From Marhart where Innovation of Money and Power Collie in Silicon Vallet NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
I'm Caroline Heine Bluemberg's world headquarters in New York. Ed Ludlow, He's off today. This is Bloomberg Technology coming up. Apple races to tweak it smart watch software a head of a US ban on its seventeen billion dollar business. Details ahead, and a conversation with the CEO of Massimo, which argues the device infringes its patterns. Meanwhile, Jeff Bezos's Blue Origin Rocket takes to the sky for the first time in fifteen months, paving the way for people to.
Stop flying on New Shepherd again. Full coverage ahead.
Plus we'll sit down with technology entrepreneur and investor Massello Clary as he returns to Soft Facts Open Opportunity Fund to support diverse founders. That comma say so much more coming up this how at first as a wait check on these markets as we've just been hearing from Alex and Guy Nazak is on quite a role. Then as that one hundred once again hitting that intra day record high, we're at up to tenths of a percent.
The tenure yields actually pulling back.
Looks still optimism there that the Federal Reserve is done on its rate height and actually going to be seeing some rate cuts as soon as maybe even March next year, some voices being put towards that. Today we look at New York crewed up more than two percent. This again a geopolitical tension on issue with the Red Sea and WORRI is that basically some of this traveling of oil is going to take that much longer if they are
going to have to bypass that particular route. We look at what's happening in the world of crypto, because dollar's been falling away, but so too has bitcoin. We're down by some sevent tens percent, just still at that forty two three.
Hundred dollars level.
We'll have a dig in conversation on ultimately what the ETF is lined up to. Will we get a spot bitcoin ETF as soon as January as sanctioned by the seccene. Meanwhile, let's turn back to that Blue Origin return to flight after fifteen long months joining US now Space Capital founder and managing partnership. Anderson also the author of the space economy, and while the space economy got the return of a key player, how important was this to go as well as it seemingly did.
Yeah, I think, I mean it seemed to go flawlessly, and it's great to see. You know, it's after fifteen months. That's a pretty extended period for any vehicle to be offline. I think that a lot of that has to do with, you know, there's some some some regulatory checks that need to happen before a vehicle.
Like this comes back online.
But I also think that Blue Origin sort of in their culture and DNA since the beginning, it's very methodical and very slow, and so.
They want to get everything right.
Like slow as smooth and smooth as fast has been their model, and they used to actually stamp tortoises on the vehicle after successful flights. And so it's great to see it coming, you know, coming back on online. But I think you know, the company has big ambition, they're going to need to step it up, and so you know, they're making some moves to sort of help.
Make that happen.
And let's talk about those moves, because not only is there a point of the launch the twenty fourth as it was reusable rocket doing well, but ultimately a changing of the guard. Dave Limp goes from Amazon to become the helm of Blue Origin, and we hear from Jeff Bezos himself on certain podcasts saying we need to be more decisive. How are you going to see that become a reality?
Yeah, it's great to see, you know, and I mean, look, you've got so interesting to see the juxtaposition between SpaceX and Blue Origin. Both of the companies were founded in two thousand and two, both of them have similar ambitions and actually similar funding. Bezos continues to invest heavily into Blue Origin, with another couple of billion dollars this year, which is brings US total investment into the company we estimate to be somewhere around ten billion dollars, which is
actually slightly more than what SpaceX has raised. But if you look at the two companies and what they've achieved, you know, SpaceX is dominates the launch market. They're launching almost one hundred times this year. They're taking NASA astronauts to the Space station, delivering a cargo to the space station, launching high profile classified missions for the Department of Defense, and they're you know, in Pole position to land nas
astronauts on the Moon. Meanwhile, Blue Origin has new Shepherd flying, and they have big aspirations and a lot of really interesting things that are in the works. But you know, twenty years later, you'd like to see some of those things start to come online. Fields like Bezos is very confident that their larger orbital vehicle is going to come online next year. So next year should be pretty big for the company to that.
And I mean we remind of you as R and D through Space Angels, an investor in space X, and ultimately the business models are different, and there has been more of a focus on space tourism thus far coming from Blue Origin.
But is there enough market share?
Is there enough reward for this amount of players within the space de pardon upun.
Oh sure? I mean, look, the world runs on space technology.
GPS is the most visceral, sort of most personal example that you that you can give some most successful space technology and existence. It's generated trillions of dollars in economic value and some of the largest venture outcomes we've ever seen. So the space economy and the opportunity here is much
larger than just rockets and satellite hardware. But with you know, with the launch today, and that's what we're talking about in launch SpaceX makes it look really easy that launch today was flawless, and it makes it.
