THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. CAROLINE: I'M CAROLINE HYDE IN NEW YORK. ED: THIS IS BLOOMBERG TECHNOLOGY. CAROLINE: COMING UP, A CONVERSATION WITH CATHIE WOOD. ED: WE WILL TAKE A LOOK AT THE HEALTH OF STARTUPS AMID THE CRISIS.
WE ARE JOINED BY THE CEO OF PILOT. CAROLINE: AND THE OUTLOOK FOR THE GAMING INDUSTRY. CEO JOINING US WITH AN EXCLUSIVE CONVERSATION ON HIS FINDINGS. ALL OF THAT AND SO MUCH MORE COMING UP. IS IT RELIEF?
ANXIETY DIALING BACK ON THE FINANCIAL CRISIS? WHAT FOR THE FEDERAL RESERVE? MONEY TENTATIVELY GOING INTO THE NASDAQ. THE RISK SENTIMENT IS IMPROVING. MONEY IS MOVING OUT OF BONDS. YIELDS PUSH HIGHER. IS THE BANKING CRISIS BEING ALLEVIATED BY REGULATORY MOVES? THE TWO YEAR YIELD IS UP 17 BASIS POINTS.
BITCOIN IS TAKING A BREATHER. WHAT ABOUT THE LIKES OF THE OTHER CRYPTO COINS? EITHER IS CURRENTLY UP ONE PERCENTAGE POINT. WE ARE SEEING MOVEMENT AND OTHER DIRECTIONS OF CRYPTOCURRENCY TODAY. ED:
NEWS HEADLINES ARE DRIVING INDIVIDUAL MOVERS. META IS UP .6%. ALPHABET IS MARKEDLY HIGHER. THE GENERATIVE AI TOOL BEING
ROLLED OUT TO THE PUBLIC. TESLA IS ON THE BEST PERFORMERS. MOODY'S GAVE IT AN INVESTMENT GRADE RATING. LET'S LOOK AT FIRST REPUBLIC POUNCING OFF OF RECORD LOW AS OF MONDAY NIGHT. JAMIE DIMON COMING UP WITH A PLAN TO BOLSTER FIRST REPUBLIC.
THOSE SHARES UP 40%. OUR CONVERSATION WITH CATHIE WOOD IS COMING UP IN A FEW MINUTES, BUT FIRST I WANT TO BRING IN SONALI BASAK. FOR A LOOK AT WHAT'S HAPPENING WITH THE BANKING CRISIS AND ALSO THE RISK SENTIMENT IN THE MARKET. SONALI: WE HAVE TO TALK ABOUT A FEW THINGS. FIRST PUBLIC SHARES ARE UP ON THE DAY AS THE U.S. IS CONSIDERING MEASURES THAT COULD BACKSTOP DEPOSITORS AS WELL AS THE BANKING LEADERS GETTING TOGETHER THINKING ABOUT WHAT THEY COULD DO TO STAVE THE PAIN. I DON'T WANT TO DISCOUNT THE
VOLATILITY NOT JUST IN THAT STOCK, BUT WHAT IT'S DONE TO THE CAPITAL MARKETS. WITHOUT SVB TO COMMUTE -- TO SUPPORT THE COMMUNITY OF INNOVATORS AND ENTREPRENEURS, WITH THE UNCERTAINTY IN LENDING IN THE REGIONAL BANKS, YOU ARE SEEING THE CAPITAL MARKETS LARGELY FREEZING UP. WITH THAT SAID, NOT AS ALL THAT IN THE MARKETS.
WE LIVE IN AN UPSIDE DOWN WORLD WHERE YOU HAVE A BANK LIKE FIRST REPUBLIC DOWNGRADED WITH A CREDIT RATING THAT IS LOOKING AT AN OPPOSITE TRAJECTORY OF A FIRM LIKE TESLA WHERE THE MOODY'S RATING IS MORE THAN YOU SEE AT THE JUNK RATING AT FIRST REPUBLIC. WHAT DOES THIS MEAN AT THE END OF THE DAY FOR HOW PEOPLE VALUE COMPANIES? YOU HAVE SOME OF CATHIE WOOD'S TOP WAGERS FEELING LOVE. TOP EXEC AT OF LAST WEEK POINTED OUT TO ME THAT ROBINHOOD WAS WORTH MORE THAN CREDIT SUISSE. THAT WAS TRUE LAST WEEK, IT IS CERTAINLY TRUE TODAY.
ALSO HAVE COINBASE FEELING THE LOVE OF BITCOIN COMING BACK TO LIFE. THE BITCOIN PRICE STAYING ABOVE 28,000. SERIOUS MOVEMENT THAT WE ARE SEEING ON THE YEAR. THE QUESTION IS HOW SUSTAINABLE IS IT WHEN THIS RISK APPETITE IN THE MARKETS IS SO HEAVILY CLAMPED UP? WE WILL BE EXCITED TO SEE WHAT YOU HAVE TO SAY. CAROLINE: AS WE ANTICIPATE THE FEDERAL RESERVE, JAY POWELL IS GOING TO TAKE THE STAGE TOMORROW. WHAT IS THIS ALL MEANING IN THE
WORLD OF PRIVATE MARKETS AS WELL? WE ARE FOCUSED ON THAT THINKING ABOUT VC INVESTMENT AND STARTUPS. SONALI: WE'RE WATCHING THE PRIVATE CAPITAL PROVIDERS PARSED THESE LOANS WHEN IT COMES TO SILICON VALLEY BANK. THERE'S ONLY SO MUCH THEY CAN TAKE ON WHICH SHOWS YOU THE PRIVATE CAPITAL CAN'T STEP IN FULLY. A LOT OF THOSE CROSSOVER FUNDS ARE STILL FEELING A LOT OF PAIN. THE CAPITAL RAISING ENVIRONMENT IS CLAMPED UP. A LOT OF UNCERTAINTY AND UNANSWERED QUESTIONS, BUT THE MONEY TOMORROW WILL CERTAINLY BE THE -- LESS THAN THE MONEY OF LAST YEAR.
CAROLINE: WE ARE GOING TO BE GETTING TO A KEY CONVERSATION WITH CATHIE WOOD. WE WELCOME OUR TV AND RADIO AUDIENCES WORLDWIDE. WE HAVE BEEN DISCUSSING BANK FAILURES. THE CONFIDENCE CRISIS AND YOU HAVE SAID THAT FOR YOU IS THE RISK OF SYSTEMIC EVENT HAS IT BEEN AVOIDED? CATHIE: I THINK THEY ARE ADDRESSING LIQUIDITY ISSUE BUT NOT REALLY THE SOLVENCY ISSUE FROM OUR POINT OF VIEW. A COUPLE OF THINGS THAT HAPPENED HERE THAT HAVE NEVER HAPPENED REALLY IN HISTORY SO THE BANKS DIDN'T EXPECT IT. THE FIRST WAS INTEREST RATES UP 19 FOLD IN LESS THAN A YEAR. NEVER HAPPENED.
