Bloomberg Technology 08/02/2023
ANNOUNCER: FROM THE HEART OF WHERE INNOVATION, MONEY, AND POWER COLLIDE IN SILICON VALLEY AND BEYOND. THIS IS "BLOOMBERG TECHNOLOGY" WITH CAROLINE HYDE AND ED LUDLOW. ED: I AM ED LUDLOW IN SAN FRANCISCO. CAROLINE HYDE IS OFF. THIS IS "BLOOMBERG TECHNOLOGY." COMING UP, FOR EARNINGS
COVERAGE AS WE WRAP RESULTS FROM PINTEREST AND PUSH AHEAD TO QUALCOMM. WE WRAP CHIPMAKERS FROM AMD, LOOK AT SOFTBANK'S IPO EYING EVALUATION OF MORE THAN $60 BILLION. PLUS A DEEP DIVE INTO THE WORLD OF CRYPTO AND WE SPEAK TO THE CEO OF THE SCANNING CRYPTOCURRENCY PROJECT WORLD COIN.
NASDAQ 100, VERY TECH HEAVY INDEX, ADD SESSION LOWS, DOWN MORE THAN 2%. WE HAD HOT LABOR MARKET DATA, THE TREASURE ISSUING DEBT, THAT IS WEIGHING ON THINGS AND EARNINGS STORY AT THE CENTER, YOU THINK ABOUT SEMICONDUCTORS IN PARTICULAR, THE STOXX OR PHILADELPHIA INDEX UNDERPERFORMING, DOWN 4%, DOUBLE THE DECLINE OF INDEX, THE BIGGEST DRAG AMD. WE WILL GET TO THAT IN THE SECOND. U.S. 10 YEAR YIELD ABOVE 4% AND BITCOIN MOVING BACK ABOVE 29 THOUSAND U.S. DOLLARS, THE TOKEN WE WILL FOCUS ON CRYPTO HALFWAY THROUGH THE SHOW WITH SONALI BASAK. THE EARNING STORY, TWO NAMES IN PARTICULAR, TO START WITH AMD, IT BEAT ON THE TOP EXPECTATIONS IN THE QUARTER GONE, SIDES OF RECOVERY IN THE PC MARKET, A LONG-TERM PROJECTION ABOUT THE MARKET OPPORTUNITY FOR THEM IN THE CONTEXT OF AI AND AI ACCELERATORS.
I WILL BE JOINED LATER IN THE SHOW TO GO THROUGH THE NUMBERS AND TALK WHERE AMC SITS IN THE ECOSYSTEM. THEN PINTEREST, THE PROJECTION IS SHOWING IT IS NOT HAVING THE SAME FORTUNE IN THE AD SPACE THAT SOME OF ITS PEERS ARE. WHY? WHY IS IT NOT DOING AS WELL AS THE LIKES OF META? WHAT IS IT ABOUT THE PLATFORM THAT IS NOT RESONATING IN SOME OF THE OTHER AD BASED SOCIAL PLATFORMS? JOINING US IS AN ANALYST, SENIOR MANAGING DIRECTOR.
MARK HAS AN OUTPERFORM RATING ON PINTEREST WITH A $45 PRICE TAG IT. -- TARGET. GOOD MORNING. WHAT IS THE STORY OF PINTEREST? IT'S A STORY YOU LIKE. MARKET: IT IS WHEN WE UPGRADED, NOT SO MUCH FOR THE: BUT -- QUARTER BUT THE FUNDAMENTAL INFLECTION POINT. THAT REQUIRES PEOPLE AT MARKET TO REBOUND AND RECOVER. I THINK THE TRUTH FROM EARNINGS SEASON IS IT REALLY HAS NOT DONE THAT.
META HAD PHENOMENALLY GOOD RESULTS IN TERMS OF ITS SEPTEMBER QUARTER OUTLOOK. I THINK THAT IS MOSTLY COMPANY SPECIFIC FACTORS. IT HAS A BUNCH OF PRODUCT CYCLES AT THE SAME TIME AND THEY HAVE THE EASIEST COMPS AS THEY WERE THE MOST DRAMATICALLY IMPACTED BY THE APPLE PRODUCTS A YEAR AGO. THERE IS A GENEROUS CASE WHERE THE OTHER NAMES ARE SEEING MODEST IMPROVEMENT, GOOGLE, PINTEREST, SECOND -- ESPECIALLY SECOND-TIER PLATFORMS. ADDITIONAL DECLINING ON A NEGATIVE BASE TO BEGIN WITH, A BASTER LINING LAST YEAR. PINTEREST, WE WE NEED -- IT IS TBD. WE THINK EVENTUALLY WE WILL GET
THIS RECOVERY IN THE AD MARKET AND THEN WE SEE A LOT OF INITIATIVES AT PINTEREST STARTING TO SHOW OFF -- SHOW UP IN TERMS OF ACCELERATING USER GROWTH, SOLID GROWTH AND ENGAGEMENT. WE NEED THE ADVERTISERS TO START CLICKING IN AND I THINK THIS PARTNERSHIP THEY ARE ROLLING OUT WITH AMAZON IN THE BACK HALF OF THE YEAR WILL BLOCK THE ADVERTISER INTEREST. THAT IS WHY WE ARE LONG AND LIKE PINTEREST. ED: SALES IN THE CORRIDOR GONE 6% TO $708 MILLION FOR THE PERIOD ENDING JUNE 30, ABOVE STREET EXPECTATIONS. IF YOU COMPARE WITH META, META DELIVER DOUBLE-DIGIT PERCENTAGE GROWTH.
ONE PART OF META'S STORY WAS AI DRIVEN RECOMMENDATIONS AND THAT SEEMED TO BOOST THE AD SIDE OF THE EQUATION AS WELL. WHAT TOOLS DOES PINTEREST HAVE FROM A TECHNOLOGY PERSPECTIVE TO DRIVE GROWTH? BOTH AT THE USER LEVEL AND TOP LINE? MARK: THEY ARE APPLYING AI TO FIGURE OUT BETTER -- WHICH CONTENT TO PUT IN FRONT OF THEIR USERS, TO HELP ADVERTISERS BETTER TARGET ADS AND SOON TO CREATE CREATIVE, BUT YOU STEP BACK, META AND GOOGLE, THE BIGGEST AD PLATFORMS, WILL HAVE STRUCTURAL ADVANTAGES WHEN IT COMES TO AI AND PARTICULARLY META HAS BEEN AGGRESSIVE AND RIGHTLY SO AND SMARTLY SO IN TERMS OF PUTTING A LOT OF MONEY ON RESOURCES -- AND RESOURCES ON USING MACHINE LEARNING AND AI OVER THE LAST COUPLE YEARS AND GENERATIVE AI TO HELP MARKETERS FIND THE RIGHT AUDIENCE, MONETIZE -- OPTIMIZE THEIR CAMPAIGNS, AND DO THE BEST TARGETING AND TRACKING AND MEASUREMENT OF THOSE CAMPAIGNS, THEN ALSO VERY SOON TO START CREATING ADS AND A BE TESTING THEM A MASSIVE SCALE WHICH THEY COULD NOT DO BEFORE. IF YOU REALLY WANT TO SEE A WINNER IN THE APPLICATION OF GENERATIVE AI TO ADVERTISED MODELS, IT IS PROBABLY META AND OVER FOR STAN PROBABLY GOOGLE TOO. THE OTHER PLAYERS WHO ALSO BENEFIT I THINK JUST NOT NEARLY
TO THE EXTENT OR LARGE-SCALE THERE AS WELL. ED: THE CEO HAS BEEN THERE FOR A YEAR, WHAT IS YOUR ASSESSMENT OR SCORECARD OF MARK: HIS LEADERSHIP? MARK:HE IMPLEMENTED A SERIES OF CHANGES TO TRY TO GET -- TO REGROW THE USER BASE AND RAISE ENGAGEMENT. IT LOOKS TO ME HE GETS A B PLUS, A MINUS FOR DOING THAT SINCE HE HAS JOINED THE COMPANY HE STARTED TO GET ACCELERATING USER GROWTH ABOUT $450 MILLION IN THE YEARS IT IS GROWING, SUBTLY -- SOLIDLY 7%. THAT IS GOOD GROWTH FOR A BASE OF THAT -- GOOD GROWTH FOR THAT BASE. THEN YOU HAVE METRICS THEY'RE TALKING ABOUT, SESSIONS, SAVES, THOSE ARE ALL GROWING FASTER THAN USERS. IT IS A BIG BE PLUS OR A MINUS. IT IS TBD, ON THE ADVERTISER SIDE.
