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Intel shares rise a CEO Pat Gelsinger leaves the company after a failed turnaround effort plus Tesla and byd ramp up discounts and incentives in China in a final push to meet annual sales targets and tenstorrant NAB's a two point six billion dollar valuation off the backing from Jeff Bezos. And in Nvidia, we sit down with the CEO and chip design legend Jim Keller later this hour. But first check on these markets, a check in on Intel. We
dive straight there. We are more than three percent on the back of the news that Intel CEOPA Gelsinger is leaving the company and is indeed going to be two interim CEOs that take the helm for the time being, CFO David Sinsner Michelle Johnston Helpo's going to be serving as the interim leaders as the board searchers for a replacement. This after, of course, his departure is potentially signaling more strategic shifts at the business.
The investor base collaps.
It slightly, but we get into the details with Man Deep Singer, BlueBag Intelligence.
Look, many would say they're surprised.
Many would say, Look, the August numbers that came from Intel just showed that this turnaround, this restruction was going to be so painful, and the boarders lost confidence.
Yeah, and look, I think it probably suggests that the numbers for four Q don't look very good either. So clearly, you know, the gross margin going down, and the foundry business was a big contributor to that because even though you know, Intel has about eighteen billion dollars of foundry revenue, it's negative gross margins. And when you think about that eighteen billion dollar number, how much of that business comes from the outside, Like they don't have any big customers
like TSMC does. You know, when it comes to the foundry business, it's mostly internal when you think about that eighteen billion dollar number. So that's where you know, the question marks were raised around Intel's capex of around twenty five billion, which is the major reason why they are, you know, burning fifteen billion dollars a year, and I think pat had about four years to decide on the fate of the foundry business. He actually wanted to acquire
power Semis that didn't happen because of regulatory hurdles. So you have to ask yourself was focusing on foundry business the right strategy and the answer probably is not, given it hasn't turned around in the last four years.
And yet the US government is handing them a lot of money to build chicks to be the future of on shoring.
How resilient does that look?
How resilient does well trying to do both manufacturing and design look for the business.
Yes, so you're absolutely right the government wants them to succeed on the manufacturing side. The problem is the optics here. Why would an Amazon or a Microsoft, or an Nvidia for that matter, go to Intel foundry when they know Intel is a competitor on the design side. And that's where you know, divesting that foundry business will actually make it, you know, more palatable for competitors like Amazon and Nvidia to use some portion of Intel's foundry, similar to what
MD did with Global Foundaries. I mean, Global Foundry has a lot of business outside of MD now because it's an independent entity. So that's where the gross market profile will still be a lot lower for the foundry business, but at least the core Intel business, which is how investors look at some of the parts of Intel and they say, the core client PC business is still where they dominate. I mean, look the server side, they are leading share to Nvidia, but more than fifty percent of
the revenue still comes from core PCs. And even though it's a saturated market, the AIVA will help spur refreshed cycle at some point. We don't know it's going to be first half or second half, but it will come.
And it will come under new leadership.
Mande Singh, We thank you so much on all things Intel will have plenty more of that in a moment. But let's just talk a little bit more about the US focus on chips, because the Biden administration unveiled new restrictions on China's access to vital components for chips and artificial intelligence, and the Department of Commerce slapping additional curbs on the sale of high bandwidth memory and chip making gear. It's impacting twenty seven types of chip design and fabrication tools.
It's also blacklisted one hundred and forty more Chinese entities than it accused of acting on Beijing's behalf. Blomberg's and mackenzie Hawkins had a busy Thanksgiving period reporting all this out. McKenzie and just go first and foremost as to whether this actually looked perhaps slightly better to the market than some had anticipated.
So this is what's become kind of the third annual update to these sweeping outport controls of the Biden administration has levied on companies trying to sell chips and chip making gear to China. But the latest controls, which were unveiled this morning, came in slightly softer than some proposals
that officials had floated earlier this year. They didn't sanction a handful of key Chinese companies with ties to Huawei that they had discussed sanctioning, and they also exempted important allies, notably Japan and the Netherlands, which are home to of the most important ship tool making companies, from rules that restrict additional types of chip making gear from being sent to China.
