'Bloomberg Technology' Full Show (11/29/2022)
CAROLINE: I AM CAROLINE HYDE. ED: THIS IS BLOOMBERG TECHNOLOGY CAROLINA: THE DOW HIT SILICON VALLEY HARDER. WE TALKED TECHNICAL'S. EDIT: AMAZON WEB SERVICES CEO DISCUSSES THE NEW IN-HOUSE CHIPS AND LATEST ON RESTRUCTURING. CAROLINE: TWITTER IS NO LONG LEASING COVID MISINFORMATION. FIRST, LET'S CHECK IN ON THESE MARKETS BECAUSE IT WAS ANOTHER DOWN DAY. WE WERE FOCUSED ON THE MACRO
PICTURE, MORE FOCUSED ON WHAT FED CHAIR POWELL HAS TO SAY TOMORROW. WHAT WILL HE HAND IN TERMS OF POLICY AND WILL IT IMPACT VALUATIONS ON THE NASDAQ 100? THE S&P 500 MANAGED TO PUSH OFF ITS LOWS. VOLUMES RELATIVELY MUTED. I'M LOOKING AT THIS PARTICULAR
ETF, THE TECHNOLOGY SELECT ETF SECTOR. ANALYSIS SAYING THIS IS GOING TO UNDERPERFORM THE S&P ETF. FROM A TECHNICAL PERSPECTIVE, IT LOOKS LIKE WE ARE LIKELY TO GO NOVEMBER LOWS, 3% LOWER VERSUS MANAGING TO BREAK THROUGH A TECHNICAL SUPPORT LEVEL FRAUD IN IN APRIL.
I'M ALSO WATCHING CRYPTO BECAUSE NOTABLY, THE DOLLAR WAS ON THE HIGHER SIDE -- THE LOWER SIDE EVEN THOUGH WE WERE CONCERNED ABOUT THE PICTURE OF THE FEDERAL RESERVE AND WHAT WILL BE HAPPENING IN THE NEXT COUPLE OF DAYS IN TERMS OF FED POLICY. LOOKING AT BITCOIN, IT HAS BEEN LOWERED BY .6% BUT WE MANAGED TO BREAK UP A LITTLE BIT ON THIS DAY TRADE. NOTABLE GIVEN IT WAS A REFLECTION AROUND HOPES OF COVID POLICY IN CHINA. ED: I WANT TO GET STRAIGHT TO THE EARNINGS -- CROWD STRIKE IN THE CYBERSECURITY SPACE ABSOLUTELY SINKING AFTER ITS FOURTH-QUARTER REVENUE FORECAST CAME IN SIGNIFICANTLY BELOW EXPECTATIONS CITING MACRO HEADWINDS. AROUND THEY COME -- CONVERSATION THE SOFTWARE SPACE, EARNINGS CONTINUING TO BE A FACTOR.
WHEN YOU LOOK AT THE INDIVIDUAL NAMES ON THE NASDAQ 100, THE OUTPERFORMER'S WERE U.S.-LIFTED CHINESE TECHNOLOGY SHARES. NAMES LIKE JD.COM, THERE IS OPTIMISM ON WALL STREET THE PROTEST WE SEE ACROSS CHINA WILL RESULT IN SOME EASING OF COVID RESTRICTIONS WHICH WOULD BOOST CHINA TECH.
WHEN HAVE YOU HEARD THE WORD LORDSTOWN IN A COUPLE OF MONTHS? IT'S A BIG TIME BECAUSE IT HAS REGULATORY APPROVAL TO START SELLING THE FEW EV'S IT HAS MADE TO CONSUMERS. AMC NETWORKS DOWN AFTER CONFIRMATION IT WOULD CUT STAFF AND HAVE AN EXECUTIVE SHUFFLE. APPLE DOWN FOR A THIRD STRAIGHT DAY. THE WORST RUN OF DECLINES. THERE IS STILL CONCERNED ABOUT WHAT'S HAPPENING AND HOW THE IPHONE 14 PRODUCTION WILL BE IMPACTED. YOU SEE THAT PLAYING OUT IN EQUITY MARKETS, DOWN 4.6% OR SO. CAROLINE: CAN'T FIGHT THE FED AND YOU CAN'T FIGHT APPLE.
I WANT TO DIG INTO SOME OF THOSE DAILY MOVES. LET'S BRING IN ROB CANTWELL, A PORTFOLIO MANAGER AT UP HOLDINGS. WE SAW OPAL A BIT OF DATA FROM TWITTER. WE GO OUT WITH OUR DAILY POLL
AND WE WANTED TO ASK OUR AUDIENCE WHETHER THEY ARE CURRENTLY SELLING BIG TECH AND WHAT ARE THE REASONS AROUND THAT , WHETHER THEY ARE BRING IT -- BLAMING THE ECONOMIC SLOWDOWN OR POLITICAL HEADWINDS. ACTUALLY WE GOT SOME BULLISH SENTIMENT. THEY ARE NOT SELLING, THEY ARE BUYING IN THE MAJORITY. ARE YOU BUYING AT THIS POINT?
