ANNOUNCER:
FROM THE HEART OF WHERE MONEY AND POWER COLLIDE IN SILICON
VALLEY, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE
AND ED LUDLOW. CAROLINE:
I'M CAROLINE HYDE AT BLOOMBERG WORLD HEADQUARTERS IN NEW YORK.
ED: I'M ED LUDLOW IN SAN FRANCISCO
CAROLINE:. THIS IS BLOOMBERG TECHNOLOGY.
WE'VE GOT THE LATEST ON THE BANKING SYSTEM IN THE STATE OF
FUNDING, FROM FIAT VENTURES AND COAST ANOVA ED: VENTURES.
COINBASE WEIGHING THE UNITED ARAB EMIRATES FOR ITS HUB.
WE TALKED TO BRIAN ARMSTRONG ON WHAT'
S CAROLINE: DRIVING THAT
DECISION. AND THE LATEST ON META--- THE
COMPANY MAY END NEWS CONTENT ON FACEBOOK AND INSTAGRAM IN
CANADA. AS WE DWELL ON THAT STORY
AROUND A PUBLICLY TRADED COMPANY, LET'S GO BROADLY
ACROSS THE INDICES. SOME CAUTION IN TODAY'S TRADING.
TODAY, WE PULL BACK A LITTLE BIT , BASICALLY FLAT ON THE
DAY, COMING OFF OF OUR LOWS. SEEING SOME TREASURE ON THE
BOND MARKET, NOT MORE FOCUSED ON THE FED BUT FOCUSED ON
SUPPLY, ON CORPORATE BONDS BEING SOLD AND A WHOLE HAVE TO
THEM. WE AR
E UP BY FIVE BASIS POINTS
AS WE SEE SUPPLY PRESSURE IN THE TWO YEAR YIELD CREEPING UP
TO 3.96%. EVEN THOUGH WE SEE THIS
CAUTIOUS TRADING, VOLATILITY IS LOW.
THAT'S HAPPENING IN THE WORLD OF CRYPTO -- WE'VE SEEN
VOLATILITY THERE. WE ARE GOING TO DIG IN TWO
STORIES AROUND BINANCE AND ABILITIES TO TRADE THE OG IN
THE CRYPTO SPACE. NEW MEME COINS COMING ON TO
THAT ECOSYSTEM. ED: TWO HALTS IN A 24 HOUR TIME
FRAME ON BINANCE. THIS PENDING BITCOIN
TRANSACTIONS, YOU SEE CRYPTO-RELATED STOCKS IN THE
EQUI
TY SPACE MOVING TO THE DOWNSIDE, CLOSELY LINKED TO
THAT STORY. THERE IS A LOT OF FEEL-GOOD IN
CYBERSPACE AFTER ITS PRELIMINARY RESULTS CAME IN FAR
ABOVE EXPECTATIONS. YOU SEE ENERGY IN THE
CYBERSECURITY SPACE AND THAT'S WHY REGIONAL BANKS, WE SEE THE
REBOUND IN PACWEST, FOLLOWING ON FROM WHAT WE SAW FRIDAY.
WHAT IS THE RATIONALE -- THERE'S BEEN A LOT OF TALK
ABOUT ITS OPERATIONAL HEALTH AND I REMIND MYSELF THIS
PROGRAM, WHEN IT WAS FOUNDED IN 1999, IT WAS WITH THE REMIT TO
SERVE VENTURE-BACKED C
OMPANIES. REALLY IMPORTANT FOR OUR
AUDIENCE BECAUSE SOME OF THEM HAVE A BANKING SERVICE EVEN
WITH THESE REGIONAL BANKS. CAROLINE:
IT'S IMPORTANT TO THINK ABOUT THE MORE BROAD RISK-TAKING
PEOPLE DO AND DON'T WANT TO DO IS WE ARE SLIGHTLY CAUTIOUS
AROUND THE ULTIMATE SAFETY OF THE BANKING SYSTEM.
LET'S TALK ABOUT THE BANKING SYSTEM WITH SONALI BASAK. IT FEELS LIKE THEY HAVE DIALED
BACK BUT ANY FUNDAMENTAL REASON? SONALI:
THESE STOCKS HAVE SOLD OFF DRAMATICALLY.
IF YOU LOOK AT FRIDAY EVENING, WE HA
D A LOT OF TENUOUS NEWS,
FITCH PLACING PAC WEST ON A NEGATIVE BASIS LOSS. IT IS NOT BECAUSE OF THE BOND
HOLDINGS THAT HURT SO MANY OF THESE BANKS.
THE REASON THEY PUT THEM ON A NEGATIVE WATCH AS THEY ARE
WORRIED ABOUT THIS STRATEGIC DIRECTION MOVING FORWARD.
THERE WERE STORIES ABOUT POTENTIAL STRATEGIC ASSET SALES.
WHAT IS THE BUSINESS MODEL OF PACWEST MOVING FORWARD?
TO ED'S POINT, A FEW OF THESE BANKS STILL UNDER PRESSURE,
BEYOND FIRST REPUBLIC, PACWEST AND WESTERN ALLIANCE HAVE BEEN
AMONG THE
WORST PERFORMERS. A LOT OF BANKS BASED OUT WEST.
WHAT IS IT ABOUT THESE FIRMS THAT BRING THESE DEPOSIT BASES
AND THE RISKS TIED TO LENDING THAT HAVE INVESTORS SPOOKED? ED:
IF THERE IS ANYTHING THE MARKET IS CHEERING, IT SEEMS TO BE A
DIVIDEND CUT. SONALI: TYPICALLY WHEN YOU SEE A
DIVIDEND CUT, YOU DON'T SEE INVESTORS REACT IN POSITIVELY.
BUT IN THIS INSTANCE, THE REASON THERE MIGHT BE RELIEF'S
INVESTORS ARE LOOKING TO PAC WEST TO DO EVERYTHING IT CAN TO
KEEP ITS CAPITAL BASE STRONG. IT DOESN'T
NEED TO BE THE CASE
THESE BANKS FALL INTO DEEPER AND DEEPER CONCERN AFTER WE
HAVE SEEN SUCH BIG ISSUES ALREADY.
THERE ARE LONGER-TERM WORRIES AND YOU SEE IT REFLECTED IN THE
BOND PRICES OF WESTERN ALLIANCE AND PACWEST WHICH HAVE THEIR
BONDS TRADING AT 60 OR $.40 ON THE DOLLAR.
WHEN I TALK TO INVESTORS ON THE SIDELINES, THERE IS A HESITANCY
TO GET IN. UNTIL SOME OF THESE EXISTENTIAL
QUESTIONS ARE CLEARED UP. ED: LET'S RING IN FIAT VENTURES
MANAGING PARTNER, MARCUS FERNANDEZ. WHAT IS UNIQUELY RELE
VANT TO
THE VC COMMUNITY THAT YOU ARE A PART OF AND VENTURE BANK
STARTUPS IN THIS SCENARIO? WHY ARE YOU PAYING SUCH CLOSE
ATTENTION? >> BANKS LIKE SILICON VALLEY
BANK AND PACWEST CATERED TOWARD THE VENTURE COMMUNITY AND START
UP COMMUNITY AS A WHOLE. IT'S NOT JUST THE DEPOSITS THEY
HOLD BUT VENTURE DEBT SOLUTIONS THAT HELP THEM EXPAND OUT THE
RUNWAYS. FOR THOSE FOUNDERS IN PARTICULAR, ITS LOANS THAT HELP
THEM DO THINGS LIKE PURCHASE HOMES WHEN A LOT OF THEIR VALUE
IS TIED UP IN PRIVATE EQUITY. W
E PAY BIG ATTENTION AND WORK
CLOSELY WITH OUR FOUNDERS TO HELP THEM SEEK ALTERNATIVES AS
MARKETS CONTINUE TO BE MORE VOLATILE. ED: THIS IS THE GUEST TODAY JUMP IN
PACWEST ON RECORD. BUT I DON'T THINK YOU LYING
AWAKE AT NIGHT THINKING ABOUT THAT.
