Biden in Poland and Apple's $200K Bonuses

dome bas region, but falters in Key. We'll look at the continuing fallout from the war from cyberspace to outer space, plus Apple dolling out an additional unusual bonus to Key engineers some upwards of two hundred thousand dollars. How to keep staff loyal as the post pandemic war for talent ramps up. We'll have more on that. Bloom School and install cart also trying to lawre new employees by taking an unexpectedly lower valuation, slashing its own valuation by almost

from thirty nine to twenty four billion dollars. This is public market volatility continues. We'll discuss another work school all of that in a moment, but first let's get a look at the market. Tech stocks and in the week down are at Ludlow here now with the latest and it's not all bad news right now. Okay, look we're a little lower flat on a Friday, but we did see a late come back from the ASTAC one D very tech heavy index. Of course, that's his oil trim games.

You see w t I West Texas in the media above a hundred ten dollars a barrel higher a hundred thirteen aout in US tenure yield at two point four seven percent nears two and a half percent. But coming me into my bloombow terminal, will look we have some sustained momentum in tech stocks and has that one hundred having his first back to back weekly gain since the beginning of February that despite the backdrop of higher yields. Of course, yields has impacted tech stocks with higher multiples.

This concerned, of course, that it discounts the present value of future profits Elsewhere big tech names on the move, of course, this Friday, looking at Meta parent company of Facebook, it looks like the US and EU has reached a deal and accord over data movement, the flow of data between the two continents. Facebook was a company to express concern their octa continues to be lower off that high can Spotify ending its ad platform, add back platform, free

to play platform in Russia as well. Emily, all right, thanks for that update. I want to move now to our top story. Talks between Russia and Ukraine are making no progress, according to a top aid to the Ukrainian president, but President Biden did make progress with EU leaders on a plan to wean Europe off Russian oil and Titan sanctions. The President also visiting troops near Poland's Ukrainian border as the war enters its second month. Joining US now works

Aggie Council from the ground in Poland. Aggie, you have been near the Polish border since almost the beginning of the war. Talked to us about how the refugee crisis you're seeing is evolving. Yes, So when I first came here several weeks ago now, the waiting times for people to try and cross the border was up to sixty hours, which in a Polish and Ukrainian winter can be a real risk to people's lives, and that was a real concern for the border guards and for the authorities on

both sides of the border. Now we're seeing that that process of getting people over the border has been streamlined, and it's also coupled with the fact that there are actually fewer people crossing the border now than where a couple of weeks ago. When I speak to volunteers on the ground here, a lot of them think that quite a lot of the people who have already crossed the border are those who are already going to do so, and then the ones who remain in the Ukraine are

choosing to do so to be closer to their families. Now, President Biden's visit to the Polish border, is any of this changing how he feels how the US will respond to Russia. Well, to be honest, there is an immediate effect of Biden's visit in the fact that the day before he arrived here in Gejov in Poland, he and now or the White House announced that the USA would be taking in a hundred thousand of the Ukrainian refugees. Of course, that pales in comparison to the two million

that Poland has has taken in. However, that is a significant step on the part of the United States, and him coming here is also a signal to Poland that they're acknowledging the humanitarian relief that Poland is doing here. And also Poland has been pushing for the EU to give them greater aid when it comes to financially supporting them throughout this refugee crisis. What's next for the president worth He after he's heading to Warsaw after this, So

he's going to meet with more people in Warsaw. Today he already met with the age second airborn here in chechov Um and now he's going on to Warsaw, the

capital of Poland, in order to have further meetings. And so a key factor of this this meets, these meetings that he's having here in Poland is not just the humanitarian angle, but also the security angle President due to the Polish President said in his press conference today with President Biden that he that he saw that his country was essentially the front line of the current concerns that the Native Alliance have when it comes to Russia's aggression

against Ukraine. All Right, bloombergs Aggie Control for us with an update from Poland. Thank you, Aggie for your reporting there from the ground. Meantime, cybersecurity defenses around the globe remained boosted as the war on Ukraine persists. Joining US now Tony Anscomb, chief cyber threat officer of SET, the group that detected the latest round of cyber attacks targeting various Ukrainian organizations, and talk to us about this latest salvo. Tony,

what is significance about the tactics you're seeing from the Russians. Well, firstly, these cyber tanks were data wipers, so I mean, we're all very familiar with things like ransomware. They're encrypted data and you can get it back if you pay pay the cyber criminal. These are just malicious pieces of code that actually do exactly what they say on the tin. They wipe the data so it can no longer be accessed or recovered in any way. So it's very very malicious.