All of this context is the US trying to limit capabilities over in China, trying to home grow a supply chain here in the United States, which does involve Intel just going back to that story of the day, mackenzie, how much do you think the US government is going to be upended by change of leadership? How much has Intel benefited from the CHIPSACK for example.
So Intel actually last week solidified a deal for seven point eight billion dollars in funding from the CHIPSAC, which is this broader fifty two billion dollar program to bring chip manufacturing back to the United States. The company i said it's committed to its US expansion plans, which include more than one hundred billion dollars in investment, ninety billion of which will come by the end of the decade, and plans to execute on factories in Arizona, Ohio, Oregon,
and New Mexico. Galsinger's departure shouldn't change the company's plans as we see it now, but of course a new CEO will have to decide whether to pursue options that Galsinger had left off the table, and the US government we're watching that closely.
They will be McKenzie Hawkins, thanks for breaking it all down. Meanwhile, we want to get the whole circumference of the chip sector for you now with Pierre Faragu from New Street Research. Your first take on the announcement of Pat Gelsinger retiring.
Were you surprised?
I was very surprised by the abrupt news, like retiring today. It is no transition period, so difficult, a difficult situation. We knew the board was stands since the summer urum early and the CEO of Cadence resigned from the board of over the summer, and it was like reflecting like difficult conversations. And so it probably looks like, you know, Pat loss the continents of the board or didn't get the support of the boat for his strategy anymore. And
basically probably and uh decided to leave abruptly. So so that was a surprise now that you know, we are four years into the turnaround. Bad direction was let's double down and Intel's capabilities in manufacturing. Let's make Intel like a leading manufacturer. Let's go large, Uh, you know, go big and you know, leverage at a maximum. The political support will have to do that. So that was the plan. And the plan failed basically because TSMC's model cannot be
competed against. I think it's that's so we've had from the beginning, so Intel being able to preserve manufacturing capabilities yes, Intel being like a scalable like like a large scale competitor to TSMC is probably not possible for like scale and experience reasons, and that's why things failed.
In August on that very bleak announcement of numbers that we had and ish disastrous sell off in the shares.
Was this restructuring.
It involved a lot of job losses, but it did involve also the sort of peeling away of the foundry business to be able to be managed sort of separately but alongside Intel. Does that stay or do we start to see actual purchasing coming from well with the reports previously of Qualcom being interested even the chip designer.
ARM So the situation is going to be very very fluid for quite some time for sure. As you mentioned last summer, you know, the word was say to be fighting of you know, activist activist Shoulder is getting prepared to fight of activity smooth. The stitution is of course very complex. On one hand, Intel has manufacturing capabilities. Intel has manufacturing capabilities onshore and owned buy like a US
control company. So it's a very very unique asset, extremely valuable in today's cheer political context, and I think Intel needs to continue to be able to to build on that. So of course there is a tempting, tempting route, which is to say, okay, maybe Quale common Intel could merge or Qualcome to biot Intel or try and trigger the consolidation of that type. I don't see that as good as a good opportunity. It's difficult to generate synergies between
Quale governing Intel. The chips qual Come do are very different from the Intel ships. Manufacturing is a complex business, so I'm not super you know, that's an area that scares me more than anything else.
You know, bad many.
Decisions typically can arrive in a situation like that. What's more interesting, I think is to be like, okay, how can we make sure we create a sustainable US owned on us SO manufacturing capability. And if you do that, you have quody to admit that you're not going to compete with TSMC. You need to partner with TSMC, right, you need to find other very large partners that are going to super oft to And of course the one that comes to mind that has that those maybe to
the US is in video. So you know, like Engagent partnering around manufacturing with TSMC as a partner and Vidia as a partner would be a much more interesting route to pursue from here.
There is ongoing breaking news around this story and Bloomberg leading the charge with how Pat Gilsinger was inteed forced out after the board grew frustrated. The biggest frustration Pier was that they missed the AI evolution jumping on and being able to ensure that what they produced, which.
Is GOWI, was able to compete.
I mean, they're likely to miss that five hundred million dollar target for this year when very is busily making about one hundred billion a year.
