Bloomberg Technology 12/22/2023
>> THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I AM CAROLINE HYDE AT OUR BLOOMBERG HEADQUARTERS IN NEW YORK. ED: I AM ED LUDLOW IN SAN FRANCISCO AND THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: ELON MUSK LASHES OUT. WE GET AN OUTLOOK FOR TECH STOCKS IN THE NEW YEAR. ED:
AND $80 BILLION ROUTE UNDERWAY IN CHINA AS BEIJING IMPOSES NEW CURBS ON GAMING. WE WILL BREAK DOWN THE EMBARKATION FOR THE COUNTRY'S GIANT INTERNET SECTOR. CAROLINE: WE TALK ALL THINGS AI AS CHATGPT ENDS THE YEAR WITH A NEW LIST OF COMPETITORS. WHAT WILL 2024 BRING? FIRST, LET'S CHECK IN ON PUBLIC MARKETS AND A FEW KEY THEMES.
MANAGING TO HOLD ON GAINS FOR THE NASDAQ AND S&P 500. HAVE NOT SEEN THAT FOR YEARS ON THE S&P 500 BENCHMARK, AT LEAST. STILL ANTICIPATION AT 1.5% OF CUTS IN THE 2024 YEAR. INTERESTING WE ARE SEEING MONEY COME OFF THE TABLE IN CHINA.
THIS IS ABOUT GAMING. THIS IS ABOUT THE POWER OF THE GOVERNMENT VIS-À-VIS THE GAMING SECTOR IN CHINA. WE WILL DIG INTO THAT FROM A MICRO BASIS.
OIL HOLDING STEADY AT THE MOMENT. WE HAVE SEEN A RAMP UP ON OIL. LAST COUPLE OF WEEKS, WE HAVE SEEN THAT ON THE BACK OF TENSIONS THROUGHOUT THE RED SEA. LET'S MOVE ON TO THE WORLD OF CRYPTO. WE ARE DOWN .9%, STILL ABOVE THE $43,000 LEVEL. ED: GOT THAT MICRO LOOK AT THE STORY IN CHINA.
CHINA'S TOP VIDEO GAMES REGULATOR PUBLISHED A SURPRISE LIST OF DRAFT GUIDELINES, ALL DESIGNED CLAMPING DOWN ON THE AMOUNT OF TIME VIDEO GAMES PLAYERS SPEND ON SPECIFIC TITLES. THIS IS THE MARKET REACTION. TENCENT DOWN ALMOST 10%. PRUSUS -- PROSUS, A BIG MAJORITY OF THESE INVESTORS HOLDINGS ARE IN TENCENT. WE HAVE AN EXPERT ON THIS TOPIC AND CHINA VIDEO GAMES LATER IN THE SHOW. HERE AND NOW IS ELON MUSK. IT IS WIDE-RANGING. ELON MUSK GOES OFF TO HER -- AFTER THE PUBLIC MARKETS.
HE WADES INTO THE PASSIVE VERSUS ACTIVE INVESTING DEBATE. TESLA IS THE ONLY PUBLICLY TRADED PROXY, UP .6%, UP 107% YEAR TO DATE. A BENEFICIARY OUTPACING S&P 500 GAIN OF 20% IN THE PUBLIC MARKETS THAT MUST HAD LOTS TO SAY ABOUT. CAROLINE: IT IS MESIC TO CATHIE WOOD'S EARS, WHO HAS AN ACTIVELY MANAGED SET OF ETF'S. OVERALL, WE DID SEE ELON MUSK PUSHING OUT AGAIN ON THE STATE OF U.S. FINANCIAL MARKETS. WE ARE LOOKING AT THE MOMENT OF
TESLA HOLDERS. TAKE A LISTEN TO WHAT HE HAD TO SAY. [VIDEO CLIP] >> THE PERCENTAGE OF THE MARKET THAT IS PASSIVE IS SIMPLY TOO GREAT AT THIS POINT. AT THE END OF THE DAY, SOMEONE HAS TO MAKE AN ACTIVE DECISION. THE PASSIVE INVESTORS ARE
RIDING ON THE DECISIONS OF THE ACTIVE INVESTORS. YOU GET ESSENTIALLY MASSIVE MOVEMENTS OF THE STOCK BASED ON THE DECISIONS OF FOUR OR FIVE ACTIVE MAJOR STOCK PICKERS. CAROLINE: ELON MUSK HIMSELF IS THE BIGGEST HOLDER OF TESLA STOCK. THEN IT IS VANGUARD, BLACKROCK, STATE STREET. WE BRING IN MAX, WE HAVE HEARD HIM RAIL AGAINST THE FACT THERE IS A LOT OF PASSIVE MONEY NOW. DOES HE HAVE A POINT?
>> THERE IS NO SURPRISE HE IS RAILING AGAINST THE REGULATORY BURDEN OF RUNNING A PUBLIC COUNTRY -- PUBLIC COMPANY. HE HAS BEEN FIRING OFF INSULTS AT THE SEC. NO SURPRISE THERE. IN TERMS OF THE ACTIVE VERSUS PASSIVE, THIS IS A CASE OF BOTH OF THESE PEOPLE TALKING THERE BOOKS. CATHIE WOOD ALSO RUNS A VENTURE FUND, WHICH IS MAKING INVESTMENTS AVAILABLE TO INVESTORS. SHE TALKED ABOUT THAT ON THE PODCAST. THERE IS LOTS OF REASONS FOR THEM TO TALK ABOUT, THE VANGUARD APPROACH IS NOT GREAT. ELON MUSK IS A GUY WHO BENEFITS
FROM THE VIBE STYLE INVESTING. ANYTHING THAT IS NOT VIBES IS NOT AS GOOD FOR TESLA AND IS COMPANIES. ED: IN THE FIVE OR SIX YEARS I HAVE COME WITH ELON MUSK, HE HAS BENEFITED FROM THE CAPITAL MARKETS AND HAS BEEN PRETTY CLEAR THAT HE DOES NOT LOSE THAT MUCH SLEEP OVER THE THOUGHTS OF INVESTORS. IN AN EVEN LONGER PERIOD OF
TIME YOU HAVE COVERED ELON MUSK AND TESLA, THAT HAS BEEN TRUE, AS WELL. WHAT WAS HIS BASIC ARGUMENT ABOUT THE FUNCTIONING OF MARKET? THIS IS WHAT I DO NOT GET. WHAT IS HE ARGUING IN FAVOR OF? MAX: HE IS TAPPING INTO A CRITIQUE OF THE POWER OF MONEY MANAGERS, WHICH IS NOT SOMETHING EXCLUSIVE TO TESLA.
