More Job Cuts at Meta and Big Equity Firms Circle SVB Assets

to fundamentals. We talk jobs, we talk inflation. Coming up, let's talk exactly that more job cuts at Metro in particular the company planning to slash ten thousand rolls head and five thousand vacant positions. Or on the company's restructuring ahead, and we'll have the latest on the collapse of Silicon Valley Bank and the big three private equity firms looking to snap up the bank's assets. And sticking with SVB, we'll talk take a deeper die into the state of

venture capital and talk executive leadership. The tray Stevens are founders Fund and former IBM CEO Jinny Rametti. But again day two of our new time of the show, and we look at the market repercussions. What a difference a day makes as we drive higher on the NASTAP, but this time we see bonnials actually rising. After we saw yesterday the collapse in borrowing costs, we anticipated the Federal Reserve that just had to pull back in the face of a banking crisis. Today we look at inflation data

and we note that CPI is still running hot. It means the Federal Reserve is likely still to have to hike thirty five basis points and moves higher on the two year. We also see the KBW Bank index really take a sigh of relief. We're just starting to digest the repercussions of SVB the crisis, and now we're dialing back our anxiety. We're up almost five percent on this particular bank index. Flip it on tell me where we're also up for a second straight day. Bitcoin the reprieve

is relentless. We are up another seven percent. We are now trading the highest on Bitcoin. The og of crypto ed well since June twenty twenty two. Look at the CPI, a real driver in the market. Most of the tech names in the NASA one hundred a really policy sensitive

index higher Nvidia and Apple the biggest points. Moves to the upside interesting to track the ride share is Uber and Lyft, both higher after the California Appeals Court reaffirms that a gig worker is an independent contractor, not an employee. Flip up the board's meta. Ten thousand more staff to be cut, Mark Zuckerberg, citing the economy shares up six and a half percent. We knew this was coming, but let's bring in Sarah Fryer from Bloomberg News to talk

about this, because Sarah, ten thousand a big number. What else have we learned about the specifics of this latest round of layoffs. Well, this is the second big round for MATA in the last six months. So I think what we're really hearing from most of our sources is just that the morale is hitting a low point at the company and workers have had a lot of anxiety about what might come next. And of course MATTA is saying that it is still working to continue to restructure

the company, including by flattening the organization. They want to make sure that managers aren't you having just a couple direct reports. They want to make sure that that engineers to managers ratio is a little healthier. In Zuckerberg's eyes, in giving them more ability to release products faster, to be more efficient. They think that reducing the number of middle managers will really help them get there. But this is really about the Zuckerberg's Year of efficiency. He's all

about efficiency. That is what is driving the stock, and whilst you seem to like it, they do still seem to like it, even though many those working at the company still don't know whether they'll be keeping their jobs by a proliff. You're on the tech groups, it's going to be if you're more on the business line, not finding out till may. From a morale perspective. Therefore, moving more to I thought the buzzwords were interesting the fact that he's still saying we're going to be investing in

artificial intelligence. It didn't feel like he was really doubling down on metavers even though that is still their big focus. Yeah, that's that's been interesting for us too. We've really heard that Zuckerberg's focus on AI has been prominent in these last few weeks and months, which which has some employees wondering whether that metaverse mission is as all encompassing as he previously made it sound. Of course, Oculus sales are they are he says they're strong, but certainly they had

to reduce the price recently. There are some indications that it just really isn't catching on among consumers at the rate that they expected. So I think that going all in on AI is his next move here and and really relates also to the business. I mean, they have to use AI to improve their algorithm, they have to use AI to make up for the deficiencies and their

advertising work. Because of the changes that Apple made to tracking, shares up more than six percent, biggest jump in around six weeks, Sarah, As you and I have reported, By contrast, morale is pretty much rock bottom with inside Meta. Remind us why this is happening now. We had some reporting about the urgency to get these job cuts done about Mark Zuckerberg in particularly and what he's about to do well. He wants to make sure that they could meet some

lower expense schools. They really want to make sure that they can be a more efficient organization as revenue growth slows. Now, the context here is that these platforms that they've created, Facebook, Instagram, these giants are really not growing as fast as they used to. They're trying to grow the attention, but the user base is already very saturated around the world, so they have to come up with other ways to get their profits in line with what walshrit expects to keep

