'Bloomberg Technology' Full Show (03/17/2023)
ANNOUNCER: FROM THE HEART OF OR INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY AND BEYOND, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE IN WORLD HEADQUARTERS IN NEW YORK. ED: THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: SVB FINANCIAL FILES FOR CHAPTER 11 BANKRUPTCY AS FIRST REPUBLIC SEES ITS WORST WEEK EVER ON RECORD. WE WILL BRING YOU UPDATES AS THEY CROSS. ED: AND WE LOOK AT HOW THIS PLAYS OUT IN THE MARKET.
OUR GUEST JOINS US WITH THEIR TAKE ON BITCOIN FLIRTING WITH ITS BIGGEST WEEKLY GAIN IN TWO YEARS. CAROLINE: HOW THE CRISIS IS PLAYING OUT IN THE C-SUITE. WE SPEAK WITH THE CEOS OF MERCURY, RIPPLING FOR THEIR TAKE AND GET THE VENTURE CAPITAL OUTLOOK WITH THE COFOUNDER OF A VENTURE COMPANY. ALL THAT AND MORE COMING UP. LET'S GET FIRST TO AN EXTERNAL AIR WEEK IN THE MARKETS FINISHING WITH AN EXTRA NERI DAVE OFF BY 1% ON THE NASDAQ BUT THIS INDEX IS HIGHER TO THE TUNE OF 4% ON THE WEEK AS ACTUALLY THE BIG TECH STILL OUTPERFORMS WHEN WE ARE WORRIED OUT -- ABOUT SMALL TECH AND THE KBW BANK INDEX, ANOTHER 15% ON THE WEEK, DOWN 5% ON THE DAY, DOWN THE MOST ON THE MONTH SINCE MARCH 20, 2020, 28% OF VALUE OF THE KBW BANK INDEX HAS BEEN EXTINGUISHED. TWO YEAR YIELD FLIGHT TO SAFETY
AGAIN, UP BY TONY FOR BASIS POINTS THIS AS WE SEE INFLATION EXPECTATIONS FROM THE CONSUMER FROM DATA COMING DOWN. LET'S LOOK AT WHAT IS HAPPENING WITH AN INFLATION HEDGE AT THE MOMENT, IS IT SOME SORT OF SAFETY TRADE AT THE MOMENT, UP 23% IN THE LAST FIVE DAYS, DIG INTO SOME OF THE MICRO NEWS. ED: LAMELLA TECH -- MENTALITY OF THE MARKET IS INTERESTING. HALF A PERCENTAGE POINT WITH MOST NAMES ARE DOWN THERE'S A DEBATE WHETHER THAT IS A MOVE TO SAFETY OR FEEL-GOOD FROM THERE AND -- AI ANNOUNCEMENTS. VIDEO PUSHING HIRE 1%, MORGAN
STANLEY CALLING IT A MEGATREND IN AI AND VIDEO TALKED ABOUT FOR A FEW DAYS NOW AS ONE OF THE MAIN BENEFICIARIES. INTERESTING TO LOOK AT THE STREAMERS, DISNEY DOWN, NETFLIX DOWN SIGNIFICANTLY, THIRD-PARTY DATA OUT FRIDAY SHOWED DISNEY'S AD SUPPORTED TEAR OF DISNEY PLUS IS OUTPERFORMING THE AD SUPPORTED TEARS OF SOME OF ITS PEERS. NOT TRANSLATING TO THE STOCK. FIRST REPUBLIC, WE HAD HALT, VOLATILITY, ALL TOLD THE STOCK IS DOWN 70% OVER A FIVE DAY BASIS. ITS WORST WEEK ON RECORD, THE STOCK TRADING AT LOWEST LEVEL SINCE 2011. WE ARE STILL WAITING FOR DEFINITIVE ANSWERS IN THIS BANKING SECTOR. WHAT WE KNOW IS BIDEN IS PAYING
CLOSE ATTENTION TO THIS. CAROLINE: AS WE ALL RP LET'S TALK A LITTLE ABOUT THE STEP-BY-STEP TAKE WITH SVB, THE PARENT COMPANY FILING FOR CHAPTER 11 BANKRUPTCY TODAY. WITH US TO BREAK IT DOWN AS SHE HAS EVERY DAY OF THE WEEKEND WE CAN BEFORE COMMISSION ALI BASSETT. WHAT DOES IT MEAN FOR THE
PARENT COMPANY TO FILE BANKRUPTCY AND WHO IS INVOLVED? >> THERE ARE A LOT OF QUESTIONS TO BE CONSIDERED. I'VE BEEN FOLLOWING THIS CLOSELY AND ASKING WHY HAS THERE NOT BEEN A BANKRUPTCY FILING. NOW WHAT YOU WILL HAVE HIS CREDITORS WILL WANT A CERTAIN AMOUNT OF MONEY BACK NUMBER ONE. NUMBER TWO, THERE ARE CERTAIN ASSETS THAT WILL NOT BE INCLUDED HERE, CERTAIN BANKING ASSETS AND INCLUDING SOME OF THE ASSETS TIED TO HIS VENTURE PORTFOLIO AND SECURITIES BUSINESS AS WELL. WHAT I -- WHAT I HAVE BEEN HEARING THROUGH THE WEEK IS HOW DIFFICULT IT HAS BEEN TO SELL ASSETS, RECOUP VALUE. NOW THIS IS UNDER THE OVERSEEING OF A BANKRUPTCY JUDGE AS WELL. THE HOPE HERE IS THERE IS
ENOUGH MONEY THAT CAN THE REDEEMED HEREBY STRATEGIC OPTIONS FOR SOME OF THESE ASSETS. CAROLINE: WHAT'S INTERESTING IS SILICON VALLEY BANK, WHICH IS PREVIOUSLY UNDERNEATH SVB FINANCIAL, IT STILL GOT A BRIDGE BANK, GOT NEW EXECUTIVES? ED: YES. IT IS SVB FINANCIAL THAT DID THE CHAPTER 13, SVB THE BRANCH BANK AND 10 USED TO BE A CALIFORNIA CHARGE BANK UNDER THE RECEIVERSHIP OF THE FDA SEE AND CANNOT FALL INTO BANKRUPTCY. THAT SAID, ASTONISHING REPORTING ON THE BLOOMBERG TERMINAL. ONE YEAR AGO THE SAN FRANCISCO
FED BROUGHT IN A NEW ASSESSMENT TEAM, QUICKLY FLAGGED ISSUES AT THAT BANK AND ASKED MANAGEMENT TO ACT ON IT WHAT HAVE WE REPORTED? SONALI: THIS IS A COMPLICATED THING AND THERE ARE A LOT OF QUESTIONS ASKED, NOT JUST ABOUT HOW THEY LOBBIED FOR EASINESS WHEN IT CAME TO HOW THEY OPERATED, THERE IS A LOT OF QUESTIONS ABOUT WHETHER THE SYSTEM ACROSS THE UNITED STATES IS NOT EQUAL TO BEGIN WITH. ONE EXAMPLE YOU POINTED OUT IS THE ROLE BACK IN RULES HELPED CATAPULT THE EXPANSION HERE OF SILICON VALLEY BANK IN THE MOST RECENT YEARS. I WOULD ALSO SAY WHEN IT COMES TO THE WAY THEY LENT TO BUSINESSES, THEY HAD DIFFERENT RULES THAN SOME OF THE LARGEST BANKS THAT ARE OCC CHARTERED AND HAD REALLY STRICT RULES AROUND LEVERAGE LENDING AND LENDING TO UNPROFITABLE VENTURE-BACKED COMPANIES WHICH IS WHY NOW WHEN YOU SEE THESE FIRMS TRYING TO BUY AND CIRCLE ASSETS AROUND THAT VENTURE-BACKED LOAN PORTFOLIO, EVEN PRIVATE -- PRIVATE EQUITY AND CAPITAL FIRMS ARE SAYING THIS IS A NO GO BECAUSE IT IS NOT HOW THEY WERE USED TO LENDING. IT IS A COMPLICATED EQUATION AND DOES NOT MEAN THINGS WILL NOT GET SOLVED.