ROB: IT'S TRICKY TO GO ON A TECHNOLOGY PLATFORM AND ASK IF THEY WANT TO BUY MORE TECHNOLOGY. WE ARE FINDING PLENTY OF GOOD DEALS IN THE SPACE BUT IT'S A FASCINATING TIME TO BE AN INVESTOR IN BIG TECH, SMALL TECH, MEDIUM TECH BECAUSE BIG TECH HAS GOTTEN SO BIG IT IS NOW MORE THAN 25% OF THE S&P 500. IT HAS BECOME INTERTWINED WITH MACROECONOMIC FACTORS AND STATISTICS AND THAT HAS NOT BEEN THE CASE FOR THE PAST 20 YEARS. GOOGLE HAS NOT HAD TO CARE
ABOUT CURRENCY HEADWINDS UNTIL ABOUT SIX MONTHS AGO. YOU HAVE ALL THESE TECH ANALYSTS SCRAMBLING BECAUSE OF THE EARNINGS CALL -- EVERYBODY MISSED DUE TO CURRENCY. NOW YOU HAVE TECH ANALYSTS THAT HAVE TO BECOME CURRENCY ANALYSTS SAID IT HAS THROWN THINGS UP SIDE DOWN. IT HAS CREATED PLENTY OF OPPORTUNITIES FOR THOSE WILLING TO WAIT SOME OF THIS STUFF OUT BECAUSE YOU WANT TO BE BUYING WHEN FOLKS ARE SELLING. ED: WE'VE BEEN SAYING THIS LINE FOR
WEEKS ABOUT HIGHER RATES DISCOUNT THE FUTURE PROFITS. THAT'S WHY WE CARE ABOUT THE FED IN THE CONTEXT OF THE TECH SECTOR. WHAT'S THE BIGGER RISK TO THE TECHNOLOGY SECTOR, THE FEDERAL INFLATION? ROB: INTEREST RATES AFFECT A LOT OF THINGS. THEY CAN PUSH OR MULTIPLE DOWN FROM THE DISCOUNT FACTOR YOU JUST DISCUSSED. IT ALSO PUSHES DOWN YOUR GROWTH
RATE AND A LOWER GROWTH RATE DRIVES LOWER MULTIPLE. IF YOU LOOK BACK LONG ENOUGH, HIGHER INTEREST RATES MEANS LOWER MARGINS. YOU ARE TALKING ABOUT A TRIPLE HIT OF YOUR DISCOUNT FACTOR, MARGINS FOR THE COMPANY AND GROWTH RATE EXPECTATIONS. THAT IS WHY YOU HAVE SEEN STOCKS LIKE META TRADE DOWN 70%. THEY OBVIOUSLY HAVE OTHER FACTORS AS WELL. WHERE WE SIT RIGHT NOW, INTEREST RATES ARE MORE OF A RISK TO THE GLOBAL ECONOMY THAT INFLATION. INFLATION HAS STARTED COMING
DOWN BUT WE ARE IN A LOW GROWTH WORLD AND MOST CENTRAL BANKS ARE SAYING THEY ARE NOT DONE RAISING INTEREST RATES. SO THERE IS NOT A SINGLE ANALYST FORECASTING A RE-ACCELERATION IN GROWTH BECAUSE UNTIL WE SEE INTEREST RATES HAVE PAUSED, THAT AFFECT INTEREST RATES HAVE ON GROWTH FOR THE WORLDWIDE ECONOMY IS GOING TO CONTINUE TO BE AN ISSUE. CAROLINE: THE IMPACT RAISING RATES HAS ON THE LABOR MARKET IN PARTICULAR IS THE OTHER SIDE OF THE COIN AND A SACRIFICE THE FEDERAL RESERVE IS WILLING TO SWALLOW AT THE MOMENT. WE SEE THE LAYOFFS COMING THICK
AND FAST TO THE TECH SECTOR. IS THAT HOW YOU WANT TO SEE COMPANIES CONTROLLING COSTS? ARE WE SEEING THEM BE IN THE -- BE THE CANARY IN THE COAL MINE IN THIS SWEEPING INTO OTHER SECTORS? ROBERT: JOB LAYOFFS ARE A TRICKY ONE. YOU SAW WITH THE ONSET OF COVID EVERY COMPANY LAID OFF TO ANY EMPLOYEES IN SIX MONTHS LATER, THEY WERE SCRAMBLING TO REHIRE AGAIN. YOU GET THESE STRANGE BOOM AND BUST CYCLES WERE COMPANIES FIRE, OFF AT MARGIN START IMPROVING AND THEN THEY START CHASING EMPLOYEES ALL OVER AGAIN. RECENT HISTORY TELLS US COMPANIES ARE LIKELY GOING TO FAR AGAIN IN THESE RACES -- IN THESE RECENT LAYOFFS. THIS SOCIALLY ACCEPTED AVERAGE, WE FOUND IT TO BE A LITTLE PECULIAR AND WAS MORE REFLECTIVE OF COMPANIES JUST TRYING TO HIDE IN THE AVERAGE AND NOT STAND OUT BY NOT FIRING BUT NOT TRYING TO STAND OUT BY OVER FIRING THEIR OVERALL WORKFORCE.
IN AGGREGATE, VOLATILITY IN AN ECONOMY IS A RISK BECAUSE IT DOESN'T ALLOW MANAGERS TO PLAN AND EXECUTE THEIR STRATEGIES AS SMOOTHLY AS THEY COULD IF THERE WAS LESS VOLATILITY. CERTAINLY IN A VERY VOLATILE MOMENT. ED: WE KNOW IT HAS BEEN A TOUGH YEAR. LOOK AT THE NASDAQ 100 AND WE ARE DOWN 80% AS OF TUESDAYS CLOSE, THE WORST YEAR SINCE 2008. IF THERE ARE ANY BRIGHT SPOTS IN THE TECHNOLOGY SECTOR, WHERE ARE THEY? ROBERT: WHAT IS REMARKABLE IS THE USAGE OF TECHNOLOGY REMAINS INCREDIBLY STRONG.
ELON REPORTING RECORD USAGE SIGN-UPS AT TWITTER, THAT'S NOT UNIQUE TO TWITTER. IT'S HAPPENING AT INSTAGRAM AND TIKTOK. THERE ARE A COUPLE OF OTHER TRANSITIONS HAPPENING -- THE CLOUD COMPUTING 1 -- DATA DOG IS A WELL-POSITIONED COMPANY MAKING MONEY AND EXPANDING MARGINS. STRIPE IS A PRIVATE COMPANY, THOSE ARE AREAS WHERE EVEN THOUGH THERE HAS BEEN A SLOWDOWN IN GROWTH AS A WHOLE, YOU ARE SEEING THE TECHNOLOGY HAS SUCH AN ADVANTAGE OVER THE INCUMBENTS OF THE GROWTH RATES OF THOSE COMPANIES HAVE REMAINED UNDER TRADING. THOSE ARE THE AREAS WE ARE MOST FOCUSED ON. ED: SOME OPTIMISM FROM ONE VOICE IN
THE INVESTMENT COMMUNITY. THANK YOU. LET'S TURN TO TWITTER WHICH SCRAPPED ITS POLICY PREVENTING THE SHARING OF FALSE OR MISLEADING INFORMATION ABOUT COVID-19. THAT WAS DONE QUIETLY, ANNOUNCED ON THE COMPANY'S WEBSITE OVER THE HOLIDAY WEEKEND HAS BEEN EFFECTIVE SINCE NOVEMBER 23. SARAH FRIER IS HERE WITH MORE DETAILS. WHY WAS THIS ANNOUNCED SO
QUIETLY? SARAH: I THINK WHAT WE ARE SEEING IS THIS COMPANY IS NOT AS FOCUSED ON BEING PROACTIVE IN ITS COMMUNICATIONS EXCEPT DIRECTLY THROUGH ELON MUSK. HE IS THE ONE TWEETING OUT WHAT IS HAPPENING WITH TWITTER, EXPLAINING HIS THOUGHTS, ALMOST STREAM OF CONSCIOUSNESS TO THE PUBLIC. WHEN IT COMES TO THESE POLICY CHANGES, WE MIGHT NOT SEE A BROADER ANNOUNCEMENT LIKE WE HAVE AN PAST. THEY ARE NOT STAFFED TO DO IT. THEY LAID OFF THE ENTIRE COMMUNICATIONS STAFF. THIS IS A PRIVATE COMPANY RIGHT NOW AND WE AS REPORTERS HAVE TO ASK QUESTIONS OF OUR SOURCES, AND PAY ATTENTION TO WHAT THE LEADERSHIP SAYS. CAROLINE:
DRAMATICALLY REDUCING THE SIZE OF THE TEAM TACKLING CHILD SEXUAL EXPLOITATION. YOUR TEAM DRIVING THAT HOME. TALK TO US WHERE HE IS THEREFORE FOCUSED. IF HE'S NOT FOCUSED ON SOME OF THE CONTENT WHICH MANY BRANDS ARE WORRIED ABOUT, HE SEEMS TO BE WORRIED ABOUT WHERE PEOPLE ARE SITTING IN THE OFFICE AND HOW THEY ARE COMING TOGETHER.
