'Bloomberg Technology' Full Show (04/27/2023)
Hardware, innovation, money and power collide in Silicon Valley. NBA. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. I'm Caroline Hyde Bloomberg Quicktake is a Neil and I made Love, Love in San Francisco. This is Bloomberg Technology.
Coming up, full coverage of tech earnings. Of course, we break down metals results and push ahead to Amazon's after the bell. Plus, we'll bring you our interview with the CEO of Activision Blizzard as the UK holds the 69 billion dollar gaming deal. And in today's venture capital spotlight, we speak with Teeth Boy Founders Fund, discuss investment opportunities outside of Silicon Valley. Well, not so much more coming up, including from private to public markets. Once again, second straight day of gains
on the Nasdaq really leading the charge. It seems to be anxiety leaving us when it comes to tech earnings. But still, there's some worry out there about the U.S. economy, the growth slowing in the first quarter more than expected, and that inflation risk still clear and evident as consumers are still spending. We're up one point 10 percent on the Nasdaq. But to the gills, just pushing higher by eleven basis points. This is we see that inflationary
pressure just remaining resilient. We'll come to the next one to shine a light that actually Asia did relatively well. They responded. China just moving a little bit higher. We also saw European stocks on the upside, bouncing back after a big sell off yesterday. So moving on and look at what other risk offset is. Well, proving volatile once again.
Check out the moves on bitcoin. In the last couple of days, we spiraled higher above 30000 and drove back down. Everyone's scratching their heads as to why liquidity seems to be the key issue of the day.
But we are back up one of five percent worth nearly twenty nine. Almost thirty thousand. Never once again. But go micro for a moment. Yeah, I think you're right. The earnings is a big driver in this market. But we've had a lot of headlines in the world of technology to Dropbox off by two point two percent, cutting 16 percent of its global headcount.
We'll bring you those details later in the show. Mobilize the automotive tech chip maker down by 24 percent, biggest drop since it went public last year, cutting the full year forecast. Worrying signs about demand on a dark side. Amazon ahead of earnings. We can get into that preview later in the program. But I think there's a bit of buoyancy from what we've heard from other tech companies.
Microsoft, Alphabet and NIKKEI last night up 4 percent ahead of earnings. And Comcast also showing strength on broadband and weakness in television. But investors like what they see up 8 percent.
There is one story which is metal. I'm going to bring you the numbers. So to Q Outlook for revenue, twenty nine point five to thirty two billion dollars. Even at the low end of that range, it was above consensus. Then you have the pivot.
Six minutes spent talking on a by Mark Zuckerberg, 30 seconds talking about the metaverse cost efficiency, cost efficiency, cost efficiency. And at the same time, they're investing in infrastructure. So much to pass. But the big picture is the bread and
butter ad business is doing well and they're committed to being a leader in that space car. That was so notable, wasn't it? The length of time, the short duration, they focused on the metaverse, the long duration they focused on A.I. and generative A.I. they're in. Let's talk about the stock. Let's talk about the business matter a little bit more. Debra Aho Williamson, insider intelligence fiscal analyst and I'm pleased to say in the studio in New York, welcome. Tell us a little bit about what you made of that.
Yes, a bounceback in advertising is not going to be proved resilient, though. It's a really good question. So I think what we're seeing right now is a lot of rejoicing over what's been a pretty small growth in ad revenue quarter year over year. We are not in the area and we probably will never, ever again be in the era of double digit ad revenue gains. So I think investors are really looking at, you know, flat is good. Single digit growth is a sign for rejoicing.
I think honestly, Metta is sowing some signs of coming out of the woods. I think their Q2 guidance is also pretty strong. And if they can meet the top end of that guidance, that's going to give them their first double digit growth in quarterly revenue since late, late 2020.
So, you know, overall, potentially positive, quite a bitter pill to be swallowing if you're still waiting to hear whether you're going to lose your job or not. How do you think morale is going to be affecting productivity right now? There is a problem with that. Right. And I think that the larger effect as well, in addition to the many thousands of jobs that are being cut, which is very terrible news for Metta, you know, the larger picture is that I think this is also potentially damaging some of the innovative spirit that we've seen at matter over the years. Now, this is the company that basically,
you know, if it didn't invent social networking and social media, it really popularized it. And it built so many amazing features of the work in the metaverse, the working age. I mean, there's a lot that that matter wants to accomplish. But with morale being low and people worried about layoffs, it's very hard, I think, to get that enthusiasm going. And that's what I worry about. You look at the stock reaction, biggest jump since early fab stock at its highest level since Fed 2022. But there are investors out there, Caroline. Questioning why.