THERE ARE NUMBERS HE HAS THROWN OUT ABOUT SMALL PERCENTAGE OF ADVERTISERS WHO ADOPTED THE TOOLS AND HAVE 30% GROWTH YEAR OVER YEAR. I WANT TO KNOW IF THAT WILL EXPAND AND COVER HALF OF THE PINTEREST ADVERTISER BASE AND WHETHER HE CAN REALLY GET NEW TYPES OF ADVERTISERS ONTO THE PLATFORM. THAT IS WHAT WE'RE WATCHING FOR AND IT WILL BE SIMPLE, IT WILL SHOW UP IN NUMBERS AND WE WON'T JUST HAVE REVENUE GROWTH OF 6%, 7% YEAR-OVER-YEAR, IT SHOULD GET CHUNKY AND GO 15%, 20%, THAT WOULD BE THE REAL TEST TO IMPROVE WHETHER HE IS SUCCEEDING IN TERMS OF GETTING ADVERTISERS, TO UNLOCKING ADVERTISERS SPEND. ED:
I KNOW IT HAS BEEN 36 HOURS SINCE UBER POSTED ITS NUMBERS BUT I WANTED TO GET YOUR TAKE, A MILESTONE THAT SURPRISED PROFITABILITY BUT THE MARKET SEEMED TO SELL SHARES ON THE LONGER-TERM GROWTH CONCERNS, HOW THEY CONTINUE GROWING I GUESS AT THE BRIGHTER LEVEL BUT THE FUTURE OF THIS BUSINESS BEYOND ITS LEGACY MARK. -- LEGACY, MARK. MARK: I THINK YOU SET IT UP RIGHT, I WOULD JUST LAYER IN ONE OTHER THING, AS WE HAVE GONE THROUGH EARNINGS SEASON, IT'S A HIGH BAR QUARTER. THAT WAS NOT THE CASE THE LAST TWO QUARTERS. BEATEN DOWN LAST YEAR IN TERMS
OF ESTIMATES AND MULTIPLE D RATINGS AND THIS YEAR YOU HAVE HAD A RECOVERY, A SMALL RECOVERY AND RECOVERIES. THE BAR IS HIGHER. EVEN LOOK AT META, WHICH I WOULD CONSIDER THE MONSTER COMPANY REPORT OF THE QUARTER. THE FORWARD GUIDANCE WAS MATERIALLY BETTER THAN EVEN THE BULLS THOUGHT POSSIBLE AND YET THAT STOCK IS BARELY HOLDING ONTO THE GAINS, 3% OF 4% GAINS. IT IS A TOUGH FAR THIS QUARTER
AND UBER PUT UP A GOOD QUARTER, EXPECTATIONS WERE HIGH, THE REVENUE CAME IN LIGHT. THAT IS MOSTLY DUE TO ACCOUNTING CHANGE BUT THERE IS LITTLE QUESTION MARK. THE STOCK HAD A MAJOR YEAR TODAY RALLY AND I THINK THERE ARE TECHNICAL FACTORS IN THERE BUT THAT ASIDE, FOR SOME NAMES, THIS QUARTER WILL NOT BE A GAP OF QUARTER FOR GOOD NUMBERS, IT WILL BE KIND OF A CONSOLIDATION QUARTER AND COMPANIES WILL BE FLAT OR DOWN MID-SINGLE DIGIT PERCENT, THEN WE WAIT AND SEE IF THE FUNDAMENTALS CONTINUE THE IMPROVEMENT IN H2 AND H ONE.
IF THAT HAPPENS, ESPECIALLY FOR ADD NAMES AND RETAIL NAMES LIKE AMAZON, STOCKS WILL GO HIGHER BUT THIS WILL BE A TOUGH QUARTER FOR ANY -- YOU HAD LESS QUARTER A COUPLE OF THESE NAMES TRADED UP DOES WILL -- DOUBLE DIGIT PERCENT. THAT IS MUCH HARDER THIS QUARTER. I THINK THE SET UP TOUGHER. ED: THURSDAY DOES BRING AMAZON. WHAT ARE YOU EXPECTING FROM AMAZON? MARK: THREE THINGS THAT MATTER HERE, WHETHER THE OPERATING MARGINS ON THE RETAIL BUSINESS CONTINUE TO RECOVER. I THINK WE WILL SEE THAT, WHETHER THE ONLINE RETAIL GROWTH RATES STABLE AND MAYBE START TO ACCELERATE BASED ON RECENT POSITIVE DATA POINTS, I THINK WE WILL SEE THAT.
IT IS LESS CERTAIN TO ME. THE MOST IMPORT AND IS WHETHER A WS RE-EXCEL OR A WAY WE PHRASE IT, IT'S GOOD TO HEAR THE CFO USE THE A WORD, ACCELERATION. IF IT ACCELERATES, YOU WILL SEE FALTER ON THE STOCK. I THINK THE STOCK AND GO HIGHER BUT I DON'T KNOW IF THEY WOULD BE ABLE TO SEE THAT.
WHETHER THEY SEE SIGNS OF THAT IN SEPTEMBER QUARTERS IS AN UNKNOWN FOR EVERYBODY. THAT WILL BE THE MOST IMPORTANT THING WE GLEAN FROM THAT EARNINGS CALL. ED: MARK MAHANEY, THANK YOU FOR YOUR TIME.
