WEBVTT - Amazon HQ2 Construction on Pause and Another Apple Exec Leaves 0:00:14.600 --> 0:00:16.919 I'm Caroline High and I'm ad Love though, both of 0:00:16.960 --> 0:00:20.200 us in San Francisco. The final time this week, Busy Friday. 0:00:20.320 --> 0:00:23.720 This is Bloomberg Technology. The markets risk on Friday, the 0:00:23.800 --> 0:00:26.520 headlines flying left right in center, and I'll tell you 0:00:26.560 --> 0:00:29.080 there's one asset class that is not risk on today too. 0:00:29.200 --> 0:00:31.600 We'll dig into all of that. First coming up, Amazon 0:00:31.680 --> 0:00:35.479 puts construction of its second headquarters on hold following its 0:00:35.479 --> 0:00:40.000 biggest ever job cuts, and Apple's executive exodus continues. This 0:00:40.080 --> 0:00:42.159 time is the person in charge of I Cloud, I 0:00:42.280 --> 0:00:47.000 Message and FaceTime and Silvergate's struggle for survival. It's weighing 0:00:47.080 --> 0:00:51.200 on overall crypto sentiment. Bloomberg breaking the story that constructions 0:00:51.240 --> 0:00:54.880 being paused Carrow in Virginia on HQU two. That second 0:00:54.880 --> 0:00:58.400 phase of construction the three twenty two story towers really interesting. 0:00:58.640 --> 0:01:01.240 Let's get into the d Tell the person who broke 0:01:01.280 --> 0:01:03.880 the story one, Matt Day is with us, and just 0:01:03.960 --> 0:01:07.600 talk to us, Matt about the importance of this second 0:01:07.640 --> 0:01:09.920 phase of the construction, because it's actually the bigger part 0:01:09.920 --> 0:01:12.640 of the construction. Right, Yeah, that's right. They're just now 0:01:12.680 --> 0:01:15.800 wrapping up the construction of two twenty two story towers. 0:01:15.840 --> 0:01:18.520 That's the first phase. It's basically done. Amazon moves their 0:01:18.560 --> 0:01:21.000 eight thousand workers in the area into those fieldities this 0:01:21.040 --> 0:01:23.679 spring and summer. What's a issue here is a much 0:01:23.760 --> 0:01:26.679 larger three twenty two story towers. It's the part of 0:01:26.680 --> 0:01:28.520 the complex. It's going to have the helix, the sort 0:01:28.520 --> 0:01:31.880 of spiral poopamoji shaped building that's going to have a 0:01:31.959 --> 0:01:34.200 bunch of plants in it, big conference center, the centerpiece 0:01:34.280 --> 0:01:37.400 architecturally of the campus that Amazon hopes to build. All 0:01:37.440 --> 0:01:42.080 that's on pause right now, no digging for the foreseable future. Hey, Matt, 0:01:42.280 --> 0:01:44.840 I know that last April this was approved and sources 0:01:44.840 --> 0:01:47.120 of telling us that Amazon was ready to pull the trigger. 0:01:47.120 --> 0:01:49.680 They held off. They then considered getting shovels in the 0:01:49.680 --> 0:01:52.680 ground to start the year. What did Amazon tell you 0:01:52.960 --> 0:01:56.559 about this decision? Why they decided to hit the brakes? 0:01:56.840 --> 0:01:58.680 So they said some of the obvious things you'd think, 0:01:58.720 --> 0:02:00.560 you know, like listen, we're not sure what kind of 0:02:00.640 --> 0:02:02.080 hiring we're going to be doing in the next couple 0:02:02.120 --> 0:02:04.840 of years. They've had a hiring freezon since late last year. 0:02:04.960 --> 0:02:07.240 We don't know when that lifts. And there's also just 0:02:07.280 --> 0:02:09.560 a different vibe around Amazon today. Than there was when 0:02:09.560 --> 0:02:11.519 they announced this campus in the first place. You know, 0:02:11.520 --> 0:02:13.440 back then they were growing billiaps and bounds. They'd run 0:02:13.440 --> 0:02:15.359 out of space in Seattle. They were searching for really 0:02:15.400 --> 0:02:18.120 anywhere to put people all across the country. So twenty 0:02:18.160 --> 0:02:20.640 five thousand was not so ambitious a target then. It 0:02:20.639 --> 0:02:24.800 looks a lot more ambitious today. Just looking at pictures 0:02:24.840 --> 0:02:28.400 of that poop emojie as you called it, I thought 0:02:28.400 --> 0:02:30.079 it was a helix. I think we hadn't heard it 0:02:30.160 --> 0:02:35.240 called that officially yet, Matt, talk to us though about 0:02:35.280 --> 0:02:37.840 you know, the serious nature of this is that Arlington, 