UNDER VOLKER, IT WAS TWOFOLD 10% TO 20%. THE LOW BASE DOES MATTER. A LOT OF PEOPLE DISMISSED IT. EXPECTATIONS WERE A LOW BASE. WE HAVE NEVER SEEN THAT
MAGNITUDE OF AN EARTHQUAKE I WOULD SAY. THEN THE SECOND THING THAT NO ONE EXPECTED AGAIN BECAUSE IT HASN'T HAPPENED IN SUCH A LONG TIME WAS DEPOSITS LEAVING THE SYSTEM. SILICON VALLEY BANK, IT WAS VENTURE CAPITAL FACING A FUNDING DROUGHT SO THEY HAD TO DRAW DOWN THERE DEPOSITS. FOR OTHERS, YOU HAVE MONEY MARKET FUNDS ATTRACTING PAYING MUCH HIGHER THAN DEPOSITS ATTRACTING FLOWS. THAT COMBINATION WAS LETHAL.
NOW, THEY HAVE THE BACKSTOP IN. NOW WHAT WE HAVE? THEY ARE GOING TO BE PAYING UP IF THEY ARE DEPENDING ON THE FACILITY. THEY WILL PAY ROUGHLY 4.37% IS THE RATE. THAT IS MUCH HIGHER THAN MANY OF THEM HAVE BEEN PAYING FOR DEPOSITS NUMBER ONE. WHILE IN THE CASE OF SILICON VALLEY BANK, THEIR AVERAGE HELD TO MATURITY SECURITY ON THE ASSET SIDE OF THEIR BALANCE SHEET WAS ONLY 1.6. THEY ARE GOING TO SEE NET INTEREST LOSSES.
INSTEAD OF HAVING MARKET HIT EQUITY, THESE LOSSES ARE GOING TO HIT EARNINGS. ED: THAT'S THE CAUSE, LET'S GO TO THE EFFECT. SINCE THE COLLAPSE OF SILICON VALLEY BANK, THE MARKET HAS CHANGED ITS FED EXPECTATIONS FOR A LESS HAWKISH OR MORE DOVISH FED. YOU CITE THE FED AS THE CAUSE.
HOW NIMBLE ARE ARK BEING? HOW MUCH ARE YOU RECOUNTING YOUR VIEW GOING FORWARD? CATHIE: AS WE SAID BEFORE COVID AS WE WERE DESCENDING INTO THAT AND WE ARE SAYING NOW, INNOVATION SOLVES PROBLEMS. YOU SHOWED A FEW CHARTS AT THE BEGINNING THAT SUGGEST THAT SOME OF INNOVATORS OUT THERE ARE SOLVING PROBLEMS. THE MOST DRAMATIC EXAMPLE OF IT TO US WAS THE BEHAVIOR OF BITCOIN LAST WEEK. IT TOOK OFF. IT WAS A FLIGHT TO SAFETY VEHICLE. IT IS REALLY PROOF OF CONCEPT THAT INNOVATION SOLVES PROBLEMS. IN BITCOIN, FULLY DECENTRALIZED, FULLY
TRANSPARENT AUDITABLE WHICH IS ADDRESSING ALL OF THE BANKING'S PROBLEMS RIGHT NOW. A FLIGHT TO SAFETY A LITTLE BIT OF AN INSURANCE POLICY. THERE IS NO CENTRAL POINT OF FAILURE IN BITCOIN. ED: ARK HAS 2030 CALLS ON BITCOIN. THE MOST BEARISH AROUND 250,000. THAT IS THE BASE CASE. AT A TIME WHEN NO ONE IS MAKING THAT KIND OF LONG-TERM PROJECTION. CAROLINE: WE KNOW YOU ARE A LONG-TERM
INVESTOR WITH LONG-TERM CALLS, BUT WHAT GETS US TO THE BULL CASE OF $1.5 MILLION PER BITCOIN IF A BANK CRISIS DOESN'T? CATHIE: ONE OF THE THINGS THAT HAPPENS IN A CRISIS IS LIQUIDITY DRIES UP. THAT TENDS TO HER ASSETS. THE FACT THAT BITCOIN MOVED IN A VERY DIFFERENT WAY FROM THE EQUITY MARKETS IN PARTICULAR WAS QUITE INSTRUCTIVE. YOU WILL FIND THE BUILDING BLOCKS OF THOSE PRICE TARGETS IN OUR BIG IDEAS 2023. FOR THE BASE CASE, I WOULD SUGGEST QUITE CONSERVATIVE. WE HAVE DOWN SOME OF THEM DOWN SINCE LAST YEAR.
I CORPORATE TREASURIES PULLED AWAY FROM BITCOIN BECAUSE THE REGULATORS WERE PULLING THEM AWAY FROM BITCOIN ON THEIR BALANCE SHEETS. BUT WE DO BELIEVE THE BEHAVIOR OF THE PRICE THROUGH THIS CRISIS IS GOING TO ATTRACT MORE INSTITUTIONS FOR EXAMPLE. WE HAVE DONE A REPORT TARGETING INSTITUTIONAL INVESTORS AND THE ALLOCATION THAT THEY SHOULD MAKE IF THEY CARE ABOUT THIS NEW ASSET CLASS DIVERSIFYING THE PORTFOLIO'S. I BELIEVE IT IS SOMEWHERE BETWEEN 2.5% AND 6.5%. THESE ARE THE KINDS OF ALLOCATIONS THAT WOULD HAVE MADE TO EMERGING NEW CATEGORIES. CAROLINE: LET'S DISCUSS SOME OF THE WAYS THAT CATHIE WOOD AND ART HAVE INVESTED AND GOT EXPOSURE TO CRYPTO. THERE ARE COMPANIES LIKE
COINBASE, BUT ALSO G BDC, THE GRAYSCALE BITCOIN TRUST. ED: SHE MADE AN INTERESTING POINT ABOUT INSTITUTIONAL ADVISORS -- INVESTORS. PART OF YOUR THESIS ABOUT THE RUN-UP IN BITCOIN IS THAT U.S. CORPORATE'S WOULD ADD IT TO THEIR BALANCE SHEET IN PLACE OF CASH. DOESN'T APPEAR TO HAVE HAPPENED AT THE LEVEL YOU HELPED. IS THAT JUST BECAUSE THE U.S. IS NOT A REGULATORY FRIENDLY
ENVIRONMENT FOR THIS TO HAPPEN? CATHIE: IN THE BEGINNING OF THE CRISIS IT SEEMED LIKE REGULATORS WANTED TO BLAME CRYPTO INSTEAD OF THE SIGNIFICANT RISE IN INTEREST RATES AND THE DEPOSIT OUTFLOWS. NOW WE ARE SEEING IT AS A SOLUTION TO THE PROBLEM, BUT THE REGULATORS ARE STILL RETICENT. SOMETHING INTERESTING HAPPENED TODAY OR MAYBE IT WAS YESTERDAY.
