'Bloomberg Technology' Full Show (05/03/2023)
>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE, THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE AT BLOOMBERG'S WORLD HEADQUARTERS IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: WE COUNT YOU DOWN TO THE FED RATE DECISION AND A LOOK AT THE FINTECH HELPING TO SPEED UP DEPOSIT FLIGHT. ED: DEEP INTO THE WORLD OF VENTURE CAPITAL. CAROLINE: HOW MAO WELL OPERATORS ARE CASHING IN ON THE AI HYPE TO TARGET YOUR BUSINESSES. CHAT GPT AND CYBERSECURITY WITH
THE META HEAD OF SECURITY. IT FEELS AS IF THERE IS CAUTION. WILL WE HIKE 25 BASIS POINTS? WHAT DOES THIS MEAN FOR THE SOLIDITY OF THE BANKING SECTOR IN THE UNITED STATES? THE NASDAQ IS UP HIGHER. TWO-YEAR YIELDS SHOW STILL THAT LEVEL OF ANXIETY, COSTS COMING DOWN BY TWO TO THREE BASIS POINTS ACROSS THE CURVE. I'M LOOKING AT THE WORRY OF GLOBAL GROWTH. THE U.S. SERVICES DATA BEING PULLED BACK IN TERMS OF BUSINESS ACTIVITY AT THE MOMENT. NEW YORK CRUDE SHINING A LIGHT ON WHAT IS HAPPENING IN COMMODITIES.
IT IS MORE OF A RISK ASSET AT THE MOMENT, WORRIED ABOUT THE OVERALL VIEW ON WHERE OUR ASSET PRICES ARE GOING TO GO. REMEMBER, RESILIENT YESTERDAY AS MANY SOUGHT SAFETY AMID THIS ONGOING WORRY ABOUT A BANKING CRISIS. WE GET INTO SOME OF THE INDIVIDUAL MOVERS. ED: THERE IS NOT A LOT OF ACTION IN THE EQUITY MOVERS. HAPPY FED DAY.
AMD DOWN A .5 PERCENT, PRETTY BIG DRAG ON THE S&P 500 AND NASDAQ 100. REALLY TEPID GUIDANCE FOR THE CURRENT PERIOD. THE NARRATIVE THAT THERE WILL BE A RECOVERY IN THE SECOND HALF OF THE YEAR. FORD IS INTERESTING, NOW .1% HIGHER. THEY HELD GUIDANCE BUT THERE WAS WORRY ABOUT THE TRANSITION TO EV AND WHAT MARGINS LOOK LIKE IN THAT EXAMPLE.
BOTH STRONG AND PUSHING HIGHER. THE OTHER MOVER TO THE DOWNSIDE IS ADOBE. A LITTLE SOFTER AFTER U.K. MARKETS AND COMPETITION MARKETS AUTHORITY SAID THAT THEY FORMALLY STARTED AN INVESTIGATION INTO THE M&A WITH FIG MOTHER. THIS WAS EXPECTED, SOMEWHAT OF
A FORMALITY. WE KNEW THAT THIS WAS COMING, BUT THERE IS SOMETHING IN THE MARKET. PSYCHOLOGY AROUND THAT. A LOT OF SCRUTINY IN M&A FOLLOWING THE DECISION TO BLOCK MICROSOFT AND ACTIVISION. WE ARE TRACKING WHAT HAPPENS WITH ADOBE. THE DECISION I THINK COMES IN
JUNE. CAROLINE: THERE IS A SWIFTER DECISION TO BE SAID TODAY. HAPPY FED DAY TO THOSE WHO CELEBRATE. THE RISING INTEREST RATE PATH IS REALLY MEANT FOR A PRETTY SENSITIVE AREA. IT IS TECH. LET'S TALK ABOUT BLOOMBERG MENTIONED ON ALL OF THIS. WHAT ARE YOU MAKING OF THE MOVES WITH WHICH WE ARE CURRENTLY SEEING THE MARKET? HOW IS THIS BEING PRICED IN BY TECHNOLOGY? >> LOOKING AT WHERE TECHNOLOGY STOCKS ARE TRADING, IT IS 25 TIMES. BLOOMBERG INTELLIGENCE THINKS
THAT THE FEDERAL RESERVE NEEDS TO CUT RATES BY 300 BASIS POINTS. THIS IS A STORY THAT WE DID ON THE EQUITY TEAMS. WHEN YOU HEAR THAT NUMBER -- CAROLINE: TO VINDICATE? JESS: TO VINDICATE THE PRICE THEY ARE PAYING AT THIS POINT AND THOSE VALUATIONS. IF YOU'RE LOOKING AT THE BACK HALF OF THE YEAR THERE ARE A COUPLE OF CUTS BEING PRICED IN, BUT WHAT'S TYPICALLY AHEAD SCRATCHER BASED ON HISTORY, USUALLY RATE CUTS AREN'T SOMETHING THAT BODES WELL FOR TECHNOLOGY IN PARTICULAR.
WHEN YOU THINK BACK TO THE DOT-COM BUBBLE. IN EARLY 2001 THE FED DID HAVE EMERGENCY RATE CUTS. THAT ISN'T WHEN THE BROADER MARKET OR TECHNOLOGY BOTTOMED.
IT IS MORE OF A PAUSE THAT TENDS TO BE MORE OF A BENEFIT WHEN IT COMES TO STOCKS. ED: WE WILL GET THE PRIVATE MARKETS' TAKE LATER IN THE PROGRAM WITH SEQUOIA AND POST THE BENCHES. WHY DO WE CARE ABOUT WHAT THE FED DOES WHEN IT COMES TO TECH? IN THE EQUITY MARKETS OR PRIVATE MARKETS? WHEN I READ YOUR REPORTING, IF ONE GOES BACK AND LOOKS AT HISTORY AND RATE CYCLES AND HOW TECH PERFORMS, THERE IS GOOD REASON TO TRACK IT CLOSELY, RIGHT? JESS: THERE ARE. WHEN YOU THINK OF TECHNOLOGY, LONGER DURATION STOCKS WILL GET HIT HARDER IN CYCLES. DATA GOING BACK TO THE 1990'S, THE FOUR MAJOR HIKING CYCLES BEFORE THIS ONE, YOU SAW TECHNOLOGY LEADING THE WAY AT THE END OF IT BECAUSE IT GOT HIT AT THE BEGINNING. BY THE TIME YOU GOT TO THE END INVESTORS WERE MORE FORWARD-LOOKING.
TECHNOLOGY WAS LEADING THE CHARGE. A LOT OF THE GAINS WHEN YOU THINK OF THE DOT COM BUBBLE. THAT REALLY MOVE THINGS FORWARD, BECAUSE INVESTORS ARE NOT THINKING ABOUT RIGHT NOW, THEY'RE THINKING ABOUT WHAT IT MEANS SIX MONTHS TO ONE YEAR OUT. THEY ARE THINKING THAT POTENTIALLY IF YOU HAVE A PAUSE THAT WILL NOT PRESSURE AS MUCH AS THE CORRELATION WITH THE STOCK PRICES. EARNINGS GROWTH AS WELL, BUT THIS EARNINGS SEASON WE HAVE SEEN TECHNOLOGY IN PARTICULAR HOLDING UP BETTER THAN WHAT PEOPLE WERE ANTICIPATING. YOU WERE TALKING ABOUT THE
TEPID OUTLOOK. SOME OF THOSE PC CONCERNS, THEY MIGHT BE ABLE TO ALLEVIATE THEMSELVES IN THE SECOND HALF OF THE YEAR. CAROLINE: YOU ALWAYS WRAP UP SO WELL. TUNE NANETTE 1:30 P.M. EASTERN FOR FULL COVERAGE OF THE FED ON OUR SPECIAL FED DECIDES. LET'S SEE WHAT ELSE THE FEDERAL RESERVE IS TRYING TO NAVIGATE. HOW TO HIKE RATES AMID AN ONGOING BANKING CRISIS.
