>> FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY, THIS IS "BLOOMBERG TECHNOLOGY," WITH CAROLINE HYDE AND ED LUDLOW. CATHERINE: I'M CAROLINE HYDE AT BLOOMBERG'S WORLD HEADQUARTERS IN NEW YORK. ED: I'M ED LUDLOW. CATHERINE: COMING, TESLA GETS TENTATIVE APPROVAL FOR A DRIVING SYSTEM IN CHINA. ED: PARAMOUNT EXPECTED TO OUST ITS
CEO AHEAD OF EARNINGS. CATHERINE: SOFI SHARES DROP AFTER Q2 GUIDANCE FAILS. MARKETS, CAUTIOUSLY UP ON THE NASDAQ AT THE MOMENT, .3%.
BIG WEEK. WE'VE GOT THE FED, ALL IMPORTANT CLAIMS, JOBS DATA ON FRIDAY. WE ARE SEEING A 10-YEAR YIELD OF DIVING BACK FOUR OR FIVE BASIS POINTS AHEAD OF THE FEDERAL RESERVE AND WHERE WE SEE THE ECONOMY AND THE INTEREST RATE ENVIRONMENT GOING. NOTABLY, A LOT CAPTURING THE
ATTENTION IN JAPAN AT THE MOMENT. SOME OF THE TRAINING IS GOING TO BE MORE MUTED, BUT WITH THE YEN IT'S BIG VOLATILITY OVER THE DOLLAR-YEN, WHICH GOES HIGHER. WAS IT JAPANESE BOJ INTERVENTION? THEY REMAIN MUM ON THE SUBJECT. BITCOIN, DOWN AGAINST THE U.S. DOLLAR BY 1.25% WITH A RISK OFF YIELD MORE GENERALLY AND ETF FROZEN. WHAT ARE YOU LOOKING AT ON THE MICRO? ED: TESLA, WHICH IS A BIG, ALMOST SURPRISE STORY. JUST A FEW TENTHS OF A PERCENT
AWAY FROM ITS BIGGEST JUMP SINCE JANUARY OF 2020 TWO. SIMILAR TO THE GAINS WE SAW APRIL 24. FULL SELF DRIVING IN CHINA ACCORDING TO A BLOOMBERG SOURCE. TWO SUBSETS OF THAT. A PARTNERSHIP WITH BAIDU ON INCOME MAPPING, SPECIFICALLY FOR THE CHINA MARKET, AND AN AGREEMENT OVER DATA PRIVACY OR TERMS ON DATA PRIVACY THAT WOULD ALLOW IT TO MOVE FORWARD WITH FSD. BIG REACTION IN THE MARKET. ELON MUSK WENT TO CHINA OVER
THE WEEKEND AND MET WITH THE PREMIER, A SURPRISE SEVEN DAYS AFTER HE BAILED ON INDIA. THERE'S A LOT TO UNPICK IN THIS ONE AND IT'S A MOVE HIGHER IN THE TESLA STOCK. CATHERINE: BLOOMBERG, OF COURSE, ALL OVER THIS STORY. IT WAS A SURPRISE AND IT LOOKS AS THOUGH THE MEETING FOR FRUIT. WHAT DOES IT MEAN FOR THE ROBOTAXI AUTONOMOUS VEHICLE FUTURE THAT HE PAINTS? >> WE HAVE TO SEPARATE OUT ROBOTAXI AND WHAT TESLA CALLS. DRIVING. THE NOMENCLATURE HAS BEEN A
MISNOMER. IT IS A DRIVER ASSISTANCE SYSTEM. WHEN YOU ACTIVATE IT, YOU ARE IN CONTROL OF THE VEHICLE AND ARE RESPONSIBLE FOR SUPERVISING IT. IF YOU DO GET INTO A CRASH, TESLA HAS SHOWN A TENDENCY TO TURN AROUND AND BLAME YOU, THE DRIVER. THERE IS A BIG DIFFERENCE BETWEEN THIS SYSTEM THAT TESLA CALLS FSD AND THE ROBOTAXI THAT MUSK HAS MANAGED TO GET WALL STREET EXCITED ABOUT, DESPITE THE FACT THAT HE'S BEEN TALKING ABOUT IT AS A CONCEPT SINCE 2016 AT LEAST. THIS IS A BIG DEVELOPMENT IN THE SENSE THAT FSD, FOR ALL OF ITS SHORTCOMINGS, AND THE PROGRESS THAT HE TO BE MADE TO BE MORE WIDELY USED AND ACCEPTED, IT'S BRINGING MORE INCREMENTAL REVENUE BUT ONLY IN CERTAIN MARKETS. SOMETHING THEY CAUSE -- CHARGE
FOR. IF YOU CAN MAKE ARRANGEMENTS TO GET INCREMENTAL REVENUE OUT OF CUSTOMERS IN CHINA, IT COULD BOOST BUSINESS THERE AT A TIME WHEN IT COULD SORELY USE A LIFT. ED: BEST AS I CAN TELL, YOU HAVE BEEN COORDINATING OUR TEAMS IN CHINA, THE U.S., AND EUROPE. EXPLAIN THE CHRONOLOGY OF WHAT HAPPENED. THERE WERE MULTIPLE STAGES TO ARRIVE AT THIS? CRAIG: WE HEARD RUMBLINGS THAT WAS GOING TO MAKE THIS -- HE WAS GOING TO MAKE THIS TRIP AND LO AND BEHOLD WE WAKE UP TO THE IDEA THAT YES, HE'S LANDED. IT WAS SURPRISING IN THE SENSE THAT TESLA DOESN'T EVEN HAVE A PRESENCE AT THE BEIJING AUTO SHOW.
IT GOT UNDERWAY LAST WEEK, BUT CERTAINLY IT WAS A TIMELY VISIT IN THE SENSE THAT THERE WERE A LOT OF GOVERNMENT OFFICIALS IN TOWN FOR THE SHOW. THE AUTO INDUSTRY HAS BEEN A BRIGHT SPOT FOR THE CHINESE ECONOMY. THE CHINESE RELATIONSHIP WITH TESLA HAS BEEN REALLY POSITIVE. IT'S A SUCCESS STORY, EVEN WITH THE CHALLENGES THEY'VE HAD LATELY WITH CONTINUING THEIR MOMENTUM IN CHINA. CAROLINE: MARKET SHARE ERODED TO NONE OTHER THAN BYD, THE LOCAL COMPETITOR.
