Cathie Wood on Tech, Crypto and the Fed

look at the health of startups amid the crisis. We're joined by the CEO of Pilots, the tech startup accountant doing the books of Silicon Valley, and we'll get the outlook for the gaming industry this year. Unity CEO John Ricatello joining us for an exclusive conversation on his findings. We of course are going getting now to a key conversation with Kathy Wood, and at that note, we do welcome in our TV as well as our radio audiences worldwide for the conversation with the Arc Invests CEO and

CIO Cathy Wood. We've been discussing, of course, bank failures. Kathy, We've been talking about a confidence crisis and you have said that FED policy J. Powell was a primary culpit the pace really of rate hikes from such a low base. But for you, is the risk of a systemic credit event still key? Has that been avoided? Well, I think they're addressing the liquidity issue, but not really the stallvency

issue from our point of view. A couple of things have happened here that have never happened really in history, and so the banks didn't expect it. The first was interest rates up nineteenfold in less than a year. Never happened under Vulker, which it was twofold ten to twenty percent. And the low base does matter. Many people dismissed it, saying, oh, just such a low base. No expectations were low base. So that the first we've never seen that magnitude of

an earthquake, I would say. Then the second thing that no one expected, again because it hasn't happened in such a long time, was deposits leaving the system. For Silicon Valley Bank, it was venture capital facing a funding drought, and so they had to draw down their deposits. But then for others, we've got money market funds attracting paying much higher than deposits attracting flows, so that combination was lethal. And so now they have the backstop in now what

do we have. We have them they're going to be paying up if they if they're depending on the facility, they'll pay roughly four point three seven percent right now? Is that rate ois plus ten And that's much higher than many of them have been paying for deposits number one, while in the case of Silicon Valley Bank, their average held to maturity security on the asset side of their balance sheet was only one point six. So they're going to see net interest losses now. Instead of having marked

market hit equity, these losses are going to hit earnings. Kathy, that's the cause. Let's go to the effect. Since the collapse of Silicon Valley Bank, the market has changed its FED expectations for a less hawkish or a more dubbish FED. You cite the FED as the cause. How nimble arc being, how much are you recalculating your view going forward? Well, as we said before COVID, as we were descending into that,

and we are saying, now, innovation solves problems. And you showed a few charts at the beginning that suggests that some of the innovators out there are solving problems. I mean, I think the most dramatic example of it to us was the behavior of bitcoin last week. It absolutely took off. It was a flight to safety vehicle, and so it

is really proof of concept that innovation solves problems. There are in bitcoin fully decentralized, fully transparent, auditable which is addressing all of the banking's problems right now, and so a flight to safety a little bit of an insurance policy. There's no central point of failure in bitcoin. Caroline Arc has twenty thirty calls on bitcoin. The most bullish case around one point five million on bitcoin, the most bearish

around two hundred and fifty thousand on bitcoin. Somewhere in the middle we have around six hundred and eighty two thousand, two hundred. That is this sort of base case there interesting at a time when no one is making that kind of long term projection. Yeah, and Kathy, we know you're a long term investor with long term calls, But what on earth gets us to that bull case of

almost one and a half million dollars per bitcoin? If a bank crisis doesn't oh well, one of the things that happens in a crisis is a liquidity drives up, so that tends to hurt assets, and the fact that bitcoin moved in a very different way from the equity markets in particular was quite instructive. You'll find the building blocks of those price targets in our Big Ideas twenty twenty three. So our Big Ideas twenty twenty three and there for the base case, I would suggest quite conservative.