I THINK WE SHOULD STICK WITH AMAZON, AMAZON LAUNCHING THE BIGGEST OVERHAUL OF ITS GROCERY BUSINESS, SINCE IT ACQUIRED WHOLE FOODS MARKET'S SIX YEARS AGO. FOR MORE ON THE DETAILS, WE BRING MATT DAY WHO HAS BEEN WRITING ABOUT THIS. WHAT I ENJOYED ABOUT YOUR ARTICLE IS YOU PUT AMAZON INTO CONTEXT OF THE ENTIRE LANDSCAPE FOR GROCERIES IN THIS COUNTRY BUT WHAT DOES THE RESET LOOK LIKE? >> THE RESET LOOKS LIKE PUSHED TOGETHER ALL THE DISJOINTED PARTS OF GROWTH IN BUSINESS. THEY BOUGHT WHOLE FOODS SEVERAL YEARS AGO, AMAZON HAS ITS OWN AMAZON FRESH DELIVERY BUSINESS, OPENED A FEW DOZEN STORES, TRYING TO MAKE THAT SING BETTER TOGETHER. IF YOU GO ONLINE AND TRY TO SHOP FOR GROCERIES ON AMAZON, YOU MIGHT MAKE THREE SEPARATE PURCHASES FOR THREE SEPARATE OF LIVERIES AND THEY WILL FUNNEL THAT INTO ONE SINGLE BASKET OR CART AND EVENTUALLY HOPING TO STARRY EXPANDING THE BRAND-NEW AMAZON FRESH GROCERY CHAIN THEY STARTED DURING THE PANDEMIC. ED: WHAT IS ANDY JASSY'S ATTITUDE
TOWARDS THE GROCERY BUSINESS? YOU REPORTED HE LOOKED AT OTHER UNITS LIKE PRIME VIDEO IN SIMPLE LET'S GET THIS UNDER CONTROL. WHAT WE KNOW ABOUT HOW HE VIEWS THE GROCERY OPPORTUNITY? MATT: SINCE JEFF BEZOS FIRST NUDGED AMAZON TOWARD GROCERY 15 TO 20 YEARS AGO, THE REST HAS BEEN THE KIND OF THE SAME FOR AMAZON. GROCERY SHOPS, MOST FREQUENT PURCHASE THAT PEOPLE MAKE AND WE NEED TO BE THERE IF WE ARE GOING TO BE A LARGE, GLOW-STRUGGLING RETAILER. AMAZON HAS A TIGHT BUSINESS BUT WE HEARD ANDY JASSY MAKE SIMILAR COMMENTS.
WE THINK WE HAVE SOMETHING TO SAY THERE AND ARE COMMITTED FOR THE LONG TERM. HE DID MAKE A PRETTY BIG TAP ON THE BRAKES ABOUT THIS TIME A YEAR AGO WHEN THEY STOPPED EXPANDING. AMAZON FRESH STORES TAKING A HARD LOOK AT WHETHER THE GROCERY STRATEGY WAS THE RIGHT ONE. THEY THINK THEY ARE THERE BUT I GUESS WE WILL SEE. ED: MATT DAY, CHECK OUT HIS PEACE IN THE BUSINESSWEEK ABOUT THE BIG AMAZON GROCERY RESET.
COMING UP, AMD TOPPING QUARTER ESTIMATES AND TOUTING INROADS INTO ARTIFICIAL INTELLIGENCE. WE WILL DIVE INTO RESULTS NEXT. WHAT IS GOING ON HERE? AFTERMARKET, 12 TO 18 HOURS AGO, SHARES WERE UP AND NOW WE'RE DEFINITELY WELL IN SESSION LOWS. WE DISCUSSED. THIS IS BLOOMBERG. ♪ -- DISCUSS. THIS IS BLOOMBERG. ♪ ED: THEME D REPORTING BETTER-THAN-EXPECTED RESULTS WITH OPTIMISM BY THE CHIPMAKERS, THE CEO SAYING WHILE WE ARE IN THE EARLY DAYS, WITH THE NEW ERA OF AI IT IS CLEAR IT REPRESENTS A MULTIBILLION-DOLLAR GROWTH OPPORTUNITY FOR AMD. JOINING US NOW IS BLOOMBERG INTELLIGENCE'S COULD JENSEN BONNIE.
THE OPPORTUNITY IS $150 MILLION BY 2020 SEVEN, TALKING SPECIFICALLY ABOUT AI ACCELERATORS. STARK, AT SESSION LOWS, WHAT DO WE NOT LIKE ABOUT WHAT AMD SAID? >> I THINK THE REACTION IS DUE TO ANY QUANTIFIABLE METRICS -- LACK OF QUANTIFIABLE METRICS. THERE'S NO DOUBT THERE IS POSITIVE CUSTOMER INTEREST, POSITIVE CUSTOMER FEEDBACK, BUT THESE PROCESSES TAKE A LONG TIME. YOU GO FROM SAMPLING TO CUSTOMERS, THEY NEED TO QUALIFY, AND AFTER THAT THERE IS A COUPLE QUARTERS FOR THE RAMP. I THINK DUE TO THE LACK OF INTO QUANTIFIABLE METRICS ON THE MAGNITUDE AND TIMING OF THE REVENUE UPSIDE FROM THIS BUSINESS FOR NEXT YEAR. ED:
THE WAY AMD FRAMED IT IS THE CUSTOMER ENGAGEMENTS, ENGAGEMENTS WITH SEVEN ACTS IN THE QUARTER GONE BUT THAT DOES NOT EQUATE TO BOOKING REVENUE, I GUESS THAT IS YOUR POINT. KUNJAN: EXACTLY, YES. ED: TALK ABOUT WHERE AMD IS IN ITS LIFECYCLE. ON THE SHOW, WE ALWAYS TALK ABOUT THE EN H1 100S BUT THAT IS JUST RELEVANT GPO'S THAT HAVE BEEN IN THE MARKET FOR A LONG TIME. HAS AMD GOT ANYTHING IN THE WILD CUSTOMERS HAS THEIR HANDS ON? KUNJAN: THE MI 300 X WILL BE A SPECIFIC AIG P WHICH IS SUPPOSED TO SAMPLE OR RAMP. NVIDIA IS DEPLOYING THE
SECOND-GENERATION GPU'S ALREADY BUT AMD IS LATE TO THIS GAME. ED: THE STORY FOR AMD IS AI ACCELERATORS. WHAT IS AN AI ACCELERATOR? KUNJAN: I THINK MOST PEOPLE ARE AWARE OF THE CPU, THE GENERAL-PURPOSE COMPUTE, DESIGNED TO PROCESS A LOT OF DIFFERENT TASKS AND DO IT WELL BUT AN ACCELERATOR IS A CHIP SPECIFICALLY DESIGNED TO VASTLY PROCESS ONE SPECIFIC TYPE OF TASK, HENCE THE NAME ACCELERATOR BECAUSE IT ACCELERATES THE PROCESSING OF ONE SPECIFIC TYPE OF TASK. A GPU IS A TYPE OF ACCELERATOR, OTHER TYPES ARE CHIPS LIKE ONES FROM BROADCOM, THE TPU GOOGLE USES IS ONE. WHEN THERE IS A CHIP DESIGNED TO ONLY COMPUTE FOR SPECIFIC TASK, OR DO IT FAST, THAT IS WHAT WE CALL AN ACCELERATOR. ED: AWAY FROM THE EXCITEMENT OF AI,
THIS EARNINGS SEASON HAS BEEN ABOUT THE CALLING -- ABOUT THE CORE BUSINESSES. WHAT DID YOU LEARN ABOUT AMD'S HEALTH IN PCN DATA CENTER? KUNJAN: SIMILAR TO INTEL, THE RESULTS AROUND PC WAS REALLY GOOD. IT SHOWS THE PC MARKET BOTTOM IS TURNING AND ON ITS WAY TO RECOVERY AND THE SECOND HALF WILL BE A TAILWIND. AND IT COMES TO DATA CENTER, WE SEE IT BOTH FROM INTEL THAT THE ENTERPRISE MARKET IS A MIXED ENVIRONMENT.
