From the heart of where innovation, money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hide and Ed Ludlow.
I'm Caroline Hide Bloomberg's melted quarters in New York. Ed Ludlow, He's an assignment in Sun Valley. This is Bloomberg Technology.
Coming up. Microsoft wins us CORT approval to move.
Forward with its sixty nine billion dollar deal for Activision Blizzard.
We'll discuss the next steps of the.
FTC face as a loss in blocking the biggest ever gaming deal plus Amazon Prime Day kicks off shop is expected to spend upwards of thirteen billion dollars or break down what to expect from the e commerce giants, and we go live to Ed.
Ludlow in Sun Valley, Idaho.
Billionaires also to send on the mountains for their annual gathering or break down what to expect as artificial intelligence, future streaming, and of course there's massive gaming deals dominate the conversation. Let's dig in on the Minushai to deal with Microsoft's court when here in the US we've got Bloomberg's Malati Nayak with us. Who's covering this trial day
in day out for US and Malati. Before I start asking you about the UK, just dwell on what's happening in the United States right now, because it felt like you'd already called it that the judge seemed to be erring towards Microsoft and Activision.
That's right. You know, we did see in the last round of questioning by the judge that she was really asking the FTC for a lot of evidence that they were unable to sort of come up with in court. So today we have a ruling with the judge has denied a preliminary injunction, which is basically a request by the agency to block the deal while the while it's
longer in a challenge to the deal, is spending. But as we've seen, you know, something similar happened with Meta and Meta's acquisition within and that deal was also sort of a loss for the FTC at this stage, and the FTC backed out. So it's possible that you know, the FDC will back out because there is an administrative sort of a court case that the FDC still has spending against Microsoft, a sort of internal court case. That's that's you know, going to happen in the next couple of weeks.
Okay, so it's not a full gone conclusion, but we anticipate and certainly the market anticipates that it's more likely to get done ultimately. How much of a knock is this to the FTC, as you say, they seem to be trying to take on really tough cases here.
Yeah, you know, this has been a big test for the FTC's ability, especially when it comes to challenging big tech MNA deals. They really needed this win, you know, especially after what happened. This is coming, you know, just very close in the you know, on the heels of what happened with FTC and FTC challenge to Meta and within.
So it just seems like even in speaking with a lot of folks who were in court the merger arb charges, they were very very closely watching this case because I think they were interested in seeing where the FTC might go moving forward. You know, is the FDC actually bringing some cases which are leading to this sort of losing streak. Do they have to sort of think perhaps carefully about battles that they want to sort of sort of enter
and sort of win. So we'll have to see what happens next in terms of FTC moving forward with other deals, but we've seen already, you know, Chairman Lina Khan, She's just been one of the most aggressive tresbusters we've seen in the US in decades. So we'll have to see what the FTC decides to do next after this particular ruling.
I'm sure Amazon is keeping a close eye as well. Alasin Naya, thank you so much for bringing us the expertise. Let's just get the Microsoft angle, an Andy, the International angle next to Bruemmegsdina Bass and Diana. I'm sure this is going to be joyous Forasati and Adela, and indeed Bobby Kotek, They're both going to be over there in
Sun Valley. But there are still some stumbling blocks. What do you make of the headline around Microsoft and activision in the UKCMA, the Competition Markets Authority also perhaps pausing that litigation.
Yeah, all eyes.
Around the CMA right now. The minute that this ruling came out this morning, everybody's attention turned away from that courton in California and across the pond to the UK,
which is the remaining stumbling block for this deal. Now the CMA has just in the last couple of minutes said that they are willing to consider any proposals for Microsoft to restructure the transaction in a manner that would address their concerns, and as a result, they and Microsoft and Activision have asked the court in the UK to pause the litigation so that they can focus on proposals.
Microsoft has issued statement as well, saying that they still don't agree with the CMA's objections, but they are interested in trying to find a way to resolve them.
Two the FTC's perspective, have they kind of won a little bit, or indeed, have competition authorities at least gleaned some sort of changes to the ultimate deal to ensure that that might be competition.
Is this almost a win win on every side, Dina.