Have a listen to what one investor told us earlier today. I certainly was surprised it met his earnings. I did not expect them to have growth in users. I did not expect to see the positive news coming out of ads.
And I would expect that a lot of those efficiencies that people heard that had already been priced in as well. So I'm a little surprised at the game that we've seen. Victoria Fernandez there across Mark, Deborah. What was so interesting is Susan Lee's role in all of this, how she emphasized efficiency, but they're also lapping what was softer comps last year. Remember what was happening a year ago,
the war in Ukraine. So how do we discern the health of the ad business at its core? Yes. So I think there's a few really strong indicators to look at.
The first one is during the earnings call yesterday, Susan talked about growth from e-commerce advertisers, particularly China based e-commerce advertisers who are looking to reach consumers outside of China. We haven't heard media talk about these types of advertisers. It's e-commerce advertisers so positively in the past few quarters. So I think that's a really good sign. Another thing that we're looking at is a certain type of advertising program that Meadow offers called Advantage Plus Advantage Plus is really aimed at helping the bottom line for advertisers. That's really done very well. So as we see that take off, those are
going to present some positive signs as well. I don't know what you had on your bingo card for last night's earnings call that artificial intelligence was on everyone else's. I was so interesting to hear CFO Susan lay quite new to the role, but she wasn't just in command of the numbers. She really was given some fighting talk on this. A ISE strategy.
Absolutely. And Mark Zuckerberg talked quite extensively about A.I. as well. I mean, he made a strong point that he's metaphor.
He is trying to correct a perception that men of matter is not moving away from the metaphors. It's actually pursuing the metaverse as well as artificial intelligence at the same time. And he believes strongly and in my opinion, this could maybe, maybe be maybe a change in message. But he said he believes strongly that
there are many ways that A.I. and the metaverse can come together over time. I think my position is that A.I. is certainly something that needs to be involved in, whether it's generative A.I., predictive A.I. or any other form of A.I. It's the buzzword of the moment, the metaphors, you know, they're continuing to invest. It's really hard to know exactly where
and when that's going to pay off for the company. But I mean, we've heard enough times from Mark Zuckerberg over the past few quarters that they are committed to it. I think investors in the market just need to accept that and then focus on the rest of metals business for more signs of growth. Caroline Bloomberg's bring her right in the top live blog that this was a sassy Mark Zuckerberg. He had a lot to say about things that made it very clear point on misinterpretation of strategy. Sassy. But does measurement tell us the real story? I'm looking at what, right? Six minutes that you'd discussed generative A.I. in his opening 90 seconds.
He discussed the metaverse for me. Deborah, that speaks volumes. But I'm interested in what you make of the overall lost, the investment that they make in the metaverse at the moment and how long investors are going to give them a leash on that. It's an incredibly large amount of money. I mean, four billion dollars just in this past quarter alone, something over the over 13 billion dollars last year. Yeah. I mean, this is definitely something that should be weighing on the minds of investors.
But, you know, at the end of the day, this is an advertising supported business. This is this is a company where the vast majority of their revenue does come from advertising. And so I think we need to pay attention to what's going on in the advertising model and where they're making gains so far this quarter. Last quarter looked pretty good. Signs are perhaps next quarter will look
good as well. Yes. This is a long year of efficiency. The year of efficiency that Mark Zuckerberg is talking about. We have a lot ahead of us. Well, we point out that expenses as a full cost, I think, was lowered from to billion to 90 billion for the full year. Twenty three. So gives you a sense of direction, Deborah.
Hi, William, Senate Insider Intelligence. Thank you. The other big name reporting after the bell, Amazon reporting earnings. You know, this big beast, it's winding down some areas in health. But actually, let's bring him
Bloomberg's Matt Day out of Seattle, because I think, Matt, there is one key area of focus and that is the cloud. That's right. You know, cloud used to be Amazon. Sure thing. You know, some years it accounted for all of Amazon's operating income. That sort of thing is is definitely gone at this point in terms of other sales growth that's been slowing to record lows since Amazon began breaking out the figure back in 2014. I mean, investors are really looking for when that bottoms out. Is that going to be something later this year? Is Amazon Web Services sales growth gonna hit single digits? You really can't can't overestimate the importance of the cloud for Amazon. And it's really slowing down.
