there's familiar and easy way to access. And 0:19:25.320 --> 0:19:28.560 then there's the eleven ETFs that got approved, and it's 0:19:28.600 --> 0:19:31.480 amazing that in the news cycle already flagging those that 0:19:31.520 --> 0:19:35.840 won't actually offer the service. Do we need eleven ETFs? 0:19:37.960 --> 0:19:40.800 Market will decide that I'm not sure that we need eleven, 0:19:40.840 --> 0:19:43.639 that we do see some breakout performance, as they noted 0:19:43.680 --> 0:19:48.280 with Bitwise, Fidelium, Blackrock. On the private side, some of 0:19:48.280 --> 0:19:51.439 the products that are developing to further financialize the space 0:19:51.480 --> 0:19:55.600 are also exciting and likely to those that purchase spot 0:19:55.640 --> 0:19:58.840 ETF themselves. So to mention a few of the areas 0:19:58.880 --> 0:20:01.760 of innovation that we're seeing in the private markets, I'll 0:20:01.800 --> 0:20:05.560 note that the point denominated insurance products came to market 0:20:05.680 --> 0:20:09.040 in late twenty twenty three. What that means is that 0:20:09.119 --> 0:20:12.040 you can hold a policy that's to nominate in the 0:20:12.600 --> 0:20:19.000 scene that's producing a BTC return. And we're seeing products 0:20:19.000 --> 0:20:22.600 that also further helped the space mature, such as a 0:20:22.680 --> 0:20:24.960 lease for preserve software. 0:20:24.800 --> 0:20:28.600 Just deep analysis a lease and we're grateful for your 0:20:28.640 --> 0:20:32.360 time release, But we're at a time Cara quit check 0:20:32.400 --> 0:20:34.640 in on the market. There is some momentum right now 0:20:34.680 --> 0:20:38.360 around Meta. I don't see any real news catalyst when 0:20:38.359 --> 0:20:41.520 it comes to social media stocks or Meta in particular, 0:20:41.760 --> 0:20:44.399 but it is a percentage point it is doing well. 0:20:44.560 --> 0:20:46.640 The opposite of that being Tesla is the biggest points 0:20:46.720 --> 0:20:49.359