We've dialed some of them down since last year. I know that corporate treasuries pulled away from bitcoin because because the regulators were pulling them away from from bitcoin on their balance sheet, so we've pulled back there. But we do believe that the behavior of the price through this

crisis is going to attract more institutions. For example, we've done a report targeting institutional investors and an the allocation that they should make if they if they care about this new asset class diversifying their portfolios, and I believe it's somewhere between two and a half and six and

a half percent, so not crazy. These are the sorts of allocations they would have made to emerging new categories of assets like real estate in the seventies, emerging markets and small cap in the eighties and nineties, and Kathy, I mean, let's discussed some of the ways that Kathy and Ark have invested and got exposure to crypto. Of course, there's the companies such as coin Basto. There's also GBTC. The gray scale bitcoin trust and regulation is in the

eye of the storm there as well. Ed. I mean to talk us through what the SEC seems from pushing us towards. Yeah, and it calculated an interesting point. They're right about institution investors, Kathy, if I remember correctly, back in twenty twenty one, a big part of your thesis on the run up in bitcoin was that more US corporates would add it to their balance sheet in place of cash. That doesn't appear to have happened to the level that you'd hope. Is that because the US is

just not a regulatory friendly environment for this to happen. Yes, you know, in the beginning of the crisis, it seemed like regulators wanted to blame crypto instead of the significant rise in interest rates and the deposit outflosed. Now we're seeing it as a solution to the problem, but the regulator are still are still reticent. Something interesting happened today, or maybe it was yesterday. Governor DeSantis basically said that

he was going too. I don't know if you said this exactly, but the conclusion of his saying we're going to set Florida apart from the rest of the nation was this ability to touch companies that touch crypto. After all, these are cash deposits there FIA deposits, they're not crypto, and this can be done on a state by state basis. So I think you'll see Florida, like it has done in many other ways, distinguish itself from the rest of

the pack. Kathy Katie Greifeld, my good friend and a just terrific reporter on the ECF beats, has been talking about gray scale and the opening arguments in the case with the SEC. In that discussion in how much are you considering adding to your position around trust? How are

you reading how that grayscale situation is playing out? So it seems as though the judge is having some trouble understanding how the SEC could prove a bitcoin futures ETF, which is swaps based and therefore has counterparty risk, but will not allow a spot bitcoin ETF. It really makes no sense so they'll either have to basically shut down the Bitcoin futures ETF, it seems to me, or allow a bitcoin ETF. So I think Grayscale is doing Bitcoin a great service and its arguments have been very sound.

We all saw our audience, Kathy, what they make of the behavior in bitcoin. This was what they had to say in the terms of how the set class behaves. Is it a must have in a banking crisis? Few respondents said yes, No, it's too volatile. As the main response, Caroline, interest in your take on that. What this all comes down to is how we're playing the interest rate environment, right, how we're reading the FED, how we're reading across different

asset classes. Yeah, and to that point, Kathy, you have said, just earlier in the conversation, the rate of change of the FED, the nineteenfold increase in interest rates that have so upended you say, in many ways what's happening in the financial markets and financial conditions. But we did see signaling from the Fed. They did tell us they were going to be hiking rates and hiking rate fast. Why

then didn't you move your portfolio around more? Well, the premise of the question is that we're an asset allocator. We are not. We invest exclusively in disruptive innovation, nothing else. What we did do was we concentrated our ship strategy so AARKK and and our other strategies AARKQ, a ARK WARKF and we moved in the flagships case, from fifty eight names in February of twenty one when we peaked

down to twenty seven twenty eight names. We have a scoring system, and the scoring system is based on variables we believe are very important to innovation, and so we concentrated the portfolio. Many people in the traditional asset management world, when they go through a risk off period, they will diversify their portfolios by moving closer to their benchmarks. What they're doing is typically selling our kinds of names, and so that is why they're putting extreme pressure on them.

Will create losses by selling stocks, and that gives us a tax loss asset which we have it's over two billion dollars right now against which we can take future gains and then concentrate towards our highest conviction names. We have a paper on our site which shows the benefits of this concentration strategy during risk off and diversification strategy during risk one, but of course when it's risk off,

you've underperformed. And actually even on a five year basis, I know people will say, look, you're always looking in a long period, five year outlook kind of perspective. But look back from here over the last five years, and yes, it's been a turbulent time, it's been an interest rate hike time, but you've underperformed the S and P five hundred.