that growth going. And this is how they're doing it. And I think that that Meta really saw an opportunity. It's not that they have to or else will there will be some dire hostel pusiness for their business, but they saw an opportunity in this moment where a lot of companies are doing this, to say listen, we can do it and it won't reflect badly on us, and

in fact, it will make us look smart. And a time of course emergency when there's an addition to his own family as well as his Meta family with the Zuckerberg household at the moment about to go and parental leaf serify, We thank you so much for digging in on the Meta news now. Of course, Meta job cuts makes us think about fundamentals inflation, in particularly the CPI

print keeping pressure. It would seem on the Federal Reserve the most critic up to you got more on it, Yeah, Caroline, it does feel like the focus has kind of shifted, maybe just a little bit away from the banking fall back into the idea of CPI. This highly awaited report from the Federal feeds me from the Bureau of Economics, and this is really important because you are seeing a deceleration inflation. This is good news for the Federal Reserve

for the first time in about a year. Economists we're banging on estimates zero four point four percent rise month over month, on a yearly basis, a six percent rise. But if the components that matter here, because services inflation is still rising, goods inflation is coming down. You're seeing those shelter costs in particular decelerating. The housing market has been in focus for a while, but commodity pressures are

kind of coming back up. You're seeing that in gas prices, in food prices, and that's what the Federal Reserve is going to see as the danger. And that really factors into the repricing that you're seeing into the markets. Because after the SVB fallout, Caroline and ed who did see the market reprice from a five point eight percent terminal rate over the summer all the way down to five five point one percent again over the summer, essentially saying

that look, this tightening cycle is over. In the just really the last twenty four hours. Especially with the CPI report, you are now seeing that terminal rate come back higher

and higher. Wall Street now split. You have calls from likes of City, for example, a fifty basis point hight to really keep the pressure on inflation all the way to the other side of the spectrum, Nomura perhaps talking about a rate cut and even at the end of quantitative tightening, something that would bode well for a lot of the technology names. And that's why I was saying that now's not having its best day since February twenty trying three of the CIA pretty great revoting. Thank you.

Let stick on valuations at stick on fundamentals with CPI with jobs as talk to the Wee family officers CEO Lago Messino and Advice refirm everything. Get this, more than fourteen billion dollars in assets and I just melt reassert your focus here when we're trying to work out the

direction of interest rates. What does it mean from your perspective on tech valuations, Well, I think that obviously tech valuations are likely to increase, particularly over a longer period of time, So you know, I'm a tech ball over the next five to ten years, I think a lot of the issues we're dealing with, like involation, are going

to be solved through increased productivity. And the answer the productivity are all these tech companies and tech processes that are really going to help us become a lot more productive. So I think when interest rates were zero, people were willing to pay everything for growth. As interest rates have

come up, the valuations came down. But now you're actually saying, I think we're getting towards the end of a cycle, so I expect that the valuations will increase, particularly because you have so many tail wins with a lot of these tech strategies. So you know, whether we're talking about AI, or we're talking about electric vehicles or we're talking about a farm mine, you start to see the activity that's going on in the space. I continue to be a

tech bull, but I'm a tech bull over time. So I think if you think about the next three five years, we're going to have much higher valuations for these companies. Okay, so you're liking perhaps an Nvidia that has exposure both to the autosector but also the AI focus. Who where are the companies? Where are the opportunities that you think if you're going to allocate money now you should be fine, Well, I think there's a lot more opportunity actually in the

private space than in the public space. And I think when you think about the public space, we have five thousand companies, right when you think about the private space, you have a million companies. And I think the opportunity in the public space is going to be because the public companies are buying these private companies to actually be

able to have access to these technologies. And so when you look at Adviser buying Siegen, or you think about Google's investments or Microsoft's investments in AIM, I think that that's where you're going to see the growth. But obviously I think the opportunity is much greater in the private space. Mel we think about inflation, we think about the FED, but I'm looking at some of the movers in the market. In earnings is still such a big driver of individual