0:02:37.880 --> 0:02:40.040 Virginia is going to be worried. In particular, they think 0:02:40.040 --> 0:02:42.799 of the tax breaks well eight hundred million dollars worth 0:02:42.960 --> 0:02:45.160 given to Amazon to lure them to bring in what 0:02:45.240 --> 0:02:48.639 twenty five thousand workers, that's right. But the good news 0:02:48.639 --> 0:02:51.720 for Arlington anyways, they haven't handed anything over yet. You know, 0:02:51.800 --> 0:02:55.560 some of the tax breakes related to hotel occupancy fees 0:02:55.600 --> 0:02:57.720 I would get sent Amazon's way, But a lot of 0:02:57.720 --> 0:02:59.919 them were just job related, Like once they started put 0:03:00.280 --> 0:03:02.200 butts and seats and they hit certain targets, you know, 0:03:02.240 --> 0:03:05.560 then they'd get tax breaks on on the payroll taxes there, 0:03:05.600 --> 0:03:07.799 so that that money hasn't started changing hands yet. That's 0:03:08.000 --> 0:03:10.400 the good news for Arlington is if Amazon says they're 0:03:10.400 --> 0:03:12.600 committed to it, they still think that they're getting a 0:03:12.600 --> 0:03:15.320 pretty good deal winning if Amazon does complete the campus 0:03:15.320 --> 0:03:19.400 as they've planned. Bloomberg's Matt Day reporting out of Seattle. 0:03:19.600 --> 0:03:21.959 Good stuff, Thank you so much. Let's branch out a 0:03:22.000 --> 0:03:24.519 little bit and talk about tech more broadly. Denny Fish, 0:03:24.600 --> 0:03:28.800 portfolio manager at Janie Henderson, managing four billion dollars across 0:03:28.840 --> 0:03:33.280 funds in the tech space, leading technology research. It's interesting, Denny. 0:03:33.560 --> 0:03:35.040 I won't put you on the spot when it comes 0:03:35.040 --> 0:03:37.120 to Amazon specifically. I know you hold that stock in 0:03:37.200 --> 0:03:40.920 your funds, But as an example, Amazon kind of hitting 0:03:41.000 --> 0:03:44.360 the brakes on the real estate side, having already worked 0:03:44.400 --> 0:03:46.800 on the layoff side. What is that telling you about 0:03:46.840 --> 0:03:50.120 about the technology set right now? The prudence that it's 0:03:50.200 --> 0:03:53.880 kind of going through, well, it's it's definitely different than 0:03:53.920 --> 0:03:56.240 it was twelve months ago in terms of the general 0:03:56.280 --> 0:04:01.240 philosophy for the background, both in terms of in Amazon's 0:04:01.280 --> 0:04:05.000 case specifically, it's a company that overhired during the pandemic, 0:04:06.360 --> 0:04:10.040 put a lot of capital to work and logistics and fulfillment. 0:04:10.440 --> 0:04:13.720 You know, we're just talking about, you know, the headquarters 0:04:13.720 --> 0:04:17.680 being put on pause. And the challenge for Amazon is twofold. 0:04:17.760 --> 0:04:21.560 You have this highly profitable growth business, Amazon Web Services 0:04:21.600 --> 0:04:24.840 that's starting to slow. But more importantly for them, they're 0:04:24.839 --> 0:04:27.839 really a physical business with a digital front end. And 0:04:27.920 --> 0:04:30.560 as a result, there's only one way to get out 0:04:30.720 --> 0:04:34.480 of that situation when you overinvest, and you either have 0:04:34.520 --> 0:04:37.560 to significantly reduce your footprint, which is really hard for 0:04:37.600 --> 0:04:39.800 them to do because of the nature of what fulfillment 0:04:39.800 --> 0:04:42.680 and logistics represents. So they have to grow out of it, 0:04:42.880 --> 0:04:46.279 and they have to get efficiencies on a unit profitability basis, 0:04:46.520 --> 0:04:49.599 and that's what the company is grinding through right now. 0:04:49.880 --> 0:04:54.320 And then when you exacerbate that with a tough economic environment, 0:04:54.520 --> 0:04:56.520 it just makes it that much harder and that much 0:04:56.560 --> 0:05:00.400 longer to recoup and start to actually drive some leverage 0:05:00.400 --> 0:05:03.080 out of those investments that they've made. The other story 0:05:03.120 --> 0:05:04.800 of the week has been earnings, and I think about 0:05:04.880 --> 0:05:07.880 names like Dell and then contrast that with Broad Common. 