REMIND US OF THE DEALS THAT HAVE HAD TO BE DONE WITH CHINESE PLAYERS, ULTIMATELY, TO BE ABLE TO GET THE GRANTING. CRAIG: THE KEY ONE FLAGGED BY ED IS WITH BAIDU. IT'S BEEN INTERESTING BECAUSE ELON MUSK HAS BEEN ON THE RECORD FOR YEARS NOW SAYING THAT TESLA DOESN'T NEED MAPS. IT'S A CRUNCH. IF YOU FORGIVE A CAR UPON, FROM THIS STANCE, IT'S NOT NECESSARY. IN CHINA, FOR YOU TO OFFER THESE KINDS OF SYSTEMS, YOU NEED TO HAVE A PARTNERSHIP WITH A MAPPING AND NAVIGATION COMPANY AND IT JUST SO HAPPENS THAT THE COMPANIES ABLE TO OFFER THOSE SERVICES ARE CHINESE.
IN TERMS OF HOW THEY CONTROL THE ELECTRIC VEHICLE BATTERY MARKET, IN THE MORE INFANT YEARS OF THE EV INDUSTRY FOR CHINA, IT REALLY WAS SUCCESSFUL IN HELPING TO KIND OF BUILD UP WORLD DOMINATING COMPANIES LIKE CAT L. THEY ARE LOOKING TO KIND OF REPLICATE THAT PATTERN WITH COMPANIES THAT PLAY A CRITICAL ROLE IN THESE DRIVER ASSISTANCE SYSTEMS THAT ONE DAY MAY BE ABLE TO SUPPORT FULLY TAKING THE HUMAN DRIVER OUT OF THE EQUATION. ED: WHAT IS SO INTERESTING IS THAT BAIDU IS SO CONFIDENT IN THE DOMAIN OF DEVELOPING AUTONOMOUS TECHNOLOGY. THE STOCK IS ON TRACK FOR ITS BIGGEST JUMP SINCE JANUARY OF 2022. PERCEIVED GOOD NEWS, MORE NUANCED VIEWS IN THE MARKET ABOUT WHAT HE'S DOING HERE. >> ELON MUSK SAW THE OPPORTUNITY TO SAY LET'S GO IN THERE, I WANT TO DO THIS. YOU HAVE SEEN THE CLASHES
BETWEEN THE U.S. AND CHINA. HE'S TRYING TO PUT A FOOT IN BOTH SIDES TO SAY I HAVE GOT THIS TECHNOLOGY. HE HAD THE PREMIUM BRAND AND SUDDENLY THE EV'S STARTED TO GET LESS EXPENSIVE AND TESLA LOST SHARE.
TO ME THIS IS A WAY OF SAYING I'M GOING TO CHANGE THE MATH FOR MYSELF AND IF I CAN BE SUCCESSFUL IN THIS, MAYBE I GET TO BE THE OUTLIER. ED: THAT WAS SARAH HUNT, EARLIER ON "BLOOMBERG SURVEILLANCE." WE HAVE A STRONG PIECE ON THE TERMINAL RIGHT NOW SAYING HOLD ON -- A WEEK AGO ELON MUSK WAS SUPPOSED TO GO TO INDIA AND HE BAILED. NOW HE'S GONE STRAIGHT TO CHINA.
HE SHOWS US THE POWER DYNAMICS AND THE SKILL IN ALL OF THIS, NAVIGATING GEOPOLITICS. CAROLINE: YEAH -- CRAIG: YEAH, THAT HAS BEEN MUTUAL BACKSCRATCHING FOR YEARS NOW. TESLA WAS THE FIRST INTERNATIONAL FOREIGN CAR COMPANY TO BE ALLOWED TO OPERATE IN CHINA WITHOUT HAVING TO READ TO A JOINT VENTURE WITH A LOCAL MANUFACTURER. IT WAS A HUGE WIN FOR ELON MUSK
AND SOMETHING THAT HE FOUGHT FOR FOR YEARS. THE CONSTRUCTION OF THE PLANT FOR TESLA WAS RECORD TIME. EXTREMELY TIMELY IN THE SENSE THAT MUSK WAS REALLY RAMPING UP THE MODEL 3, TRYING TO REMODEL Y OUT. THEY WERE ABLE TO KEEP THE PLANT RUNNING EVEN DURING PANDEMIC, WHEN OTHER PLANTS IN CHINA HAD A DIFFICULT TIME OPENING BACK UP FROM THE INITIAL SHUTDOWN.
SO, CHINA HAS VERY MUCH SUPPORTED TESLA WHEN TESLA NEEDED IT MOST. WE ARE SEEING U.S. COMPANIES PULL BACK A BIT FROM CHINA, MAYBE AT LEAST DERISK A LITTLE. APPLE DID THAT IN INDIA. A SIMILAR MOVE. IT'S CLEAR THAT MUSK DOESN'T SEE THE -- URGENCY TO DO THAT. ED: TERRIFIC REPORTING, THANK YOU SO MUCH. ANOTHER STORY CLOSE TO THIS ONE, U.S. AUTO SAFETY REGULATORS
INVESTIGATING THE FORD A BLUE CRUISE ASSISTANCE DRIVER FEATURE AFTER A PAIR OF FATAL CRASHES INVOLVING THE TECHNOLOGY. THE OFFICE OF DEFECT INVESTIGATION OPENED A PRELIMINARY EVALUATION AFTER RECEIVING NOTICE OF TWO SUVS THAT COLLIDED WITH STATIONARY VEHICLES. WE WILL CONTINUE TO TRACK THAT ONE. CAROLINE: NOTABLE. COMING UP, LOOK, GOT TO TURN OUR ATTENTION TO ANOTHER KEY STOCK ON THE MOVE.
PARAMOUNT, ANNOUNCING ITS OWN CEO OUSTING, POTENTIALLY, A HEAD OF A POTENTIAL PURCHASE OF THE BUSINESS. WE WILL BRING YOU MORE. THIS IS "BLOOMBERG TECHNOLOGY." ED: TALKING TACTIC, THE SUPREME COURT REJECTED AN APPEAL FROM ELON MUSK OVER THE SO-CALLED TWITTER SITTER, OVERSEEING SOCIAL MEDIA POSTS ABOUT TESLA. WITHOUT COMMENT THEY REFUSED TO HEAR CONTENTIONS ON THE ACCORD THAT HE SIGNED INTO THOUSAND 18 THAT HE SAYS NOW VIOLATES HIS CONSTITUTIONAL FREE-SPEECH RIGHT . WE WILL TRACK THAT ONE.
THE APPLE IPAD HAS BEEN HIT BY THE DIGITAL DOMINANCE CRACKDOWN, ADDED TO A LIST OF BIG TECH PRODUCTS AND SERVICES HIT BY THE RULES. IT MEANS THAT APPLE HAS SIX MONTHS TO MAKE SURE THAT THEIR TABLET ECOSYSTEM COMPLIES WITH A RAFT OF PREEMPTIVE MEASURES UNDER THE DIGITAL MARKETS ACT. DAVID ELLISON HAS OFFERED CONCESSIONS, AS WELL AS THE REDSTONE QUESTION, TO MAKE POSSIBLE CONTROL OF PARAMOUNT GLOBAL MORE APPEALING. THE SKY DANCE BID WAS DESCRIBED AS A BEST AND FINAL OFFER ON SUNDAY.