PEOPLE ARE LOOKING AT THE PIECE OF THE PIE AND ASSETS BUT TO YOUR POINT, REGULATION, THE LACK OF, THE PROCESS IN PUSHING FOR LIGHTER REGULATIONS. THAT WILL NOT JUST BE LOOKED OUT FOR THIS FIRM, IT WILL BE LOOKED AT FOR A LOT OF THE SMALLER FIRMS THAT HAVE DONE THE SAME THING. ED: SEVEN DAYS UNTIL THE SILICON VALLEY BANK FAILED, AND I THINK THE QUESTION IS ABOUT ACCOUNTABILITY, IN OTHER WORDS WHO IS RESPONSIBLE FOR WHAT HAPPENED? WE DO NOT HAVE A CLEAR ANSWER. CAROLINE:
AND IT IS SOMETHING JOE BIDEN, PRESIDENT JOE BIDEN IS LOOKING INTO, ACCOUNTABILITY. WE STILL HAVE CHIPS TO FALL WITH OTHER REGIONAL LENDERS. SONALI: WE DO. I THINK WE HAVE TO LOOK AT THAT TO DROP IN THE STOCK PRICE AND EASING OF THE BONDS WHEN YOU LOOK AT FIRST REPUBLIC, JUST HOW MUCH IN VALUE THIS COMPANY LOST THIS WEEK ALONE, LESS THAN A $5 BILLION COMPANY BY MARKET VALUE.
WE LOOK AT WHAT HAPPENED IN THE SVB AND HAVE BEEN TALKING ABOUT THIS IN MY SOURCES SAY THIS IS A BANK YOU COULD HAVE MAYBE ABOUT THURSDAY NIGHT BEFORE THE $42 BILLION DEPOSIT BUT THINGS DETERIORATED QUICKLY. THEY ARE TRYING TO NOT MAKE THIS HAPPEN FOR FIRST REPUBLIC. FIRST REPUBLIC HAS A LOT OF AMAZING ASSETS. FOR THE CALIFORNIA COMMUNITY, TALKED TO BANKS ACROSS THE COUNTRY AND FIRST REPUBLIC DOVE IN IN A WAY A LOT OF BIG BANKS WERE NOT ON TOP OF AS QUICKLY AS THEY WERE WHEN IT CAME TO CATERING TO THE ELITE OF CALIFORNIA, CERTAINLY THE COUNTRY.
THE WEALTH MANAGER, BANK MORTGAGE IT -- MORTGAGE LENDER FOR EXAMPLE AT A LOT OF QUESTIONS ABOUT THE FUTURE OF FIRST REPUBLIC AS WELL, BOTH FOR THE CALIFORNIA COMMUNITY AND REST OF THE COUNTRY AND WHETHER THIS IS A BANK THAT CAN BE SOLD ULTIMATELY AND THAT IS SOMETHING THE MARKET IS WATCHING CLOSELY. ED: SONALI BASAK, YOU HAVE BEEN EVERYWHERE THIS WEEK. THANK YOU FOR YOUR REPORTING AND HAPPY FRIDAY. I WANT TO STICK WITH THE MARKETS, MARKET IMPACT OF WHAT IS PLAYING OUT ACROSS ASSET AND BRING IN SYLVIA DEVAUGHN SKI, THE DEFINED CFC CIO. HEADED FIRST BEST WEEK SINCE NOVEMBER DESPITE THE BROAD RISK OF SENTIMENT WE HAVE SEEN THROUGHOUT THIS WEEK DRIVEN BY HEADLINES.
>> GREAT TO BE HERE. YES, IT WAS A GREAT POINT MADE AT THE TOP OF THE SHOW AND IT IS SOMETHING I HAVE BEEN TALKING ABOUT AND THINKING ABOUT FOR WEEKS. PRIOR TO THE BANKING CRISIS HERE, IN MY MIND, EVEN IF YOU TAKE AWAY THE BANKING CRISIS, SUMP TOP FAANG COMPANIES, TOP TECH NAMES ESPECIALLY OUR ON THE PRECIPICE OF INNOVATION WITH CHAT GPT. WE ALL KNOW AI AND HOW WE
EXPECT THAT TO PLAY OUT SO THERE IS GOOD REASON TO INVEST FOR THAT REASON ALONE BUT ON TOP OF IT THEY WERE BATTERED LAST YEAR AND LOOK WHERE THEY ARE, THEY STICK WITH STRONG BALANCE SHEETS AND YOU HAVE A MACRO OVERHANG HERE OF A HAWKISH FED THAT IS NOW SHIFTING REGARDLESS OF THE BANKING CRISIS. SO SVB YOU HAVE SOME DEFLATIONARY PRESSURES, A FED THAT IS LIKELY TO THINK ABOUT PAUSING AND STOPPING ON THE RATES AND WHO DOES THAT BENEFIT? TECH COMPANIES. THEIR COST TO BAR BECOMES CHEAPER. CAROLINE:
JUST TO JUMP IN ON THE FED, DO YOU THINK THEY WILL NOT BE HIKING THEREFORE COME NEXT WEEK? >> I THINK THE FED WILL LIKELY -- I DO NOT KNOW WHAT THE FED WILL DO BUT IN MY OPINION I THINK 25 BETS IS LIKELY TO BE ON THE TABLE WITH A LONG EXPLANATION THAT IS NOT AS HAWKISH AROUND THE IDEA THEY WILL PAUSE AND TAKE IN THE ENVIRONMENT AND SEE WHAT HAPPENS BECAUSE I THINK THIS IS THEIR -- THIS MASSIVE FEE TO -- NEED TO INSTILL CONFIDENCE IN THE BANKING SYSTEM. THAT DOES HAVE AN IMPACT ON CONSUMERS AND INVESTORS AND MAKES INVESTORS WANT TO SIT ON THE SIDELINE, CONSUMERS NOT WANT TO SPEND BECAUSE THEY WORRY ABOUT RECESSION AND SO ON. SO I DO THINK JOHN THIS NEXT RATE HIKE IT WILL BE A MUCH DIFFERENT STORY THAN A MONTH AGO. CAROLINE:
SO WHEN YOU'RE LOOKING AT ALLOCATING MONEY, HAVE YOU BEEN, THIS WEEK, AND INTO WHAT. SYLVIA: NOT YESTERDAY WHEN THE MARKET WAS RALLYING BUT I LOOK AT THE LONG-TERM AS AN INVESTOR IN THE THINGS I LIKE IN THE LONG TERM ARE THE FOURTH INDUSTRIAL REVOLUTION, THE QUANTUM, THE MACHINE LEARNING, AND AI. I CONTINUE TO ALLOCATE THEIR SO WHEN WE HAVE PULLBACK DAYS LIKE TODAY'S, NAMES I LIKE TO LOOK AT A BASKET OF STOCKS THAT REPRESENTS THOSE NAMES WHETHER IT IS SEMI CONDUCTORS, BIG TECH COMPANIES, AND IN MY MIND I WILL HOLD THOSE FOR THE NEXT THREE TO FIVE YEARS AND THAT WILL PAY OFF. THEN I DIVERSIFY, I LIKE DEFENSIVE PORTFOLIOS AND ALTERNATIVE ENERGY, THINGS LIKE HYDROGEN, THE WAY -- THE FUTURE OF HOW WE WILL POWER OUR CARS AND THINGS LIKE THAT, THAT IS A GROWING TREND. ALL OF THESE NAMES ARE BATTERING THE MARKET THIS WEEK. IF YOU ARE AN INVESTOR, I THINK
EVEN INDEX EXPOSURE BEGINS PICKUP AT THESE LEVELS WHEN YOU GET PULLBACK LIKE TODAY. CAROLINE: WHEN I THINK OF DEFIANCE I THINK OF THE ETF'S RELATED TO CRYPTO AND NOT JUST IN THE NASDAQ AT A WEEK FOR CRYPTO. ED: I GUESS MY QUESTION WOULD BE THERE IS THIS HIGH DEGREE OF BULLISHNESS AROUND CRYPTO OR DIGITAL ASSETS YET THE WORLD AROUND THAT INDUSTRY, THE STARTUPS AND COMPANIES, ARE UNDER SEVERE DURESS. HOW DO YOU SQUARE THAT? SYLVIA: SO GOING BACK TO CAROLINE, I THINK WE SQUARE IT BY CREATING A FUND SO WE ARE WORRIED ABOUT SOME OF THAT RISK AND INVESTORS IN THE SHORT-TERM TERM WILL BE BEARISH BUT THAT BEING SAID I THINK IT DEPENDS ON WHAT CRYPTO WE ARE TALKING ABOUT.