THERE IS STILL INVENTORY THE NEEDS TO BE CLEARED AND DEMAND IS NOT A STRONG. ON THE SIDE, ON THE DATA CENTER FOR THE CLOUD, INTO THIS YEAR, WE KNOW THE SPEND IS LOWER THAN WHAT WE EXPECTED AT THE END OF 2022 AND THEY ARE HEAVILY SPENDING IN THEIR A CLOUD PORTION WHICH FORCES THEM TO OPTIMIZE IN THE NON-A ICLOUD PORTION AND THAT IS WHERE THESE PLAYERS HAVE THE BIG MARKET AND AMD AND INTEL ARE FEELING THE BURN. ED: BLOOMBERG INTELLIGENCE'S KUNJAN SOBHANI. CHECK OUT HIS OUTLOOK ON THE BLOOMBERG TERMINAL. SOFTBANK IS ALSO FEELING OPTIMISTIC ABOUT AI. THE COMPANY'S SEMICONDUCTOR
UNIT ARM IS TARGETING AN IPO VALUED BETWEEN $60 BILLION AND $70 BILLION. ACCORDING TO SOURCES, THE COMPANY COULD GO PUBLIC AS SOON AS SEPTEMBER. EARLIER THIS YEAR, BANKERS PINCH DEVALUATION TRADING FROM $30 BILLION TO $70 BILLION BUT THE CEO AND ONE FROM SOFTBANK CONSIDERED THE LOWER END OF THE RANGE TOO LOW. ITS DEBUT WAS SURPASSED MOST IN THE CHIP INDUSTRY.
COMING UP, STICKING WITH AI, IMPACTING THE WORKFORCE, HOW SOME U.S. STATES ARE TO REGULATE THE NEW TECH. THIS IS BLOOMBERG. ♪ ED: TIME NOW FOR WORK SHIFTING WHERE WE LOOK AT THE CHANGING LANDSCAPE OF THE LABOR MARKET AMID ADVANCES IN TECHNOLOGY. TRYING TO SORT WINNERS FROM LOSERS AS AI SPREADS THROUGH THE ECONOMY. THE STOCK MARKET IS AND IT GOES
WAY BEYOND NVIDIA AND MICROSOFT. A TRIO OF RESEARCHERS FROM CALIFORNIA UNIVERSITIES SAY COMPANIES WITH WORKFORCES RIGHT FOR AI ARE BEATING THE MARKET. THE STUDY TIED TO GENERATIVE AIM FIRM VALUES DEPICT A MARKET ALREADY MAKING BROAD JUDGMENTS ABOUT HOW AUTOMATION WILL IMPACT THINGS I CASH FLOW AND STOCK VALUATION AS INTELLIGENT SYSTEMS SUBMIT THEMSELVES AS TOOLS OF PRODUCTION. STICKING WITH AI, U.S. STATES ARE SEEKING TO REGULATE AI WITH NEW LEGISLATION.
NORTH DAKOTA'S AI-RELATED MEASURES WERE AMONG MORE THAN ONE DOZEN NOT PAST LEGISLATURES ACROSS THE U.S., COVERING MATTERS THAT RANGE FROM ROAD MAINTENANCE TO EXAMINING POTENTIAL RACIAL DISCRIMINATION BY AUTOMATED SYSTEMS. COMPANIES THAT CONTRACT SOCIAL MEDIA INFLUENCERS ARE DEMANDING THOSE INFLUENCERS BY -- BY INSURANCE . THEY WANT THE PERSONALITIES TO
TAKE A POLICIES TO PROTECT THE BRANDS THEY ARE PROMOTING BEFORE THEY CAN EXPECT ANY MORE DEALS. HERE WITH ALL OF THE DETAILS, ALEX BARINKA IN L.A.. WHY DOES A SEMIFAMOUS INFLUENCER NEED ANY INSURANCE POLICY? WHAT IS THE ARGUMENT? ALEX: IT'S USUALLY THESE ARE BRANDS WHO ARE CONTRACTING THESE INFLUENCERS. WHEN BRANDS GO TO INFLUENCERS
AND ASK THEM TO MAKE CONTENT EITHER FOR THEIR OWN CHANNELS OR POST ON SOCIAL MEDIA, THERE'S ALWAYS BEEN THIS INHERENT LEVEL OF RISK. YOU ARE TURNING OVER YOUR BRAND VOICE TO THESE INFLUENCERS, THESE INTERNET INDIVIDUALS, AND NOW IT SEEMS LIKE THEY ARE TAKING IT A STEP FURTHER. AS INFLUENCERS HAVE BECOME A BIGGER PART OF THEIR MARKETING SPEND, IT SEEMS BRANDS ARE LOOKING TO CAP RISK BY ASKING THESE CREATORS TO TAKE OUT THESE INSURANCE POLICIES THAT WOULD PROTECT THEM FROM DOING THINGS LIKE USING MUSIC THAT IS NOT LICENSED FOR COMMERCIAL USE OR AS I SEE HERE IN L.A. ALMOST EVERY DAY, TAKING PICTURES IN FRONT OF A PAINTED WALL OF A BUILDING AND THAT BUILDING IMAGE HAPPENED TO BE COPYWRITTEN. BRANDS ARE LOOKING TO CAP THEIR RISK BUT IT IS AN INTERESTING MOVE FOR CREATORS.
A LOT OF WHICH ARE NOT MAKING SO MUCH MONEY IN EVERY YEAR. ED: IS THE THREAT OF LEGAL ACTION REAL? HAVE WE SEEN LAWSUITS AGAINST PEOPLE TRYING TO MAKE THEIR NAME ONLINE? ALEX: WE HAVE. THERE HAVE BEEN A COUPLE KEY CASES MENTIONED BY OUR COLLEAGUE IN GOOD REPORTING. ONE IS ENERGY, AN ENERGY DRINK THAT IF YOU SPEND ANY TIME ON TIKTOK, YOU SEE CREATORS BIG AND SMALL PROMOTING IT. THERE'S A LAWSUIT THAT ALLEGED
CREATORS PROMOTING THIS WAS USING MUSIC ON TIKTOK THAT WAS NOT SANCTIONED FOR COMMERCIAL USE. NOT EVERY SOUND OR SONG ON TIKTOK ARE YOU ABLE TO USE IN SOMETHING LIKE AN AD. THERE IS ALSO A SUIT IN LONDON FOR A BEAUTY BRAND WERE A CREATOR TOOK A PICTURE IN FRONT OF A PIECE OF WALL ART THAT WAS COPYWRITTEN. THESE THINGS ARE BEGINNING TO
COME UP BUT THE ECONOMICS ARE REALLY INTERESTING. YOU COULD BE A CREATOR LOOKING TO GET PAID $4000 FOR ONE POST BUT THE BRAND HAS BEEN ASKING YOU TO TAKE OUT A $2 MILLION INSURANCE POLICY BASICALLY TO INDEMNIFY THEM AND ASK YOU TO SPEND 2000 A YEAR TO KEEP THAT POLICY VIABLE SO QUITE INTERESTING ECONOMICS HERE ASKED OF THESE CREATORS AS BRANDS ARE LOOKING TO THEM TO CREATE CONTENT, FRANKLY A LOT CHEAPER THAN THEY CAN MAKE IN-HOUSE. ED: SOME NUMBERS BEHIND THESE POLICY LIMITS ARE INCREDIBLE. HOW DOES IT WORK? I'M IN ENTRANCE PLOEGER -- INSURANCE BROKER, I'M IN INFLUENCER, WHERE YOU GETTING THIS FROM? IS THERE MARKET SAYING WE BETTER PROTECT THESE FAMOUS PEOPLE? ED: I WOULD CALL THE MARKET BUDDING. FOR LARGER CREATORS, FAMOUS NAMES YOU AND I MIGHT KNOW, CELEBRITIES ONLINE, THIS HAS BEEN PAR FOR THE COURSE BUT WHEN YOU TALK ABOUT THE VAST MAJORITY OF CREATORS WHO ARE SMALLER, MICRO-INFLUENCERS, WHO HAVE 1000 TO 10 THOUSAND FOLLOWERS, THAT IS A SCATTERSHOT APPROACH. THE BROKERS CALLING SAY THEY BASICALLY DO IT ON A CASE-BY-CASE BASIS, LOOK AT THE CREATOR AND SEE HOW CONTROVERSIAL THEY ARE AND THEY PICK A NUMBER BASED ON THEIR OWN INTERNAL CALCULATIONS. ED:
ALEX BARINKA HOW IN L.A., THINK YOU VERY MUCH. COMING UP, SUSPENDS THE ACTIVITY OF THE NEWLY LAUNCHED WORLD COIN. WE SPEAK TO THE CEO NEXT. A QUICK LOOK AT SHARES, FALLING AROUND 6% HERE. THEY'RE FORECASTING REVENUE OF ONE MILLION -- $1 MILLION ON EACH OF THE NEXT TWO QUARTERS BELOW EXPECTATIONS.