Look pretty easy.
But of the one hundred plus launch companies that have raised twenty seven billion dollars over the last ten years, there are only three that are operational SpaceX, rocket Lab and New Shepherd if you count it as a suborbital vehicle, so there's actually only only two. So we'll see, you know, if Ula, which is using Blue Origins engines, comes online early next year. We'll see if New Blend comes online
next year. But we could use some competition here. Competition spurs lower costs and more entrance and more innovation, and you know, with only a couple of privately funded players, we could definitely use some more.
Is the venture capital there to back such new competition? Is it an international center of competition that we need to see?
Well, so, we've been operating in space for decades, but it's only recently become a category for investment. Really on the heels of SpaceX, going from basically no private market activity, investment or entrepreneurial activity, you know, ten years ago, on the heels of SpaceX. We've now seen two hundred and eighty billion dollars invests to the eighteen hundred unique space companies over the last ten years. So there is a lot more activity happening today, and most of that is
coming from venture capital. So three quarters of all of the rounds that have gone in that make up that two hundred eight billion are from venture capital and two thirds of the capitol it's coming from venture capital. So and a lot of that action is happening in the US, a significant portion of it, but this is an international play.
Geopolitics is playing into this in a major way. Governments around the world are starting to into the importance of space technology and they are prioritizing its protection, knowing that it gives us positioning, geospatial intelligence and intelligence about the
movement of goods and activity on the Earth's surface. And also it's connecting us now through satellite connectivity, through initiatives like Starlink, helping to keep the Ukrainians connected, for example, but connecting the remote parts of the planet as well. So this is critical national infrastructure, not just for the US but for many countries, and we're seeing increased activity across the globe.
Whether it comes from Jeff Bezos, whether it comes from Amazon, Project Kaiper, whether it comes from SpaceX, and indeed more broadly abroad as well, Chad Anderson is so good to catch up with you. Thank you so much as Space Capital and Space Angels. Meanwhile, let's shift gears a little bit and look at Alphabet right now, because it's going to have to pay seven hundred million dollars and alter its Google Play policies to settle claims that the app
store unlawfully dominates the Android mobile applications market USA. Say the Blue moslea Ninland joins us more on this case. And this was Attorney's General particularly putting forward on.
This behalf of the consumer, millions of them.
Ultimately, what are the policies that are going to have to change?
Hearlier.
Yeah, So this was a case brought by thirty six state attorneys general, but the settlement was signed by off fifty so this is going to apply across the country.
So Google agreed to pay some.
Money, but the bigger changes are ones to its play store. So now it's not going to require companies like Samsung and Motorola who make its phones, to have the play store be exclusively and the only app store available on phones. It's also going to allow developers to use alternative payment systems, so instead of just using Google Player on the phone, you might now be able to start using things like
Square or Venmo or PayPal. And they also will be allowed to tell consumers a little bit more about whether they can get cheaper options elsewhere. So for example, they could say, hey, you know, if you agree to sign up for our subscription online instead of hearing through the app, will give you a discount, a three dollars discount, And so you know, they might have a link to go to their website where you can get a cheaper price.
All of this begs the question, of course posts the epic games lost, and of course they said that they're going to be fighting that one. But ultimately this is questioning the business model not just of Alphabet's Google, but also of Apple and also weez into a whole feeling that antitrust is just on fire right now. You'll beat in particular the fact that we're seeing case of the case being brought m and a falling apart.
Am I right to feel that it's up the ante at the moment?
Yeah, I mean this is the thing about anti trust is it often takes a long time. So the cases that we're talking about that have come to trial this year, we're actually really filed or started back in twenty nineteen, twenty twenty, so it's taken a long time, but we're finally seeing some of the results of the anti trust enforcement that has been sort of brewing up to this point. And now with the Biden anti trust enforcers who've been
taking and even more aggressive approach. That's the FTC and the Justist Department under Elina Kahn and Jonathan Canter, they've been challenging a lot more deals. We had a story just earlier this week about how they challenged a record number of fifty deals last year, which is more than any since they started looking at deals beforehand in the nineteen seventies.
Well, you put the context there for us Leon Anon as these things take a long time, but they all do seem to be like buses when they all come at once.
Blue most lean Eland has been busy. We thank you so much.