And notably, they've been taking staff out of there. We know that making. Headcount cuts in across the United States, Canada, Costa Rica, which I hadn't realized that was so prevalent that not when, though, we start to see this focus on profitability basically making those sorts of cuts. Where are we going to see a driving force of growth? Do we have to hold a wait? Because retail sales, it looks as though the consumer is strong right now according to macro data. That's right. If you go back to the holiday quarter, you know, Amazon retail sales held up OK. And I think investors have been a little bit patient waiting for that. The benefits of those cuts to to come
down the pike. But, you know, we're we're at a year here since Amazon said, you know, you go back this quarter, a year ago, they said we've got too many warehouses, too many people. And it was sort of the first, you know, flashing warning sign that something something was up. And they're going to have to start start rationalizing across the business. They've been working at that for a year now. So I'd expect to hear some hard
questions for from management on when when that's going to translate to improved margins this year. What are the fun things we want to look for? Are we going to hear anything about artificial intelligence? I suspect we do. Amazon jumped into the generative intelligence race just this month, announcing that they had their own set of models designed to go head to head with open eyes, Chachi beauty and friends. They say their approach a little bit different. I expect we hear a good deal about that. It was also a feature of CEO Andy
Jesse's letter to shareholders early this month. And I'm personally curious if Andy Jesse shows up again on the conference call. You know, Jeff Bezos decided to basically not speak to analyst for the last decade plus of his tenure running the company. Andy Jesse surprised everybody by showing up last quarter. We're going to hear from the boss again. I've been doing for decades, so keep trying to remind us that day. Really great to have that look ahead
with you. We thank you so much. A busy day. Meanwhile, coming up, we bring you our interview with Activision Blizzard. CEO IBEX say ad did a great job with
that. This is Bring Back. Story of the Week UK Competition and Markets Authority Blocking Microsoft Sixty nine billion dollar takeover of Activision Blizzard. But CEO Bobby Kotak says the deal will prevail. Have a listen. It clear the is in a rational conclusion, and I think we have every expectation, as does Microsoft, that we should prevail in an appeal with with the tribunal. We're very fortunate. You saw our first quarter earnings.
Our ladies continue to be very focused and engaged in delivering great games for our players around the world. We had net bookings up 25 percent. Our gap earnings were up over 70 percent. And so business is strong. And I think we are going to continue to focus with resolve on the remaining countries that we are securing approvals from. And we think the appeals process will work in our favor. Bobbie, that is the question. You know, I look at the earnings statement across titles and franchises strong. So if earnings are so strong and the
growth story is still that, why does Activision need to people find Microsoft? Well, 98 percent, I think of our shareholders approved our transaction, and I think that one of the things you realize is that there are increasingly larger number of competitors, whether it's Google or Apple or Netflix or Tencent or Nasties or Holly Baba or Nintendo or Sony. There's so many companies now that are competing in our industry. And one of the nice things about a combination with us and Microsoft that historically has been an enterprise focused company is we're hopeful that we'll be able to attract some of the great A.I. and machine learning talent data
analytics UI and UX talent. There's a enormous amount of great talent at Microsoft that if we were able to have access to, would allow us to grow even better. And the wars for talent have continued to be really, really challenging, especially in areas like A.I. where everybody is looking for what is a dearth of talent.