And what is interesting about these particular variants is there was intent here because they were compiled some of them back in the end of last year, and they've been sitting on systems and we think they've been there for some time prior to actually being implemented. We don't know how they got there, but we certainly know they've been there for some time and then unleashed to coincide with

Russia's attack on the Ukraine. Now, yeah, we can't attribute where these came from or who's who have who wrote these pieces of code? Um, But yes, they're they're causing causing damage. You've detected a couple of other attacks in recent weeks, But there is this lingering question of why we're not seeing more and more devastating cyber attacks from Russia. Why is that? Well, I have my own opinion here, Emily, it could well be that. Um. You know, firstly, it's

very hard to attribute a cyber attack. If somebody launches a cyber attack, actually turning around and saying it came from this personal or this this group is very difficult and complex. So if all nations states have the ability to have a cyber attack on each other, it could actually be that we're sitting here looking at the new digital deterrent in the same way we think of a nuclear deterrent. Everybody has one and it's hopefully everybody using it.

Maybe that's the case where we're sitting with a digital deterrent that each side knows that they both have access to tools that could do untold damage in both in societies all over the world, and maybe we're seeing that that play out. Now, how strong do you think cyber defenses are. Of course, we've been hearing these warnings from the Widen administration that companies need to buckle up boost all of their defenses. Is it going to work? Well? Hopefully.

I mean, let's be clear, over the last several years, we've seen so many cyber attacks and so much infrastructure and finance and education get at tanked by ransomware, all for monetization purposes. So a lot of organizations are already very well down the path of having the right pieces in place to keep themselves protected. This is just another bump on the a cybersecurity teams to turn and say, right, you know, we need to do a little bit more. But I think this is not you know, we're not

starting from scratchy, And that's my point. One thing that concerns me though, is if you look at the number of for example, water water utility companies here in the US, it's fifty of them, and many of them are very very small and very regional, and I think they probably lack a lot of the skills and resources needed to actually create that cyber secure environment. I'm I mean, I'm not far from you down in half Moon Bay, and I'm certainly the one here in Half Moon Bay is

very small and very rural. All right, Well, let's hope that all of these companies, all of these different organizations, these utilities, have what they need when it comes to protecting themselves. Tony Anscom of e Set, thank you for giving us an update on cyber space. Coming up, grocery delivery giant Instacart slashing its valuation by almost but saying too good thing for employees. At least, we'll discuss why next, Mrs Bloomberg, Apple is paying a small number of engineers

another round of special stock bonuses. This is part of an unusual push to retain Key Town. According to people with knowledge of the matter. Let's bring in Bloomberg's Mark German on yet another scoop. So, Mark, look, Apple pays out bonuses all the time, but this one seems more unusual. Why are they doing this? Yes, so this is a bonus. Is the second time they're doing this. This is restricted stock you and so these vest over four years right now.

Obviously inflation is very high. Bay area high housing prices are increasing per usual. Uh, you're seeing a lot of poaching being done from Amazon, Microsoft and particularly Meta Slash, Facebook of Apple employees to help build their metaverse. They're also having their stringent return to work policy kicking into place over the next several weeks. So Apple wants to do everything it can to really retain that key talent.

So they're giving these massive bonuses to people working in their software from car division, software engineering, and hardware engineering, and those four your vesting periods are designed to keep those people in place for the next little while. Now, Apple is you know, certainly one of those places that has always been a magnet for top talent, and they've managed to keep people for years despite all of this competition.