THE POINT IS THAT A LOT OF INVESTORS ARE INVESTING MONEY WITH THESE BIG ASSET MANAGERS, THEREFORE THESE BIG ASSET MANAGERS TEND TO HURT TOGETHER -- HERD TOGETHER. IT IS NOT A NOVEL ARGUMENT OR ONE THAT HOLDS A TON OF WATER. THESE FUNDS HAVE DONE WELL FOR MOST PEOPLE. AS YOU SAY, AND, TESLA AND ELON MUSK HAS DONE INCREDIBLE WELL TAKES TO THE CAPITAL MARKETS, WHICH HE DID ACKNOWLEDGE IN ANOTHER PART OF THIS X SPACES EVENT. HE ACKNOWLEDGED ONE OF THE REASONS HE PUT UP WITH THIS REGULATORY BURDEN IS THE AMOUNT OF CAPITAL THAT HE HAS ACCESS TO ON THE PUBLIC MARKETS IS WAY GREATER THAN ON A PRIVATE MARKET. ED: THE BIGGEST SINGLE SHAREHOLDER
OF TESLA IS ELON MUSK, 13%, THAT IS VANGUARD, BLACKROCK AND STATE STREET, HDS ON THE BLOOMBERG. THANKS FOR JOINING US. LET'S STICK WITH PUBLIC MARKETS AND GET A BROADER OUTLOOK ON THE TECHNOLOGY SECTOR INTO 2024. THE DIRECTOR OF QUANTITATIVE MARKET STRATEGY AT FIDELITY INVESTMENTS, FANTASTIC TO HAVE YOU ON THE SHOW THIS FRIDAY. REAL QUICK ON THE LET'S GET YOUR TAKE ON MR. MUSK'S VIEW ON ACTIVE VERSUS PASSIVE, THE
INFLUENCE IN THE MARKETS. WHAT DO YOU MAKE OF THAT? >> WHEN YOU LOOK BACK IN TERMS OF HISTORY IF YOU WERE SAYING DIFFERENT MARKET REACTIONS IN TERMS OF HOW STOCKS WORK MOVING, YOU WOULD SAY ONE IS MORE MARKET MOVING THAN THE OTHER. I HAVE HEARD ARGUMENTS IN TERMS OF MOST OF THE MARKET IS PASSIVE, THEREFORE, IT IS BUILDING UP THESE DISLOCATIONS OR POTENTIAL BUBBLES CAUSING THIS MASSIVE MOVES IN STOCKS. WHEN YOU LOOK BACK THROUGH HISTORY, I AM NOT SEEING ANY DIFFERENCE IN TERMS OF PATTERNS AND THE DATA I LOOK AT. I THINK YOU CAN ALWAYS THINK ABOUT IT FROM AN ALLOCATION PERSPECTIVE IF YOU BUY A TECHNOLOGY ETF OR EVEN IF YOU STATE IN CASH AS AN INVESTOR. THAT IS AN ACTIVE DECISION. IT DEPENDS ON WHO YOU ARE
TALKING TO ANYTHING ABOUT ACTIVE VERSUS PASSIVE. CAROLINE: THEY ARE SPEAKING OUT OF ONE SIDE OF THE MOUTH TO BE THIS DEMOCRATIZATION WHEN YOU ARE ABLE TO HAVE ACCESS TO BIG ETF'S AND ABLE TO HAVE ACCESS TO ACTIVELY MANAGED ETS. I AM INTERESTED IF INVESTORS ARE INKING, OK, STRATEGIZE TO ME IN THE MOMENT. SHOULD I WITH THE AMOUNT OF
CHANGE I HAVE IN CASH, BE SEMI--- VIS-À-VIS THE AMOUNT I HAVE, ALLOCATE IT TO TECH? SHOULD I REMAIN IT ALLOCATED TO TECH GIVEN THE OUTPERFORMANCE OF 2023? DENISE: 2023 HAS BEEN A GREAT YEAR IN TERMS OF TECHNOLOGY LEADERSHIP. THAT IS A CAUTIONARY NOTE TO INVESTORS BY USING THAT -- BAD NEWS TO STAY ON THE SIDELINES BECAUSE STOCKS ARE THIS DISCOUNTING MECHANISM. BY THE TIME NEWS GETS GOOD, THE GAINS MAY ALREADY BE IN. I WILL SAY AS WE APPROACH 2024,
I AM STILL LOOKING AT CONSTRUCTIVE SIGNALS. ONE ON THE EARNINGS FRONT, BOTH ON TECHNOLOGY AND FOR THE BROADER MARKET. A LOT OF THINGS IN TERMS OF THAT WE SAW COSTS INCREASE IN COSTS TICK DOWN CORPORATE PROFIT MARGINS OVER THE LAST YEAR SEEMS TO BE UNWINDING AND THE PPI RELATIVE TO THE CPI ALSO DECELERATING.
THAT IS ONE OF THE REASONS WHY TECHNOLOGY STOCKS HAVE DONE SO WELL, EVEN THOUGH EARNINGS HAS NOT BEEN QUITE VERY STRONG AND IT IS USUALLY WHEN YOU SEE STOCKS MOVE AHEAD OF THE EARNINGS, WHICH TO MOST PEOPLE IN THE MARKET, THAT IS, WAIT, IF THE STOCKS MOVED AHEAD OF EARNINGS, MAYBE THAT CREATES A NEGATIVE RISK REWARD. WHEN YOU LOOK BACK THROUGH HISTORIES, STOCKS MORE OFTEN THAN NOT ACTUALLY GET IT RIGHT AND MIDCYCLE EARNINGS TEND TO BE HIGHER IF THE STOCKS MOVE FIRST. I THINK THAT IS PART OF WHAT YOU ARE SEEING IN TECHNOLOGY, WHICH IS A CONSTRUCTIVE OUTLOOK AND A POSITIVE RISK REWARD DESPITE THE LEADERSHIP WE HAVE SEEN AS WE APPROACH 2024. ED: DENISE, I WOULD LOVE TO TAKE A LOOK BACK THROUGH HISTORY. LET'S DO IT, 24 HOURS AGO ON THE SHOW, DENNY FISHER AND JANET HENDERSON JOINED US. I MADE A POINT IF YOU GO BACK TO 2018 WHEN I TRACKED THE NASDAQ 100 RELATIVE TO THE S&P 500, IT OUTPERFORMS. DENNY MADE
THE POINT IF YOU GO BACK TO 1995, RELATIVE THE S&P 500, IT OUTPERFORMS YEAR TO DATE AGAIN ON THE NASDAQ 100 IS 53%, S&P 500 24%. DOES ANYTHING CHANGE THAT HISTORIC TREND IN 2024? DENISE: WHAT YOU ARE TALKING ABOUT IS ESSENTIALLY A STATISTICAL CONCEPT OF THRUST, MEANING, DID THIS MASSIVE MOMENTUM, ARE YOU MORE LIKELY TO SELL THAT OR ARE LIKELY TO BUY THAT? THIS IS TRUE SPECIFICALLY IN THE NUMBERS YOU WERE JUST TALKING ABOUT, BUT EVEN IN THE BROADER S&P, SIX WEEKS INCREASING ON A WEEKLY BASIS, THAT IS A RARE SIGNAL. IS THAT RARE SIGNAL BETTER OR WORSE? WHAT YOU FIND IN HISTORY IS THE MORE THRUST YOU HAVE OR THE BETTER SOMETHING HAS DONE, THE MORE LIKELY IT IS TO CONTINUE TO DO WELL IN THE FUTURE. THE CONCEPT IS MOMENTUM IS WELL EXPLORED, BUT I THINK THAT MOST PEOPLE WANT TO SELL THAT MOMENTUM WHERE STATISTICALLY -- THIS IS NOT TO SAY THAT 100% OF THE TIME IT WORKS, BUT THE MORE YOU HAVE SEEN SOMETHING MOVE, THE MORE LIKELY THE MARKET IS RIGHT, THERE IS A POTENTIAL CATALYST COMING UP IN ONE OF THOSE CATALYSTS I THINK IS THE INCREASE IN EARNINGS WE ARE LIKELY TO SEE OVER THE COURSE OF THE NEXT 12 TO 18 MONTHS. ED: IF YOU'VE GOT THE CAPACITY AND YOU'RE NOT FINDING EXPOSURE VIA THE NASDAQ OR NASDAQ 100, CAN YOU ROTATE WITHIN TECHNOLOGY?IS IT TIME TO BROADEN OUT FROM THE MAGNIFICENT SEVEN? DENISE: THAT IS A GREAT QUESTION BECAUSE IT HAS BEEN DOMINANT IN THE GREATER MARKET.