HIGHER INTEREST RATES. ALSO, IS THERE A BIT OF AN ACCELERATION IN SOME CRISES BECAUSE OF THE EASE AT WHICH WE CAN PULL CASH OUT OF OUR DEPOSITS? JOINING US IS OUR GP MANAGING CONSULTANT. YOU HAVE 16 YEARS IN THE CAREER OF RISK MANAGEMENT. I PUT IT TO YOU, HOW MUCH OF A WORRY AT THE MOMENT IS FINTECH? THE ABILITY TO WHICH WE CAN WITHDRAW OUR DEPOSITS FROM BANKS? DOES THAT SPEED UP THE ANXIETY AND THE CRISIS CYCLES THAT WE ARE SEEING? ? >> THANKS FOR HAVING ME. IT CERTAINLY PLAYS A ROLE.
I THINK WE HAVE FINTECH TECHNOLOGY TO PULLOUT OUR DEPOSITS QUICKLY. WHAT REALLY IS THE PROBLEM WITH THIS PARTICULAR BANKING CRISIS IS THE HIGH CONCENTRATION OF UN INSURED DEPOSITS. WE HAVE BANKS, SILICON VALLEY BANK HAD 90% EXPOSURE TO UNINSURED DEPOSITS. BY THEIR NATURE, UNINSURED DEPOSITS ARE NOT SENSITIVE TO THE FED AND INSURANCE. THE FDIC INSURANCE. RATHER, THEY ARE OPPORTUNISTIC.
THEY MOVE FAST ONTO A BETTER OPPORTUNITY, OR THEY GET SCOOPED AND THEY MOVE IN TANDEM. THAT IS WHAT WE SAW IN THIS MOST RECENT BANKING CRISIS. CAROLINE: ARE YOU EXPECTING A CHANGE TO WHETHER ALL DEPOSITS ARE NOT BEING INJURED BY THE FDIC? CANDICE: IF ALL DEPOSITS ARE INSURED BY THE FBI SEE, THAT MEANS THE FDIC AND BANK FEES, THE CHARGE FOR DEPOSIT INSURANCE, WILL HAVE TO INCREASE AND WILL HAVE TO BE DISTRIBUTED DIFFERENTLY AMONG BANKS. I SUPPOSE THAT IS AN OPTION.
I THINK THERE ARE SO MANY MORE PRUDENT DECISIONS THAT CAN BE MADE BEFOREHAND TO IMPROVE SUPERVISION, INCLUDING THE USE OF TECHNOLOGY IN SUPERVISION, SUCH THAT WE DON'T HAVE TO INSURE ALL DEPOSITS. IT DOESN'T MAKE SENSE WHEN THERE ARE INTERIM THINGS REGULATORS CAN DO. IF YOU READ THE REPORTS BY THE FED AND THE FDIC THEY ADMITTED THEIR SHORTFALLS. I THINK THAT CAN BE AMELIORATED BY THE USE OF TECHNOLOGY, AMONG OTHER THINGS. CAROLINE: TECHNOLOGY AT THE HEART OF THIS. ALSO THE FACT THAT WE HAVE
NEO-BANKS, FINTECH, OFFERING HIGHER RETURNS. DO WE SEE A STAMPEDE? ED: A STAMPEDE OR HERD MENTALITY. GOING BACK TO SVB AND FIRST REPUBLIC, IT IS AN ISSUE OF CONFIDENCE? DEPOSITORS LOSE CONFIDENCE AND PULL THEIR MONEY. THE POINT THAT CAROLINE RAISES IS SMART. YOU HAVE SO MANY MEANS, TECHNOLOGICALLY SPEAKING, TO TRANSFER FUNDS.
GIVE US GRANULARITY ON HOW MUCH THAT HAS CHANGED THE GAME. HOW MUCH HAS CONTRIBUTED TO THE RISK OF A BANK RUN? CANDICE: I THINK IT HAS CONTRIBUTED GREATLY. YOU CAN HAVE A BANK RUN FROM YOUR CELL PHONE IS WHAT YOU ARE SUGGESTING. IN THE OLDEN DAYS PEOPLE WAITED
IN LINE FOR THE BANKS TO OPEN TO PULLOUT THEIR PHYSICAL CASH. NOW YOU CAN HAVE A BANK RUN FROM YOUR LIVING ROOM. I DON'T THINK PAYMENTS ARE GOING TO SLOW DOWN. PAYMENT TECHNOLOGY AND FINTECH TECHNOLOGY ISN'T GOING TO SLOW DOWN. AS A RESULT RISK MANAGERS NEED TO BE MORE PRUDENT WITH REGARD TO THEIR CONCENTRATION AND EXPOSURES TO THINGS LIKE UNINSURED DEPOSITS.
YOU'RE GOING TO CONTINUE TO HAVE ADVANCES IN PAYMENTS. I THINK THEY ARE HEALTHY FOR THE ECONOMY IN A LOT OF WAYS. THEY MAKE OUR LIVES AS CONSUMERS VERY CONVENIENT. BUT THAT IS NOT GOING TO CHANGE AND WE ARE STILL GOING TO BE EXPOSED TO THE RISK OF RAPID WITHDRAWALS FROM BANKS AND FINANCIAL INSTITUTIONS GIVEN THE EASE WITH WHICH WE CAN DO IT. ED: WHAT HAVE YOU BEEN ADVISING
YOUR CLIENTS SINCE THE SILICON VALLEY COLLAPSE? SINCE FIRST REPUBLIC WAS ACQUIRED BY JP MORGAN? WHAT HAVE YOU TOLD THEM TO DO FROM A TECH PERSPECTIVE? CANDICE: THIS IS UNLIKE OUR LAST CRISIS WHERE IT WAS A CREDIT CRISIS. THIS IS AN ASSET LIABILITY MISMATCH. WE ALWAYS ADVISE OUR CLIENTS, EVEN DESPITE THIS, AND ADMITTEDLY WE WORK WITH LARGER AND MIDSIZED CLIENTS IN MY PARTICULAR SPACE, BUT WE ALWAYS ADVISE THEM TO STAY ON TOP OF STRESS TESTING AND BE PRUDENT ABOUT MANAGING YOUR RISKS AND EXPOSURES TO SHIFT IN THE MACROECONOMIC MARKET. LOOK FOR MACRO HEDGES TO WHATEVER IT IS YOU ARE TAKING EXPOSURE TO. WE'RE STILL GIVING THE SAME GOOD RISK MANAGEMENT ADVICE DESPITE WHAT IS GOING ON IN THE MARKET, BECAUSE THESE THINGS WERE FORESEEN AND THEY CONTINUE TO ENGAGE THEM.