SARAH: I THINK HE IS ABSOLUTE CONCERNED WITH MAKING SURE THERE IS A SENSE OF MOMENTUM, A SENSE OF ALL THE ENGINEERS TRYING TO BUILD THE NEXT ITERATION OF THE PRODUCT HE WANTS TO LAUNCH. A NEW FORM OF VERIFICATION VERY SOON AND HE'S CROSSING HIS FINGERS AND DOESN'T CAUSE THE PUBLIC DISASTERS LAST TIME IT HAPPENED. I THINK HE IS GETTING A TRIAL BY FIRE IN UNDERSTANDING HOW SOCIAL MEDIA BUSINESSES WORK. WE SAW HIM TALK IN THE LAST COUPLE OF DAYS ABOUT THE APP STORES AND HOW HE THINKS THEY ARE UNFAIR. THIS IS A MOMENT WHERE THE MODERATION STUFF WE WILL SEE FALL BY THE WAYSIDE A BIT AS HE TRIES TO PROVE HE CAN GROW TWITTER. ED: I WANT TO BRING YOU SOME HEADLINERS -- OATH KEEPERS LEADER RHODES WAS CONVICTED OF THE JANUARY 6 SEDITION CHARGE.
THE JURY HAS BEEN CONSIDERING THE CHARGE AGAINST THAT MILITIA GROUP AND ITS LEADER FOR A NUMBER OF WEEKS, BUT THAT IS THE HEADLINE CROSSING THE BLOOMBERG TERMINAL. WE WILL BRING YOU MORE AS WE GET THAT. INTERESTINGLY, MORE HEADLINES CROSSING THE BLOOMBERG -- TWITTERS FORMER TRUST AND SAFETY BOSS SPEAKING PUBLICLY SAYING HE FEARS NOT ENOUGH TWITTER EMPLOYEES LEFT TO POLICE CONTENT. THAT'S COMING FROM SUMMIT WHO KNEW THE TRUST AND SAFETY SIDE WELL. THAT IS CONCERNING. SARAH: POLICE IS A WEIRD WAY TO PUT IT. IT'S ABOUT HAVING THE EXPERTISE TO KNOW WHERE TO DRAW THE LINE BETWEEN SOMETHING BEING AN OPINION OR A NECESSARY THING THEY WANT TO SAY TO THEIR AUDIENCE VERSUS SOMETHING THAT COULD BE HARMFUL, THAT COULD INSTIGATE VIOLENCE, THAT COULD CAUSE ISSUES.
WHEN YOU DON'T HAVE SUBJECT MATTER EXPERTS IN VARIOUS AREAS OF CONTENT, YOU MAY NOT BE ABLE TO MAKE THAT DETERMINATION. TWITTER, BY CUTTING A LOT OF IT STAFF, WE REPORTED TODAY THE TEAM NETWORKS ON CHILD EXPLOITATION CONTENT, HIGHLY SPECIFIC EXPERTISE TO BE ABLE TO WEED THAT STUFF OUT HAS BEEN CUT IN HALF. YOU WILL END UP WITH A LOT OF TROUBLE AND ONE THING WE REPORTED, AND IN FACT YOU HELPED US REPORT THE STORY -- THE TEAM WORKING WITH GOVERNMENTS TRYING TO UNDERSTAND WHAT TO DO ABOUT CONTENT TAKEDOWN REQUESTS FROM CERTAIN GOVERNMENTS OR ASKING FOR DATA ON USERS, THAT TEAM HAS BEEN DECIMATED. THEY ARE GOING TO BE IN A TOUGH SPOT WITH A LOT OF THESE VERY DIFFICULT DECISIONS GOING FORWARD. CAROLINE: THANK YOU SO MUCH FOR ALL OF THAT. WE WENT TO BRING YOU BACK TO SOME OF THE BREAKING NEWS WE JUST HEARD -- WE UNDERSTAND THE OATH KEEPER LEADER RHODES HAS BEEN CONVICTED OF THE JANUARY 6 SEDITIOUS CHARGE.
A JURY WAS WEIGHING IN NOT ONLY AGAINST STEWART RHODES, BUT OTHER DEFENDANTS. THIS IS THE FIRST PERSON CONVICTED OF SEDITIOUS CONSPIRACY SINCE 19 65. THE CHARGE CALLS FOR UP TO 20 YEARS BEHIND BARS AND FIVE DEFENDANTS FACE SEVERAL OTHER CHARGES. WE WILL BRING YOU ALL THE BREAKING NEWS REGARDING THE JANUARY 6 IMPLICATIONS. COMING UP, WE WANT TO BE TALKING ABOUT THE FALL OF FTX. WAS IT DUE TO TOO MUCH CENTRALIZATION? CAROLINE: LET'S GET TO THOSE ALL-IMPORTANT CRYPTO MARKETS.
WORRIES ABOUT CONTAGION FROM THE IMPLOSION OF FTX STILL HANGS OVER THE DIGITAL ASSET CLASS. NEVERTHELESS, THEY ARE PUSHING HIGHER ON TUESDAY. ED: WE FOUND A LITTLE MOMENTUM ACROSS A NUMBER OF DIGITAL TOKENS. THE MAIN SESSION, WE SPILL OVER INTO THE FOLLOWING DAY, FINDING OUR FEET.
I WANT TO GET STRAIGHT TO THE BLOOMBERG GUARANTEE CRYPTO INDEX. IT TRADES SIMILAR TO THE EQUITY MARKETS IN AN EQUITY INDEX. IT HAS AN OPENING AND CLOSING POINT AND IT IS WEIGHTED BASED ON THE BIGGEST DIGITAL TOKENS BY MARKET VALUE. LARGELY BITCOIN, ETHER, TETHER. BUT SINCE THE ORIGINAL TWEET
WHEN WE FIRST HAD THOSE REVELATIONS RAISED ABOUT FTX, WE ARE DOWN MORE THAN 25% ACROSS THE BASKET OF CRYPTOCURRENCIES. THE QUESTION POSED IN THE STORY TODAY IS AS MORE AND MORE OF THE FALLOUT BECOMES UNVEILED, AND WHICH DIRECTION DOES THIS INDEX GO? IT STILL HAS SOME DOWNWARD MOMENTUM AND IT LOOKS LIKE WE WILL HAVE SOMETHING SERIOUS TO SNAP OUT OF THIS DOWNWARD TREND AND THIS BROUGHT A BASKET OF CRYPTO. CAROLINE: LET'S GET MORE INTO THE FTX COLLAPSE. THERE HAS BEEN MUCH HANDWRINGING . IT'S GOT A WIDE IMPACT ON THE GROWTH OF CRYPTO AT LARGE. MANY HAVE TRIED TO HIGHLIGHT THAT THEIR DEMISE UNDERPINS THE FACT THAT DECENTRALIZED FINANCE IS NEEDED BECAUSE FTX WAS TO CENTRALIZED.