IF YOU LOOK AT BITCOIN, IT IS ALMOST LIKE THE S&P 500 OF CRYPTO RIGHT? IT IS THE LEAST RISKY OF CRYPTO ASSETS AND I THINK WITH THE BANK , A LOT OF INVESTORS VIEW THAT AS A GOOD ALTERNATIVE TO NOT HAVE EXPOSURE ESSENTIALLY TO BOTH GOVERNMENT BANK FAILURES AND THINGS LIKE THAT SO IT IS -- IS ESSENTIALLY CATCHING A BID BUT IF YOU LOOK AT THE OVERALL CRYPTO ECONOMY, IT IS THE SAME SITUATION AS WITH HIGHLY LEVERAGED GROWTH COMPANIES THAT ARE NOT THE THINGS NECESSARILY BUT THEY ARE HIGHLY IMPACTED BY RATES, BY INFLATION, VERY VOLATILE AND WHEN YOU HAVE A BANK COLLAPSE AND UNCERTAIN MACRO BACKDROP OF RECESSION OR NOT, YOU ARE UNLIKELY HAVING INVESTORS PILING INTO THOSE NAMES IN MY OPINION. I THINK THEY WILL STICK WITH BITCOIN, MAYBE LOOK AT ETHEREUM, BUT I THINK THE SMALLER NAMES ARE PROBABLY NOT GOING TO GET INTO BED. ED: TWO NAMES I SHOWED WERE NVIDIA, MICROSOFT, ARTIFICIAL INTELLIGENCE DESPITE THE CHAOS IN THE BANKING SECTOR HAS CONTINUED TO BE A THEME, AT LEAST THAT IS WHAT SELL SIDE IS WRITING ABOUT. HOW ARE YOU POSITIONING TO TAKE ADVANTAGE OF MOMENTUM IN THE SPACE? SYLVIA: AT OUR COMPANY TO THE TOP HOLDINGS IN THE QUANTA BASKET IS MACHINE LEARNING AND AI TRADE THERE AND WHAT WE ARE LOOKING FOR IS JUST THE BUILD OUT THERE IS EXPECTED TAKER OF 37% IN THE NEXT FIVE YEARS, STRICTLY OFF OF AI. IF YOU THINK ABOUT HOW THAT WILL IMPACT EVERY SECTOR FROM RETAIL, AMAZON BEING ABLE TO TARGET ADS AND PUT THINGS BACK INTO YOUR BASKET MORE ACCURATELY, HEALTH CARE, CONNECTING DOCTORS, ROBOTS RESEARCH ALL OF THESE THINGS WE TALKED ABOUT BEFORE, DEFENSE, MORE PRECISE TARGETING, THIS DEPENDS ON AI. WE KNOW THAT IS GROWING IN MICROSOFT PUT THEMSELVES IN THE FRONT OF THE PACK IN TERMS OF R&D AND INVESTMENT IN THE SPACE. CAROLINE:
DISCUSSION OF ANNUAL GROWTH RATE, WE LOVE IT. SYLVIA JABLONSKI , WE WISH YOU A RESTFUL WEEKEND. ED: I THINK WE ALL NEED ONE. STAYING IN THE WORLD OF CRYPTO,
A CLASH INVOLVING DISGRUNTLED COIN BEST CUSTOMERS WILL GIVE THE U.S. SUPREME COURT ITS FIRST TASTE OF THE WORLD OF CRYPTOCURRENCIES FOR SHADOWING FUTURE CASES THAT COULD DEFINE THE INDUSTRY. NEXT WEEK JUSTICES HEAR ARGUMENTS FROM COINBASE'S EFFORTS TO PUSH TWO SUITS INTO ARBITRATION SOY PROCEDURAL BATTLE RATHER THAN CRYPTO SPECIFIC MATTER. POINT IS ONCE PROCEEDINGS STOPPED WHEN AN APPEAL IS FILED SEEKING TO COMPEL ARBITRATION. THE JOINT CASE COMES AS HIGH STAKE FIGHTS INVOLVING THE LIFE'S -- LIKES OF RIPPLE AND GRAYSCALE WORK TOWARD THE COURT, SHAPING THE RIGHTS OF CUSTOMERS AND COMPANIES ALIKE IN THE FLEDGLING INDUSTRY. WE WILL KEEP ACROSS THE AND THE COMING WEEKS.
AS WE GO TO BREAK, JUST LOOKING AT BITCOIN, OVER A SEVEN-DAY BASE IS 23%, WE WILL TRACK AND IN OUR BEST WEEK SINCE FEBRUARY 2021 AND THAT IS WHAT WE WERE TALKING WITH SYLVIA ABOUT THAT, THE LONGER-TERM BULLISHNESS DESPITE SHORT-TERM BEARISH JITTERS. THAT IS THE PICTURE OF BITCOIN. THIS IS BLOOMBERG. >> LET'S SAY THE FED HADN'T STEPPED UP AND SILICA AND VALLEY FAILED AND A WHOLE BUNCH OF STARTUPS LOST THEIR VENTURE DOLLARS, THAT WOULD HAVE BEEN AN EVENT THAT I THINK WOULD HAVE BEEN WAY WORSE. THAT WOULD HAVE BEEN CATASTROPHIC. ED: I WAS LONG TIME VENTURE CAPITALIST THOUGH GIRLY WITH SOME OF HIS THOUGHTS ON THE BANKING CRISIS -- BILL GARLIC. WITH SOME OF HIS THOUGHTS ON
THE BANKING CRISIS. MANY TECH STARTUPS AND VENTURE CAPITALISTS, THE SAME INDUSTRIES THAT FUELED SVB'S RISE SCRAMBLED TO PULL THEIR MONEY OUT AND AMID THE EXIT IS, TECH COMPANIES DIVERSIFIED A WAY FROM ONE SINGLE BANK TO A MIX, TOP-TIER NAMES BUT FINTECH STARTUPS THAT TECHNICALLY ARE NOT BANKS THAT ARE ONE OF THOSE MERCURY END IN THE PAST WEEK THE START OF HAS GOT THOUSANDS OF NEW CUSTOMERS AND THE COFOUNDER AND CEO JOINS US NOW. YOU ARE NOT A BANK. >> YES. ED: YOUR BANKING SERVICES PROVIDED BY CHOICE FINANCIAL AND EVOLVE BANK, SO EXPLAIN HOW YOU HAVE BEEN ABLE TO BENEFIT THIS WEEK FROM SB VISA SITUATION. >> YOU CAN GO TO MERCURY.COM AND GET A BANK ACCOUNT.