What do you say to those that have a shorter time frame in terms of investing, those that are looking to retire in the next five to ten years, should they be with you or do we have to be long term? Equity investors that have a much longer runway to get have exposure to our investments. So we're the closest thing to a venture a strategy, to a venture capital fund in the public equity markets, and a venture

fund has a long term investment horizon. If an investor cannot have that long term an investment horizon, then they should allocate perhaps a small amount to our strategy, say one or two percent, which, by the way, from what we can tell, most advisors have us at that one to three percent range. Now, why would you put any if the risk was the volatility that you see on this chart. It is because our companies are going to

disrupt the traditional world order. And if we're right, then the large cap benchmarks and even some of the mid caps MidCap funds are going to be disrupted. We will be a hedge. Now, you'll, I will say it submit to you that last year was the most unusual year of my investment career, and not only mine, but bond investors. So bond investors had the worst year in two hundred and some odd years. When interest rates go up nineteenfold in less than a year, it's going to kill long

duration assets. Bonds are long duration assets. They've never seen a year like that. Arc is a long duration asset. But if we're right and these companies are going to disrupt the traditional world order, then we want to be on the right side of change and the market will come our way away from those benchmarks which represent the traditional world order, to our strategies for a global TV and radio audience was speaking with Kathy Wood, CEO of

Investment Management. Kathy in June on Stage up summit cited retail inventory levels and you told me to if you remember that inflation would unravel. Did you get that one wrong? No, if you look at if you look at upstream, what's going on. Commodity prices are coming down quite dramatically, some by seventy eighty percent. And I will also say the retail call was very right. I think I think you'll

agree on that. The discounting, we think is going to continue to work its way through the system from the commodity price level to downstream nearer the consumer. And you can see this Tesla's cutting prices. Many people say, oh, it's because of competition. No, it's because their commodity prices are coming down. And Elon's even talking about deflation. And the cost associated with innovation is coming down because it

follows a learning curve. So I think the innovation that our companies are delivering are going to be one part of the deflation commodity prices another. And I will also tell you the yield curve it last the week before last was down inverted by as much more than one hundred basis points. That also is a deflationary signal, as is what's now going on in the banking system. I

think the banking system is fearing deflation. Well, Kathy to that note we've been talking about sort of a de facto tightening of financial conditions in the wake of Silicon Valley Bank. You move last year to give investors exposure to venture funds private firms in that partnership with Titan. Has that proved to be bad timing? How impacted has that been from SVB? And we've only got a couple of minutes left. Sure, well we're fledgedling. Still, it takes

a long time. We have, as you say, with Titan, a social distribution strategy. We have other rappers as well. I'm much preferred to start a strategy during tough times. And actually now we can be a solution if we get inflows people looking for venture for they can get into our venture fund for only five hundred dollars. So again the democratization of investing and this idea public closest to a venture capital fund in the public markets to be able to actually do a venture fund at a

time that the venture community needs us. If you look at Silicon Valley Bank, that situation has robbed a lot of venture capitalists funding. Has it involved in the US of innovation, Kathy, which you think I would say that regulations threatened to do that and certainly in the crypto space. Absolutely, But I also think that seizing up is not just a US phenomenon. It looks like it's more of a

global phenomenon judging what has just happened in Europe. So it's not as much that it is regulation the likes of which we're seeing our blockchain technology. Okay, retain US's position innovation. Kathy very quickly. Did you have any exposures SVB, none whatsoever. Well as our business know and our company's very limited exposure, I was so surprised. I just wanted to see our little although I just wanted to clarify that for our audience. Kathy. I'm sorry to jump in,

but we got to go. Kathy Wood, CEO of our invest We're really grateful for your time here across Bloomberg Television and Radio. Thank you. Now, coming up, we stick with the crypto discussion as Circle picks France for its new European headquarters. All of that. Next, this is Bloomberg time for a quick Wall Street Beat, where we take a deep dive into the world of Wall Street in Global Wall Street. In today Caroline Circle choosing France as

its new European headquarters. Is interesting in that conversation with Caffee Wood, the same ideas that the US might not be the most friendly regulatory environment if you're trying to foster innovation or a change in the system. Yeah, really interesting, almost like a competition to Wall Street, shall we say,