So I don't know that the FTC will see it that way. We'd have to ask.
The judge actually made that point in court at one point, saying that you know the fact that Microsoft had signed some of these agreements to put call of duty on other platforms and he was willing to sign on with Sony meant to the FTC on some level had already won.
And you know, when you look.
Through her ruling, it was one of the reasons that she found the FTC's case was not persuasive, you know, is that Microsoft had from the minute the deal was announced, it made it clear that they wanted to, you know, to put it on other platforms. She made similar arguments on some of the arguments the FTC was making on lack of you know, worse than the competitive picture and cloud gaming as well as gaming subscriptions, you know, in
those areas. She seemed to find some of Microsoft's arguments more persuasive than the FTCs.
How big a relief is this to Brasmith and Vestia now, well, again.
They still to get through the CMA that you have to realize that if the judge ruled the opposite wave she had issued a preliminary injunction.
The deal was on the dead.
Bobby Kodik, while on the stand, said that, you know, if there was a preliminary injunction issued, his board was likely back away.
From the deal.
Microsoft made a similar point in their preliminary filings in the case there was really not a way forward for this deal if the judge had issued a preliminary injunction.
They still have to get through the UK situation.
As you say, all eyes on the UK now and the CMA Deana Bass, brilliant to have you on. Thank you so much for the latest on Microsoft's perspective to that ruling.
Meanwhile, coming up, Amazon Prime.
Day kicks off and Shop was prepared to spend millions.
I'll get inside the head of Amazon W John Felton, I'm pleased to say, Amazon Senior vice president of worldwide Operations. Meanwhile, look, there are other deals that still are being assessed by certain authorities.
And VMware is currently.
Jumping more than five and a half percent as you can see session highs on an FT report that the EU is set to clear its own sixty nine billion dollar acquisition by Broadcom. So all eyes on these competition authorities at the moment.
From New York, this is Bloomberg. I don't know if you noticed, but Amazon Prime Day is underweight.
Shop is estimated to eclipse last year's spend of twelve billion dollars worldwide. For more on what we can expect, let's bring in Punum Goil from Bloomberg Intelligence right here in New York.
So please to have you Punum here.
I'm expecting consumers to be enticed as much as previous years. Is this going to be the biggest ever. It should be the biggest ever.
It always is.
Yeah, consumers are focused on value, right, so Prime Day just brings value back up front consumers. Mind, there are our deals, there have been deals all year, but I can tell you just from what I've been seeing all day is that the deals are bigger than they have been all year. They're rolling out lightning deals. Some things are already sold out, so I think consumers will just be watching and seeing a lot of consumers are saying that they have a list going into Prime Day, so
clearly budget focused. And then there are many fifty percent according to our survey, that will just buy as they see deals.
Okay, so looking for value.
What about sort of the global perspective of this as well? How does the Prime Day offering vary? I'm looking at a US offering. What does it look like in the UK and Europe?
Well, remember Prime Day? If you think about like just Prime members, right, one hundred and sixty million of the two hundred plus million members are in the US, so it is definitely largely a US event, but it is also international and everywhere across the world. I think everyone
is crunched for cash right now. Infestrates are higher, there are macro economic tensions, your political tensions around the world, so the value proposition that Amazon offers on Prime Day will also be sought after abroad as well as here.
And just remind us how important is to the overall company and indeed there for the investor, because what's interesting in the last few years, you've actually seen a bit of a sell off of sort of a fade into Prime Day from a stock perspective.
I think it's important in it's eight percent of the quarter's sales and just two so clearly still very important for Amazon. But also it keeps Amazon top of mind, right so as you think about consumers shopping for the summer, for back to school and even the holidays. You know, we're hearing people are shopping for the holidays as early as right now. So it just keeps some relevant, It keeps some top of mind. It shows that we have everything here and you can buy it. But Amazon's not
the only one offering deals today and tomorrow. If we've seen Target Circle Week, we've seen Walmart, you know, doing its Plus week, So there's a lot going on outside too.
There's always a competition. Pun I'm Goyl.