Is Apple facing you know, a bigger challenge with other big tech companies at this moment because of the post pandemic environment. I think every tech company is facing the same issue. Right. You have people leaving Google, you have people leaving Microsoft, Amazon, Apple, you have people leaving all of these companies, right, so they're all competing with different

benefits to keep their top talent. Uh. Interestingly, Apple is the place that you go to me be if you're a veteran in your field, Right, if you're the type of person who wants to work on a product that you know is going to be used by hundreds of millions or billions of people. That's not necessarily the same perk that you get by working and maybe Meta or Google or Facebook if we're talking about hardware or one unified service. So it is pretty enticing, you know, for

certain people to work at Apple. Now, Apple doesn't always pay as much as competing companies, right, I know, Meta you know is paying more than Apple for a number of very similar positions if you compare it Apples to Apples. Right. Meta also has their remote work policy in place, so you could work at Meta. You can work remotely for as long as you want, whereas Apple for three days per week you're expected in the office. Likewise, with Google you to be expected in the office three days per week.

So everyone is competing for top talent in order to keep turning out these products. All right, well we'll see how that shakes out. Apples to Apples, as you say, Mark German, as always, thank you, meantime grocery to every upstart. Instacart has slashed its valuation by almost to reflect public market declines across the tech industry. The company raised money at a thirty nine billion dollar valuation last year. The new valuation twenty four billion dollars, but the company believes

the new number will give new employees more upside. I want to bring in Bloombergs Jackie Dablos now for more details on this, another bloomberg scoop, So Jackie, insta cart is voluntarily lowering its valuation. This is fairly unprecedented. But of course if you look at companies like door dash where we've seen massive declines, Shopify, where we see massive declines, they say, this just makes sense. Give us a more

context on why they're doing this. You put it perfectly, This is not that unusual for perhaps a public company that is already you know, has employees eyes on their share price. What instacart is doing is behaving more like a public company. There's been so much speculation that they could potentially I p O this year, but when you look at what's going on in the public markets, they took a step back and said that there's a bigger issue at play here outside of going public, which is

the war for tech talent. Exactly what's going on in other companies around Silicon Valley, and so what's happening here now is that they're going to prioritize these recruitment efforts new hires entice them in by giving them shares at a lower price and then unlocking that upside as the company continues to grow. Now, as I understand, in insta cart CEO Fi g c MO explain some of their reasoning at an all hands meeting at the company today.

Instacart also released this statement to us, saying, we're confident in the strength of our business, but we're not immune to the market turbulence that has impacted leading technology companies, both public and private. We can't control the market, but we can control how we respond. How do you think employees, Jackie, are going to respond to this. I mean, it is one thing if you come into a company at a thirty nine billion dollar valuation, and it's a different thing

when you find out the next day it's worth billion dollars. Instead, it's a delicate balance, and they are taking a look at what it's going to take to get to the next level, to achieve that next phase of growth, and they will need the people to get there, and so absolutely for those long time employees, for even the employees of Caper. As you recall, they acquired a company for stock earlier in October. Those employees will now only you know, see a cut of about less from where the purchase

price was. So there are going to be winners and losers. But this is about the long term play. And here instacart is saying we want to be a real player in this search for talent, and I think they're going to accomplish it. But you also have to think about what this means for for investors. They came in at a thirty nine billion dollar her valuation this time around. Last year they poured in two hundred and sixty five

million dollars heavyweights like Andreas and Horowitz Sequoia. So there are going to be those that don't benefit from this type of move, But overall, the long term play is they're going to have the talent to really take them to the next level. Al Right, Well, our very own Bradstone is gonna be sitting down with insta Cart CEO fij cmo at Shop Talk next week. I'm sure this will be on the top of his agenda to talk to her about, so we'll be looking for highlights from

that conversation. Jackie Dablos, who covers in stacart for us, thank you. Coming up in video eying a deal with one of the biggest rivals it has, and that is Intel. How the competitors could be looking to collaborate to end the chip crisis. That is next, This is Bloomberg. After returning to making computer monitors, Apple should now go back to another market, home WiFi routers. Five years ago, Apple's

Mac business was a mess. The Mac mcpro had dropped key features, The MacPro was a disaster, and updates to the Macikre and mc minnie were nowhere to be found. Apple had even stopped making routers and monitors. The story today could not be more different. Maxim have a fair blend of performance, battery life and aesthetics, and Apple external monitors are back on sale. Next up should be those routers.