THAT IS WHAT WE ARE ADVISING OUR BANKING CLIENTS TO DO. ED: THANK YOU FOR YOUR TIME. COMING UP, WHAT TO MAKE OF THE RAPID EVOLUTION IN THE GENERATIVE AI SPACE.
WE WILL BRING YOU THAT WITH KONSTANTINE BUHLER. CAROLINE: AND WE HAVE TO KEEP OUR EYES ON ALL THINGS CHIPS AFTER A TEPID SET OF NUMBERS COMING OUT OF THE SECOND BIGGEST PC CHIPMAKER. WE KNOW THE CONCERN ABOUT THE PC MARKET. WE SAW IN THE INTEL MOVE. ALL SIGNS FROM QUALCOMM IS THAT
CHIPMAKER HAS DIVERSIFIED AWAY FROM JUST PCS. UP BY 8.5%. THIS IS BLOOMBERG. CAROLINE: LET'S TALK ARTIFICIAL INTELLIGENCE WITH JEFFREY HINTON -- GEOFFRY HINTON LEAVING GOOGLE AND JOINING HIS VOICE TO A GROWING CHORUS WARNING ABOUT AI. THE DEEP MINDED CEOS SET DOWN WITH BLOOMBERG ORIGINALS TALKING ABOUT HOW THE INDUSTRY IS NOT ONLY LOSING PEOPLE BUT ATTRACTING A LOT OF TALENT. LISTEN.
>> I WOULD SAY IT'S AN INCREDIBLY DYNAMIC FIELD RIGHT NOW. ALL SORTS OF THINGS HAPPENING, RESEARCH GOING ON. LITERALLY IN THE LAST SIX MONTHS PROBABLY HUNDREDS OF THOUSANDS OF PEOPLE, TALENTED ENGINEERS AND OTHERS, HAVE GOTTEN INTO THE FIELD. I THINK THEY HAVE COME FROM MANY OTHER FIELDS AND DECIDED THAT MAYBE THEY WERE NOT INTERESTED IN AI UNTIL RECENTLY, BUT THEY DECIDED THAT THIS IS A GREAT GROWTH POINT.
THAT HAS BROUGHT IN A A LOT OF ENERGY TO THE SPACE, A LOT OF DYNAMIC IDEAS. SO, EVEN FOR US WHO ARE RIGHT IN THE MIDDLE OF IT IT IS HARD TO KEEP TRACK OF ALL OF THAT AT ONCE. YOU HAVE TO TAKE INTO ACCOUNT AND LOOK AT THE MAIN TRENDS AND THREATS AND FOCUS ON THAT, I WOULD SAY. IT IS ALMOST LIKE YOU NEED AN
AI SYSTEM TO HELP YOU KEEP TRACK OF ALL OF THE DEVELOPMENTS THAT ARE GOING ON. ED: GOOGLE DEEP MIND CEO. YOU CAN WATCH MORE OF THAT INTERVIEW ON BLOOMBERG'S ORIGINALS AII ARE REAL AND STREAM NEW EPISODES WEDNESDAYS 8:30 P.M. Y-- LET'S KEEP THE CONVERSATION GOING WITH KONSTANTINE BUHLER WHO HAS BEEN IMMERSED IN AI FOR A DECADE ALREADY. WE HAVE SOME CATCHING UP TO DO WITH YOU.
THAT WAS AN INTERESTING MOVE BECAUSE THE HISTORY OF AI IS CLOSELY TIED WITH A DEEP MIND. THEY BROUGHT GOOGLE AND DEEP MIND TOGETHER. LET'S GET YOUR REACTION TO THE LANDSCAPE AND THAT IN PARTICULAR. KONSTANTINE: FIRST, THANKS FOR HAVING US. IT IS A PLEASURE TO BE HERE,
ALWAYS. WE ARE IN THE MIDDLE OF AN INCREDIBLE REVOLUTION IN AI. IT IS PROBABLY MOST SIMILAR TO THE PERSONAL COMPUTER REVOLUTION OF 40 YEARS AGO. DEMIS ALLUDES TO THIS BRIEFLY WHEN HE SAYS WE ARE IN THE MIDDLE OF SOMETHING VERY BIG HERE. WHY PERSONAL COMPUTER REVOLUTION? BECAUSE OF THE IMPACT IT IS HAVING. IMAGINE BEFORE THE PERSONAL
COMPUTER REVOLUTION YOU WERE A TYPIST AND EVERY TIME YOU MADE A MISTAKE AND HAD TO MAKE A CHANGE YOU THROW AWAY THE PAPER. YOU THROW AWAY THE PAPER, YOU HAVE TO PUT A NEW ONE IN, YOU HAVE TO START ALL OVER AGAIN. THEN THE PERSONAL COMPUTER COMES AROUND. AND EVERYTHING IS FASTER, EASIER, WAY MORE STREAMLINED. BUT THERE ARE SOME CHANGES. THERE IS RETRAINING THAT NEEDS TO BE DONE. YOU HAVE TO LEARN THE NEW TECHNOLOGY.
THE SAME KIND OF THING IS HAPPENING IN AI. THERE IS MASSIVE POTENTIAL. WE ARE RIGHT IN THE MIDDLE OF IT. IT HAS BEEN THE CORNERSTONE OF
MY CAREER, AND AT SEQUOIA IT HAS BEEN A CORNERSTONE FOR 30 YEARS AND IT IS THE EARLY INNINGS. ED: SO YOU ARE PRINCIPALLY A SEED STAGE AND SERIES-A INVESTOR. HOW DO YOU ACTUALLY INVEST IN THAT MOMENT? KONSTANTINE: YES, THE FIRST THING IS FOUNDER-DRIVEN.
FOUNDERS ARE ALWAYS THE LIFEBLOOD OF THE VENTURE CAPITAL INDUSTRY, THE TECHNOLOGY INDUSTRY AT LARGE, AND DEFINITELY THE AI INDUSTRY. THINK BACK TO WHEN SEQUOIA STARTED ITS VENTURE IN AI IN 1992 WHEN WE BACKED UP THE SERIES-A ARGUABLY THE MOST IMPORTANT AI HARBOR COMPANY IN THE WORLD, NVIDIA. IT WAS A FOUNDER-DRIVEN INVESTMENT BECAUSE HE WAS AN EXCEPTIONAL ENGINEER FROM A PREVIOUS SEQUOIA COMPANY. FOUNDER-DRIVEN ALWAYS. IN 1999 ARGUABLY THE MOST
IMPORTANT AT MATURITY AI COMPANY , GOOGLE, WAS ALSO A SEQUOIA INVESTMENT. TODAY, A LOT OF GREAT AI COMPANIES ARE COMING UP, HUNDREDS AT THIS POINT. WE ARE MEETING AND EXCITED TO FIND THE MOST BRILLIANT FOUNDERS FOR WHAT THEY ARE BUILDING IN THE FUTURE IS WHAT SEQUOIA IS ALL ABOUT. ED: WE SEE THAT ACTIVITY ON THE SHOW EVERY SINGLE DAY. THE HUNDREDS OF NEW COMPANIES THAT HE IS TALKING ABOUT, THE ENERGY. IT CAME FROM OPEN AI IN
NOVEMBER OF LAST YEAR AND MICROSOFT'S INVESTMENT AT THE BEGINNING OF THE YEAR. CAROLINE: AND SEQUOIA BACKS OPEN AI. YOUR NEW PORTFOLIO, IT FEELS THE REST OF THE VC COMMUNITY IS RUSHING, REGULATORS ARE BEING FORCED TO RUSH. IT FEELS AS THOUGH THIS HAS TAKEN US BY SURPRISE, BUT YOU HAVE BEEN STUDYING FOR 13 YEARS. WHY HAVE WE SUDDENLY BEEN -- HAVE WE HAD THE RUG PULLED A LITTLE BIT? KONSTANTINE: YOU ARE EXACTLY RIGHT.