Thank you so much breaking it down from Blue Meg Intelligence and look, we can go straight to the horse's mouth right now. I'm very pleased to welcome John Felton, Amazon Senior vice president of worldwide Operations, who's.
Probably having a pretty busy day.
John.
So we're appreciative if you're fitting us in.
And I mean you have caused a sensation. Other companies do try to copy you on the same day at the same sort of a time. How do you set yourselves apart and keep people wanting to come back?
Yeah, it's Christmas in July, and it's one of our favorite times a year. We're noppening into our ninth prime day and so really exciting about it. It has just become kind of its own events, which we love. This year, I do expect to be bigger than ever. We've got more deals than ever before. We've got millions and millions of deals. They're dropping every thirty minutes, and so we're really excited about what we're seeing so far and the
things I'm thinking about. It's like, we got fifty percent off the top selling toys, percent off the top selling TVs was seventy five percent off amazonderleasss there really is a deal for.
Everybody out there.
I've even got friends who they use Prime Data kind of shop for their everyday essentials of kind of getting the tooth base, getting.
The shampoo, and so it's a really big day.
We're since society kind of thank Prime members for their loyalty, and the best way we know how to do that.
Is give them value and give them savings.
One stat that I still still think is amazing is last year Prime members saved one point seven billion dollars and we're hoping to explic the clips out this year and make.
It more personal.
How are you using technology in and of itself to try and make sure that I feel targeted in the right way.
Yeah, that's a great question.
A lot of our AI technology is really focused on the personalization. You'll even see it this year differently kind of when you look at the website for yourself, it's different than looking at it for your friends. We are working kind of day and night to keep improving a personalization, building kind of an AI technology to really help that. So we give you a really customized experience you can find the deals that work for you.
And also using Alexa right not only you able to sort of buy the latest Alexa, but you can use it to shop too.
Yeah, there's some great new Alextra features we have now. Is anything that's in your kind of your shopping cart right now? And and you're wishless? Anything unsaved for later if it goes on deal or Lexa will announce it to you and let you know, Hey, this just went on a great deal.
Do you want to buy it?
And so at Helping customers find the deal that's right for them, helping with their most excited core is really what's Fine Day.
Is all about.
Of course, we can see people behind you busily at work. How much of a logistical feat is that? How much work you have to put in? How ensuring are you that you're sort of as close to the customer as you can be.
Yeah, let's see what we plan for months for Prime Day.
And I've kind I'm here in Melville, New York, in a sub Same Day building, and they're just excited. The employees here are excited. They love Prime Day as much as Prime members do. And so you can feel the excitement. You can feel the buzz in here, and everyone's expended to go to deliver all the gifts we have.
What about the robots.
The robots are also behind me.
There's now seven hundred and fifty thousand of them running around, so you can kind of see that the shelf kind of comes to the employee right now. And so that's what we felt kind of really good about kind of our robotic technology. It's how do we help our employees kind of do their jobs better, how do we help them do it safer, how do we help them do it more productively, and how do they kind of really enjoy the collaborative experience with the robots.
Of course, with great success comes great responsibility, and there has been that focus on ensuring that the workforce labor.
Is treated right.
There's also it seems to be a focus on, well that you're supporting small business here. Just tell us, sister, why you're looking at that and why perhaps you don't want to seem like you're meeting everyone's lunch.
Yeah, it's exactly right. Small business is incredibly for it. It's been powering Amazon for years. Sixty percent of everything we sell is from small businesses, and there's a lot of new features that we have on the website this year. We recently app launched the ability to kind of filter
your surf results by small business results. I was actually playing around with this this morning, and we're doing hot sauce, and I was able to find kind of hot sauce than your small businesses that are supporting in logout where I'm at right now, and so really kind of helping small businesses be successful.
Small businesses are kind of a lot of the drivers of the growth.
They're getting more deals in ever of this Prime Day, and so we're really excited about how do we support them.
Does the consumer ultimately not just talk the talk but walk the walk on that, Do they really care about small businesses? Do they really care about the fact that you're perhaps closer to them, so less of an environmental perspective.
What do you see from the consumer?
That's what we're seeing is consumers are having a great Prime day to day.