Again, across titles and franchises, there is strength. You know what caught my eye? Bobby was king and Candy Crush. Continuing to grow. How does King fit into the relationship
with Microsoft? How do you see that impacting Microsoft's ambitions around mobile gaming? But also, I guess, when it comes to King, their ambitions for a mobile gaming store. So I think that the king is actually a great example of the irrational conclusion that the CMA reached. Microsoft isn't in the mobile gaming business. And this gives them with Candy Crush, a single title that gives them an opportunity to actually participate in the mobile market. In one of the things that you would expect is that since King is actually headquartered in the UK, the UK would be welcoming and supportive and enthusiastic of a business that is based in its own country. But the opportunity that we have with Microsoft is to give them more access to mobile talent, mobile technology. And that's something that they saw as
incredibly valuable. And the thing I think that was very misunderstood by the CMA is that they were focused on the console gaming market, which Sony has roughly 80 percent market share in rather than we're in the global market has gone. And that's to mobile gaming. Activision Blizzard CEO Bobby Casey. The point is carry that in the UK as a judicial review process. But all the judge can do is look at the CMA action and see if they acted in a way that was irrational or was prissy proprietary, procedurally incorrect. They can actually look at the market
merits and this is what makes them so important. I think one academic really talking about how post Brexit CMA is is really decisively making itself a clear competition enforcer here. I mean, Sarah Caudle over there talking about preventing entrenched market power. Does that then stop some prevents competition overall? There is this tension, though, isn't there, that the UK is some way stifling innovation, but notable from what? Not one, but like there are now three female leaders of these competition commissions in the EU and the US and the UK, and they're will go looking this really toughly said in the context the UK. The CMA was really focused on cloud gaming and I asked Bobby about that and he said it's an inconsequential part of the business, which is fascinating because Microsoft's going really big on how gaming transitioning X box from console to cloud. Well, Bobbie thinks it's inconsequential. That was a bit of a surprise actually
coming out of that interview. And that seems to be the focus, the CMA thinking that is a real driver of innovation and might be stifled. And it was a brilliant interview. Thank you for bringing it to us. Meanwhile, coming up, we're going to talk a little bit about the tension that's going on within Silicon Valley. And I'd really break down some of the biggest stories over there and beyond. We want to be talking about particular Dropbox, some of the concerns around layoffs, 16 percent of the workforce likely to be cut. This is in part due to natural
maturation of existing businesses. So says Drew Halston, but also a guy who needs to hire up beef up in that particular part of the business. Down 2 percent this spring. Back in. Time for talking tag. Germany in talks to limit the export of chemicals to China that are used to manufacture semiconductors.
The proposal, part of a package of measures that Chancellor Olof Schultz's government is discussing that would cut off China's access to goods and services needed for the production of advanced semiconductors. Apple and Popo are battling it out to be the top smartphone maker in China in the first quarter. Shenzhen based opposed saw the bigger share shipments with Apple's iPhone following close behind.
That's according to IDC latest figures. Competition is intensifying as the country's market contracts and remains weak. And Elon Musk's bid to dominate global car making is taking a new turn and dividing opinions. Tesla's cut prices. A half dozen times already this year, we've Musk betting his competitors will have little choice but to respond to the price cuts. But the question is, is this disruption or is it desperation? For more, let's bring in Bloomberg's automotive czar, Craig Dale, who authored that Bloomberg big take. You and I've been looking at this chart
for a while, a downward trend on prices. But you have to look at another chart, Craig, which is the downward trend on margins as well. Yeah, absolutely, and I think, you know, even Musk, to his credit, said this was going to happen, right? I go back to the end of last year, there was a Twitter space as he did, where he sort of talked about his his view that the economy was was going to get tougher.
That we were headed for challenges. That interest rates were making it really difficult for people to make big ticket purchases. And he said, look, you know, I'm willing to give up margin for volume and I'm willing to, you know, basically go to not making any money or making very little money if it means growing. And I think what's what's been surprising for people is is just how much they've had to cut and how quickly. And also, I think the demand response. I don't think, you know, the the pop has really been there. And there's, you know, concerns about
Monk mounting inventory for Tesla and just sort of how productive these cuts have been. What's kind of amazing is the ripple effects this have on so many more. Just thinking of mobility, which is a stock that, Ed, you brought up at the beginning of the show, down more than 20 percent because of the impact on the Chinese market.
These price cuts are having, Craig. How much is this going to be a global story of trying to reach for basically sales over margin? And do we think that really they can preserve a luxury brand when they do this? I think it's interesting and it's it's been kind of patchy. I think where we've seen the most intense competition on price has absolutely been on China, which you touched on here in Europe. We're seeing really, you know, more so
the case that that there's a long sort of order bank for a lot of these companies. They've been able to keep pricing strong for the time being. Demand has been quite good. The last few months, the question is how long that will last. And I think in the U.S., too, it's a little patchy where in some segments
where Tesla doesn't play, you know, you've not necessarily seen responses from other companies of them feeling the pressure to need to to match Tesla in other respects. You know, you do see some moves. And so within Ford's own lineup, for example, the F 150 lightning, you've actually seen them take the pricing for that up with the Mustang marquee, however, which goes, you know, right up against the model. Why you've had you've seen them have to cut.
So, you know, it's it's really dependent. Craig, we want to thank you so much. Craig, to go really deep, look at what's happening over with Tesla and please to go and read that big take or listen to it. We have a full cost around it.
