Bloomberg Technology 03/26/2024
>> FROM THE HEART OF HER INNOVATION, MONEY AND POWER COLLIDE, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE AND ED LUDLOW. ED: I'M ED LUDLOW IN SAN FRANCISCO. THIS IS BLOOMBERG TECHNOLOGY. FROM AI TO ANTITRUST AND GEOPOLITICS GET THE FULL READ ON THE TECH SECTOR WITH DEBBIE FISCH OF JANUS HENDERSON. WE HONE IN ON SOME CORPORATE NEWS AS ALIBABA PULLS OFF ITS PLANNED IPO WHICH COULD RAISE MORE THAN $1 BILLION. WE GET THE READ FROM INSIDE THE
C-SUITE. WE ARE BORN -- JOINED BY DANNY GARCIA. BUT FIRST WE WANT TO BRING YOU SOME IMPORTANT UPDATES ON THE SEARCH AND RESCUE MISSION UNDERWAY IN BALTIMORE AFTER THE FRANCIS SCOTT KEY BRIDGE COLLAPSED EARLY THIS MORNING WHEN A CARGO SHIP STRUCK THE MAJOR TRANSPORTATION ROUTES. THIS IS A LIVE FEED OF THE PATAPSCO RIVER AND THE WRECKAGE FROM THAT CRASH. SEARCH AND RESCUE IS THE PRIMARY FOCUS IN BALTIMORE.
THERE ARE ALSO MAJOR IMPLICATIONS FOR GLOBAL TRADE AS THE PORT OF BALTIMORE IS THE LARGEST HANDLER OF U.S. IMPORTS AND EXPORTS OF CARS AND LIGHT TRUCKS. THE FAA HAS CURRENTLY RESTRICTED DRONE FLIGHTS NEAR TO THE BRIDGE. U.S. HOMELAND SECURITY SECRETARY ALLIE HUNDRED MAYORKAS SAID IN A POST THAT THE COAST GUARD IS ON THE SCENE AND IS ACTIVELY INVOLVED IN THE SEARCH AND RESCUE MISSION. WE ARE EXPECTING TO HEAR FROM
PRESIDENT BIDEN LATER TODAY AND WE WILL BRING YOU UPDATES ON SITUATION IN BALTIMORE THROUGHOUT THIS HOUR. STICKING WITH WHAT'S HAPPENING. THE NASDAQ 100 WE ARE COMING OF THE BEST WEEK OF THE YEAR SO FAR. WE WILL HAVE A CONVERSATION ABOUT NVIDIA.
WHEN YOU'RE A TRUE ASH TO TRILLION DOLLAR MARKET CAP COMPANY TO PAY ATTENTION TO THAT. YIELDS CREEPING HIGHER. AND BITCOIN IS STAYING ABOVE 70,000 U.S. DOLLARS PER TOKEN. THERE WAS A BIG MOVE JUST BEFORE THE SHOW A HIGHER TORT THOUSAND U.S. DOLLARS. THAT MARKETS PICTURES KIND OF A
WAIT AND SEE MOMENT BECAUSE ALL THE FED SPEAK DUE TO COME IN THE COMING WEEKS. LET'S GET BACK TO BALTIMORE AND STICK WITH THE COLLAPSE OF BALTIMORE SKI BRIDGE. BECAUSE AS WE HAVE STRETCHED WHILE SMALL IN THE COMPLEX OF U.S. PORTS IT'S THE BIGGEST HANDLER -- IN THE LAST HOUR WE SPOKE TO THE CFO OF FORD AND GOT HIS REAL-TIME REACTION TO THE BROADER IMPLICATIONS OF WHAT HAPPENED.
>> IT'S A LARGE PART WITH A LOT OF FOLLOW-THROUGH. IT WILL HAVE AN IMPACT. AT THIS POINT WE WILL HAVE TO UNDERSTAND WHAT IT MEANS FOR US SPECIFICALLY. WE WILL WORK ON THE WORKAROUNDS THAT HAVE TO DIVERT PARTS TO OTHER PORTS ALONG THE EAST COAST OR ELSEWHERE IN THE COUNTRY. THEY PROBABLY LENGTHEN THE SUPPLY CHAIN A BIT. >> IT'S A DEVELOPING SITUATION TALKING ABOUT HAVING TO DIVERT PARTS TO OTHER PORTS ON THE EAST COAST. HOW SERIOUS IS THIS?
WHAT IS THE IMPACTED THE SUPPLY CHAIN AND ECONOMIES. LET'S BRING IN THE PORTFOLIO MANAGER AT JANUS HENDERSON INVESTOR. YOU WAKE UP TO NEWS LIKE THIS IS A MONEY MANAGER HOW DO YOU FEEL ABOUT IT? >> IT IS A TRAGEDY OF COURSE. YOU HOPE THE PEOPLE THAT ARE
UNACCOUNTED FOR OUR BROUGHT BACK SAFELY. BUT FROM AN ECONOMIC STANDPOINT IT IS TOO EARLY TO TELL. IT IS NOTHING LIKE WE FACED DURING COVID WHEN WE HAD SEVERE SHORTAGES OF COMPONENTS THROUGHOUT THE ENTIRE AUTOMOTIVE SUPPLY CHAIN. WE CAN GET THE PARTS HERE THROUGH OTHER PORTS IT JUST MAY TAKE A BIT OF TIME AND MIGHT BE MORE EXPENSIVE. BUT THAT'S HOW WE THINK ABOUT IT. BUT NOT A MATERIAL IMPACT TO THE TECH ECOSYSTEM.