One of the things I've been kind of happy with is I do think of the US consumer, even the global consumer. They've got high they're doing with high inflation, high interest rates, but they've been surprisingly resilient. They continue to kind of come back, but they are looking.
For value, and that's what Prime Day is.
How do we kind of bring them as much value, and this idea we can save them billions of dollars on Prime Day is just a tremendous dialareble to offer customers.
And of course the reason they want value is because the economy is in a much tougher position, and Amazon itself has been having to ensure that it's focused much more on costs, having to make tough choices, laying off people. I'm interested as to really how optimistic you are going past Prime Day that the consumer is there to support your business.
I'm optimistic.
I still have a lot of optimism in the US economy and the US consumer.
They continue to show up. I agree they are.
They're they're looking for value, and we need to make sure we're able to kind of be best on price, best on speed. I'm in a sub same day building, so these items here are being able to delivered in four or five hours. So to be able to get your Prime Day order on the same day within four hours, it's an amazing feed. This business itself is subday same
day business. We're over fifty percent in the first quarter, and so it's really resonating with consumers that they're looking for speed and convenience price.
Jean Felton, busy day. We'll let you get back to it. Amazon the SVP for worldwide operations. We thank you for your time. Time now for talking tech. First Up, Tata is closing in on a deal to become the first Indian iPhone maker, and the company is set to buy an Apple Supplies factory as soon as August in an effort to increase the plant's employment and expand output, according to Bloomberg reporting. Meanwhile, Uber seeing its biggest ever executive
departure since going public. Chief financial officer Neilson Chai is planning to leave the right hailing giant. Try informed CEO Dora Koslshahi of his intentions to move on, though a decision on timing hasn't yet been made. I was tapped by Koslshahi in twenty eighteen to lead the listing.
Plus, an artificial intelligence researcher who co authored one of Google's most influential.
Papers, is leaving the company to launch a startup.
Employee who helped write the pioneering AI paper, Attention is All You Need confirm to Bloomberg that he will depart Google Japan later this month. Some of the biggest names. Meanwhile in technology, media and business, well guess where they are the Idahoo Mountains for the Allen and Coe Sun
Valley Conference, also dubbed Look the Summer Camber Billionaires. The annual summit features a series of big picture panels, many of which will focus on the rise of art, traditional intelligence of course, also the future streaming and well m and a as it stands, a Red Ludlow, you're on site.
You're in some valley, Idaho, and boy, they're all going to.
Be talking about that sixty nine billion dollar deal.
Right, yeah, yeah, we have news. It will be front and center. You know you were talking earlier in Bloombo Technology of Dina Bass. Imagine if the decision had gone the other way. But Bobby Kotik is here this week in some valley. I understand that Sacha and Adela will be here too, And what a blow this is to
the FTC in CMA. When I touched down last night in between the mountains, the sun setting on the bluetiful landscape, I was thinking about Lee Na Kahan and the FTC because actually this year there's a real emphasis on the history of some value, which is Telecom's technology and media or TMT and deals, and last year there was only one story Elon Musk's purchase of Twitter. But all the breaking news of this morning puts the landscape for deals
in this sector front and center for the attendees. We might see some more activity, now.
Yeah, isn't it.
It's not the only sixty nine billion dollar deal even. I mean the fact that Brawcom looks like it might get VMware according to the Fts, so some really big major chip steals. And indeed, as we've seen gaming deals, but talk to us about the world of streaming and indeed, well content really yeah, we're potentially seeing art mimic life a little bit with succession.
I love that arc mimicking life. You know, the streaming story is also one of all of the names involved. You know, the top ranks of Netflix will be here, David'sarslove w Warner Brothers, Discovery, and I understand that in the last couple of minutes, Bob Iger has just walked through the front door of some valley. I think if there's a deal that we pick out, it might be Hulu because remember that Comcast retains a third of Hulu with an option to enforce Disney to buy out its stake.
My understanding is that Brian Roberts Comcast isn't here this week, but it's one that everyone's watching because the current valuations like twenty seven billion dollars. I know that Disney don't think it should be that much if they were to buy out the remaining Steak.