0:05:07.920 --> 0:05:10.960 We're getting kind of really make signals about demand from 0:05:10.960 --> 0:05:14.560 corporate America, global corporates and the consumer kind of what's 0:05:14.600 --> 0:05:17.120 your tea leaves read of this week and what we're 0:05:17.160 --> 0:05:19.400 seeing from tech. You know, I would say broadly the 0:05:19.560 --> 0:05:22.919 entire earning season if we wanted to unpack that, and 0:05:23.000 --> 0:05:25.760 this was just a continuation of that, and that is 0:05:25.839 --> 0:05:29.560 that if we look across sectors, you know, semiconductors are 0:05:29.600 --> 0:05:33.520 always the leading indicators for global economic growth or global 0:05:33.520 --> 0:05:37.760 economic slowdowns, and we've seen a material slowdown there, most 0:05:37.760 --> 0:05:42.280 companies lowering expectations pretty materially for the year. But nonetheless 0:05:42.320 --> 0:05:44.760 the stocks have actually been responding all right, which is 0:05:44.760 --> 0:05:47.679 really encouraging because semiconductors are the first ones to actually 0:05:47.720 --> 0:05:50.840 start to discount the upturn as well when they're incredible 0:05:50.880 --> 0:05:55.600 businesses with great industry structure, but nonetheless that's where we're at, 0:05:55.680 --> 0:05:59.520 and they're highly economically sensitive. And then you have kind 0:05:59.520 --> 0:06:03.000 of the secular growth stories and software and internet and 0:06:03.040 --> 0:06:08.120 other sectors where things are still growing, but they're just 0:06:08.160 --> 0:06:11.720 not growing nearly as fast as the economy starts to 0:06:11.760 --> 0:06:14.960 take hold as well as there was just so much 0:06:15.000 --> 0:06:17.560 capital that came into the space over you know, a 0:06:17.600 --> 0:06:21.159 five to seven year period, and the market's really starting 0:06:21.200 --> 0:06:25.160 to discern now within these names on the unit economics, 0:06:25.240 --> 0:06:28.880 and you know, companies that have really good, strong, durable 0:06:28.920 --> 0:06:33.479 competitive positions, really durable unit economics, and those are the 0:06:33.480 --> 0:06:35.800 companies that are likely to perform as we get to 0:06:35.839 --> 0:06:38.839 the other side of this, you know, economic situation that 0:06:38.839 --> 0:06:40.960 we're in right now and strong balance sheets. And I 0:06:41.040 --> 0:06:43.760 just want to bring this particular point that was really 0:06:43.839 --> 0:06:45.800 driven home by g Sam a little bit earlier. Just 0:06:45.839 --> 0:06:52.120 take you listen to any tech is getting grouped in 0:06:52.160 --> 0:06:54.320 with growth quote unquote if you will. But there's a 0:06:54.320 --> 0:06:56.839 lot of quality. There's good balance sheet, there's a lot 0:06:56.880 --> 0:06:59.120 of cash, there's the ability to still do m and 0:06:59.200 --> 0:07:03.480 a strong activities. And so again we're really focused on 0:07:03.600 --> 0:07:07.400 there are some strong, solid micro stories and it's less hey, 0:07:07.520 --> 0:07:12.480 let's buy the index. All people sort of throwing babies 0:07:12.480 --> 0:07:14.720 out with bath waters, to use that awful phrase, but 0:07:14.840 --> 0:07:18.800 ultimately people tying everything up. Some great big babies in there. 0:07:19.040 --> 0:07:22.320 You're throwing those out? Yeah? Or have we now discerned 0:07:22.440 --> 0:07:25.160 that Microsoft, which I think is your largest holding, some 0:07:25.240 --> 0:07:28.640 other companies are of a different beast and actually perhaps 0:07:28.640 --> 0:07:30.240 don't see them as growth stocks in the way they 0:07:30.320 --> 0:07:34.240 used to. Well, I think it's twofold. There are a 0:07:34.280 --> 0:07:36.080 couple of dynamics that are going on. If we just 0:07:36.120 --> 0:07:39.080 think about what I call the gigacaps. Okay, so kind 0:07:39.080 --> 0:07:41.840 of think about feng Ma. You know, broadly speaking, we 0:07:41.960 --> 0:07:44.360 have started to see a lot more discernment in terms 0:07:44.400 --> 0:07:47.320 of the multiples we've seen where you know, Google's traded 0:07:47.440 --> 0:07:50.200 much lower in terms of its you know, expected earnings multiple. 