THIS INTO TIM DRAPER AND WHAT HE HAD TO SAY ABOUT IT. >> FTX IS VERY CENTRALIZED. IT WAS CENTRAL -- CENTERED AROUND THIS ONE GUY. WHEN YOU CENTRALIZED ANYTHING, BAD THINGS CAN HAPPEN. CAROLINE: LET'S TALK ABOUT ALL OF THIS WITH HER NEXT GUEST OF THE COFOUNDER OF THE COLLECTIVE INTELLIGENCE PROJECT.
UNLIKE TIM DRAPER, DON'T THINK CENTRALIZATION IS INHERENTLY BAD. BUT IN YOUR OWN FILING FOR YOUR PROJECT, YOU DID TAKE SOME READ GRANTED FUNDS FROM THE FTX FUTURE FUND. THEY'VE GIVEN MONEY TO A LOT OF ORGANIZATIONS. YOU ARE AN EXPERIMENT RESEARCH
ORGANIZATION. TELL US WHY THE FUTURE FUND WOULD HAVE INTEREST GETTING TO DEMOCRATIC GOVERNANCE THAT YOU STUDY. >> THERE IS A LOT BETWEEN THAT QUESTION ABOUT CENTRALIZATION AND DECENTRALIZATION. THERE IS SOMETHING ABOUT DEMOCRATIC AFFECTIVE GOVERNANCE AND SELF DETERMINATION ENABLED BY THESE TECHNOLOGIES THAT WE ARE ABLE TO DO MORE DECENTRALIZED, LESS INTERVENTION ORIENTED STRUCTURES AND WE WERE EXPERIMENTING WITH DEMOCRACY AND TECHNOLOGY AND GOT GRANTED FUNDS FROM FTX IN THAT PROCESS. IT SPEAKS TO THIS QUESTION WHETHER CENTRALIZATION IS GOOD OR BAD.
ACCOUNTABILITY IS A BIG PART OF THE GOAL IN DECENTRALIZATION AND CENTRALIZATION AND IT'S OFTEN MORE FOCUSED ON THE DEGREE AS OPPOSED TO THE TYPE OF DECENTRALIZATION. SO YOU RAN THE QUOTE OF TIM DRAPER SAYING FTX IS TO CENTRALIZED. BUT COMPARING THAT TO BANKS, THEY ARE VERY CENTRALIZED AND REGULATED AS SUCH. IT'S QUITE COMPLICATED TO CALL SOMETHING PURELY CENTRALIZED AND SAY ALL OF ITS FAULTS ARE DOWN TO THAT. ED: WE'VE HAD THIS DEBATE OVER CENTRALIZED AND DECENTRALIZED, BUT YOU'VE INTRODUCED US TO A NEW TERM, POLY CENTRALISM.
WHAT IS THAT? DIVYA: IT IS A BIT OF AN ACADEMIC TERM. BUT WE DON'T WANT EITHER DECENTRALIZATION OR CENTRALIZATION. THE TERM IS A BIT WHAT IT SOUNDS LIKE -- HAVING MANY CENTERS. THE PROBLEM IS CENTRALIZED SYSTEMS OFTEN CARRY A GRAIN OF DECENTRALIZATION IN THEM. THE PROTOCOL THAT UNDERPINS A LOT OF COMMUNE OCCASION CAPABILITIES OF THE INTERNET IS DECENTRALIZED AND HAS-BEENS SIXTH HAT -- HAS BEEN SUCCESSFULLY DECENTRALIZED. BUT THAT HAPPENED THROUGH THIS COMPLEX POLYCENTRIC SYSTEM OF REGULATORY AGENCIES AND PRIVATE COMPANIES THAT SPRUNG UP AND ALLOWED FOR THAT TO STAY IN PLACE.
HOWEVER, THE INTERNET IS NOT DECENTRALIZED. MOST OF US SPEND OUR TIME ON THE INTERNET ON FIVE WEBSITES. HOW DID THAT HAPPEN? MANY OF THE LAYERS CENTRALIZED BECAUSE THERE WAS NO CLEAR POLYCENTRIC STRUCTURE KEEPING THEM DECENTRALIZED. DECENTRALIZATION TENDS TO CENTRALIZE WITHOUT CHECKS AND BALANCES. INSTEAD OF ALLOWING CHAOTIC CENTRALIZATION FROM CHAOTIC DECENTRALIZATION, YOU HAVE CHECKS AND BALANCES.
THIS UNDERPINS FEDERALISM AND THE U.S. GOVERNMENT AND THESE THINGS THAT SAY THERE SHOULD BE SOMETHING BETWEEN THE LOCAL AND FEDERAL. CAROLINE: IS IT REGULATION THAT HELPS WITH THE TRANSPARENCY WITH INEVITABLY CENTRALIZED PARTS? HOW DO YOU GET TO THE UTOPIA OF POLY CENTRALISM? DO YOU NEED FUNDAMENTAL RULES IN PLACE TO DRIVE IT? DIVYA: THAT'S A GREAT QUESTION.
REGULATION IS ONE THING, BUT MANY SUCCESSFUL POLYCENTRIC SYSTEMS WHETHER YOU THINK OF IT -- WIKIPEDIA HAS A POLYCENTRIC SYSTEM AND THE WORD COMES FROM A NOBEL PRIZE WINNER WHO LOOKS AT SELF-GOVERNING SYSTEMS, NOT REGULATION OR STATE RUN SYSTEMS AT ALL. A LOT OF THIS IS NOT JUST RULES BUT CAN YOU HAVE DIFFERENT KINDS OF INSTITUTIONS? THAT'S HOW THE STANDARD-SETTING PROCESS OF THE INTERNET CURRENTLY RUNS. POLY CENTRALISM WON'T WORK IF IT IS JUST RULES TOP DOWN. THE CRYPTO INDUSTRY, WHERE IT GOES NEXT IS UNCLEAR, BUT TO SUCCEED, IT WILL NEED TO DEVELOP THIS POLYCENTRIC ABILITY TO NOT JUST INVITE REGULATION BUT HAVE DIFFERENT GROUPS AT THE TABLE. OTHERWISE A LOT OF THESE TEND TOWARD CENTRALIZATION OR PLUTOCRACY. ED: ED: TIME FOR TALKING TECH -- TODAY A VENTURE CAPITAL ROUNDUP STARTING WITH FARM ROBOTS.
THAT IS WHAT CLEVELAND AVENUE, AVC FIRM FOUNDED BY A FORMER MCDONALD'S CEO, LEADING A A FUNDING ROUND FOR THE AGRICULTURE TECH START UP. THIS, AS FARMERS INCREASINGLY RELY ON TECHNOLOGY TO PRODUCE ENOUGH FOOD FOR A GROWING POPULATION WHILE ALSO FACING A SHORTAGE OF WORK. WHILE THE VENTURE MARKET IS IN THE MIDDLE OF A DOWNTURN, THERE'S PLENTY OF EMERGING PLAYERS.