in this particular beat. But what's interesting the circle was as exposure to Silicon Valley Bank was the fact that we've got a deepeg of its key stable coin USDC for a moment because of that sort of connection of decentralized finance to centralized finance in that moment, but notable that really London's trying to be the place, UK trying to be the place for European regulatory space for crypto, but France seems to be winning out. They already wooed

the likes of Binance previously. I remember five years ago when cause main function was to move money between borders before the crypto pivot. Welcome back to Bloomberg Technology. I made lovelow in San Francisco where it is nine thirty am, but over in London four thirty pm where European markets

are closing. Continue momentum in the equity space to six hundred Europe at one point four percent, and continuing to see the Euro strengthen against the dollar at one o eight ish, the highest level for the Euro against the dollar since the first week of February. Like in the United States, as Caroline was talking about earlier, the action is at the short end of the curve when it

comes to the bond markets, specifically in eurosenominated bonds. You look at the German two year up by around twenty three basis points as we kind of pull out of the more kind of haven assets, or at least at the short end of the curve, the more policy sensitive end. That's where the actions at more muted in guilt. You look at the UK two year yield, Okay, a little higher,

but three point two seven percent. We're still kind of passing over the fallout from not necessarily what's happening with credit SUITEE and ubs, but the backstop being provided by central banks and liquidity situation, but also what the ECB is going to do going forward. To Caroline, all of that of course having repercussions for a sentiment across technology. But let's get back to some innovation in and of itself.

Let's talk open AI of course. Well, actually it temporarily shut down it's popular chat GPT service just yesterday and it was in the morning after receiving reports of a bund then allowed some users to see the titles of other users chat histories. A spokesperson told Blingberg actually that the bug is an unnamed open source software caused that problem. An open AI is still investigating the precise cause. But

right notable when something like this happens. You go to Reddit and you go to Twitter, and there's so many people that screen grabs and we're like, I've never asked chat GBT that you know, some of the images out

there astonishing. But it shows like with all the euphoria comes risk that if the system breaks down, the user base is so big now and in many ways we've seen big companies, regulated companies, banks in particular, not wanting this sort of third party software, not letting people use chatsubt when they're in the workplace because of they're worried about vulnerabilities. Let's dig into that in this world of innovation or what it means in terms of cyber risks.

Wendy Whittmoss with US Senior vice president for Unit forty two over at Palo Alto Networks. Of course, your bread and mutter is thinking about security, but particularly you're looking at vulnerabilities when it comes to outsources of your workflow,

the supply chain into your company. You've just been putting out some key reports whenning what are the key findings at the moment, Yeah, Banks, Caroline, I think it really ties into the story that you're talking about here right in terms of technology being disruptive and that can be used for good, it can also be used for bad, and so I think our report really tells a story that we live every day, which is that banks, financial institutions, organizations, schools,

cities throughout the world, they're all being targeted in particular by ransomware actors. And we show is that these cybercriminals are becoming even more effective at doing their job. They do a great job of understanding what's in an environment

and which data that they can steal. And stealing is a very important concept here because what we're not seeing is just a traditional ransomware attack where an organization's data is encrypted, but we're seeing much like nation state actors have done for years, we're seeing data being stolen and ex filtrated from environment and used for extortion, and attackers are doing that on a daily basis. They're not just threatening it. We're actually seeing up four times every four hours.

We're seeing more organizations data being posted ed with regularity, and the stakes well becoming evidently well high. Yeah, and there's a point that I wanted to make on chat GPT Wendy, which is that it impacted chat GPT and also the premium to GPT plus. While you could see the such titles of other uses, you could not actually get into the conversation. So I want to be clear you couldn't actually kind of access data relevant to other users, but it was basically deemed as a bug in the

open source software. My question to you in the context of cybersecurity is are they is this kind of issue and after thought as people try to rush these products out, they don't think about kind of the base security of the software that they're writing, you know. So I think that software vulnerabilities across the board are challenging for every organization to deal with, and they're only going to become more of a problem just due to this scale that