Yeah, I think it's the frustration came from the lack of prudence of the initial plan going to be too large, assuming you know, demand would follow as long as you can pull together like quality, quality, supply. And yes, the underlying causes that uh Intel ended up not being in the growing part of the market, and namely it was last summer was particularly abrupt, like you see, like the complete failure of the Intel AI chips and the fact that they would not be at all in the market.
Him is actually carving out a fairly sustainable niche positioning in that market. So that was part of it, But I think part probably stuck too much to his initial plan with like a very ambitious, very large scale plan and should have a year or eighteen months ago thought about like you know, changing tag to smaller and more colarborative with other players in the market.
Because yeah, Peah, I mean much of this predated the pack coming back in twenty twenty one. That course was already kind of paved, and he didn't reorientate quickly enough. Where now in terms of leadership and in terms of Intel's place in the ecosystem very quickly, please.
So I think INTE could be specialized in manufacturing in the US under US control and ownership and collaborate with the rest of the industry instead of instead of competing, I think in like smaller scale, remaining like keeping a position at the leading edge and leveraging the products of Intel like the PC ships and the servitude that are still very good and in very high demand.
Right, Yeah, thank you so much for lending your expertise today, Pierre for Ago on New Street research and all things intell and chips. Meanwhile, sticking with the error of AI, shares of super Micro absolutely soaring today. The company says that an external review of its business found no evidence of wrongdoing and the company will appoint a new CFO. This follows, of course, that tumultuous year for super Micro, which is also facing USDOJ probe following a report from
short seller Hindenburg Research. This, of course, is a company that uses in video chips within its servers that it sells on two key clients for up thirteen fourteen percent over the last two training days. Meanwhile, coming up, we're going to break down the Black Friday sales data and trends for Cyber Monday. Mick max Richel topograph stick with us. There's a bluebog technology. Of course, Today is Cyber Monday, and Adobe expects consumers will spend a record thirteen point
two billion dollars, up six percent year on year. Online spending is expected to peak, especially between eight and ten pm later tonight, with fifteen point seven million dollars spent every single minute.
That's Eastern time.
Of course, let's look at all of that Anergy, what happened on Black Friday and the weekend?
Rachel tipographs with US founder and c here mcmack.
It's an e commerce marketing platform for multi channel brands. It feels like a big year I'm certainly getting hit with a lot of marketing. Is it feeling that way for you?
Rachel?
It is.
You know, despite what's happening in the economy, consumers are showing up to really save I want to say spend, but it's really about savings right now.
Okay, that's interesting.
So it's more about the deal making and how are companies managing to access those consumers right now? What innovative ways are they using to market across various platforms. Oh, do we have some technological issues?
Rachel?
Absolutely? You know, when we look at what happened from stinks hello, can you hear me?
Apologies, there's a big delay, Rachel, Do carry on?
Hello. When you look at what happened between things thank Giving and Sunday, the majority of traffic came from social, Meta being number one, TikTok being number two, and YouTube being number three. If we were looking at results from Gear,
YouTube wouldn't have made the top three. What's really clear right now is brands are recognizing that social is the third shelf and wherever short video and creators are, that's where brands are investing their dollars in their time to gain mind share to then drive traffic to their Black Friday deals.
How Rachel all the companies that are doing well, the likes of Walmot we sold release stealing a lot of the marketshed and the targets, how are they tracking it? How are they making sure that they've got the measurements that proves that the investment's making sense to them?
Absolutely. I mean, if you look at Amazon's earnings or Walmart's earnings, it's very clear that these reach tailors are now becoming data businesses. They're making eighty to ninety percent margins on selling data as a service, and we all know they're not making those margins on selling physical goods. So when it comes to measurement, major brands are first relying on retailer's first party data, but then they have to marry that to third party sources because we can't
all be grading our own homework. So they're turning to companies like Mickmac, Adobe Circana, which was the merger of Iri NPD to really validate what's happening between Mickmac's data and Adobe's data. We're pretty much seeing the same thing. In Mickmac. We've seen a one percent one percent increase in conversion rates during the Black Friday weekend this year
compared to last year. If you extrapolate that to what Adobe seeing Adobe sawn increase in a billion dollars in revenue, that one percent increase in conversision rate marries that one billion dollar increase in revenue. So by marrying moremultiple sources of truth, we can all start to see the picture
that consumers showed up. They were really choosy with their dollars and they turned to places like Walmart because that's where the value is and that's also where breadth of merchandise is this holiday season.