GOVERNOR DESANTIS BASICALLY SAID THAT WE ARE GOING TO SET FLORIDA APART FROM THE REST OF THE NATION. THE ABILITY TO TOUCH COMPANIES THE TOUCH CRIB. -- TOUCH CRYPTO. THESE ARE CASH DEPOSITS, FIAT DEPOSITS NOT CRYPTO AND THIS CAN BE DONE ON A STATE-BY-STATE BASIS.
I THINK YOU WILL SEE FLORIDA LIKE IT HAS DONE IN MANY OTHER WAYS DISTINGUISH ITSELF FROM THE REST OF THE PACK. ED: KATIE GREIFELD, A TERRIFIC REPORTER HAS BEEN TALKING ABOUT GRAYSCALE AND THE OPENING ARGUMENTS IN THE CASE WITH THE SEC. IN THAT DISCUSSION, HOW MUCH ARE YOU CONSIDERING ADDING TO YOUR POSITION AROUND TRUST? HOW ARE YOU READING HOW THAT GRAYSCALE SITUATIONS PLAYING OUT WESTMARK? CATHIE: IT SEEMS AS THOUGH THE JUDGE IS HAVING SOME TROUBLE UNDERSTANDING HOW THE SEC COULD PROVE BITCOIN FUTURES ETF WHICH IS SWAPS BASED THEREFORE HAS COUNTERPARTY RISK BUT WILL NOT ALLOW A SPOT GOING ETF. -- A SPOT BITCOIN ETF. THEY WILL EITHER HAVE TO BASICALLY SHUT DOWN THE BITCOIN FUTURES ETF OR ALLOW A BITCOIN ETF. I THINK GRAYSCALE IS DOING BITCOIN A GREAT SERVICE AND ITS ARGUMENTS HAVE BEEN VERY SOUND.
ED: WE ASKED OUR AUDIENCE WHAT THEY MAKE OF THE BEHAVIOR IN BITCOIN. THIS IS WHAT THEY HAD TO SAY IN THE TERMS OF HOW THE ASSET CLASS BEHAVES. IS IT A MUST HAVE IN A BANKING CRISIS? A FEW RESPONSES SAID YES OR NO, BUT NOT SURE WAS THE MAIN ANSWER. IT ALL COMES DOWN TO HOW WE ARE READING THE FED AND DIFFERENT ASSET CLASSES. CAROLINE:
YOU HAVE SAID EARLIER IN THE CONVERSATION, THE RATE OF CHANGE OF THE FED, THE 19 FOLD INCREASE IN INTEREST RATES THAT HAVE SO UPENDED YOU SAY WHAT'S HAPPENING IN THE FINANCIAL MARKETS AND FINANCIAL CONDITIONS. WE DID SEE SIGNALING FROM THE FED. THEY DID TELL US THEY WERE GOING TO BE HIKING RATES FAST. WHY DIDN'T YOU MOVE YOUR
PORTFOLIO AROUND MORE WESTMARK? CATHIE: THE PREMISE OF THE QUESTION IS THAT WE ARE AN ASSET ALLOCATOR. WE ARE NOT. WE INVEST EXCLUSIVELY IN DISRUPTIVE INNOVATION. WHAT WE DID IS WE CONCENTRATED OUR FLAGSHIP STRATEGY AND OTHERS . WE MOVED IN THE FLAGSHIP CASE FROM 58 NAMES IN FEBRUARY 21 WHEN WE PEAKED DOWN TO 27 OR 28 NAMES.
WE HAVE A SCORING SYSTEM AND IT IS BASED ON VARIABLES WE BELIEVE ARE VERY IMPORTANT TO INNOVATION. WE CONCENTRATED THE PORTFOLIO. MANY PEOPLE IN THE TRADITIONAL ASSET MANAGEMENT WORLD WHEN THEY GO THROUGH A RISK OFF TIME, THEY WILL DIVERSIFY THEIR PORTFOLIOS BY MOVING CLOSER TO THEIR BENCHMARKS. WHAT THEY'RE DOING IS TYPICALLY SELLING OUR KINDS OF NAMES. THAT IS WHY THEY ARE PUTTING EXTREME PRESSURE ON THEM WILL CREATE LOSSES BY SELLING STOCKS AND THAT GIVES US A TAX LOSS ASSET WHICH IS OVER $2 BILLION NOW AGAINST WHICH WE CAN TAKE FUTURE GAINS.
AND CONCENTRATE TOWARD OUR HIGHEST CONVICTION NAMES. WE HAVE A PAPER ON OUR SITE THAT SHOWS THE BENEFITS OF THIS CONCENTRATION STRATEGY DURING RISK OFF AND DIVERSIFICATION STRATEGY DURING RISK ON. CAROLINE: WHEN IT'S RISK OFF, YOU HAVE UNDERPERFORMED AND EVEN ON A FIVE-YEAR BASIS. I KNOW PEOPLE WILL SAY YOU ARE
ALWAYS LOOKING AT A LONG TIME FIVE-YEAR OUTLOOK KIND OF PERSPECTIVE, BUT LOOK BACK FROM HERE AND IT HAS BEEN A TURBULENT TIME, AND INTEREST-RATE HIKE TIME. BUT YOU HAVE UNDERPERFORMED THE S&P 500. WHAT DO YOU SAY TO THOSE WHO ARE LOOKING TO RETIRE IN THE NEXT 5-10 YEARS? SHOULD THEY BE WITH YOU OR DO WE HAVE TO BE LONG-TERM EQUITY INVESTORS THAT HAVE A LONGER RUNWAY TO GET EXPOSURE TO ARC INVESTMENT? CATHIE: WE ARE THE CLOSEST THING TO A VENTURE CAPITAL FUND AND THE PUBLIC EQUITY MARKET. A VENTURE FUND HAS A LONG-TERM INVESTMENT HORIZON. IF AN INVESTOR CANNOT HAVE THAT LONG-TERM AND INVESTMENT HORIZON, THEN THEY SHOULD ALLOCATE PERHAPS A SMALL AMOUNT TO OUR STRATEGY SAY 1% OR 2% WHICH BY THE WAY FROM WHAT WE CAN TELL MOST ADVISORS HAVE US AT THAT 1% TO 3% RANGE. WHY WOULD YOU PUT ANY IF THE RISK WAS THE VOLATILITY THAT YOU SEE ON THIS CHART? IT IS BECAUSE OUR COMPANIES ARE GOING TO DISRUPT THE TRADITIONAL WORLD ORDER.