Meanwhile, well, let's stick with it en masse because he may be supporting certain celebrities we verified on Twitter. But other prominent players are actually paying for Twitter blue as well. We're gonna have a deep dive into, what, 7, 7 6 founder and Reddit co-founder Alexis Ohanian has to say about the infamous blue check. Just take a listen. I had that. Yes, I am guilty of paying for it. But I guess it was a business decision. And I frankly, it's more valuable to me to have everyone on our team with that blue checkmark, because I think they're special.
They deserve it. Welcome back to Bloomberg Technology, I'm Caroline Hyde in New York. And I'm Ed Ludlow in San Francisco. I'm sorry, Caroline. Check out the markets. Cut you off. Let's check out these markets for a moment, because actually we are still seeing such resilience in big tech. It's all about those earnings, the mood music turning more positive that even in the macro picture from the GDP figure for Q1, not looking so resilient. Nasdaq 100 up more than 2 percent.
So really second day of gains here. Interestingly, Chip is not playing into this and we're more worried perhaps about some of the smaller chip names that have been giving us earnings that look to the downside and look in video is a bit of a drag there on the day as well. But I didn't want to shine a light on what's happening at other risk assets and the volatility is back. When it comes to the OIG of bitcoin, we're seeing it bouncing around sell off. It's all about liquidity at the moment, but nevertheless, with back near that 30000 dollar level after a recent selloff.
Spin it on. I want a look at some of the individual movers because we have had tech earnings that can fast. Don't forget some of them. eBay actually up more than 4 percent. Resiliency in some of those collectibles areas. And remember, this is a company that's really trying to stabilize its revenue post Covid area area and looks as though we're doing well from Jamie.
We're seeing Roku also up more than 3 percent stabilization. The watchword there as well in terms of its revenue intel. We wait with bated breath as to how this chip maker does after the bell. And actually it's shrugging off the rest of the weakness in its sector.
We're seeing Intel outperform as we hope that the worst is behind us. Lastly, I mean, it's the story of the day matter. More than 14 percent off to the right. It's already had so far this year read
quite phenomenal people really taking away hope that we're turning a corner in terms of advertising spend on that particular company. Forgetting the numbers, this story January to buy. And we were at the RSA Cyber Security Conference yesterday in San Francisco.
Guess what was top of mind for everyone generate today. This is what some of our guests had to say. Have a listen. It's going to be a game changer, generative A.I. has been something that we've really
focused on for a long time, and you think about generative A.I. and how it can be used in security. It can really help in automation. That's where it's going to really augment that human essence. You're going to see some of the most rapid advances where security challenges that were very hard on a great identity security.
Suddenly we go, all right, we're great at it now. I think there are a lot of people that are actually concerned about the growth of A.I. and what the downsides could be from all different standpoints, from ethical to also, you know, the potential for what does I mean for cybersecurity. What's really important is that we're having that conversation up front as we start to really understand the technologies and how we can take advantage of it, get into it, wrap up everything that's being talked about. At RSA Conference, we have Wendy Whitmore, senior vice president for Unit 42 at Palo Alto Networks. Quite a lot of that was in abstracts generated A.I., generative, A.I. Let's get technical.
When we consider the network infrastructure required for cyber security, the software tools. Why is everyone so excited about this new area of technology? Well, first of all, what a great recap from so many industry leaders. Right. But specifically focus at while we're here at RSA on generative A.I.. So when you talk about the technology piece, you're going to hear many of us saying the same thing, which is that we've had machine learning and A.I.
embedded in our products and tools for a long time. The genitive piece as someone for me who responds to attacks on a daily basis, I'm most concerned about the immediate impacts that that has on the attackers ability to conduct much more effective socially engineering attacks. All right. We're going to see much more sophistication coming from them. And you've already seen that over the course of the past year with cyber criminals really getting in the gang game in an effective way. So generally, technology fuels the
offense a bit more faster than it's going to feel the defense. But I think we also feel very well-prepared on the defensive side. We heard from Jacob Ballou, Rapid 7. She also sits on a number of technical
boards in Europe right from a regulatory perspective. And she made the point that she's really worried about quantum computing and machine learning from the threat actors perspective. Your industry has all these tools, but so did those you're trying to combat. Absolutely. I mean, when we talk about espionage,
right. We're talking about cyber espionage. That's a world that we live in. And you're always going to have that cat and mouse game. So it's a matter of technology companies making the right investments in next generation technologies to effectively combat those attacks. Let's talk about your investment and
some of what you're unveiling at the moment, Wendy, because I was reading with interest that the forensics and incident response service, basically you're using artificial intelligence to help companies, enterprises react faster. How? Yes. So. So, thanks, Caroline. So, you know, 42 is expanded throughout the globe over the course of the past year. We've got offices in EMEA and Asia-Pacific and we're seeing clients from all over the globe have these same kind of questions. Right. How can we use A.I.