WE WORK WITH TO PARTNERS AND PROVIDE A SUITE OF SERVICES. EWING DO THE DEMO CARD, VENTURE DEBT -- YOU CAN DO DEBIT CARD, VENTURE C DEBT, CREDIT CARD. ED: IT IS 9:17 LOCAL FRIDAY AND 12:17 IN NEW YORK. AT THIS MOMENT, GIVE ME A
DOLLAR VALUE FOR THE BUSINESS YOU BROUGHT IN THIS WEEK. >> IT HAS BEEN ABOUT TWO BULLION DOLLARS SO FAR. ED: THAT EQUATES TO DEPOSITS? >> YES, DEPOSITS. CAROLINE: YOU'VE EXPLAINED SO SAINT YOUR BUSINESS AND THE PARTNER BANKS IN PARTICULAR. YOU LEND TO PARTNER OR USE. I'M INTERESTING TO NOW INSURANCE, EVERYONE MUST COME TO YOU AND SAY AM I FDIC INSURED? WHEN YOU GO TO THE WEBSITE IT SHOWS IT CAN BE INSURED UP TO 5 MILLION IN TERMS OF DEPOSITS.
UNDERSTAND FOR OUR AUDIENCE HOW THIS IS PROTECTED IN PARTICULAR. >> WE ARE NOT A BANK SO WE DO NOT TAKE DEPOSITS AND THIN THEM OUT. WE WORK WITH OUR PARTNER BANKS AND THEY HAVE A NETWORK OF SWEETS BANKS UNDERNEATH THEM SO IN ORDER TO PROVIDE 5 MILLION IN FDIC INSURANCE, THAT IS SPLIT BETWEEN 20 BANKS. WE HEARD LAST WEEK WE HAD ABOUT $1 MILLION IN FDIC INSURANCE SO WE INCREASED IT BY FIVE X AND THAT IS 20 X BIGGER THAN WHAT YOU WOULD GET I WON.
WE HEARD PEOPLE WERE CONCERNED ABOUT WHAT IS HAPPENING AND IS THEIR MONEY SAFE AT MERCURY AND OBVIOUSLY I CAN SAY IT IS SAFE BUT PROVIDING THE EXTRA ASSURANCE WITH FDIC INSURANCE ON THEIR DEPOSITS HELPS A LOT. ED: I THINK THE MAIN POINT YOU HAVE DISCUSSED ALL WEEK IS DIVERSIFYING WITH SOMEONE -- SOMETHING NO ONE THOUGHT ABOUT THAT THERE WERE BENEFITS GOING TO TRADITIONAL BANKS AND START UPS THAT OFFER DIFFERENT THINGS THAN TRADITIONAL BANKS. CAROLINE: TO THAT POINT, YOU ARE OFFERING ACCESS TO MONEY MARKET FUNDS BUT THEY ARE NOT YOUR MONEY MARKET FUNDS, IT IS VANGUARD'S FOR EXAMPLE, OFFERING IT TO SPIN A PEOPLE'S DEPOSITS AND SPREAD THEM ACROSS A RANGE OF OTHER LENDERS. WHY COME TO A MIDDLEMAN? WHY COME TO A MERCURY WHEN YOU ARE WORRIED ABOUT THE SECURITY OF THESE? >> MERCURY IS A SOFTWARE PROVIDER. AT THE END OF THE DAY IF YOU BUY A VANGUARD FUND YOU CAN GO TO VANGUARD OR GO TO E*TRADE OR COME TO MERCURY TO DO IT.
WE JUST MAKE IT SIMPLE. THESE BUSINESS OWNERS HAVE A LOT ON THEIR MIND AND JUST WANT TO BUILD THEIR BUSINESS, THEY DON'T WANT TO BE THINKING ABOUT WHERE'S MY MONEY, WE CAN DO THINGS LIKE AUTOMATICALLY SET UP RULES SO WHEN YOU NEED MORE OPERATIONAL ACCOUNT MONEY IT AUTOMATICALLY SWEEPS BETWEEN THE VANGUARD FUND TO NORMAL OPERATIONAL FUND. SO WE MAKE IT SIMPLE AND EASY AND MERCURY THE FINANCIAL INSTITUTIONS. ED: YOU ARE BACKED BY CRV AND OTHERS, RAISE THAT A $1.6
BILLION VALUATION IN 2021 AND YOU ARE RAISING NOW? >> NO, WE ARE PROFITABLE, MAKING MONEY EVERY MONTH. I'VE HAD LOTS OF VC'S REACHOU BUT IT HAS BEEN SO BU. BUT THIS IS NOT THE TIME TO REACH OUT. CAROLINE: THANK YOU FOR MAKING TIME AMID THE FLOOD OF INTEREST. THANK YOU.
COMING UP, WE WILL TURN TO ARTIFICIAL INTELLIGENCE AS BAIDU SURGES AFTER THE TEST JUST REVEALED A CHAT GPT LIKE SERVICE. TALKING TECH AND STICKING WITH ARTIFICIAL INTELLIGENCE, WATCHING NVIDIA SHARES JUST UPGRADED TO OVERWEIGHT TO MORGAN STANLEY AND ANALYSTS SAYING THE DEVELOPMENT OF GENERATIONAL AI IS TOO MUCH OF A MEGATREND TO GET DISTRACTED BY TACTICAL CONCERNS. CURRENTLY UP 1% AND -- 1% FROM ITS HIGHS OF THE DAY. THIS IS BLOOMBERG. ♪ >> ON A MARKET-NEUTRAL BASIS, THE QUALITY FACT OR IS AT A NEW HIGH, SO THE MARKET FORESEES THESE COMPANIES, THE APPLES AND MICROSOFT'S, HAS A QUALITY AND SAFE HAVEN. THAT IS WHAT KEPT THE S&P AFLOAT.
FINANCIALS GETTING CRUSHED BUT TAX PULLING IT. ONCE THE MARKET STARTS THINKING AND FEELING THAT EVEN APPLE IS NOT SAFE, AND THE SP COULD ROLL OVER. CAROLINE: HAS THE NASDAQ HIGHER TOO. THERE'S A HEAD OF TECHNICAL STRATEGY MACRO RISK ADVISORS. IT IS TIME TO TALK IN TECH, BAIDU SURGING 14% AFTER BROKERAGES INCLUDING CITIGROUP TESTED THE COMPANY'S UNVEILED CHAT SERVICE AND GRANTED IT THEIR PRELIMINARY APPROVAL. THEY REVERSED THE 6% LOSS THURSDAY AFTER THE FOUNDER HERE DEBUT THE TECHNOLOGY BY A RECORDED VIDEO.