IF WE ARE RIGHT, THE LARGE-CAP BENCHMARKS AND EVEN SOME OF THE MID-CAP FUNDS ARE GOING TO BE DISRUPTED. WE WILL BE A HEDGE. I WILL SAY AND SUBMIT TO YOU THAT LAST YEAR WAS THE MOST UNUSUAL YEAR OF MY INVESTMENT CAREER. NOT ONLY MINE, BUT BOND INVESTORS. BOND INVESTORS HAD THE WORST YEAR IN 200 SOME ODD YEARS. WHEN INTEREST RATES GO UP 19 FOLD IN LESS THAN A YEAR, IT'S GOING TO KILL LONG-DURATION ASSETS. BONDS ARE LONG-DURATION ASSETS. THEY HAVE NEVER SEEN A YEAR
LIKE THAT. ARK IS A LONG-DURATION ASSET. IF WE ARE RIGHT AND THESE COMPANIES ARE GOING TO DISRUPT THE TRADITIONAL WORLD ORDER, THEN WE WANT TO BE ON THE RIGHT SIDE OF CHANGE. THE MARKET WILL COME OUR WAY AWAY FROM THE BENCHMARKS WHICH REPRESENT THE TRADITIONAL WORLD ORDER TO OUR STRATEGIES. ED: FOR OUR GLOBAL TV AND RADIO AUDIENCE, WE ARE SPEAKING TO CATHIE WOOD. IN JUNE, YOU CITED RETAIL INVENTORY LEVELS AND YOU TOLD ME THAT INFLATION WOULD UNRAVEL. DID YOU GET THAT ONE WRONG? CATHIE: NO, IF YOU LOOK AT UPSTREAM WHAT'S GOING ON, COMMODITY PRICES ARE COMING DOWN QUITE DRAMATICALLY.
SOME BY 70% OR 80%. I WILL ALSO SAY THE RETAIL CALL WAS VERY RIGHT. I THINK YOU WILL AGREE ON THAT. THE DISCOUNTING WE THINK IS GOING TO CONTINUE TO WORK ITS WAY THROUGH THE SYSTEM FROM THE COMMODITY PRICE LEVEL TO DOWNSTREAM NEAR THE CONSUMER. YOU CAN SEE THAT TESLA IS CUSSING -- CUTTING PRICES. IT'S BECAUSE THERE COMMODITY PRICES ARE COMING DOWN. ELON MUSK IS TALKING ABOUT DEFLATION.
THE COST ASSOCIATED WITH INNOVATION IS COMING DOWN BECAUSE IT FOLLOWS A LEARNING CURVE. THE INNOVATION THAT OUR COMPANIES ARE DELIVERING ARE GOING TO BE ONE PART DEFLATION. COMMODITY PRICES AND OTHER. I'VE ALSO TELL YOU THE YIELD
CURVE, THE WEEK BEFORE LAST IT WAS INVERTED BY MORE THAN 100 BASIS POINTS. THAT IS ALSO A DEFLATIONARY SIGNAL AS IS WHAT'S GOING ON IN THE BANKING SYSTEM. I THINK THE BANKING SYSTEM IS FEARING DEFLATION. ED: WE HAVE BEEN TALKING ABOUT A DEFECTOR TIGHTENING A FINANCIAL CONDITIONS IN THE WAKE OF SILICON VALLEY BANK. YOU MOVED LAST YEAR TO GIVE INVESTORS EXPOSURE TO VENTURE FUNDS, PRIVATE FIRMS IN THAT PARTNERSHIP WITH TITAN. HAS THAT PROVED TO BE BAD TIMING? HOW IMPACTED HAS THAT BEEN FROM SVB? CATHIE: WE ARE FLEDGLINGS STILL. IT TAKES A LONG TIME.
WITH TITAN, A SOCIAL THIS TRADITION STRATEGY, WE HAVE OTHER WRAPPERS AS WELL. I MUCH PREFER TO START STRATEGY DURING TOUGH TIMES. WE CAN BE A SOLUTION IF WE GET INFLOWS, PEOPLE LOOKING FOR VENTURE. THEY CAN GET INTO OUR VENTURE
FUND FOR ONLY $500. THE DEMOCRATIZATION OF INVESTING AND THE IDEA CLOSEST TO VENTURE CAPITAL FUND IN THE PUBLIC MARKETS TO DO A VENTURE FUND AT A TIME WHEN THE VENTURE COMMUNITY NEEDS US. IF YOU LOOK AT SILICON VALLEY BANK, THAT SITUATION HAS ROBBED A LOT OF VENTURE CAPITALISTS FUNDING. CAROLINE:
HAS A ROBBED THE U.S. OF INNOVATION? CATHIE: I WOULD SAY REGULATIONS THREATENED TO DO THAT CERTAINLY IN THE CRYPTO SPACE ABSOLUTELY. I ALSO THINK THE SEIZING UP IS NOT JUST A U.S. PHENOMENON. IT LOOKS LIKE IT IS MORE OF A GLOBAL PHENOMENON JUDGING WHAT HAS JUST HAPPENED IN YOUR. -- IN EUROPE. IT IS JUST REGULATION THE LIKES
OF WHICH WE ARE SEEING AROUND BLOCKCHAIN TECHNOLOGY THREATEN U.S. POSITION OF INNOVATION. ED: DID YOU HAVE ANY EXPOSURE TO SVB? CATHIE: NONE WHATSOEVER. AS OUR BUSINESS, NO. OUR COMPANIES VERY LIMITED EXPOSURE. ED: I JUST WANTED TO CLARIFY. FOR OUR AUDIENCE. I'M SORRY TO JUMP IN, BUT WE HAVE TO GO. CATHIE WOOD, WE ARE GRATEFUL
FOR YOUR TIME ACROSS BLOOMBERG TELEVISION AND RADIO. COMING UP, WE STICK WITH THE CRYPTO DISCUSSION. CIRCLE PICKS FRANCE FOR ITS EUROPEAN HEADQUARTERS. ED: TIME FOR A QUICK WALL STREET BEAT WHERE WE TAKE A DIVE INTO WALL STREET. TODAY, CIRCLE CHOOSING FRANCE
AS ITS EUROPEAN HEADQUARTERS. INTERESTING THE CONVERSATION WITH CATHIE WOOD, THE U.S. MIGHT NOT BE THE FOR -- THE MOST FRIENDLY REGULATORY ENVIRONMENT. CAROLINE:
ALMOST LIKE A COMPETITION TO WALL STREET. WHAT IS INTERESTING WITH CIRCLE WAS THE EXPOSURE TO SILICON VALLEY BANK. WE GOT A DEEP EGG OF ITS -- ID PEG OF ITS STABLECOIN. NOTABLE THAT LONDON IS TRYING TO BE THE PLACE, U.K. IS TRYING TO BE THE PLACE FOR EUROPEAN REGULATORY SPACE FOR CRYPTO, BUT FRANCE SEEMS TO BE WINNING OUT. ED:
I REMEMBER FIVE YEARS AGO WHEN CIRCLES MAIN JOB WAS TO MOVE MONEY BETWEEN BORDERS. COMING UP, WE WILL TALK ABOUT GENERATIVE AI AND THE SECURITY LANDSCAPE. ALL OF THAT COMING UP NEXT, THIS IS BLOOMBERG. ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY.