THIS IS ACTUALLY DECADES IN THE MAKING. FOR US AT SEQUOIA, FOR ME, FOR OUR TEAM THIS IS SOMETHING WE HAVE BEEN TRAINING FOR AND EXCITED FOR FOR DECADES. THERE IS A BIG, EXCITING CHANGE AND IT IS WHAT YOU DESCRIBED. THERE IS A NEW USER INTERFACE. I TALK ABOUT THE USER INTERFACE HARKENING BACK TO THE PERSONAL COMPUTER WHEN YOU HAVE THE GRAPHICAL USER INTERFACE COME OUT. THAT WAS THE ADVENT OF THE
FIRST MICROSOFT WINDOWS. THE ADVENT OF A LOT OF THE FIRST APPLE COMPUTERS. THE POINT OF THE FIRST GRAPHICAL USER INTERFACE IN THE PERSONAL COMPUTER REVOLUTION IS THAT ANYONE COULD USE THEIR MOUSE AND CLICK AS OPPOSED TO THE OLD TERMINAL-BASED MS DOS THAT ONLY ENGINEERS COULD USE. ANYONE CAN USE AI. YOU DON'T HAVE TO BE AN AI ENGINEER. THAT IS WHY WE ARE IN AN
INCREDIBLY IMPORTANT MOMENT. ALL OF A SUDDEN AI IS ACCESSIBLE TO EVERYONE. THAT IS WHAT HAS CHANGED. CAROLINE: THE DATA IT RUNS ON IS STILL IN MANY WAYS NOT PERFECT. HOW ARE YOU THINKING ABOUT THE STARTUPS THAT YOU INVEST IN AND OF THE OVERALL REGULATORY ENVIRONMENT THAT WILL HAVE TO PLAY CATCH-UP IN SOME WAY? KONSTANTINE: YES, NO DOUBT IT IS THE DATA AND YOU ARE REFERRING TO "HALLUCINATION" -- THAT IS THE TERM THAT IS USED. THIS IS TOP OF MIND. THERE ARE SEVERAL WAYS THIS IS BEING ADDRESSED FROM AN ENGINEERING AND COMPANY-BASED RESPECTIVE TO IMPROVE THAT. POLICY, THERE ARE A COUPLE OF RESPONSES.
ONE IS TO STEP BACK AND SAY IT IS TOO POWERFUL, TOO DANGEROUS. ANOTHER IS TO SAY LET IT RUN. THE THIRD WAY, WHICH IS WHAT WE THINK AT SEQUOIA, WHAT I BELIEVE IS THE RIGHT APPROACH, IS TO SAY THIS IS INCREDIBLY POWERFUL. LET'S BE INVOLVED. LET'S TAKE ACTIONS TO FORM IT SAFELY.
LET'S BE PART OF THIS EVOLUTION OF THIS TECHNOLOGY SO IT CAN BE A POWERFUL FORCE OF GOOD FOR HUMANITY. CAROLINE: YOU ARE SOUNDING POSITIVE. YOU ARE SOUNDING OPTIMISTIC. WE DID A TWITTER POLL, AS WE DO EVERY SINGLE DAY. LOOK AT THE RESULTS. WE ASKED IF THEY ARE PESSIMISTS OR OPTIMISTS AROUND AI. ACTUALLY ONLY 22% SAID YES. ED:
TOO EARLY TO TELL. WE HEAR IT SO OFTEN. YOU HAVE BEEN IN THIS FOR A LONG TIME AND PROBABLY SOCIETY IS CATCHING UP. THERE IS A PARALLEL WITH CRYPTO. YOU HAVE BEEN AN ACTIVE INVESTOR IN THE CRYPTO INDUSTRY. THE LATEST WAS EDX MARKETS. THAT IS A FROTH AND BUBBLE
BURST CYCLE. WHY WILL WE NOT SEE THE SAME THING PLAY OUT IN AI? KONSTANTINE: I AM A BELIEVER IN CRYPTO AS WELL, BUT THAT IS A SEPARATE TREND FOR FURTHER DISCUSSION. THERE IS A LOT OF DEPTH THERE TOO. TOO EARLY TO TELL IS A CRITICAL POINT AND I ENCOURAGE YOUR AUDIENCE TO USE AI AND MAKE IT PART OF THEIR LIVES.
THERE IS THIS TRITE QUOTE, AI IS NOT GOING TO TAKE YOUR JOB. A HUMAN USING AI WILL. THERE IS A LOT OF TRUTH TO THAT. THE ACTION TO TAKE IS TO START HARNESSING THE POWER OF AI. IF YOU'RE NOT USING AI TOOLS, TRY THEM OUT AND SEE HOW THEY CAN MAKE YOU BETTER. INTERNALLY AT SEQUOIA WE TALK ABOUT AUGMENTED INTELLIGENCE AS OPPOSED TO ARTIFICIAL INTELLIGENCE. CAROLINE: ABSOLUTELY GREAT TO HAVE YOU.
THANK YOU SEQUOIA CAPITAL PARTNER KONSTANTINE BUHLER WITH THE OPTIMISTIC POINT OF VIEW. GO PLAY WITH AI. COMING UP, WHAT U.K. REGULATORS ARE DOING IN TERMS OF ACQUIRING INTO ADOBE'S DEAL TO BUY FIGMA.
WE ARE TALKING TECH. THIS IS BLOOMBERG. ED: IT IS TIME FOR TALKING TECH. ACROSS THE POND OF THE UNITED KINGDOM'S COMPETITIONS AND MARKET AUTHORITY HAS STARTED A MERGER INQUIRY INTO THE ADOBE PURCHASE OF START UP FIGMA SETTING A JUNE 30 DEADLINE FOR THE PHASE ONE DECISION. THE DEAL IS ALSO UNDER SCRUTINY IN THE U.S.
DRAWING UP PLANS TO BUILD THE FIRST CHIP FABRICATION PLANT IN EUROPE ACCORDING TO SOURCES. THE CHIPMAKER IS IN TALKS WITH PARTNERS TO SPEND AS MUCH AS $11 BILLION ON THE NEW PLANT BASED IN SAXONY, GERMANY. GOLDMAN SACHS HAS JUST NAMED ITS GLOBAL HEAD OF TMT BANKING. SHE IS A VETERAN DEALMAKER WHOSE RECENT WORK INCLUDES ENDEAVOR GROUP'S $9 BILLION TAKEOVER OF WWE. CAROLINE: LET'S DIG INTO ANOTHER PART OF
THE NEWS AGENDA. THE LATEST ON THE WAR IN UKRAINE. RUSSIA SAYS IT WAS ABLE TO AVERT AN ATTACK BY A PAIR OF DRONES. IN MOSCOW TUESDAY NIGHT.