0:07:50.600 --> 0:07:53.640 Microsoft and Apple have continued to hold their multiples, I think, 0:07:53.720 --> 0:07:56.520 just given the confidence in those business models over the 0:07:56.560 --> 0:07:59.880 longer term, and all of these companies are getting a 0:07:59.880 --> 0:08:02.000 lot more competitive with each other. You know, if we 0:08:02.120 --> 0:08:04.680 just think about the idea of AI and what we've 0:08:04.720 --> 0:08:08.000 seen with open AI and chat GPT and the potential 0:08:08.040 --> 0:08:12.960 implications to Google search business. But that's all upside for Microsoft, 0:08:13.040 --> 0:08:17.280 and so the market's trying to figure out what this 0:08:17.520 --> 0:08:20.680 is going to mean over the longer term. And then, yeah, 0:08:20.680 --> 0:08:22.720 I would say twenty twenty two, we just kind of 0:08:22.720 --> 0:08:25.960 threw everything out, you know it with the bathwater, and 0:08:26.000 --> 0:08:28.720 then early this year we've had this risk on rally, 0:08:28.760 --> 0:08:30.720 not you know, the last week and a half or so, 0:08:30.800 --> 0:08:33.400 which has been a little choppier, but coming into this 0:08:33.480 --> 0:08:36.559 year now like it's it's one of those classic early 0:08:36.720 --> 0:08:39.280 cycle potential rallies. I don't know if it's a bear 0:08:39.360 --> 0:08:41.520 market rally. I don't know if it's an early cycle rally, 0:08:41.679 --> 0:08:44.040 but it feels more like an early cycle rally because 0:08:44.280 --> 0:08:47.800 everything then rises and then what usually happens is you 0:08:47.840 --> 0:08:49.880 get six or nine months down the road. It's the 0:08:49.880 --> 0:08:53.120 companies that have the real financial performance that really start 0:08:53.200 --> 0:08:56.079 shining through, and that's where you start to generate your 0:08:56.080 --> 0:08:58.839 returns over a multi year basis. And tech Okay, you 0:08:58.880 --> 0:09:02.680 mentioned Chat Pizza, and one of the key megacaps that 0:09:02.760 --> 0:09:05.040 has outperformed so far this year is in Nvidia. I 0:09:05.080 --> 0:09:08.680 know it's holding of uls. All you making bets now 0:09:08.800 --> 0:09:11.439 on who is best place in the artificial intelligence race 0:09:11.559 --> 0:09:14.760 right now? Yeah, we are. You know, obviously, as you mentioned, 0:09:15.240 --> 0:09:19.240 Invidia's an obvious one for the moment because the fact 0:09:19.240 --> 0:09:22.600 of the matter is you can't deploy GPT without a 0:09:22.600 --> 0:09:24.960 ton of GPUs, right, I mean, it's just like that's 0:09:25.200 --> 0:09:29.360 that's what it is. And now is that going to persist? 0:09:29.600 --> 0:09:32.160 You know, there's still the opportunity for companies to develop 0:09:32.600 --> 0:09:36.839 application specific processors that might be more efficient for certain 0:09:36.840 --> 0:09:39.920 types of models. So that's a risk. One of the 0:09:39.960 --> 0:09:42.880 most amazing parts of Nvidia's growth story over many years 0:09:42.880 --> 0:09:45.959 has been Kuda. It's software platform for developers that makes 0:09:46.000 --> 0:09:48.920 it easier to program against GPUs and sort of has 0:09:48.920 --> 0:09:52.280 allowed it to win the race. Is that going to 0:09:52.320 --> 0:09:54.680 be a competitive advantage in a world of generative AI 0:09:54.720 --> 0:09:57.760 and large, large language models. We're not quite sure on that, 0:09:58.000 --> 0:10:01.640 but for now there's probably no cleaner play than than 0:10:01.720 --> 0:10:05.960 in video. But as you start thinking across the ecosystem, 0:10:06.080 --> 0:10:09.160 you know, it's interesting. We just mentioned Microsoft for example. 0:10:09.520 --> 0:10:12.839 Anything they do with being is all upside, you know, 0:10:13.000 --> 0:10:16.720 And could they can potentially displace Google as the default 0:10:16.800 --> 0:10:21.320 on iOS? Could they What do you think they potentially could? 