THE PARAMOUNT BOARD IS STILL UNDECIDED ABOUT ENTERING THE DEAL WITH ELLISON GIVEN THE OPPOSITION FROM OTHER INVESTORS. CAROLINE: THERE'S A LOT TO CONSIDER AND CHRIS HAS BEEN REPORTING ON IT ALL WEEKEND. WE UNDERSTAND THE BOARD IS WONDERING IF THEY ASKED THE CURRENT CEO OF PARAMOUNT, AHEAD OF EARNINGS COMING OUT AFTER THE BELL TODAY, AMID THE SALES PROCESS. CHRIS: THE SITUATION WAS DESCRIBED AS BEING VERY FLUID, WHICH IS I THINK AN UNDERSTATEMENT. WE ARE REASONABLY CERTAIN THE
COMPANY WILL ANNOUNCE EARNINGS THIS AFTERNOON, BUT BEYOND THAT, YES, THEY ARE EXPECTED TO SAY GOODBYE TO THEIR CEO, BOB BAKISH , REPLACING HIM WITH A MANAGEMENT COMMITTEE ON AN INTERIM BASIS. SKY DANCE, THAT WOULD BE A CHANGE OF CONTROL FOR THE COMPANY AND THAT WAS THEIR BEST AND FINAL OFFER YESTERDAY DAVID ELLISON, THE OWNER OF SKY DANCE, OFFERING HIS CONTRIBUTION IN TERMS OF BUYING PARAMOUNT STOCK AT A PREMIUM FOR WHAT IT'S TRADING AT TODAY. APPEASING THE SHAREHOLDERS. REDSTONE IS ALSO APPARENTLY MAKING CONCESSIONS ALLOWING THE NONVOTING SHAREHOLDERS TO WEIGH IN ON A DEAL, SOMETHING THAT THEY DON'T HAVE TO DO BUT IT IS SORT OF BEST PRACTICE IN SECURITIES LAW THESE DAYS. SO, A WHOLE LOT GOING ON. ED:
YOU HAVE OUTLINED THE MECHANICS OF THE DEAL, BUT GIVE US THE RATIONALE AS TO WHY. WHY ARE WE TALKING ABOUT SOMEONE CHANGING THE DEAL WITH PARAMOUNT? WHAT’'S GOING ON? CHRIS: THE TRADITIONAL TV BUSINESS IS IN TROUBLE, PEOPLE LEAVING FOR STREAMING SERVICES. ADVERTISING HAS BEEN IN DECLINE. YOU WILL SEE A PICKUP THIS
QUARTER BECAUSE OF THE SUPER BOWL. THE STREAMING BUSINESS THAT IS THE FUTURE IS STILL LOSING MONEY. ALTHOUGH THE LOSSES ARE COMING DOWN A BIT, STILL IN THE HUNDREDS OF MILLIONS OF DOLLARS. IT'S A QUESTION AS TO WHETHER THEY WILL EVER STOP. SO, WHEN YOUR MAIN BUSINESS IS LIKE THAT, THE MOVIE BUSINESS BEING A PROBLEM OVER THE LAST YEAR, A CHALLENGE GETTING PEOPLE BACK TO THEATERS. PRETTY MUCH EVERY LEG OF THEIR
BUSINESS IS IN SOME SORT OF PERIL. THAT IS WHY THE STOCK IS NOW AND THEY ARE CONSIDERING ALL OPTIONS. ED: ALL RIGHT, CHRIS, REALLY APPRECIATE HAVING YOU UP FROM L.A. SO FAR, SHARES OF SOFI ARE FALLING.
WE WILL SPEAK TO THE CEO. ANOTHER STOCK ON THE MOVE. CAROLINE: IT'S IN FRANCE, ALL ABOUT CONTENT GETTING SPLIT INTO FOUR UNITS. SALES ROSE IN THE FIRST ORDER FOR THE FRENCH MEDIA COMPANY. THIS IS "BLOOMBERG TECHNOLOGY." CAROLINE: SOFI COME OUT WITH EARNINGS, LOOKING STRONG TODAY, BUT THE FORECAST IS WHAT PEOPLE ARE WARNING OTHERS ABOUT.
ADJUSTED NET REVENUE DOWN, THERE. WE WANT TO DIG INTO THAT NUANCE WITH ANTHONY NOTO. YOUR FULL-YEAR GUIDANCE WAS RAISED IN YOU ARE FEELING POSITIVE ABOUT HOW YOU ARE STEALING -- STEERING THE COMPANY AT AN INFLECTION POINT, BUT WHY IS THE SECOND ORDER ABOVE EXPECTATIONS? WHAT CAN YOU ADD TO WHAT WE ARE SEEING RIGHT HERE, RIGHT NOW? ANTHONY: GREAT FIRST QUARTER, IT'S IN LINE WITH THE TRANSFORMATION THAT WE TALKED ABOUT, OUR COMBINED TECH PLATFORM FINANCIAL SERVICES BUSINESS, GROWING 54% YEAR-OVER-YEAR, COMBINING THE FLAT REVENUE. THAT WAS A PART OF THE PLAN. WE HAD OUR SECOND CONSECUTIVE QUARTER OF POSITIVE EPS, IN ADDITION TO GROWING BOOK VALUE ON A TANGIBLE BASIS PER SHARE BY 60%, POTENTIALLY. WE GUIDED THE FULL YEAR, AS YOU MENTIONED, ABOVE NOT JUST OUR BEAT BUT OUR PRIOR GUIDANCE. THAT'S A POSITIVE OVERALL OUTLOOK.
WE HAD NOT USUALLY GIVE THE CURRENT QUARTER AND AT THE END OF 2024 WE GAVE THE FULL GUIDANCE FOR Q1, NOT Q2. BECAUSE WE ARE TAKING A CONSERVATIVE VIEW ON LENDING, LENDING WILL BE DOWN SEQUENTIALLY IN Q2, WHILE OUR TECH PLATFORM FINANCIAL SERVICES REVENUE WILL HAVE STRONG YEAR-OVER-YEAR GROWTH WITH STRONG SEQUENTIAL GROWTH AND CONTINUED PROFITABILITY AS WELL. WE FEEL GOOD ABOUT THE BUSINESS TRANSFORMATION WE HAVE MADE OVER THE PAST SIX YEARS. GROWING REVENUE THAT'S FLAT IS
A REAL TESTAMENT TO THE DIVERSITY OF OUR BUSINESS. YOU CAN'T FEEL GREAT ABOUT THE SHARE REACTION -- CAROLINE: YOU CAN'T FEEL RIGHT ABOUT THE SHARE REACTION. ANTHONY: YOU CAN'T REACT TO THOSE DAY TODAY.