One stop shop is what people are liking.
Rachel topograph for me, Thank you so much for the expertise, CEO of Mick Mac.
Time now for talking tech. First up, five Canadian news media publishers.
They've sued open ai for breaching copyright, alleging the company scraps content to train its AI products. According to an open ai spokesperson, is models are trained unquote publicly available data.
Grounded in fair use.
Plus Elil Musk has asked a federal court to block open ai from pursuing an illegal quote conversion to a for profit business. In his latest court filing, Musk repeated earlier claims that open Ai broke its promise to him and abandoned its founding purpose as a charity, and it accepted backing for Microsoft back in twenty nineteen. And In Video CEO Jenson Wang is set to meet the Thai Prime Minister on Tuesday. The two were expected to discuss
investment plans and cooperation within the Thai government. The meeting comes after and Video announced a buildout of AI data centers and manufacturing in Thailand back in October. Now, sticking with all things Asia, and let's just talk about China and ev makers, in particular Tesla BUYD. We're getting data that they've unleashed even more discounts and incentives in China. This is a final push to meet annual sales targets.
Let's break down with Bloomberg's David Welch and look what are we getting on offer here in China.
I think they've been fighting for market share all year long, and now everyone's trying to hit their sales goals as we get into the last month. So reminds me when I looked at some of these deals as Toyota's December, to remember that they have every year in the US, but this is electric vehicles in China, so zero percent
plus rebates on some Tesla models. They'd already announced some discounts last week, and I think model why BYD has been doing this for a while, basically launching a price war to put pressure on their competitors gain market share. Byd is one of the few EV makers in China. The Chinese makes that is that even makes money, so it's going to put a lot of pressure on its
domestic rivals. And then look, Tesla's trying to hang in there in a tough market for foreign auto makers, so they want to keep the market share up and they want to keep the cars moving too, So very good deals if you're looking for an EV in China right now, and you're seeing some of that in the US as well.
In the US, maybe some very reasonably priced zero percent loans that are going on if you want to be making purchases in evs.
There are new entrants as well within China.
Shoomi, for example, has made real inroads into the EV market. Tesla is dependent on China in many ways, and many wonder whether they're going to make their fourth quarter targets in terms of sales.
How difficult is it to navigate China?
Very tough right now, especially if you're a foreign automaker foreign to the Chinese market. The Europeans have had a tough time there, so as General Motors, Tesla is trying to really stay in the game and they're having to discount. One of the reasons you're seeing other car companies like General Motors and Volkswagen struggle is they're not as willing to discount and sell cars at a loss as the
domestic producers are. And BYD is driving a lot of this because they're huge, they're profitable, they're trying to grow all over the world. They've got lower costs, so they're
able to do it in a lot of ways. And you know, there's a bit of a Darwinian game playing out in China where the top domestic producers who can afford a discount are going to go for market share, go for overall size and scale and push some of the others, whether they be American and German companies or even Tesla itself or some of their own Chinese domestic competitors, push them out of business or into downsizing, so they
just dominate the market. One day. They're already pretty big and they just want to be the player in the country.
Evan Wilch with a pretty brutal help look on evs over in China.
Thank you so much.
Meanwhile, let's talk about one key carmaker. Stellantis has left without clear leadership after a surprise departure from its CEO, Carlos Tever's, which was supported earlier by BlueBag News. This comes at a time when Stalantis is under pressure to halt a sales slide in the US. It's also struggled with the European market, where demand for EBS is waning. Just as we're just talking about Chinese manufacturers to span in the region. Remember they are key when it comes
to the likes of Fiat and Jeep. Welcome back to Blue Meg Technology and Caroline Hide in New York. Let's get a quick check on these markets, and let's focus in on what's happening when it comes to chips. The key story of the day a five percent rise in Intel, as the CEO, Pat Gelsinger, hired back in twenty twenty one to turn around this iconic chip maker will leave the job as that turnaround has thus far failed and he's lost the confidence of the board. According to Bloomberg reporting,
in Vidia is up five ten percent. Look under his tenure. It's twenty twenty one at Intel. Intel shares dropped sixty percent, in Videa's shares rows eight hundred percent. We shine a light on what's happening with the chip sector more broadly. We're up two and a half percent on the socks, and let's just shift gears a little bit talk chips more broadly and how there's some new entrance into the
AI part of the equation. Jeff Bezos, for example, and Samsung are betting big on AI chip startup ten Storrant announcing a seven hundred million dollar investment, which puts the company now on a two point six billion dollar valuation. Joining us to discuss is the CEO of the company, Jim Keller, who is himself a legend and chip making world. Of course, your resume includes know who's who of AMD, Apple, Tesla and indeed Intel. Jim, the money that you're raising,
what is it that you're hoping to do? You're wanting to make a more cheaper operation and option out there for AI accelerator chips.