to more further enhance these type of services? So we're absolutely integrating A.I. into these tasks that we can automate, right. Make less manual, less human driven, enable. These are humans on our team to be able to move faster to answer the questions that are the most challenging and let machines do a lot of the automation behind that. Does that mean you let me need less firepower, less talent internally at Palo Alto Networks? How much can you end up outsourcing what you do to computers to a ISE? It doesn't. Which is great in terms of needing continued need to employ a lot of people. But on the challenging side, right, we
all know there's a skills shortage in our industry in particular. So what we're really doing is enabling the machines to take care of tasks that will allow us to focus our team members on the much more sophisticated components of it, which means we can solve cases faster. We can give better service to our clients. And also, this is such a global conversation, isn't it? I mean, goodness, we're all talking about. We'll get delving into a little bit later, but a prank call between Russia and the U.S. at the moment. But I want to dig in a little bit more
on how global and how big of expansion this is. Well, one thing that really caught me by surprise was across all of the conversations we had on air and in the corridors, everyone went hard on China straight off the bat without problems. And Wendy, I want to understand why. I mean, is it just simply that as geopolitical political tensions have ramped up, so have the threats? I don't understand the link. So. Great question.
So certainly over the course of the last year, I think the world's been focused on Russia and Ukraine. And in the background, we have seen Chinese nation state actors and we're tracking over 30 of these groups specific to China alone. Our telemetry coming in from a global perspective and really showing that they're continuing to march forward from an espionage campaign, prepositioning reconnaissance, all of the types of activity that they've done for some time. But I think they're more aggressive than they've ever been before, and they're really able to do it under the veil of distraction. You know, while the world is focused on so many other major issues, fascinating. Wendy Whitman, we thank you so much. Keeping that cyber conversation front
and center. Senior vice president for Unit 42 Palo Alto Networks. We thank you. Meanwhile, the on RSA generative A.I. is also top of mind for someone else. Alexis Ohanian, 7 7 6, found a general partner and, of course, co-founder of Reddit. He talked about why generative A.I. makes him excited, but also pretty anxious to take a listen.
It is a game changer, and certainly I do feel somewhat responsible given that Reddit provides a lot of the training data that's made, you know, opening up possible these other platforms. I I'm excited. I have never been more exhilarated. Right. I started in tech in 2005. So in almost two decades, I have never woken up every morning more excited than I am right now because of this technology. With that, I'm also more anxious than ever, not just about the potential downsides of which there are, but also because it is an existential crisis for every business to understand how this technology, how this breakthrough is going to change the way that they work. We think about it within our own venture firm, 7, 7, 6.
We think about it across our entire portfolio. And like I said, it's exhilarating, causing me to have a lot less sleep these days. But I do feel it's transformational. And this is a trend that is important for everyone to pay attention, to go back to the anxiety, a little bit of data that it's being fed off, in particular using Reddit, for example. Do we think regulations aren't so bad? Do you think it's self-regulation? You think about a lot about that across various parts of the tech ecosystem. Yeah, okay. I want to use lower case R regulation, which I do think is important.
The problem the problem for me is intellectually, I think this makes sense to give rules of the road to figure out a process because look, these breakthroughs are happening literally week to week. The part that gives me pause is I've seen enough meetings down at the Senate interviewing, you know, heads of, you know, pick your favorite social network where folks were so ill equipped, they don't even know the business model of Facebook. Remember that infamous Senate meeting? My concern is the very people who should be at the forefront of understanding this technology in order to figure out how we could properly create those rules. The road are among the least informed.
And so that gap is what worries me, because I do think it's important to create some structure. I think this look, it's also important to make sure this industry continues to evolve here in America, because we know that counterparts, for instance, in China, they're going to triple, quadruple down on this technology as well. So I think it is important for us to keep making progress here in the states as quickly as possible. And at the same time, it is so important for our elected officials to get as smart as possible as fast as possible, because a ham fisted, a poor decision here could have some pretty serious repercussions in terms of our global competitiveness, but also in terms of hamstringing what could be very transformational, good technology. This is not a small feat.