And then Eiger, what's his future? I remember a.
Year ago when I was here, he arrived with Bob Chaypeck. He just retired. Chapeck had taken the reins and how long did that last? Not long at all, and it was already awkward. Then he was already under pressure because Disney was not having a great time this time a year ago.
Yeah, and now we're all lying as to who he's come with now, from those heading up the TV part of Disney, those heading up on the.
Parks as well.
And I'm interested in not only sort of some of the succession planning and some of the individuals, but individuals of old.
What's so interesting you mentioned we were all.
Talking Elon Musk this time last year, and that it's.
Deal his deal for Twitter.
Yes, now we're thinking about the competition.
For Twitter.
Mark Zuckerberg Yet, will he be the man of the moment. You know you and I have talked every day about Threads, every milestone, one hundred million on the show twenty four hours ago. I remember twenty twenty one, the New York Times published that big story about how Mark Zuckerberg's relationship Michelle Sandberg had deteriorated because of how she had handled Facebook. Now Meta's relationship with Washington, DC, and I remember being there.
A guess who walks past smiling ear Mark Zuckerberg and Cheryl Samdberg very different vibe. Now he could be the main man everyone wants to talk to.
I can imagine.
And I'm sure you're going to be giving us live updates on threads and Twitter and whatever other social medium.
Form you're going to be taking.
Ed Ludlow live in some valley, Idaho.
Welcome back to LUMO Technology. I'm Caroen Hide in New York.
Let's get onto the individual intricacies of another asset type crypto. Now, we know that all regulators benign that particular space, particularly here in the United States, and well look at the SEC in particular, It's power over crypto just seems to be growing. SEC Chair Gary Gensler filling the crypto regulatory void at the moment, I want to dig into that, and some of the push from big institutions still want
to get in on the space. Avalad's president John Woo joins us and place to say along with our very own Chinnali Basek crypto expert in residence, and let's start the journal a little bit as to how the mood feels right now, because last time we've come on, you know, peak bank crisis, peak worries and trials and tribulations to crypto, we can seem to be in a holding pattern right now.
Well, I think the mood for practitioners like ourselves who are operating the space is obviously better ever since, ever since Frankly, Larry Fink, black Rock, Fidelity and all these big players aside to refile for their ETF. It's a big short of confidence that not only do they think they're in individual users, we're talking about nine trillion of assets at black Rock, five trillion of fidelities are interested
in the space. But I have a deep succission that Larry Fink realizes now based on its comments, that there is real use case and it's useful to tokenize financial assets to streamline operations.
He was so skeptical. He was so skeptical.
We just quotes from seventeen eighteen versus twenty two to twenty three complete about face, and that's what makes me very excited. We need new leaders into the space.
But if you have a crypto industry that was supposed to be separate from Wall Street, and you have a Wall Street giant stepping into the crypto industry, why embrace it? If you're kind of a crypto native here, if you believe that there should be another system, then what is the point of Blackrock getting in.
I think there will be two worlds. There will be the white glove service that a black Rock provides low fees, custody, etc. Etc. And then there are the deeper intricacies where only a native crypto firm like Ava Labs really really understands all the stuff that Larry Fink is talking about. Of the Labs already provides in what we call a subnetwork, which is a blockchain that's a service with a software development kit that has all the features for compliance and use cases.
In fact, we've already partnered with Wisdom Tree, with Wellington and t Road doing similar things. So I'm excited because it lends more credibility to space.
What about Coinbase, Let's talk about it for a second, because Blackrock chose a crypto firm, Coinbase, to deal with its custody of bitcoin. On the same time, there's a lot of questions about feed compression when it comes to the bitcoin space. How do you kind of net out the effect here for a firm like Coinbase as more ETF get in.
Yeah, absolutely, there's definitely going to be feed compression on the retail side. On the institutional side, Coinbase is making huge strides. In fact, I think five of the all five of the top ETF filers, Blackrock as well as CBOE are using Coinbase as a surveillance partner. Now, if these mega traditional financial institutions trust coinbas maybe the agencies will have to also reevaluate if they trust them as well.