Open Opportunity Fund, a bene capital firm dedicated to funding black Latino founded technology companies, so announced that Marcello Claro is coming back is returning to the company as a vice chairman in general partner. Joining us now is Marcello and Paul Judge, Open Opportunity Fund chairman, who's managed to lure him back.
And Paul, I'll start with you.
Already fun one one hundred million dollars put to work on five black Latino tech companies.
Can you just say.
How we've managed to make an impact, how we're already seen what was it?
Seven exits as full seven exits so far the companies over seventy five percent of them have raised their following rounds already. They're growing at one hundred percent of revenue year over year, all of them on average, across the portfolio, even in this environment. And so it just shows that even though minority founders have often overlooked, when they've given the chance, they overcome and they outperform.
And often it's felt if you can't see it, you can't be it. Well, here we see it, you know, a Latino founder and operator, black operator and indeed founder. People realizing that this can be done, but it's still so hard. Ultimately, Macelo, why buy that? Why did soft Bank let you buy it?
Ultimately, this is something I started when I was a soft Bank back in June twenty twenty, when the whole Black Lives Matter was it's a big problem. And one day just bothered me to see so many people talk and say, you know, we stand behind the black community, but really nobody would doing anything. So I went to mass and say, hey, why don't we this our business. We're a venture we are a venture capital firm. Why don't we start a fund to just help Black and
Latin entrepreneurs. And you know in the with MASSA we started this fund. I invited Paul, who were both Henry Cranfellows. That's how we met, and we launched it and it has proven to be incredibly successful. And then I made an appeal to Softpak saying, you know, I think the fund needs to return back to his roots, and I don't think there's a better duo than doing it than a Hispanic entrepreneur or Hispanic investor with Paul, who's probably one of the black, one of the best Black investors
and operators. So we're ready to tackle those seventy five companies. And we are already starting to raise for Phone number two, and we're going to call on a lot of people who always say, you know, we're here to help, And this is something I'm incredibly passionate about. You know, I'm a Hispanic founder and when I started brid Star, I struggled to raise capital, and it's just something that was very close to my heart. How hard was it to race capital and how my competitors, who were white, was
so easy for them to raise capital. At the end, we ended up racing capital. So I just want to make sure it's easy for successful black and Latin entrepreneurs to have a fund that's solely dedicated to them.
Well, I mean, some of the security based companies that you've founded, your three time founder, you've done that alongside other people of color, and I'm sure come up against that reticence of sometimes getting people to allocate you the checks. I'm interested Therefore, when soft ig is still going to be a key investor in Fund two but perhaps not founding LP, who are the other institutions and how galvanized they are they to still give money at this point, I think.
There's a lot of organizations that they know that this is the right thing to do. But what we've proven with Fund one is that it's also the profitable thing to do very fun. One is outperforming, is delivering top qualtawer returns. And when you look at the portfolio, over eighty percent of the companies that we invest in are B to B software companies, and so half of those companies are areas where minority founders have a unique viewpoint
like education, finances, workforce development, healthcare. But then half of those companies are just solving some of the hardest problems in AI and cybersecurity. And so we see organizations, whether it be endowments or pinter funds or institutional investors. I've found a lot of interest in supporting us in fund too and beyond.
I think of ASUSU founder we've interviewed plenty of times trying to fix basically ultimately access to real.
Estate and credit checking. When you're thinking about.
The founders, you want to back at the moment, where are you finding them? Because you're also someone who's so busy looking in Latin America for Latin American founders. Are you basing this mainly in America or No?
I've been buying GP interests of a lot of different funds, you know in Brazil, in you know, you know Bicycle, which is sort of venture or growth equity fund dedicated to Latin America. I've done some in the US press or Capital Partners, which is a private equity company, and so on. You know, I, like I said, in this new part of my life, I want to make sure that I'm backing successful people so I can pass on my capital, my experience, my contacts, and not necessarily operate myself.
This is a little bit different because this is you know, opportunity fund is really personal to me, and this is something that, like I said, I'm clearly passionate of helping. I think black and Latino founders are as good as any other founders, but sometimes are not given the opportunity. So this and my Latin American founders are probably two of my favorite areas of interest.
Now this has become a politicized area, though, and you just think about the fearlest fund over in Georgia at the moment, which because of the views in which the Supreme Court thinks about how money and indeed allocations to people getting into university and then allocations and money.
To diverse people.
I'm interested in whether you've had any political pushback from LPs wanting to get into a fund, or whether you still feel that people are interested in basically the profits.