Yeah, that's right. We're building out the team, we're building out our products. We're starting the ship our products, and our real mission right now is to bring on developers and early customers.
Let's talk about the customers and what you offer that isn't in the market at the moment.
Jim, what's your selling point?
Well, we have a couple of things we license our IP and we're building a business on that for both risk ICPU and AI. We're selling low cost development systems like I'm really interested in hitting a much lower cost point. And then we open source to our whole AI compiler stack and people like the transparency they can see exactly what the technology is doing. They actually it's turned into a great recruiting vehicle for our software engineers.
Interesting.
So let's just go first to the price point, just a cheap offering. A lot of that's done by having less pricing components. For example, in videos, chips are incredibly expensive. We know people pay it because of what they offer the full stack in many ways, but they struggle from a choke perspective on how bandwidth memory chips in particular, you.
Don't need them, Why do you need them? Why don't you want them?
Well, it's partly about choices. So there's two choices. One is, if you pick a really expensive memory technology, you'll never get the price down right, and so you need to then make technology decisions to lower your costs. So we have a tensor process or architecture, we keep the data
on chip. More, we have a software stack that's very good at partitioning AI workloads across multiple chips, and then they can send information and compute packets to each other without having to go through memory, and that lowers the memory vandwith required and also lets it scale more naturally across many chips.
So I'm a new investor. You brought me on board. I'm interested Bezos Samsung.
But you're saying, look, I'm going to do this with more open architecture with cheaper offerings. How much of the market shed do you have to get? What sort of price point are we looking at for your chip offering?
Yeah, so this is really wild. The market is so big to percent we have to get is actually pretty small to be a real value proposition. You know, next year we'll die and go to heaven if we make two hundred million dollars. We have already booked one hundred and fifty million in revenue. I'm really interested in finding small players, early players. People want to own their technology. People are excited about our software and hardware architecture, and
you know, I want to grow organically from there. I think some people will focus on the big guys first, That's not how new technology introductions go. You focus on smaller players, people who need a differentiation. And that's what we're really that's our mission.
So what therefore is the mission building in in terms of long term value of generative AI of AI applications? Do you think that we are in some sort of hype cycle? Do you think that actually this market is as big as manufacturing in.
Well, first of all, we are definitely in the hype cycle. There's going to be multiple and people say, well, Jim, you'll understand it's going to go down next year, and then it's going to go up, and it's going down low past filter all that stuff. Right, What's really going to happen is AI is going to dominate computing over the next ten years and we're just starting and the hardware is going to change a lot, the software is
going to change a lot. Like one day you read in the papers, LMS can do anything, and the next day you read they've hit a limit. Ignore all that stuff. We're just starting this. There's going to be massive transformations. So what I really wanted tense Torrent to have is great computer designers, general purpose CPUs, AI processors, chip design, system design, software design. And then the open source stuff
is really interesting because that engages a community. People are really passionate about that to contribute back.
This is why you're thinking about your own talent team. You've managed talent, as we said, sort of across the board. You began like you're integraled to the chip design process in the US. When you think back to DC and then the work that you then did at AMD moving to Apple, you were Intel, and I just have to go there. On this day that Pat Gelsinger hands in his well, hands his hat on off, he's going to re resigning. Many would say it's because they didn't get into AI quickly enough.
That was prior to him. What do you make of the transition?