Chanani, I mean, with your expertise, the way you're following it at the moment, What about the regulatory overhang, because that's what we've been talking about for the first few months, and then now with black rol come with these big institutions, what about SEC what about CFTC.
Yeah, I mean I think that there's been this big expectation that the SEC will come in and just approve these ETFs, but we've seen many years go by without that happening. At the same time here, I mean, I'm wondering, you know, how hesitant are Wall Street firms to get in. And the issue we've been talking about on the sidelines here is not just the ETF world, but also just the plan old liquidity you're seeing in boring all bitcoin markets. We have gone nowhere, guys.
For three weeks.
It's been up against thirty thousand who's trading.
That's a great point. If you look at the volumes, whether be on coinbase or the overall averages in the indites, volume is still coming down even though prices are going up. And that's what I've been talking about for a long time. The market structure is still kind of broken. All the leverage players in the past, whether that be Celsius, Block five, Genesis, they're not in there to provide leverage so people can
trade more. It's the same people trading creating price movement, but the volumes are still down and going down.
It is a lack of leverage ultimately a better, more healthy thing. And to that point, does that then move us outside of the world of just talking about bitcoin into well some of the old coins and your own ecosystem.
And yes and no, leverage has been part of every financial ecosystem, whether it's mortgaging for a house or whether it is in other financial markets. In fact, if you don't have leverage, you don't have velocity of money and you don't have growth. So leverage is healthy. Maintaining and maintaining healthy leverage is important for any ecosystem.
And John, give us a sense of like globally where we sit right now, because the talk on this show has been a lot about well, we're losing our talent from the US.
They're all going to.
The Middle East for interesting news out of bid Oasis and the regulatory oversight there today. But people are looking at other places to build the companies, their startups.
But where are.
Volumes coming from internationally, because it all needs to be based on China rely.
Great question. I mean from my seed as an operator, I see far more business development activity in Asia as well as in Europe. Although the US financial services firm have taken a step back waiting for the compliance and regulation to play out, the amount of deals we're working on at ov labs in Asia as well as in Europe have only increased, so they see the usefulness of the blockchain technology and they're engaged us. Hopefully with these new leaders will start that process as well.
You know, it's interesting to see this international engagement, but at the same time, wouldn't you still see bitcoin prices move higher if there was that much more engagement at this point? Do you see more risks to the upside or the downside when it comes to bitcoin?
No one could predict the short short term. It's a forty forty five percent volve products, so who knows. But I see in the medium and long term upsides where you want to be the haviening coming next year. Historically that means it goes higher into it. And also if you look at the curves in the financial markets for the futures contracts for bitcoin, no one's giving it price appreciation. So I think you can look at the options market, a twenty five delta call on bitcoin is priced almost
the same as for three months. It's almost the same as a twenty five delta call six months out on bitcoin. And for a forty five to fifty voll product, that's really not much canentangle. It's kind of weird, so no one's giving you credit, and usually you take the opposite side of where people are standing.
Oh, John, technical analysis music to our ears to a little bit about being anything other than basically speculative asset class Like even in the world of NFTs, we have still seen underlying work being done there, interesting moves with mischief, interesting moves with Movieton, interesting.
Moves with collectibles.
But the price points aren't shifting particularly, and I'm interested in ultimately whether people see this as anything other at the moment than a spective aske clas.
We see it differently. The work we're doing with NFTs, we're working with like sk which is a large conglomerate in Korea. They have probably one of the largest loyalty programs in the world. Twenty four to twenty five million South Koreans are in this ninety thousand unique merchants. So basically they're going to put that loyalty program on a blockchain. When you have that many participants and you need to move information of value at the same time, you want
to do it on a blockchain. That's how we're exploring with NFTs to loyalty programs. There are other companies even in the US work brand companies working with NFTs to create more engagement. There's a use case for NFTs not just pure digital collectibles.
Great to have some time and you always have a labs president John will Blue Emotion Alibas and the house, so pleased to have it with me as well. And look, it's a crypto kind of a day stick with Bloomberg Crypto. It's at one pm Eastern at ten am Pacific coming up. Oh guess what the other flavor of the month, of course is and the year State of AI. We're going to talk about that as well as cybersecurity. Venture Investing.