AI brings to the table. Right, So we're going to continue to see these type of vulnerabilities. You know, I think one thing that's exciting is that, you know, last week was released a national Cybersecurity Strategy, and in that we talk about in particular the need to protect expand the definition of critical infrastructure, so and the role that

technology vendors and providers play in that. Right. So we see that with these my chain attacks becomes a major issue, but we're also seeing a lot more rapid information sharing that is becoming incredibly positive. I'm reading over the results or your findings in this research, and Caroline, what's so interesting to me is the types of businesses found most vulnerable are those businesses we entrust with our data on a daily basis, and I suppose also when we're thinking

of keeping our own company protected. I don't know about you done countless training exercises about knowing fishing, but smishing is a new one. One day that you've been talking a lot about what are the ways in which companies can protect themselves. Yeah, so, you know, we've talked so much about AI write now the technology investments. But I think Carolyne, what you're getting at are the human side

of that. I think one of the most compelling findings for us is that we've seen these attacks increased in now twenty percent of attacks that we deal with include a harassment element, and I would imagine that if we talk again in two months, we're going to see that

number probably double. What I mean by that is attackers are specifically going after security, so executives, their families, reaching out to them, personally, their staffs, finding any way that they can to socially engineered data out of them, and that's going to become a continued, incredibly compelling And they're also getting super savvy about understanding how businesses work, right, So understanding that if I target not only your organization

maybe has a great security barrier and perimeter, but you have business process outsoorders and outsourcers that also have access to your most sensitive data. And there are employees in those environments that I can target equally effectively that have access to your environment. So we're going to continue to see that type of activity directed towards employees across the board. And so how a company is protecting and assessing the

vulnerabilities of that right supply chain. Yeah, you know, I think one of the biggest keys is the mindset shift. You're seeing so many organizations do that and actually win. So I think there's really a positive outlook here and our report tells that story too, which is that so many organizations are effectively defending against these attacks because they identify them early, they practice their response, they understand that

these attacks are going to come. It's simply part of hosting a business on the Internet today, and they've got great relationships across the board, not only with experts but also law enforcement who can really rapidly provide them answers, often in the form of decryptors that can render these

attacks ineffective. It is fascinating, and when you're reading these sorts of data reports is basically what the people the attackers are trying to set out to do here, right, And that's why our audience in particular should care because they're going off to finance, yes, they're going off to data and telecommunications. And the last one which we have to discuss weendy is cryptocurrency. Why are they targeting these

specific areas? Is it just for financial gain? Well, any avenue they have that makes it easier to move money is certainly going to be a target. Right. So the more that we can work related to sharing information between public and private partnerships and stopping the ability of movement of cryptocurrency, for example, of disrupting attack or infrastructure. The more that we can do that, the more effective we

are going to be against these attacks. And I think we are in a better place now in terms of that information sharing and being able to do it in a way that starts disrupting attack or infrastructure in really starting to stop some of these attacks. All right, Wendy Witmore, Senior vice president for Unit forty two palawlto Networks, thank you so much. Just a headline crossing the bloomberg on credit suites. They've decided to suspend some bonuses for credit

suite staff that coming from the Swiss themselves. Will continue to track that story as a number of I'm sure technology industry, bankers and others impacted by that decision will bring you the latest report. Now, another story, a rare move. Google has suspended pdd's main Chinese shopping app pin Dodo from its play store after discovering malware in unsanctioned versions

of the software. The action could cast a cloud over the company at a time when US lawmakers have accused Chinese owned apps like TikTok of potentially threatening national security, not really impacting ADRs. Shares of PDD up around half of a centage point. Yeah, coming up, we're also going to talk about the impact of the SVB fallout on startups. We're seen to hear CEO of the startup focus accounting firm Pilot. That's next, Caroline, And I mean you were

just talking about Pindodo. Let's just stick on China for a moment because we're watching shows of ten Cents, the gaming and social media giant seeing Well, remember one hundred and sixty billion dollar rallies since October. The next leg, well, it's going to hinge on the crucial earnings release that's