WHAT IS THE ONGOING CONCERNS FOR VCS LIKE YOU AND YOUR
PORTFOLIO? >> THE NEWS BROKE ON A THURSDAY
AND EVEN GOING INTO THAT WEEKEND WE DID NOT HAVE
CERTAINTY. THE FED DID A GOOD JOB BY
COMING OUT FIRST THING MONDAY MORNING AND MAKING SURE THEIR
CERTAINTY
AROUND THE DEPOSITS AS WELL AS A SUITOR.
IT DID HELP US SLEEP BETTER AT NIGHT AND FOR A LOT OF STARTUPS
WE HAVE BEEN WORKING WITH, WE HAVE BEEN HELPING THEM SEEK
ALTERNATIVES AS THIS CONTINUES TO UNFOLD.
THE SHORT ANSWER IS WE HAVE NOT LOST MUCH SLEEP. THERE ARE PHENOMENAL PEOPLE AT
PACWEST BANKS AROUND THE WORLD AS WELL AS SILICON VALLEY
BANK'S, SO WE WANT TO MAKE SURE WE GET TO OUR PARTNERS IN THOSE
BANKS AS WELL. ED: IF YOU ARE A STARTUP FOUNDER OR
VC, YOU ARE UNIQUELY NOT LIQUID. THINK ABOUT
YOUR NET WORTH TIED
UP IN THE VALUATION OF YOUR PRIVATE COMPANY. THE OTHER THING WE HAVE LEARNED
IS YOU HAVE TO DIVERSIFY AND MODERNIZE. CAROLINE:
AND MAY BE START TAPPING FINTECHS, ONES THAT DON'T HAVE
A BANKING LICENSE BUT HAVE -- THIS IS WHERE YOUR EXPERIENCE
COMES INTO PLAY. YOU ARE SOMEONE WHO HAS WORKED
AT OTHER FINTECHS, SOPHIA AND TELL US ABOUT FINTECH, WHETHER
THIS IS A MOMENT FOR IT TO OUTPERFORM OR WHETHER THERE IS
MORE WORRY ABOUT NEW ENTRANTS. MARCOS:
I HATE TO SAY MY GLASS IS ALWA
YS HALF-FULL BUT ONE OF THE
EARLY WINNERS IS FINTECHS. OTHERS LIKE MERCURY BANK HAVE
SEEN A LOT OF INFLUX FOR TWO BIG REASONS.
THEY BUILT TECH STOCK ON TOP OF LEGACY INFRASTRUCTURE WHICH
HELPS THEM ON BOARD AND OPEN UP ACCOUNTS WERE EASILY.
THEY WORK WITH MULTIPLE FINANCIAL INSTITUTIONS AND
PARTNERS. NOT ONLY DOES THAT ALLOW FOR
THEM TO SEE MORE DIVERSITY BUT IT ALLOWS THEM TO EXTEND THE
PROTECTIONS THAT FALL WITHIN THAT FOR THEIR CONSUMERS.
WHILE A LOT OF COMPANIES AND INDIVIDUALS HAVE GONE BAC
K
TOWARD THESE PILLAR BANKS DURING THESE UNCERTAIN TIMES,
IT IS -- IT HAS EXPOSED A LOT OF INEFFICIENCIES BEHIND THESE
INSTITUTIONS THAT RELY ON INDIVIDUALS TIME AND PROCESSES
TO OPEN UP ACCOUNTS. THIS IS AN ISSUE AND INSTANCE
OF WHY FINTECH AND DIGITIZATION AROUND TRADITIONAL SERVICES IS
IMPORTANT. CAROLINE: WHAT DO YOU WANT TO SEE BUILT
THIS MOMENT WHEN YOU ARE FOCUSED ON FINTECH AND BACKING
NEW STARTUPS? WHAT IS THE PROBLEM YOU WANT
MOST SORDID IN THE MOMENT? MARCOS:
THE FIRST WAVE OF FINANCI
AL TECHNOLOGY INNOVATION, PEOPLE
FOCUSED ON DIRECT TO CONSUMER BUSINESSES.
THE NEXT WAVE IS MUCH MORE EMBEDDED.
IN SOME CASES, YOU WON'T KNOW THERE IS A FINTECH AT PLAY WITH
THESE TRADITIONAL INSTITUTIONS YOU ARE BRINGING YOUR MONEY AND
DEPOSITS TO. THAT IS IMPORTANT BECAUSE OVER
TIME, EVERY COMPANY UNDER THE SUN HAS SOME SORT OF FINANCIAL
ASPECT TO THEIR BUSINESS. THOSE ARE THE PICKS AND SHOVELS
AND INFRASTRUCTURE THAT ALLOW LARGE FINANCIAL FIRMS TO BECOME
MORE EFFICIENT AND THOSE IN ADJACENT I
NDUSTRIES LIKE HEALTH
CARE. THAT IS WHAT GETS US EXCITED.
CAROLINE: WHEN I HEAR ABOUT PICKS AND
SHOVELS, WE ARE TALKING ABOUT THE MINING EDGE OF CRYPTO.
ON A DAY WHEN WE KEEP AN EYE ON WHAT IS HAPPENING IN CRYPTO,
THERE IS THE READ ACROSS WITH THE RIPPLE FOR A WHILE. ED: IF YOU ARE GOING TO TALK ABOUT
THAT, THE WANT FOR CENTRALIZED SYSTEMS, THREAD THOSE TOGETHER. WHEN YOU ARE LOOKING AT WHAT IS
HAPPENING IN THE BANKING SECTOR, THE HYPE AND BOOM WITH
WHAT HAPPENED AROUND CRYPTO, DO YOU HAVE THE S
AME SYSTEMIC
CONCERNS THAT APPLY TO BOTH? MARCOS:
IN SOME CASES, YOU SEE A LOT OF CORRELATION BETWEEN THE TWO.
INDIVIDUALS GET EXCITED ABOUT THE POTENTIAL OF THE TECHNOLOGY
BUT IT TAKES TIME FOR THAT TO BECOME SOMETHING WE CAN ADOPT
OVER A LARGE SCALE. A LOT OF NEO-BANKS CAME IN AND
GOT PEOPLE EXCITED BUT DURING THIS MARKET VOLATILITY, WE ARE
SEEING THEM GOING BACK TO THESE TRADITIONAL BANKS.