ED: I REMEMBER SO MANY DAYS SPENT TO THE PORT OF LOS ANGELES DAYS AND WEEKS DOWN THERE PART OF THAT STORY WAS INFLATION. WE ARE TRYING TO TIE TOGETHER WHAT'S HAPPENING WITH THE TECH SECTOR. HOW CLOSELY ARE YOU WAITING ON THE FED AND HOW NERVOUS ARE YOU EACH DAY. I KNOW YOU'RE NOT A VERY NERVOUS PERSON ABOUT INFLATION AND WHEN THE FEDS COULD PULL THE TRIGGER. DENNY: WHAT'S HAPPENED WITH INFLATION IS IT'S COME DOWN A LOT. THERE STILL SOME STICKY
ELEMENTS TO IT AND MAYBE WE DO NOT GET AS MANY CUTS FROM THE FED AS WE THOUGHT WE MIGHT. TOWARDS THE END OF LAST YEAR BUT NONETHELESS THE DIRECTION OF TRAVEL, THE FED WILL START TO EASE AT SOME POINT. IF THAT PACE OF MONEY NOT BEING AS AGGRESSIVE AS ONE MIGHT EXPECT A COUPLE MONTHS AGO. THAT'S GOOD FOR STIMULATING THE ECONOMY. ED:
WE ARE HERE TO TALK ABOUT TECHNOLOGY AND WE CANNOT DO THAT WITHOUT SPEAKING ABOUT NVIDIA. IT'S AN IMPORTANT NAME FOR YOU AND YOUR FUND. A BRILLIANT STORY ON THE BLOOMBERG, NVIDIA TRADERS FIND REASONS TO WORRY BE SKYHIGH STOCK PRICE. I -- A GAIN IN THE PRICE IS SOMETHING YOU'VE REACTED TO. THE LOGIC OUTLINED IN THE STORY IS A LOT OF POTENTIAL GAINS FROM NVIDIA FEEL GOOD. IT'S BEEN BROUGHT FORWARD AND HAPPEN IN A CONDENSED SPACE AND TIME. GIVE ME YOUR THESIS.
DENNY: IF WE LOOK BACK TO LAST YEAR IT WAS SOMETHING SIMILAR. MOST OF THE GAIN FROM THE STOCK CAME IN THE FIRST HALF OF THE YEAR PARTICULARLY DUE TO DUST BEFORE IT BECAME KNOWN HOW BIG OF A SUPPLY AND DEMAND IN BALANCE WE HAD FOR GP USE. YOU COULD ARGUE THIS YEAR MAY BE THE SAME THING IS HAPPENED. THE STOCK PUT ON A TRILLION DOLLARS OF MARKET CAP SINCE THE BEGINNING OF THE YEAR IT'S PRETTY MUCH UNPRECEDENTED. WHAT IS IMPORTANT ABOUT IT AND THIS IS WHAT MAKES IT HARD FROM AN INVESTOR STANDPOINT IS THE REASON THE STOCK HAS GONE UP SO MUCH IS BECAUSE EARNINGS HAVE GONE UP SO MUCH. IF WE GO BACK 18 MONTHS AGO I
THINK THE STREET THOUGHT NVIDIA MIGHT TURN SOMEWHERE AROUND FIVE DOLLARS A SHARE THIS YEAR AND THAT'S PROBABLY GOOD TO BE CLOSER TO $25 SO THE STOCK IF YOU LOOK AT THE EARNINGS MULTIPLE 2025 IT'S ACTUALLY STILL QUITE REASONABLE BUT WE COULD ARGUE WHAT MIGHT HAPPEN AS SUPPLY AND DEMAND COMES INTO BALANCE. NONETHELESS THE DEMAND PROFILE THERE REMAINS UNPRECEDENTED IN THE EVALUATION REMAINS REASONABLE. ED: SOME ANIMATION OF BLACKWELL HOW BIG OF A MOMENT WAS THAT FOR YOU? DENNY: IT'S A CONTINUATION OF HOW NVIDIA HAS BEEN INNOVATING OVER THE LAST SEVERAL YEARS AND IMPORTANTLY A COUPLE OF THINGS IT REALLY FOCUSES ON PRICE-PERFORMANCE AND POWER CONSUMPTION WHICH ARE TWO BIG ISSUES FOR GP USE. IT DOESN'T GET AS MUCH ATTENTION BUT IT'S PROBABLY THE SINGLE BIGGEST CONSTRAINT TO DEPLOYING INFERENCE ACROSS THE GLOBAL ECONOMY BECAUSE OF THE INABILITY TO GET ENOUGH POWER INTO THESE DATA CENTERS. THERE'S A LOT THAT COMES ALONG
WITH THAT. THE OTHER THING IS BLACKWELL WILL BE LESS EXPENSIVE. SO THAT SHOWS YOU NVIDIA'S CONFIDENCE THAT THE VISIBILITY THEY HAVE INTO DEMAND THAT THEY CAN ACTUALLY START LOWERING THE PRICE DESPITE THEIR EFFECTIVELY BEING NO ELASTICITY. >> I WAS IN THE ROOM FOR 90 MINUTES AND HE BASICALLY SAID STARTING THIS YEAR THE DATA CENTER BUSINESS IS $250 BILLION PER ANNUM BUT HE WAS TALKING ABOUT GROWTH RATES OF 20% TO 25%. WHAT'S NOT CLEAR IS THE TIPPING
POINT FROM WHERE THE MAJORITY OF THAT IS TRAINING TO INFERENCE BECAUSE I DON'T THINK NVIDIA HAS TALKED MUCH ABOUT. AND CAME OUT ABOUT THE STORY. HOW MUCH DID YOU BUY I GUESS THE SOFT GUIDANCE THAT HE WAS GIVEN. >> IT SEEMS REASONABLE. ON THEIR LAST CALL IF I
REMEMBER CORRECTLY THEY TALK ABOUT INFERENCE NOW THAT HAS CROSSED OVER HALF OF WORKLOADS RELATIVE TO TRAINING. AND NEEDS TO TALK ABOUT INFERENCE BECAUSE NVIDIA HAS ONE THE TRAINING MARKET. THE NEXT PRIZES INFERENCE. THAT'S GOING TO BE MULTIPLES OF THE MARKET OPPORTUNITY THE TRAINING IS BECAUSE THIS IS HARD TO DEPLOY. IT'S LIKE DEVELOPING SOMETHING AND PUTTING IT INTO PRODUCTION THAT'S WHAT'S GOING ON WITH AI WORKLOADS NOW.
SO THAT SHOULD CONTINUE TO BE A REALLY HEALTHY TAILWIND FOR THE ECOSYSTEM AS A WHOLE. >> THE OTHER DATA POINT I WAS WATCHING WAS CHINA'S IPHONE SHIPMENTS FELL 33% IN FEBRUARY. A NAME YOU HAVE A SMALLER POSITION IN. LET'S FOCUS ON CORPORATE APPLE
AND CHINA. IS THAT A DATA POINT THAT WORRIES YOU. >> IT IS NOT SURPRISING AND IT'S NOT SURPRISING BECAUSE OVER THE LAST YEAR YOU'VE SEEN CHINA ACTUALLY RETALIATE SOMEWHAT TO THE RESTRICTIONS WE PLACED ON THEM FOR ALL OF OUR MOST VALUABLE INTELLECTUAL PROPERTIES.