ONE TRAIT WHICH IS TECHNOLOGY AND TECHNOLOGY RELATED STOCKS, I THINK 2024, WE HAVE THE CATALYST OF POTENTIALLY LOWER RATES THAT DOES SUGGEST MARKET BROADENING HISTORICALLY. ON TOP OF THAT, YOU HAVE A LOT OF WHAT I CALL DISLOCATION VARIABLES, MEANING THERE IS A WIDE DISPERSION OF EVALUATIONS WITHIN TECHNOLOGY. TYPICALLY WHEN YOU SEE WIDE DISPERSION, THAT IS NOT ONLY GOOD FOR THE SECTOR BUT GOOD FOR PRODDING OUT OF THE SECTOR. THINK ABOUT SOMETHING LIKE SOFTWARE THAT FINALLY FOR THE FIRST TIME SINCE 2014 IS OUT OF THE TOP QUARTILE ON EVALUATION, WHICH CHANGES YOUR RISK REWARD. ALL OF A SUDDEN, YOU ARE STARTING TO SEE THESE SIGNALS BROADEN OUT TO EQUAL WEIGHT IN TECH AS OPPOSED TO SOMETHING THAT HAS BEEN DOMINANT IN THE CAP-WEIGHTED INDICES. THIS IS NOT JUST WITHIN TECHNOLOGY, THIS IS WITHIN THE BROADER S&P. IT HAS BEEN A TIGHT MARKET IN
TERMS OF THE SECTOR OUTPERFORMANCE, BUT I THINK THAT IS LIKELY TO SHIFT BECAUSE WE ARE EVOLVING FROM A SITUATION WHERE 2023 WAS REALLY A CONTRACTION IN EARNINGS WITH HIGHER RATES TO 2024 POTENTIALLY BEING THE EXACT OPPOSITE. RATES MIGHT HAVE PEAKED AND WE ARE STARTING TO SEE AN ACCELERATION IN EARNINGS. THAT IS USUALLY COINCIDENT WITH A BROADENING MARKET. CAROLINE: SOME OPTIMISM AS WE LET YOU DO SOME PURCHASING TO FINISH OFF THE YEAR. HAPPY HOLIDAYS, THANK YOU FOR SPENDING TIME WITH US. COMING UP, FRESH RESTRICTIONS
IN CHINA HAVE SET THE -- SEND THE VIDEOGAME INDUSTRY INTO A TIZZY. WE DISCUSSED MORE WITH LISA HANSEN, PRESIDENT AND CEO OF NIKO PARTNERS. ED: TIME FOR TALKING TECH AND FIRST UP, LIONS GATE ENTERTAINMENT IS MERGING ITS STUDIO BUSINESS WITH SPECIAL ACQUISITION COMPANY SCREAMING EAGLE. THE NEW ENTITY WOULD TRADE ON THE NASDAQ WITH A DEAL THAT VALUES THE BUSINESS AT $4.6 BILLION INCLUDING DEBT. PREMIUM CABLE CHANNEL STARZ IS NOT INCLUDED IN THE DEAL. AS OF THURSDAY AFTERNOON, APPLE IS NO LONGER SELLING ITS SERIES NINE AND WATCHES ONLINE IN THE U.S.
APPLE SAYS IT WILL NOT BE ABLE TO REPAIR ANY OUT OF WARRANTY PRODUCTS. SCHEDULE TO HALT ALL SALES EFFECTIVE DECEMBER 20 FIFTH, SALES WILL CONTINUE AT APPLE STORES INTERNATIONALLY BOTH ONLINE AND IN PERSON. ASML SAYS IT HAS SHIPPED THE FIRST PARTS OF ITS NEWEST CHIPMAKING MACHINE TO WINTEL, PART OF ITS STATE OF THE ART ULTRAVIOLET SYSTEM SHIPPED TO THE INTEL FACTORY IN OREGON.
IT IS A WIN-WIN FOR BOTH COMPANIES. CAROLINE: LET'S STICK ON THE THEME WE WERE RACING IN THE BEGINNING AND THE MARKET IMPACT OF TODAY, TENCENT. THIS COMES AFTER WHAT HAS COME OF A SURPRISING POSITION, A NEW GAMING CURVE THAT AMONG FEARS BEIJING MAY BE TOPPING THE COUNTRY'S GIANT INTERNET SECTOR. WITH MORE, THE PRESIDENT AND
CEO OF NIKO PARTNERS. THE PERFECT VOICE. TELL US HOW MUCH OF A SHOCK THIS WAS, THE MARKET SEEMS TO REFLECTING A SHOT. WERE YOU SURPRISED? LISA: I AM BASED IN CALIFORNIA AND WOKE UP SURPRISED THIS MORNING TO SEE THIS NEWS COMING THROUGH. I SAW THAT THE MARKET VALUE OF TENCENT AND OTHER MAIN GAME COMPANIES WERE DECLINING. I THINK SOME OF THAT IS A KNEE-JERK REACTION AND I AM SURPRISED BY THE SEVERITY THAT THE MARKETS HAVE APPLIED TO THIS NEW, REGULATORY DISCUSSION BECAUSE IT DOES NOT EVEN A FINAL SET OF REGULATIONS YET. THERE IS STILL GOING TO BE A MONTH OF DISCUSSION AND INPUT. FOR THE MOST PART, THE
REGULATIONS THAT WERE ANNOUNCED WERE, HAVE ALREADY BEEN IN PLACE FOR QUITE SOME TIME. ED: THEY ARE DRAFT RULES, AND THE AIM IS TO ESSENTIALLY LIMIT THE AMOUNT OF TIME THAT A PLAYER CAN SPEND ON A PARTICULAR TITLE, LOCKED INTO A PARTICULAR ONLINE GAME. IT ALL GOES BACK TO THE RATIONALE. WHY IS THE TOP REGULATOR DOING THIS? LISA: YEAH, WELL, THE NATIONAL PRESS AND PUBLICATIONS ADMINISTRATION IS THE REGULATOR IN CHINA THAT MONITORS AND REGULATES ALL OF THE GAMES WORLD, EFFECTIVELY, ALTHOUGH THERE ARE SEVERAL REGULATORS THAT TOUCH THE SPACE FOR INTERNET CAFÉS AND SO MUCH MORE. THE IN PPA HAS PUT OUT THESE MEASURES FOR THE ADMINISTRATION PROTECTION OF ONLINE GAMES. FRANKLY, I DO NOT KNOW IF THAT IS THE EXACT TITLE.