SAME WITH CRYPTO. THE IDEA OF DECENTRALIZED
SYSTEMS HAS A TON OF USE CASES BUT IT TAKES TIME TO BUILD TH
E
UNDERLYING INFRASTRUCTURE ADDED A SCALE WHERE MILLIONS AND
HUNDREDS OF MILLIONS OF GLOBAL INDIVIDUALS CAN TAKE ADVANTAGE
OF THAT. THERE'S CORRELATIONS BEHIND THE
TWO BUT WHAT I WOULD SAY IS, NOT TO USE A SPORTS METAPHOR
BUT WE ARE NOT IN THE EARLY INNINGS.
I DON'T KNOW IF WE HAVE STARTED THE GAME YET.
FOR BOTH FINTECH AND CRYPTOCURRENCIES.
THERE'S SO MUCH POTENTIAL AND WE ARE SEEING PEOPLE CAN PUT
THE FUNDAMENTALS BEHIND IT. BUILDING OUT THE BUSINESSES
THAT WILL HELP US SCALE TO THIS HUNDREDS
OF MILLIONS OF
CONSUMERS BOTH IN THE U.S. AND GLOBAL MARKETS. CAROLINE: THAT LEADS US SMOOTHLY ONTO OUR
NEXT CONVERSATION. GREAT TO HAVE SOME TIME WITH
YOU. ED: WE ARE GOING TO KEEP THE CRYPTO
CONVERSATION GOING. COMING UP, WE WILL HEAR FROM
COINBASE CEO BRIAN ARMSTRONG AND WHEN THE COMPANY IS LOOKING
TO ESTABLISH ITS INTERNATIONAL HUB.
I WANT TO CHECK AND IT REALLY QUICK ON BITCOIN AND WHERE WE
ARE TRADING RIGHT NOW. WHAT WE SAW IS THIS FALL
FURTHER AWAY FROM 30,000 U.S. DOLLARS, WE HAVE FALLEN
BELOW
THE 50 DAY MOVING AVERAGE. THE STORY OF THE LAST 24 HOURS
WAS BINANCE HALTING MORE THAN ONCE, TRANSACTIONS RELATING TO
BITCOIN. THOSE TRANSACTIONS HAVE STARTED
UP AGAIN. THERE WERE HIGH VOLUMES INTO
ISSUES ON THE BLOCKCHAIN THAT IMPACTED THE BIGGEST TOKEN.
THIS IS BLOOMBERG. ♪ ED: CRYPTO EXCHANGE COINBASE IS
WEIGHING UNITED ARAB EMIRATES FOR ITS INTERNATIONAL HUB.
CEO BRIAN ARMSTRONG SAYS THE UAE IS LEADING THE WAY
REGIONALLY IN CRYPTO. HE SPOKE TO BLOOMBERG AT THE
DUBAI FINTECH SUMMIT EA
RLIER. BRIAN:
OUR MISSION IS TO INCREASE ECONOMIC TRADING IN THE WORLD.
THAT MEANS WE NEED TO DO THAT IN MANY COUNTRIES.
WE STARTED IN THE U.S. AND TOOK A COMPLIANCE-FOCUSED
APPROACH AND BECAME A LIFTED COMPANY THERE.
BUT WE HAVE INCREASINGLY EXPANDED INTO OTHER MAJOR
MARKETS AROUND THE WORLD. WE ARE LOOKING FOR A HOME TO
SET UP AN INTERNATIONAL HUB THAT COULD SERVE THE LONG TAIL
OF COUNTRIES IN THE WORLD, THE MIDDLE EAST, AFRICA, PARTS OF
ASIA. FROM THAT POINT, THE UAE IS
VERY ATTRACTIVE. THEY
ARE THE FIRST COUNTRY IN
THE WORLD I'M AWARE OF THAT CREATED A DEDICATED REGULATOR
FOR CRYPTO. THEY PUBLISHED RULEBOOK AND ITS
PROTECTING ITS CONSUMERS. I WOULD SAY THEY ARE HEADED
WHERE THE U.S. IS. THE EU HAS PUBLISHED COMP OR
HINTS OF LEGISLATION IN THE U.K. IS ON THEIR WAY BUT THE UAE,
THEIR APPROACH HAS BEEN MORE FORWARD THINKING THAN THE U.S.. >> WE SPOKE TO YOUR CFO, SORT
OF DIGGING AROUND FOR NEWS AND I THOUGHT WHAT IS THIS?
IS THIS AN ARMAGEDDON MOMENT FOR COINBASE IN THE UNITED
STATES
OF AMERICA? BRIAN: I THINK THIS MOMENT IS AN
OPPORTUNITY TO GET SOME REGULATORY CLARITY IN THE
UNITED STATES AND WE ARE HAPPY TO DO THAT.
IT'S A GREAT ROLE FOR US TO PLAY IN THE INDUSTRY AND
AMERICA. >> YOU ARE GOING HEAD TO HEAD
WITH THE SEC. BRIAN: WE DON'T RELISH THE OPPORTUNITY
TO BE A LITIGATION WITH ONE OF OUR REGULARS.
WE HAVE TRIED TO BE PROACTIVE WHEN THERE WASN'T CLARITY BUT
IF THERE IS NO CLEAR RULEBOOK, WE HAVE CREATED OUR OWN BEST
PRACTICES TO EVALUATE OVER A THOUSAND ASSETS AND REJ
ECTED
MANY OF THEM. THERE HAS BEEN NO CLEAR
RULEBOOK. IF WE RECEIVE A WELLS NOTICE,
WE HAVE A DUTY TO PUSH BACK AND SEE A CASELAW THAT WILL BRING
CLARITY TO THE U.S. >> I'VE FIDDLED AROUND WITH
THIS QUESTION FOR ABOUT TWO HOURS.
FTC, CFTC, WHAT'S THE QUESTION YOU ASK A CFO MUST RECORD THE QUESTION -- ARE THESE REGULATORS
BRIAN: FIT TO THE PURPOSE? CRYPTO IS MANY THINGS.
CRYPTO HAS COMMODITIES. WE THINK THERE SHOULD BE A
ROBUST, HEALTHY MARKET FOR THAT. THERE'S ALSO STABLECOINS AND
THERE IS WORK
WITH AND FTS. CRYPTO'S GOING TO HAVE A NUMBER
OF DIFFERENT REGULATORS AND IS PROBABLY GOING TO NEED NEW
REGULATION TO PASS IN THE U.S. THERE IS BROAD BIPARTISAN
SUPPORT IN CONGRESS WITHOUT ACTUALLY HAPPENING. >> CAN YOU SEE BEING GONE FROM
THE U.S.? BRIAN: WE HAVE A CHOICE OF WHERE TO
INVEST ARE DOLLARS THAT WE ARE NOT GOING TO LEAVE THE U.S.
THE GOOD THING IS THERE IS RULE OF LAW AND WE DO REACH THE
RIGHT OUTCOME EVENTUALLY. ED: THE COINBASE CEO BRIAN
ARMSTRONG WITH MANUS CRANNY. CAROLINE:
LET'
S STICK TO CRYPTO A LITTLE MORE. YOU REFERENCE THE BINANCE
SITUATION AND HOW IT HAS RESTARTED WITHDRAWS OF BITCOIN
ITSELF. THE SUSPENSION AND WAIT ON THE
CRYPTOCURRENCY AND MARKET, WE CAN GO TO KAILEY LEINZ TO
DISCUSS ONE OF THE NEW MEME COINS -- WHAT'S THE ORIGINAL OF
THE CRYPTO SEER, BEFORE WE ASSOCIATE AND FTS AND MEME
COINS WITH A THEORY HIM. WHY ARE WE ASSOCIATING IT WITH
BITCOIN? >> YOU CAN TRACE IT BACK TO THE
ORDINALS PROTOCOL WHICH ALLOWED NON-FUNGIBLE TOKENS AND MEME
COINS TO BE MINTED
ON THE BITCOIN NETWORK WHICH
PRIMARILY, THEY WERE BASED ON ETHEREUM.