Well, it's hard to say. So I like Pat personally. I've met him a number of times. He's a smart guy. He really cares. I think the market focuses too much on stuff like execution and AI transition the way you make money. Get customers to build great products. Like Steve Jobs is the best at this focus on the product, make the best product you possibly can. And I think they need somebody way more hands on, really focus on product, and they need to stop talking about AI execution all
the nonsense. Right when they make the best product, the best fab, the best chip, the best GP accelerator, they'll do fine.
Jim, when you're thinking about all of the errors, you want to own. How much does US and China factor into your growth story?
So, first of all, we are building open source software risk five based technology. We think that's an open platform. There's a lot of people interested in that. At the same time, you know, there are you know, restrictions by the US government and trade rules. We have really good lawyers and trade compliance people. We work very closely with those those guys. We want to do the right thing both for the business and for you know, being compliant to what's going on. And it's a changing world and
we're very involved in that. Short run. Our business possibilities are really big, and you know, if China plays in that, that'll be interesting. If it doesn't, for you know, various reasons.
That's fine, got a big valuation. Come back when you're executing on the latest round. Thank you, Jim Keller of ten Stone, All right, great to have you. Meanwhile, Europe's most valuable start up, Housing has moved from software to hardware. Company that provided AI software for drones and jet fighters and now making weapons of its own, debuting a new attack drone. Blum Begs mart Bergen joins US for more five billion.
Euro values start up.
And this is all about drones potentially to be used in terrain for example Russia issue.
Correct, I mean, so there's a couple of things. They have their AI software. Their main feature here is that they say they have built software that allows these drones to avoid GPS jamming. So a major problem in the war in Ukraine has been Russia's electronic warfare that has blocked GPS and effectively rendered these drones kind of useless, right, And they say that we've built these autonomous drones they can get over this GPS issue. Now they're going to
be shipping these new units. They're said, they're talking to Ukraine and their NATO allys. And the way the company describes it is they sort of see this as this border deterrent, not just in Ukraine but across all the eastern flank of countries in Europe that border Russia.
Let's just talk a little bit about the startup itself, pretty cagy around details of the technol energy in sales. They didn't want to give a demonstration, but who is backing them and who is buying from them?
So they've had some pretty prominent backers that the most early one was Daniel Eck who invested the Spotify founder invested through his fund. They received some pretty big investments from general catalysts, the US fund that's become much more active in Europe, so getting a mixture, i say, of European and American investors. They have had a deal with SOB to work on the euro Jet fighter, and they've also done some deals with Airbus and some drug manufacturers.
What we haven't really seen is actually, is to our point in the story, a clear demonstration of the products. You know, a lot of this has been sort of bespoke AI deals and kind of working on command and control software and making these weapons sort of more intelligent and more autonomous. This is the first time we're going to actually see something that they produced potentially go into
the battlefield. They have not shared anything about revenue or profits, but as we know, they've raised nearly a billion dollars to date.
We'll see how the HX two performs when we get that sort of detail in information.
Mark Bergen, it's a brilliant story. Thank you.
Coming up, look at how the fade of TikTok in the US can impact future investments in Chinese tech. Michail Green of lead Edge Capital that he's joining us. Next, this is Blue Meg Technology. Let's get a check in on these crypto markets for you and the moment, because maybe we've been tempering some of the phenomenal rally that we've seen in bitcoin. We're not nearly one hundred thousand dollars, Mark quite ninety six thousand where it trade were off
by one point percent. The whole of crypto seems to be partying Miami this week, but I'm looking at Mara Holding, so we're down by five point five percent. New kid on the block announcing how much it's buying in terms of bitcoin onto its balance sheet. This, of course is a bitcoin mining company, and micro Strategy has been doing this.
For several years now.
We know Michael Saylor has been plowing yet more money into bitcoin in the last week, announcing that this morning as well. Let's do it all with Isabelle Lee. I mean, Michael Saylor showed us how it's done. What they own more than thirty maybe even forty billion dollars worth of bitcoin on a balance sheet.
Now Mara is joining.