WE ARE HAPPY WITH THE TREND. WE ARE TAKING A CONSERVATIVE VIEW ON LENDING, PRUDENT GIVEN THE UNCERTAIN ENVIRONMENT. WITH IT AS IT BECOMES MORE STABLE, WE WILL BE MORE AGGRESSIVE WITH LENDING. GIVEN THE UNCERTAINTY IN THE LAST SIX MONTHS ON RATES. ED: GOOD MORNING.
A LOT OF THE QUESTIONS WE GOT FROM THE AUDIENCE FOR YOU WERE ABOUT THE CAPITAL THAT YOU RAISED AND YOUR STRATEGY GOING FORWARD. A LOT OF INTEREST IN THAT. I'M NOT CURE WHY THE PEOPLE WANT TO KNOW, BUT THAT IS THE QUESTION. ANTHONY: I THINK THAT PEOPLE MISUNDERSTAND THE SHARE COUNT. FIRST, WE ISSUED A CONVERTIBLE
NOTE. 1.2 5% INTEREST. IT ALLOWED US TO REDEEM A PREFERRED SECURITY, PAYING 12.5 PERCENT INTEREST. THAT WILL PROVIDE SAVINGS FOR US TO.
WE HAVE ALREADY NOTICED THE HOLDERS OF THAT PREFERRED INSTRUMENT BEING REDEEMED SOONER THAN EXPECTED. WE ALSO BOUGHT BACK AN EXISTING CONVERT TRADING BELOW FACE VALUE ACCRETIVE TO BOOK VALUE. IT WAS BASICALLY NEUTRAL ON TANGIBLE BOOK VALUE PER SHARE. THERE WAS A PERCEPTION THAT IT'S DILUTED. IT'S NOT. I THINK THERE WAS A MISUNDERSTANDING ON THE CIRQUE OUT IN THE FUTURE. ED: MY COLLEAGUE AT BLOOMBERG INTELLIGENCE HAS A CLEAR THESIS FOR YOU GUYS, BRILLIANT APP ONE-STOP SHOP THAT TARGETS YOUNG PROFESSIONALS. THAT IS WHAT THEY THINK.
BUT THE STORY REALLY IS THIS HIGHER INTEREST RATE FOR LONGER ENVIRONMENT NARRATIVE. HOW DOES THAT THESIS WORK IN THAT RATE ENVIRONMENT? ANTHONY: YOUR COLLEAGUE SAID IT WELL, WE SHOULD CONSIDER HAVING THEM AS ONE OF OUR SPOKESPEOPLE. HIGHER FOR LONGER WILL CREATE CHALLENGES FOR FINANCIAL INSTITUTIONS.
IT'S A RISK-BASED CAPITAL RATIO RELATIVE TO WHERE WE HAVE TO OPERATE FROM A REGULATORY STANDPOINT WITH PLENTY OF LIQUIDITY. AS WE SAID TODAY, A REGIONAL BANK WAS CHALLENGED AND WE BENEFITED FROM STRONG DEPOSIT OF , RECORD GROWTH IN DEPOSITS. 90% OF OUR DEPOSITS WERE FROM DIRECT DEPOSIT CUSTOMERS, WE ARE THEIR PRIMARY ACCOUNT AND IT'S VERY STICKY.
WE WILL PUT STRESS ON THE BALANCE SHEETS OF OTHERS THEY ARE NOT HEDGING APPROPRIATELY DELAYED WE DO. WE HEDGE THE LOANS SO THEY DON'T HAVE THAT INTEREST RATE EXPOSURE AND CAN MATCH WHAT WE ARE GIVING AS THE APY FOR MONEY MEMBERS AGAINST THE OFFERS THEY HAVE TO MAINTAIN HIGHNIM AND WE HAVE A PLATFORM NOT TIED TO INTEREST RATES. IN THE FINANCIAL SERVICES BUSINESS, WE HAVE THE INVEST PLATFORM GROWING NICELY AS ANOTHER SOURCE OF DIVERSIFIED REVENUE FOR US. CAROLINE: WE ARE A TECHNOLOGY THAT WANTS TO GO INTO THE SPECIFIC, BUT WHY ARE YOU MORE CAUTIOUS ON THE U.S. ECONOMY? WHY ARE YOU SAYING 5% IN EXCESS OF UNEMPLOYMENT WITH INTEREST RATE CUTS THAT YOU HAVE HAL VED? ANTHONY: OUR BALANCE SHEET HAS GROWN QUITE MEANINGFULLY. AS WE CAME INTO 2024, OUR CHOICE WAS COULD BECOME UP WITH OUR OWN EXPECTATIONS FOR 2020 FOUR AND USE CONSENSUS? THE PLANNING STANCE THAT WE TOOK WAS THAT THERE WOULD BE ONLY FOUR RATE CUTS. THE MARKET FACTORED IN SIX AT
THE TIME. WE TOOK A PLANNING STANCE ON UNEMPLOYMENT THAT HAD BEEN MORE THAN 5%. THE MARKET WAS WELL BELOW THAT. WE TOOK A STANCE THAT WAS MODEST ON CONTRACTION. HERE WE SIT TODAY THREE MONTHS LATER IN THE MARKET IS ONLY FACTORING IN ONE TO TWO RATE CUTS, SO I'M THANKFUL THAT WE TOOK A CONSERVATIVE STANCE AND STILL HAVE A CONSERVATIVE STANCE .
I COULDN'T FEEL BETTER ABOUT THE UNDERLYING TRENDS AND STRATEGY OF OUR BUSINESS, BUT WE ARE NOT IN AN ENVIRONMENT WHERE ANYONE HAS A STRONG OR HIGH CONVICTION LEVEL ON WHERE THE RATES WILL BE AND THERE IS STILL A DEBATE ABOUT RATE CUTS WHATSOEVER. WE CANNOT PUT THE BUSINESS AT RISK HOPING THAT WE CAN FIGURE IT OUT, SO WE ARE HEADED TO A CONSERVATIVE POINT OF VIEW. ED: WE ARE SHORT ON TIME, BUT YOU'RE MOVING AWAY FROM THE STUDENT LOAN REFI TRADEMARK IS THIS. WHY? ANTHONY: THE STRATEGY WAS TO CREATE A ONE-STOP SHOP FOR FINANCIAL SERVICES NEEDS. NO ONE WAS PROVIDING ALL THE PRODUCTS THAT YOU WOULD NEED. SO, WE OFFER HOME LOANS,
STUDENT LOANS, PERSONAL LOANS, IN SCHOOL LOANS, CHECKING AND SAVINGS, INVESTING, INSURANCE, SMALL TO MEDIUM BUSINESS LOAN GENERATION, AND THE TECH PLATFORM BUSINESS. THE STRATEGY WAS ALWAYS ABOUT BUILDING A ONE-STOP SHOP FOR YOUR FINANCIAL SERVICES BUSINESS NEEDS RESULTING IN A DIVERSIFIED BUSINESS ALLOWING US TO MAKE CHOICES ABOUT WHAT WE GROW AND WHAT WE TAKE A CONSERVATIVE VIEW ON. ED: ANTHONY NOTO, GREAT TO CATCH UP AND HAVE YOU BACK ON THE PROGRAM. COMING UP, HONG KONG IS NEXT IN LINE TO LIST A BATCH OF CRYPTO ETS. THOSE DETAILS, NEXT.