THE FACT THEY HAVE COME TO BE PART OF THIS ECOSYSTEM HAS
MEANT IT IS MORE CONGESTED AND AS A RESULT, FEES HAVE GONE
HIGHER AND FINANCE SAYS THAT'S WHAT THE PROBLEM WAS.
THIS WAS NOT, AS WAS SPECULATED EARLIER, ABOUT PEOPLE PULLING
MONEY FROM THEIR EXCHANGE, THIS WAS A CONGESTION PROBLEM.
AS A RESULT, TO ADDRESS THIS, THEY HAVE RAISED FEES TO MAKE
SURE THOSE PENDING TRANSACTIONS WILL BE MINED BY BITCOIN MINERS.
BUT THAT IS WHAT
IT COMES DOWN TO.
THE CEO OF BINANCE SAYING SOME OF THOSE FEES ARE UP 18 TIMES
AS WE'VE SEEN MORE ACTIVITY TAKING PLACE ON THIS BLOCKCHAIN.
ED: THE DATA POINT THAT CAUGHT MY
EYE IS THE $5 BILLION WORTH OF TRANSACTIONS HAPPENING FROM A
VOLUME PERSPECTIVE, IT MAKES YOU REALIZE BITCOIN IS
EVERYTHING FROM A VOLUME PERSPECTIVE.
THE VOLUME IN TRANSACTIONS TRYING TO RAM THROUGH THE CAUSE
OF ALL OF THIS. KAILEY: THAT IS EXACTLY RIGHT.
A CONGESTION PROBLEM. BUT YOU ARE SPEAKING TO THE
VOLUME FINANCE IS
SEEING HERE. THAT'S WHY THIS IS SO CRITICAL
IN TERMS OF DRIVING SENTIMENT BECAUSE IT IS THE LARGEST IN
THE WORLD, ESPECIALLY AFTER THE COLLAPSE OF FTX.
PEOPLE LOOK TO BINANCE AS A BELLWETHER FOR WHAT'S HAPPENING
IN THE WIDER SYSTEM. THE OUT OF ACTIVITY WHEN THEY
SEE DISRUPTIONS IS WHY YOU START TO SEE MARKET
PARTICIPANTS GETTING CONCERN. IT'S A GREAT POINT WHEN WE ARE
TALKING ABOUT THE BROADER CRYPTO ECOSYSTEM, BITCOIN IS
NOT THE MONOLITH BUT THE DOMINANT CRYPTOCURRENCY IN THIS
ECOSYSTEM. MAY BE
THESE MEME COINS ARE A
DISTRACTION AT THE DAY. CAROLINE:
BEFORE WE DIVE INTO THE WORLD OF PEPE AND OTHER EXUBERANT
RISING COINS, TALK TO US ABOUT THE INTERNATIONAL FOCUS.
WE HAD ANXIETY AROUND BINANCE. WHAT MORE ABOUT GLOBAL
INTERACTION IN CRYPTO AT THE MOMENT.
IN SOME PARTS OF ASIA -- WHAT HAPPENS IN CHINA?
IT STILL THINKING ABOUT HOW CHINA IS INTERACTING WITH
CRYPTO MORE BROADLY. KAILEY: ESPECIALLY AS CHINA IS SEEKING
TO BUILD UP HONG KONG AS ANOTHER CENTER FOR THIS
ACTIVITY . IT COMES DOWN T
O DIFFERENCES IN
THE REGULATORY ENVIRONMENT. BINANCE U.S.
IS SUPPOSED TO OPERATE INDEPENDENTLY IN ITS OWN SILO
BUT THE CFTC SUED BINANCE FOR VIOLATING U.S. DERIVATIVES.
IT HAS BEEN UNDER A LOT OF REGULATORY SCRUTINY AND THE
SAME GOES FOR OTHER PLAYERS. WE'VE HEARD HOW COINBASE WANTS
TO HAVE A WIDER FOOTPRINT BECAUSE AT THE END OF THE DAY,
WHAT ACTIVITIES PEOPLE CAN ENGAGE IN TO DIFFER COUNTRY BY
COUNTRY. THAT'S A HUGE FACTOR AND I
WOULD NOTE PART OF THIS REGULATORY LANDSCAPE, WHAT HAS
HAPPENED W
ITH THE BANKS IN THE U.S.
IS WHEN THE LIQUIDITY PICTURE COMES INTO THE CONVERSATION,
I'VE HAD A LOT OF GUEST ON BLOOMBERG CRYPTO TALK ABOUT HOW
LIQUIDITY IS SO THIN AND THAT EXACERBATES IN THE PRICE MOVES
TO THE UPSIDE. BUT ALSO TO THE DOWNSIDE WHICH
WE ARE SEEING PLAY OUT IN BROAD-BASED SELLING IN CRYPTO
TODAY. ED: KAILEY LEINZ IN WASHINGTON DC.
THANK YOU VERY MUCH. BAIDU, KNOWN FOR ITS SMART HOME
DEVICES IS ADDING A NEW PRODUCT TO ITS AI OPERATED DEVICES AND
ENTERING A ALREADY CROWDED ARENA.
W
E ARE TALKING TECH COMING UP. CAROLINE:
ANOTHER KEY STORY -- SHARES OF THE COMPANY IN ASIA TRADING
HAVE ROCKETED MORE THAN 7%. WE WILL TALK ABOUT WHY WE ARE
SEEING OPTIMISM COMING FROM THE LEADER OF THAT BUSINESS.
THIS IS BLOOMBERG. ED:
TIME FOR TALKING TECH -- FIRST UP, CHINA LIMITING ACCESS BY
FOREIGN ENTITIES TO ITS DATA AFTER A SERIES OF REPORTS
PUBLISHED BY U.S. RESEARCH FIRMS SPOOKED
GOVERNMENT OFFICIALS ACCORDING TO THE WALL STREET JOURNAL.
THE MOVE IS EXPECTED TO MAKE IT HARDER TO ANALYZ
E WHAT IS GOING
ON INSIDE CHINA AS TENSIONS BETWEEN WASHINGTON AND BEIJING
MOUNT. CHINESE TECH FIRM BAIDU IS
ENTERING THE MOBILE PHONE MARKET, AT A RING -- ADDING
SMARTPHONES TO ITS GADGET. THE DEVICE WILL BE UNVEILED
NEXT WEEKEND WILL UTILIZE ITS ARTIFICIAL INTELLIGENCE
SOFTWARE. PLUS THE TENCENT BANK SOUTHEAST
ASIA COMPANY BOOSTING PAY FOR MOST OF ITS WORKERS THIS SUMMER.
WORKERS WHO JOINED ON OR BEFORE MARCH 31 WILL GET A SALARY BUMP.