It's thirty eight billion, and they're now announcing their fourth straight week of buying. It's just really astonishing. We have the likes of Kassie Wood really kind of rejoicing. Sounds bad, but they're rejoicing the Trump administration because they know that this will mean good news for the coin. And as you can see, it really bols soed ever since Trump won. You can see the chart, it really was just a spike higer. And yes we're struggling to hit the one
hundred thousand mark, but we're inching ever closer there. It's around ninety six ninety seven, So that's really a positive news. And we have Trump saying on his first day he will fire SEC chair Gary Gensler. No need for that since Gensler said he will step down. But we have Paul Atkins, who served as Republican SEC Commissioner being considered, according to reports by Bloomberg.
So it's really lots of tailwinds.
For the space. And now we have the establishment takeover of fifth as well.
Yeah, I mean so interesting how at one point Tesla was doing the same thing. Companies did have bitcoin on the balance sheet, but really it was only Microstructurgy that stayed committed. Now we have Mara doing the same thing. What's interesting is we did hear from Kathie Wood saying praising a new regime under the administration. She's pretty long digital asset classes. But where else does she see positivity?
He sees a lot of positivity, not only in crypto, but also in fintech companies and m and a all of that. Really all of the things that were clamped down under this administration. Remember a lot of the CFTC also banned a lot of acquisitions in the tech space. So she just sees more loose regulations, softer regulations on the space. And when it comes to bitcoin, it's not just Marathon Mara Holdings or even micro Strategy acquiring bitcoin
for the US government potentially being a whale. There's a bill that if it's passed, will require a fed to sell some of their goal and buy bitcoin. So that's good news for the space, but of course it will create risks like price volatility in the run up to that gold price might think bitcoin might rise, and of course whoever holds what will kind of suffer or celebrate. But there's really a lot of things happening in this space.
But it's interesting because now a lot of companies on more bitcoin than others.
It's a bali or thanks crypto, We appreciate it. Look, crypto regulation is looming over law makers in Washington, but it's not the only tech policy facing uncertainty. Of course, the future of TikTok in the United States is also up in the air, as well as impacts of President elect Trump's threats to impost weeping tarifs, most significantly on Chinese goods. Mitchell Green's with us founder and managing partner
and need Edge Capital, key investor in byte Dance. You've been building up that investment in the secondary market, Mitchell, and I just want to understand how much of a weight you think US China is on it.
Thanks Carolin for having me, and how much weight do I think it is?
So for us?
We actually in our base case, assume that we have assumed that the US business would have actually not account for anything, and we thought it would be banned. What you see Trump saying is looks like it may head another way. You know, what people say and do in
Washington on both sides are two very different things. Who knows, you know, I think I can't imagine the first thing Donald Trump wants to do though, is being TikTok, especially when a lot of his big supporters like inn Elon Mosk, who I think is you know, probably an ads with Mark Zuckerberg, who would be the one to benefit off of a you know, being a TikTok band, or like a Joe Rogan who's a huge supporter on TikTok, Right, I love, I think it's pretty positive for TikTok to have Trump in office.
Meanwhile, Mark Zuckerberg, we understand, has been dining with Trump over in mar A Lago last week, so maybe real music changes there. But I'm I'm interested more broadly on just spell out TikTok and how integral it is too broad a bite dance investment choices of yours.
Yes, so the Chinese business, you know, the you know, it's been it's been rumored and reported in the press that you know, the North American version of TikTok is a single digit percentage of the business. It is not a very It is not a giant part of the business. I think it is a part of the business where a lot of investors or potential investors in it see a huge amount of opportunity. You know, I believe that TikTok is the biggest existential threat to a business like
Facebook or you know, Instagram inside Facebook or Snapchat. I mean, just go ask millennials in America what they use or if you know your own kids, or just look at their usage patterns and look at the data around like daily active users and how much time has spent on all these different apps. And TikTok is a real player. But I can assure you Mark Zuckerberg would love to have a band. It would be great for his business.
But Mitchell, your expertise is so great on the show because you led or co led some significant investments like buy Dance, but also like Ali Barba, you're someone who understands the consumer of China where technology is going there.
How much harder has your life become.
To access these sorts of deals on secondary market, for example, to be long China investments.
It's not very popular at the moment. We'll put it that way, although some of the greatest investors I know say, if you do you know, if ninety nine percent of investors are doing, If you want to know where public markets are doing, ask the ten smartest hedge fund investors. And when all of them tell you one, when nine of them tell you one thing and one tells you the other, you know, do what the one does and you'll probably make a lot of money. It is sure
now of consensus trade at the moment. Buy in China.