Ever, well, I'm a huge believer and that's you know, when I was when I had my first company, Brice Star, I never used a Latino card because I hate having to tell people give me a preferential treatment, because I was like, you know, I think that's wrong. You know, I do believe that we need to we have a proven business model. I think the founders that we're back in are as good as any other founders, and people should not invest with us because it's hey, it's just
let's help black and Latino. We don't want that. We want people to recognize the Opportunity Fund as a top quartel fund and we're going to choose some amazing founders, some amazing entrepreneurs who I'll tell you, being a Black or Latino entrepreneur, you know, you have to try sometimes twice as hard, but you know, once once you're there, you know, I think that we're as capable of anybody else. So that's what we want. We don't want people to just give us money because it feels good to back
black and Latinos. We want people to understand that there's a great business model here and that this founders are as good as anybody else.
And you've got the growth as far and some of the access prove it. We thank you so much for joining us. It's wonderful to have you in the studio. From the Open Opportunity Fund of course, Poul Judge there and Marcello Claren. I mean, while coming up, we analyze the crypto market performed well.
Waym's had a bit of a run up. Blake LaVita Gupt is.
Joining US, founder and general partner at Delta Blockchain Fund a's Bluebow Technology. Time for Talking Tech now first up, reshuffling at time on sem in conduct and Manufacturing Chairman martinlu will retire in twenty twenty four.
And seed his role to c C. Way.
While Way keeps a low profile as CEO, he is said to be basically in the driving force behind TSMC's advanced packaging business and producing.
Chips for Apple and Nvidio.
Meanwhile, Michael nmograts he's doubling down on his expectations for a Bitcoin ETF approval in January. Nomgrats, of course, the CEO Galaxy Digital Holdings. He's told CNBC he expects SEC approval before January tenth Galaxy has partnered with Invesco on plans to launch a Bitcoin ETF, one of many. Meanwhile, let's continue to discuss the state of the crypto market. Cavita Gupter's with found and general partner of Delta Blockchain Fund, and I have a feeling.
So we enter the holiday season, some.
Of the conversations around the dinner table were a little bit easier at the moment with the runoff in bitcoin. I mean, how do you feel about January the tenth, or at least some sort of date being viewed as the one where we get a spot BITCOINYTF.
Carolyne, It's time.
This has been going on for too long and SEC has never given clarity.
Of why not or why should And I think with.
Setting up a date, it's just really it's just counting your days and walk into a new year with a new approval and having an institutional buy into the space which should have been legitimized.
In US long time back.
I'm very excited, and believe me, I tweeted this and it was seriously but I'm going.
Through that last year.
During this time, everybody was texting me and asking me, hey, are you doing okay, but you need for New Years. And this year, all I'm hearing about is how to buy crypto for my boyfriend and for my dad.
So I think like this is going to be.
A little crazy New Year, which may or may not be enjoyable for me.
And then everyone gravitates towards bitcoin. But is that the crypto of choice at the moment? Is that the area that people will be galvanized by such an atfo will it spill over? And what about some of the projects that even analyzing I.
Think technology will continue to be the heart of this whole industry, like old coins itself. When I say all coins, technology coins actually from different layer onns, different layer twos. Projects have also fueled up really high. I mean, one of the major projects which I'm a huge fan of, let's say Polygon, it really went down to around fifty cents or forty eight cents when the whole SEC news came out directly or indirectly classifying it as a security.
That has also jumped up to like eighty eight ninety cents.
Points right, So not just Bitcoin, but of course the whole position of SEC or the market that there is going to be a huge institution.
Buy in into the space also moves the other old coin up.
So we are seeing EAT really up and.
Having a very good holding position at two point two from the sixteen hundred base point a sixteen.
Hundred dollars point where it has been lying.
So of course it's a whole market and also a lot of technology projects which has been coming up, Like we are talking about layers, we are talking about aostack. Bunch of those projects are also looking at the market with a huge adoption with these institutions.
Talking of institutional play, we did hear from Michael Sonshein over at Grayscale about his optimism around his own conversion to an ETF.
Just take a listen, Convita.
I think that the SEC should and does in fact want to create an even playing field, and so we've publicly been advocates of the fact that when the Commission is ready to give the requisite approvals for SPOT products to come to market, that it should be done all at once. The issuers who are operationally ready to launch their products should come out the gate all at once.
So say they will come out the gate all at once in January, what sort of immediate institution will pickup?