I THINK THAT IS SOMETHING SIMILAR TO THAT. THOSE MEASURES DO NOT ALL DEAL WITH THE AMOUNT OF TIME PEOPLE CAN SPEND ON GAMES. THERE IS A LOT OF REGULATIONS AROUND THE PROTECTION OF YOUTH, WHICH HAVE ALREADY BEEN IN PLACE SINCE SEPTEMBER 2021 WHEN THERE WAS A BIG PUSH TO OVERHAUL HOW YOUTH GAMERS UNDER AGE 18 IN CHINA CAN INTERACT AND SPEND TIME ON GAMES. SOME OF THE MEASURES THAT WERE DISCUSSED IN TODAY'S DOCUMENT ARE A REPEAT OF THOSE. THERE ARE SOME NEW ONES THAT MIGHT IMPACT ADULT GAMERS, PRIMARILY AROUND -- THERE MIGHT BE SOME LIMITS ON THE TOTAL SPENDING ON LOOT BOXES AND ON THE TRADING OF IN GAME ITEMS BETWEEN PEOPLE OR THE OTHER PLATFORM THAT THEY COME FROM. BUT, AGAIN, THERE IS NO DEFINED LIMIT SET YET. WHILE THERE ARE 710 MILLION
GAMERS IN CHINA AND $47 BILLION IN REVENUE AND BY OUR ESTIMATION RISING TO $57 BILLION IN THE NEXT FEW YEARS, SOME OF THAT REVENUE MIGHT BE IMPACTED BY THESE NEW RULINGS BUT WE DO NOT KNOW WHAT IT IS YET. CAROLINE: AT THE MOMENT, MAYBE A NERI -- MAY A KNEE-JERK REACTION. ARE THE RIGHT NAMES BEING IMPACTED? WE DID SEE UBISOFT, SOME OTHER NOT PURELY CHINESE FOCUSED NAMES BEING WRAPPED UP IN ALL OF THIS. LISA: UBISOFT SHOULD BE ON THE POSITIVE, BECAUSE TODAY AT THE SAME TIME THAT THESE NEW REGULATIONS, THE DRAFT OF THEM WAS ANNOUNCED, THE CHINESE GOVERNMENT DID THE WORLD A FAVOR AND ALSO ANNOUNCE THE APPROVAL OF 40 IMPORTED TITLES OR ISBN LICENSES, THAT IS A COVETED LICENSE AND BRINGS THE TOTAL THIS YEAR TO I BELIEVE 98 IMPORTED GAMES APPROVED, HIGHER THAN THE YEAR BEFORE THAT AND THE YEAR BEFORE THAT.
UBISOFT IS ONE OF THE GAME COMPANIES THAT HAD A TITLE APPROVED. I THINK THAT WAS CALLED HORIZONS, PHOENIX RISING. UBISOFT SHOULD BE BENEFITING FROM TODAY'S ANNOUNCEMENTS, RATHER THAN GET HIT BY IT. ED: THANKS TO LISA, PRESIDENT AND CEO OF NIKO PARTNERS. A DEEP KNOWLEDGE OF THE GAMING INDUSTRY, PARTICULARLY IN CHINA. COMING UP, A CHINA CHIP CRACKDOWN. THE U.S.
IS SET TO THOROUGHLY REGULATE OUR ALLIANCE -- RELIANCE ON CHINESE MADE SEMICONDUCTORS. THAT IS NEXT. ED: CHINA TECH UNDER MORE SCRUTINY. THE U.S. COMMERCE DEPARTMENT SET TO
BEGIN GATHERING INFORMATION OF LEGACY SEMICONDUCTORS MADE IN CHINA TO UNDERSTAND HOW RELIANT THE U.S. IS ON CHINESE MADE CHIPS. JOINING US WITH THE LATEST, BLOOMBERG'S MACKENZIE HAWKINS IN SAN FRANCISCO. WHILE YOU AND I WERE ASLEEP OVERNIGHT, THE CHINESE GOVERNMENT RESPONDED TO THIS ISSUE. WHAT DID THEY HAVE TO SAY? >> WHAT WE SAW OUT OF WASHINGTON THE PAST COUPLE OF DAYS, THE BIDEN ADMINISTRATION IS WEIGHING PARIS ON OLDER MODELS OF SEMICONDUCTORS REDUCED IN CHINA. THE CHINESE SAID THAT WOULD HURT THE U.S., UNDERMINE FREE
MARKETS AND FAIR COMPETITION. THE U.S. DOES NOT SEE CHINA AS A MARKET-BASED ACTOR AND A FAIR PLAYER, WHICH IS THE REASON WASHINGTON IS CONSIDERING PURSUING. CAROLINE: LET'S TALK ABOUT THE BEHAVIOR THAT ONCE AGAIN, GINA RAIMONDO IS RESPONDING TO. THE WORRY IS WHAT, THEY ARE FLOODING THE MARKET WITH CHEAPER GOODS/ MACKENZIE: EXACTLY. THE U.S. HAS INTRODUCED CONTROLS ON THE MOST ADVANCED SEMI CONTRACT -- SEMICONDUCTORS AND CHINA ON WHICH POWERS EVERYTHING FROM YOUR PHONE, YOUR CAR TO WEAPONS SYSTEMS. OLDER GENERATION CHIPS WHICH ARE STILL ESSENTIAL TO
THE ECONOMY, BEIJING HAS DOUBLED DOWN ON PRODUCTION ON THOSE AND THE WORRY IS CHINESE CHIPMAKERS COULD UNDERCUT COMPETITORS WITH CHEAPER PRICES OR USE THAT TECHNOLOGY AS A CHOKEPOINT THAT COULD GUTTER THE U.S. ECONOMY AND SET THE ENTIRE WORLD INTO A TALE SEND -- TAILSPIN. ED: WHAT YOU HAVE BEEN REPORTING ON CONSISTENTLY IS THAT TARIFFS AND PROHIBITIVE ACTION GOES HAND IN HAND WITH SUBSIDY. WHAT THE U.S. IS TRYING TO DO IS ONSHORE AN ENTIRE INDUSTRY AND REALIZING, IT SEEMS, THEY ARE GOING TO HAVE TO TAKE ACTION ON EXPORTS AND IMPORTS AT THE SAME TIME TO BE COMPETITIVE. MACKENZIE: EXACTLY. IT WAS ACTUALLY A SHORTAGE OF LEGACY CHIPS DURING THE COVID PANDEMIC THAT SPURRED WASHINGTON TO ENACT THE CHIPS ACT, WHICH PUTS 00 BILLION IN SUBSIDIES FOR CHIPMAKERS TO CONVINCE THEM, LET'S MANUFACTURE THESE CRITICAL ELECTRONIC COMPONENTS HERE. THE U.S.