ED: WELCOME BACK TO "BLOOMBERG TECHNOLOGY." ED LUDLOW HERE IN SAN FRANCISCO. NASDAQ 100 VERY TECH HEAVY INDEX, NEAR SESSION LOWS, DOWN 2.4%. THE MARKET DEALING WITH A TRIO OF MACRO FACTORS, THE DOWNGRADE FOR THE U.S. ECONOMY AND CREDIT RATING FOR
FINCH. WE HAD HOT PRIVATE LABOR DATA AND THEN THERE IS THE TREASURY ISSUING DEBT BUT EARNINGS IS THE CORE OF THE STORY. LOOKING AT THE BIG MOVERS FROM A POINTS PERSPECTIVE TO THE DOWNSIDE, THEY ARE CHIPMAKERS FOLLOWING AMD, REACTIONS TO ITS SHARES. ALSO ELECTRONIC ARTS DOWN IN THE SESSION, GAVE A FORECAST OF BOOKINGS THAT WAS PRE-MUCH BELOW EXPECTATION. TWO THINGS HAPPENING, APEX LEGENDS WEAK BUT FEE FOR STRONG. IT'S SOMETHING WE CONTINUE TO WATCH, $35 MILLION MARKET CAP, VIDEOGAME MAKER. AS HE WATCHED "BLOOMBERG
TECHNOLOGY," YOU KNOW WE COVER VIDEOGAMES ON THIS PROGRAM. LET'S GO FROM EARNINGS IN THAT MARKET TO CRYPTO. IT IS THE SEARCH FOR CRYPTO CLARITY. INVESTORS ARE SEEING THE CRYPTO MARKET SURGE AND THERE ARE TWO FEDERAL NEW YORK JUDGES ISSUING DECIDING THE DIFFERENT RULINGS OVER ONE SINGLE QUESTION, IS CRYPTO A SECURITY? ON JULY 13, COINBASE SHARES SURGED 24% AS U.S.
DISTRICT JUDGE ANNALISA TORRES FOUND ISSUED TOKENS WERE NOT A SECURITY DESPITE THE SEC ARGUMENTS THAT IT WAS. THEN ON THE FOLLOWING TUESDAY, DISTRICT JUDGE GENERAL, FOUND TERRAFORM LABS TOKENS MAY BE A SECURITY. PROMPTING COINBASE TO FALL AS MUCH AS 9.5%. ANOTHER STORY IN CRYPTO, THE FTX CO-FOUNDER CLAIMS REVOKING HIS BOND AND JAILING HIM FOR SPEAKING WITH A NEWSPAPER REPORTER WOULD VIOLATE HIS FREE-SPEECH RIGHTS. FOR MORE, SONALI BASAK JOINS US. I HARD ONE TO UNDERSTAND BUT
WHAT IS HIS ARGUMENT? SONALI: LET'S TAKE A MINUTE TO TALK ABOUT WHAT GOT US HERE. JULY 20, YOU HAD THE NEW YORK TIMES PUBLISHING THE STORY THAT GOT INTO HERE, GOOGLE DOCUMENTS HAD THE PRIVATE WRITINGS OF CAROLINE ELLISON WHO WOULD HAVE CONFLATED TO BE A STAR WITNESS IF YOU LOOK AT THE TRIAL WOULD HAPPEN BETWEEN SAM BANKMAN-FRIED AND HIS WORKINGS IN FTX. CAROLINE ELLISON WAS ONE STATING SAM BANKMAN-FRIED AND SOME OF WHAT SHE SAID ACCORDING TO THE NEW YORK TIMES REPORTING WAS SHE WAS UNCERTAIN ABOUT HOW SHE HAD RAN ALAMEDA, THAT SHE DID NOT PARTICULARLY FEEL WELL-SUITED TO RUN THE COMPANY AND IT FELT WEIRD GIVEN THEY HAD BEEN DATING ON AND OFF THESE TWO. WITHIN A DAY, THE U.S. PROSECUTORS ALLEGED SPF OF PROVIDING THE PRESS WITH THESE WRITINGS TO DISCREDIT HER AS A WITNESS. NOW WHAT SAM BANKMAN-FRIED IS DOING, HE ASKED A JUDGE TO REVOKE THE 250 MILLION DOLLAR BOND, HE SAYS REVOKING THE BOND WOULD VIOLATE HIS FREE SPEECH RIGHTS.
THIS WAS HIS EXACT RESPONSE THAT FOR AN -- SAM BANKMAN-FRIED'S CONTACT WAS NOT AN INTIMIDATE ATTEMPT OR TAINT THE JURY POOL, IT WAS A PROPER EXERCISE OF HIS RIGHTS TO MAKE A FAIR COMMENT ON AN ARTICLE ALREADY IN PROGRESS. WHICH THE REPORTER ALREADY HAD ALTERNATE SOURCES. THAT IS WHERE WE STAND, SIGNIFICANT DISPUTE FROM SAM BANKMAN-FRIED WHO -- FREED. WE WILL SEE HOW THE TRIAL PLAYS OUT. ED: WE ARE STICKING WITH THE BROADER CRYPTO THEME, A DIFFERENT PROJECT, WORLD COIN, THE COMPANY AIMING TO CREATE DIGITAL IDS BY SCANNING PEOPLE'S EYEBALLS HAS BEEN SUSPENDED IN KENYA AFTER LAUNCHING JUST LAST WEEK. THIS AS THE COUNTRY LOOKS INTO SECURITY AND DATA CONCERNS. WE SPOKE WITH CHRIS PERKINS --
CHRIS PER SKINS, AN INVESTOR OF WORLD COIN, ABOUT HIS AVAILABILITY IN THE FUTURE IN THE UNITED STATES. >> I HAVE HAD MY ORB PERSONALLY SCANNED, IT IS A MATTER OF WHEN THE TOKEN WILL DROP. I THINK HE GOES BACK TO ITS OWN PSYCH A LOT OF THESE CRITICAL CURRENCIES ARE A LOT LIKE ORIGINS SO AS THE NARRATIVE PLAYS OUT, I THINK YOU WILL SEE THE TOKEN BECOME AVAILABLE HERE, BUT IT IS HERE, YOU CAN GET YOUR EYES SCANNED ON THE ORBIT I THINK IT WILL DELIVER UTILITY INTO THIS BRAVE NEW WORLD. ED: THAT WAS A KEY INVESTOR. FOR MORE WE ARE JOINED BY THE WORLD COIN CEO. WELCOME TO "BLOOMBERG TECHNOLOGY" AND THANK YOU FOR YOUR TIME.