THE PLANE WAS IMMEDIATELY PLACED ON UKRAINE WITHOUT PROVIDING EVIDENCE. ANTONY BLINKEN SAID THAT HE COULD NOT VALIDATE THE REPORTS AND WARNED TO TAKE ANY KREMLIN CLAIMS WITH A LARGE SHAKER OF SALT. FOR NOW ZELENSKYY SAYS IT IS UNTRUE. FROM NEW YORK, SAN FRANCISCO, >> WELCOME BACK TO BLOOMBERG TECHNOLOGY'S.
ED: CHECK ON THESE MARKETS. -- LET'S GET A CHECK ON THESE MARKETS. THERE IS UNDERPERFORMANCE IS IN SEMICONDUCTORS. A LOT OF THAT TO DO WITH AMD EARNINGS. DOWN MORE THAN A PERCENT WHICH WE WILL GET TO ANY SECOND. SOME FALL BACK ON YIELDS AS
WELL. 10.37%. DOWN FROM THAT LEVEL WE WERE AT EARLIER IN THE WEEK, KIND OF CLIMBING DOWN INTO THAT FED MEETING. CRYPTO, BITCOIN IS STILL AROUND $28,000.
HERE ARE SOME OF THE SPECIFIC MOVERS WE ARE WATCHING IN SPECIFICALLY CHIPS. AMD UP. IT IS THAT OUTLOOK FOR THE SALES ON $5.3 BILLION PLUS OR -$300 MILLION. THEY WERE LOOKING FOR SOMETHING A BIT HIGHER, BUT ALSO HOW FLAT THE DATA CENTER OF BUSINESS IS, RECOVERING THE SECOND HALF OF THIS YEAR.
INTEL SEEMS TO BE BENEFITING FROM THIS TRADE AFTER THE MARKET KIND OF BOUGHT ITS OUTLOOK FOR THE SECOND HALF OF THE YEAR. THEY ARE NOT DOING SO WHEN IT COMES TO AMD AND MET LAST STOCK MOVING UP 1.2%, THAT IS THE MARKETS. CAROLINE: TURNING BACK NOW TO YOUR CHIEF ECONOMIST FOR THAT PARTICULAR COMPANY, OUT WITH A WARNING ABOUT THE EXTENT TO WHICH ARTIFICIAL INTELLIGENCE CAN BE DANGEROUS IN THE HANDS OF BAD ACTORS. HE SPOKE AT THE WORLD ECONOMIC FORUM PANEL IN GENEVA. >> I'M QUITE CONFIDENT THAT, YES, AI WILL BE USED BY BAD ACTORS AND YES, IT WILL CAUSE REAL DAMAGE, AND YES, WE HAVE TO BE VERY CAREFUL AND VERY VIGILANT TO AVOID THAT. IT IS POSSIBLE WE HAVE TO PUT SAFEGUARDS. CAROLINE:
LET'S TALK ABOUT THE MIX OF CYBER AND AI. META OUT WITH A QUARTERLY THREAT REPORT THAT SHOWED MALWARE OPERATIONS USING, FOR EXAMPLE, CHATGPT USES PHISHING LINKS TO TARGET BUSINESSES AND CONSUMERS. JOINING US, NATHANIEL, I WANT TO DIG INTO HOW YOU MALWARE STRAINS YOU ARE FINDING ARE BASICALLY INCLUDING PRODUCTIVITY TOOLS. IT FEELS AS THOUGH MALWARE, BAD ACTORS ARE GETTING IN ON THE AI HYPE. NATHANIEL: I'M HERE TODAY BECAUSE WE ARE RELEASING A SERIES OF THREAT REPORTS ON THREATS WE'VE ENCOUNTERED AROUND THE WORLD THAT HELP TO KEEP PEOPLE SAFE. SAFE. ONE OF THE THREATS IS MALWARE.
MALWARE AND MALICIOUS TOOLS THAT ARE DESIGNED TO LOOK INNOCENT BUT FOCUS ON COMPROMISING PERSONAL DEVICES, COMPROMISING YOUR ACCOUNTS. WE KNOW THAT A TARGET BUSINESSES. AND AS YOU SAY, MALWARE DEVELOPERS ALWAYS TRY TO GET IN ON BUZZWORDS. THEY ARE LOOKING FOR WAYS TO TRICK PEOPLE INTO DOWNLOADING MALWARE. THEY TRY TO GET PEOPLE TO CLICK ON LINKS SUGGESTING YOU WE CAN ACCESS TO NEW CRYPTOCURRENCY APPS TODAY. SUGGESTING IF YOU CLICK ON A LINK, YOU MIGHT GET ACCESS TO CHAT GPT OR ANOTHER TOOL AND ACTUALLY YOU WOULD BE DOWNLOADING MALWARE. CAROLINE: JUST WHO WITHIN A BUSINESS IS
THE MOST VULNERABLE? WHO IS BEING SENT THESE LINKS? NATHANIEL: BUSINESSES SHOULD BE CONSCIOUS THAT MALWARE ACTORS TARGET INDISCRIMINATELY ACROSS THE BUSINESS INCLUDING MAYBE PEOPLE WHO ARE CONNECTED TO PROMINENT LEADERS OR INDIVIDUALS THAT MIGHT JUST THE OPERATING IN THE BUSINESS AND MAINTAINING OR ADMINISTERING THE BUSINESS'S SOCIAL MEDIA PAGES. THE GOOD NEWS IS THAT THERE ARE A NUMBER OF FAIRLY SIMPLE THINGS THAT PEOPLE AND BUSINESSES CAN DO TO KEEP SAFE. WHETHER THAT IS TURNING ON TWO FACTOR AT THE END OF ACACIA WERE USING STRONG PATH THROUGH THE CROSS ONLINE ACCOUNTS, WE ARE ROLLING OUT A SERIES OF NEW PROTECTIONS FOR BUSINESSES TO HELP THEM STRENGTHEN THEIR DEFENSES ON META AND ALSO TO HELP THEM PROTECT AGAINST MALWARE WHEREVER IT MIGHT TARGET THEM. WHETHER THAT IS ON THEIR DEVICES, OTHER ONLINE ACCOUNTS, OR ON OUR PLATFORMS. ED: THIS IS A STORY ABOUT BAD ACTORS POSTING URLS THAT PURPORTS TO TAKE USE OF A CHAT GPT-LIKE PRODUCT. WHAT I WANT TO KNOW, HAVE YOU DETECTED THREAT ACTORS WHO ARE ACTUALLY USING THE TECHNOLOGY, USING GENERATIVE AI TO MAKE THE CONTENT THEY POST ON YOUR PLATFORMS HARDER TO DETECT? NATHANIEL: WE HAVEN'T SEEN SIGNIFICANT, SOPHISTICATED CAMPAIGNS RELYING ON AI TODAY.
WE DO KNOW THAT FACTORS -- BAD ACTORS TRY TO ABUSE EVERY PIECE OF NEW TECHNOLOGY SO WE EXPECT THEY ARE GOING TO TRY TO ABUSE GENERATIVE AI. THAT IS WHY IT IS PARTICULARLY IMPORTANT TO DEFEND TEAMS AT META AND OTHER COMPANIES AROUND THE WORLD, THINKING ABOUT HOW THESE ABUSES MIGHT HAPPEN AND STEPS WE CAN TAKE THEM PROTECT PEOPLE AND COUNTER THE BAD ACTORS. ED: CISCO WARNED THAT AI WOULD MAKE PHISING ATTACKS HARDER TO DETECT. DO YOU SHARE THAT CONCERN?