SPEAKING OF AI, DATA QANDIL ENOUGH -- ANALYTICS FIRM OPENED AG 42 WORTH 25 $20 BILLION FOR ITS 496 MILLION SHARE. THE LATEST SIGN OF STRONG DEMAND FOR THE MIDDLE EAST AND OFFERINGS. MARCUS OFFHANDED IN FORMAL ANTITRUST COMMITMENTS TO THE EU. WATCHDOGS ARE PROBING 60 $9
BILLION PLAN BY ACTIVISION BLIZZARD. THIS PUTS THE OWNERS ON BRITAIN'S MERGE WATCHDOG TO DO A DECISIVE RULING ON THE DEAL AND THE EU FINAL DEADLINE ON MARCH 16 AND MAY BETWEEN SECOND. THE CEO OF AMAZON'S TWITCH GAMING STREAMING PLATFORM IS RESIGNING. EMMETT SCHEER WILL BE REPLACED BY THE TWITCH PRESIDENT , THE LATEST EXECUTIVE TURNOVER AND SCHEER HAS BEEN AT TWITCH SINCE ITS ORIGINS AS HE'S LEAVING TO SPEND MORE TIME WITH HIS FAMILY. ED: RIPPLING RAISED 500 MILLION DOLLARS IN EMERGENCY FUNDS FOLLOWING THE COLLAPSE OF SILICON VALLEY BANK.
WE ARE GOING TO TALK TO THE CEO, PARKER CONRAD, NEXT. THE ACTIONS IN THE BANKS, WE ARE TRACKING WHAT IS HAPPENING, FIRST REPUBLIC CONTINUES TO DROP ON TRACK FOR ITS BIGGEST WEEKLY DECLINE EVER AND TRADING AT AN APRIL 2011 LOW. YOU SEE HOUSE IS IMPACTED THE KB W BANK INDEX ALSO DROPPING, WIDESPREAD AND WE HAVE A LOT TO DISCUSS IN THE NEXT 30 MINUTES. THIS IS BLOOMBERG. ♪ ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." IT IS 9:30 A.M. ON THE WEST COAST FOR 4:30 P.M. IN LONDON.
EUROPEAN MARKETS CLOSING, THE STOXX EUROPE 600 DOWN 1.3 PERCENT PASSING OVER ECONOMIC DATA AND JITTERS IN THE BANKING SECTOR. HERO CONTINUE TO STRENGTHEN AGAINST THE DOLLAR, 1067 ON EURO-DOLLAR UP AROUND .6%. WE SEEN FLUCTUATIONS IN THE CURRENCY MARKET OVER THE COURSE OF THE WEEK BECAUSE CENTRAL BANK POLICY BEING A KEY FACTOR, UCB GIVING US THE HALF-POINT HIKE BUT NOT A LOT OF GUIDANCE FOR WHAT IS TO COME IN THE MONTHS AND YEARS AHEAD. THE BOND MARKETS, WE ARE SEEING SOME ADVANCEMENT CONTINUING.
THE GERMAN 10-YEAR OFF BY 16 BASIS POINTS, THE U.K. TO YEAR YIELD AT THE SHORT END AT 3.2 PERCENT DOWN 16 BASIS POINTS AS WELL. INFLATION A BIG FOCUS WHEN IT COMES TO THE UNITED KINGDOM. CHANGE THE BOARDS AND LOOK OVER
THE COURSE OF THE WEEK BECAUSE THE STOXX 600 EUROPE IN THE EQUITY FACE -- SPACE HAVING ITS WORST WEEK, FEELING THE IMPACTS OF THE BANKING SITUATION, COMPARED WITH THE PICTURE IN THE UNITED STATES AND THE NASDAQ 100. CAROLINE: CERTAINLY THE RIPPLE EFFECTS FAR AND WIDE. LET'S TALK ABOUT HOW DIFFICULT THE BANKING CRISIS HAS MADE IT TO RAISE CAPITAL FOR TECH STARTUPS.
HERE'S WHAT THE CLEO CAPITAL CO-FOUNDER HAD TO SAY ABOUT IT EARLIER. >> IT WILL BE HARD QUARTER TO PITCH IN. GETTING THE CAPITAL FROM A LOT OF VCS THAT DON'T ALREADY HAVE AN OBLIGATION TO THE MONEY THEY PUT WITH YOU WILL BE HARDER THAN EVER AND IT DOES NOT MEAN IT IS TOTALLY DRIED UP AND THERE WILL BE TONS OF PEOPLE STARTING GREAT NEW COMPANIES BUT THIS IS OWING TO BE A MUCH DIFFERENT FUNDRAISING ENVIRONMENT THEN EVEN A FEW MONTHS AGO. CAROLINE: FOR SOME. THE FUNDING IS STILL OPEN. LET'S BRING IN PARKER CONRAD: FOR HIS TAKE, CEO, RIPPLING, JUST RAISED 500 BUYING DOLLARS AND THREE DAYS ALONE. THIS IS ALL IN MANY WAYS
BECAUSE OF WHAT OCCURRED WITH A SLICK AND VALLEY BANK. CAN YOU TALK US THROUGH THE MONEY YOU MANAGED TO RAISE AND WHY? PARKER: YES. RIPPLING IS AMONG OTHER THINGS A PAYROLL COMPANY, WE MAKE SOFTWARE FOR BUSINESSES TO MANAGE, EVERYTHING RELATED TO EMPLOYEES, PAYROLL, HR, FINANCE, EXPENSE REVERSE -- REIMBURSEMENTS.
WE THINK WE CAN CUT THE MINISTRY OF WORK IN RUNNING THOSE THINGS OUT BY DOING IT IN ONE PLACE. COMPANY SEND US MONEY A FEW DAYS AHEAD OF PAYDAY AND WE SEND IT TO EMPLOYEES. WHEN'S SILICON VALLEY BANK FAILED, THEY WERE PREVIOUSLY THE RAILS FOR OUR SERVICE.
WE HAD TO MOVE IN A FEW HOURS OVER TO J.P. MORGAN CHASE. WE ALSO KNEW ON FRIDAY WITH THE BANK FAILING THERE WERE 50,000 PEOPLE THAT WE NEEDED TO MAKE SURE GOT PAID WHOSE COMPANIES HAD ALREADY SENT US MONEY SO WE ACTUALLY TOOK ABOUT $130 MILLION OF OUR OWN CAPITAL AND SENT IT OUT THE DOOR TO MAKE SURE EVERYBODY GOT THEIR PAYCHECK FRIDAY AND MOVED HEAVEN AND EARTH TO DO THAT. ED: KATIE RUTH TEXTED ME AND HAS BEEN WRITING ABOUT YOUR SITUATION.