THE COMPANY HAS REACHED SELF-SUFFICIENCY AFTER TAKING
DRAM
ATIC MEASURES TO SLASH COSTS. CAROLINE: WHAT A DIFFERENT TACT FROM A
FEW MONTHS AGO. COMING UP, WE'VE GOT TO DIVE
INTO WHAT IS HAPPENING IN META TODAY.
STORIES ABOUT A VOW TO FIGHT BACK IN THE U.S.
THE FTC AS IT FACES STIFF REVIEWS OF ITS PRIVACY POLICIES.
WE WILL ALSO BE DISCUSSING WHAT IT'S DOING ABOUT CANADA.
LET'S CHECK IN HOW SHARES ARE MOVING AT HOW MORE BROADLY THE
TECH MARKET IS MOVING. META-MANAGING TO HOLD UP, DOWN
.1%, IN LINE WITH THE REST OF THE MARKET, DRAGGING SOME OF
THE INDICES
LOWER AFTER WHAT HAD BEEN A LOT OF EXUBERANCE
FOLLOWING A FEW OF THEIR EARNINGS. FROM NEW YORK AND SAN
FRANCISCO, THIS IS BLOOMBERG. ♪ CAROLINE:
WELCOME BACK TO BLOOMBERG TECHNOLOGY.
I'M CAROLINE HYDE IN NEW YORK. ED:
I'M ED LUDLOW IN SAN FRANCISCO. NOT A LOT OF ENERGY IN
FINANCIAL MARKETS IS RUNNING. LOOK AT THE NASDAQ 100, WE ARE
COMPLETELY FLAT. SOME SLIGHTLY TOWARD PRESSURE. OUTPERFORMING SLIGHTLY IN THE
STOCKS. A LOT OF AI RELATED SHIP NAMES AS WELL AS ALPHABET DURING
MONDAY'S SESSION, SOME
MOVEMENT IN BONDS. RISK OFF WHEN IT COMES TO
CRYPTO. WE TALKED ABOUT THAT STORY
THROUGHOUT THE SHOW. BITCOIN, THAT HAS HAD AN IMPACT
WITH BELOW 28,000. INDIVIDUAL MOVERS ARE
INTERESTING. THE SCALER CARRYING A NUMBER OF
CYBERSECURITY STOCKS WITH THAT. THE REST OF THIS IDEA THAT
SPENDING ON CYBERSECURITY WAS UNDER QUESTION.
ALPHABET, AND AR -- AND AI-RELATED NAME.
MICROSOFT AND MEDA HAS PAIRED SOME OF ITS LOSSES. CAROLINE:
LET'S DIG INTO ONE OF THEM. POINT DRAGS LOWER AND VOLUME IS
THIN BUT A LOT
OF NEWS TO DIGEST WHEN IT COMES TO META-.
LET'S TALK ABOUT HERE IN THE UNITED STATES AS THE COMPANY
FIGHTS BACK THING IT'S GOING TO OPPOSE AND FTC PLAN TO LOOK AT
BANNING IT FROM PROFITING FROM CHILDREN'S DATA.
FOR MORE, WE WILL BRING IN MILLIE BURNED DOWN.
THE BACK STORY IS THE FTC IS ANALYZING SOME MISTAKES MADE IN
THE MESSENGER PART OF THE OFFERING TO CHILDREN AND TRYING
TO READ THAT ACROSS A BROADER IMPLICATION ON HOW THEY MAKE
MONEY FROM CHILDREN MORE BROADLY? >> THE FTC IS LOOKING BACK TO
AN AGREEMENT THEY CAME TO WITH META-IN 2020. ALONGSIDE A FIVE BILLION DOLLAR
CIVIL PENALTY, WHICH IS RECORD-BREAKING IN THE AGENCY'S
HISTORY, THEY HAD META-AGREE TO A SERIES OF PRIVACY PLEDGES AND
THEY SAY FACEBOOK HAS NOT ADHERED TO THE PROMISES IT MADE
AND THAT GIVES THEM THE RIGHT TO GO BACK AND REVISE THAT
AGREEMENT THEY CAME TO WITH FACEBOOK IN 2020 AND PUT THESE
NEW STANDARDS IN PLACE TO MAKE SURE THEY ARE PROTECTING THE
PRIVACY OF U.S. USERS. ED: WHAT IS MEDA'S ARGUMENT AND ALL
OF THIS?
EMILY: MEDA SAYS THE AGENCY IS VASTLY
OVERSTEPPING ITS AUTHORITIES, THAT THEY ARE TRYING TO TAKE A
MECHANISM THE AGENCY DOES HAVE WHICH IS REVISING OLD
AGREEMENTS AND THEY ARE GOING TOO FAR IN BANNING THEM FROM
MONETIZING CHILDREN'S DATA, PUTTING ALL THESE NEW
RESTRICTIONS THAT WOULD FORCE THEM TO SUBMIT TO PRIVACY
REVIEWS BEFORE THEY LAUNCH ANY NEW PRODUCTS.
THEY INTEND TO FIGHT IT IN COURT AND IT SHOWS THAT FTC IS
BIASED AGAINST META-. ED: EMILY BURNED DOWN IN D.C.
LET'S STICK TO THE STORY AND
BRING IN DIANA MOSS, PRESIDENT
AND CEO OF THE AMERICAN ANTITRUST INSTITUTE.
HOW MUCH DOES THIS TEST THE BOUNDARIES OF THE FTC'S ABILITY
TO SHAKE THAT SHAPE PRIVACY POLICY THROUGH ENFORCEMENT?
DIANA: THAT IS A GREAT QUESTION. WE ARE SEEING RIGHT NOW I REAL
TENSION BETWEEN THE FTC'S MANDATE TO PROMOTE CONSUMER
PROTECTION BUT ALSO PROMOTE COMPETITION.
THEY HAVE HAD A BIT OF A ROUGH GO IN SOME OF THE CASES
INVOLVING BIG TECH AND NOW WE SEE THE MOVES ON PRIVACY.
THE IMPORTANT THING TO REMEMBER IS US
ER DATA IS THE FUEL, THE
GASOLINE THAT POWERS THE DIGITAL PLATFORMS AND
COLLECTING THAT DATA, HARNESSING THE VALUE OF IT
THROUGH AI AND MACHINE LEARNING IS CORE TO THE VALUE
PROPOSITION OF ATTRACTING USERS AND LOCKING THEM INTO A
PARTICULAR PLATFORM. ED: YOU HEARD WHAT EMILY HAD TO SAY
ABOUT MEADOWS ARGUMENT IN THIS DISPUTE.
DO YOU THINK META-FIGHTING THE FTC ON THIS WILL BRING THEM
SUCCESS? THIS IS AN EXAMPLE WHERE
PUSHING BACK WILL FALL IN META--- IN METAS FAVOR? DIANA:
I DON'T. I THINK WHAT W
E ARE SEEING IS A
GROWING RECOGNITION THAT THE FTC ALONE CANNOT, THROUGH ITS
AUTHORITIES ADDRESS BOTH THE COMPETITION AND PRIVACY ISSUES.