>> THERE'S THE REPORTING FROM BLOOMBERG THAT THE CHINESE GOVERNMENT WAS BASICALLY TRYING TO GET ANY SERVER DESIGNS TO USE DOMESTIC SEMI'S GOING FORWARD. DENNY: THAT'S EXACTLY RIGHT. THEY'RE TRYING TO FIND WAYS WHERE THEY CAN ACTUALLY EXERT SOME POWER AND SOME MARKET INFLUENCE. THAT IS TOUGHER APPLE BECAUSE
THEY ARE SAYING NO STATE OWNED ENTERPRISES, THEY ARE STARTING TO EXTEND THAT. IT IS INCREMENTAL DEMAND LOSS ON ONE OF THE MOST IMPORTANT MARKETS FOR APPLE. INDIA IS STARTING TO TAKE THE BATON AND GROW FASTER.
THEY DON'T HAVE THE PURCHASING POWER THAT YOU HAVE IN CHINA. NOT NEARLY AS MATURE BUT THAT SHOULD HELP OUT. CHINA IS A TOUGH MARKET FOR APPLE AND THEY ARE INEXTRICABLY TIED BECAUSE OF THE SUPPLY CHAIN AS WELL. YOU CAN EVEN REPLICATE THEIR SUPPLY CHAIN. ED:
APPLE ONLY DOWN 10% ON THE NEWS. THIS LAST WEEK HAS BEEN FASCINATING. WE TALKED ABOUT IT ON THE SHOW IN THE CONTEXT OF ANTITRUST. DOJ SUED BUT ALSO WHAT CAME OUT
OF THE DMA PROBE. FOR THE FIRST TIME I'M THINKING BACK TO LAST THURSDAY WITH THE STOCK FALLING ON THE DOJ SUIT. INVESTORS SEEM TO BE SAYING THERE IS A REAL ANTITRUST PROBLEM OR RISK TO THE STOCK HERE. IS THAT A CONCERN YOU SHARE? >> FOR A COUPLE OF REASONS. IT'S NOT JUST THE SUIT THE DOJ
BROUGHT AGAINST APPLE. I KNOW THE STOCK REACTED TO THAT OR THE DIGITAL MARKET CASE IN EUROPE. BUT IT'S ALSO THE GOOGLE CASE ON SEARCH. GOOGLE PAYS SUMMER BETWEEN 20 AND 25 BILLION DOLLARS A YEAR TO APPLE PAY THAT IS 100% GROSS PROFIT. IT'S NO SURPRISE THEY
POTENTIALLY ARE DOING THAT. >> IT GETS A LOT OF PRAISE ON THIS BOTTOM-LINE MANAGEMENT AS WELL. DENNY: YOU HAVE TO LOOK AT IT FROM BOTH ANGLES. THAT COULD BE BAD FOR APPLE AND IT COULD BE GOOD FOR GOOGLE BECAUSE THEY DON'T PAY AS MUCH FOR THAT PLACEMENT ON THE IPHONE. BUT FOR THE FIRST TIME WHAT YOU ARE SEEING IS THE DOJ <GO> AFTER IT, IT'S ALL RIGHT TO HAVE A MONOPOLY.
IT'S NOT ALL RIGHT TO EXERCISE AND ABUSE OF POWER WITHOUT A MONOPOLY AND THAT'S WHAT THE GOVERNMENT IS SAYING. WHAT'S INTERESTING ABOUT IT IS AS A CONSUMER YOU ACTUALLY OPT INTO THAT MONOPOLY IF YOU BUY AN IPHONE. IN SOME WAYS YOU COULD ARGUE APPLE'S CASE ON THAT SIDE OF THE LEDGER IS PRETTY STRONG VERSUS COMPARED THAT TO THE GOOGLE CASE WHERE ITS DEFAULT ON AN ANDROID DEVICE, AND THEY ARE FORCING YOU INTO THE GOOGLE PLAY STORE, THAT DOES NOT SEEM AS VALID AS WHAT APPLE SHOULD BE ABLE TO DO GIVEN WHAT IT'S PROVIDED TO CONSUMERS AND THE BENEFIT THEY GET. >> WHETHER IT'S A SUITS OF THE REGULATORY ACTION. YOU CAN GO ELSEWHERE IF YOU WANT.
YOU ARE ABLE TO DISCUSS SO MANY CORNERS OF THIS TECHNOLOGY MARKET. WE LOVE HAVING YOU ON THE MARKET. COMING UP, ALIBABA PULLS ITS PLANNED IPO FOR ITS LOGISTICS ARM. WE WILL BRING YOU THOSE DETAILS NEXT. A BIT FLAT ON THE U.S. ADRS OF ALIBABA. THIS IS BLOOMBERG TECHNOLOGY.
ED: ALIBABA CALLING OFF AN INITIAL PUBLIC OFFERING. LOGISTICS ARE MUCH-ANTICIPATED DAY THE COULD'VE RAISED MORE. THE BIG QUESTION IS WHY THEY PULLED THE IPO. >> AS THE STOCK WANED THE COMPANY LOST INTEREST. THE HONG
KONG AND CHINESE STOCK MARKET AREN'T DOING SO WELL BUT WE HAVE NO INDICATION THIS GOES ELSEWHERE. IT DOESN'T MEAN ALIBABA WON'T BE PROVIDING THESE IPOS. THEY FILED HER PAPERWORK IN SEPTEMBER AND CHOSE AND WHICH THEY HAD TO UPDATE IT. INSTEAD THEY ARE GOING TO BUY UP ALL THE REMAINING STOCK HELD FOR $3.75 BILLION.
OF COURSE WE HAVE ALIBABA CHAIRMAN SAYING THIS IS AN APPROPRIATE TIME TO DOUBLE DOWN ON THEIR INVESTMENT. FOR NOW THEY HAVE AROUND A 64% STAKE. AFTER THAT IT WILL BE 100%. >> THERE'S BEEN SOME INCONSISTENCY ON WHAT IS AND IS NOT HAPPENING WITH THE SPINNING OFF OF VARIOUS LISTINGS. NOW IT IS IMPORTANT IS THE LOGISTICS ARM.