share moves, particularly in the technology sector. There's a discussion to be had around how the rest of the year looks to tech and whether they're recalibrating the strength of the economy. You saw Mark Zuckerberg's site the sort of longevity of headwinds that his company faces in the economy. Do you think we need to again when it comes

to earnings expectations? Yes, because and I think that's why you're seeing the layoffs and the tech companies, because a lot of the growth had to do with number of subscribers for new customers, new markets that were opening up, and because I think a lot of these companies actually have huge market share. The name of the game is not going to be how many new subscribers or how many new clients. It's going to be how can you

actually change your business model to create more profitability. So, whether you're looking at a Facebook or you're looking at any of the media companies, I think the name of the game has changed. I think what people are really looking for is profits and higher margins. Now you're the former CEO of JP Morgan's private bank. What have you made the last five days in the banking sector particularly

and how it's hit tech. Well, I mean, obviously, I think from the perspective of JP Morgan, it's been like a birthday party because everybody has tried to take their money out of the banks, out of the other banks and put them primarily in JP Morgan. So I think that's good news for JP Morgan. In terms of the tech sector, I think when it comes, for example, to the venture space, I think we're going to I think we're going to see maybe lower evaluations, which is actually

a great opportunity for venture investors. I think what's so interesting in particularly Caroline, is how we're threading what's happening with SVB to what's happening in the global economy. The commonality appears to be that tech companies all sizes are under duress. Yeah, largely because interest rates are having to go up. They're having to think about costs, and that means people and mel it also means people who are

managing these businesses. You're someone who not only was a very senior at JP Morgan and now running around money in this respect for family offices, but also someone who's on the border Cocacola and Disney. What do you make of executive oversight here and board oversight? I think I think board oversight has never has never been more important. And I think that especially usuals like cybersecurity, for example,

are more important than ever. And I think that the kind of credentials that you need to be able to have and the kind of work that you need to be able to do to serve on these boards has increased dramatically. We family officers, CEO mel la A Messino, thank you so much. Which can breaking headlines on the Bloomberg terminal. Caroline AMC Entertainment shareholders have approved a common share increase, issuing new equity the shares responding inevitably to

those headlines. A crossing the Bloomberg will bring you more as we have it. Of course, we'll continue to watch the fallout of Silicon Valley banks sudden collapse and that as we understand that Apollo Kko Blackstone showing interest in spb's loan book for example here to cover all of it origin Nati Bassak and we now sought to understand where many feel value actually lies. We are and when you look at it, we have the loan book that is worth more than seven billion, seventy billion dollars, so

it's quite large. The question is will Apollo Kker blacksone will they start to bid on parts of it or all of it? More likely you'll see them bid on parts of it. Because the idea here and this is great analysis by Bloomberg Intelligence as well. Here this is a loan book that has not lost a lot of money. There's a lot of questions and concerns about the quality of the loans underpinning given that Silicon Valley Bank was so aggressive encoding Silicon Valley and the tech entrepreneurs and

sometimes unprofitable companies. But the idea here is Apollo Kiker blacks on their credit their experts here their credit experts. So the idea is that if they take on these loan books, they take on these clients and they feel that they could do a better job at managing these loans. But with that said, there are other assets as well, including the venture on the asset manager, if you will, and the investment bank that worked on about ninety nine

billion dollars with deals last year. And what's so interesting is we still to try and think about where the value is A Shinali outlines. Sali, we were just talking to mel over at we Family Offices and she was talking about board oversight and the need for that at the moment. There's real due diligence going in what executives

were and we're not doing at this time. Yeah, Look, the FDIC came in an appointed new leadership at Silicon Valley Bank, but inevitably, Shinali, there is a post mortem going on and what happened and the action that executives took. What have we reported in the last hour. There are a few things to keep an eyron here ed, and that is both the investigation that is happening when it comes to Silicon Valley Bank, it's executives actions taken before.