Do you think that actually.
Will be Have you put numbers or thought to that when at the same time we also hearing from a like some Jamie Diamond.
He says, look, I would close it down if I was in powered.
I mean, you know, every time Jamie Diamond has taken a stage and said something negative about bitcoin, the market has really picked up. So he's actually a good sign and good ormin for us. So he can go on saying all these things, but looking at if one, two, or all of them come out based on whatever their applications.
And Blackstone has made some.
Changes, a lot of other places, a lot of other appliers are making some changes. It's a multi billion dollar going into a trillion dollar.
Market which we are looking into right.
But I feel like also the technology of custody associated with it, theology of able to give it to individual clients to have liquidity, that's also important.
Kavita, so great to catch up with you. Come back in January.
Can we get to a founder and general partner of Delta Blockchain Fund.
Welcome back to.
Bloomberg Technology and Caroline Hired in New York. Let's get a quick check on these markets because while we're still rallying on to new highs and then as that one hundred, we're fading on bitcoin though a little bit tenure yield gets a bid. This is we anticipate that actually we will see some FED cuts as soon as maybe even March next year.
That being echoed by another FED member. We're looking at the Bitcoin off by one and a half percent.
Maybe there's some profit taking at the moment we know. Indeed, Ark has been selling some of its gray scale bitcoin trush shares as bitcoin had been rallying up to about forty three thousand. Move on, have a look at some of the individual names that we're looking at, because well there's some deals being made and video are off on about one point five percent. Look call that profit taking
as well if you'd like. We're looking at a firm though really rallying hard, Walmart, deepening that connection there by now pay later. We're more than six percent, so rocketing higher on further deepening of partnerships there. I'm looking at
a Lumina though more than five percent. It was one of the best performers on then as that one hundred today this as we see agitation, could we indeed be seeing Carlai can come in try and once again be moving to make big impact of this business as they sell off their Grail acquisition that ultimately was put off by regulators. Illumina On the upside as, many feel that actually this investor and an activist at investor at that
could lay bear some changes for the business. Meanwhile, we want to talk about other areas of change and perhaps some drama because on Christmas Day, you're no longer going to be able to buy perhaps some of Apple's latest smart watch devices here.
In the US.
Now, this is the company battles on ongoing patent dispute for more bluembogs. Mark German joins us now and this is the culmination of a pan dispute that came out from October.
And what is it is this posturing?
Is this actually that you won't be able to buy via Apple itself?
Yeah, this has been going on for quite a while.
There was a lengthy trial between Apple and Maximo in California. This is in relation to patents for blood oxygen saturation. Masimo's held patents for years on the technology use in not invasively to term the amount of oxygen your blood.
They believe that.
They suit Apple over this, that they violate those patents for their blood Oxygen app that launched in twenty twenty on the Series six. And this is no joke, this is not posturing.
The International Trade Commission, the ITC ruled that there's going to be an important junction. That important junction is scheduled to come into place on Christmas Day, December twenty fifth. Apple has put all the measures in place to stop sales of the Ultra two in the Series nine, which represent the vast, vast, vast majority of Apple Watched sales.
These are their newest smart watches. Those sales will stop online on Thursday, and by Christmas Eve on the twenty fourth, they will stop in Apple's about two hundred and seventy US retail store.
So this is real. We are only a few days.
Away from this happening, so I would say it's extraordinarily unlikely that anything changes. Maybe there's a settlement or cross licensing or a licensing agreement, maybe the Biden White House steps.
Into play lace in the next few days.
But barring that, sales of the Apple Watch Ultra too, sales of the Apple Watch Series nine, those will seize to happen through Apple's direct sales Channels by Christmas Marc German.
Fascinating, great analysis, Thank you for bringing it to us, and indeed, well we can ask about whether there is anything likely to change in the next few days. As mentioned, it's a medical device maker, Massimo has accused Apple of copying patented technology for measuring blood oxygen.
Levels that they used in their smart watch. Joining us now. Joe Keiani is the founder.
And chairman and CEO of Massimo, and it's great to have.
Some time with you, Joe.
And look, will anything has Apple in any way turned to you, tried to be making any sort of well, agreement, negotiate some sort of settlement here.
No, no, they haven't ever since twenty thirteen when they contacted me and said we're the platinum of non invasive monitoring. They want us to go in meet with them because they want to integrate our technology. We have not heard from them, and stead they ended up recruiting twenty five of my engineers, including our chief medical officer and CTO from a spinoff company. And this is not an accidental infringement. This is a deliberate the taking of our intellectual property.