OPTIMISM FROM ONE OF YOUR BIGGEST INVESTORS ABOUT THE POTENTIAL WORLD COIN, BUT ACKNOWLEDGMENT OF SECURITY INCIDENTS AND EXISTING CONTROVERSY AROUND THE COMPANY AND WHAT HAS HAPPENED. WHAT IS YOUR RESPONSE? >> THAT IT IS CONTROVERSIAL, IT IS NOT SURPRISING TO US. I THINK THERE IS THIS IMMEDIATE REACTION TO BIOMETRICS AND SPECIFICALLY IRIS SCANNING AND THAT IS TO BE EXPECTED. HOWEVER, THE TECHNOLOGY IS PRIVACY PRESERVING AND WE BELIEVE IT IS GOING TO BE VERY IMPORTANT IN TIME IN WHICH AI WILL BECOME PROBABLE. SONALI: IN THE FIRST ONE HE FOUR HOURS OF THE LAUNCH THERE WAS SIGNIFICANT UPTICK ALREADY WHEN WE LOOK AT THE WORLD COIN TOKEN THAT DROPPED.
HOW HAS THAT UPTICK CONTINUED AND HAVE YOU SEEN A TAPERING AT ALL? ALEX: IT STAYED SURPRISINGLY CONSTANT. WE DID NOT SEE MUCH CHANGE EITHER UP OR DOWN. IT IS VERY EARLY OF COURSE. THIS IS A MULTI-YEAR-LONG OR MULTI-DECADE LONG PROJECT SO SUPER EARLY IN THE GAME HERE. HOWEVER, I'M HAPPY HOW IT WENT. FROM ALL PARTIES. I THINK IT WAS A GREAT START.
WE HAVE A LOT OF GROUND TO COVER GOING FORWARD. SONALI: HOW MANY PEOPLE HAVE SIGNED UP FOR THE SCANNING? HOW MANY PEOPLE HAVE GOTTEN INTO THE TOKEN? WHEN DO YOU SEE IT COMING TO THE UNITED STATES IF AT ALL? ALEX: I DO NOT HAVE THE EXACT NUMBERS AS OF NOW. BUT IT IS A LITTLE OVER 2 MILLION. WE HAD A CRAZY SPIKE IN DEMAND LAST WEEK.
WE HAD I THINK OVER 600,000 DOWNLOADS IN THE FIRST COUPLE DAYS AND WE HAD HEADLINES ALL OVER THE WORLD WHICH WAS VERY ENCOURAGING AND CRUEL TO SEE -- COOL TO SEE THE REVERSAL FROM TOKYO, HONG KONG, TO SINGAPORE, ARGENTINA, NAIROBI. IT WAS A GOOD WEEKEND WE HAD A LOT OF DEMAND TO REACT TO AND ESPECIALLY EARLY ON IT BROKE DOWN UNDER THAT. BUT AS I SAID, IT IS EARLY. WE HAVE TO GROW AND ROLL OUT MORE DEVICES IN THE COMING MONTHS, SO IT IS REALLY THE BEGINNING OF A LONG SPREAD. ED: WE REFER TO WORLD COIN AS A CRYPTO PROJECT BUT I'M INTERESTED IN THE RETINAL SCANNING COMPONENT, THE UNDERLYING TECHNOLOGY. CAN YOU EXPLAIN TO OUR AUDIENCE
WHERE YOUR COMPETENCE LAYS? IS IT IN THE RETINAL SCANNING TECHNOLOGY THAT YOU GUYS HAVE BEEN DOING MOST OF YOUR WORK, OR DO YOU GET THAT FROM A THIRD-PARTY? ALEX: FIRST OF ALL, IT IS A PROTOCOL, AN OPEN SOURCE AND EVENTUALLY DECENTRALIZE PROTOCOL EVERYONE CAN USE AND IT IS NOT A COMPANY. THAT IS THE FIRST IMPORT THING TO UNDERSTAND. I'M THE CEO OF TOOLS FOR HUMANITY, ONE OF THE FOUNDING CONTRIBUTORS TO THE COIN BUT THERE WILL BE MANY OTHERS AS WE GO FORWARD. TO YOUR QUESTION, EXPLAINING WHERE THE COMPETENCE LIES, HOW IT FITS TOGETHER WITH CRYPTO, THE ORIGINAL IDEA OF OUR COIN WAS STARTING A FINANCIAL NETWORK BASED ON THE IDEA OF PROOF OF PERSONHOOD, THAT ESSENTIALLY MEANS AS A U.S. USER -- THE USER YOU CAN VERIFY ONLINE, THAT YOU ARE UNIQUE HUMAN BEING WITHOUT REVEALING ANY PRIVACY-RELATED DATA. SO YOU LET'S SAY WITH TWITTER
OR X, YOU WON A VERIFY YOU ARE NOT A BOT, WHICH WE BELIEVE WILL BE INCREASINGLY IMPORTANT GOING FORWARD AS AI BECOMES INCREASINGLY POWERFUL, YOU WILL BE ABLE TO DO ID WITHOUT REVEALING ANY PERSONAL INFORMATION ABOUT YOURSELF BY USING WHAT IS CALLED YOUR KNOWLEDGE PROVES. THAT IS ONE OF THE REASONS CRYPTO IS IMPORTANT. CRYPTOGRAPHY, THERE IS PROVES THAT LET YOU PROVE CERTAIN STATEMENTS WITHOUT REVEALING THE UNDERLYING INFORMATION, WHICH IS IMPORTANT.