THE SEED STARTS HAS LAUNCHED A PLATFORM ALONG WITH A SWISS BASED HOLDING COMPANY. THE GOAL TO FARM AS MUCH AS $500 MILLION OF NEW FUNDING INTO EMERGING AND DIVERSE VC MANAGERS AND AFRICA, ASIA, THE MIDDLE EAST, AND CENTRAL EASTERN EUROPE. STAYING IN THE WORLD OF GLOBAL VC'S, GLOBAL EVOLUTION IS SCOUTING FOR MEASURES FROM ASIA AND THE MIDDLE EAST. THEY'VE RAISED 500 MILLION DOLLARS WITH A TARGET OF $750 MILLION.
CAROLINE: LOVING HOW YOU FOLLOW THE MONEY. THAT EIGHT OF U.S. CEO DISCUSSING LAYOFFS, DISCUSSING THE CHIP SECTOR AND COMPETITION. THIS IS BLOOMBERG. ♪ CAROLINE: WELCOME BACK TO BLOOMBERG TECHNOLOGY. I'M CAROLINE HYDE. THE COMPANY ANNOUNCING IT WILL
BUILD ITS OWN CHIPS FOR NATIVE YES CUSTOMERS. EMILY CHANG IS IN SAN FRANCISCO JOINING US WITH MORE. EMILY: JOINING US FROM REINVENT IN LAS VEGAS IS ADAMS LIPSKY. THE CONFERENCE OFF TO A GOOD START. YOU HAVE A PRONOUNCED ECONOMIC DOWNTURN HAPPENING IN LAYOFFS HAPPENING ACROSS THE BOARD, INCLUDING AT AMAZON BUT RECORD CYBER MONDAY SALES. WHAT'S THE MAIN MESSAGE YOU
WANT CUSTOMERS TO TAKE FROM REINVENT THIS YEAR? >> GREAT TO SEE YOU, EMILY. WE ARE SO EXCITED TO BE HERE IN LAS VEGAS AT OUR 11TH REINVENT WITH 50,000 CUSTOMERS AND PARTNERS AND 300,000 REGISTERED ROUND THE WORLD FOR THE VIRTUAL PART OF THE EVENT. THE BIGGEST MESSAGE HERE IS COMPANIES AND ALL SORTS OF ORGANIZATIONS CONTINUE TO TRANSFORM THEMSELVES USING THE CLOUD. PARTICULARLY IN TIMES OF ECONOMIC UNCERTAINTY, THAT'S THE BEST TIME TO LEAN AND BECAUSE THE CLOUD IS THE MOST EFFICIENT PLACE TO BE RUNNING COST SAVINGS, AT LEAST 30% FOR ENTERPRISES CLOSE TO THE CLOUD. THE CLOUD IS THE PLACE TO BE FLEXIBLE.
YOU CAN GROW AND SHRINK YOUR CAPACITY AT WILL AND IT'S A PLACE TO INNOVATE AND DO MORE WITH FEWER RESOURCES. PRECISELY BECAUSE OF THE ECONOMIC UNCERTAINTY AND NOT DESPITE IT, WE SEE A LOT OF COMPANIES LEANING IN. EMILY: AMAZON HAS REINVENTED CLOUD TECHNOLOGY.
WHAT'S THE NEXT ERA OF REINVENTION LOOK LIKE? ADAM: I THINK WE ARE VERY EARLY IN CLOUD ADOPTION DESPITE THE FACT AWS IS A SIGNIFICANT LEADER IN THE CLOUD SPACE. THEY DID PIONEER IN 2006. DEPENDING ON WHAT STUDY YOU LOOK AT, 10% OF I.T. WORK HAS MOVED TO THE CLOUD AND THAT IS A LOT OF DOLLARS BECAUSE THERE'S A LOT OF I.T.
IN THE WORLD. IT IS STILL ONLY A SMALL PERCENTAGE AND WE BELIEVE IN THE FULLNESS OF TIME, MOST I.T. WILL MOVE TO THE CLOUD.
WE ARE SEEING COMPANIES LEANING INCOME A LOT OF ACCELERATION HAPPENING IN TREMENDOUS INTEREST IN CONTINUING TO IMPROVE PRICE-PERFORMANCE FOR CUSTOMERS INTERESTED IN DATA, ANALYTICS AND INTEREST IN SPECIALIZED SOLUTIONS FOR DIFFERENT INDUSTRIES. EMILY: IF THIS IS INDEED A RECESSION, IT'S THE FIRST FOUR EIGHT OF U.S. AS A COMPANY WITHIN A COMPANY. AMAZON HAS SEEN THIS BEFORE BUT AWS HASN'T. YOU HAVE BIG COMPANY SALES BUT ALSO BIG COMPANY PROBLEMS.
WHERE ARE YOU CUTTING AND WIRE -- WHERE ARE YOU PAUSING AND WHY? ADAM: A DEBBIE U.S. WAS LAUNCHED IN 2006. WE WERE IN BUSINESS FOR THE GREAT RECESSION IN 2008, 2009. WE DIDN'T KNOW THEN IF THAT WOULD HELP US OR HURT US AND IT TURNS OUT I THINK IT WAS A SIGNIFICANT TAILWIND BECAUSE A LOT OF COMPANIES THAT DID NOT HAVE THE MONEY FOR CAPITAL EXPENDITURE WERE ABLE TO MOVE TO THE CLOUD AND GET MOVING QUICKLY WITH JUST OPERATING EXPENSE AND BEING ABLE TO TURN CAPACITY ON AND OFF. I DON'T KNOW HOW THAT WILL IMPACT OUR CUSTOMERS, BUT THERE IS A REASONABLE HYPOTHESIS THAT A LOT OF COMPANIES COULD TURN TO THE CLOUD IN THE CASE OF A RECESSION AND WE ARE FOCUSED ON HELPING COMPANIES BE EXTREMELY COST-EFFECTIVE IN GOOD TIMES, IN LEAN TIMES, WE WANT CUSTOMERS TO SPEND AS LITTLE AS THEY POSSIBLY CAN FOR ANY PARTICULAR UNIT OF WORK AND THEY WILL BRING MORE WORKLOADS TO THE CLOUD IF IT MAKES SENSE. EMILY:
ANDY JAFFE HAS SAID CUTS ARE GOING TO CONTINUE INTO NEXT YEAR AND THE PLAN IS TO LAY OFF THOUSANDS OF CORPORATE EMPLOYEES. HOW MANY OF THOSE EMPLOYEES ARE COMING FROM WITHIN A WS? IS THERE A HIRING FREEZE? HOW ARE YOU CHANGING YOUR SPENDING STRATEGY? ADAM: WE HAVE TAKEN A PAUSE ON HIRING NEW EMPLOYEES. WE'VE EXPANDED TREMENDOUSLY OVER THE PAST SEVERAL YEARS.