AS I JUST SAID, THEY ARE INTEGRALLY RELATED, USING DATA,
POTENTIALLY ABUSING DATA IS THE WAY TO REALIZE THAT VALUE
PROPOSITION. WHAT WE ARE SEEING WILL BE A
SERIES OF VIOLATIONS AND PUSHBACK BECAUSE THAT'S THE
VALUE PROPOSITION. YOU ARE TALKING ABOUT STRONG
INCENTIVES FOR THE DIGITAL PLATFORMS TO USE AND
POTENTIALLY ABUSE DATA TO REALIZE THAT VALUE PROPOSITION
AND WHERE WE MIGHT BE GOING IS THE NEED FOR A BROADER SYSTEM
OF REGULATION IN THE UNITED STATES, MUCH LIKE IN THE U.K.,
BOTH ON COMPETITION ISSUES AND PRIVACY ISSUES AS WELL.
CAROLINE: YOU REFERENCED THE U.K., WHAT
ABOUT MORE BROAD REGULATION GLOBALLY?
A MORE JOINED UP APPROACH? DIANA:
I TO GETS WHERE THAT'S GOING. THE PROBLEM IS WE HAVE A LOT OF
JURISDICTIONS AND WE DON'T HAVE ANY INTERNATIONAL AUTHORITIES
BUT THERE IS A TREMENDOUS AMOUNT OF CROSS-FERTILIZATION
AND COLLABORATION ON INTERNATION
AL REGULATORY
PURCHASE. THE OTHER THING TO NOTICE IS
WHAT IS GOING ON WITH THE DATA AND META-IN THIS CASE IS GOING
TO BE NO DIFFERENT THAN OTHER PLATFORMS USE OF DATA TO POWER
THE E-COMMERCE AND SOCIAL MEDIA PLATFORMS AND ADVERTISING ON
THEIR PLATFORMS. A REGULATORY INFRASTRUCTURE WOULD ADDRESS
NOT ONLY THE CONCERNS WITH META-BUT OTHER DIGITAL
PLATFORMS THAT ARE VERY POWERFUL. CAROLINE: TO BE FAIR, META-HAS LIMITED
INFORMATION WITH CERTAIN ADS, PARTICULAR WHEN IT RELATES TO
TEENS. THEY WITHDREW
THE ABILITY FOR
ADVERTISERS TO TARGET TEENS ON THEIR INTEREST AND ACTIVITIES.
YOU ONLY KNOW LOCATION DATA AND NH.
BUT THEY HAVE QUITE A PR FEED ON THEIR HANDS.
SAYING WE NEED TO MAKE MONEY BY ADVERTISING DIRECTLY TO
CHILDREN, HOW DO THEY MANAGE TO MAKE THAT NUANCED?
WITH YOUR YEARS AND DECADES OF EXPERIENCE, CAN COMPANIES MAKE
A CASE FOR THEMSELVES THAT THIS IS IN LINE WITH WHAT IS GOOD
FOR THE COMPANY BUT NOT ENTER MENTAL TO SOCIETY MORE BROADLY?
DIANA: THAT IS A HARD LINE TO WALK
GIVEN HOW INT
EGRAL DATA COLLECTION AND DATA PROCESSING
AND HARNESSING THE VALUE OF THAT DATA IS FOR THE DIGITALS.
THE U.S. IS GETTING TO A POINT WHERE THE
COMFORT LEVEL IN ACCEPTING PROMISES AND REASSURANCES FROM
THE COMPANIES ABOUT HOW THEY WILL NOT MISUSE DATA IS
BEGINNING TO WEAR THIN. WHAT WE SEE WITH THE FTC, TO
THEIR CREDIT, IS A STRONG ENFORCEMENT ACTION.
BUT IT IS THIS CASE-BY-CASE APPROACH WHEN THIS PROBLEM IS
SO SYSTEMIC AMONG THE DIGITAL PLATFORMS USE AND POTENTIAL
ABUSE OF DATA THAT IT WARRANTS A
BROADER REGULATORY SYSTEM
LIKE WE SEE ELSEWHERE IN THE WORLD. CAROLINE: MEANWHILE, MEDA CALLED THE FTC
PROCEEDINGS A POLITICAL STUNT. THANK YOU SO MUCH.
IT'S ANOTHER FOCUS OF THE DAY WITH META--- THE COMPANY SAYING
IT MIGHT END NEWS CONTENT ON FACEBOOK AND INSTAGRAM IN
CANADA. THE LAWMAKERS PASSED A BILL TO
REQUIRE SOCIAL MEDIA PLATFORMS TO PAY PUBLISHERS TO FEATURE
THEIR WORK. MEDA DESCRIBES THE BILL AS
FUNDAMENTALLY FLAWS BUT IT ADDRESSES A MARKETING IMBALANCE
IS MORE DIGITAL FORMS TURN TO NE
WS ON THE ED: DAILY.
COMING UP, HOW STARTUPS CAN KEEP UP WITH BIG TECH AND THE
AI. THIS IS BLOOMBERG. ♪ ED: THIS IS A GLOBAL STORY THAT
CAUGHT MY EYE -- A JAPANESE FIRM PLANNING TO START TO DEBT
FUNDS ALONG -- ALONGSIDE LIQUIDITY CAPITAL.
IT WILL BE ESTABLISHED IN A JOINT VENTURE AND PROVIDE AS
MUCH AS $400 MILLION IN FINANCING FOR MIDDLE AND LATER
STAGE STARTUPS IN JAPAN. IN EUROPE, THE MOVE IS THE
LATEST BY JAPAN'S BIGGEST BANKS TO RAMP UP STARTUP FINANCE
WHERE THEY INCREASINGLY SEE POTENTIAL
FOR NEW BUSINESS.
CAROLINE: FASCINATING GIVEN THE TIMING. COME PAYS LIKE MICROSOFT AND
GOOGLE DOMINATE THE CONVERSATION. BUT VC IS THERE.
THEIR FLAGGING HOUSE STARTUPS CAN GET LOST ON THE BATTLEFIELD.
HERE'S WHAT SOME OF OUR RECENT GUESTS ARE SAYING ABOUT THE AI
ECOSYSTEM. >> WE ARE IN THE MIDDLE OF AN
INCREDIBLE REVOLUTION IN AI. >> I WOULD SAY THERE ARE MANY
MORE BAD AI STARTUPS AND GOOD START UPS AND IT'S HARD TO
DIFFERENTIATE IF YOU ARE NOT EXPERIENCED WITH AI. >> IF YOU ARE A COMPANY TODAY
AND NOT EMBRACING THE CHANGES TAKING PLACE WITH THE DOUBT --
WITH AI, YOU'RE GOING TO BE LEFT BEHIND. >> I THING IT'S TOO EARLY TO
REGULATE AI. WE DON'T KNOW ENOUGH ABOUT IT. >> THE COMPANIES BUILDING THIS
RECOGNIZE REGULATION IS NEEDED. CAROLINE:
THERE IS SO MUCH TO GET INTO WITH OUR NEXT GUEST. I AM
INTERESTED IN THE VIEWPOINTS AROUND REGULATION ARE THICK AND
FAST BUT ULTIMATELY HOW YOU SORT THE WHEAT FROM THE CHAFF. THERE'S FAR MORE BAD AI
STARTUPS AND GOOD. HOW DO DISCERN WHICH ONES ARE
GOOD
IN THE MARKETPLACE RIGHT NOW? >> WE INVEST IN EARLY-STAGE
STARTUPS, SO AT THAT POINT, YOU HAVE TO ASSESS THE FOUNDER AND
FUNDAMENTALS OF THEIR IDEA. WE ARE ABSOLUTELY SEEING THIS
WAVE OF COMPANIES WE SAW GENERATIVE AI NATIVE WHERE THEY
ARE CLEARLY BUILT ON TOP OF GENERATIVE AI FROM THE START
AND YOU RECOGNIZE IMMEDIATELY. JUST UNLESS TWO WEEKS, I SOUGHT
TO STARTUPS, SAME CATEGORY. ONE WAS LIKE THE AI REMODEL AND
THE OTHER WAS CLEARLY BUILT ON TOP OF THE LARGE LANGUAGE
MODELS EVERYONE WAS TALKIN
G ABOUT ON YOUR SHOW.