MARKET CONDITIONS ARE ONE THING BUT HOW SURPRISING IS IT OF A U-TURN ON A DECISION FROM MAJOR FINANCIAL TRANSACTIONS? >> THIS ISN'T THE FIRST HIGH PROFILE IPO, THEY ALSO IN 2023 HALTED THEIR IPO THEIR CLOUD ARM AND HELD THE GROCERY UNIT WHICH IS FRESH. THIS IS THE THIRD WE WILL BE TALKING ABOUT. IT'S REAL INTERESTING BECAUSE LAST YEAR EVERYONE MADE A BIG DEAL ABOUT THE HISTORIC SHAKEUP OF ALIBABA. THE COMPANY CAME OUT AND SAID
WE ARE GOING TO BREAK UP INTO SIX. WE HAVEN'T SEEN ANY OF THAT. WE HAD BLOOMBERG INTELLIGENT SAYING INSTEAD OF SEEING THIS PLAY OUT WE ARE SEEING A RETRACTION. WE DON'T KNOW HOW THIS WILL PLAY OUT IN THE FUTURE. A LOT OF PEOPLE ARE LOOKING TO THIS AS A BLUEPRINT BECAUSE ALIBABA IS OFTEN SEEN AS A BAROMETER OF THE CHINESE ECONOMY. THEY WERE LIKE WE WILL SEE IF THIS WILL WORK OUT BUT FOR NOW NO SIGNS YET. ED: THANK YOU VERY MUCH.
STICKING WITH CORPORATE NEWS WE WORK COFOUNDER AND FINANCING PARTNERS SUBMITTED AN OFFER TO BUY THE BANKRUPT COMPANY FOR MORE THAN $500 MILLION ACCORDING TO A REPRESENTATIVE FOR HIS REAL ESTATE COMPANY. MAX CHAFKIN JOINS ME WITH THE DETAILS. ADAM NEUMANN TRYING TO BUY WE WORK FOR 500 MILLION U.S. DOLLARS. EXPLAIN.
>> ADAM NEUMANN FORMER CEO OF WE WORK, LEFT THE COMPANY AFTER TAKING IT TO DIZZYING HEIGHTS. EVALUATION THOUGHT TO BE CLOSE TO 50 BILLION AT ONE POINT NOW THE COMPANY IS BANKRUPT. ADAM NEUMANN VERY GOOD SALESPERSON HAS A LOT OF RESPECT FROM SOME INVESTORS IN SILICON VALLEY. WILLING TO LOOK PAST SOME OF THE MISSTEPS.
VERY INVESTED IN THIS SPIRITUAL IDEA OF WE WORK. IT'S SAYING WE ARE BACK. ED: MY GOODNESS. IT DID SO WITH $19 BILLION OF LIABILITY.
I THINK THERE ARE MANY QUESTIONS MANY MORE THAN ANSWERS RIGHT NOW. DO WE HAVE A SENSE OF HOW ADAM NEUMANN IS GOING TO FINANCE THIS, HIS PLAN FOR WE WORK VERSION 2.0, WHATEVER VERSION IT IS NOW. >> I THINK THERE ARE BASICALLY TWO OPTIONS. THE CORE OF THEIR BUSINESS WAS PRETTY STRAIGHTFORWARD.
FINDING OFFICES, SIGNING LEASES AND DIVIDING THEM UP AND RESELLING THEM. PART OF WHAT HAPPENED HERE IS THEY EXPANDED TO QUICKLY. ADAM NEUMANN WAS LIKE A MASTER OF HYPE AND GOT AHEAD OF HIS SKIS.
THERE'S A VERSION OF THIS WHERE THE BANKRUPTCY PROCEEDING TO RENEGOTIATE THESE LEASES TO GET THE COSTS BACK IN CONTROL AND YOU HAVE A SMALLER BUT SENSIBLE BUSINESS. THE OTHER OPTION WHICH I HAVE TO THINK IS A POSSIBILITY GIVEN WHAT WE ARE TALKING ABOUT IS RESTART THE HYPE TRAIN. ADAM NEUMANN STARTED THIS OTHER COMPANY WITH BACKING, THEY'VE STILL -- THEY THINK IS A GREAT ENTREPRENEUR. SO YOU COULD IMAGINE SOME SORT OF EFFORT TO SORT OF DO THIS THING ALL OVER AGAIN AFTER ONE EXPECTS RENEGOTIATING TRYING TO GET THE COSTS UNDER CONTROL. >> ADAM NEUMANN'S FIVE AND A MILLION-DOLLAR BID TO BUY BACK WE WORK.
COMING UP WE WILL CHAT WITH TOM WALKER ABOUT THE LAUNCH OF WHAT IT'S CALLING DRONE UP ECOSYSTEM. IN THE AIR, ON THE GROUND AND IN THE COMPUTER. THIS IS BLOOMBERG TECHNOLOGY. ED: DRONE UP REEF THINKING DELIVERY.
UNVEILING WHAT HE CALLS ECOSYSTEM INDICATING GROUND, AIR AND SOFTWARE PRODUCTS INTO A SINGLE PLATFORM. JOINING ME WITH MORE IS THE DRONE UP CEO. WHERE I WANT TO START IS WHY GO BEYOND JUST BEING A DRONE COMPANY. WHY'D YOU NEED TO MAKE A SYSTEM AND TECHNOLOGY THAT SAYS HERE IS THE ALL-ENCOMPASSING LAST MILE DRONE PACKAGE. >> FURLONG LEADERS HAVE INSISTED THAT DRONES WERE THE ANSWER TO THE LAST PROBLEM. WE REALLY HAVEN'T ATTACKED IT
CORRECTLY. WE TRIED TO FIX IT USING DRONES WHICH IS LIKE A TRANSPORTATION, TRYING TO FIX IT BY GETTING A BETTER TRUCK. IN ORDER TO BE ABLE TO LOWER COSTS YOU HAVE TO DECREASE LABOR, YOU HAVE TO PROVIDE A WAY THAT RETAILERS CAN GET THE PRODUCT ONTO THE DRONES QUICKLY AND EFFICIENTLY AND ALSO BE ABLE TO DELIVER TO THOSE 100 MILLION PLUS AMERICANS WHO DON'T LIVE IN SINGLE-FAMILY HOMES. >> WE ARE SHOWING VIDEO OF HOW THE SYSTEM WORKS. YOU LOAD YOUR PACKAGE INTO THE GROUND UNIT, OF THE DRONE LANDS, THE PACKAGE IS RAISED UP AND ATTACHED TO THE DRONE. IT SEEMS SIMPLE. WHO'S GOOD TO BE USING THIS.