0:10:21.520 --> 0:10:25.679 It's clearly in their ambition and all things equal, Um, 0:10:26.040 --> 0:10:28.800 if you're Apple, you just want to provide a consistent 0:10:28.880 --> 0:10:32.240 user experience and you want to extract as much economic 0:10:32.440 --> 0:10:35.480 value as you can GPT GPU. I'll hit you in 0:10:35.559 --> 0:10:38.760 another acronym that Karen and I have been hearing every day. Fomo. 0:10:40.160 --> 0:10:43.480 That was comes you by me is what we're seeing 0:10:43.520 --> 0:10:46.559 in the market broadly. Fomo. You know, C three AI 0:10:46.800 --> 0:10:51.559 is a name another third percent today based on fundamentals, 0:10:51.600 --> 0:10:54.480 I think I think not, No, it's not and and 0:10:54.720 --> 0:10:57.559 so fomo is driving you know, so when I talked 0:10:57.600 --> 0:11:00.439 about that classic so we have two things. We've kind 0:11:00.440 --> 0:11:03.000 of had that classic early cycle behavior in terms of 0:11:03.000 --> 0:11:06.160 the market, and then we also have you know, the 0:11:06.720 --> 0:11:12.480 thematic artificial intelligent. It's kind of you know, investing environment 0:11:12.559 --> 0:11:15.480 and institution and retail investors get behind and it's easy 0:11:15.520 --> 0:11:18.160 to kind of throw some capital at some names like that. 0:11:18.240 --> 0:11:20.560 But and so the reality is like that is a 0:11:20.600 --> 0:11:23.600 lot of FOMO, right because the fundamentals haven't changed that much. 0:11:23.920 --> 0:11:27.840 There aren't a lot of pure ways to actually play 0:11:27.960 --> 0:11:32.720 artificial intelligence, and it's really going to be more of 0:11:33.320 --> 0:11:37.240 what can actually enhance the value of an existing business um, 0:11:37.960 --> 0:11:41.239 you know, where companies are well positioned on the infrastructure 0:11:41.280 --> 0:11:44.760 side to you know benefit from you know, the massive 0:11:44.760 --> 0:11:46.640 buildouts that we're going to actually have to see to 0:11:46.760 --> 0:11:50.920 support this. And and but we're also going to see 0:11:50.920 --> 0:11:53.880 a ton we always see this, a ton of speculation 0:11:54.360 --> 0:11:56.880 around the edges and sort of maybe some of the 0:11:56.960 --> 0:11:59.640 less proven. But you know, a company that has AI 0:11:59.760 --> 0:12:05.319 and it's you know, yeah, exactly, well let's go from 0:12:05.320 --> 0:12:09.760 AI to VR because ED was helping break great scoops 0:12:09.760 --> 0:12:13.920 on Meta today and ultimately this company is having to 0:12:14.000 --> 0:12:18.320 cut prices of its pretty expensive virtual reality headsets. That 0:12:18.480 --> 0:12:20.280 still there's a lot of hope, a lot of hype, 0:12:20.360 --> 0:12:23.320 perhaps not in the purchasing that many had anticipated, but 0:12:23.400 --> 0:12:25.920 you've been adding to your meta position. What was another 0:12:26.000 --> 0:12:29.240 back of that, Yeah, so it's it's it's interesting. It's 0:12:29.280 --> 0:12:33.640 not because of ARVR, to be clear. Yeah, yeah, it's 0:12:33.640 --> 0:12:35.400 not the metaver you know. The metaverse is like, it's 0:12:35.400 --> 0:12:37.280 this thing we've been talking about for many, many years, 0:12:37.559 --> 0:12:40.200 and it's going to evolve more slowly, right because you're 0:12:40.200 --> 0:12:43.440 gonna have a bunch of different metaverses, consumer, enterprise, different 0:12:43.520 --> 0:12:46.960 use cases. What's interesting about meta one is the stock 0:12:47.000 --> 0:12:50.520 got too darn cheap. Okay, the expectation was, you know, 0:12:50.600 --> 0:12:53.000 they had to do something to repair their stock price 0:12:53.040 --> 0:12:55.480 and get aggressive with their cost structure, and they did 0:12:55.520 --> 0:12:57.199 so that was part of the thesis. But there's another 0:12:57.200 --> 0:13:01.440 part of the thesis too, and that is about eighteen 0:13:01.480 --> 0:13:07.080 months ago, Apple effectively exercised its market power and you 0:13:07.160 --> 0:13:11.200 had two things you hadda yeah, yeah, yeah exactly, or 0:13:11.400 --> 0:13:15.360 reduced ad tracking right with IDFA and ATT and oh 0:13:18.160 --> 0:13:22.680 they're they're two more and that really hurt meta. It 0:13:22.880 --> 0:13:26.280 really inhibited their ability to drive return on AD spend 0:13:26.559 --> 0:13:30.679 because they lost the ability to retarget and measure consumers 0:13:30.920 --> 0:13:35.280 across the broader Internet. Now what's interesting is they are 0:13:35.440 --> 0:13:38.480 one of the largest buyers of GPUs right now on 0:13:38.520 --> 0:13:41.120 the planet. They're rear connecting their data centers and the 0:13:41.200 --> 0:13:43.200 reason they're doing it is they're all in on AI 0:13:43.640 --> 0:13:46.960 to drive better AD measurement. To the extent they're able 0:13:47.000 --> 0:13:50.319 to do that, they might actually widen their competitive advantage 0:13:50.360 --> 0:13:54.720 over time. And it's kind of like a maybe not 0:13:54.880 --> 0:13:58.120 quite as obvious way to think about a company that 0:13:58.160 --> 0:14:01.400 could benefit from AI, given how bad it's been hurt 0:14:01.440 --> 0:14:06.360 by Apples so far. Love that thesis. Come back, Denny. 