coming this week. Much of ten cents rally has been driven by anticipation features, sales streams, and of course I believe that Beijing It's promise of supporting the private sector and more on the company's earnings when they report tomorrow. This is Bloomberg. We continue to track the fallout from svb's collapse. What does it mean for the future of early and growth stage companies which relied on the bank to fill the gap left by bigger players. Less inclined

to take on that kind of risk. In a not out today, our Bloomberg Intelligence team says liquidity contagion from lack of access to credit for startups and VC bank companies is quote undeniable and the SVB spot will be hard to fill. That research from dishagera at BI now what seemed is the founder and CEO of Pilots, an accounting firm for startups and small businesses which specializes in CFO services, bookkeeping, tax prep, etc. Joins me on set

in San Francisco. A lot of people didn't understand and come Monday morning of this week, how SVB played out in real terms for running a business. What was the experience of your customer base. Well, it was very panicked, I can tell you that, and it was panicked on two fronts. One was, of course, for our customers that banked with SVB, which was about half of our customers.

They were concerned about the safety of their deposits. But the second order thing I think many people have not anticipated is the impact this had on our clients being able to make payroll. Because if you didn't bank with SVB, but your payroll processor did, you had a problem Sunday night Monday morning, probably more importantly, I had so many phone calls and text messages from VC saying the ADPY went through, the ADPI went through, they had accessed SVB,

but it didn't really mean anything. They were trying to make payroll. Where do you come in in that process? And it's basically an accountant? Sure, So our phone and email inboxes were ringing up the hook the entirety of the weekend, Thursday, Friday, all the way through Sunday night. Say Hey, what do I need to do here? What funds am I actually to be able to access? Which ones am I not going to be able to access? Do I have to file a claim with the FDIC?

How do I actually make pyrol? Can I transfer funds? Have a personal account so I can pay my employees? There are just a lot of panic, a lot of uncertainty about tactically how do I make sure my employees get paid? You know, Caroline. In the last week or so, what's been put in perspective for me at least is we talk about startups tech in kind of abstract terms.

They're businesses run by people with responsibilities. You know, That's really come out in the conversations we've had they are and that was going to be the collateral damage if a rescue of SVB didn't come in for the depositors were seen after effects of SVB are that the counterparty risks were so large because they banked the same types of clients. You are a founder dependent on the same

types of clients Pilot is servicing tech startups. Did you something think, old goodness, I need to diversify my own business. I mean, one of the things we always think about the mission of Pilot has always been not to do accounting for technology companies, as though it's where we specialize. It's to help every small business owner out with this problem. So we're always thinking about how do we make sure

our own customer base is robust against these types of shocks. Okay, so you haven't suddenly thought I need to broadened to make my marketing perhaps more of a just early small company SME rather than a VC focused backed sort of a company. I would say not urgently. I mean, this is always something we're talking about. But we have a number of startup customers who continue to grow and thrive, and we're excited to continue to serve them. Have you

won business because of what's happened. Are there any founders that basically said, I can't do this, I need your help. I think probably what we did do is do a good job of helping people navigate the crisis. Now, I'd say, unlike another provider, if you have another bank, for example, probably lots of new bank accounts were opened as a consequence of all the sub excitement. It is not the case that lots of new pilot customers showed up at

the door, though. I think folks appreciated that we kind of were a nice hand holding guide throughout the process. I was saying, a lot of people have said, Look, it isn't actually that easy to go around diversifying who you bank with. People want minimums, People want an ability to show the lack of risk in your business model. And that's WHYSBB was so important to the tech system. What are you now seeing. Are people still with ease changing banks? Are they able to diversify to ensure that

treasury management is where they want it to be. Well, I think a lot of people are now willing to incur a lot more pain here than they were previously, which is before all of the SB and B excitement. I think no one thought too hard about is my bank safe? Is my bank secure? And now I think the prevailing sentiment is that folks who were might have otherwise taken a more laid back approach here have become