VERY HIGH EMPLOYEE GROWTH FOR A NUMBER OF YEARS IN A ROW. TO SUPPORT THE THINGS OUR CUSTOMERS WANT TO DO. WE HAD A SIGNIFICANT AMOUNT OF RESOURCES AROUND THE COUNTRY. WE ARE WELL-POSITIONED RIGHT NOW TO MAKE SURE WE ARE BEING EFFICIENT WITH ALL THE PEOPLE WE HAVE HIRED AND WE WILL HAVE ALL THE CAPACITY OF PEOPLE WE NEED RIGHT NOW TO GET A LOT OF THINGS DONE FOR OUR CUSTOMERS. WE ARE GOING TO TAKE THE PAUSE
BUT I STILL THINK WE WILL BE ABLE TO DELIVER. EMILY: ON THE LAST CALL, YOU SAID THE GROWTH RATE OF AWS TRAILED OFF IN Q3. HAS THAT CONTINUED INTO Q4? YOU MENTIONED FINANCIAL SERVICES, CRYPTO, MORTGAGES -- ARE THOSE STILL THE WEAKER BUSINESS LINES AND IS ANYTHING BUCKING THE TREND? ADAM: AS WE SAT ON THE LAST CALL, THERE IS A MIX OF HEADWINDS AND TAILWINDS. WE DO SEE CUSTOMERS TIGHTENING THEIR BELTS AND GETTING EFFICIENT WITH THEIR CLOUD SPACE AND FRANKLY THEY SHOULD BE DOING THAT ALL THE TIME.
BUT I THINK MORE OF THEM ARE DOING IT RIGHT NOW. AT THE SAME TIME, YOU SEE OTHER CUSTOMERS LEANING IN BECAUSE OF THE COST EFFICIENCIES AND FLEXIBILITY IN THEIR OVERALL USAGE. SO I THINK YOU SEE A MIX OF THESE THINGS. REGARDLESS OF WHATEVER HAPPENS IN THE SHORT TERM, REALLY THE SECULAR TREND OF VERY STRONG, LONG-TERM ADOPTION IS GOING TO CONTINUE.
EMILY: DATA CENTERS CONSUME A LOT OF WATER AND AMAZON WEB SERVICES HAS PROMISES -- HAS PROMISED TO REPLACE THE NUMBER IT IT CONSUMES, BUT YOU HAVE NOT DISCLOSED THE AMOUNT OF WATER A DEBBIE U.S. HAS USED. WHY NOT RELEASE THAT NUMBER WHEN THE INDUSTRY AND STAKEHOLDERS WANT MORE TRANSPARENCY? ADAM: WE ARE A LEADER IN SUSTAINABILITY OVERALL. WE'VE RELEASED A LOT OF STATISTICS AND PLEDGED TO BE NET ZERO CARBON. WE SAID WE ARE GOING TO BE 100%
RENEWABLE ENERGY BY 2025. THERE'S LOTS OF STATS WE HAVE RELEASED AND WE DID MAKE A PLEDGE TO BE WATER POSITIVE BY 2030, WHICH MEANS WE ARE GOING TO RETURN MORE WATER TO THE COMMUNITIES THAN WE USE IN OUR DIRECT OPERATIONS AND WE RELEASED OUR ACTUAL ENERGY EFFICIENCY USAGE STATS. WE CONCERN -- WE CONSUMED -- THAT'S NOT A STAT EVERY OTHER CLOUD PROVIDER RELEASES AND THOSE WHO DO DO NOT HAVE AS GOOD PERFORMANCE AS WE HAVE. WE ARE THE LEADER IN THE CLOUD SPACE WITH THAT AND WE WILL CONTINUE TO RELEASE MORE DATA AS THE MONTH AND YEARS GO ON. IT WILL BE GOOD TRANSPARENCY FROM A DEBBIE U.S. AND MOST IMPORTANTLY, WE WILL CONTINUE TO BE A LEADER AND BUILD TOWARD A SUSTAINABLE FUTURE, INCLUDING WITH WATER.
EMILY: YOU ARE CONTINUING TO DEVELOP YOUR OWN CHIP TECHNOLOGY AND YOU ARE PROMOTING IT AT REINVENTED AND IT DOES MAKE A LOT OF SENSE. I WONDER HOW IT IMPACTS YOUR RELATIONSHIPS WITH SUPPLIERS. WHY WOULDN'T NVIDIA, INTEL OR A MD GIVE BETTER PRICES WERE SUPPLY TO OTHER COMPETITORS? YOU'VE GOT YOUR OWN SILICON IN THE MAKING. ADAM: WE HAVE GREAT RELATIONSHIPS WITH ALL OF THOSE CHIP MANUFACTURERS, INCLUDING THE ONES YOU MENTIONED. WE ARE GOING TO CONTINUE TO HAVE THOSE GREAT RELATIONSHIPS AND SIGN LONG-TERM DEALS WITH MANY OF THOSE SUPPLIERS. A DEBBIE U.S. IS LARGE NOW. LAST QUARTER, WE WERE AND $82
BILLION A YEAR RUN RATE AND WE HAVE TREMENDOUS CAPACITY NEEDS AROUND THE WORLD. OUR CUSTOMERS HAVE A VAST HETEROGENEITY OF DIFFERENT NEEDS AND THERE ARE LOTS OF USE CASES FOR THOSE CHIP VENDORS TO BE WORKING WITH US TO SERVICE CUSTOMERS. AND THERE WILL BE INCREASING USE CASES, A BIG-TIME UTILITY FOR OUR OWN CUSTOM-DESIGNED CHIPS AS WELL. EMILY: ADAMSON LIPSKY JOINING US FROM REINVENT IN LAS VEGAS.