NATHANIEL: WE'VE SEEN SOME LIMITED EXAMPLES OF PEOPLE USING AI-BASED TOOLS TO CREATE PROFILE PICTURES THAT ARE OF PEOPLE WHO DON'T EXIST BUT LOOK REALISTIC. WE'VE SEEN DEEPFAKE VIDEOS. THESE THREATS ARE CERTAINLY OUT THERE AND IT IS IMPORTANT TO BE READY TO COUNTER THEM. THAT IS WHY YOU NEED TO HAVE ANALYST TEAMS THAT HUNT FOR THIS TYPE OF THING AND THE OTHER SIDE OF GENERATIVE AI IS THAT IT HAS A LOT OF REALLY POSITIVE ATTENTIONAL'S, AND ONE OF THEM IS HELPING DEFENDERS WERE LOOKING TO PROTECT AND IMPROVE DETECTION RESPONSE SYSTEMS SO WE CAN KEEP PEOPLE SAFE. CAROLINE: IT DOESN'T PARTICULAR MATTER WHERE IT IS COMING FROM.
YOU IDENTIFIED A VIETNAM-BASED SIDE OF CRIMINAL OPERATIONS. IS A LOT COMING FROM THEIR? CAN YOU SEE WHERE A LOT OF THIS ATTACK IS STEMMING FROM? NATHANIEL: MALWARE DEVELOPMENT HAPPENS ALL OVER THE WORLD AND IT CAN BE HARD TO TELL EXACTLY WHERE THE ACTORS ARE, WHERE THEY ARE COMING FROM. WHAT WE ARE ABLE TO IDENTIFY IS A PARTICULAR COMPANY OR ACTOR WHO IS BEHIND IT AND WE WILL TAKE ADDITIONAL STEPS TO DETER THEM AND IMPOSE COST ON THEM. FOR SOME OF THE PEOPLE DEVELOPING THIS MALWARE, WE REFERRED THEM TO LAW ENFORCEMENT AND WE SENT CEASE AND DESIST LETTERS. WE OFTEN SEE COMPANIES THAT TRY
TO SEEM LEGITIMATE BUT ALSO OPERATE ON THE DARK SIDE OF ALL OF THIS AND TRY TO SHARE MALWARE. AND FOR COMPANIES LIKE THAT, YOU CAN IMPOSE A LOT OF COAST ON THEM BY HIGHLIGHTING THIS, EXPOSING WHAT THEY ARE DOING AND BRINGING LAW ENFORCEMENT TO BEAR AGAINST THEM. CAROLINE: OF COURSE, ED, WHAT IS INTERESTING IS WE ARE WONDERING ABOUT A VERY GLOBAL CYBERATTACK THREAT. WE ARE THINKING AND TALKING TO A GLOBAL COMPANY THAT, OF COURSE, HAS CHANGED ITS NAME, BUT ALSO DEEPLY INGRAINED IN INVESTING IN AI, IN SOME WAY. ED: NATHANIEL, MARK ZUCKERBERG REALLY EMPHASIZING META'S COMPETENCE IN THE FIELD OF AI, RIGHT? SO HOW DO YOU AND THE SECURITY TEAM USE ARTIFICIAL INTELLIGENCE AS A TOOL? HOW CAN IT HELP YOU? NATHANIEL: GENERATIVE AI IS A NOVEL AND FAST-DEVELOPING TECHNOLOGY. THERE ARE A LOT OF PLACES WHERE HE COULD HAVE REAL IMPACT. MEDICINE, EDUCATION.
BUT I DO THINK ONE OF THE INTERESTING OPERA -- OPERATIONS IS TRACKING COUNTER THREATS AROUND THE WORLD. WHEN WE ARE MOVING AT A GLOBAL ENVIRONMENT -- IN A GLOBAL ENVIRONMENT WHERE THERE ARE MANY COMPANIES, AND MANY THREAT ACTORS, EVERYTHING WE CAN DO TO MOVE MORE QUICKLY IS EFFECTIVE. WE WORK TO PAIR THOSE TYPES OF AUTOMATED TOOLS WITH EXPERT HUMAN INVESTIGATORS WHO CAN TRACK AND COUNTED THE MOST SOPHISTICATED THREAT ACTORS. AND PAIRING THEM UP IS THE MOST EFFECTIVE IN COUNTERING THE BAD GUYS. ED: THANK YOU FOR BRINGING US YOUR
LATEST REPORT. ANOTHER STORY THAT WE ARE FOLLOWING, TIKTOK TRUST AND SAFETY FOR THE U.S. IS LEAVING THE COMPANY. THE SENIOR OFFICIAL IN CHARGE OF ENSURING USE OF SAFETY IS DEPARTING AMID INCREASED PRESSURE FOR THE U.S. GOVERNMENT TO BAN THE APP. HE HAD BEEN ONE OF THE MOST PROMINENT OFFICIALS IN THE EFFORT TO CONVINCE LAWMAKERS THAT THE APP IS SAFE FOR U.S.
USERS. CAROLINE: MEANWHILE, COMING UP, A COMPETITION BETWEEN CHINA AND THE U.S. WITH SOMEONE WHO CALLS IT THE MOST IMPORTANT WAR OF THE NEXT TWO DECADES. THE TECHNICAL-ECONOMIC WAR. WE WILL BE OF COURSE BE JOINED BY NO OTHER THAN VINOD KHOSLA. IN INDIVIDUAL PARTS OF THE MARKET, WE WILL SHINE A LIGHT ON IT AGAIN.
SOX, CHIP AREA, AFTER THE NUMBERS COMING OUT, THE FALL IN THE SOX MARKET, WE'VE GOT NERVOUSNESS IN THIS MARKET. THIS IS BLOOMBERG. ♪ CAROLINE: TIME NOW FOREVER VC ROUNDUP AND STARTING WITH AN AI START UP AND A GROWING APP CHATBOT THAT IS INTENDED TO SERVE AS A SORT OF PERSONAL COMPANION. MEANWHILE, ACCEL IS REALLY FOCUSING ON AI STARTUPS. THE FIRM WILL CHOOSE AS MANY AS HALF A DOZEN STARTUPS TO FUND, MENTOR. IT IS ALSO TARGETING COMPANIES
THAT USE TECHNOLOGY TO MAKE MORE CONVENTIONAL INDUSTRIAL PROCESSES MORE EFFICIENT. ED? ED: STICKING WITH ALL THINGS VENTURE CAPITAL, VINOD JOINS US FOR TODAY'S SPOTLIGHT HERE IN SAN FRANCISCO. LET'S GO TO AI. IT IS ALL THAT ANYONE WANTS TO TALK ABOUT. OPEN AI WAS THE FIRST BIG CHECK THAT YOU WROTE, RIGHT? VINOD: WE WROTE THE FIRST VERY LARGE CHECK AND OPEN AI THAT WE HAD DONE, YES. THE FIRST VENTURE CAPITAL FIRM ALONG WITH SOME INDIVIDUALS. ED: FAST-FORWARD TO PRESENT DAY,
THERE IS A HYPE CYCLE AROUND ARTIFICIAL INTELLIGENCE AND HALF OF YOUR FIELD OF VC SAYS WE'VE BEEN DOING THIS FOR A DECADE. AND THEN HALF ARE GETTING INTO A NEW. HOW DO YOU ASSESS WHAT IS HAPPENING? VINOD: EVERYBODY WANTS TO GET ON THE BANDWAGON BECAUSE IT IS A MAJOR CLIENT AND A MAJOR TIME. NOT SURPRISING PEOPLE CLAIMING THEY'VE BEEN DOING IT FOR A DECADE. I WROTE ABOUT IT EXTENSIVELY ABOUT 10 YEARS AGO AND THEN FOUR YEARS AGO WE INVESTED IN OPEN AI. FIVE OR SIX YEARS AGO WE HAD A WHOLE BUNCH OF OTHER STARTUPS WE INVESTED IN IN THE SAME AREA.