Turned back the clock and Apple was one of the first major proponents of WiFi, launching an airport face station accessory that let users plug in Ethernet cable to give their entire home wireless Internet. Over time, Apple launched several new variations like the high end Airport Extreme, a low end Airport Express, and the Time Capsule for wirelessly backing up Mac data. But then Apple discontinued its routers without giving any real explanation, seating the market to competitors like

Arrow and others. Apple should now return to making privacy focused, well designed, and well integrated routers for its own product hardware ecosystem. That router, of course, should be mesh, so it should include multiple pieces to expand wireless Internet reliably across an entire home. Apple could even jam those routers into a home pod Mini, taking a page out of Nesson's book and creating a product that competes nicely with both the Google and Amazon ecosystems. I'm Mark German. This

is power On. You can subscribe to Mark's weekly power On newsletter at Bloomberg dot com. Now let's get an update on the world of chips within video. One of the world's biggest chip makers said earlier this week it is considering tapping its main rival Intel to manufacture those chips. Let's get more on this with our very own in King, who of course covers the chip industry for us. Why

would nvidio Ian decide to use Intel as its foundry. Yeah, I mean it's important to put these remarks in context. Kind of typical piece of Jensen lying the CEO, kind of talking really he said, look, we're open to looking at any new suppliers. Having as many supplies as we can possibly get makes sense Intel, if you know, if they can get back to leading edge, if they can get back to you know, the best production, best performance,

then will definitely look at them. So what's the next step here, what's going to get Intel over the line or an invidio say over the line? Yeah, I mean the the other side of the gentsen wing experiences. He you know, he makes positive complementary remarks about Intel, says this is the right thing for Intel to do, and then says, oh, by the way, yeah, you know, getting to be as good as TSMC is going to be

really difficult. They'll have to change their whole culture. And he starts on this long list of comparisons, unfavorable comparisons with TSMC and Samsung and says how good they are. So the bottom line is, he said, it will take a long time. Now, yesterday we slash you also broke some news about the arm I p O and looking at a sixty billion dollar valuation. This, of course, that deal that in video couldn't close. Sixty billion seems high,

doesn't it It does? I mean if you compare it to what the semi conductor sort of average multiples would give you its turn twenty billion dollars above what even the highest end would be. But if you look at it from the price of what the video transaction had become, given the appreciation of video shares, it's about on par with what in video would have ended up paying for ARM.

And what we're being told is that this is really just trying to set a floor in people's minds about what really soft Bank thinks this company is worth, because this, as Massa Sonders said, this is a really pervasive company. These companies everywhere. It's way more than just another chip company. And this ARM I p O is way more than just a traditional I p O. Right, It's kind of complicated, that's right. I mean, there's obviously a lot of stake.

There's obviously one of the most important companies in the semiconductor industry, what will be the largest I p O in the sector by a long way. And at the same time, soft Bank, as we said in the stories, topping these tapping these banks and saying, oh, yes, if you want to underwrite this I p O, then you're

going to have to basically loan us some money. You know, it's it's attaching multiple billions of dollars of margin loans to the mandate, which again is is an interesting way to do things and obviously has you know, potentially positive consequences for softbanks liquidity. Alright, and King, thank you for those updates and all the news this week coming up, Why everyone seems to be searching for evs on Google

this month? Put the more on Ukraine and rising gas prices be an inflection point for the world's transition to electric cars. We love more on that next, plus advice for startups in uncertain times as the war on Ukraine and inflation rattle markets worldwide. This is Bloomberg. Welcome back to Bloomberg Technology. I'm only chang in San Francisco. I