GOOD LUCK WITH THE REST OF THE CONFERENCE. ED: COMING UP, THE PLOT THICKENS CAROLINE: BLOCKFI, WHICH IS GOING THROUGH ITS OWN BANKRUPTCY RIGHT NOW IS LOOKING TO COLLECT MONEY FROM ALAMEDA RESEARCH. SONALI BASAK IS HERE TO EXPLAIN THE DISPUTE AND HUGE AMOUNT OF DOCUMENTS YOU'VE BEEN WAITING THROUGH. SONALI: THERE HAVE BEEN A LOT OF LEGAL DOCUMENTS. LET'S BRING YOU THROUGH THIS
FOR A SECOND BECAUSE YOU HAVE MONEY BLOCKFI WAS OWED FROM ALAMEDA. THEN FTX HAD A CREDIT LINE TO BLOCKFI. THEY ARE OWED 275 MILLION DOLLARS. THEY HAD A CREDIT LINE IN WHICH BLOCKFI WAS NOT ABLE TO GET THE ENTIRE EXTENT OF THEIR MONEY. WHEN IT COMES TO THE MANY THEY LENT TO ALAMEDA, INTERESTINGLY, BLOCKFI IS SEEKING THE COLLATERAL AND DOING IT IN THE MEANS OF A SEPARATE REGULATORY FILING. I'M HOLDING THE LAWSUIT AGAINST
EMERGENT FIDELITY TECHNOLOGIES. THAT IS THE COMPANY THAT BOUGHT THE ROBINHOOD SHARES. THAT IS WHAT MAKES THIS INTERESTING. ALSO DEFENDING IN THE LAWSUIT IS ED AND F MAN, WHICH HAS HELD THE COLLATERAL BEING DISPUTED HERE. ACCORDING TO THE FINANCIAL TIMES WHICH SAW THE DOCUMENTS, THE COLLATERAL IN DISPUTE IS ROBINHOOD SHARES. CAROLINE:
THEY WANT THEM BACK? SONALI: THIS IS WHAT WAS LIQUID IN THE SAM BANKMAN-FRIED EMPIRE. THAT DRAWS A LOT OF QUESTIONS IN TERMS OF HOW BLOCKFI GETS PAID AND FRANKLY HOW OTHER PEOPLE GET PAID BECAUSE BLOCKFI WANTS TO GET PAID TO PAY EVERYONE ELSE. CAROLINE: THIS IS DEEPLY CONFUSING. YOU ARE HEARING FROM LAWYERS HOW LIKELY THEY ARE TO GET A SIGNIFICANT AMOUNT OF THE MONEY SONALI: BACK. SONALI:IT'S INTERESTING BECAUSE $680 MILLION IN THE SCOPE OF BILLIONS OF DOLLARS IS A SIGNIFICANT AMOUNT OF MONEY WHEN YOU LOOK AT THE REST OF WHAT BLOCKFI'S CREDITORS ARE OWED HERE. A LOT OF CREDITORS ARE OWED $720 MILLION OR SO.
650 WOULD HELP ON THAT. I SPENT ANOTHER DAY WITH THE BANKRUPTCY EXPERTS AND LAWYERS AND SOMETHING INTERESTING THEY TOLD ME IS ONE THING THAT HAS NOT HAPPENED IS CREDITOR COMMITTEES GETTING TOGETHER WHICH COULD BECOME INTERESTING. IN THIS, YOU WATCHING NORMAL BANKRUPTCY PLAN ON WALL STREET, YOU SEE HEDGE FUNDS OR PRIVATE EQUITY FIRMS BAND TOGETHER TO GET THEIR MONEY BACK OR FIGHT AGAINST EACH OTHER. BUT BECAUSE THE DEPOSITORS ARE KEY, YOU MIGHT SEE MORE ALIGNING OF INTEREST BETWEEN THESE INSTITUTIONAL INVESTORS AND THE CUSTOMERS WORKING TO GET THEIR MONEY BACK. CAROLINE: I HAVE A FEELING THIS WILL GO ON AND ON. THERE IS A LOT OF MONEY BEING PASSED AROUND SOME VERY INTERCONNECTED IT PARTS.
LET'S SWITCH GEARS AND TALK ABOUT LAYOFFS BECAUSE AMC NETWORKS, THE NETWORK RESPONSIBLE FOR SHOWS LIKE BREAKING BAD SAYS IT'S PLANNING TO LAY OFF 20% OF ITS U.S. WORKFORCE. THIS FOLLOWS THAT ANNOUNCEMENT EARLIER TUESDAY THAT ITS CHIEF EXECUTIVE HAS STEPPED DOWN LESS THAN THREE MONTHS AFTER TAKING THE REINS. IT'S BECOME THE LATEST MEDIA COMPANY ROCKED BY LOSS OF VIEWERS. COMING UP, WE WILL GET DIGGING DEEP INTO THE CHIP SECTOR INTO CHINESE EXPOSURE OF LAM RESEARCH. THE CHANGING SOME CONDUCTOR LANDSCAPE AMID GEOPOLITICAL -- THIS IS BLOOMBERG.
ED: NOW TO THE FAST-CHANGING POWER STRUGGLES IN THE SEMICONDUCTOR CHIP INDUSTRY. MAJOR COMPETE LIKE APPLE AND AMAZON OR JUMP STARTING PLANS TO MAKE IN-HOUSE CHIPS FOR THEIR PRODUCTS. AS GEO LITTLE TENSIONS GET IN THE WAY OF MANUFACTURING. COVID LOCKDOWNS AND WORKER PROTESTS AND APPLES KEY ASSEMBLY PANEL -- PLANT IN CHINA HAVE PUSHED BACK TIMES FOR THE IPHONE 14 AS MUCH AS 37 DAYS. NOW WHITE HOUSE TRADE RESTRICTIONS WITH CHINA ARE CREATING MORE HEADACHES FOR CHIPMAKERS AND CHIP EQUIPMENT MAKERS. LAM RESEARCH SAYS IT COULD LOSE NEARLY HALF ITS CHINA REVENUE BECAUSE OF THOSE NEW POLICIES.
FOR MORE, WE BRING IN THE CFO, DOUG BETTINGER AT THE CREDIT SUISSE TECHNOLOGY CONFERENCE IN ARIZONA. HOW DO YOU NAVIGATE A WORLD WHERE THAT U.S., YOUR HOME COUNTRY, HAS POLICIES IN PLACE THAT PREVENT YOU SELLING TO CHINA, YOUR BIGGEST POTENTIAL MARKET? DOUG: WHAT I OBSERVED IS THERE WERE SOME TECHNOLOGY LINES THAT WERE DRAWN. SOME OF THE MOST ADVANCED MANUFACTURING PROCESS CAPABILITY NOW REQUIRES A LICENSE TO SHIP TO CHINA WHICH PRESUMPTIVELY IS NOT GOING TO BE NOT GRANTED. WHAT THAT HAS DONE IS AS WE LOOK INTO NEXT YEAR, IT HAS IMPACTED $2 BILLION TO $2.5 BILLION OF REVENUE. REGULATIONS ARE WHAT THEY ARE,
YOU HAVE TO COMPLY WITH THEM AT THE END OF THE DAY AND THAT'S WHAT WE ARE DOING. WE JUST FINISHED THE BEST QUARTER FINANCIALLY IN OUR 42-YEAR-OLD COMPANY, NORTH OF $45 BILLION IN REVENUE. WE ARE SEEING STRENGTH CONTINUING THEIR IN SPITE OF THE FACT WE HAVE TWO DEAL WITH THESE RESTRICTIONS IN TERMS OF CERTAIN CUSTOMERS AND TECHNOLOGIES IN CHINA. ED: THERE IS SOME EVIDENCE SOME NAMES HAVE BEEN ABLE TO BE A BIT NIMBLE. WERE THE RESTRICTIONS AND LICENSES AS HARD TO COME BY AS YOU FEARED? DOUG: WE KNEW THIS WAS COMING. WE'VE BEEN INTERACTING WITH THE
DEPARTMENT OF COMMERCE RELATIVE TO HOW THE INDUSTRY WORKS, HOW WE WERE POSITIONED IN THE INDUSTRY AND HOW THE EQUIPMENT SECTOR SUPPORTS THE CUSTOMER BASE. IT WAS AN EDUCATED PROCESS AND WE UNDERSTOOD IT WAS COMING AND WE WERE PREPARED FOR IT. CAROLINE: DO YOU UNDERSTAND MORE COULD BE COMING? TOUGHER RULES? DOUG: AS WE SIT HERE TODAY, I DON'T SEE ANYTHING INCREMENTAL THAN WHAT HAS ALREADY BEEN COMMUNICATED AND OUT THERE. I THINK WE ARE WHERE WE ARE AND
IT IS PART OF JUST DOING BUSINESS. CHINA IS GOING TO BE A LITTLE DIFFERENT BUT THE BROAD BUSINESS IS STILL PRETTY STRONG. WE ARE DOING OUR BEST TO -- TO SUPPORT OUR CUSTOMERS NO MATTER WHERE THEY ARE GEOGRAPHICALLY. CAROLINE: YOU REMAIN COMMITTED TO CHINA, AS INVESTED GOING FORWARD? DOUG: WE STILL HAVE A LOT OF CUSTOMERS WE ARE SHIPPING TO IN CHINA.