OVER IN LONDON, IT IS FOR: 30 P.M., WHERE EUROPEAN MARKETS ARE CLOSING. STOCKS EUROPE IS UP ONE .4%. EURO-DOLLAR IS THAT ABOUT 1.08. LIKE IN THE UNITED STATES, THE ACTION IS AT THE SHORT END OF THE CURVE WHEN IT COMES TO THE BONDS. LOOK AT THE GERMAN 2-YEAR, UP AROUND 23 BASIS POINTS AS WE PULL OUT OF THE SHORT END OF THE CURVE. MORE MUTED IN GILTS.
3.27%. WE'RE STILL PASSING OVER NOT ONLY WHAT'S HAPPENING WITH CREDIT SUISSE AND USB, BUT ALSO WITH THE ECB IS GOING TO DO GOING FORWARD. CAROLINE: ALL OF THAT HAVING REPERCUSSIONS FOR SENTIMENT ACROSS TECHNOLOGY. LET'S GET BACK TO SOME INNOVATION IN AND OF ITSELF. LET'S TALK OPEN AI. IT TEMPORARILY SHUT DOWN
YESTERDAY. THAT WAS AFTER RECEIVING REPORTS OF A BUG THAT ALLOWED SOME USERS TO SEE THE CHAT TITLES OF OTHER USERS'S HISTORY. UNKNOWN SOFTWARE CAUSED THAT PROBLEM. OPEN AI IS STILL INVESTIGATING THE PRECISE CAUSE. BUT NOTABLE. ED: WHEN SOMETHING LIKE THIS HAPPENS, YOU GO TO REDDIT AND TWITTER.
SO MANY PEOPLE TOOK SCREEN GRABS. THEY SAY, I NEVER ASKED CHAT GPT THAT. BUT THE USER BASE IS SO BIG NOW. CAROLINE:
IN MANY WAYS, WE HAVE SEEN IT BIG, REGULAR TO COMPANIES, BANKS IN PARTICULAR, NOT WANTING THE SOFTWARE IN THE WORKPLACE BECAUSE THEY'RE WORRIED ABOUT VULNERABILITIES. LET'S TO GET TO THAT IN THIS WORLD OF INNOVATION AND WHAT IT MEANS IN TERMS OF CYBER RISKS. WENDI WHITMORE, SENIOR VICE PRESIDENT OF UNIT 42 NETWORKS. YOUR BREAD AND BUTTER IS SECURITY. YOU'RE PARTICULARLY LOOKING AT VULNERABILITIES WHEN IT COMES TO OUTSOURCES OF YOUR WORKFLOW, THE SUPPLY CHAIN INTO YOUR COMPANY YOU HAVE BEEN PUTTING IN KEY REPORTS. WHAT ARE THE KEY FINDINGS OF
THE MOMENT? WENDI: THANKS. I THINK IT TIES INTO THE STORE YOU'RE TALKING ABOUT, IN TERMS OF TECHNOLOGY BEING DISRUPTIVE. THAT CAN BE USED FOR GOOD OR ALSO FOR BAD. SO, I THINK OUR REPORT REALLY TELLS THE STORY THAT WE LIVE EVERY DAY, WHICH IS THAT THINGS, FINANCIAL INSTITUTIONS, ORGANIZATIONS, CITIES, THEY ARE ALL BEING TARGETED IN PARTICULAR BY RANSOMWARE ACTORS. WHAT WE SHOW IS THAT THESE CYBER CRIMINALS ARE BECOMING EVEN MORE EFFECTIVE AT DOING THEIR JOB. THEY DO A GREAT JOB OF UNDERSTANDING WHAT IS IN AN ENVIRONMENT IN WHICH DATA THEY CAN STEAL. STEALING IS A VERY IMPORTANT
CONCEPT BECAUSE WHAT WE ARE NOT SEEING IS JUST THE TRADITIONAL RANSOMWARE ATTACK, WHERE AN ORGANIZATION DATA IS ENCRYPTED. WE ARE SEEING DATA BEING STOLEN AND X WILL TRADED FROM ENVIRONMENTS, AND USED FOR EXTORTION. ATTACKERS ARE DOING THAT ON A DAILY BASIS. THEY ARE NOT JUST THREATENING IT, WE ARE ACTUALLY SEEING ABOUT EVERY FOUR HOURS, MORE ORGANIZATION DATA BEING POSTED. CAROLINE: AND WITH REGULARITY. THE STAKES ARE BECOMING
EVIDENTLY MORE HIGH. ED: THERE'S A POINT I WANTED TO MAKE ON IT CHECK GPT, WHICH IS THAT IT IMPACTED THEM AND THE PREMIUM TIER. WHILE YOU COULD SEE THE SEARCH TITLES OF OTHER USERS, YOU COULD NOT GET INTO THE CONVERSATION. YOU COULD NOT ACCESS DATA TO OTHER USERS, BUT IT WAS BASICALLY DEEMED AS A BUG IN THE OPEN SOURCE SOFTWARE.
MY QUESTION TO YOU, IN THE CONTEXT OF CYBERSECURITY, IS ARE THESE AN AFTERTHOUGHT? DO THEY NOT THINK ABOUT THE BAY SECURITY OF THE SOFTWARE THEY ARE WRITING? WENDI: I THINK VULNERABLE IT IS ACROSS THE BORDER CHALLENGING FOR EVERY ORGANIZATION TO DEAL WITH AND THEY'RE ONLY GOING TO BECOME MORE OF A PROBLEM DUE TO THE SCALE THAT AI BRINGS TO THE TABLE. WE ARE GOING TO CONTINUE TO SEE THESE TYPES OF VULNERABILITIES. I THINK ONE THING THAT IS EXCITING IS THAT LAST WEEK, THERE WAS RELEASED A NATIONAL CYBERSECURITY STRATEGY. IN THAT, WE TALK ABOUT THE NEED TO PROTECT AND EXPAND THE DEFINITION OF KREGEL INFRASTRUCTURE. WE SEE THAT WITH THESE SUPPLY CHAIN ATTACKS AND IT BECOMES A MAJOR ISSUE. WE ARE ALSO SEEING A LOT MORE
RAPID INFORMATION SHARING AND THAT IS BECOMING INCREDIBLY POSITIVE. ED: I'M READING OVER THE RESULTS OF YOUR RESEARCH AND WHAT IS INTERESTING TO ME IS THE TYPES OF BUSINESSES FOUND MOST VULNERABLE ARE THOSE WE ENTRUST WITH OUR DATA ON A DAILY BASIS. CAROLINE: I SUPPOSE ALSO WHEN WE ARE THINKING OF KEEPING OUR OWN COMPANY PROTECTED, WE HAVE DONE COUNTLESS TRAINING EXERCISES ABOUT PHISHING. WHAT ARE THE WAYS IN WHICH
COMMITTEES CAN PROTECT HIMSELF? WENDI: WE HAVE TALKED SO MUCH ABOUT AI AND TECHNOLOGY INVESTMENTS, BUT I THINK WHAT YOU'RE GETTING AT IS THE HUMAN SIDE OF THAT. ONE OF THE MOST COMPELLING FINDINGS FOR US IS WE HAVE SEEN THESE ATTACKS INCREASE SO THAT 20% OF THE ATTACKS WE DEAL WITH INCLUDE A HARASSMENT ELEMENT. I IMAGINE IF WE TALK AGAIN IN TWO MONTHS, WE WILL SEE THAT PROBABLY DOUBLE.