DO YOU HAVE ANY SIGNED UP CUSTOMERS? >> WE DO. WHAT WE'VE DONE IS WE WILL ALLOW THEM TO HAVE THE MOMENT WE WILL BE ROLLING BOTH THIS AND OUR NEXT GENERATION DRONE OUT IN THE NEXT QUARTER WE WILL BE WITH SOME TOP RETAILERS. I WOULD SAY STANDBY FOR THE ANNOUNCEMENT. IT'S A BIG LEAP FORWARD TO THEM. IT'S COMING NEXT QUARTER.
>> TOM I'M SURE OUR BLOOMBERG TECHNOLOGY AUDIENCE WOULDN'T MIND YOU SHARING THOSE NAMES. PARTICULAR THE QA -- QR SIDE. ABOUT WHAT WALMART WAS DOING. THAT IS A SMALL SCALE PILOT. CONVINCE ME IN THE AUDIENCE AT SCALE. >> OUR TECHNOLOGY IS INTEGRATED FROM OUR AIRSPACE MANAGEMENT BUT MANAGES THE AIRSPACE, POWERED BEHIND IT IS A VERY SOPHISTICATED LOGISTICS SYSTEM THAT ENSURES WE GET THE PACKAGE YOU WANT WHEN YOU WANT IT. EACH OF THE UNITS, THE
TECHNOLOGY WE CREATED IT'S LIKE AN INTERNET OF THINGS. IT'S SMALLER THAN A PARKING SPACE, IT POWERS ON WITHIN 15 MINUTES IT'S PART OF THE ECOSYSTEM SO DRONES MOVE THROUGH THE ECOSYSTEM AUTONOMOUSLY. AND DECREASE DEMANDS IN THOSE AREAS. 74% OF THE COSTS OF LABOR. THIS SYSTEM ESSENTIALLY
ELIMINATES THAT LABOR ON THE PICKUP SIDE AND THE DELIVERY SIDE. SO IF YOU'RE GOING TO BRING THOSE COSTS DOWN YOU HAVE TO START BY ELIMINATING LABOR. IN THIS CONFIGURATION YOU'RE SEEING JUST ONE. IT CAN BE INTEGRATED WITH THE FULFILLMENT SYSTEM. IT WILL SCALE VERY QUICKLY BECAUSE IT CREATES A MORE AFFORDABLE APPROACH. ED: COME BACK WHEN YOU ARE READY TO
ANNOUNCE THOSE CUSTOMERS. THANK YOU. COMING, STARLINK'S EFFECTIVENESS IS MAKING THE SATELLITE INTERNET SERVICE AT TARGET FOR A GROWING BLACK-MARKET TRADE. ED: WELCOME BACK TO BLOOMBERG TECHNOLOGY. TODAY'S BLOOMBERG BIG TAKE. ELON MUSK STARLINK TERMINALS
HAVE HIT THE BLACK MARKET. A BLOOMBERG NEWS INVESTIGATION HAS IDENTIFIED KITS BEING TRADED AND ACTIVATED ILLEGALLY HERE IS THE BLOOMBERG SPACE EDITOR ERIC JOHNSON. THE BIG TAKE IN THE INVESTIGATION IDENTIFIES A NUMBER OF COUNTRIES. MANY OF THEM AREAS OF CONFLICT
WHERE THIS IS HAPPENING. ILLEGALLY OBTAINED STARLINK GROUND RECEIVER. BRING US THE DETAILS. >> STARLINK'S GROWTH HAS MADE IT AN INVALUABLE RESOURCE FOR REGULAR PEOPLE, MYSELF AND OTHERS WHO JUST NEED HIGH-SPEED INTERNET BUT IT'S ALSO IN ITS WIDESPREAD AVAILABILITY, IT'S FALLEN INTO THE HANDS OF THE WAR-TORN REGIONS WHERE THERE NO OPERATIONS AGREEMENT BETWEEN THE COMPANIES AND THE GOVERNMENT THERE. ALSO IN PLACES WHERE UNDER U.S. SANCTIONS. AND OTHER NICHE -- OTHER NATIONS.
>> SPACEX DID NOT RESPOND AND OF COURSE THEY WERE INVITED. TO DISCUSS IT. THEY DID SAY BACK IN FEBRUARY WERE THEY TO OBTAIN ANY KNOWLEDGE THAT A STARLINK TERMINAL USED BY AN UNAUTHORIZED PARTY THAT THEY INVESTIGATE THE CLAIM AND TAKE ACTIONS TO DEACTIVATE THE TERMINAL. DO WE HAVE A SENSE OF HOW PERVASIVE IT IS. THIS SCALE OF WHICH THE ILLEGAL USES HAPPENING. IS IT LIMITED TO SPECIFIC CASE STUDIES IN THOSE COUNTRIES? ERIC: THAT WAS THE MOST FASCINATING REVELATION FOR US IS HOW WIDESPREAD IT IS. IT'S BEING USED AROUND THE
WORLD. SPACE AND MUSKA SAID THE CASE WAS BROUGHT INTO -- WHENEVER ONE OF THE TERMINALS IS ACT -- ACTIVATED. IT RAISES QUESTIONS ABOUT HOW EFFECTIVE THEY ARE AT THIS. HIS ALLEGIANCES ARE HARD TO ASCERTAIN.
IT RAISES QUESTIONS ABOUT WHO HAS THE POWER TO DO THIS IN WHAT AUTHORITIES ARE GOING TO GET INVOLVED WHETHER IT'S THE U.S. GOVERNMENT, LOCAL AUTHORITIES ON THE GROUND IN THESE PLACES SUCH AS YEMEN, SUDAN. THERE'S BEEN UNCONFIRMED REPORTS OF SOLDIERS IN RUSSIA USING IT. WHICH IS OF COURSE UNDER U.S. SANCTIONS. TO YOUR POINT THIS IS A WIDESPREAD PROBLEM AND IT MAKES STARLINK INTO THIS GEOPOLITICAL WILDCARD WITH VERY UNCERTAIN USE AROUND THE WORLD. ED: IT'S ALSO BECOMING AN
INCREASINGLY IMPORTANT PART OF THE SPACE X MODEL. I'VE DONE SOME REPORTING WHICH YOU'VE EDITED OVER THE LAST YEAR OR SO ABOUT THE GROWTH OF THE STARLINK BUSINESS. JUST OUTLINING ON WHERE THE GROWTH LAYS RIGHT NOW. FOR SPACE-BASED OR CONSOLATION BASED. ERIC: STARLINK IS VITAL.