K Solm is going to be the best partner of Bank Capital Ventures. That's next. This is Bloomberg.
Now, it's today's VC Spotlight, and we're very pleased to welcome to the show Bane Capital Ventures partner Enrique Solam, who focuses on well all stages in investing, particularly in infrastructure, software and cybersecurity over at Bain. And let's also bring in Bloomberg Investing reporter Hemma Palmer, who's helped bring about this interview and we really appreciate it so Enrique Bank Capital.
You've been there, what.
Since twenty fourteen, you were leading Samantech, which eventually of course support by Broadcom and has changed its name. But as a leader and now as an investor, how much has the game sort of been reorientated towards artificial intelligence for twenty twenty three.
Yeah, if you look at the opportunities right now, we're definitely seeing that generative AI specifically, which is really the thing that is driving a lot of meaningful change if you take a look at what it's going to disrupt. Think about how software is being written today. Software developers have to sit down and write each line of code. In the future and near term, we expect that probably you know, forty percent of what a developer has done can be handled through AI. And we think that's not
a fad, that is a meaningful change. And that's just one example of what we think is going to be really meaningful as we take advantage of this new major trend.
And speaking about you know, disruption and AI, talk to us a bit about what you think the disruption could mean when it comes to phishing and hacking in cybersecurity, What influence does what we're seeing in AI now mean for that universe.
Well, the thing that has going on is using new gender AI technologies, what an attacker can do is be significantly more targeted. So what does that mean? They can quickly generate an email message, a phishing attack that will be very specific to you to what you do. Things they know about you that before they wudn't have been able to do as effectively.
And so what does that mean.
That means it's more likely that somebody we will respond and if they respond, now the attacker is inside the network, and so we just think that the sophistication from the attacker's perspective will significantly increase.
And you spoke about the opportunity set with AI. How do you look at the risks.
You just mentioned?
One, are there certain areas of AI and venture or later stage investing that you're avoiding given some of the concerns that we're seeing right now.
Well, you know, when you look at the total landscape, there's always things that you want to be careful and you know, one of the areas that a lot of us have thought about, and you just had a discussion on what's happening with what we'll call centralized finance We're big believers in decentralized finance and we think that that is going to be a big opportunity going forward. But I would say broadly, we're bullish on what's happening AI. We're bullish on what's happening in.
Cyber decentralized finance.
What airs, I mean, you're still running checks when it's related to crypto.
Yeah, So we raised a fund last year, and so we continue to invest in the companies that are working on new blockchain technologies. And so we've got investments in companies like Scroll Celestia, and we think there's still real opportunity ahead. You know, the question really is there's cycles, and we saw some of the you know, excesses of twenty one. We think we're in a much healthier environment now, this is more normal, and we even.
The AI startups even for valuations there.
You know, I think you're seeing that the best founders have moved into what's happening in the generat AI space, and so what that begins to do is they can command premium valuations. And so definitely we're seeing some overheated prices, but we think that's driven by what the opportunity set
is which we think is incredible. You know, we've made an investment, for example, in a company called Unstructured, and if you think about what they do is they're taking all your corporate data and allowing you to train a
model on your own specific data. And so we think companies like Unstructured, companies like Contextual, which are solving real problems around hallucination because one of the problems with gener of AI that I think we've all experienced is that sometimes you'll ask a question or you'll ask for some information and it'll give you some amount of randomness. And what companies like Contextual that we've invested in are really trying to do is eliminate that hallucination.
Speaking about valuations, how do you see the runway ahead when it comes to the number of downrounds that we might see over the next twelve months, whether an AI even more broadly looking at.
Infrastructure, Yeah, so if you look at the current environment, you know, twenty twenty three is probably not an ideal time to fundraise. Most of the founders that we engage with are really focused on thinking about raising in twenty twenty four and twenty twenty five, where we expect that their revenues will have grown in to the valuations, but there will probably be some companies that will be in a position where they have to raise financing at a lower valuation than last time.