776 general partner, Reddit co-founder Alexis Ohanian, so much more of that interview online. Yeah, I think we stick with venture, right? We got to go. It's Miami. And look at the tech scene out on the
East Coast. What sectors other than crypto have seen momentum that found his fund? Kieffer Boy, goodness, Karev, we've been looking forward to this one. And I want to take a look at shares of Fast Republic, largely because this is a non drama day in the scheme of things, at least in terms of an upside move where we stand. Is the banks rivals, they've kind of stepped in to help it. And the US government playing this game of chicken. And there's a fantastic story on the Bloomberg terminal about who is going to step in and when. But we're really worried about the
banking sector. The question is whether the west of it is over mender loads of seasoned startup founders. They look to fast republic when FTSE fell apart. We got that story. This has been. Now in today's spotlight, we take a look at the Miami RTS scene, as many of you descended on the city of Miami Tech. I want Miami.
Look, it's not the level of the biggest hubs out of New York or Silicon Valley, but at the moment, the Bay Area, for example, that share of deal counts at some falling below 20 percent for a third consecutive quarter, according to pitch. But is this the opportunity for the Florida city? Let's bring in Keith Lavoy, found as one general partner, Phil Read on this. And Keith, I set you up there because I'm so I say, wow, 20 22 was really the year for Miami. But two, one, we still see funding slip a lot. What do you make of the trends? I don't look at it quarter by quarter numbers over the year this year. Covid apparently going to raise a ton of
money. There's phenomenal companies here. We're 5, 4, 5 of all the five major investments we've made in Miami up doing phenomenally well. The rough ratio in the Bay Area would be 15 percent are doing well. So it's for X better at least maybe 5 x 6 hours further. So I'm not not worried.
I don't really care about the averages either. It's a parallel business. We have the right companies doing the right things with the right amount of capital here in Miami. Okay. Casey, you don't look at the data quarter by quarter. Do you recognize the opportunity as a V.C. in Miami, the East Coast, moving at a
different speed to what's happening here in the Bay Area? Is innovation moving at different paces? Why is it attractive to you and shore? Well, I think the future of CAC is the conflict of culture, design and technology in Miami is the epicenter of that. We have the best city in the United States for art. We are the epicenter of pop culture in the United States. Is the Financial Times recognized? And we have technology now over the last two to three years. The combination is the future. Chuck is eating the world's eating software first, but it's going to eat culture. You're seeing that right now play out
through things like tick tock, et cetera. But the future feature of that, using by any people who lead in entertainment, the people who believe in music and people who need it, athletics are all based in Florida. Caroline, in the conversations you and I have been having for the last six months or so, when we think about Miami, we think crypto. You know, that's where we are has been.
And until this point, you mentioned that that art focus and that sort of became an NFTE focus. But we know that the floor was tucked beneath that to a large extent wasn't too dependent on crypto. Well, it would never was for us. None of the companies I've funded in
Miami noting the Companies Founders Fund has funded in Miami where crypto based. So we never thought of it as a crypto or NFTE based in Florida or Miami. I know the media sometimes likes to write about that. We've taken 10 percent of our fellow founders fund 7 and invested in it by which is up from literally zero. The fund before and I only moved here halfway through that fund cycle, so it underestimates massively the percentage of investments that are in Miami. To put that in some contrast, New York
was only was 15 percent of founders Fund 7 in the Bay Area was about 20 percent to that, which is down from 55 percent. The funding for that area slashed in half by Miami 010 Founders Fund 8, which is going to start pretty soon, almost surely will have Miami funded at the same rate as New York. Interesting. Yeah, that's a pretty good portfolio there. Yeah, I was shining a light on.
I was. Where's the ISE? My question and I'm not sure you've got a case, you know. I talk to industry colleagues all the time. And what I'm finding most interesting is venture capitalists want to put capital into startups in the field of A.I. that are technologically trying to solve
problems that have not been solved. They're not looking to the open ISE or the growth stage names. They want to see what's at the cutting edge. And we just want to know where your head is at. With a I in that respect. Well, the role of the venture capitalist is to produce significant returns of logos and capital. And that's impossible to achieve by
investing in large entities. So, you know, this is gonna have a bias against investing in large entities, even if large entities do capture all the value. We can't earn our money. We can't distribute money to our employees by investing in late stage public companies. DAX said, I actually think that future will be based on products and value propositions, not technology. So to me, the key is what consumer value proposition and creating that's unique and differentiated in a ISE the magic wand that might enable you to do something that was physically or metaphysically impossible or economically impossible before. But I don't really care whether you're
using a ISE or some other technology. I care. What are you delivering to what set of customers? How delighted are they going to be? What about your customers at open store? Because they're not just a V.C. You're also say he have been running a business. This is about basically automating for people who are selling through Shopify. Is that artificial intelligence led at the moment? No, it's not. So what we do in open store is we provide long tail Shopify.