WHAT I MEAN BY THAT IS THAT ATTACKERS ARE SPECIFICALLY GOING AFTER EXECUTIVES, THEIR FAMILIES, REACHING OUT TO THEM PERSONALLY, THEIR STAFF, FINDING ANY WAY THEY CAN TO SOCIALLY ENGINEER DATA OUT OF THEM. THAT IS GOING TO BECOME A CONTINUED AND INCREDIBLY COMPELLING, AND THEY ARE ALSO GETTING SUPER SAVVY ABOUT UNDERSTANDING HOW BUSINESSES WORK. UNDERSTANDING THAT IF I TARGET NOT ONLY YOUR ORGANIZATION, MAYBE IT HAS A GREAT SECURITY BARRIER AND PERIMETER, BUT YOU HAVE YOU HAVE THESE OUTSOURCERS THAT ALSO HAVE ACCESS TO YOUR MOST SENSITIVE DATA. THERE ARE EMPLOYEES IN THOSE ENVIRONMENTS THAT I CAN TARGET EQUALLY EFFECTIVELY THAT HAVE ACCESS TO YOUR ENVIRONMENT. WE ARE GOING TO CONTINUE TO SEE THAT TYPE OF ACTIVITY DIRECTED TOWARD EMPLOYEES ACROSS THE BOARD. CAROLINE: HOW ARE COMPANIES PROTECTING
AND ASSESSING THE VULNERABILITIES OF VERY SUPPLY CHAIN? WENDI: I THINK ONE OF THE BIGGEST KEYS IS THE MINDSET SHIFT. WE ARE SEEING SO MAY ORGANIZATIONS DO THAT AND WIN. I THINK THERE A POSITIVE OUTLOOK , AND OUR REPORT SHOWS THAT SO MANY ARE EFFECTIVELY DEFENDING AGAINST THESE ATTACKS BECAUSE THEY IDENTIFY THEM EARLY, THEY PRACTICE THE RESPONSE, THEY UNDERSTAND THAT THESE ATTACKS ARE GOING TO COME BECAUSE IT IS SIMPLY PART OF POSTING A BUSINESS ON THE INTERNET TODAY.
THEY HAVE GREAT RELATIONSHIPS ACROSS THE BOARD NOT ONLY WITH EXURBS, BUT ALSO LAW ENFORCEMENT -- EXPERTS, BUT ALSO LAW ENFORCEMENT. THEY CAN RENDER THESE ATTACKS INEFFECTIVE. CAROLINE: IT'S FASCINATING WHEN YOU'RE READING THESE SORTS OF DATA REPORTS. IT IS BASICALLY WHAT THE ATTACKERS ARE TRYING TO SET OUT TO DO. ED:
YES, THEY ARE GOING AFTER DATA AND TELCO MEDICATIONS, AND THE LAST ONE, WHICH WE HAVE TO DISCUSS, IS CRYPTOCURRENCY. WHY ARE THEY TARGETING THESE SPECIFIC AREAS? IS IT JUST FOR FINANCIAL GAIN? WENDI: ANY EBONY THEY HAVE THAT MAKES IT EASIER TO MOVE MONEY IS CERTAINLY GOING TO BE A TARGET. MORE WE CAN WORK RELATED TO SHARING BETWEEN PUBLIC AND PRIVATE PARTNERSHIPS, AND THE MOVING OF CRYPTOCURRENCY, DISRUPTING ATTACKER INFRASTRUCTURE, THE MORE WE CAN DO THAT, THE MORE EFFECTIVE WE ARE GOING TO BE AGAINST THESE ATTACKS. I THINK WE ARE IN A BETTER PLACE NOW, IN TERMS OF INFORMATION SHARING AND BEING ABLE TO DO IT IN A WAY THAT STARTS DISRUPTING ATTACKER INFRASTRUCTURE AND REALLY STOPPING SOME OF THESE ATTACKS. ED: WENDI WHITMORE, SENIOR VICE PRESIDENT FOR YOU NEAR -- UNIT 42 AT PALO ALTO NETWORKS.
JUST ACROSS BLOOMBERG ON CREDIT SUISSE, THEY HAVE DECIDED TO SUSPEND SOME BONUSES PER CREDIT SUISSE STAFF. THAT IS COMING FROM THE SWISS THEMSELVES. WE WILL CONTINUE TO TRACK THAT IS A NUMBER OF INDUSTRY BANKERS AND OTHERS ARE IMPACTED BY THAT DECISION. NOW, AND RARE MOVE. GOOGLE HAS SUSPENDED PDD'S SOFTWARE AFTER FINDING MALWARE IN THE UNSANCTIONED VERSION. IT COMES AT A TIME WHEN OFFICIAL THAT U.S. LAWMAKERS HAVE ACCUSED CHINA -- COMING UP, WE'RE ALSO GOING TO TALK ABOUT THE IMPACT OF THE SVB FALLOUT ON STARTUPS.
WE HAVE THE CEO AND COFOUNDER OF PILOT. CAROLINE: LET'S JUST STICK WITH CHINA FOR A SECOND. REMEMBER, 106 $2 BILLION RALLY. THE NEXT LEG IS GOING TO HINGE
ON THE CRUCIAL -- CRUCIAL EARNINGS RELEASE. IT IS BEING DRIVEN BY ANTICIPATION. WE BELIEVE BEIJING WILL KEEP ITS PROMISE OF SUPPORTING THE PRIVATE SECTOR. THIS IS BLOOMBERG.