IS DOING SOMETHING SIMILAR WITH CLEAN ENERGY TECHNOLOGIES THROUGH THE INFLATION REDUCTION ACT, WHICH IS BIDEN'S SIGNATURE CLIMATE LAW. THE U.S. IS WEIGHING TARIFFS ON A LOT OF GOODS THAT ARE SUBSIDIZING MANUFACTURERS TO MAKE IN THE U.S., WORRIED THAT CHINESE COMPANIES COULD UNDERMINE THAT EFFORT. CAROLINE: THE TIPS, THE TAX -- THE TATS THAT GO ON. THANKS FOR COVERING THROUGHOUT 2023. COMING UP, WE TALKED MORE TRADE, BUT THE COMMERCIAL DISRUPTION IN THE RED SEA WREAKING HAVOC ON THE GLOBAL SUPPLY CHAIN ECOSYSTEM.
WE DISCUSSED WITH FLEX PORT CEO, RYAN PETERSON. WITH AN ALMOST IN TO THE HOLIDAY PERIOD, THIS IS -- AN ALMOST END TO THE HOLIDAY PERIOD, THIS IS "BLOOMBERG TECHNOLOGY." ♪ ED: "BLOOMBERG TECHNOLOGY" WELCOME BACK TO "BLOOMBERG TECHNOLOGY." -- WELCOME BACK TO "BLOOMBERG TECHNOLOGY." CAROLINE: WE ARE STILL HOLDING ON GAINS
IN THE EQUITY MARKET, UP POINT 2%. THIS HAS BEEN AN EIGHT WEEK WINNING STREAK FOR THE NASDAQ 100 AND S&P. RISK ON AS WE THINK THE FEDERAL RESERVE WILL START TO PULL BACK RATES COME 2024. THIS AS GLOBAL TENSION ABOUT TO DIVE INTO THE HOUTHI REBELS DRIVING UP THE COST OF OIL. PERHAPS SOME OPTIONS HEDGING
THEIR BETS, SEEING AND ANTICIPATING THAT ETF COME JANUARY. A LOOK AT THE NASDAQ, IT SEEMS THE MARKET WAS TAKEN OFF GUARD BY SOME MOVES IN THE GAMING INDUSTRY, PARTICULARLY ADULT GAMERS ABILITY TO MAKE PURCHASES WITHIN CERTAIN GAMES. TENCENT UP BY MORE THAN 9%. WE ARE LOOKING THAT OVERALL IMPORT BAN COMING INTO PLAY COME THE 25TH OF DECEMBER. ED: GLOBAL SUPPLY CHAINS ARE A TOP CRITICAL STORY, ATTACKS BY HUMANS HOUTHI REBELS ON COMMERCIAL TRAFFIC IN THE RED SEA CAUSING HAVOC IN ONE OF THE WORLD'S MOST CRITICAL WATERWAYS, ENDANGERING THE GLOBAL ECONOMY. FOR MORE, WE ARE JOINED BY RYAN PETERSON, THE CEO OF FLEXPORT. LET'S BRING UP A MAP OF GLOBAL SHIPPING LANES AND EXPLAIN WHAT IS HAPPENING. THE CANAL IS A PRINCIPAL ROUTE,
A SHORTCUT. ATTACKS ARE IMPACTING THE ABILITY OF CARRIERS TO GO THROUGH THAT SHORTCUT. WHAT IS THE NET RESULT THAT YOU ARE SEEING? >> YOU ARE SEEING ESPECIALLY IN THE CONTAINER SHIPPING LINES WHERE THERE IS EFFECTIVELY NO CONTAINER SHIPPING LINES TRANSITING THROUGH THE RED SEA NOW. YOU SEE DOTS, BUT THOSE ARE OTHER SHIPPING LINES. THE CONTAINERS WHICH CARRY MOST
OF THE GOODS YOU BUY HAVE DECIDED IT IS NOT SAFE FOR CREWMEMBERS SAFETY, ONE GOT HIT BY A MISSILE, TO GOT NARROWLY MISSED AND THESE COMPANIES SAY IT IS NOT WORTH IT. THEY ARE GOING AROUND. THE IMPACT IS, IT IS A 25% LONGER JOURNEY. OF COURSE, THAT IS DELAYED BUT IT IS LESS ABOUT DELAYS THAN IT IS A REDUCTION OF SUPPLY IN SHIPS BECAUSE NOW YOU NEED MORE CHIPS TO SERVICE THE TRADE LANE.
IT IS 25% MORE SHIPS. ED: IN OUR REPORTING, FLEX PORT HAS SHARED DATA ON SOME OF THOSE DIVERGENCE, ABOUT 180 VESSELS FINDING AN ALTERNATIVE ROUTE. EXPLAIN WHY FLEX PORT TRACKS THAT DATA. RYAN: WE ARE ONE OF THE LARGEST FREIGHT PORTERS IN THE WORLD. IT IS A PLATFORM FOR SHIPPING CARGO AROUND THE WORLD. WE DO A GOOD JOB OF MONITORING
WHERE THE CARGO IS. WE USE SATELLITES AND INTEGRATIONS WITH THE CARRIERS. A LOT OF THE SHIPS THAT ARE TRANSITING THE RED SEA NEAR THAT AREA HAVE TURNED UP THERE -- TURNED OFF THEIR SATELLITE TRANSPONDER BECAUSE THEY DO NOT WANT TO BE TARGETED BY THE REBELS. AT THE EXACT MOMENT YOU WOULD LIKE TO SEE, WHERE IS THE SHIP, IT IS APPEARS FROM YOUR SYSTEM. 25% REDUCTION IN SUPPLY CAN LEAD TO A HUGE SWING IN PRICE, WE ARE SEEING PRICES BETWEEN THREE AND FOUR TIMES HIGHER FROM SHIPPING TO ASIA ON EUROPE FROM OCEAN FREIGHT. THAT IS A BIG IMPACT ON THE PRICE OF CONSUMER GOODS.
WE TALK ABOUT INFLATION, SOME PEOPLE THINK IT IS UNDER CONTROL BUT WE HAVE NEW CAP -- NEW FACTORS UNACCOUNTED FOR. CAROLINE: WHAT ABOUT THE IMPACT ON YOUR OWN BUSINESS? MANY WOULD SAY DURING THE SUPPLY CHAIN HEADACHES TO PUT IT LIGHTLY THAT OCCURRED IN 2021, WAS A BOON TIED FOR FLEX PORT. HOW DOES THAT IMPACT YOU? RYAN: WE ARE TRYING TO SERVE OUR CUSTOMERS AND DO A GOOD JOB. WHEN PRICES GO UP, THEY HAVE TO PAY MORE. THAT IS WHAT IT IS, PRICE OUT OF YOUR CONTROL. IT CREATES A LOT OF CHAOS. IMAGINE THAT SHIP THAT GOT HIT
WITH A MISSILE, THE MSC SHIP, THE PALLADIUM THREE GOT HIT OFF THE COAST OF YEMEN. IT WAS MEANT TO GO TO BARCELONA AND PICK UP FOUR CONTAINERS FOR A FLEX PORT CUSTOMER AND BRING THEM TO MOROCCO NEXT WEEK. THAT IS HAPPENING IN MASS ON EVERY SHIP THAT GOT DIVERTED, HAVE TO REPLAN EVERY SCHEDULE.