GIVEN NOW THE SPV SITUATION IS MORE RESOLVED, WHAT WILL YOU DO WITH THAT $500 MILLION? PARKER: WE RAISED THE MONEY TO MAKE SURE WE WOULD BE ABLE, EVEN IF THE FBI SEE DID NOTHING, WE WOULD BE ABLE TO BACKSTOP OUR CLIENT FUNDS. AS IT TURNS OUT, DEPOSITORS WERE PROTECTED SO WE NOW, RIPLEY, IS INCREDIBLY WELL-CAPITALIZED. WE HAVE ALMOST $1 MILLION ON THE BALANCE SHEET. ED:
WHAT WOULD YOU HAVE DONE IF THE DEPOSITS WERE NOT INSURED? PARKER: WE WANTED TO MAKE SURE ANY COMPANY THAT SENT US MONEY WE WERE GOING TO GET THEIR EMPLOYEES PAID. THAT WAS WHY WE WANTED TO MAKE SURE WE HAD THIS AS A BACKUP PLAN TO A BACKUP PLAN TO A BACKUP PLAN. ED: THIS IS AN AMAZING CONVERSATION BECAUSE IT'S A SNAPSHOT OF WHAT HAPPENED IN THE MOMENT. WE ARE HEARING SO MANY FOUNDERS PRETTY DIRE ABOUT THE LONG-TERM IMPACTS OF SVB AND RAISING FUNDS AND HERE YOU HAVE A COMPANY THAT DID IT IN THREE DAYS. CAROLINE:
AND YOU ALSO LUCKILY HAVE A BANKING PROVIDER OTHER THAN SVB WHICH J.P. MORGAN -- WITH J.P. MORGAN BUT WENT OUR OWN AUDIENCE AND SAID AS A FOUNDER AND FUND TO DIVERSIFY YOUR BANKS? IT IS COMPLICATED SAID 44%. TO THAT POINT, WAS IT COMPLICATED FOR YOU TO REV UP THE J.P. MORGAN AND ARGUE MORE DIVERSIFIED EVEN THAN THAT? PARKER: IT WAS. WE HAVE A NUMBER OF DIFFERENT BANKING RELATIONSHIPS, MANY DIFFERENT BANK ACROSS THE WORLD. BUT WE ALWAYS US IF SOMETHING HAPPENED WITH SVB, MAIN RAILS FOR THE PAYROLL SERVICE, WE WOULD HAVE ABOUT TWO WEEKS TO GET SOMETHING UP AND RUNNING AND WHAT HAPPENED IS WHEN THE BANK FAILED WE ONLY HAD ABOUT 3.5 HOURS.
SO WE PUT A TEAM OF 15 OF THE BEST ENGINEERS IN THE COMPANY ON GETTING THIS UP AND RUNNING IN THE TIMEFRAME AND A MUCH LARGER TEAM OVER THE WEEKEND AND DAYS TO COME REALLY MAKING SURE EVERYTHING WAS SOLID AND WELL GROOMED AND COMPRESSED THE TIMELINE TO MAKE SURE NOTHING WAS INTERRUPTED FOR OUR CLIENTS. CAROLINE: WHAT IS ALSO SO FASCINATING ABOUT YOUR STORY IS THE SUPPORT OF YOUR CAPITAL SUPPORTERS AND IN PARTICULAR THE ROUND LED BY NEW META-. HOW IMPORTANT WAS IT TO HAVE VC'S ON HAND THAT WOULD RALLY THE TROOPS AND GIVE YOU MONEY WHEN YOU NEEDED IT? PARKER: WE ARE IN CREDIT BEFORE TO THEIR ARE A BUNCH OF INVESTORS THAT HAVE BEEN SUPPORTIVE, THAT WE'VE KNOWN FOR A LONG TIME, AND THAT HAVE EVEN AS THE FUNDING ENVIRONMENT FOR LATE STAGE STARTUPS HAS GOTTEN SHAKY HAVE ALWAYS WANTED TO FIND WAYS TO OWN MORE OF IT. WE WERE ABLE TO PUT TOGETHER ON
SHORT NOTICE AT A FAIR PRICE AT $11.25 BILLION VALUATION TO GET A BUNCH MORE CAPITAL BUSINESS AND THAT WILL ALLOW US NO MATTER WHAT HAPPENS HERE TO FOCUS ON BUILDING THE RIGHT PRODUCT FOR OUR CUSTOMERS AND GROWING OUR COMPANY. ED: YOU SCRAMBLE TO TAKE MONEY FROM YOUR BALANCE SHEET TO HELP WITH PAYROLLS OF OTHERS. HAVE YOU MADE WHOLE AGAIN AFTER WHAT HAS HAPPENED? AND REFLECTING ON YOUR CUSTOMER BASE, IS THERE STILL PROBLEMS OUT THERE? ARE THERE STILL PROBLEMS FOR PEOPLE TRYING TO MAKE PAYROLL TO MOVE MONEY AROUND? PARKER: ON MONDAY MORNING WHEN SVB REOPENS, WE GOT ALL THE CUSTOMER FUNDS OUT OF SVB SO WE HAVE BEEN MADE COMPLETELY WHOLE FOR THIS. ED:
AND THERE ARE PROBLEMS STILL IN THE ECOSYSTEM? PARKER: NOT FOR US. OUR SYSTEMS ARE AS SOLID AS EVER, JUST WITH A DIFFERENT BANK, J.P. MORGAN CHASE. I DO NOT KNOW WHAT WILL HAPPEN MORE BROADLY TO THE ECONOMY AS A RESULT OF SOME OF THE SHAKINESS OF THE BANKING SECTOR BUT WE FEEL GOOD ABOUT OUR SERVICE. ED: WE ARE BILLING THIS HAS AN EMERGENCY FUND RAISE AND I WANT TO KNOW HOW YOU FELT ABOUT THE TERMS OF THE RAISE. PARKER:
I DISAGREE WITH THE CHARACTERIZATION OF IT AS AN EMERGENCY. I THINK HE CAME TOGETHER QUICKLY, BUT THIS WAS GREAT CAPITAL ON ATTRACTIVE TERMS. THERE ARE NOT ALLETE -- A LOT OF LATE STAGE STARTUPS THAT CAN RAISE THAT CAPITAL IN A SHORT PERIOD OF TIME AT THESE VALUATIONS. I THOUGHT IT WAS A GREAT DEAL
FOR THE COMPANY AND I FEEL REALLY GOOD ABOUT IT. CAROLINE: HOW HEADLINE CURRENTLY SAYS EMERGENCY FUNDS MAY BE UP THAT -- UPDATE THAT TO NEW FUNDS. ULTIMATELY WHAT NOW? DO EXPAND AND USE THE $500 MILLION TO GROW OR CAN YOU IN SOME WAYS GIVE IT BACK? PARKER: WE ARE GOING TO FOCUS AND USE THIS MONEY TO CONTINUE TO INVEST IN OUR PRODUCT AND IN RESEARCH AND DEVELOP AND. RIPPLING HAS AN UNUSUAL COMMITMENT TO R&D ALONG SIDE OTHER COMPANIES. AND NORMA SURROUND -- AMOUNT ON DEVELOPING NEW PRODUCTS, BUILDING NEW SOFTWARE, AND WE THINK IT IS WHAT MAKES US HAVE THE BEST PRODUCT ON THE MARKET. CAROLINE:
YOU ARE A FINTECH AND YOU UNDERSTAND FINANCIAL PLUMBING BETTER THAN MOST. DO YOU THINK AT THIS MOMENT THE SINGLE POINT OF FAILURE YOU HAD AVOIDED BY HAVING OTHER BANKS, DOES IT MCCUE ARIA ABOUT A CENTRALIZED FINANCIAL SYSTEM AS IT STANDS? PARKER: WE HAVE DIFFERENT BANKING RELATIONSHIPS WITH A NUMBER OF DIFFERENT BANKS AND CONTINUE TO SORT OF DIVERSIFY SORT OF THE RAILS WE HAVE WITHIN THE BANKING SECTOR. I THINK IN THIS CASE IT WORKED OUT PRETTY WELL. WE FOUND HOW TO NINE A CAR CAME FRIDAY ON THE DAY EMPLOYEES WERE SUPPOSED TO GET PAID THAT SVB WAS SHUT DOWN AND ALL THE FUNDS THAT WERE SUPPOSED TO ARRIVE FOR PAYDAY FRIDAY WERE LOCKED UP. WE HAD THREE HALF HOURS TO GET THINGS UP AND RUNNING WITH J.P. MORGAN AND WE WERE ABLE TO DO IT ON A 3.5 HOURS AND GET
PEOPLE PAID USING OUR OWN CAPITAL. I LOOK AT IT AS A REAL SUCCESS STORY ABOUT OUR ABILITY TO MAKE SURE 50,000 ORDINARY AMERICANS PAID THROUGH RIPPLING GOT PAID LAST FRIDAY. ED: RIPPLING CEO PARKER, RYAN, THICK YOU FOR SHARING THIS STORY. COMING UP, WE ARE JOINED BY OUR NEXT GUEST TO TALK THINGS VC AFTER WHAT WAS A CRAZY WEEK IN THE WORLD OF BANKING BUT ALSO CRITICALLY FOR TECHNOLOGY. CAROLINE: BUT LOOK AT THE BIG TECH BENCHMARKS AND MAYBE YOU WOULD BE OK AT THINKING IT WASN'T AS CRAZY AS MANY FELTS, 4.5%
HIGHER ON THE NASDAQ OVER THE LAST FIVE DAYS. BIG TECH STILL PROVING ATTRACTIVE. THIS IS BLOOMBERG. ♪ ED: TIME FOR OUR GLOBAL VC ROUND UP.