0:14:06.400 --> 0:14:08.160 It's been a joy to actually here's that next to 0:14:08.160 --> 0:14:10.840 you up San Francisco. But hope you come back into 0:14:10.840 --> 0:14:12.319 the office. We thank you for making a special trip 0:14:12.360 --> 0:14:16.920 to Sidney. Jannis Henderson, portfolio manager, Denny Quish coming up 0:14:17.240 --> 0:14:20.160 another key Apple executive, just talking about that company. When 0:14:20.160 --> 0:14:22.800 they're leaving the company, will discuss why this has Bloomberg, 0:14:33.680 --> 0:14:36.880 the executive in charge of Apple's I Cloud, I message 0:14:36.880 --> 0:14:40.720 and FaceTime infrastructure, is leaving the company, according to sources, 0:14:40.760 --> 0:14:43.120 after five years in the role. Michael Abbott is stepping 0:14:43.200 --> 0:14:46.520 down as the company's cloud chief next month. It adds 0:14:46.560 --> 0:14:50.000 to the revolving door of executives at the company. Bloomberg 0:14:50.080 --> 0:14:53.200 Senior technology editor Nigg Turner is here with us the 0:14:53.280 --> 0:14:56.800 revolving door. I think that's part of the story, isn't it. Yes. 0:14:56.880 --> 0:14:59.160 I mean, you know, it's not necessarily uncommon around the 0:14:59.240 --> 0:15:01.440 end of the year for certain number of Apple executives 0:15:01.440 --> 0:15:04.560 to leave. It feels like more than normal this year, 0:15:05.280 --> 0:15:07.880 especially between now and like the sort of the last 0:15:07.880 --> 0:15:10.200 few months of the year, you've had a lot of 0:15:10.240 --> 0:15:12.840 sort of VP level people in charge of everything from 0:15:12.880 --> 0:15:16.120 kind of industrial design, the chief privacy officer to the 0:15:16.200 --> 0:15:21.240 head of the website, you know, depart resart. So April 0:15:21.480 --> 0:15:23.520 is the time that he's going to be particularly leaving. 0:15:23.560 --> 0:15:26.280 Michael about nuts in large part because of when it 0:15:26.480 --> 0:15:30.800 shares best right. I'm interested though, on whether they're filling 0:15:31.120 --> 0:15:34.720 these roles that swichly in some cases, and in this case, 0:15:34.760 --> 0:15:36.960 they are having someone take over his duties, which is 0:15:37.000 --> 0:15:40.480 Jeff Robin, who's the guy who invented iTunes. So that's 0:15:40.520 --> 0:15:45.640 not a bad flax claim nice, you know. So in 0:15:45.760 --> 0:15:49.080 some other cases they're basically divvying up duties and giving 0:15:49.080 --> 0:15:50.840 them other people. There's not really going to be a 0:15:50.920 --> 0:15:53.480 chief privacy officer the way there was before, for instance, 0:15:53.840 --> 0:15:57.760 the industrial design person. They essentially giving those duties to 0:15:57.800 --> 0:15:59.800 different people, which is pretty big deal because that used 0:15:59.840 --> 0:16:02.320 to be Johnny I and right, you know the heart 0:16:02.360 --> 0:16:04.920 of Apple more real quick, We've only got about thirty seconds. 0:16:04.920 --> 0:16:07.960 But the serious thing is that services is important, right, well, 0:16:08.000 --> 0:16:10.880 so everything cloud related. That's been huge for them. I 0:16:10.880 --> 0:16:12.640 think there's been a bit attention over the years in 0:16:12.680 --> 0:16:14.760 terms of how much they rely on like Amazon and 0:16:14.800 --> 0:16:18.280 Google to do cloud versus doing it themselves. And so 0:16:18.400 --> 0:16:20.520 maybe that's something the new person will have to sort 0:16:20.520 --> 0:16:24.000 of sort out too, but they do basically a mix 0:16:24.040 --> 0:16:28.280 at the moment. Nick, fascinating, great story coming from Mark 0:16:28.320 --> 0:16:30.760 German and Nick turn a key team pays. We thank 0:16:30.760 --> 0:16:42.240 