There are so many critics in the market that say, listen, some of these issues we have known about when it comes to their balance sheet management. But even beyond that, the stock sales from the manager is particularly the CEO, Greg Becker, leading into a lot of the disclosures of the information that we had seen before the collapse of

Silicon Valley Bank. In addition to that, I would also remember, while you have the DJ and the SEC forming investigations around the collapse of Silicon Valley Bank and the management of it, you also have the Federal Reserve doing its own investigation of how itself has handled the situation. So

really questions all around the board here. The reason we're tracking both threads of the story is even twenty four hours ago, we had a key bench catalyst on this program saying we want Silicon Valley Bank to survive in some form because we've always done business with them and

we want to continue carrow. Yeah. And I think also people juxtaposing the decisions that were made in the US for the regulators versus the UK UK very swiftly getting a buyer, I mean at a very rock bottom price that has to be said, I mean one pound for svb ucastionally. But what have you made of the difference? Is that a huge differences And remember it is a smaller arm when you're looking at the UK arm. There's been a lot of questions on Friday morning when we

all woke up. There's a question about half of Wall Streets circling these assets. If you take a look to the point that ED had made, there has been drips and drabs of plans announced on restructuring, but there has been no bank ruptcy filing. That's an important differentiation here because had there been one, then it would be up to kind of the jurisdiction of a judge in that

sort of a situation. But now that you have these assets slowly coming up for sale, it makes it a little easier for different parts of Wall Street to absorb these things, particularly in a way that's compliant with regulations and could help them avoid a lot of the two thousand and eight era liabilities that cost firms like JP Morgan a lot of money coming out of the post two thousand and eight investigations. Wool Street is debating moral hazard,

as we've been discussing on air all day. Just very quickly, Shannali, how do the banks look this Tuesday? I mean, there's still concerned about the sector, right there's certainly self concerned

about the sector. But there was a lot of acknowledgment that silk On Valley Bank was an outlier in terms of the way that it's deposit based looked and the way they manage their assets ed. We have to look at other sectors now also as we weigh the lagged impact of interest rates commercial real estate that is maybe not as front and center and emotional Silicon Valley Bank is, but certainly it's a slower leading problem, and so we

are certainly not out of the woods. Though it is a big relief to the market to see the regional bank stops hop back up, particularly with the likes of a First Republic and some of the banks on the West coast like Western Alliance and Pac West that some of the market was concerned about yesterday. Shnani, how many cups of coffee on today? I won't disclose that on air. A lot, folks, It's a lot Shani Bassak always there with their caffeinated hies. We thank us so much. Ed Yeah,

coming up, we'll continue the conversation. The UK's Communications Regulators says the BBC has to change. We'll tell you why next in Talking Tech and as we look at some other movers out there in the market, Arc Innovation ets OR it's biggest inflows since twenty twenty one, that ETF around up around two and a half percent. In this session, we'll dig into the specifics. That's next. This is bloomberg

time for Talking Tech. The BBC has got to change, says Melanie Dawes, the head of the UK's Communications Regulators, saying that the public broadcaster should let freelancers who are not involved in news reporting have more freedom of expression on social media. This comes after a high profile row between BBC management and popular football show host Gary Lineker over his tweet commenting on the UK government's new immigration

bill and whether that tweet breached the broadcasters commitment to impartiality. Meanwhile, Blackstone agreed to buy c Then for eight dollars fifty cents per share and the enterprise value of about four point six billion dollars for the event management software company. Blackstone has received a fully committed one billion dollar credit facility as part of the financing of this transaction, which

expects to close mid year. And finally, Kathy Wood's Ark Innovation ETF is getting a strong vote of investor confidence. The ETF attracted close to four hundred million dollars of inflows on Friday, according to overnight data compiled by Bloomberg, the largest influx since April twenty twenty one, a time when the fun hit it's all time high during the cheap money era. Caroline money is still going somewhere and this current volatility. Welcome back to Blue Meg Technology and