Businesses take 1 to 10 million dollars in sales and there's a lot of those 2 million Shopify businesses that don't have infinite sales. We give them liquidity. We offer them liquidity. Peace of mind. So they build a brand.
They build a business. They want to run it for 40 years. So stressed out. So we'll take our business and give them an offer in 24 hours. We also have a second product now where
we'll agree to run their business for a year and guarantee them the cash flows so they don't want to sell their baby, this proverbial baby that they've built. We'll run the business and guarantee them the money and we'll run the business and drive in. So to do both. And then we stitch these businesses together into one decentralized department store that will be shipping to consumers later in this month. Keith, your colleague Peter Teal has signaled he's not going to be a sort of politically active going into 2024. What do you make of that?
Well, I think, Peter, you know, parties this time and what's most important for him. So he has a lot of things he does, including, you know, investing in technology companies very successfully. So he he used to think about, you know, what what's the best resource? What's the best time to turn out of his time? I don't know what the answer is, but I'm sure that's part of the calculation. All right. Keeper Boy found his fun general party, he's got to run Caroline because he's going to be teaching a Barry's class very soon. I believe it's good to catch up with you. Thank you for your time.
Now coming up, going viral, how Russian pranksters were able to hop on the phone with Fed Chair Jay Powell. We'll bring you the details. This has been dubbed. In today's going viral. Have you seen this one? Federal Reserve Chairman Jerome Powell held a call with a pair of Russian pranksters posing as Ukrainian President Vladimir Zelinsky.
That's according to a video shown on Russian state television. Let's bring in Bloomberg's Kailey Leinz out in D.C. What's so astonishing about this is that the coup took place in January. Mm hmm. Yeah. No, and it's just kind of making the rounds on Russian media and then US media by extension today. Now these two prankster pranksters known as the Von and Lexis nicknames apparently were impersonating Zelinsky and Chairman Powell in thinking he was speaking with Zelinsky, spoke with them about a number of subjects, including inflation and the Russian central bank.
Now, the Fed today is saying that it is unclear if the video is edited. It appears to be it could not confirm that it is accurate and said in the statement that Chair Paul participated in the conversation in January was someone who misrepresented himself as the Ukrainian president. It was a friendly conversation and took place in a context of our standing in support of the Ukrainian people. In this challenging time, no sensitive or contraband confidential information was discussed and added that this matter has now been referred to the appropriate law enforcement.
But still, guys. This raises some pretty big questions about security at the Fed, considering these two were known. They have done this with the global leaders before, and yet they were still were able to get through to the chairman. Precisely. And so will there be ripple effects?
Will there be action further to saying we can't talk about the veracity or authentic ness of some of the videos, at least the circulating? Well, we'll see where law enforcement takes this. The Fed basically left it out. We've given it over to them. We're not going to comment on it any further. But this has really been something that has gone on for years. And earlier this year, we saw something similar with ECB President Christine Lagarde, who also was apparently pranked by these two posing to be ISE Vladimir's LINSKY. So it also raises questions about what more largely can be done in terms of security in order to put a stop to these two impersonating their way into these conversations with global leaders.
But this is just something we have to think about in the age of deep fakes and A.I. and the ability to manipulate information and how it's perceived on the Internet. Clearly, central banks and governments around the world have to be paying attention. Yeah. I mean, to talk about A.I. and then go back to something so deeply
90s in terms of prank calling, Kailey Leinz bringing a little bit of levity. But I mean, this is serious, particularly amid the geopolitical backdrop. We thank you. Meanwhile, that does it for this edition of Bloomberg Technology Ed. Join us tomorrow. We've got a really important conversation. Darren Walker, president of the Ford Foundation, is to be joining us on guess what, the rise in popularity of artificial intelligence. You don't want to miss it.
Yet four days into a mega week for tech earnings, remember Amazon and Intel after the bell? So much to recap. So listen to iPod cost wherever you get your podcasts, of course, on Bloomberg platforms, but also Apple, Spotify, I ha gosh, Caroline. For days it's been intense. One more to go. We got this. This has been back.
2023-05-03 01:20