TEAMS ARE WORKING OVERTIME NOW TO KEEP UP WITH THIS AND DO A GOOD JOB FOR OUR CUSTOMERS, TO MAKE SURE CARGO ARRIVES ON TIME OR IF NOT, THEY ARE WELL INFORMED ABOUT WHAT IS GOING ON. CAROLINE: THE CUSTOMER RELATIONSHIP IS SOMETHING YOU WERE ALREADY FOCUSED ON WHEN YOU CAME BACK TO THE HELM OF FLEX PORT, SOMETHING YOU THOUGHT HAD BEEN SACRIFICED DURING YOUR TRANSITION. HOW ARE YOUR EMPLOYEES ENGAGED AT THE MOMENT? THEY HAVE HAD A TURBULENT TIME IN 2023. RYAN: IT HAS BEEN A TOUGH TIME FOR THE LAST DECADE IN GLOBAL SHIPPING. THERE IS ALWAYS UPS AND DOWNS
AND CHAOS. WE GET ENERGIZED WHEN YOU SEE THE ENTIRE REASON WE ARE HERE TO HELP PEOPLE MOVE CARGO AROUND THE WORLD AND IDENTIFY WHEN IT IS GOING TO ARRIVE, GET THEM ACCURATE DATA. WE HAD A TEAM OF ENGINEERS WHO WORKED ALL WEEKEND, UPDATED OUR PRODUCTS SO THAT YOU CAN RETURN EVERY CONTAINER SHIP YOU CAN -- SO THAT YOU CAN TURN EVERY CONTAINER SHIP ORANGE ON OUR MAP. IF IT IS DELAYED, IT TURNS ORANGE. OUR TEAMS WERE WORKING ALL WEEKEND, THAT IS WHAT ENERGIZES US AND MAKES US PROUD TO BE IN THIS BUSINESS. ED: YOU ARE BACK AT FLEX PORT AS CEO.
WHEN YOU WERE LAST ON THE SHOW, YOU JOINED US AS A NEW MEMBER OF FOUNDERS FUNDS TEAM. DAVE CLARK THEN LEFT FLEX PORT AND YOU WENT BACK TO BEING CEO OF FLEX PORT. EXPLAIN HOW YOU MANAGE YOUR TIME BETWEEN THE TWO AND WHAT YOU ARE DOING MOSTLY. RYAN: I'M STILL ON THE TEAM AS A VENTURE PARTNER.
MOSTLY FOCUSED ON FLEX PORT, I THINK THEY UNDERSTAND I HAVE GOT TO GET FLEX PORT GOING THE RIGHT DIRECTION. WE ARE WELL AHEAD OF OUR GOAL. FOUNDERS FUND IS A PLACE WHERE WE ARE VERY PATIENT, LOOKING FOR THE PERFECT DEALS. WE ARE NOT THE MOST ACTIVE INVESTOR IN THE WORLD.
WE WANT TO BE CONTRARIAN. WE WANT TO FIND THINGS OTHER PEOPLE ARE NOT FINDING. IT IS A MOMENT FOR FOUNDERS FUND TO SAY, LET'S NOT BE WRITING TONS OF CHECKS, WE ARE LOOKING FOR THE BACK PAGE OF THE PERFECT COMPANY THAT COMES ALONG. EVERYBODY WANTS TO GET FOUNDERS FUND. AS AN ENTREPRENEUR, I CAN SAY I HAVE TRIED TO GET THE BEST INVESTORS, ALWAYS FOUNDERS FUND. ED: DAVE TOOK TWO SOCIAL MEDIA WHEN THAT CHANGE HAPPENED. AS A POINT OF CLARIFICATION,
WHEN YOU DID JOIN FOUNDERS FUND, AT THAT TIME, WERE YOU EXPECTING YOU WOULD HAVE TO GO PORT -- GO BACK TO FLEX PORT? RYAN: IT WAS A DECISION THAT HAPPENED A COUPLE MONTHS AFTER I HAD BEEN AT FOUNDERS FUND. I REALIZED FLEX PORT NEEDS TO GET MORE CUSTOMER CENTRIC, MEANS TO FOCUS ON -- WELL, TO GROW AND BE A BUSINESS-TO-BUSINESS. IT MEANS YOU HAVE TO SPEND A LOT OF TIME WITH YOUR CUSTOMERS. I THINK THAT IS SOMETHING WE WERE NOT SEEING ENOUGH OF. THAT IS WHY I CAME BACK TO FLEX
PORT. CAROLINE: YOU SAID THAT YOU ARE OUTPERFORMING WHERE YOU THOUGHT YOU WOULD BE. I AM INTERESTED IN AS WE ARE ABOUT TO ALL BREAK UP FOR THE HOLIDAYS, YOU HAVE GOTTEN INSIGHT INTO THAT BECAUSE FLEX PORT BOUGHT SHOPIFY'S LOGISTICS PART OF THE BUSINESS. HOW MUCH HAVE YOU BEEN ABLE TO FOCUS ON THIS NEW AREA OF GROWTH, OR HOW MUCH OF THAT HAS BEEN A DISTRACTION TO WHAT NOW IS THE FOCUS OF B2B LOGISTICS? RYAN: THAT IS ALSO B2B SERVING BUSINESSES IS OUR CUSTOMERS FOR THAT. IT HAS A GREAT LEADERSHIP TEAM AND WE RUN IT AS A BUSINESS UNIT, IT RUNS ON ITS OWN WITH AN AMAZING WOMAN HEADING THAT. SHE RUNS THAT, BUT I WORK WITH HER ALMOST EVERY DAY ON STRATEGIES AND HOW DO WE GET, CROSS SELL THAT INTO OUR CORE CUSTOMER BASE AND VICE VERSA. IT IS NOT A DISTRACTION AT ALL,
IT IS PART OF THE END TO END STRATEGY FROM TAKING GOODS TO A CUSTOMERS FACTORY INTO CONSUMER STORES AND RETAIL STORES AND DO THAT ON A TWO INTO BASIS. YOU SEE HOW POWERFUL THAT IS, IF YOU ARE RUNNING A FULFILLMENT CENTER, THERE IS NO INVENTORY, YOU DO NOT KNOW WHEN IT IS NOT GOING TO ARRIVE AND ABLE TO PLAN THINGS AND MAKE SURE THE CARGO GETS WHERE IT NEEDS TO BE. CAROLINE: FOYER IS EVERYONE LOOKING AT WHEN THEIR DELIVERY IS COMING. IS THE CONSUMER STRONG FROM YOUR PERSPECTIVE? RYAN: SEEMS TO BE. IN THE U.S., DEMAND IS BACK ABOVE 2019 LEVELS. VOLUMES WENT WAY UP DURING THE PANDEMIC ONE PAPER -- WHEN PEOPLE WERE NOT ABLE TO GO AND BUY GOODS.