You spent millions to take on Apple.
Well, is this because of your business, because of what you think. Ultimately you could win out in terms of them being forced to pay you for the use of your technology or to settle or is this something bigger.
Well, first of all.
I'm glad the world can now see we're the true inventors and creators of this technology. We want to actually let you know that by banning the Apple Watch with SBO two ely there's no issue because in Apple's internal documents that we saw in court showed that they knew that product wasn't good enough to be used medically and they didn't even seek FDA clearance.
Because of that.
Their own testing showed they got two measurements a day on thirty seven percent of the people.
That's it.
We get over seventy thousand measurements a day on everyone, and they pushed that out anyway, because, as their email showed, they thought, and the chaos of COVID this is their quotation, they could get market share away from fitbit. So no, why we sue them, because this is our intellectual property.
We have our own product.
I'm showing here, and we have been in Pulsark symmetry business for thirty five years, not only now in the consumers, but hospitals. In fact, we just got FDA clearance for a product we call Stork, which is a baby monitor to help parents monitor their baby's pulsec symmetry when they're not next to them.
Now, an Apple spokesman, Women Joe, has said that the company is working on submitting workarounds in the US to the Customers Agency, and that's of course in charge of actually approving changes to get a product back in the market. But do you think the product that you just showed us, your product could take any market share?
Absolutely, we are focusing from hospital to home right now with this product, but there's a consumer version of that product that we're going to be introducing here shortly. This is the freedom Watch that has all of our bio sense and capability that we have in these chips that we put on the back of these watches, and with our distribution channel which is about twenty thousand locations, with their near recent acquisition we made of Sound United, which
is the owners of Bowers and Wilkins. Then in the Morans, we hope to pick a good market share for people that really care about pulse asymmetry, people with chronic illnesses, about a third of the population that buys these watches have chronic illnesses and they will benefit from a serious, accurate product.
Joe, Ultimately, what could have been done to stop this? Obviously Apple could have come to and bought and license the technology. But when ultimately big tech companies or any technology companies takes talent, takes employees, well, that's kind of just the way in which business is done. What do you think, if anything you could have done to stop your CTO, your chief medical officer from leaving.
Well, first of all, not every company does this. Apple is the biggest company, the most powerful company. They could be an example of how to do things right and do things well. They didn't have to steal our people. We could have worked with them. But secondly, you know this whole ITC case. Apple could have not been even under their jurisdiction if they made these watches in the USA. The fact that they still haven't, I don't know, it says something about their relationship with China.
This could have been averted for them.
Now.
Ultimately, we're suing them in the California and Delaware courts for pan infringement, and if we went there, we'll get an injunction regardless where they manufactured. But this ITC case could have been averted by them by just making it here, and they've refused to do it.
We make it here, make all of our.
Sensors in New Hampshire, hundreds of millions of LEDs and detectors. We bring them here to Irvine and we do the final manufacturing. So why they can't make it here, I don't understand.
Would you settle, Joe?
The short answer is yes, despite their leadership doing some of the things they've done to us, and not just Massimal but other smaller companies that they sherlocked, or they do efficient infringement to for better men of people and our Muture shareholders. I put out the Olive branch on one of these news programs that I would work with them to improve their product, or they can even put these chips behind their product.
But they haven't called it takes two the tangle, and.
It takes the right price point.
What sort of dollar amount would be the right from a fiduciary duty and responsibility perspective from your part, Joe.
Well, they haven't even asked. We haven't.
I mean they're a starting number. Say I'm not I'm on the phone.
Oh come on, I'm not negotiating with you on TV. No, there needs to be an honest dialogue. There needs to be an apology. These guys have been caught with their hands and the cookie jar, and instead of being embarrassed and doing the right thing, they're blaming everybody and they're fighting everybody.
You know.
In twenty twelve, when they decided to make the watch, they decided the most important feature was Paul socks. But they couldn't do it, so they created a project called Rover to see who can They found fifty companies and in their own internal documents they said there are two stand up companies, Massimo and Circle Corps, both run by Joe Kiani. They went to Tim Cook and said we should buy them just to get Joe let all that technology because they called me to see jobs of the
healthcare industry. But Tim Cook said, no, you get the same result by smart recruiting.
So what do they do?