♪ ED: WE CONTINUE TO TRACK THE FALLOUT FROM SVB'S COLLAPSE. WHAT DOES IT MEAN FOR EARLY AND GROWTH STAGE COMPANIES WHICH RELIED ON THE BANK TO FILL THE GAP LEFT BY BIGGER PLAYERS LESS INCLINED TO TAKE ON THAT KIND OF RISK? OUR BLOOMBERG INTELLIGENCE TODAY SAYS, "LIQUIDITY CONTAGION FROM LACK OF ACCESS TO CREDIT FOR START UPS, IT IS UNDENIABLE AND THE SVB SPOT WILL BE HARD TO FILL." WASEEM DAHER IS THE CEO AND COFOUNDER OF PILOT. IT SPECIALIZES IN CFO SERVICES, BOOKKEEPING, TAX PREP, ETC.
HE JOINS ME IN SAN FRANCISCO. A LOT OF PEOPLE DID NOT UNDERSTAND COME MONDAY MORNING OF THIS WEEK HOW SVB PLAYED OUT IN REAL TERM FOR RUNNING A BUSINESS. WHAT WAS THE EXPERIENCE OF YOUR CUSTOMER BASE? WASEEM: IT WAS VERY PANICKED, I CAN TELL YOU THAT. ONE WAS FOR THE CUSTOMERS OF THE BANK, WHICH WAS ABOUT HALF OF OUR CUSTOMERS. THEY WERE CONCERNED ABOUT THE SAFETY OF THEIR DEPOSITS. THE SECOND THING THAT I THINK MANY PEOPLE DID NOT ANTICIPATE IS THE IMPACT THIS HAD ON OUR CLIENTS BEING ABLE TO MAKE PAYROLL.
IF YOU DIDN'T BANK WITH AS HE -- SVB, BUT YOUR PROCESSOR DID, YOU HAD A PROBLEM. ED: SUNDAY NIGHT, MONDAY MORNING MORE IMPORTANTLY, I HAD SO MANY CALLS AND TEXT MESSAGES. THEY HAD ACCESSED SVB, BUT IT DID NOT MEAN ANYTHING. THEY WERE TRYING TO MAKE PAYROLL.
WHERE DO YOU COME IN, IN THAT PROCESS AS AN ACCOUNTANT? WASEEM: OUR PHONE AND EMAIL BOXES WERE RINGING OFF THE HOOK ALL THE WAY THROUGH SUNDAY NIGHT. "WHAT DO I NEED TO DO HERE, WHAT FUNDS CAN ACTUALLY ACCESS, WHAT CAN I NOT ACCESS, DO I HAVE TO FILE A CLAIM WITH THE FBI SEE, HOW DO I ACTUALLY MAKE PAYROLL, CAN I TRANSFER FUNDS OUT OF A PERSONAL ACCOUNT SO I CAN PAY MY EMPLOYEES?" TACTICALLY, HOW DO I MAKE SURE MY EMPLOYEES GET PAID? ED: IN THE LAST WEEK OR SO WHAT HAS BEEN PUT IN PERSPECTIVE FOR ME IS STARTUPS AND TECH, IN ABSTRACT TERMS. THEY ARE BUSINESSES RUN BY PEOPLE WITH RESPONSE ABILITIES. -- RESPONSES BANG. CAROLINE: THE AFTER EFFECTS OF SVB ARE THAT THE COUNTERPARTY RISK WAS SO LARGE BECAUSE THEY BANG TO THE SAME TYPES OF CLIENTS. YOU ARE A FOUNDER DEPENDENT ON
THE SAME TYPES OF CLIENTS. PILATE'S SERVICING TECH STARTUPS. DID YOU THINK, I NEED TO DIVEST MY OWN BUSINESS? WASEEM: THE MISSION OF PILOT HAS ALWAYS BEEN NOT TO DO ACCOUNTING FOR TECHNOLOGY COMPANIES, ALTHOUGH THAT IS WHERE WE SPECIALIZE. IT IS TO HELP EVERY SMALL BUSINESS OWNER WITH THIS PROBLEM. HOW DO WE MAKE SURE THIS IS
ROBUST AGAINST THESE TYPES OF THINGS? CAROLINE: YOU DIDN'T THINK, I NEED TO HAVE BROUGHT IN, I NEED TO MAKE MY MARKETING FOR EARLY, SMALL COMPANY, RATHER THAN A VC -BACKED COMPANY? WASEEM: NOT URGENTLY. WE HAVE A NUMBER STARTUP CUSTOMERS THAT ARE CONTINUING TO GROW AND STRIVE, AND WE ARE EXCITED TO HELP THEM. ED: ARE THERE ANY FOUNDERS WHO SAID, I CAN'T DO THIS I NEED YOUR HELP? WASEEM: I THINK WE PROBABLY DID A GOOD JOB OF HELPING PEOPLE NAVIGATE THE CRISIS.
UNLIKE ANOTHER PROVIDER, IF YOU HAD ANOTHER BANK, FOR EXAMPLE, PROBABLY LOTS OF NEW BANK ACCOUNTS WERE OPENED. I THINK FOLKS APPRECIATED THAT WE WERE A NICE HANDHOLDING GUIDE THROUGHOUT THE PROCESS. CAROLINE: A LOT OF PEOPLE HAVE SAID IT IS NOT THAT EASY TO GO AROUND DIVERSIFYING WHO YOU BANK WITH. PEOPLE WANT MINIMUMS, AND
ABILITY TO SHOW THE LACK OF RISK IN YOUR BUSINESS MODEL. WHAT ARE YOU NOW SEEING? ARE PEOPLE STILL WITH EASE CHANGING BANKS, ABLE TO DIVERSIFY AND ENSURE TREASURY MANAGEMENTS WHERE THEY WANT IT TO BE? WASEEM: I THINK PEOPLE ARE MORE WILLING TO INCUR A LOT MORE PAIN THAN THEY WERE PREVIOUSLY. I THINK NOT TOO MANY PEOPLE THOUGHT TOO HARD, IS MY BANK SAFE, IS IT SECURE? NOW, THE PREVAILING SENTIMENT IS THAT FOLKS WHO OTHERWISE TOOK A MORE LAID-BACK APPROACH HAVE BECOME EFFECTIVELY FINANCIAL PROPERS. THEY WERE SHOCKED BY THE FACT
THAT THIS WAS NOT AVAILABLE FOR A FEW DAYS. THEY NEED TO MAKE SURE IT NEVER HAPPENS AGAIN. CAROLINE: GREAT TO HAVE YOUR INSIGHTS. WASEEM DAHER, FOUNDER AND CEO OF PILOT. COMING UP, WE WILL TAKE A LOOK AT THE GAMING SPACE. I SHIFTING CANONIC HEADWINDS
ARE NOT SHOWING -- SLOWING DOWN THE PACE OF GAME DEVELOPMENT. UNITY SOFTWARE CEO JOHN RICCITIELLO. WE ARE LOOKING AT PARTICULAR COMPANIES. ED: FIRST REPUBLIC UP 42%. WE CLOSED AT A RECORD LOW ON
MONDAY. WHAT IS DRIVING THIS IS A REPORT THAT JAMIE DIMON AND MORGAN ARE LOOKING TO STABILIZE FIRST. ONE IDEA, ACCORDING TO SOURCES, IS THAT THEY TAKE THE BACKING FROM THE BANKS AND MAKE IT A DIRECT CAPITAL INJECTION. EITHER WAY, THE SOFT CUT, 42%. SO MUCH MORE TO TALK ABOUT NEXT. THIS IS BLOOMBERG. ♪ ED: A TENTATIVE DEFEATED BID TO BLOCK $69 BILLION ACQUISITION OF ACTIVISION BLIZZARD.