SERVICE CONSUMPTION HAS GONE WAY UP, THINGS LIKE TRAVEL, WHATEVER IT MIGHT BE. THOSE THINGS HAVE GONE BACK UP, BUT GOODS CONSUMPTION HAS NOT COME DOWN, IT IS STILL ABOVE 2019. HEALTHY CONSUMPTION AND A LOT OF PEOPLE PROTECTED GOODS IS GOING TO COME DOWN AS SERVICES GO UP. SERVICES HAS GONE UP AND GOODS HAVE STAYED STRONG. THE CONSUMER SEEMS TO BE HEALTHY IN THE UNITED STATES.
CAROLINE: THANK YOU SO MUCH FOR YOUR TIME. A BUSY TIME ACROSS THE BOARD. COMING UP, WE WERE JUST TALKING ABOUT GEOPOLITICAL ISSUES AND REAL ATTACKS IN THE RED SEA. WE ARE GOING TO TALK ABOUT CYBER ATTACKS POSED TO INCREASE AFTER WREAKING HAVOC THIS YEAR. THIS IS BLUE -- THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: RECENT REPORTING FROM THE WASHINGTON POST HAS DETAILED HOW THE CHINESE MILITARY IS RAMPING UP ITS ABILITY TO DISRUPT KEY AMERICAN INFRASTRUCTURE INCLUDING POWER AS WELL AS COMMUNICATIONS AND TRANSPORTATION SYSTEMS. THIS YEAR ALONE, CYBERATTACKS HAVE
WREAKED HAVOC ACROSS SEVERAL INDUSTRIES, NOT TO MENTION HEALTH CARE. THE RUBRIC CEO IS HERE TO TALK ABOUT THE DATA THAT YOU FOCUS ON, YOU ARE FOCUSING ON DATA MANAGEMENT, RECOVERY FROM RANSOMWARE ATTACKS, THINKING ABOUT HOW IT CAN ACCELERATE MOBILITY. IT FEELS AS A MURKY OUTLOOK 2024 WHEN IT COMES TO CYBERSECURITY. >> WHAT HAS HAPPENED IS THAT EVERYBODY IS REALIZING THAT CYBERATTACKS ARE INEVITABLE. EVERY ORGANIZATION IN THE WORLD
HAS ALREADY BEEN PENETRATED. THE LATEST NEWS AROUND CHINA AND THE U.S. PROVES THAT POINT. EVERYBODY HAS TO THINK ABOUT, HOW DO THEY PLAN TO PREPARE AND BE RESILIENT -- RESILIENT AGAINST ATTACKS? THAT IS THE LANDSCAPE WE ARE LOOKING AT FOR THE NEXT YEAR. ED: LET'S SPARE A THOUGHT THIS HOLIDAY SEASON, CAROLINE, FOR THE CIO. I AM NOT TALKING ABOUT CHIEF INVESTMENT OFFICER.
ON "BLOOMBERG TECHNOLOGY," WE ARE TALKING ABOUT CHIEF INFORMATION OFFICER. IF SOMETHING GOES WRONG, THEY ARE THE FIRST PEOPLE YOU BLAME IN THE CONTEXT OF A CYBERATTACK. BIPUL, IS THE CIO GOING TO BE THE HERO OF THE C-SUITE IN 2024? BIPUL: I PERSONALLY BELIEVE THE CIOS JOB IS MERGING BECAUSE THERE IS NO I.T. WITHOUT SECURITY. IF YOU LOOK AT THE EVOLUTION OF THE JOB, JOB OF THE CIO IS TO PUT TOGETHER A SET OF SERVICES FOR THE BUSINESS TO REDUCE THE RISK. THEY PLAY A MAJOR ROLE, BUT THE CHALLENGE IS THAT THE CYBER HAS EMERGED TO BE A BIG RISK.
THERE HAVE BEEN CASES WHERE THEY ARE RESPONSIBLE FOR CYBERATTACKS. IN SOME WAYS, THEY ARE THE HEROES, AS WELL AS THE VICTIM. I FEEL THE DISCUSSION HAS TO BE REFRAMED WHERE, INSTEAD OF JUST FOCUSING ON PREVENTING AN ATTACK AND STOPPING AND ATTACK, CSO'S HAVE TO BE THING OF, HOW DO I RECOVER WHEN ATTACKS ARE INEVITABLE? ED: MANY SEE SOWS AND CIOS FORCE THIS PROGRAM.
IF YOU ARE OUT THERE AND WORKING AT A TECHNOLOGY COMPANY, GIVE THEM SUPPORT THIS HOLIDAY SEASON TO YOUR CSO AND CIO. WHERE THE ATTACKS ARE TARGETING, YOU TALK ABOUT THE EDGE DEVICES, WHAT WE MEAN HIS ROUTERS, POINTS OF VULNERABILITY IN I.T. INFRASTRUCTURE. WHY DID THEY FOCUS ATTACKS THERE? BIPUL: ATTACKERS ARE GOING AFTER THE EASIEST WAY TO ENTER. IN MANY CASES, ATTACKERS ARE NOT HACKING IN, THEY ARE LOGGING IN. THEY ARE PLAYING WITH OUR EMOTIONS TO GET OUR CREDENTIALS AND LOGIN AND DO THE DAMAGE.
STOPPING ATTACK IS IMPOSSIBLE BECAUSE THERE ARE SO MANY WAYS TO GET IN, BECAUSE OF THE VOLUME OF DATA, THE AVAILABILITY OF THE DATA HAS GONE BEYOND HUMAN COMPREHENSION. THE QUESTION IS, WHAT IS THIS TRAGEDY, TO BE RESILIENT AGAINST ATTACK. EVERYBODY HAS TO FOCUS ON THAT, THAT IS HOW THE CSO'S WILL SUCCEED IN THE NEW YEAR. CAROLINE: YOU ARE ALSO POTENTIALLY IPOING IN THE NEXT YEAR. ? HOW IS THAT GOING BIPUL:
WE ARE FORECAST AGAIN ON BUILDING A LONG-TERM BUSINESS. I LEAVE THE IPO TO THE EXPERTS. I CAN'T COMMENT ON IT. ED: RUBRIK CEO, BIPUL, COME BACK AGAIN AND WE WILL ASK AGAIN WHEN YOU ARE GOING TO TAKE YOUR COMPANY PUBLIC. COMING UP ON "BLOOMBERG TECHNOLOGY," LIONS GATE TAKING A STUDIO BUSINESS PUBLIC VIA SPAC. WE HAVE THOSE DETAILS NEXT. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: LET'S TURN TO THE WORLD OF ENTERTAINMENT. WE ARE TALKING ABOUT LIONS GATE, THE STUDIO OF THE HUNGER GAMES TAKING ITS STUDIO BUSINESS PUBLIC. IN A DEAL THAT VALUES THE BUSINESS AT $4.6 MILLION, THAT DOES INCLUDE DEBT. JOINING US TO DISCUSS IS FELIX,
THIS SEEMS TO BE A THEME OF BIG MEDIA COMPANIES SPLITTING THEMSELVES INTO. >> THEY HAVE BEEN TALKING ABOUT THIS FOR YEARS, SEPARATING THE MOVIE AND TV ASSETS FROM STARZ , THE CABLE AND STREAMING DISTRIBUTOR. IT CREATES A PURE PLAY CONTENT COMPANY. THERE IS GOING TO BE A LOT OF HIM AND A TECHNOLOGY IN THE MEDIA SPACE NEXT YEAR. BY NOW, YOU HAVE ANOTHER OPTION FOR BIG CONTENT LIBRARY IF YOU ARE LOOKING TO BULK UP YOUR STREAMING SERVICE.