I was paying my people ninety at percentile. It's not like I don't pay our people well, believe in them. They began doubling their salaries and bonuses. Some of them they gave millions of dollars in RSUs to get them some in unlabeled buildings a couple of blocks from me for those who didn't want to move to northern California.
Yeah, this is not normal business.
We will put that to Apple thus far, of course, Apple have said that they're looking for a workaround.
Could they fix us with software?
First of all, with software, I don't think that could work. It shouldn't because our patents are not about the software. It's about the hardware with the software. But they could do a lot of things differently. Maybe it's time they think different or maybe they act different.
What about the administration? Are they being in touch? Are they looking for different behavior?
Well?
I believe so.
You know, the administration has been critical of the top four tech company saying they're stepping on smaller arrivals and they're going to try to defend that. So I don't expect the administration to step in here. And every time Apple content them, I guess by a law they have to call us to get our response. So, yes, we've been in contact with them, and we don't think they will intervene. I think their recent stunt to pull the products off the market a few days earlier than the
ITC decided it should be pulled off the market. They're trying to get the public to force the Biden administration to do something they don't think they should do.
But I don't think it's going to work.
Jokiani, it's fascinating talking to you. Please, you're not going to negotiate with me on TV. But when or if you do, indeed negotiate with Apple, you let us know.
Please how much watch what you want me to do?
And Massimo stay well, thank you for your time today. The CEO there.
Meanwhile, coming up, we're going to talk about the health of something else now a bench capital in twenty twenty four, pitch Books got this outlookout will break down the findings next with analyst Carl Stamford is Rumage Technology, Finacial.
Data and Research from Pitchbook.
Well, it's out with its twenty twenty four venture Capital outlook and we want to break.
It down for you with the findings.
Kyle Stamfords here his lead US bench capital research analyst at Pitchbook, And well, I mean it hasn't been the prettiest of pictures to twenty twenty three. Are we expecting VC allocation of funds to pick up a little bit in twenty twenty four.
Maybe a little bit, right. I don't think we're looking at twenty twenty four as a as a full rebound for a venture, but certainly fundraising is one area that a lot of people are really interesting. We looked at our distribution data and tried to model out the next four quarters. You know, we do see it to be relatively similar, maybe a little uptick in fundraising, but not incredibly strong. Right, It's going to be well below the records of twenty twenty and twenty twenty one. It's going
to be well below the historical growth trend. But you know, with that distribution data, there can always be a couple of billion dollar funds that maybe are raised and increase that top line figure. To know more acceptable level for the VC market.
We're looking at a chart of annual VC backed public listing value. So ultimately like where the exits come from as well, CAR and that's.
Going to in any way feed better.
Do you think will we get some public exits, Will we therefore get some more interest in money being handed back to LPs and LPs wanting to recommit.
I think too expect it to be this record year. Anywhere near what we saw in twenty twenty one is probably, you know, kind of a fool's end, right, But when you look at where the IPOs happened. What IPOs did happen this year, there were thirty nine they've committed completed so far. More than half of those are in healthcare. Then you look at there's you know, seven hundred and twenty unicorns in the US. There's a lot of money
that's still stuck in the private markets. But we are entering a year with a little bit better economic signals than we did in twenty twenty three. Russell two thousand growth is up twelve percent the last month. Prices, sales ratios are expanding a little bit in the public markets, and I think we'll get to a spot where founders and companies are able to compromise on a price works for them and get out into the public market. That's
what we see. It's not gonna be a great year, but it should be better than this year.
I mean, look then, as that one hundreds at a record high. A lot of that's to do with a magnificent seven. But I'm sure there's some AI stories that can be pitched next year. I'm interested in who, if anyone, is committing to.
The world of VC. Are we seeing.
A typical LP coming in at the moment you're seeing different types of commitments coming from the.
Institutions, or indeed are they going direct now?
Are we cutting out a VC entirely and then putting allocations towards the startups themselves?
Sure allocation is not going to get or two vcs is not going to get cut right, But what we have seen over the past two years is LPs try to find their balance and now after the twenty twenty two is the stock market shock that really unbalanced their portfolios, wasn't allowing them to commit. Now we see in last year kind of rebalancing of the broader market, and now they know where they see it and they can know where to expect inflation to be or interest rates and
adjust their portfolio in that way. So we do expect there to be a little more interested in LP's committing to funds. Right, we had thirty two billion dollar funds in twenty twenty one, those funds would likely be coming back and start fundraising you know, this year, maybe late in the year. So we do think that LPs will continue committing, not at an extreme pace and very similar to what we see this year, but a little.