MUSKA SAID THE LAUNCH BUSINESS ITSELF IS CAPPED BUT IT COULD BE A $30 BILLION YEAR BUSINESS. THE POINT WAS TO HAVE FINANCIAL UNDERPINNINGS IN GROWTH TO HELP MUSKA ACHIEVE HIS LIFELONG DREAM OF GETTING TO MARS WITH THE STARSHIP ROCKET. IT'S GROWTH -- >> THANK YOU FOR SHARING WITH US THE BLOOMBERG BIG TAKE. WE WANT TO HEAD OUT TO WASHINGTON ON THE SEARCH AND RESCUE MISSION UNDERWAY IN BALTIMORE. UNDER THE FRANCIS SCOTT KEY BRIDGE COLLAPSED EARLY THIS MORNING AFTER A CARGO SHIP STRUCK WHAT IS A MAJOR TRANSPORTATION ROUTES. UNDER THE FRANCIS SCOTT KEY BRIDGE. BLOOMBERG'S WENDY BENJAMINSON
JOINS US FROM D.C.. WHAT DO WE KNOW OF THE SEARCH AND THE U.S. GOVERNMENT RESPONSE? WENDY: WE KNOW HERE IN WASHINGTON PRESIDENT BIDEN HAS BEEN BRIEFED ON THIS AND HE IS EXPECTED TO SPEAK IN THIS HOUR ABOUT THE RESCUE EFFORTS.
THEY ARE SENDING TO BALTIMORE IN MARYLAND. TO GET THIS PORT OPEN AGAIN ED MIGHT BE STUCK IN THE WATER. TRANSPORTATION SECTOR A PETE BUTTIGIEG WILL ALSO COME TO THE AREA AND EXPECT -- INSPECT AND SEE WHAT'S GOING ON. THIS IS A MAJOR DISRUPTION EVEN IF THERE THANK GOODNESS SEEMS TO BE A SMALL LOSS OF LIFE. ED: OUR THOUGHTS ARE WITH THOSE
IMPACTED. MARYLAND'S GOVERNOR SEEMED TO SUGGEST EARLIER THAT THIS WAS AN ACCIDENT. THIS IS AN IMPORTANT POOL IN THE CONTEXT. IS THERE ANY SENSE HOW LONG IT WILL BE DISRUPTIVE. WENDY: IT COULD LAST MONTHS WHICH SEEMS TO MAKE SENSE. THIS IS A MASSIVE BRIDGE THE
JUST BROKE APART. IT IS GOING TO BE A TREMENDOUS IMPACT. THERE ARE SHIPS ALREADY WAITING ON THE INLAND SIDE OF THAT BRIDGE THAT ARE WAITING TO GO OUT. THEIR DISTRIBUTION ON THE BRIDGE. FEDEX, HOME DEPOT, MAJOR COMPANIES THE PEOPLE ORDER THINGS FROM. ALSO TRUCKS USE THAT BRIDGE. IF THEY'RE CARRYING ANY HAZARDOUS CARGO. BECAUSE THEY CAN GO IN THE TUNNEL UNDER THAT BAY YOU ARE SEEING. THERE ARE THOSE TRUCKS.
WHICH RISKS OBVIOUSLY FURTHER ACCIDENTS. THIS IS CAN IT TAKE MONTHS. TO SORT OUT THE SCOPE OF THE PROBLEM.
>> KEY UPDATES FROM THE FRANCIS SCOTT KEY BRIDGE WHICH COLLAPSED EARLIER THIS MORNING. WENDY, THANK YOU FOR YOUR REPORTING. WE WILL KEEP YOU POSTED. THIS IS BLOOMBERG TECHNOLOGY.
FINK LIVE ON TV AND RADIO. THIS IS BLOOMBERG. SUNSHINE, A STARTUP THAT HELPS USERS AUTOMATE MUNDANE TASKS LAUNCHING A NEW AI PRODUCT. PRODUCT INCLUDES TO COMPLEMENT TREE FEATURES A PHOTO SHARING APP AND AN EVENTS WEBSITE INDIVIDUALLY. JOINING US NOW WITH THE AI STORY HERE.
IT'S ABLE TO -- THIS PHOTO IS OF -- SHARE WORTHY. HOW DO THEY KNOW WHAT IS OR IS NOT SHAREWARE THE. >> THE CURRENT OF AI IS VERY ADVANCED. WE CAN LOOK AT WHERE THEY WERE TAKEN WHOSE IN THE PHOTOS AND WHAT'S IN THE PHOTOS. ALL OF THOSE SIGNALS TELL US WHEN YOU MIGHT WANT TO SHARE IT WITH SOMEONE ELSE. ED: YOU'VE BEEN IN THE TECHNOLOGY
INDUSTRY A LONG TIME AND BUILT COMPANIES. DID YOU DECIDE TO BUILD THE UNDERLYING MODELS FOR THIS YOURSELVES OR DID YOU WORK WITH A THIRD-PARTY USING EITHER MLM'S OR OTHER MACHINE LEARNING TECHNOLOGY FROM A PARTNER. >> WE DO USE SOME OF OUR OWN TECHNOLOGY BUT ALSO RELY ON INCREDIBLE APIS PROVIDED BY LARGE VENDORS IN THE SPACE. ED:
WHAT I FIND INTERESTING ABOUT SHEIN'S WHO THE TARGET AUDIENCE IS. WE TALK A LOT ABOUT HOW THE -- ABOUT THE CREATOR ENVIRONMENT AND INDUSTRY. IS THAT PRINCIPALLY WHO YOU HAVE IN MIND OR ARE YOU TARGETING A BROADER USER WHO MAY WANT TO SHARE PHOTOS WITH FAMILY OR FRIENDS OR WHATEVER IT MAY BE? >> THE REALITY IS PHOTO SHARING, IT'S FOR CREATORS AND ALL CONSUMERS. WE WERE THERE FOCUSED ON HOW DO
WE HELP PEOPLE REMEMBER TO SHARE THE PHOTO, JUST MAKE IT EASIER TO DO THAT. ALSO WE ARE WORKING WITH PEOPLE WHO PUT THINGS TOGETHER. IN TERMS OF ORGANIZING PARTIES, TRIPS, ETC.. OUR SUNSHINE.COM ALLOWS YOU TO DO MORE FORMAL EVENTS. THE APP SHEIN, PARTIES TO SIMPLE HANGUPS. ED:
THAT BRINGS US TO THE EVENT PORTION WE SPOKE ABOUT IN THE INTRO. I HAVE THE ABILITY TO RUN MY PHOTOS THROUGH THE AI, NOW EXPLAIN THE EVENT PORTION TO ME AND HOW THEY WORK HAND-IN-HAND. MARISSA: THE PHOTOS PORTION ESSENTIALLY IS THOSE ALBUMS. THEY MIGHT BE
IN FORMAL EVENTS BUT THEY CAN ALSO BE FORMAL EVENTS. THE MOST IMPORTANT PHOTOS FOR PEOPLE ARE TAKEN AT FORMAL EVENTS. PARTIES, CONFERENCES AND SO OUR WEBSITE, IT ALLOWS THEM TO CREATE STUNNING INVITATIONS, USING GENERATIVE AI.