TO DO THAT, AS A USER TO RECEIVE YOUR WORLD ID, YOU HAVE TO VERIFY YOURSELF IN FRONT OF A PHYSICAL DEVICE, A 20 CENTIMETERS FEAR CALLED THE ORB, AND THEY WILL BE ALL OVER THE WORLD IN PUBLIC SPACES, IN MALLS, AND EVEN AROUND CITIES. IT IS A DECENTRALIZED MODEL SO IT IS NOT WE AS A PROJECT OPERATING THESE BUT RATHER ENTREPRENEURS AND FOUNDERS ALL OVER THE WORLD I CAN OPERATE THESE DEVICES AND EARN SIGN-UP. YOU AS A USER DOWNLOAD THE APP, CALLED WORLD OUTCOME OF THE FIRST APP THAT ALLOWS YOU TO DO THAT BUT MANY OTHERS WILL COME, AND YOU CLICK ON A MAP ON THE YOU SAY I WANT TO VERIFY NOW AND YOU GO IN FRONT OF ONE OF THE DEVICES AND RECEIVE YOUR WORLD ID WHICH LETS YOU VERIFY ONLINE WITH WHOEVER INTEGRATES IT IN THE FUTURE. ED: SAM ALTMAN IS ONE OF THE FOUNDERS OF THIS INITIATIVE, WORLD ID. DAY-TO-DAY, WHAT ROLE DOES HE PLAY? HOW ARE YOU AND HE SEPARATING YOUR TIME AND DUTIES? ALEX: SAM IS CLEARLY FOCUSED ON OPENAI, GIVEN HE IS THE CEO OF OPENAI AND I'M THE CEO OF TOOLS FOR HUMANITY. HE IS COFOUNDER HERE SO ALL IMPORTANT INITIATIVES, OBVIOUSLY IF THERE ARE THINGS THAT REALLY TOUCH HIM AND OTHERWISE HIS INVOLVEMENT CHANGES, DEPENDING ON WHAT WE ACTUALLY WORK ON LIKE IS IT MOSTLY PRODUCT OR ENGINEER FOCUSED? HE IS LESS INVOLVED BUT OTHERS HE IS MORE INVOLVED. IT DEPENDS ON WHAT IS HAPPENING
IN THE BUSINESS DAY TODAY. SONALI: I'M CURIOUS HERE, WE TALKED ABOUT THE KENYAN GOVERNMENT REACTION TO WORLD COIN MORE RECENTLY AT THE START OF THIS INTERVIEW. I AM WONDERING IF YOU ARE WORKING WITH THE KENYAN GOVERNMENT TO ADDRESS SOME CONCERNS THEY MAY HAVE, GIVEN HOW IMPORTANT THE MARKET WAS EARLIER ON IN THE PROJECT. ALEX: WE WORK WITH THE GOVERNMENT,
MULTIPLE GOVERNMENT BODIES, TO RESOLVE THE UNCERTAINTIES OR QUESTIONS THERE ARE. CERTAINLY THE SPIKE IN DEMAND SOLACE WEEK WAS VERY SURPRISING SO I HOPE WE CAN GET IT BACK TO DELIVERING THE ACTUAL PRODUCT IN KENYA. HOWEVER, WE COMPLY WITH THE GOVERNMENT AND THE QUESTIONS THAT ARISE AND ALL THE REGULATORS THAT ARE IMPORTANT TO DO SO. WE STOPPED OPERATING IN KENYA UNTIL THAT IS THE FACT AND WE HOPE THAT WE CAN RESUME OPERATIONS. SONALI:
HOW DO YOU ADDRESS SECURITY CONCERNS AS WELL? RECOGNIZING THERE WERE WORRIES ABOUT STOLEN CREDENTIALS WHEN IT CAME TO WORLD ID EARLIER ON, BLACK-MARKET SALES, ARE THESE THINGS YOU ARE WORKING AND FINDING A WAY TO PREVENT IN THE FUTURE? ALEX: YES THEY ARE NOT SURPRISING. ESSENTIALLY, FIRST OF ALL, LET'S EXPLAIN WHAT WE ARE TALKING ABOUT. AND WHAT WAS REPORTED ON. WHAT WAS REPORTED ON IS USERS IN COUNTRIES WHERE WORLD COIN IS NOT AVAILABLE, CHINA, BY ACCOUNTS FROM USERS WHERE WORLD COIN IS AVAILABLE, SAY NAIROBI, WHAT IT MEANS IS YOU DO NOT SELL YOUR BIOMETRIC DATA OR ANYTHING LIKE THAT. I THINK THAT WAS ONE OF THE MAJOR MISUNDERSTANDINGS TO CLARIFY BUT RATHER YOU SELL YOUR LOGIN CREDENTIALS, LET'S SAY YOUR USERNAME AND PASSWORD.
AS THE BEST ANALOGY TO NORMAL USE CASES. AND THAT IS NOT IN MIDTERM A CONCERN BECAUSE AS A USER CAN JUST RECOVER YOUR ACCOUNT, YOU CAN GO BACK TO AN ORB AND RECOVER YOUR ACCOUNT AND WHAT IT MEANS IS THE OTHER PARTY THAT ACQUIRED THE ACCOUNT ACQUIRED SOMETHING THAT WILL TURN OUT TO BE WORTHLESS BECAUSE THE LOGGING CREDENTIALS WILL STOP WORKING. SO THIS IS NOT AN ACTUAL MEDIUM TO LONG-TERM CONCERN. AND PRIVACY FROM THE USERS IS NOT COMPROMISED. ED:
ALEX BLANIA OF WORLD COIN AND SONALI BASAK, THANKS TO YOU BOTH. COMING UP ON "BLOOMBERG TECHNOLOGY," WE SPEAK TO THE CEO OF PORTAGE ABOUT THE STATE OF FUNDRAISING IN SILICON VALLEY, TODAY'S VC SPOTLIGHT, FOCUSED ON FINTECH. AS WE GO TO BREAK, WATCHING SHARES OF MICROSTRATEGY, DOWN AROUND 7% IN THE SESSION, THE LEADERSHIP OF THE COMPANY GIVING PRETTY CONSISTENT LONG-TERM, BULLISH OUTLOOK ON BITCOIN WHICH UNDERPINS A LARGE CHUNK OF THEIR BALANCE SHEET. THIS IS BLOOMBERG.
ED: A STORY IN PRIVATE MARKETS, TRACKING CHARLES LEE, THE FORMER HEAD OF HONG KONG STOCK EXCHANGE RAISED 450 MILLION DOLLARS IN SERIES C FUNDING ROUND FOR HIS COMPANY, MICRO CONNECT. THE COMPANY AS A PLATFORM TO LINK INTERNATIONAL CAPITAL TO SCHOOL BUSINESSES IN CHINA THE FIRM ANNOUNCED FUNDING WITH PARTICIPATION FROM NEW AND EXISTING INVESTORS FROM NORTH AMERICA, THE MIDDLE EAST, AND GREATER CHINA. TURNING US IS THE PORTAGE CEO, DELIVERING FLEXIBLE CAPITAL SOLUTIONS AND STRATEGIC RESOURCES TO HELP PUBLIC AND PRIVATE LATER STAGE FINTECH BUSINESSES, THE LATE -- DAILY VENTURE SPOTLIGHT. GOOD MORNING TO YOU AND WELCOME
TO THE PROGRAM. >> GOOD TO BE BACK ON. THANKS. ED: THERE'S THIS IDEA WE HAVE BEEN TALKING ABOUT I NEED TO SEE SPOTLIGHT THAT IF YOU LOOK AT THE DATA IN 2023, ACTIVITY BROADLY FOR VENTURE BANKS START UPS HAS DROPPED OFF. IF I GO ON BLOOMBERG.COM OR REPLAYS OF THE SHOW AND LOOK AT THE HEADLINES, LOTS OF PEOPLE CLOSING FUNDS AND LOTS OF COMPANIES RAISING MONEY. WHAT IS YOUR TAKE ON WHAT IS HAPPENING RIGHT NOW FROM AN ACTIVITY PERSPECTIVE? >> FOR CERTAIN WE HAD A FALSE DAWN IN Q1 WHERE WE FELT THINGS WERE COMING BACK AND THEN WE GOT SLAMMED BY SVB AND THE CONSEQUENCES RELATED TO IT.
I THINK U2 WILL PROVE TO BE THE LOW AND ANECDOTALLY YOU ARE RIGHT, WHAT WE ARE SEEING OURSELVES AND WITH MY COLLEAGUES ACROSS THE VENTURE AND GROWTH MARKETS IS THINGS ARE PICKING UP. I DO NOT THINK WE HAVE BEEN BUSIER IN 12 TO 18 MONTHS FROM TERMS OF PERSPECTIVE TERM SHEETS WE HAVE GOTTEN IN MARKET, DEALS THAT WERE CLOSED. IT DOES FEEL A LOT BETTER, I THINK WE WILL BE MORE COMFORTABLE IF WE HAVE BETTER VISIBILITY ON WHERE THE FED LIES IN THE FALL BUT IT ABSOLUTELY, THE SENTIMENT IN THE MARKET IS STRONGER. ED: YOUR FIRM IS FOCUSED LARGELY IN FINTECH AND FINANCIAL SERVICES. HE REFERENCE THE VOLATILITY AROUND SILICON VALLEY BANK'S COLLAPSED.