STAY TUNED, WE'LL BE RIGHT BACK. LOOK A LOT, BUSY MONDAY, BIG WEEK AHEAD. THIS IS "BLOOMBERG TECHNOLOGY MORGAN: AFTER A YEAR AND A HALF BREAK, APPLE IS FINALLY READY TO RELEASE NEW VERSIONS OF THE IPAD. APPLE WILL RELEASE A NEW
VERSION OF THE IPAD PRO, AND UPGRADE TO THE IPAD ALE -- AIR, AS WELL AS A NEW PENCIL STYLUS AND KEYBOARD KIT. THE IPAD PRO WILL GET THE BIGGEST UPGRADE OF ALL, ADDING AN LED DISPLAY TO THE IPAD FOR THE FIRST TIME, THE SAME CRYSTAL SCREEN TECHNOLOGY USED IN THE IPHONE X SINCE 2017. THE IPAD PRO WILL ALSO GET THE M3 CHIP, THE SAME PROCESSOR USED SINCE MARCH.
THE IPAD AIR WILL GET THE M2 CHIP FROM 2022 AS WELL AS A 12.9-INCH SCREEN OPTION. THAT MEANS THE MID TIER RANGE WILL GET A BIGGER DISPLAY SIZE FOR THE FIRST TIME. THE MAGIC KEYBOARD, WHICH INTEGRATES THE KEYBOARD AND TRACKS THAT INTO AN IPAD CASE, WILL GET A NEW ALUMINUM FRAME, MAKING THE IPAD PRO MORE LAPTOP-LIKE WHILE IN USE. I AM MARK GURMAN, THIS IS POWER ON. EMILY: WELCOME --ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." I'M ED LUDLOW IN SAN FRANCISCO.
CAROLINE: I AM CAROLINE HYDE. WE WORK HAS MANAGED TO KIND OF BANKRUPT THE DEAL. WE UNDERSTAND THE ALL-IMPORTANT MEETING TODAY, APRIL 29, COMING THE EXIT DEAL. NEWMAN IS OBJECTING, SAYING IT IS A FAILED PLAN. NEWMAN HAD OFFERED TO BUY WE WORK, BUT IT WAS REJECTED. THE FACT THAT THEY HAVE
BASICALLY GOT A $4 BILLION INSECURE DEBT THAT IS A KEY ISSUE, LIMITING ISSUE HERE MORE BROADLY, BUT IT LOOKS AS THOUGH A DEAL HAS BEEN CUT, BUT ADAM NEUMANN IS NOT INVOLVED. LET'S GET A MARKET CHECK. THEY ARE TENTATIVELY HIGHER. WE GOT THE FED, THE DOLLAR STILL LOWER VERSUS JAPANESE YEN, A BIG MARKET MOVE, AND MAYBE WE SEE SOME BOJ INTERVENTION THAT HAS SO FAR REMAINED SILENT FROM JAPAN, AND IT IS INDEED MUTED AMID A HOLIDAY TRADING SESSION. LET'S LOOK AT WHAT IS HAPPENING ON INDIVIDUAL NAMES.
I WANT TO SHOW WHAT HAPPENED IN EUROPE, BECAUSE THEY JUST FINISHED TRADING IN EUROPE, ATOS OF 18%, THE FRENCH GOVERNMENT POTENTIALLY STEPPING IN WITH A BED FOR THE I.T. COMPANY -- BID FOR THE I.T. COMPANY. IT HAS TO AVOID INSOLVENCY ITSELF COME UP MORE THAN 18%. SES, THE TWO FUNDS WE COULD SEE WHEN IT COMES TO ALL-IMPORTANT VIEWS ON THE COMING TOGETHER OF SES AND INTEL. WHEN WE ONCE AGAIN THINK ABOUT A MERGER IN THESE SATELLITE BUSINESSES, THE DEAL FAILED IN PREVIOUS ATTEMPTS TO COMBINE, BUT WE COULD POTENTIALLY SEE A REVIVAL OF DISCUSSIONS.
DOWN FROM 10%. REMEMBER, INTERCEPT IS PRIVATE. MICROSTRATEGY IS DOING ALL RIGHT, AND IT HAS DONE PARTICULARLY WELL AFTER BEING A SORT OF PROXY FOR BITCOIN. 11 296, AND WE WILL TALK MORE AFTER THE BELL. SOME OF CHINA'S TOP ASSET MANAGERS ARE IN FINAL PREPARATIONS TO BEGIN TRADING TOMORROW. BLOOMBERG'S KAILEY GREIFELD JOINS US FOR MORE KID WHAT IS INTERESTING FOR HONG KONG IS AUSTRALIA ANALYZE THE OPTION.
THIS IS A THEME. KAILEY: IT IS DEFINITELY A THEME. TAKE A LOOK AT HONG KONG, FOLLOWING THE U.S. BLUEPRINT, WE HAVE A FEE WAR
BEFORE IT LAUNCHED. WE ARE TALKING ABOUT A TRIO OF ISSUERS HERE, HARVEST, SO YOU HAVE CHINA, AMSI, AND HARVEST ANNOUNCE THEIR FEES IN JUST A FEW DAYS, AND TURNED SARAH ACTUALLY CAME OUT AND WAVE THEIR FEE. 60 BASIS POINTS, THEY ARE WAVING THAT FOR THE FIRST FOUR MONTHS OR SO. COMPARE THAT TO HARVEST, THEY ARE GOING AHEAD WITH A FEE WAIVER, VERY POPULAR IN THE U.S.