YOU LOOK AT LIONS GATE, PROBABLY 20,000 MOVIES, TV SHOWS IN THEIR LIBRARY THAT YOU CAN ADD IN. NOW, YOU DO NOT HAVE TO DEAL WITH STARZ, ANOTHER PROBLEMATIC, DECLINING CABLE ASSET. ED: YOU SAY YOU DO NOT HAVE TO DEAL WITH STARZ. WHAT ARE THE UNDERLYING FACTORS THAT MOVE TO THE SEPARATION AND THE UNDERLYING FACTORS BEHIND THE IDEA OF A WARNER BROS.,
PARAMOUNT? IS IT THAT BROADCAST LINEAR TV IS DEAD? FELIX: IT IS THE CONTINUED DECLINE OF PEOPLE CUTTING THE CORD FOR CABLE, ALSO TV ADVERTISING IS ALSO GOING DOWNWARD. WHAT DO PEOPLE WANT? THE STUDIO, LIONS GATE, LOOK AT THEIR BOX OFFICE THIS YEAR. THEY DID GREAT. THEY HAD TWO BIG HITS. SAW WAS PRETTY POPULAR, THE SIXTH BIGGEST U.S. TO MYSTIC DISTRIBUTOR AT THEATRICAL, OVER $500 MILLION IN TICKET SALES. THAT PART OF THE BUSINESS IS
VERY APPEALING. WHAT IS GOING TO HAPPEN WITH STAR -- THE STARZ SIDE OF IT, EVERYONE IS CUTTING THEIR CORD. YOU ARE LOSING SUBSCRIBERS, THAT IS GOING TO BE A CONTINUED TREND INTO THE FUTURE. CAROLINE: FELIX GILLETTE, WE THANK YOU. IT IS GOING TO BE A BUSY RIDE FOR 2024 WHEN IT COMES TO MEDIA M&A. APPLE ENGINEERING ALUMS LAUNCHED AN AI PIN TO REPLACE PHONES.
I HAD A CHANCE TO TRY IT OUT WITH THE COFOUNDERS OF THE COMPANY. >> WEARABLES ON A FEW WISH LISTS THIS YEAR AND MAY BE YOUR NAME IS ON THE WAITLIST. THE AI PIN MADE BY HUMANE, NO ORDINARY SLEEP OR FITNESS TRACKER. THIS WEARABLE WANTS TO REPLACE
YOUR PHONE, THEY WANT YOU TO TALK INSTEAD OF TYPE, THEY WANT YOU TO REMAIN PRESENT. THERE HAVE BEEN SO MUCH HYPE AROUND THESE FORMER AI EMPLOYEES, AND WHAT THEY MADE THAT WE WANTED TO GET A REALITY CHECK ON ACTUALLY USING IT. TRANSLATE INTO JAPANESE. WHERE IS THE BEST SUSHI LOCAL TO HEAR? >> [SPEAKING JAPANESE] ♪ >> CAPTURE THIS. THE HUSBAND AND WIFE TEAM HOPE THE AI PIN WILL BE IN CONSUMERS HANDS EARLY 2024. I WOULD BE INTERESTED IN HAVING IT, BUT ALONGSIDE MY PHONE BECAUSE FOR NOW, IT IS HARD TO PRY YOURSELF AWAY FROM THE SCREEN FULLY.
THE APPS ARE GREAT, BUT WHAT OTHER APPS YOU CAN INTERACT WITH? FOR NOW, I HAVE TO HAVE BOTH. CAROLINE: WHEN YOU THINK ABOUT THE HEIGHT -- HYPE BEHIND THE FORMER APPLES EMPLOYEES, THEY HAVE GOT TO GET THESE THINGS INTO CONSUMERS HANDS BY EARLY NEXT YEAR. ED: IT IS INTERESTING, WHICH DO YOU GO TO? THE TOUCH AND OR HAND HOLOGRAM? BOTH? LET'S STICK WITH AI. A GROWING LIST OF COMPETITORS EMERGE THIS YEAR TO TAKE ON CHATGPT. WHAT CAN WE EXPECT FOR 2024? THERE IS A LONG LIST, YOU WROTE ABOUT THEM IN YOUR NEWSLETTER. WHERE DO YOU WANT TO START? THERE ARE MANY COMPETITORS OUT THERE.
>> I WILL SAY TO LAY THE GROUNDWORK HERE, THE REAL GAME CHANGER WAS WHEN THESE OPEN-SOURCE AI MODEL STARTED TO COME ONTO THE SCENE. FIRST, WE HAD META-RELEASE LLAMA AND LLAMA TO. WE HAVE A FRENCH STARTUP THAT HAS LAUNCHED ITS OWN OPEN-SOURCE MODEL. WHAT THOSE DO IS ALLOW ANYONE FOR FREE TO DOWNLOAD A SIMILAR TECHNOLOGY TO WHAT OPENAI HAS. ALBEIT, SOME PEOPLE SAY SIX
MONTHS OR A YEAR BEHIND THE CLOSED SOURCE MODELS, THE PROPRIETARY ONES. THAT HAS ENABLED THIS WAVE OF NEW STARTUPS THAT ARE NOT JUST BUILDING ON TOP OF OPEN AI'S API, BUT MANUFACTURING THESE LOM'S BUILDING OFF OF WHAT IS OPEN AND OUT THERE FOR FREE. CAROLINE: WHEN I THINK OF MISTRIAL, I THINK OF THE LOBBYING OF THE E.U. AI ACT AND ENSURING THIS REGULATION THAT STARTS TO COME IN GLOBALLY SPEAKING DOES NOT CHOKE OFF INNOVATION FROM SMALLER PLAYERS. IS THAT A KEY CONCERN FOR 2024?
SHIRIN: ABSOLUTELY, THERE IS A REAL DIVIDE IN THE AI INDUSTRY RIGHT NOW ABOUT WHETHER THERE SHOULD BE REGULAR TO NON-OPEN SOURCE MODELS. THE REGULATORY CONCERN THERE IS THAT IF ANYONE AND EVERYONE CAN DEVELOP AN AI MODEL, COULD IT THEN BE USED FOR SOMETHING HARMFUL? COULD SOMEONE USE THAT TO CREATE A NOVEL VIRUS AND UNLEASH IT ON THE WORLD? COULD SOMEONE START HAVING THE CODE DELETE ITSELF OR REPLICATE ITSELF? THESE ARE HYPOTHETICAL SCENARIOS. THAT IS ALL WAY TOO HYPOTHETICAL OF A RISK FOR US TO WORRY ABOUT RIGHT NOW. CAROLINE: IT IS A GREAT STORY TO END THE YEAR ON.
THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY" FOR 2023. ED: WHAT A YEAR. 2024 IS GOING TO BE BETTER.
2023-12-25 06:51