SO RSVPS AS WELL AS DIFFERENT UPDATES BETWEEN HOST AND GUESTS IS EASY. THE WAY THESE ARE TOGETHER IS THE PHOTO SHARING IS BUILT-IN FROM THE BEGINNING. ONCE YOU RSVP TO AN EVENT. IT'S VERY EASY FOR YOU TO CONTRIBUTE. AS WELL AS OTHER ATTENDEES.
>> YOU ARE BUILDING AN AI COMPANY WHERE WE JUST MICRO FOCUS ON AI AS AN INDUSTRY. IN NOVEMBER YOU WERE VERY OPEN AND CRITICAL ABOUT WHAT HAPPENED WITH OPENAI AND THAT THEN STRUCTURE ON SOCIAL MEDIA FOR EXAMPLE. IT'S THE FIRST CHANCE, WHAT'S YOUR ASSESSMENT IS A LONG-STANDING MEMBER OF THE TECHNOLOGY INDUSTRY. THE BREACHING THE MAKEUP OF ITS BOARD. >> OVERALL IT'S BEEN A GREAT STEP FORWARD. THE OVERALL GOVERNANCE MODEL. THERE ARE SOMETHING WE ARE
FOCUSED ON. I THINK THE NEW BOARD THEY'VE ASSEMBLED IS EXCELLENT AND IT SEEMS TO BE PROMISING IN TERMS OF THE DIRECTION IT'S GOING. >> THERE WERE REPORTS THAT YOU HAD BEEN APPROACHED OR SOUNDED OUT TO BE A MEMBER WHAT'S THAT THE CASE. WOULD YOU BE INTERESTED IN JOINING THAT BOARD? MARISSA: I ALREADY SERVE ON A FEW BOARDS I'M EXCITED ABOUT.
AND IN MY DAY TODAY, I'M INTERESTED IN AI. BUT NOTHING TO REPORT. >> SUNSHINE COFOUNDER AND CEO MARISSA MAYER. WE ARE JOINED BY DANNY GARCIA, THE POWERHOUSE BEHIND SOME OF DWAYNE THE ROCK JOHNSON'S BIGGEST BRANDS ON BUSINESS. THAT CONVERSATION COMING UP NEXT, THIS IS BLOOMBERG TECHNOLOGY. >> FLORIDA GOVERNOR RON DESANTIS ASSIGNED A LAW THAT WILL KEEP KIDS UNDER 14 AND REQUIRE PARENTAL PERMISSION UP TO AGE 16. THE LAW WHICH WILL TAKE EFFECT
JANUARY 1 OVERHAULS IN EARLIER PROPOSAL THAT WOULD'VE FROM HOLDING SOCIAL MEDIA ACCOUNTS. , DESANTIS VETOED SAYING HE WOULDN'T GIVE PARENTS ENOUGH CONTROL OVER DECISIONS ABOUT THEIR CHILDREN. YOU ARE PROBABLY -- YOU PROBABLY KNOW WHO DUANE -- DWAYNE "THE ROCK" JOHNSON IS BUT DO YOU KNOW WHO'S BEHIND HIS MANY BRANDS PER CHIEF PLAYED A KEY ROLE IN THE MERGER BETWEEN SETH AL AND USFL, IT RESULTED IN PROFESSIONAL AMERICAN FOOTBALL MINOR-LEAGUE BACKED BY REDBIRD, YOU FOUND TO BECOME THE FIRST FEMALE SPORTS LEAGUE OWNER. DELIGHTED TO SAY JOINING US AS THE WOMAN BEHIND IT ALL, IT'S AN INTERESTING WAY TO INTRODUCE SOMEONE. I WOULD ASK YOU INTRODUCE YOURSELF, WHO IS DANY GARCIA TO THOSE WHO DON'T KNOW YOU? DANY: YOU COVERED IT SO WELL.
CHAIRWOMAN OF THE GARCIA COMPANIES AND I'M FORTUNATE TO BE AN ENTREPRENEUR, A CEO, FOUNDER, A CO-OWNER OF INCREDIBLE SPORTS LEAGUE AND I THINK THE OVERARCHING THING IS I CONCERN MYSELF AND ATHLETE FOR LIFE WHICH ALLOWS ME TO DO THINGS VERY POWERFULLY. >> ONE OF THE REASONS I WANTED YOU TO COME ON IS WE ARE FAMILIAR WITH DWAYNE THE ROCK JOHNSON. WE KNOW HIM AS AN MOVIE STAR BUT INCREASINGLY PEOPLE GOT FAMILIAR WITH HIS USE OF SOCIAL MEDIA. MY KNOWLEDGE OF TEREMANA OR THE SKINCARE RANGE SHE NOW HAS IS BECAUSE HE'S VERY ACTIVE ON SOCIAL MEDIA. WHAT ROLE DO YOU PLAY IN THAT STRATEGY AND MAKING SURE EACH OF THE COMPANIES ARE OUT THERE ON THE SOCIALS.