AFTER SIX MONTHS, THEY WILL CHARGE .3%. THAT IS OUR LOW WATERMARK. CHINA ANC ON THE HIGH SIDE, 99 BASIS POINT, SO A BIT EXPENSIVE, BUT WE WILL HAVE TO SEE HIM OF WHAT WE SAW IN THE U.S. MARKET WAS EVEN THOUGH YOU HAVE
THOSE FEES CUT INTO THE LAUNCH, ACTIVE LUNCH, YOU HAD A LOT OF REDUCTIONS AS WELL. ED: ON THIS PROGRAM, WE LOVE COVERING CITIES AROUND THE WORLD PURE HONG KONG IS CLEARLY CONSIDERING THIS IMPORTANT, BUT IN ACTUALITY, IT IS A SMALL MARKET, YOU KNOW. GIVE US THE NUMBERS. KAILEY: IT IS A SMALL MARKET. THAT IS IMPORTANT TO NOTE. WHEN YOU LOOK AT HONG KONG, THE
TOTAL A UM IS ABOUT $47 BILLION. IF YOU TAKE A LOOK AT THE SUITE OF U.S. ESPYS, BITCOIN, ETF'S, THEY ARE ALREADY ABOVE THAT. WHEN YOU THINK ABOUT THE IMPACT TO BITCOIN, OF COURSE, PROBABLY NOT TOO MEANINGFUL FROM AN INFLOWS PERSPECTIVE, BUT WHEN IT COMES TO SENTIMENT, WHICH IS WHAT POWERS BITCOIN, IT COULD BE MEANINGFUL. ED: BLOOMBERG'S KAILEY GREIFELD, WE LOVE HAVING YOU ON THE SHOW. THANK YOU VERY MUCH. LET'S GO FROM CRYPTO BACK TO
ENTERTAINMENT WITH PARAMOUNT'S BOARD CONSIDERING REMOVING BOB BAKISH. I WANT TO TALK WITH BLOOMBERG'S GEETA ARUNATHAN. WHAT YOU THINK THE CATALYST IS, GEETA? GEETA: I THINK IT IS BASED ON THIS WEAKENING OF THE ELEPHANT DEAL.
ONE IS THERE'S AN ELEPHANT WHO OWNS US GUIDANCE MEDIA NOW PROPOSING TO BUY A BLOCK OF SHARES AT A PREMIUM TO MAKE IT MORE PALATABLE FOR INVESTORS, AND I THINK FINALLY, SHERRY REDSTONE, THE ONE WHO KIND OF CALLED ALL THE SHOTS AT PARAMOUNT, SHE FINALLY OPENED FOR WHAT IS THE MAJORITY OF MINORITY VOTERS, SO SHE IS LETTING THE NONVOTING SHAREHOLDERS HAVE A SAY IN WHETHER THIS TRANSACTION SHOULD GO THROUGH. THAT IS REALLY CRITICAL, BECAUSE THERE HAS BEEN SO MUCH BACKLASH AGAINST THE SKY DANCE DEAL, BECAUSE A LOT OF THE NONVOTING SHAREHOLDERS HAVE SAID IT WILL DILUTE THEM, AND IT REALLY ONLY BENEFIT, YOU KNOW, SKY DANCE AND OF COURSE SHELLEY REDSTONE. CAROLINE: ONE OF THE KEYS HAVE BEEN AERIAL INVESTMENTS, AND THEY HAVE IN PUTTING OUT LETTER SAYING WE ARE WORRIED ABOUT THE WAY THIS HAS BEEN EXECUTED, THE PREMIUM AND THE MERGE OF WHAT IS HAPPENING IN SKY DANCE, BUT ALSO THEY WERE TROUBLED BY THE LOOMING DEPARTURES OF FOUR PARAMOUNT BOOT DASHBOARD MEMBERS. IS THIS, FROM A GOVERNMENT'S PERSPECTIVE, IF YOU SEE THE BOARD POTENTIALLY GETTING RID OF THE CEO, A TRANSITION FOR THE CURVES? GGEETHA: RICE, HADLEY, GATES & -- GEETHA: YEAH, THIS IS UNUSUAL.
YOU HAVE BOB, WHO HAS BEEN THE CEO OF THE COMPANY FOR QUITE A WELCOME EVER SINCE VIACOM AND CBS WERE MERGED COMPANY KIND OF HAS TAKEN CHARGE, AND HE HAS I THINK DONE A FAIRLY GOOD JOB, ALTHOUGH SOME PEOPLE WOULD PAY THAT, YOU KNOW, GETTING INTO THE CEILING BUSINESS WAS NOT A GOOD IDEA TO BEGIN WITH. THAT IS BECAUSE, YES, THEY HAVE SUCCESSES, SUBSCRIBERS, BUT THEY HAVE LOST A TON OF MONEY, THEY HAVE LOST ABOUT FIVE BILLION DOLLARS, AND A LOT OF PEOPLE SEEM TO THINK THAT IT IS BECAUSE OF A MISSTEP OR WAS A MISSTEP BY BOB BAKISH. THERE'S A LOT OF CONFUSION RIGHT NOW, GETTING RID OF BOB BAKISH DEFINITELY CHALLENGES THE S STATUS QUO. BOB BAKISH WAS AGAINST THE DEAL WITH SKY DANCE. CAROLINE: WOW. IT LOOKS AT THE BIT IS EVOLVING VERY QUICKLY ON THE DAY, AND WE WILL BE LOOKING WITH YOU AGAIN. MEANWHILE, COMING UP, IT TAKING A LOOK AT A NEW KIND OF COLLEGE, CALLED THE FOUNDERS FUND.