AND SO IT IS AN EXCITING TIME. IT IS HARD TO PREDICT EXACTLY HOW FAST IT IS DEVELOPING, HOW FAST IT WILL DEVELOP. EVERY DAY, YOU SEE NEW CHANGES, BUT IT IS EXCITING. AND IT IS EXCITING FROM BOTH A BUSINESS POINT OF VIEW AS WELL AS A TECHNOLOGY CAPABILITY POINT OF VIEW. ED:
IS OPEN AI THE ONLY GAME IN TOWN OR JUST A CLEAR LEADER IN THE FIELD RIGHT NOW? VINOD: IN AMERICA THERE'S A LOT OF INTERESTING STARTUPS IN THIS AREA. GOOGLE IS A VERY CREDIBLE PLAYER AND THEN THERE'S OTHER STARTUPS THAT ARE CREDIBLE, TOO, TRYING TO MAKE A GO AT IT. I THINK THE LEADER OF ALL THIS HAS A HUGE ADVANTAGE. CAROLINE: WHAT ABOUT LEADERSHIP COMING FROM CHINA? I KNOW YOU KEEP A KEEN EYE ON WHAT YOU SEE AS A COMPETITIVE THREAT. THE NEW WAR IN THE NEXT COUPLE OF DECADES, TECHNO-ECONOMIC. VINOD: ABSOLUTELY. I PROBABLY WORRY MORE ABOUT
CHINESE AI DOING BAD THINGS THAN ANYTHING TO DO WITH AI ITSELF GOING 70 AND OR THE KINDS OF THINGS ELON MUSK TALKS ABOUT -- CINDY AND -- SENTIENT WHERE THE KINDS OF THINGS ELON MUSK TALKS ABOUT, NOT THAT THAT IS NOT A CONCERN. CHINA IS GOING TO BE A BIG ENEMY FOR THIS. YOU'RE GOING TO BE AT WAR WITH CHINA FOR ECONOMIC DOMINANCE. CAROLINE: DO THE RISK-REWARD FOR US, OR BALANCE THE RISKS. WHEN YOU'RE TALKING TO REGULATORS, AND YOU TALK TO PEOPLE IN POWER, YOUTH BEEN OVER THERE. YOU HAD A HILL AND VALLEY FORUM
WHERE YOU GATHERED VC'S TO TALK TO GOVERNMENT. DO YOU WANT THEM TO REGULATE HOW WE USE AI IN THE WILD IN THE U.S. AT THE MOMENT? OR ARE YOU MORE WORRIED ABOUT THE REGULATION OF CHINA TO BUILD THEIR OWN AI? VINOD: I'M MUCH MORE WORRIED ABOUT THE COMPETITIVE PICTURE WITH CHINA THEN ABOUT REGULATION HERE. I THINK IT'S TOO EARLY TO REGULATE AI. WE DON'T KNOW ENOUGH ABOUT IT.
I DO THINK WE SHOULD HEAVILY FUND SAFETY RESOURCES, ESPECIALLY IN THE UNIVERSITIES AND THIRD PARTIES. BUT REGULATING IT WOULD BE A REAL MISTAKE AND PUT US BEHIND CHINA IN THE RACE. CAROLINE: AND THE RACE -- IT DOES FEEL IT IS SOMETHING THAT VC'S ARE TALKING ABOUT AND ALSO A RELATIONSHIP THAT IS BEING BUILT MORE FIRMLY BETWEEN D.C
AND SILICON VALLEY. WHERE YOU SIT. ED: FOR ME, THE QUESTION IS WHAT WAS THE UPSHOT OF THE HILL IN VALLEY FORUM? WE REPORTED ON IT, WE DISCUSSED THE RELATIONSHIP BETWEEN D.C. AND SILICON VALLEY. WHAT HAS HAPPENED AS A RESULT? VINOD: THERE'S CLEARLY A LOT OF INTEREST IN THIS QUESTION. NOT ONLY AI AND AI REGULATION,
BUT EQUALLY IMPORTANTLY ON OUR AI RACE WITH CHINA. MY QUEST IS HIGHLIGHTING HOW IMPORTANT THAT ISSUE IS AND HOW MUCH WE SHOULD FOCUS ON THAT RACE WITH CHINA FOR TECHNOLOGY SUPREMACY HERE. I DO THINK THERE WILL BE MULTIPLE PLAYERS, BUT I DO THINK THERE WILL BE WINNERS THAT HAVE A DISPROPORTIONATE PART OF THE ECONOMIC PIE. AND I THINK THE U.S. MODEL IS SET UP FOR IT, BUT IT
IS NOT OBVIOUS THAT WE CAN WIN OR THAT WE WILL WIN IN 20 YEARS FROM NOW. ED: YOU SAID ECONOMIC PIE SO I'M GOING TO A SMALL PIVOT. A FED MEETING TODAY, WE EXPECT TO 25 BASIS POINT HIKE. WE TALK DAILY ABOUT TIGHTER FINANCIAL CONDITIONS. VC OF YOUR EXPERIENCE AND YOUR SCALE, HOW DOES THAT IMPACT THE ECOSYSTEM THAT YOU ARE OPERATING IN? VINOD: FED RATE HIKES AFFECT SHORT-TERM THINGS.
WHEN WE INVEST IN OPEN AI, WE DON'T EXPECT LIQUIDITY FOR 6, 7, 8 YEARS. SO I'D HAVE TO PREDICT THE MARKET IN 2030 AND THE FED RATE IN 2030 TWO REALLY HAVE AN IMPACT -- ED: YOU BE VERY POPULAR IN THIS ORGANIZATION IF YOU COULD. VINOD: MY GOAL IS REALLY TO FOCUS ON WHAT ADDS SUBSTANTIAL VALUE AND BECAUSE OF THAT, ECONOMIC VALUE. WHAT WILL BE TRUE IN TERMS OF REAL VALUE FOR SOCIETY IN 2030 IF I'M GOING TO MAKE GOOD INVESTMENTS. OUR FOCUS IS MUCH LONGER-TERM THAN SHORT-TERM INTEREST RATE HIKES. TO ENABLE MORE OR LESS FINANCING TO HAPPEN SO WE DO PAY ATTENTION TO IT, BUT MOSTLY WE IGNORE IT. ED: CAROLINE, FOR ALL THE
VOLATILITY IN PUBLIC MARKETS AND FROM A POLICY PERSPECTIVE, WE SEE TEXT GETTING WRITTEN BY VC'S. CAROLINE: AND IN THE REALM OF AI COME AT THE MOMENT. TO THAT EXTENT, ARE YOU WRITING A LOT OF CHECKS? VINOD: WE ARE WRITING A LOT OF CHECKS. WE ARE BEING AGGRESSIVE, BUT I WOULD SAY THERE ARE MANY MORE BAD AI STARTUPS THAN GOOD STARTUPS. AND IT'S VERY HARD TO DIFFERENTIATE IF YOU ARE NOT EXPERIENCED WITH THE AI.