effectively financial preppers, like they care deeply about making sure. Oh, I was shocked by the fact that this was not available for a few days. I now need to make sure this never happens again. I'll seem great to have your insights. Thank you, or seemed to her founder ZEO of Pilot. Microsoft tentatively defeated a bid by video gamers to block it's planned sixty nine billion dollar acquisition of Active Vision Blizzard. A judge tossed the case without prejudice

last night, calling it wopefully short on detail. To talk about what that means and also the future of this acquisition as it sits in the gaming industry with John Riccatello, CEO of Unity Software, a software solutions provider for games running on mobile phones, tablets, PCs, consoles and of course AAR and VR. In the first instance, your reaction to this Microsoft act Vision deal for you, how does it change the landscape? Well, for us who probably doesn't change anything.

I mean, Microsoft obviously is the maker up one of the lead console, the Xbox an Active Vision is one of the largest producers of game content. You know, this is the game industry who had been an industry of pac Man forever. Companies like Active Vision and Electronic Arts and take To have been acquiring. Sony and Microsoft have been acquiring, and then on the heels of all that, what we always see is new startups coming out of

nowhere creating amazing things. So you know, this has been an industry of serial acquisition for decades and are unexpected to stop. Microsoft in Xbox is one console platform. Some news over the weekend. I hope we can bring it up on the screen, Caroline. I've made the jump and I've bought a PlayStation five having played on Google's Stardier for the last eighteen months. And of course, Caroline, Google shut down that platform. So there you go, that's the

big news in the industry. Sho we make it that. I mean, you're meant to be agnostic, and but I mean it does seem that I know you're a key gamer and John to that point, at the moment, you have been thinking about the ways in which you can continue to develop. I'm sure you're agnostic. You're going across

every single platform. Just talk to us about whether the hype around AARVR, the worry about people in this economic environment perhaps not making a big splurge like Head, particularly on a quest for example, is that making we think about your platform building. Well, I mean that's very realistic that the largest platform in the world today for gaming is mobile. That would be Android and iOS. There's north

of four billion players there. Consoles are also super important, and some of the world's best content is made for consoles and also for the PC. And these are while they're much smaller in terms of users and aggregate, probably a couple hundred million users, they're also super important. And for someone like me, it's spending the game industry for a couple of decades. You know, I love them all, so you have to support them all Onlike ed I

don't pick winners or favorites. Well, I don't pick winners or favorites either. I was playing Studia that was shut down by by Google in my past. Right now, mobile right is where everyone's playing. What I find so interesting is you have Netflix trying to move into mobile games. You have Apple in the App Store, you have the Google Play Store. All of them are also trying to track privacy policy changes. Advertising. What's that doing in the

gaming space right now? Well, if the advertising market, it was definitely affected by the privacy changes that Apple implemented a couple of years ago, and then it also got hit to a degree by the economy. So starting last summer, buyers on the advertising side, the demand side, brought their spend down and anticipation of the recession like environment we're

in right now, and that continues to today. It's a little depressed, but it's been stable now, I would say since the middle of last summer, so continues it be a robust market. It's a little depressed from the peaks of COVID or immediately post COVID. You have a large advertising arm You yourself had to make some tough decisions for unity, for the amount of employees you have amid these economic environment that we currently see just push us

towards the hype cycle that we find ourselves. When it comes to generative AI, does that end up meaning that people look to still invest in your area in that way of producing content generative AI? Is that a help or hindrance in this environment. Well, so first off, let me just sort of bound this a little bit with

some data. So we're an all time high today for the engagement that players have on a global scale, so north of four billion, as I mentioned a moment ago, and it's even higher than it was in covid era when people were living and working and studying at home. So the industry is very, very resilient. Yeah, it's actually kind of shocking, but it's done that. Well. Now, of course everyone's got this notion of a sort of a

processionary environment. But the point they would make right now is the industry really moves on innovation and one of the most important innovations of gaming is AI Wow ending on Gaming Cara. What a show it's been from Kathy Wood to cybersecurity to gaming. An incredible start of the week, wonderful conversation. We need to see CEO there, John Ricatello. That does it. From this edition of Bloomberg Technology. That's to Bloomberg