YOU IMMEDIATELY NOTICE THE DIFFERENCE, WHAT THE INTERFACES
LIKE AND HOW THEY TALK ABOUT WHAT THEIR PRODUCT VISION IS. THAT'S WHAT EARLY-STAGE VENTURE
CAPITALISTS ARE LOOKING TO INVEST IN NOW. CAROLINE:
IT WAS INTERESTING, SUDDENLY THE OPEN SOURCE VERSUS WORLD
GARDEN CONVERSATION CAME TO BEAR AROUND ARTIFICIAL
INTELLIGENCE. WHAT ARE YOU SEEING IN TERMS OF
WHO IS GOING TO EAT WHOSE LUNCH? IT FELT LIKE AT GOOGLE THEY ARE
SAYING IT IS OPEN SOURCE. NO ONE WITH A LARGE LANGUAGE
M
ODEL IS ULTIMATELY GOING TO WIN OUT HERE? MARTINA:
I THINK YOU NEED BOTH. THEY BOTH FEED EACH OTHER.
THE VIBRANCY OF THE ECOSYSTEM REQUIRES THE SOURCE SIDE OF THE
HOUSE BUT THE WALLED GARDEN ASPECT IS THAT THING ABOUT
GENERATIVE AI IS YOU HAVE TO BE AN EXPERT TO RECOGNIZE WHEN
IT'S GOING OFF THE RAILS AND HOW TO PUT IN PLACE THE GUARD
TO MAKE IT SAFE SO THAT WHEN IT IS USED ANYWHERE ELSE, IT MAKES
SENSE. IT TENDS TO MAKE SENSE FOR WHAT
IT'S BEING USED FOR TO USE ITS JOB WELL AND THAT'S WHERE YOU
MIGHT NEED A CONVERSATION BUILT ON TOP OF THE OPEN SOURCE
FOUNDATION AND THE WALLED GARDEN MAKING IT MORE PURPOSE
AND INTENTIONAL. ED: LET'S TAKE AN EXAMPLE FROM YOUR
PORTFOLIO -- QUIZ LET. HOW LONG HAS THAT BEEN YOUR
MARTINA: ED: PORTFOLIO? ED: POINT, EVERYONE IS TRYING TO
DISCERN WHETHER IT IS A VIABLE AI RELATED OR ADJACENT COMPANY
OR NOT. HOW IS YOUR THINKING CHANGED
FROM WHEN YOU FIRST MADE THAT INVESTMENT ALMOST EIGHT YEARS
AGO TO WHEN YOU ARE CONFRONTED WITH THE DEBT RIGHT NOW?
MARTINA:
THEY'VE BEEN AROUND ABOUT 10
YEARS. AI HAS BEEN AROUND FOR QUITE
SOME TIME AND IT'S ABOUT WHAT IS THE INFRASTRUCTURE THAT
ENABLES AI? YOU NEED LARGE SUMS OF DATA AND
GREAT MACHINE LEARNING AND GREAT MACHINE LEARNING
ALGORITHMS. IT IS COMPANIES THAT HAVE BEEN AROUND SOMETIME
THAT HAVE THAT DATA SET THAT LET YOU BUILD AND TRAIN THOSE
MODELS. SO THEY CAN PROVIDE THAT LEVEL
OF AI EVERYONE IS EXPERIENCING. THEY HAVE A MONSTROUS DATA SET,
THE LARGEST DATA SET OF LEARNING TOOLS IN THE WORLD AND
THEY HA
VE BEEN TRAINING THIS DATA FOR YEARS.
NOW THEY ARE ABLE TO USE THAT ON BEHALF OF USERS CREATING
THIS GENERATIVE AI APPROACH. ED: IN THIS ENVIRONMENT, WHERE DOES
THE BALANCE OF POWER LIE? WITH THE VC'S OR AI-DRIVEN
FOUNDERS? MARTINA: I THINK IT IS ALWAYS A
PARTNERSHIP. WITH THE BEST VC FIRMS, IT'S
THE FOUNDERS HAVE GREAT IDEAS, THEY HAVE WONDERFUL TALENTS
THEY ARE BRINGING TO BEAR. BUT WHEN THE VC IS GENUINELY
ADDITIVE IN A GREAT PARTNER, THAT MAKES HIM STRONGER.
OUR FOUNDERS TEND TO BE TECHNICAL
, SO THEY NEED MORE OF
THAT GOOD MARKET PARTNER. THAT IS WHAT WE SPEND TIME WITH
THEM ON. THE STEVE JOBS, STEVE WOZNIAK,
NATION. IF THEY DON'T BACK THEM, WHO --
ED: IRRESPECTIVE OF THE APPLICATION
OR WHERE IN THE DEEP LEARNING INFERENCE PART OF THE CYCLE
LAY, EVERYONE AGREES ON ONE THING WHICH IS WE NEED TO HAVE
SOME PARAMETERS AND REGULATIONS IN PLACE. CAROLINE: WHETHER IT'S SELF REGULATION OR
COMING FROM THE GOVERNMENT, ARE YOU ON THE OPTIMISTIC FRONT OR
ARE YOU NERVOUS ABOUT HOW QUICKLY WE AR
E ADVANCING
WITHOUT FORMAL GUARDRAILS IN PLACE? MARTINA: I AM BOTH.
I'M SUPER OPTIMISTIC AND I'M ALSO NERVOUS.
I DON'T THINK THE GOVERNMENT HAS A GOOD IDEA OF WHAT THEY
CAN DO TO HELP. I THINK IT'S GOING TO BE
INCUMBENT ON COMPANIES THEMSELVES TO BE RESPONSIBLE
AND HOW THEY ARE TAKING ADVANTAGE OF THIS TECHNOLOGY
AND PUTTING IN PLACE THOSE GUARDRAILS.
WE ARE GOING TO HAVE BEFORE TIMES AND AFTER TIMES OF THIS
GENERATIVE AI NATIVE COMPANIES AT LEAST AND HOW THEY THINK AND
HOW THEY ARE PUTTING IN P
LACES GUARDRAILS WHERE YOU DON'T HAVE
TO BE AN EXPERT TO RECOGNIZE IT'S GOING OFF THE RAILS.
THE GOVERNMENT IS NOT GOING TO BE ABLE TO REGULATE THAT. ED: THAT THING THAT CAUGHT MY EYE
OVER THE WEEKEND -- WARREN BUFFETT AND CHARLIE MONGER HOLD
COURT DURING THE BERKSHIRE HATHAWAY MEETING ON SATURDAY.