HAS INTEREST IN FINTECH INSTRUCTION OF TRADITIONAL BANKING CARRIED ON INTO THE SECOND HALF OF THIS YEAR? BASED ON WHAT HAPPENED WITH SELLECK AND VALLEY BANK. ADAM: I THINK THE FINTECH MARKET AS A SEGMENT WITHIN TECH DEFINITELY HAS BEEN HIT THE MOST AND UNDERSTANDABLY EERIE I THINK THERE WAS NEW BUSINESS MODELS THAT PEOPLE UNDERWROTE THAT HAVE NOT PANNED OUT, SO I THINK RIGHTFULLY FINTECH WAS HIT THE MOST, BUT THE STRONGEST COMPANIES IN THE MARKET ARE DOING WELL. IF YOU LOOK AT OUR OWN PORTFOLIO , SIMPLE OR ALBERT, DIRECTOR -- DIRECT TO CONSUMER BUSINESSES, THEY ARE CONTINUING TO BRING GROWTH, PROFITABLE, AND THEIR CUSTOMER ACQUISITION COSTS ARE CONTRACTING AS THERE IS LESS COMPETITION IN THE MARKET. ED: SO QUESTION FOR AN INVESTOR LIKE YOU FOCUSED ON FINTECH AND FINANCIAL SERVICES, WHAT IS YOUR ATTITUDE TOWARD AI AND HOW THAT FITS IN WITH YOUR EXISTING PORTFOLIO COMPANIES? ADAM: FIRST AND FOREMOST, ACROSS OUR PORTFOLIO, WE ARE FOCUSED ON HOW WE TAKE COSTS OUT OF OUR BUSINESSES.
THERE IS HUGE OPPORTUNITIES WITHIN YOUR ENGINEERING STAFF, HUGE OPPORTUNITY IN TERMS OF CUSTOMER SERVICE, AND OPERATING LEVERAGE GROWTH IS GOING TO BE SIGNIFICANT, BECAUSE OF SUCCESSFUL IMPLEMENTATION OF AI. THAT IS WHERE WE ARE GOING TO BE FOCUSED IN THE EARLY STAGES. ULTIMATELY, THERE WILL BE OPPORTUNITIES IN I COMPANIES THEMSELVES BUT RIGHT NOW, THE TWO LEE AVAILABLE FOR FREE IN THE MARKET IS THE BEST ADVANTAGE WE CAN USE AND WITHIN OUR EXISTING PORTFOLIO. ED: WHEN A POTENTIAL PORTFOLIO COMPANY, FOUNDER, SITS IN FRONT OF YOU, DO YOU WANT TO HEAR THEM PITCH THEIR GOING AFTER THE BIG BANKS AND THEIR BUSINESS, OR DO YOU WANT TO HAVE THEM HAVE SOMETHING MORE FOCUSED, MORE NICHE THAT IS NOT YET IN THE MARKETPLACE? ED: WE WANT TO HEAR ABOUT WHY IT IS THAT A SPECIFIC SEGMENT IS GOING TO LOVE THEIR PRODUCT AND ARE ADDRESSING THE SPECIFIC ISSUE THEY ARE FACING SO IT IS NOT NECESSARILY WHERE WE TAKING CUSTOMERS FROM, IT IS WHERE THE UNDERSERVED -- WHERE THEY ARE UNDERSERVED AND HOW ARE YOU GOING TO SERVE THEM BETTER. ED:
WHERE IS THE TALENT RIGHT NOW IN FINTECH GEOGRAPHICALLY SPEAKING? ADAM: THAT IS A GREAT QUESTION. I THINK IT IS EVERYWHERE. IT IS A WONDERFUL PART OF THIS DISTRIBUTED WORKFORCE. WE HAVE PORTFOLIO COMPANIES THAT HAVE EMPLOYEES ALL THE WAY FROM DUBAI TO INDIA TO NEW YORK TO REGIONAL PLACES IN THE UNITED STATES, AND CANADA IS BECOMING A GREATER HUB AS WELL.
I THINK IT IS A GREAT TIME TO BE BUILDING COMPANIES BECAUSE TALENT IS EVERYWHERE AND IN THE DISTRIBUTIVE WORLD THEY ARE EXCITED TO WORK FOR YOU. ED: THE CANADA TELLING CONVERSATION IS ONE FOR ANOTHER SHOW. ADAM FELESKY OF PORTAGE, THINK YOU SO MUCH. HEADING TO BREAK, LOOKING AT SHARES OF ETSY AND OTHER EARNINGS -- ANOTHER EARNINGS A STORY WE WAITED. THAT IS THE INTERESTING TRADE
IN THE SESSION BUT WE ARE LOWER AFTER EARNINGS DISAPPOINTMENTS. THAT STOCK DOWN 3%. THIS IS BLOOMBERG. ♪ ED: A VIRAL STORY WE CONTINUE TO WATCH. YESTERDAY, WE REPORTED MR. BEAST SUED HIS GHOST KITCHEN
BUSINESS PARTNER, VIRTUAL DINING, SAYING THE COMPANY SACRIFICED QUALITY IN ITS BID FOR RAPID EXPANSION. TODAY, VIRTUAL DINING HAS RESPONDED SAYING "THE COMPLAINT IS RIDDLED WITH FALSE STATEMENTS AND INACCURACIES AND A THINLY VEILED ATTEMPT TO DISTRACT FROM MR. DONALDSON'S AND BEAST INVESTMENT BREACHES AT THE AGREEMENTS BETWEEN THE PARTIES." IT IS A STORY WE CONTINUE TO MONITOR AND ELSEWHERE GOING VIRAL, HOLLYWOOD STRIKES ARE STILL GOING VIRAL, THIS TIME THE WRITERS GUILD OF AMERICA SENT AN EMAILED TO MEMBERS SAYING THE HEAD OF THE ALLIANCE OF MOTION PICTURE AND TELEVISION PRODUCERS REQUESTED A MEETING FRIDAY TO DISCUSS RESUMING CONTRACT TALKS, ACCORDING TO THE ASSOCIATED PRESS.
IT WAS NOT IMMEDIATELY KNOWN WHETHER A SIMILAR MESSAGE WAS SENT TO UNION LEADERS FOR HOLLYWOOD ACTORS. THAT DOES IT FOR THIS EDITION OF "BLOOMBERG TECHNOLOGY". FROM IN SAN FRANCISCO, YOU CAN RECAP EVERYTHING IN THE SHOW ON OUR PODCASTS. MANY OF YOU WOULD LISTEN TO "BLOOMBERG TECHNOLOGY" DO WHEREVER YOU GET YOUR PODCASTS, APPLE, SPOTIFY, I HEART, AND WE PUBLISH A PODCAST ALL OF THE BLOOMBERG PLATFORMS. FROM HERE IN SAN FRANCISCO, THERE IS SO MUCH TO COME THIS EARNINGS SEASON HERE ON "BLOOMBERG TECHNOLOGY." THIS IS BLOOMBERG.
2023-08-03 17:23