want to talk about what's going viral now. As gas prices surge at the pump this month, swarms of people took to Google to search all things ev top of the pile of questions, how much does it cost to charge an electric car? Searches for that phrase. We're up this month according to Google, trends are at Ludlow is here with why and and we've all felt that pain

at the pump and it hurts. Could all this searching be the beginning of a big transition, a big momentum shift for e v s. Yeah, that's what everyone's been talking about. Right now is a good time to own an EVY. You look at the relative cost of running a car on gas versus running on electricity, and the gap has just got wider in terms of costs of ownership. Plugging in and charging has been more cost effective. So

we've seen it. People take to Google. There's other third party data out there through online auctions, for example, second hand car websites. They're thinking, where can I get an EVY as soon as possible. Celebrities are also jumping in on the fun here, and there was a tweet from iced Tea that got a lot of attention. Iced Tea so he makes this joke right that he's at the gas station and he's been robbed. He says, I've been robbed, and he has this kind of long, dire tribe through

the tweet. Get to the end of the tweet and you realize he's talking literally, of course, about the price of gas, not that he's literally been physically robbed while filling up his car right pump number nine, I believe was the culprit. I think it's got it's got like a million likes. Um. Then there was Elon Musk dancing in Europe. How do we know this has to do with gas prices and not just enjoying Elon's dancing moves.

There's that tweet. This is the other point, right that there are all these people that have decided because things are so bad at the gas pump. They're talking about and they're venting on Twitter that they want an e V and Elon Musk was dancing in Berlin because they're opening up a new factory, right, they're going to slowly ramp up production there. The picture look how happy is But the pictures speak to a much bigger point. There's all this potential in the world right now, the Austin

Planet in Texas, other EV makers coming online. I know it's ridiculous, isn't it, But the point is that those things are exciting. They're not here right now, and it's really hard to get hold of an electric vehicle. If youve gone Testa's website and try by one that's being built in Fremont or in Europe. The wait times are so long. So yeah, things are really tough right now at the gas pump. There's lots of excitement from Musk and co. About the future for evs, but getting your

hands on one, it's really difficult. Does Ellen have moves out? What do you think? I declined to answer that one. And the pawing of the drone that was the best? All right, thank you well. With the war on Ukraine still raging along with inflation, investors and companies around the world are reassessing how long will it will last? What's the path forward? Let's talk about all this and more with Mercedes Bent of light speed Ventures. Mercedes, how are

you assessing what the impact this is? What impact is going to have? Obviously we're seeing what's happening to public markets, but what about private markets? Thanks so much for having the Emily, and I would say for the private markets, we've been noticing that the later stage is being affected a lot. A lot of the crossover hedge funds had come into the market and now their core is really diving down quite a bit, and so that's meant that people are being much more wary of late stage rounds.

When you look at the comparables. Also for the late stage rounds. You know, private companies might be raising at ten x or a hundred x revenues multiples. But then you see that same company with a very similar business model and the public markets is trading at three to you know, six x, and so then you ask yourself, well, what's really the possibility for this company if it was to go public anytime soon? Should I be paying this

high of a multiple. So that's happening on the growth side, but then on the early stage side, we are seeing a lot of activity that doesn't seem entirely affected yet. So when I say early stage, I'm talking about seed A s, those rounds, and that has still been kind of business as usual. We just saw insta cart slash its valuation by from thirty nine to twenty four billion dollars. What do you make of that? And are we going

to see more companies doing this? I think we're going to continue to see more companies who are having to reassess what the dollar about, what the revenue is worth, and think through whether or not the prospects for the next twelve months are the same. We certainly are thinking about it across our entire portfolio and being much more cautious about our kind of growth stage valuations. Meantime, we were speaking earlier with a chief economist at City talking

about inflation, Andrew Holland Horse. Take a listen to what he had to say. This is not four percent inflation, This is not five percent inflation. This is inflation that's around eight percent and set to pick up closer to nine percent in the next monthly reading on a year on your basis um. And so that's why there's been such a change in expectations for what the FED will do. This is really a FED now that is in inflation