Always a bit of pill, but a reality for many. Ban Capital Ventures partner and Rique Salem, great to have some time with you. Thank you so much, Bloomberg's HMMA Palmer, We thank you so much for bringing the conversation. We've got to get back to our top story. Microsoft's court win in the US to of course proceed without sixty nine billion dollar deal for Activision Blizzard.
Let's get the FTC perspective. William Kavass with us.
He is a former acting chair of the Federal Trade Commission, former member of the FDC, and currently professor of law at George Washington University. Professor is wonderful to have some time with you. What does this mean for the FTC. They are taking big swings, but they seem to be missing.
When they've taken swings based on theories that are a bit edgy, that involved using theories about vertical acquisitions such as Microsoft Activision. They're having a hard time in court. In short, they're having a difficult time expanding the frontier of enforcement to include theories that have been deemphasized in
the past. And this is going to give the tech community confidence with certain types of transactions, especially if they're willing to offer concessions which the parties did hear that they have a fighting chance of prevailing when they get to court.
And to that end, I mean, should the FDC sort of in a way be a little bit buoyed by the fact that they fall such changes, or indeed the worldwide competition authorities out there.
If I were the FTC, I'd be claiming credit for the changes. I would say that if I hadn't been watching, if I hadn't intervened, the concessions would not have been given so directly and clearly. The judge in the case, in our opinion today emphasize the clarity with which the commitments have been made, so I certainly do claim some credit for that. Without my intervention, those would not have been presented so clearly and so directly.
What's so interesting is almost sort of five minutes apart of the headline that we understood that the US cord is sort of giving this blessing to Microsoft, we heard that the EU it's reporting from the Financial Times, But the EU might well allow the VMware Broadcom deal to go through. What about some of the these are the deals coming down the pike. It feels as though you think these could start to get through if they.
Make these concessions.
I'm thinking of Broadcon, VMware, Kroger Albertson's and the like.
If parties think very clearly and honestly at the beginning of the process about what the vulnerabilities will be, where the regulators are most likely to intervene and proceed to come up with solutions to address those, their prospects of success improved dramatically. The European Union, the European Competition Directorate has been quite willing to accept concessions. The courts in these US cases are willing to look at the suggested fix.
This is the case in today in Microsoft activision. It was the case for the Administrative Law judge and Aluminu Grail. It's been the case in a couple of the couple of the challenges that the Department of Justice has brought. In short, what parties are having success with is coming to the court and saying we concede that there might be competitive problems, but we have a solution, and just because the authorities are not willing to embrace them doesn't
mean that you judge should not endorse them. That strategy has been effected.
What then, When Lena Khan first came in, much was made, of course, of the work she'd done and the study of the law around Amazon in particular. Many are waiting for what the FTC is going to do and bring in in terms of the big one for Amazon, in some way, shape or form, does any of this perhaps arbiter an easier time for the big company, which of course we understand has been hiring a lot of XFTC people.
I think the company is almost certain to be the subject of a complaint. The FTC has made so many commitments over the past couple of years that to not bring a monopolization case against Amazon would be seen as a fairly dramatic repeat retreat, and indeed, for the chair this has been held out as one of the main
reasons she's at the agency. I think it does mean that the FTC is going to think perhaps a bit harder about how it assembles the proof that will make the case successful, because in these merger defeats what the courts have been saying is your evidence isn't good enough. And the last thing I think it does is that it probably gives the Amazon more confidence that when the litigation process unfolds, that they're going to be able to
meet the challenge. Ultimately, as an enforcer, you gain credibility by winning. You don't have to win them all, but you have to win a critical massive cases, and in Amazon, I think it suggests that if you're willing to mass all the resources that you need to take on the case, your prospects of success are going to be respectable. So I think that these defeats in a sense give them some confidence that they can prevail later on.
Professor, great to get your expertise on this. Thank you so much for joining us today, George Washington University law professor and former FDC member Bill Kommersick.
We thank him now.
That does it for this edition of Bloomberg Technology looks so much more throughout the day regarding tech, look, Bloomberg TV's got a great exclusive coming up three thirty pm, New York Time.
Citron Research founder Andrew Left.
Of course, he takes big swings in terms of thinking.
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