EASTERN TIME, BLOOMBERG ETF IQ. THIS IS BLOOMBERG. ♪ ED: AN ONLINE ALTERNATIVE TO COMMUNITY COLLEGES, TRYING TO TACKLE ALL KINDS OF PROBLEMS, ONE OF THEM BEING STUDENT LOAN DEBT IN THE UNITED STATES, AND IT CAUGHT THE ATTENTION OF FOUNDERS FUND, THE NEW EXTENSION ROUND IN THE PLATFORM. DISCLAIMER, SOMEONE WITH A BLOOMBERG LP IS ALSO INVESTED IN THEM. JOINING US ARE TRAE STEPHENS AND ANOTHER. YOU PAID $77,000 FOR THE COURSE AND ARE BRINGING AN EMPLOYMENT OPPORTUNITY FOR VERY TALENTED INVESTORS, WHICH RAISES THE QUESTION, WHY DO YOU NEED $23 MILLION MORE? TADE: YEAH, THANKS FOR HAVING ME. A LOT OF THEM ARE LOOKING FOR GIG WORK, AND WHAT WE DO AT CAMPUS IS WE ALLOW THEM TO TEACH, BRING ACCESS TO PEOPLE WHO HAVE NEVER ACCESS TO THIS QUALITY OF EDUCATION BEFORE, AND AS YOU POINTED OUT, THE FEDERAL GOVERNMENT DOES PAY FOR A LOT OF THE TUITION WITH THE GRANTS. ED:
ONE OF THE LEARNING FROM RESEARCH AND LOOKING INTO THE SYSTEM OF OUR BRIGHTEST ACADEMICS AND TEACHERS ARE PRETTY POORLY PAID IN THIS COUNTRY. TRAE, I KNOW YOU. THIS ONE IS INTERESTING. WHY ARE YOU FOCUSED ON EDUCATION? THIS IS VERY SPECIFIC CASE STUDY IN EDUCATION. TRAE: YEAH. I WOULD NOT SAY WE ARE FOCUSED
ON EDUCATION. WE DON'T DO A WHOLE LOT AT ALL IN ED TECH. ED: THAT IS WHAT I MEAN. TRAE: PETER IS KNOWN AS HAVING THIS ANTI-HIGHER EDUCATION PERSPECTIVE, WHICH LEADS TO THE FELLOWSHIP HE HAS TO STUDENTS TO DROP OUT OF COLLEGE AND PURSUE SOMETHING ENTREPRENEURIAL. WHEN THIS KIND OF HIT THAT I HAVE NOT SEEN A LOT IN TEC IS THIS IDEA THAT WE DON'T NEED A BUNCH OF STUDENTS GOING INTO MASSIVE DEPUTY AVERAGE STUDENT IN THE UNITED STATES GOING INTO HIGHER ED ED HAS DEBT OVER $20,000 BID I HAD OVER $100,000 OF DEBT COMING OUT OF COLLEGE, AND THERE IS NO REASON FOR THIS. I THINK WHAT TADE AND THE TEAM AT CAMPUS IS DOING IS BRIDGING THAT OUT TO MAKE IT POSSIBLE FOR KIDS WHO WANT TO GO TO SCHOOL AFTER THEY FINISH HIGH SCHOOL AND DO AT MUCH LOWER COSTS AND EXIT THEIR COLLEGE EXPANSION WITHOUT ANY DEBT. CAROLINE:
TADE, WE GO BACK TO THE, WHY THE NEED OF FUNDS? YOU HAVE CLEARED A MAN COMING FROM STUDENTS, PERHAPS A BIT WHEN IT COMES TO THE COACHES, TO BE MENTORING, ADVISING. WHERE WILL THE FUNDS BE PUT TO WORK? IS THIS ABOUT MARKET SHARE CAPTURE RIGHT NOW? TADE: YEAH. THE OPPORTUNITY IS JUST SO BIG. IF YOU LOOK EXTRA ALUMS IN THIS COUNTRY, IT IS $2 TRILLION. TO ACTUALLY SELL THIS AND CREATE A WORLD-CLASS QUALITY EDUCATION AND SCARE THAT UP TO A LOT OF PEOPLE, IT IS GOING TO REQUIRE LOTS OF INVESTMENT. WE GIVE STUDENTS A LOT OF SUPPORT THAT MOST COMMUNITY COLLEGES CANNOT AFFORD TO OFFER.
EVERY STUDENT GETS A LAPTOP. WE DO AN INNER SPIT -- INTERNET SPEED TEST, SO IF YOUR INTERNET IS TOO SLOW, WE WILL GET YOU INTERNET AT HOME. COACHES PLAYED A ROLE, LIKE THE ROLE MY MOTHER PLAYED FOR ME IN COLLEGE, LIKE MAKE SURE I'M SHOWING UP TO CLASS ON TIME, GETTING MY EXCITEMENT SENT -- ASSIGNMENTS IN. THAT IS NECESSARY. I'M GRATEFUL TO TRAE AND THOSE THAT FOUNDERS FUND. CAROLINE: YOU HAVE NOT BEEN THAT FOCUSED ON EDUCATION, AS YOU CLEARLY ARTICULATE APPEARED WHY THIS ONE WHEN THERE ARE OTHER ONLINE COMPETITORS OUT THERE? TRAE: YEAH. THE IMPORTANT THING FOR US, AS IT IS WITH ALL COMPANIES, IS THAT WE ARE FOUNDER-BASED, FIRST AND FOREMOST, SO LESS THAN INVESTING IN CATEGORIES OR, YOU KNOW, SPECIFIC TYPES OF COMPANIES, WE ARE INTERESTED IN INVESTING IN THE TOP FOUNDERS THAT ARE DOING THE MOST INTERESTING THINGS, THE MOST NOVEL CONCEPTS. WHEN I ORIGINALLY MET TADE, NOT
GENERALLY BEING INTERESTED IN ED TECH, I WAS BLOWN AWAY BY HIS VISION AND OWES MILLIE DECIDED TO BRING OTHER PEOPLE FROM THE FIND IN FRONT OF HIM, SAYING THIS GUY IS DIFFERENT FROM OTHERS WE HAVE SEEN IN THE ED TECH SPACE, GETTING EXCITED ABOUT THE THING HE HAS SO MUCH PASSION FOR. ED: YOU DROPPED THE REFERENCE TO THE GIG ECONOMY, SO I'M THINKING UBER AND OTHER PLATFORMS THAT DO FOOD DELIVERY, ETC. HOW WILL THE ? T -- HOW WILL THAT PLAY OUT? TADE: PRINCETON, UCLA, MOREHOUSE, YOU HAVE YOUR ON-CAMPUS JOB THAT IS IN OFFICE, YOU LOVE IT, YOU GET TO MEET WITH STUDENTS, BUT OFTEN TIMES YOU ARE AN ADJUNCT PROFESSOR PETE I USED TO THINK, ADJUNCT IS LIKE MICHELLE OBAMA TEACHING FOR FUN.
THAT IS REALLY RARE. THE MOST ADJUNCT OF RECENT GRAD SCHOOL GRADUATES WHO EARNED $40,000, 40 $5,000 A YEAR. SO WHAT WE DO IS YOU CAN TEACH IN ADDITION TO YOUR ON-CAMPUS JOB AT CAMPUS.EDU, AND WE PAY ABOUT DOUBLE OF THE NATIONAL AVERAGE WAGE, ABOUT $8,000 A CLASS. FOUR ACADEMIC QUARTERS A YEAR, IF YOU TEACH THREE CLASSES A QUARTER WITH US, YOU ARE MAKING $96,000 IN ANNUAL INCOME, DOING WHAT YOU ARE GREAT AT AND WHAT YOU LOVE DOING, TEACHING THESE STUDENTS WHO ARE SUPER AMBITIOUS AND SUPER TALENTED. CAROLINE: WE WILL HAVE TO DIG AND MORE.
FOUNDERS FUND PARTNER TRAE STEPHENS IS KEEPING WITH US, AND CAMPUS.EDU FOUNDER AND CHANCELLOR, TADE OYERINDE, THANK YOU. MEANWHILE, WE'VE GOT THE TALKS THAT THERE WAS A SWEET NEW DEAL FROM SKY DANCE OFFERED TO PARAMOUNT SHAREHOLDERS. WE UNDERSTAND IT IS $3 MILLION AND A CASH INCLUSION, REPORTED BY THE "NEW YORK TIMES," PAYING DOWN DEBT, BUYING BACK STOCKS, SO MUCH UNRAVELING IN REAL-TIME ON PARAMOUNT. WE WILL BRING IT TO YOU. THIS IS "BLOOMBERG TECHNOLOGY."