fighting mode. And when you're in inflation fighting mode, you need to get rates to a level that actually provides some restraint on the economy. Mercedes, this is going to impact companies on all fronts. How are you telling them to manage this? We're certainly telling our companies at the early stage to, you know, think about how they're building

their models in a much more sustainable way. You might be entering the bear market, you might be entering the period where capital is not going to be successful, and so they really need to have a plan for how they're going to support themselves. With the funding they have and also rely on insider funding for the next eighteen

to twenty four months. We also have a number of businesses that affected from a supply chain perspective, and so we've been working with them over the last few really quarters and years, because this isn't just the most recent phenomenon, but it's been going on during will with COVID, we've been working with them on alternative supply chain routes and ensuring that you know, they are even getting their demand forecasted further and further ahead so that they don't have

to be as reactive to short term supply chain fluctuations. All right, mercedeses Bent light Speed Adventures partner, thank you for giving us your perspective on all of this coming up. Volatility also still the name of the game in crypto. We're going to talk about it all with a Kantrovich of falcon x. Are Crypto segment is next. This is Bloomber time for our crypto report now, as Ethereum is rising for another day, outperforming Bitcoin for a second week,

let's talk about it all with our crypto contributor Sinali Boss. Sectionally, what's giving ethereum a boost. It's really interesting to look at but we should first look at bitcoin here, Emily, because with a fifteen percent rise in Bitcoin over two weeks, it is over forty four thousand dollars. It's really over forty four thousand, four hundred dollars. Here significant lift in

the last couple of days. But to your point, you are right, it is not rising as fast as Ethereum has been rising over the last two week period, where you see more than twenty percent rise in the price over the two week period. People seem to be getting very excited here a about the merge, the move to proof of stake concept. But it will be interesting. Remember, ethereum has a lower base to rise off of, so

the percentage rises are easier to see over there. The market cap is still a very wide between the two cryptocurrencies, so let's see what investors prefer. Still a long way for Ethereum to go. Okay, So Noal I stay with us. We're gonna be talking about this and more with our next guest, Ia Kantorovich, head of institutional coverage at Falcon as Iah, what do you make of Ethereum's latest run. Does it have to do with the merge or something more.

Absolutely Shanali hit the nail on the head. I think right now we're seeing seeing two things in the market.

The first is with the bullish activity around bitcoin, possibly fueled by the news that Terra was planning on purchasing roughly three billion dollars worth of bitcoin for their treasury, and then seeing a lot of a lot of hedge funds and retail investors, h and aggregators taking profit share off of Bitcoin and transferring that into E and all coins asnally mentioned into that two point oh merge and the excitement around that, Well two questions there for you,

what what more heat do you have behind eat when you see some of the money already moving over and what more room do more old coins like Terra have to run here with that excitement that other funds have behind it. So a lot of it has to do with the growth of the applications that are being built

on top of these layer ones. So whether it's a theory m or you're seeing that price activity also happening on top of layer ones like Avalanche this week, and a lot of that interoperability happening with bridging Bitcoin into these different layer ones being able to use that store value asset as collateral for usage on those platforms. In addition, just to overall more protocols and projects working on the travel rule and tackling that in order to make define

more accessible. All of these are very exciting for the application of these layer ones. Meantime, I we're still seeing bitcoin trade within this fairly narrow range, and it's been

happening now going on two months. Why is that given all of the activity, A lot of it has to do with the fact that bitcoin is now adopted by institutions, and so we're seeing that volatility drop which really needs the mass adoption, both with what we're seeing across the desk, in the conversations we're having with institutions across the board, and you're starting to see bitcoin trade very similar to some of the assets in traditional finance, and so in

general there's more liquidity in the markets. Uh, and you're seeing bitcoin and the price of bitcoin being driven by institutions as opposed to crypto native volatility traders. It's still gotten a good lift here over the last couple of weeks. It is really proven itself in some ways. But what is really going to give bitcoin another leg here and

make more institutions comfortable with the cryptocurrency. So you know, there are a number of institutions still going through due diligence with applying bitcoin, whether it's onto their balance sheet or into their investment thesis. So we still don't have a hundred percent of institutions in crypto, and so we're starting to and continuing to see that trickle roll into the space as institutions are looking for a store value asset and also just for returns across their portfolio in

the market as today. Meantime, Falcon Acts has some pretty big ambitions to get the next billion crypto users on board. Reports that you've are marked a hundred fifty million dollars for acquisitions globally. Talk to us about your expansion plans.