PETER THIEL HAD $50 MILLION OF HIS OWN MONEY IN SILICON VALLEY BANK WHEN IT WENT UNDER, FINANCIAL TIMES REPORTING TEAL SAID HE DID NOT DRAW DOWN FROM HIS OWN ACCOUNT BECAUSE HE BELIEVED THE BANK WOULD NOT FAIL, EVEN THOUGH HIS FOUNDERS FUND HAD WARNED ITS PORTFOLIO COMPANIES TO MOVE MONEY AWAY FROM THE TECH FOCUS TO LENDER. LATEST PETRONAS PLANS TO EXPAND ITS CORPORATE VCR BY UP TO 200 MILLION AS EARLY AS APRIL ACCORDING TO REUTERS CITING SOURCES BRANCH WILL FOCUS ON MAKING INVESTMENTS ACROSS ISA -- ASIA-PACIFIC BUT THE PLAN BEING FINALIZED. FINALLY WALMART IS INVESTING ANOTHER $200 MILLION IN INDIAN PAYMENT AT PHONE PAY. THIS WAS DONE AT A VALUATION OF $12 BILLION PART OF AN ONGOING FINANCE EFFORT TO RAISE THE TOTAL TO $1 MILLION FOR THE START UP. CAROLINE: LET'S THINK INTO THE FLOW OF
MONEY AND PARTICULARLY AROUND THE CURRENT BANKING CRISIS, HOW IT HAS UNFOLDED, WHO IT HAS TENTED, WHO IN MANAGED TO HIGHLIGHT THE STRIKE. THE VC WORLD IS WHEN WE WILL FOCUS ON IN THE SLICK AND BALLY VANKE AND OTHERS IN THE NAME REALM SO BEING A CONCERN. OUR NEXT GUEST IS WITH US AND I SAY WE ARE NOT QUITE OUT THE WOODS YET BECAUSE FIRST REPUBLIC BANK STILL STRUGGLING AND NEEDING SUPPORT FROM OTHER BANKS IN THE SYSTEM. ARE WE THROUGH THE WOODS OR DO
YOU THINK THERE IS MORE AREAS OF CONCERN? VINOD: SVB FOR SURE COMPLETELY SAFE TODAY. IT IS INSURED BY THE FBI SEE SO IT IS THE BEST PLACE TO PUT MONEY BECAUSE IT IS USING BETTER INTEREST RATES THAN TREASURY AND IT IS VERY SAFE OR JUST AS SAFE. CAROLINE: IN MANY WAYS, YOU OVER THE COURSE OF THE CRISIS WEEKEND WANT TO MAKE IT SAFER YOUR OWN PORTFOLIO COMPANIES, LOOKING AT A TWEET WE OUT MARCH 12 TALKING ABOUT HOW YOU ARE NOT USING LP MONEY AND TRYING TO HELP YOUR COMPANY IS BASICALLY USING THROUGH LOANS DEPENDING ON YOUR OWN PERSONAL WEALTH REPORTED.
WHAT MADE YOU DECIDE TO DO THIS ? COMPANIES NEEDED HELP. WE COULD NOT USE SVB MONEY SO WE COULD -- WE DECIDED TO USE PERSONAL FUNDS AND ZERO PROFIT FOR US PROVIDE LOANS TO OUR COMPANY, DIRECTLY FROM OUR PERSONAL LENDERS TO THE COMPANIES. ED: NEXT WEEK YOU WILL BE ONE OF MANY TRAVELING TO WASHINGTON, D.C. FOR A SUMMIT OF SORTS. WHAT WILL YOU BE DISCUSSING WITH YOUR INDUSTRY PEERS AND OTHERS? VINOD: NEXT WEEK'S DINNER REPORTED IN VARIOUS PUBLICATIONS IS ABOUT THE INFLUENCE OF CHINA AND OUR TECHNOLOGY RACE AND ECONOMIC WAR WITH CHINA. THAT IS THE TOPIC OF DISCUSSION. ED: THE LAST WEEK FOR SOME HAS BEEN UNTHINKABLY HARD, FOR OTHERS THEY MOVE QUICKLY. MY QUESTION IS HAS THIS DERAILED ALL THE THINGS YOUR FIRM AND VENTURE COMMUNITY WAS WORKING ON OR DOES IT CONTINUE ON THE WRITING OF CHECKS AND FOCUS ON AI? VINOD: THREE TO SIX MONTHS BUSINESS WILL BE BACK TO NORMAL.
WE ENCOURAGE OUR FOUNDERS TO LEAVE EVERYTHING BUT THREE MONTHS OF 20 IN SILICON VALLEY BANK AND HAVE THREE MONTHS OF CASH OUTSIDE SO WE DID NOT WANT TO CAUSE A BANK RUN. UNFORTUNATELY ALL OF OUR PEERS DID NOT DO THE SAME SO WE SAW THE PHENOMENA WE SAW. AT THIS POINT, FDIC'S MONEY IS SAFE, WE ARE ENCOURAGING FOUNDERS TO PUT MONEY BACK IN SVB, SO WE ARE IN PRETTY GOOD SHAPE. I THINK INTEREST IN AI IS DRIVEN BY FUNDAMENTALS AND NOT BAHA'I PRIVATELY SO THERE IS PLENTY FOR BAIDU. I'M EXCITED ABOUT WHERE API AND
OTHER TECHNOLOGIES CAN LEAD US. CAROLINE: I THINK THE KEY UNANSWERED QUESTION AND IT MAY TAKE TIME HIS WHO IS ACCOUNTABLE FOR WHAT HAPPENS. WE ARE STILL ASKING HOW THIS HAPPENED BUT WHO LET IT HAPPEN. CAROLINE: DO YOU HAVE A PERSPECTIVE ON THAT? SOME PEOPLE LOOK TO THE VC COMMUNITY AND SAY IT ADDED FUEL TO THE FIRE. VINOD:
THE COMMUNITY ADDED FUEL TO THE FIRE BY BEING A LITTLE IRRESPONSIBLE AT THE LAST MINUTE. I BELIEVE WHAT SVB WAS DOING WAS RUNNING A HEDGE FUND BASED ON INTEREST RATES INSIDE OF A BANK AND THAT WAS WHERE THE FAULT LIES I BELIEVE, WITH THE BEST OF THE INFORMATION I HAVE, AND THAT SHOULD BE SUBJECT TO REGULATION. CAROLINE: THE VC COMMUNITY COMES TOGETHER AGAIN AS YOU REITERATED , THINKING ABOUT RELATIONSHIPS BETWEEN THE U.S. AND CHINA. WE THINK OF THE TIKTOK CEO
GOING IN FRONT OF CONGRESS NEXT WEEK. WHAT IS THE STATUS BETWEEN CHINA AND THE U.S. IN TERMS OF TECHNOLOGY AT THE MOMENT? VINOD: THE DINNER WAS SET UP LONG BEFORE EVEN THE CURRENT EVENTS OR TIKTOK EVENTS. IT IS NOT REALLY RELATED TO TIKTOK. IT IS RELATED TO THE LARGER TECHNOLOGICAL RACE WE HAVE FOR GLOBAL TECHNOLOGY POWER AND ECONOMIC POWER GLOBALLY AND I THINK MANY OF US FEEL THE U.S. CAN INVESTING WORLD SHOULD INVEST IN TECHNOLOGY AND CONTINUE TO BE PART OF THAT WINNING STRATEGY I HOPE AND VENTURE CAPITAL HAS BEEN A BIG PART OF GDP GROWTH IN THE U.S., A BIG PART OF INNOVATION AND I
HOPE IT CONTINUES TO BE AND IT IS CRITICALLY IMPORTANT FOR THE WESTERN WORLD AT THAT HAPPEN. ED: TIKTOK AND AI ARE TWO FIELDS THAT SEEM TO BE AT THE CENTER OF THE RELATIONSHIP BETWEEN THE NIGHT -- THE UNITED STATES AND CHINA. START WITH TIKTOK, BLOOMBERG REPORTED U.S.