you so much for coming on explaining it all time. 0:16:42.280 --> 0:16:46.160 Now for talking tech, let's start with AI artificial intelligence 0:16:46.200 --> 0:16:49.600 startup Inflection AI seeking to raise as much as six 0:16:49.720 --> 0:16:52.880 hundred and seventy five million dollars that according to the 0:16:52.920 --> 0:16:57.000 Financial Times, citing sources. That's the company Carrow, founded by 0:16:57.080 --> 0:17:00.480 Mustapha Sulliman, one of Deep Minds founders, as well as 0:17:00.520 --> 0:17:05.280 LinkedIn creator Reid Hoffman, speaking of which Reid Hoffman has 0:17:05.320 --> 0:17:08.720 announced he'll step back from the Open Ai board and 0:17:08.880 --> 0:17:14.040 citing greater transparency because Graylock his firm is increasingly investing 0:17:14.080 --> 0:17:18.359 in companies using open ais APIs, Hoffman says this cou 0:17:18.480 --> 0:17:21.680 cause a conflict of interest. He's been a personal investor 0:17:21.720 --> 0:17:24.600 through his charities and on the board of open Ai 0:17:24.880 --> 0:17:28.320 since twenty fifteen. And finally, don't miss this one, Gwyneth 0:17:28.400 --> 0:17:32.320 Paltrow Kinship Ventures raising seventy five million dollars for its 0:17:32.400 --> 0:17:36.560 debut fund Axios reporting without citing where it got the information, 0:17:36.560 --> 0:17:39.240 act says the firm is looking to invest in early 0:17:39.359 --> 0:17:44.080 stage consumer goods and technology companies. Very on brand for 0:17:44.080 --> 0:17:46.920 one gwyn Poutrow Caroline, and interesting that she's doing it 0:17:46.960 --> 0:17:50.280 in line with Mujera we understand as well. Now MOS 0:17:50.480 --> 0:17:53.720 was coming from Beauty Khan and really focusing on the 0:17:53.760 --> 0:17:57.320 beauty side of investment, but also luckily having interacted a 0:17:57.320 --> 0:18:00.959 plenty with Mos in the previous times through women's networks, 0:18:01.000 --> 0:18:03.119 I know how focus she is on ensuring that women 0:18:03.600 --> 0:18:07.040 that diverse leadership and indeed people get a seat at 0:18:07.040 --> 0:18:10.160 the cap Table are able to invest in fast growing companies. 0:18:10.200 --> 0:18:13.640 So this is an interesting area that of course herself, 0:18:13.920 --> 0:18:17.479 Gwyneth paltrowa business lady Goop no Lesque getting into and 0:18:17.480 --> 0:18:20.000 also she moved on from acting to be an entrepreneur. 0:18:20.240 --> 0:18:22.320 And I think the idea is very much like, I've 0:18:22.359 --> 0:18:26.000 got some money to play with here to support entrepreneurs 0:18:26.040 --> 0:18:29.040 that I see myself. I'm, you know, Avench capitalists finding 0:18:29.119 --> 0:18:33.480 like minded people, similarly experienced people. Speaking of Avench capital 0:18:33.520 --> 0:18:35.200 I think we've got to go back to read Hoffman. 0:18:35.520 --> 0:18:39.280 This is really interesting. The basics are we are investing 0:18:39.320 --> 0:18:43.320 in all sorts of AI related startups. Those AI related 0:18:43.400 --> 0:18:48.720 startups are using GPT three point five. I can't be 0:18:48.760 --> 0:18:50.679 on the board anymore. That is a big piece of 0:18:50.680 --> 0:18:53.720 industry news, given everything that's happened so far this year. Yeah, 0:18:53.760 --> 0:18:56.920 I really think that we've been interviewing the likes of Neiva, 0:18:57.000 --> 0:19:00.200 for example, which in some ways as a competitor to 0:19:00.280 --> 0:19:02.760 the likes of open Ai by not only having a 0:19:02.800 --> 0:19:06.399 search engine that's built around these sort of large language models, 0:19:06.440 --> 0:19:08.760 but also being able to cite where the information is 0:19:08.760 --> 0:19:11.719 coming from. We've interviewed that CEO before and that's our 0:19:11.760 --> 0:19:13.960 relationships were certainly see such a screen looks. So I 0:19:13.960 --> 0:19:16.840 think this is an interesting area that there's gonna be 0:19:16.920 --> 0:19:19.840 a lot of investment being thrown into the AI space, 0:19:19.920 --> 0:19:22.280 and some will be competitors and some will be able 0:19:22.320 --> 0:19:24.119 to grow in tandem. Well very quick. We had some 0:19:24.440 --> 0:19:26.679 Motmedi his colleague on the show just a couple of 0:19:26.680 --> 0:19:28.640 weeks ago, right, and he makes the point I'm looking 0:19:28.680 --> 0:19:32.680 at enterprise companies how they can take existing tools because 0:19:32.720 --> 0:19:35.080 AI will improve every single company I think, is what 0:19:35.119 --> 0:19:38.600 he said. So this makes sense based on the activity 0:19:38.680 --> 0:19:50.640 that we're seeing out there. Welcome back to being my technology. 