SO I DO THINK LOTS OF BAD INVESTMENTS WILL BE MADE BUT ALL IN ALL, MORE MONEY WILL BE MADE THAN LOST. EVEN IF 90% OF THE STARTUPS FAIL, WHICH THEY WILL. CAROLINE: AND THAT IS OFTEN THE BAD, THAT YOU WILL HAVE FAILURES.
BUT THEN YOU WILL HAVE ABSOLUTELY EXTRAORDINARY SUCCESS THAT GIVE THE MONEY AND THE RETURNS TO VC'S. IN THIS CURRENT ENVIRONMENT, WE ARE TALKING A LOT ABOUT ZOMBIE COMPANIES. MASSIVE VALUATIONS BUT CAN'T VINDICATE THE GROWTH AT THE MOMENT, HAVING TO MAKE CUTBACKS, HAVING TO THINK MORE ABOUT REVENUE-DRIVING, PROFIT-DRIVING. WHAT DO YOU THINK OF THOSE COMPANIES THAT HAVE HUGE VALUATIONS? VINOD: WELL, THERE ARE CLEARLY OTHER CHOICES TO BE MADE. GOOD FOUNDERS ARE RESPONDING TO THE ENVIRONMENT BY SAYING THAT'S IGNORE WHAT HAPPENED IN THE PAST, LET'S IGNORE OUR OLD VALUATION AND FOCUS IN ON HOW WE CREATE VALUE FOR THE NEXT FEW YEARS. AND LET'S WORRY ABOUT WITH THE VALUATION WAS. FOUNDERS WILL FUNDAMENTALLY
DECIDE WHETHER TO CATER TO INVESTORS OR TO THE REALITY OF THE BUSINESS THEY ARE IN, AND MOST OF THE GOOD FOUNDERS I KNOW ARE REALLY FOCUSING IN ON WHAT THEY NEED TO DO TO BUILD A GREAT BUSINESS AND HOPE THAT INVESTORS WILL GET ON BOARD LATER. NOT WORRYING ABOUT SHORT-TERM PERCEPTION OF VALUATION. ED: THERE ARE OTHER DEEPLY TECHNICAL AREAS THAT YOU ARE PASSIONATE ABOUT AND THAT YOU ARE INVESTING IN. ONE OF THEM IS FUSION. YOU'VE WRITTEN OP-ED'S ABOUT THIS. BECAUSE AI HAS DOMINATED HEADLINES, WE TALKED ABOUT IT LESS.
BUT CAN YOU EXPLAIN WHY YOU ARE SO FOCUSED ON THE AREA? >> IF YOU LOOK AT THE INVESTMENT WE MADE ABOUT FOUR YEARS AGO, FIVE YEARS AGO, BEFORE THERE WAS A COMPANY, ACTUALLY, WE STARTED WORKING WITH A SENIOR FELLOW AT THE M.I.T. FUSION LAB. IT WAS VERY CLEAR. IF YOU CRACKED FUSION AS A TECHNOLOGY, IT WAS ONE OF THE LARGEST MARKETS IN THE WORLD. MUCH LARGER THAN GOOGLE BECAUSE ENERGY MARKETS ARE VERY LARGE. AND SO THAT IS EXCITING. YOU CAN LOSE YOUR MONEY, YOU CAN MAKE 1000 TIMES OR MONEY, THAT IS A PRETTY GOOD TRADE-OFF. ED: VERY QUICKLY, IS IT A GOOD TIME TO THE VENTURE CAPITALIST -- BE A VENTURE CAPITALIST? VINOD: I THINK IT IS A GREAT TIME TO BE A VENTURE CAPITALIST. MOST LARGE COMPANIES ARE CUTTING OFF THEIR ADVANCED PROJECTS SO THE BEST PEOPLE, THAT IS THE RAW MATERIAL WE NEED, GREAT TALENT, AND THERE IS PLENTY OF THAT.
THE NEXT FIVE YEARS WILL LOOK REALLY, REALLY GOOD. CAROLINE: YOU'VE GOT TO BE OPTIMISTIC IN THIS GAME. THANK YOU. MEANWHILE COMING UP, ARE WE OPTIMISTIC ABOUT THE FUTURE FOR SAN FRANCISCO RIGHT NOW? DOWNTOWN CONTINUES TO SEE A FLIGHT OF RETAILERS AND TECH WORKERS. WE WILL DISCUSS IT ALL.
THIS IS BLOOMBERG. ♪ CAROLINE: IT'S BEEN GOING VIRAL -- NORDSTROM GIVING UP ITS STORE IN DOWNTOWN SAN FRANCISCO. THE COMPANY WILL VACATE MORE THAN 300,000 SQUARE FEET OF SPACE ON MARKET STREET. IT ALSO PLANS TO -- GET THIS -- SHOP NEARBY NORDSTROM RACK.
THE MOVE FOLLOWS OTHERS LIKE OFFICE DEPOT IN MARKET STREET ADJACENT LOCATIONS. THE CITY JUST STRUGGLES WITH EMPTY OFFICE BUILDINGS AND CRIME CONCERNS. HAVING LIVED THERE BRIEFLY IN 2016 AND COMING BACK TO SEE YOU AS I LOVE TO DO, MARKET STREET IS JUST AN EXTRAORDINARY PLACE NOWADAYS. THERE'S NOTHING TO GO TO,
NOTHING TO BUY. WHEN YOU GO INTO THE MACY'S, IT'S EMPTY. ED: IT ALL STEMS FROM THE WHOLE FOODS DECISION TO CLOSE THAT DOWNTOWN STORE AROUND A YEAR AFTER IT OPENED. THERE IS A BIG DISCUSSION IN
THE CITY ABOUT WHAT WENT WRONG ON MARKET STREET. REMEMBER THEY TRIED TO BRING IN A TWITTER AND UBER, THEY GAVE THEM INCENTIVE TO DO SO TO REGENERATE THE AREA BUT IT HASN'T WORKED. CAROLINE: WHAT DO YOU MAKE OF THE CYNICISM THAT YOU SEE WITH SOCIAL MEDIA AS A GOES VIRAL? EVERYONE WRINGING THEIR HANDS. DO WE NEED TO BE AS DESPERATE AS SOME OF THE SENTIMENT SEEMS? ED: THERE'S A LOT OF PEOPLE: ON THE MAYOR AND THE DA TO TAKE ACTION AT STREET LEVEL TO FIX THAT PART OF TOWN. THERE IS DEFINITELY A TECH AND BROADER ECONOMIC STORY THAT WE WILL CONTINUE TO COVER ON THIS PROGRAM. CAROLINE:
THAT DOES IT FOR THIS EDITION
2023-05-04 22:09