SOME OF THOSE CUSTOMERS THEY HAVE PROCESS TECHNOLOGY THAT DOES NOT NEED THE LICENSE, SO WE STILL DO BUSINESS WITH THEM AND WE ARE ABSOLUTELY COMMITTED TO THE CHINA REGION AND EVERYWHERE OUR CUSTOMERS ARE BUYING EQUIPMENT. ED: IF YOU SAW THIS COMING, IS THAT 2.5 BILLION, COULD THAT PICTURE BE BRIGHTER THAN THAT? DOUG: WHAT ENDED UP HAPPENING IS TECHNOLOGY LINES WERE DRAWN AND THE MOST ADVANCED TECHNOLOGY REQUIRES A LICENSE WHICH PRESUMPTIVELY WON'T BE GRANTED. IT'S POSSIBLE SOME OF THESE CUSTOMERS WILL INVEST IN NODES THAT DON'T REQUIRES A LICENSE.
I THINK THOSE DISCUSSIONS AND EVALUATIONS ARE UNDERWAY. IF THERE IS SOME LEVEL OF SUCCESS THERE, IT WON'T BE AS BIG AS WHAT WE DESCRIBED, BUT THE REST I HAVE IS $2.5 BILLION. CAROLINE: I'M INTERESTED ABOUT CONSUMER DEMAND, PARTICULATE FOR CONSUMER ELECTRONICS. HOW IS THAT AFFECTING YOUR BUSINESS RIGHT NOW? WHAT ARE THE HEADWINDS THERE? DOUG: THIS MY CONDUCTOR INDUSTRY I DESCRIBED AS A GROWTH INDUSTRY. BETWEEN PRE-COVID AND WHERE WE ARE AT TODAY FROM WINNIE -- 2019 TO 2022, IT'S GROWN 20% AND THE SPENDING ON EQUIPMENT HAS GROWN BY NEARLY 90%. THOSE ARE THE TRENDS I SEE CONTINUING INTO THE FUTURE. BUT IT IS A CYCLICAL INDUSTRY.
AS WE EVALUATE WHAT NEXT YEAR LOOKS LIKE, AS WE TALKED TO OUR CUSTOMERS AND UNDERSTAND WITH THEIR PLANS ARE FOR NEXT YEAR, THERE WILL BE A REDUCTION IN SPENDING OF 220%. IT IS A GROWTH CYCLICAL INDUSTRY AND WE HAVE TO MANAGE THE COMPANY WHEN IT HAPPENS. WE'VE BEEN DOING IT A LONG TIME AND WILL MANAGE IT ACCORDINGLY GOING INTO NEXT YEAR. BUT THAT IS NOT WHAT GETS ME EXCITED.
THERE WAS A STUDY THAT TALKED ABOUT A TRILLION DOLLARS SEMICONDUCTOR INDUSTRY BY THE END OF THE DECADE. THAT IS EXCITING AND WHAT I SEE HAPPENING IN THIS INDUSTRY. THE SEMI CONDUCTOR INDUSTRY IS ENABLING ALL ASPECTS OF SIX SITE -- OF SOCIETY. WHERE THE PLUMBING UNDERNEATH MAKING THE DATA USEFUL AND WHEN AN INDUSTRY GROWS TO A TRILLION DOLLARS, THERE'S A LOT MORE EQUIPMENT THAT WILL NEED TO BE PUT IN PLACE TO SUPPORT THAT LEVEL OF BUSINESS. ED:
R&D -- YOU MAKE THE MACHINES THAT MAKE THE CHIPS. YOU SEEM BULLISH ABOUT INVESTMENT. TALK TO US ABOUT R&D. WHAT'S GOING TO DRIVE YOU FORWARD TECHNOLOGICALLY? DOUG: EVERY YEAR WE HAVE TO BRING OUT NEW CAPABILITY. EVERYTHING OUR CUSTOMERS WANT, YOU HAVE TO BE GETTING BETTER IN THIS BUSINESS AND THAT IS ABSOLUTELY WHAT WE ARE DOING.
ONE OF THE THINGS WHEN I LOOK AT THE PRODUCT PORTFOLIO, WE ARE BRINGING UP A BRAND-NEW PLATFORM WE ARE EXTREMELY EXCITED ABOUT. IT'S THE FIRST BOTTOM UP REDESIGN WE'VE DONE AND OVER 20 YEARS. WE HAD A BRAND-NEW TOOL CAPABILITY COMING OUT THAT CUSTOMERS ARE EXCITED ABOUT AS ARE WE. CAROLINE: THANK YOU, DOUG BETTINGER. MEANWHILE, LET'S TALK A LITTLE
BIT ABOUT WHAT IS GOING VIRAL. A NEW ACTIVIST AT TAKING AIM AT BIG TECH IS USING DEEPFAKES TO MOCK A LACK OF OVERSIGHT. THE AD SHOWS A MONOPOLY MAD -- MONOPOLY MAN WORTH INTO A DEEP FAKE OF MARK ZUCKERBERG WHO HE THANKS CONGRESS. IT WILL AIR DURING THE LAME-DUCK SESSION. TECH LOBBYISTS HAVE SPENT $120 MILLION ON ADVERTISING AGAINST THE BILL. YOU'VE BEEN MAKING SOME GREAT SOCIAL CONTENT BASED ON THIS AD. ED: WE'VE BEEN TALKING ABOUT THE
CONGRESS RESET, THE GOP COMES IN, THEY WANT THIS BILL MOVED QUICKLY BY PALOUSE SEA AND SCHUMER, SO THAT IS WHY THEY PUT THE DEEPFAKE OUT THERE. CAROLINE: IS IT ON ED: INSTAGRAM? ED:IT IS ON TWITTER. CAROLINE: THAT DOES IT FOR THIS EPISODE OF BLOOMBERG TECHNOLOGY.
2022-11-30 21:41