Uptake for VC.
What about others that we start to see on well, the investor list. When I look at the latest AI rounds, a lot of the time it's been in Nvidia, A lot of the time it's been Alphabet, it's been action corporates. Is that something we're going to see in twenty twenty four to two?
Yeah?
Well, AI is really interesting because all of those large corporates that you mentioned are now trying to be the lead for AI, right, and so you like you mentioned Microsoft and Video, they're very heavy into that sector. Corporates have declined, their activity has declined a little bit this year broadly speaking, and I think a lot of that has to do with, you know, there is still some you know, outlook of a recession. They don't want to
over commit to these long term capital bases. But those corporates, those large corporations that are sitting on a large stack of cash, do have that money to put to work in startups, and we have seen that that is a really good place for that money to go.
We will see if that continues. Carl Stamford.
It has been great to have you throughout the year with your data from pitchbook, and we thank you for pushing us toward to twenty twenty four.
Excited to have you on then.
Like Matter, it's a startup building computing products that use light in place of electricity, and it's raised additional financing amid the AI boom, pushing its valuation to a.
Call one point two billion dollars.
I'm pleased to say joining us now like Matter CEO, Nick Harris, And the reason you are so in demand at the moment or in this particular moment of generative AI is that it's really constantly, really energy inefficient to basically train a big AI large language model. You're thinking your work for years, seminal work has been done on basically using the lights as a science, as a technology to be able to make it more efficient. Can you just strip down as how that happens?
Yeah, absolutely so.
Today when you look at AI models like Chat, GPT and the stuff that Google's doing with Bard and Project Gemini, these systems are built on ten thousand node sixty thousand nodes supercomputers, and the chips that comprise these massive supercomputers building the AI models are burning an enormous amount of energy. So what we're doing at light Matter is we're actually figuring out how to scale to one hundred thousand nodes, how to drive.
The energy down.
I mean, just to give you a reference, today computer chips have about the same energy density as a nuclear reactor, and between the time when I founded the company and today, they've actually increased by about five x the amount of power per package. It's a tough trajectory. And if we want to keep growing in the AI space and getting bigger and better models, some fundamental new technologies are needed, and that's what we're doing.
It light better and you're therefore growing. What is it your head counters more than fifty percent? Is your last VC round which was back in May twenty twenty three, how do you Is it about people? Is it about talent and that's why you need the money? Or how else do you develop as technology?
Right?
So for this round, I think for the first time at light Matter, we've had investors approach us and the question was really how fast could you go if you had effectively, you know, approximately unlimited funding, what would you do?
And we looked at the headcount requirements.
We looked at our product pipeline and we decided to take on the money.
To accelerate all of that.
Where one hundred and fifty people today will be at around two hundred and twenty by the end of twenty twenty four. And what we're doing is we're taking this money to accelerate our interconnect product, Passage, accelerate the development of that, get it into data centers at the end of next year. And we're incredibly excited to get this whole thing kicked off and you're going to start to
see that. You know, these super ter are based on photonics and using light to connect everything up and it's going to be critical for the future.
So this funding is enabling all.
Of that and massive scale deployment of Passage.
Okay, so people needed on the R and D side.
On the sales side, I'm sure, and you're getting it into the data centers.
What's your own business model? How do you charge ultimately the customers that you're looking to. I'm thinking of the hyper scalers.
Yeah.
On the Passage product side, we sell wafers, so we have a semiconductor fab partner. Those wafers ship from them, and we ultimately sell to the big semiconductor companies, companies like AMD, Intel, Nvidia, and also the cloud service providers who are building their own silicon. You've got Google Cloud with the TPU, Amazon Aws with Trainium, and so on. These are the kinds of companies that we partner with
and we sell those wafers to them. What they do is they take their GPUs and their different processor chips and they scale them out on top of passage passages, this chessboard that links all of the chips optically and allows you to scale up to an entire three hundred millimeter diameter wafer and build absolutely massive computing clusters. So you can take a rays of these passages, these chessboards and scale them out to up to three hundred thousand nodes.
Is the kind of thing that we're working on today.
Same heat density as a nuclear reactor. Absolutely fascinating.
Nick Harris, thanks for painting the picture telling us where your technology is going over at like.
Matter, great hazard time with you. Meanwhile, that does it for this edition of bloom Beg Technology. You do not want to forget about our own podcast.
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