WE WILL TALK ABOUT WHAT THAT MEANS. THE FUTURE OF THIS ACQUISITION AS IT SITS IN THE GAMING INDUSTRY WITH JOHN RICCITIELLO , CEO OF UNITY SOFTWARE. THIS IS FOR GAMES RUNNING ON MOBILE PHONES, TABLETS, CONSULS, AND OF COURSE AR AND VR. IN THE FIRST INSTANCE, YOUR
REACTION, FOR YOU, HOW DOES IT CHANGE THE LANDSCAPE? JOHN: FOR US, IT DOESN'T CHANGE ANYTHING. I CHRISTOPHE IS THE MAKER OF ONE OF THE LEADING CONSULS, XBOX. THE GAME INDUSTRY HAS REALLY BEEN AN INDUSTRY OF PAC-MAN FOREVER. COMPANIES LIKE ACTIVISION AND OTHERS HAVE BEEN ACQUIRING. ON THE HEELS OF ALL OF THAT, WHAT WE ALWAYS SEE HIS NEW STARTUPS COMING OUT OF NOWHERE, CREATING AMAZING THINGS. THIS HAS BEEN AN INDUSTRY OF SOLAR -- OF SERIAL ACQUISITIONS AND I DON'T EXPECT IT TO STOP. ED:
MICROSOFT XBOX IS ONE PLATFORM. I HOPE WE CAN BRING THIS UP ON THE SCREEN. I HAVE MADE THE JUMP AND I BOUGHT A PLAYSTATION 5. GOOGLE SHUT DOWN THE PLATFORM I
USED. THERE'S THE BIG NEWS IN THE INDUSTRY. WHAT DO YOU MAKE OF THAT? CAROLINE: [LAUGHTER] YOU ARE MEANT TO BE AGNOSTIC, ED. I KNOW YOU ARE A KEY GAMER.
TO THAT POINT, IN THE MOMENT, YOU HAVE BEEN THINKING ABOUT THE WAYS IN WHICH PEOPLE CONTINUE TO DEVELOP. YOU ARE GOING ACROSS EVERY CIVIL PLATFORM. TALK TO US WHETHER PEOPLE NEED TO WORRY ABOUT THIS ECONOMIC ENVIRONMENT, PERHAPS NOT MAKING A BIG SPLURGE. IS THAT HOW YOU THINK ABOUT YOUR PLATFORM BUILDING? JOHN: LET'S BE REALISTIC, THE WEAKEST PLATFORM FOR GAMING NOW IS MOBILE. CONSOLES ARE ALSO SUPER IMPORTANT.
AND ALSO FOR THE PC. WHILE THEY ARE MUCH SMALLER IN TERMS OF USERS AGGREGATE, THEY ARE ALSO VERY IMPORTANT FOR SOMEONE LIKE ME WHO HAS BEEN IN THIS FOR DECADES, I LOVE THEM ALL. YOU HAVE TO SUPPORT THEM ALL. I DON'T PICK WINNERS OR FAVORITES. ED:
I DON'T PICK WINNERS OR FAVORITES EITHER. MY GAME WAS SHUT DOWN. MOBILE IS WHERE EVERYONE IS PLAYING. WHAT I FIND SO INTERESTING IS THAT YOU HAVE NETFLIX TRYING TO MOVE INTO MOBILE GAMES. YOU HAVE APPLE AND THE APP STORE, GOOGLE PLAY STORE, AND ALL OF THEM ARE TRYING TO ATTRACT POLICY CHANGES AND ADVERTISING. WHAT IS THAT DOING IN THE GAMING SPACE RIGHT NOW? JOHN: THE ADVERTISING MARKET WAS DEFINITELY AFFECTED BY THE PRIVACY CHANGES IMPLEMENT TO BUY APPLE A COUPLE YEARS AGO.
IT ALSO GOT HIT TO A DEGREE BY THE ECONOMY. BUYERS ON THE ADVERTISING SIDE, THE DEMAND SIDE, BROUGHT THEIR SPEND DOWN IN ANTICIPATION OF A RECESSION-LIKE ENVIRONMENT WE ARE IN RIGHT NOW. CONTINUES TO TODAY. IT IS A LITTLE DEPRESSED, BUT IT HAS BEEN STABLE SINCE THE MIDDLE OF LAST SUMMER. IT CONTINUES TO BE A ROBUST MARKET, A LITTLE DEPRESSED FROM THE PEAKS OF COVID OR IMMEDIATELY POST-COVID. CAROLINE: YOU HAVE A LARGE ADVERTISING ARE.
YOU YOURSELF HAD TO MAKE TOUGH DECISIONS FOR UNITY AND THE NUMBER OF EMPLOYEES YOU HAVE. JUST PUSH US TOWARD THE HIKE CYCLE WE FIND OURSELVES IN WHEN IT COMES TO GENERATIVE AI. DOES THAT MEAN PEOPLE STILL LOOK TO INVEST IN YOUR AREA IN THAT WAY OF PRODUCING CONTENT, GENERATIVE AI? IS THAT A HELP OR HINDRANCE? JOHN: FIRST OFF, LET ME SORT OF BOUND THIS A LITTLE BIT WITH DATA. WE ARE AT AN ALL-TIME HIGH TODAY FOR THE ENGAGEMENT THAT PLAYERS HAVE ON A GLOBAL SCALE. NORTH OF 4 BILLION PEOPLE, AS I MENTIONED A MOMENT AGO. IT IS EVEN HIGHER THAN IT WAS
IN THE COVID ERA, WHEN PEOPLE WERE LIVING, WORKING, STUDYING AT HOME. THE INDUSTRY IS VERY, VERY RESILIENT. IT IS ACTUALLY KIND OF SHOCKING THAT IT HAS DONE THAT WELL. OF COURSE, EVERYONE HAS THIS NOTION OF A RECESSIONARY ENVIRONMENT, BUT THE POINT I WOULD MAKE RIGHT NOW IS THE INDUSTRY MOVES ON INNOVATION. ONE OF THE MOST IMPORTANT INNOVATIONS IN GAMING IS AI. ED: WHAT A SHOW IT HAS BEEN.
AN INCREDIBLE START TO THE WEEK. CAROLINE: AND WONDERFUL CONVERSATION WITH
2023-03-26