OFFICIALS ARE SAYING TO BYTEDANCE SELL YOUR INTEREST IN TIKTOK OR IT WILL BE BANNED FROM THE UNITED STATES AND IS A LONGTIME NAME IN THE FIELD OF TECHNOLOGY IN THIS COUNTRY, WHAT DO YOU MAKE OF THAT? VINOD: THEY'VE TAKEN THE POSITION THAT THEY HAVE FEARED I THINK IN GENERAL TIKTOK HAS BEEN USED TO SPY ON YOU CITIZENS. IF THAT IS TRUE AND I DO NOT HAVE AS MUCH INFORMATION AS THE ADMINISTRATION DOES, THEN WE SHOULD CLEARLY PENALIZE THAT KIND OF BEHAVIOR. AS TO THE AI BATTLE, IT IS MUCH MORE CRITICAL OF A BATTLE THAN THE TIKTOK BATTLE AND THE GENERAL RACE FOR TECHNOLOGICAL SUPERIORITY AND AI IN ALL OF THE AREAS THAT IMPACT, 20 TO 25 YEARS. ED: CAROLINE AND I HAVE BEEN TALKING A LOT ABOUT ARTIFICIAL INTELLIGENCE FOR WEEKS AND MONTHS AND WE JOKE AT THE BEGINNING OF THIS WEEK THE AIR WENT OUT OF THE ROOM FOR AI BUT ACTUALLY IT STARTED TO CREEP IN IN RECENT DAYS. IS THAT AN AREA YOU ARE FOCUSED ON AND WILL YOU BE WRITING CHECKS FOR AI-RELATED STARTUPS? VINOD: ABSOLUTELY. WE INVESTED IN OPEN AI FIVE
YEARS AGO IN THE FIRST RENTER INVESTOR IN AI. THE TREND IS LONG-TERM AND CONSISTENT AND I'VE BEEN WRITING ABOUT IT FOR THE LAST 10 YEARS. AI AND HIM LOCATIONS FOR THE ECONOMY, IMPLICATIONS FOR CYBERWAR, FOR WAR, WITH DEFENSE, NONDEFENSE USES, IT IS A VERY IMPORTANT TECHNOLOGY. I THINK SMALLTIME INNOVATIONS
LIKE WE SAW AND A SIGNIFICANT BUT STILL TEMPORARY MOTIVATION WILL NOT AFFECT THE TREND IN I AND OUR INVESTIGATING AI. CAROLINE: OPEN AI, GPT FOR REALLY SEEMS TO IMPRESS, BAIDU GETTING SOME WITH ITS CHAT-GPT LIKE EARNING. CAN THERE BE SPACE FOR ADDITIVE STARTUPS IN THE SPACE? VINOD: I DO BELIEVE THERE WILL BE MULTIPLE PLATFORMS. GOOGLE HAS
A GOOD PLAY, MICROSOFT OPENED -- ENDORSED OPEN AI. I THINK THERE IS ROOM FOR MORE THAN ONE PLATFORM. I THINK THERE IS -- THE NUMBER OF APPLICATIONS ON THESE PLATFORMS WILL BE CLEARLY LARGE AND ROBUST AREA OF INVESTMENT. CAROLINE: FASCINATING TO TALK TO YOU FROM A BANKING AND INVESTMENT PERSPECTIVE AND AI PERSPECTIVE.
WE THANK YOU. STAY WELL. COMING UP, IT HAS BEEN GOING VIRAL AND WE WILL NOT TALK ABOUT BANKING. THE MARCH MADNESS, BRACKETS ARE GOING NUTS AFTER YESTERDAY'S UPSET. WE WILL TALK ABOUT BASKETBALL. ED: IF YOU'RE NOT WATCHING BASKETBALL, MAYBE YOU ARE WATCHING DISNEY, SHARES DOWN 1%. THERE WAS A THIRD PARTY REPORT THIS MORNING THAT THEIR AD SUPPORTED TEAR IS GETTING MORE TRACTION THAN THE LIKES OF NETFLIX, WARNER BROS., HAD SUPPORTED OFFERINGS, NOT DOING MUCH FOR THE START BUT OUTPERFORMING SOME OF ITS PEERS WHICH ARE ALSO LOWER, INTERESTING STOCK TO TRACK BECAUSE THE AS FOR THE TEARS ARE PRETTY NEW.
CAROLINE: ASIDE FROM BANK COLLAPSES, IT IS WHAT EVERYONE IS TALKING ABOUT, THE MARCH MADNESS BRACKET, THE MENACE THAT WAS ALL THE PREPARATION GOING INTO BRACKETS DIDN'T PAN OUT, ANOTHER 15 SEED PRINCETON SHOT VICTORY. AGAINST THE NUMBER TWO CEDED IN ARIZONA. WE AT BLOOMBERG LIKE NUMBERS AND ESTIMATES AND WE ARE SOME OF THE WEALTHIEST OF WALL STREET CEOS AND TECHNOLOGY COMPANIES TO JOIN THIS YEAR'S BLOOMBERG RACKETS FOR A CAUSE FUNDRAISER.
THE ENTRANCE DONATE WHEN HE THOUSAND AND IF THEY'RE IN THE TOP THREE FINISHER OF THE MEN'S BRACKETS -- ROUGHLY 50% OF THE PARTICIPANTS WANT ALABAMA TO WIN. HERE'S CAME SECOND THIS YEAR? ED: I MARRIED INTO A BRUINS HOUSEHOLD AND I DON'T HAVE A STRONG OPINION EITHER WAY. CAROLINE: MEANWHILE, THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY." FOLLOW US ON TWITTER, AT THE TOP OF OUR HOUR WE WILL HAVE ACE TWITTER -- A TWITTER SPACE EVENT.
2023-03-20 10:15