So we're really excited about the talent that we've brought onto our executive team, very excited about to see Walter suj Gelotti and John Kaplan coming to us from Bloomberg, Carda Ripple and Pinterest and having that caliber of talent joining us with a vision of a token ie feature.

You know you mentioned before are about this preference for some funds to get into either I'm wondering, I, as you talk to all of these institutions as you grow, how much is energy consumption a topic as you go along? S G is very much top of mind, and so to the earlier point that you mentioned, this transition from proof of work to proof of steak is going to be very very important to the adoption that institutions view for ethereum. How are you watching the war on Ukraine

as it plays out? Obviously we've seen bitcoin be used for humanitarian efforts, We've seen this executive order from President Biden, but there are also these remaining concerns about Russians specifically using cryptocurrency for illicit things to circumvent sanctions for example, How does all of this continue to play out specific to Ukraine? What we've seen in the effort to support Ukraine, whether it's within Ukraine itself, be a Dows or enough

Teeth projects that more global Ukrainian projects. Uh, it's really just the validation that cryptocurrency is adopted and the interest is widespread. We're seeing that real time value in action across this currency system, and more broadly, you know, very um in terms of how it looks for all of

the players in the ecosystem. We're continuing business as usual with the continued k y c amail that we have across the board, which is also super important about the underlying blockchain and its ability to be traceable and trackable. And there's this question going on also about you know, whether bitcoin can really replace traditional currencies, what function it has for for example Ukrainians who are using it to convert their money or to raise money via n f

t S or etheroryum or otherwise. When you're talking two institutions as well, do they see it becoming a replacement over some period of time. That's a great question. I would say today institutions aren't viewing these major cryptocurrency assets as replacements uh, more so as uh something that goes alongside more. Really, where the focus is is around stable coins and that widespread adoption uh and the way it's being adopted overall across all of the institutions using it today.

I cantavish falcon X always great to have you here. Thank you, along with Bloomberg's Shanali bassik Alright coming up the space race of the century. Russia remains a key leader in numerous space technologies, but with the War on Ukraine, a new era maybe taking flight that is next. This is Bloomberg. The war in Ukraine isn't just changing the

game in cyberspace, but outer space as well. Satellite companies that relied on Russia's soy Use rocket to get to orbit are down looking for a new ride amid sanctions and Russia cutting off access. US launch providers like Northrop in ul A use Russian built r O D one eight engines. Now Russia's ross Cosmos is facing competition not just from the likes of SpaceX, but also startups focused

on building rocket engines. One of those startups is are some Major whose founder and CEO Joe Loreenti, joins us now alongside our very own at ludload. Joe, thank you so much for joining us. So I'd love for you to set the stage here. What's happening in outer space since the war on Ukraine started. We're seeing some big shifts in the sort of center of gravity if you will, for space technologies. Yeah, you touched on two of the big headlines. There's the lack of launch from soy US

for Western players. Famously, in the last couple of weeks, one way of the UK based company has been forced to buy launches from a competitor in space X has their own Internet constellation. So that's one big piece of the story. And the second is the embargo on Russian rocket engine in which Russia announced that they will no longer be selling here to the US. So I think the most common question I get on that piece of news is the US was buying Russian rocket engines. I

think that one always surprises folks. Yeah, it is a bit of a surprise, isn't it, given that the police coll tensions and you know, I think folks forget that before SpaceX, there wasn't a lot of options out there, right, Joe, So this must be pretty good news for you in your currany. Is your phone ringing quite a lot to ask about the readiness of your rocket engine? Is? Yeah? The obviously, the international piece of this has been extremely busy.