CAROLINE: LET'S GO BACK TO THE SPOTLIGHT TODAY, FOUNDERS FUND, OUR CONVERSATION ABOUT THE FOCUS ON THE FOUNDER. ELON MUSK TODAY, DO WE LOVE THE FACT THAT WITH HIS OTHER COMPANY, TESLA, HE HAS DEEPENED TIES WITH CHINA, ONE OF THE KEY MARKET FOR HIM, BUT HOW DOES HE SIT WITH FOUNDERS, THE U.S. MORE BROADLY, STILL SOME RELATIONSHIP WITH CHINA HAD OF THINGS WHEN -- AT A TIME WHEN WE ARE ALSO DISTANCING? TRAE: YEAH. THERE'S ALWAYS A GOOD REASON TO HAVE NUANCE, SO THERE'S A LOT OF DIFFERENT, YOU KNOW, THINGS THAT NEED TO BE TAKEN INTO CONSIDERATION WHEN YOU LOOK AT INTERACTING WITH EITHER THE CHINESE MARKET VERSUS INTERACTING WITH THE CHINESE GOVERNMENT VERSUS INTERACTING WITH GOVERNMENT CONTROL OVER THINGS THAT ARE IMPACTING U.S.
CONSUMERS. I THINK OBVIOUSLY DIPLOMACY IS CRITICAL IN ALL OF THESE SCENARIOS. ELON IS DOING WHAT HE NEEDS TO DO FOR THE COMPANIES HE IS OPERATING IN THE COUNTRY THERE. CAROLINE: WHAT ABOUT THE CONSUMER RELATIONSHIP, WHEN IT IS A CHINESE-HELD BUSINESS IN THE UNITED STATES, TO DIVEST, TO PICK UP FOR AT LEAST ANOTHER NINE MONTHS? TRAE: I'M VERY CONCERNED. I'VE BEEN VERY PUBLIC IN EXPRESSING MY CONCERNS ABOUT THE USE OF TIKTOK DOMESTICALLY. DURING THE COLD WAR, WE NEVER WOULD HAVE ALLOWED FOR A RUSSIAN COMPANY TO BUY "THE NEW YORK TIMES."
HAVING SOME SENSE FOR ADVERSARY CONTROL, KEY PATHWAYS FOR INFORMATION INTO OUR POPULACE IS SUPERCRITICAL, AND TIKTOK HAS DEMONSTRATED TIME AND TIME AGAIN THAT THEY ARE NOT WILLING TO BE TRANSPARENT, THEY ARE NOT WILLING TO SHARE WITH US THE IMPORTANT INFORMATION WE WOULD NEED TO KNOW TO HAVE A LEVEL OF CONFIDENCE IN THEIR ABILITY TO SUPPORT THOSE TECHNOLOGIES BEING DEPLOYED IN THE UNITED STATES. CAROLINE: WE'VE GOT TO THINK ABOUT THE AI, ALL-ENCOMPASSING NARRATIVE HERE A LITTLE BIT, WHEN WE ARE TALKING ABOUT ELON AND TESLA, YOU REFERENCE BAIDU, OF COURSE, ALSO TIKTOK OWNED BY BYTEDANCE, CHINA HAS ITS OWN INTEREST IN ALL OF THIS. ED: TO ME, THAT IS THE STORY, RIGHT? ALL OF THE STORIES THAT TESLA, CHINA, TIKTOK. CHINA IS WORKING ON THESE TECHNOLOGIES ITSELF, TO KILL EARLY IN GENERATIVE AI OR BUILDING LARGE LANGUAGE MODELS. -- TWO BUILDING IN GENERATIVE AI OR BUILDING LARGE LANGUAGE MODELS GET HOW DO YOU BALANCE BETWEEN COLLABORATING AND PUTTING U.S. INTERESTS FIRST? TRAE: YEAH. I THINK THAT IS RIGHT. THE CCP IS VERY DIFFERENT THAN
THE CHINESE PEOPLE OR THE CHINESE MARKET. THESE THINGS ARE NOT ALWAYS INTRINSICALLY CONNECTED. THE THING THAT WE ARE CONSTANTLY TRYING TO BALANCE, NOT ONLY INSIDE OF OUR PORTFOLIO, BUT ALSO WHAT WE ARE DOING AT ANDURIL, A PORTFOLIO COMPANY AND FOUNDERS FUND THAT I STARTED BACK IN 2017, IS TO FIGURE OUT WHERE WE NEED TO NOT ONLY DEVELOP BUT ALSO SUSTAIN STRATEGIC ADVANTAGE THAT WE ARE ABLE TO SET THE RULES OF ENGAGEMENT FOR HOW THESE TECHNOLOGIES ARE ACTUALLY USED IN THE FIELD. THE MOMENT WE NO LONGER HAVE CONTROL OF THE TECHNOLOGIES, THAT IS WHEN WE LOSE CONTROL OF THE ABILITY TO REGULATE AND, YOU KNOW, KEEP THOSE TECHNOLOGIES INSIDE THE BOUNDS OF LAW. ED: I'M GLAD YOU TALKED ABOUT ANDURIL AND DEFENSE TECH, THERE HAVE BEEN MANY ARTICLES WRITTEN ABOUT YOU AND YOUR PLACE IN DEFENSE TECHNOLOGY. I WANT TO ASK YOU, IF YOU ARE SEEING SCIENCE, AT THE TOP LEVEL OF GOVERNMENT, SORT OF HAND-IN-HAND WITH SILICON VALLEY? YOU GUYS DOING REALLY WELL, SO GO AND DO IT. TRAE:
I GUESS -- WE ARE WORKING REALLY HARD, I DON'T KNOW HOW ELSE TO SAY THAT HERE BEFORE I JOINED FOUNDERS FUND 10 YEARS AGO, I WAS DOING SALES AT PALENTIR, WHERE I SPENT THE PRIOR SIX YEARS OF MY CAREER. NO MATTER WHAT WE TRY, EVERY SINGLE ITERATION OF OUR SALES STRATEGY WAS NOT WORKING, GOING TOO SLOW, RUNNING INTO ROADBLOCKS. EVENTUALLY, WE FIGURED OUT A MODEL THAT WORKS, AND THE SAME CAN BE SAID FOR SPACEX. IT TOOK THEM YEARS AND YEARS TO FIGURE OUT HOW TO DO THIS, AND THE REALITY IS, GOING INTO THIS INDUSTRY BLIND, LIKE 219-YEAR-OLDS WORKING IN A GARAGE -- TWO 19-YEAR-OLDS WORKING IN A GARAGE, VERY DIFFERENT FROM BUILDING A SOFTWARE COMPANY. TRAE: FOUNDERS FUND -- ED: FOUNDERS FUND'S TRAE STEPHENS, THANK YOU. THERE IS SO MUCH IN THE NEWS FLOW, IT IS A HUGE EARNINGS WEEK, GREAT GUEST ON THE SHOW.
RECAP ON THE PODCAST. FROM SAN
2024-04-30