0:19:50.640 --> 0:19:52.919 I'm Parranghi and I made lovelow, both of us in 0:19:52.960 --> 0:19:55.320 San Francisco for the final time this week. I'm sad 0:19:55.600 --> 0:19:58.440 to say. Now, let's get to crypto markets. They're struggling 0:19:58.840 --> 0:20:02.919 to power through the implosion of silver Gate Capital, the 0:20:02.960 --> 0:20:06.520 bank one of the main banking providers for the crypto industry, 0:20:06.920 --> 0:20:10.000 which is why we're seeing sentiment drop in other crypto 0:20:10.080 --> 0:20:13.720 related assets, Bitcoin hitting a two week low. For more, 0:20:14.280 --> 0:20:17.960 Let's bring in Bloomberg's Uchi Yanguchi. So many headlines on 0:20:18.000 --> 0:20:21.400 the Bloomberg this Friday. What is the latest with silver Gate. 0:20:21.920 --> 0:20:25.480 So we're really is still seeing the ripple effect from 0:20:25.480 --> 0:20:29.440 the collapse of FTX last November. As we know, FTX 0:20:29.560 --> 0:20:32.959 is a major client of Surrogate, and the Surrogate as 0:20:32.960 --> 0:20:35.679 a results suffered from a bank round last year. But 0:20:35.760 --> 0:20:38.240 then this week the bank said that they couldn't really 0:20:38.280 --> 0:20:41.280 file their annual filings on time. They said that this 0:20:41.520 --> 0:20:45.240 disclosed more losses for selling securities, and then they said 0:20:45.240 --> 0:20:49.000 they're evaluating if they can stay aflawed internally, and they 0:20:49.040 --> 0:20:52.960 also indicated risk of being investigated by the Department of Justice. 0:20:53.280 --> 0:20:57.639 So all of these really prompted exodus of all the 0:20:57.760 --> 0:21:01.639 keyp hunters of users on the silver Gate platform, which 0:21:01.680 --> 0:21:04.679 is one of the few and key payments platform for 0:21:04.760 --> 0:21:08.200 crypto companies to transfer US dollar between each other in 0:21:08.280 --> 0:21:13.000 real time. Quin mascalicxy Digital, Paxos Trust, all of these 0:21:13.040 --> 0:21:15.360 saying look card ties with silver Gate are being put 0:21:15.359 --> 0:21:17.679 on hold for the time being. Where then do we 0:21:17.800 --> 0:21:21.080 go for these sorts of ability to transfer, to be 0:21:21.160 --> 0:21:24.320 able to ensure that the pipes are still working, the 0:21:24.320 --> 0:21:28.040 infrastructure still there. That is the question that the industry 0:21:28.040 --> 0:21:31.840 players are trying to figure out. Another bank that's in 0:21:31.840 --> 0:21:34.960 this space is signature bank, but they already announced that 0:21:35.000 --> 0:21:38.919 they're actually planning to reduce the deposits from crypto companies 0:21:39.320 --> 0:21:43.840 and and so that's so there's not many options right 0:21:43.880 --> 0:21:46.840 now for crypto players to find a bank that's willing 0:21:46.880 --> 0:21:50.199 to take them out on and replace the role of surrogate. 0:21:51.280 --> 0:21:53.480 You tee more of a PSA for our audience, But 0:21:53.640 --> 0:21:56.399 some of the ratings agencies catching out ratings cut by 0:21:56.440 --> 0:21:59.840 Moodies at silver Gate not so sure, that's a surprise. 0:22:00.480 --> 0:22:03.439 Where do we go from here? You know, Caroline and 0:22:03.440 --> 0:22:05.680 I were talking actually earlier on a Twitter spaces about 0:22:05.680 --> 0:22:08.359 how we were talking at the end of last year 0:22:08.440 --> 0:22:10.679 the beginning of this year that Silvergate was in trouble. 0:22:10.720 --> 0:22:15.440 Why do they keep falling further and further. So we're 0:22:15.480 --> 0:22:19.720 seeing regulatory pressure from the DC as we know that 0:22:19.840 --> 0:22:24.320 after the bankruptcy of FTX, federal banking regulators all came 0:22:24.359 --> 0:22:28.320 out with warnings talking about the risk of serving cryptal 0:22:28.359 --> 0:22:31.040