The US government has been extremely busy, and then the commercial side is extremely impacted here as well. Uh. SpaceX obviously is doing a tremendous job of filling filling their manifest with satellite operators. But the entire world is gone from a position of is the launch market oversaturated? To

why is one web buying launches from a competitor. So I think that we're going to continue to stay really busy, and luckily it's just shining a light on the propulsion industrial based globally and how how companies like as A Major can come to help out both commercial entrants and uh the US government. So talk to us about that. How is URSA Major different from SpaceX or Blue Origin

or what the Russians have to offer. Well, we're different from the Russians and that we're entirely domestic, so we can provide rocket engines here to the US government and the US players and Western players as it suits them. But uh, as far as our business model and how we differentiate ourselves from a SpaceX or Blue Origin, were

entirely propulsion focused. So our engines are designed to meet a wide range of needs from space launch on orbit to hypersonic testing in the case of some of our customers. So there's a technological advantage there in which the engines are designed for a wide range about gins and pretty

diverse capability. But there's also an economic side of it in which we have a production line that we just got rolling in this year, So there are some economies of scale for for us delivering the same type of engine. The multiple customers are multiple applications. Hey, joy, let's talk about that production line. I actually was listening to Elon Muskin Texas recently talk about how SpaceX is building one Raptor engine a day almost, but of course SpaceX doesn't

sell their Raptor engines to anyone else. What kind of pace of production of you guys got, and how quickly and how to build these things? Three D printing right, Yeah, one of day is a tremendous pace. So we just started production in January of this year, and we hope to be delivering thirty engines to customers by the end of this year. But the focus is really shifting us from a capacity perspective of how many engines per year to a rate much like Elon said, an engine a day.

We'd like to be at two engines a week here in the not too distant future. So the ramping there is really limited by how quickly we can assemble the engines. You touched on the three D printing piece. Almost every part of these engines that is a primary component or a metallic component is three D printed. We then hand assemble them here in Colorado and test them about a hundred yards from where they are assembled. So I'm sitting

not too far from where we fire our rocket engines. Joe, There's another part of the story, and that is hypersonic weapons. The US has confirmed that Russia has used hypersonic weapons against Ukraine. But the US is behind not just Russia, but also China in hypersonic weapons, and the government is calling on companies like you to help change this. Talk to us about why this is important. Yeah, that's that's the other side of the coin of the story here.

We just saw We just saw Russia claim that they had used the first hypersonic weapon and warfare. So the US has been developing hypersonic capabilities for many years now, but seen over the last couple of years as a

resurgence of focus on flight testing hypersonics. So our engines are unique in that they are capable of being used on a number of applications, number of different vehicles, and they're capable of things like deep throttle or multiple restarts, so we can simulate flight across a pretty wide range

of hyper missions. And that's really important for this next phase of development because the US will be forced to develop not just new hypersonic vehicles, but new technology and new capabilities, and that flight testing is an enormous component. Hey Joe, we only got a few seconds. How much money you guys gonna make this year? It's hard to say. Yeah, the years definitely early, but we were excited to see a pretty heavy focus from the DoD budget that was

just recently approved on hypersonic testing and space flight. So um, some some nice tail wins for us. All right, fascinating stuff what you're doing and what's happening out there in outer space or some major founder and CEO Joe Loreenty and Bloomberg's at Ludlow, Thank you both. That does it

for this edition of Bloomberg Technology. Join us next week for a conversation our very own brad Stone will be sitting down with Insta cart CEO v G Cimo at the shop Talk conference in Las Vegas, along with Georgash president Christopher Payne. Also next week, I'll be speaking with Uber CEO Dara Causa Shah. He will be joining you live from shop Talk. Don't don't forget to tune in

for a lot of interesting conversations. I'm emily changing in San Francisco, have a wonderful weekend everyone, and don't forget to check out our podcast, This Is Bloomberg