DANY: DWAYNE AND SOCIAL MEDIA ARE SYNONYMOUS. I OVERSEE HOW THE BRANDS ARE SHOWING UP AND HOW THE CONNECTING WITH CONSUMERS AND THE AUDIENCE. OF DJ. SOCIAL MEDIA IS ALWAYS ONE OF OUR IMPORTANT MEDIA OUTLETS. HE IS VERY INVOLVED AND VERY DIRECT ON HOW HE SHOWS UP AND WHAT THAT TONE IS. IT'S ALIGNED TO ALL THE OTHER COMPANIES. SO THERE'S A LOT OF INTERCONNECTIVITY MINE IS TO MAKE SURE IT IS WORKING. ED:
WOULD IT BE FAIR TO SAY HE WOULD NOT OF HAD THE SUCCESS HE'S HAD AND YOU WOULD NOT HAVE THE SUCCESS YOU HAD WITHOUT SOCIAL MEDIA? DANY: I WOULD SAY IT IS VERY FAIR. HIS AFFINITY FOR SOCIAL MEDIA AT THE BEGINNING AND THE INITIAL PARTS REALLY DOUBLING DOWN ALLOWED THEM TO REACH A GLOBAL AUDIENCE AND SPEAK TO THEM DIRECTLY. HE IS A VERY TRANSPARENT RELATIONSHIP AND THAT'S WHY HIS ACCOUNTS CONTINUE TO GROW. BUT IT'S ABSENTLY HAD A MASSIVE
IMPACT ON REACH. AND MOST IMPORTANTLY ON CONDUCTIVITY. ED: YOU ARE THE FIRST FEMALE SPORTS LEAGUE OWNER. I WANTED TO SPEND SOME TIME ON THAT. IF YOU LOOK AT THE X FL AND THE U.S.FL, THAT WOULDN'T HAVE
HAPPENED IF EVERYTHING WAS COMPLETELY ROSY. JUST GIVE ME THE BACK STORY. DANY: WHEN PEOPLE ASK ABOUT IT, IF YOU START YOU WANT TO TAKE A LOOK WHERE THE LEVERAGE POINTS. HOW CAN I ACCELERATE WHAT I'M DOING.
THE X FL WHICH WE LAUNCHED, WE HAD OUR FIRST SEASON THE USFL WAS HAVING ITS SECOND SEASON WE MET ALL OF OUR MARKERS, WE WERE SUCCESSFUL AND HAPPY AND OUR ENGAGEMENT, THE WAY OUR ATHLETES WERE PLAYING AND SIMULTANEOUSLY THE USFL WAS MAKING GREAT GROUNDS. BUT OUR INTERESTS AND OUR ABILITY TO SAY WHAT HAPPENS WHEN WE LEVERAGE THESE POWERHOUSES OF OWNERSHIP IS WE ARE TALKING FOX, DISNEY, ESPN, REDBIRD CAPITAL, ALL OF A SUDDEN WE CAN DO SO MUCH MORE. ED: THIS IS BLOOMBERG TECHNOLOGY SHOW -- SO WE GO STRAIGHT TO THE STREAMING PART OF THIS BUSINESS. THERE IS A TRADITIONAL BROADCAST COMPONENT I'M WONDERING WHAT YOU ARE MOST EXCITED.
>> FOR WHICH PORTION OF OUR DISTRIBUTION? ED: IT'S GOOD TO BE INTERESTING EXPERIMENT. DANY: IF YOU LOOK BACK AT OUR HISTORY, I'M VERY EXCITED ABOUT HOW THE UFL NOT ONLY WITH OUR TRADITIONAL BROADCAST PARTNERS AND CREATING CONTENT SPECIFICALLY FOR ADDITIONAL PLATFORM. IT ALLOWS US TO REALLY CONNECT WITH THE AUDIENCE. LISTEN AND ENGAGE AND BE INNOVATIVE AND NIMBLE. TRUMAN'S AMOUNT OF OUR -- THAT
HELPS US TO GROW OUR AUDIENCE AND THE NEW MARKETS. IT'S VERY IMPORTANT. >> WHAT IS NEXT? HOW MUCH CAPITAL DO YOU HAVE TO PLAY WITH. THE ALCOHOL, ASSAULT AND STRAW, SKINCARE, SPORTS, WHAT IS THE NEXT FRONTIER.
>> CONTINUE TO BE EXTREMELY FOCUSED AND EXCITED ABOUT SPORTS. THERE IS SOMETHING I'M DOING QUITE A BIT OF RESEARCH ON AND SEE MYSELF LEANING HEAVILY IN THAT AREA. >> AT LEAST GIVE A SENSE. DANY: THE COMPANY IS GOING TO BE IN SPORTS.
DO YOU WANT TO GET PARTICULAR LIKE WHICH SPORTS BECAUSE I WON'T SHARE THAT YET. I WILL GIVE YOU THIS EXAMPLE, THE 360 APPROACH WE HAVE BROUGHT TO THE USL -- UFL WOULD BE A BLUEPRINT TO HOW I LOOK AT OTHER INVESTMENTS HAPPENING IN SPORTS. IN ADDITION WE WILL CONTINUE TO GROW SEVEN BUCKS PRODUCTION AND EXPAND THAT LEAK -- MEDIA SLATE THAT'S EXTREMELY EXCITING. I WOULD SAY THE EMPHASIS THAT REALLY FEELS WHERE I'M LOOKING.
ED: GARCIA COMPANY CEO, THANK YOU FOR BEING SO GENEROUS WITH YOUR TIME ON THE SHOW. GOOD TO HAVE YOU ON. THAT DOES IT FOR THIS EDITION OF BLOOMBERG TECHNOLOGY. WE ARE TWO DAYS INTO A VERY BUSY WEEK. THERE'S A LOT HAPPENING IN THE NEWS FLOW. RECAPPING EVERYTHING WE
DISCUSSED. SO MANY OF YOU DO THIS IN PODCAST FORMAT WHEREVER YOU LIKE TO STREAM AND WE ARE PUBLISHING THE PODCAST ON THE BLOOMBERG PLATFORMS AS WELL. AGAIN WHETHER IT'S ON LINKEDIN OR X OR INSTAGRAM, WE APPRECIATE THE FEEDBACK. CONTINUING TO MONITOR WHAT'S
HAPPENING IN BALTIMORE AND LOOKING AT THE MARKETS. WE ARE FOCUSED ON WHAT'S HAPPENING HERE IN SAN FRANCISCO, NEW YORK AND IN THE WORLD OF TECHNOLOGY. THIS IS BLOOMBERG TECHNOLOGY.
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