THEY TALKED ABOUT, AND YOU WOULD EXPECT, APPLE AND ELON
MUSK AND GUESS WHAT ELSE -- AI AND CHARLIE MONGER IS LIKE I AM
SKEPTICAL AND WARREN BUFFETT COMES OUT WITH WHAT WAS A
PRETTY PROFOUND STATEMENT
OF THE PARALLELS BUT WE ARE SEEING
IN AI IN HUMAN HISTORY. CAROLINE: WAS IT AN ATOM BOMB HE
REFERENCED? EXTRAORDINARY LANGUAGE AND HE
SEEMED TO DEMONSTRATE WHEN IT CAME TO CHAT GPT AND OTHER
TOOLS WHAT THEY ARE ALREADY DOING AND HOW THEY ARE
APPENDING THINGS. IT FEELS AS THOUGH THAT SHE
COMPARED IT TO THIS PUTTING OF THE ATOM IS A DANGEROUS ADVANCE
IN TECHNOLOGY. AND WE JUST HAD MARTINA
ARTICULATE THAT. YES, I'M OPTIMISTIC BUT ALSO
NERVOUS ABOUT THE ADVANCES AND THE SWIFT NATURE AND HOW IT IS
GO
ING TO UPEND EVERY INDUSTRY. THERE'S IS CHARLIE MONGER AND
WARREN BUFFETT IN THE MIDDLE OF INDUSTRIES THAT ARE GOING TO BE
UPENDED BY AI ED: ED:. HE WAS VERY PRAISING OF ELON
MUSK AND ENTREPRENEURIALISM. BUT HE SAID THEY NEED CERTAINTY
AND VISIBILITY ON RETURNS AND IN THE FIELD OF AI AND WHATEVER
THEY ARE DOING WITH TESSLER -- TESLA AND TWITTER, THAT IS NOT
THE CERTAINTY THEY ARE GOING TO GET. CAROLINE:
SO MUCH TO DISSECT FROM WARREN BUFFETT.
COMING UP, I WILL HAVE A LOOK AT HOW APPLE IS DOING.
A LOT OF DEBT SALES GOING ON. APPLE'S DECISION TO RAISE $5
BILLION. SEARCHING FOR SAFETY THERE?
THIS IS BLOOMBERG. ♪ ED:
APPLE SELLING DEBT IN THE U.S. BLUE-CHIP BOND MARKET.
BORROWERS FLOODING IT, LOOKING TO RAISE CASH FOR TWO KEY
PIECES OF DATA LATER IN THE WEEK -- CPI AND PPI.
THIS IS SOMETHING APPLE DOES ANNUALLY AND YOU THINK FOR
SHAREHOLDER RETURNS, THEY USE THOSE FUNDS FOR BUYBACKS AND
DIVIDENDS. CAROLINE: THIS IS OFTEN WHAT HAPPENS
AFTER EARNINGS. WE SAW MEHTA TAPPING THE BOND
MARKET. TH
EY DECIDED THEY ARE GOING TO
BE RAISING FUNDS AND DIVERSIFY THE WAY THEY HAVE MONEY ON HAND
BUT IT DOES FEEL MAYBE WE ARE GRAVITATING TOWARD SAFER AREAS.
I WAS LOOKING AT HOW THE COMPANY SLIGHTLY UNDER MORE
PRESSURE, THE DEBT MARKET IS NOT OPEN TO US WITH THE MACRO
HEADWIND THAT IS UPON US. NO WONDER THE BIG JUGGERNAUTS
LIKE APPLE AND MEADOW WITH A LOT OF CASH ON THEIR HANDS ARE
ABLE TO SELL AND SELL EASILY COME BUT NOT FOR EVERYONE. ED:
$5 BILLION AND UP TO FIVE PARTS. IT COULD YIELD 135 BASIS
POINTS
OVER COMPARATIVE TREASURIES. THAT'S WHAT WE ARE WAITING ON.
CAROLINE: LET'S FOCUS IN ON THE APPLE
PART OF ALL OF THIS. AFTER ITS EARNINGS, WE DID HEAR
IT TURNING ITS ATTENTION TO WHAT FEELS LIKE EMERGING
MARKETS TO GET THEIR GROWTH. MARK GURMAN PLEASE TO SAY AFTER
THE CALM OF THE EARNINGS STORM, YOU JOIN US TO DIGEST FROM L.A.
-- IT SEEMS LIKE IT IS ALL ABOUT INTERNATIONAL GROWTH
RIGHT NOW. MARK: I'VE NEVER HEARD APPLE TALK
ABOUT EMERGING MARKETS MORE THAN THEY DID ON THE EARNINGS
CALL LA
ST WEEK. IT IS PRECLEAR WIFE.
THESE MESSAGES THEY TALK ABOUT ON THESE EARNINGS CALLS ARE
VERY CAREFULLY CRAFTED, VERY DELIBERATE IN WHAT THEY SAY.
WE ARE ABOUT TO ENTER -- WE ARE IN OUR THIRD QUARTER WERE APPLE
IS LIKELY TO ANNOUNCE ITS THIRD ANNUAL REVENUE DECLINE IN A ROW.
IT'S VERY CLEAR THEY HAVE PLATEAUED AT LEAST FOR NOW IN
THE U.S. ARCHER AMERICAS, EUROPE, ASIA,
CHINA SPECIFICALLY, SO INVESTORS ON WALL STREET WANT
TO SEE WHERE IS THE FUTURE GROWTH.
SO APPLE HAS A NEW PITCH -- IT'S EMERGIN
G MARKETS.
THEY TALKED ABOUT HOW THIS WAS ONE OF THE BEST QUARTERS EVER
FOR EMERGING MARKETS AND HAVE VERY LOW MARKET SHARE IN INDIA.
LIKE MEXICO, BRAZIL, INDONESIA. THAT MIGHT BE BAD ON THE
SURFACE BUT THE REALITY IS THERE'S BIG, UNTAPPED MARKETS
FOR APPLE TO GROW INTO. THEY MAKE BETWEEN $15 BILLION
AND $20 BILLION PER QUARTER IN CHINA.
IMAGINE IF APPLE COULD FIND ANOTHER MARKET, MAYBE IT IS
INDIA, WHERE THEY COULD ADD ANOTHER $5 BILLION OR $10
BILLION A QUARTER. THAT'S A MASSIVE OPPORTUNITY
OV
ER TIME IF THEY ARE ABLE TO TAP INTO THESE EMERGING MARKETS
PROPERLY. IF PEOPLE DECIDE TO BUY THEIR
PRODUCTS. IF THEY MAKE SERVICES GEARED
TOWARD THOSE MARKETS, IT'S POSSIBLE APPLE REVENUE COULD
GROW FROM THOSE NEW REGIONS. CAROLINE:
SOME EXPONENTIAL GROWTH OF YOUR OWN WRITING.
THE POWER ON IS ON THE DISCORD. REALLY INTO HAVE YOU ON TO
DISCUSS ALL THINGS APPLE. READ IT ON HIS DAILY WEEKLY
POWER ON. THAT'S IT FOR THIS EDITION OF
BLOOMBERG TECHNOLOGY. ED: DON'T FORGET THE PODCAST
Comments
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This is the internet. Don't ever mention your seasons. It is extremely rude. People shouldn't have to look up when the seasons happens to be where you live to understand what you are talking about!
FTC TYPO