But it is cheap.
I mean, we can buy byte Dance, and we've been buying byte Dance, you know, sub five times earnings for a business you know, growing you know, much faster than Facebook. So we think it's really cheap and that the risk adjusted reward is quite attractive. And in our base case model we model the business is zero. Look, we might get we might get lucky. The Trump may not ban it, yeah, you may. You know, the Chinese economy made start to recover some and on any start of the imagination looking
at public Chinese comps today in the internet space. If you look at Tencent or Ali Baba or Sea Trip, these things trade that you know, substantially hire multiples in five times earning. So not only are we potentially going to get earnings growth, we're also going to get multiple expansion and MOONI exit. But I can't tell you when the company is going public, and I don't think nor can anybody else, but tailwinds. Whereas the US political environment six months ago. Look, look it was going to be
a huge headwind. It might become a tailwind, but you know, time will tell.
Mitchell Green found a managing partner of lead Edge Capital. You like people on with contrarian ideas. This gets today's screen Time letter bloom Meggs Lucashaw writing over the weekend about how he's uncovered financial details about Lebron James's media company that reveal quite a bit about the current state of Hollywood. Because joins us, Now, you were pulled off the bench from sitting and consuming content and hanging out with family to write the newsletter, because what twenty eight
million being lost? This is a company that's valued well in the heyday, very high.
Yeah, well, they benefited from the streaming boom that happened, right, You add all these companies that were making shows for Netflix and Amazon and Disney and others, and those in particular affiliated with famous people. Reese Witherspoon's company, Lebron James's company raised money at valuations that really, in retrospect, made no sense. I mean, Lebron's company got a valuation of more than seven hundred million dollars when its revenue was
high seventy millions, and it lost millions of dollars. And you know, they ended up having to pay for it in the end because the market crashed a little bit, and people are looking at these companies differently.
They're managing to well get lemon out of Lemons with a merger with full Well seventy three.
Is that going to be Lemonade? What does that deal look like?
Well, look, the deal does give them more scale, and I think that will benefit them at a time where these companies that they're competing with are giant cutting back. It also gives them some complimentary expertises. You know, the Lebron's company is very good at unscripted. Full Well is also good at unscripted, but does more live events. Lebrons has a big branding company. I do think it's probably squishing together to challenge businesses to try to solve a problem.
Sometimes that works, sometimes it doesn't.
I mean, you talk a lot about Maverick Carter, who's kind of the guy who's running the business on the daily basis, and he smart things around, not building it within Lebron James, but sort of all around Lebron.
It's sort of like he's been the expert in the building.
Meanwhile, everyone's trying to work out where content does work.
Clearly it's working in the theaters right now.
I mean Wicked and Gladiator or Moana too, seems to be one everyone's excited about.
Yeah, huge weekend at the box office, I mean Moan or two, setting records the big animated or biggest Thanksgiving opening ever, one of the biggest animated openings ever, I believe, the biggest opening of the year, most close to four hundred million dollars worldwide. Is just insane. And then the you know, the good news for movie theaters. The good news for Hollywood is that you had two other movies out in Wicked and the sequel to Gladiator that people
were very excited about. I mean, the stat that blew my mind was that seventy five percent of showtimes this past weekend were for those three movies.
Wow, and as kind of everyone's catered for in this scenario.
Kids are catered for male women no matter what you're.
Across demographics and reaction, You've got singing, You've yeah, you've got a little bit of everything for everyone.
But the money being made, I mean Gladiator and Wicked, I can't imagine prediction cheap to make.
They have to make some money.
Yeah, Gladiator very expensive. I think they have owned two hundred and fifty million dollars to produce. Some people say it's more that's the one that will be the hardest to make money on because it's probably going to top out, you know, five hundred maybe six hundred million worldwide. Wicked, I think maybe one p fifty one seventy five. It will make enough to make money, and then Mwan is going to make a fortune for.
Disney As and all the merch. I'm already going to hit with that. Bloomberg's Lucas Shaw, we love it. Thank you. That does it for this edition of Bloomberg Technology. Do not forget to check out our podcast.
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