Caroline Hyde in New York. And let's keep ourselves up to date with US authorities currently examining the collapse of Silicon Valley Bank for misconduct by officers, including whether stock sales for examples, by executives actually violated trading rules. It's all according to a source. We want to bring in a big name from Silicon Valley for her take on

all of this, Jania Metti. She's a former CEO and chairman of IBM, board member of JP Morgan, and she's out with a new book on leadership called Good Power, Needing Positive Change in our lives, work and world. Boy, Jenny, do we need some positive change? What do you make of the focus in particular of oversight of board membership

of executive management at this moment. Well, look, I think something I've learned over a long time and working with boards, it's never been more important and the importance to have on your board people with all different disciplines. So you just had Melon earlier talking about the importance of cybersecurity or those that have regulatory experience, etc. So it just goes to show it is a job that everyone really

does need to take seriously. You sit on the board of JP Morgan, of course, one of the only big bank with still the same CEO from the crisis era with still that management oversight, And I'm interested is what you'll take is from a banking perspective of these three almost overnight collapses and what this means for the sector

in general. Well, you guys have been reporting on it, and I think there'll be you know, there'll be many quarterbacking events taking place after that, and certainly from a regulatory side, obviously two hundred billion and what changes as a result of that bank that's size versus the systemically important banks management decisions you just alluded to that, And then I think it'll be interesting the discussion about the role technology played and whether it was in the quick

dispersion of facts and things that were not true some of the same technology that really Silicon Value Bank brought to life. And then I think at the end of the day, it says a lot about really what we all have to do now with the venture cap community. And I think it's going to make difficult for some parts of VC world that it was already difficult for, like women backed vcs right, which was it's only maybe two to three percent of the whole community. Now it's

even less. And what this will mean is more conservative and people then tend to do business with who they know, and so networks typically then have less women in them. So I think there'll be unintended consequences like that to come to. It's interesting to bring that up. Twenty four hours ago, we had someone on saying that, but also pointing out that for many founders, diverse founders from minority groups, women,

it was Lincoln Valley Bank. They would often write the first check you had a story career, IBM, you know the world of technology. Do you have any experience of working with SVB and what their role was in the Valley? Well, certainly worked with many in botmany companies right that they had certainly helped launch. And by the way, there are

other VC firms. I mean another one, a great one, rethink, is one that invests in just women, the largest woman owned VC firm in this country and women only investments. So I think you know, my experience has been positive and that there have been many, many good companies that we acquired. It appears the world of technologies under duress at the moment. There aren't many positive headlines. Do you

share that assessment? Well, look, I just I think when you say it's under duress, I think to paint it all in one brush is probably not exactly right, okay. And I talk a lot about it in the book and that everybody eventually has to have a chapter two. And I think that's what you see happening with a lot of companies we've had chapter two, three, four or five six. Yes, so I certainly learned that point of reinvention and learned out that balance of growth and efficiency

that has to happen. And so to me, this is just this chapter two. And you know, it can be very dangerous when somebody attacks your profit pool as an example, but this is a bit of growing pain, and I think that's what you see happening in parts of the market. Jenny. There was one opinion piece that I saw that caught my attention for more reasons than one, and I wanted to get your perspective on some of the criticism that has been leveled at so called diversity well destruction on

the board of SVB. What do you make of that as someone who basically thinks a lot about diversity on

boards and inexecutive management teams. Yeah. Look, you know in the book Good Powers you saw with its name was, which I actually named in retrospect, actually have a whole chapter I dedicated to something called good Tech, which on one hand talks about assuring new technologies in safely like AI like you've had a lot of discussion about chat GPT, and on the other side of it is this point about I don't even use the word diversity, as to me,

diversities a number. Inclusion is a choice. And I always said I lived exactly at the intersection of society and business. I need a good workforce. I authentically believe a diverse workforce is the best workforce that gives you the best products. And so I don't view this as anything other than doing what is you know, yes, right for society, right for a community, but right for my company and for the products and the customers. So I think it's a

shame to misplace that focus on it. To me, it is all about having a better company, and it's about culture. And at the moment we look at the headlines coming from Meta having to lay off another ten thousand, talk to us a little bit about your experience and having to pivot business models having to lay off people. What do you think can be done by mocksluck about Look, first, I would say whenever you have to lay off people,

it is a very hard thing. So put that point aside, because these are real people, real families that you impact. No one likes to do it. But I think the other thing, when you know I just mentioned about this is act two. For many companies. People often think about what they do. The how they do their work. I read a lot about this in the book is just

as important how they do it. So in other words, you have to be more efficient, you have to do things faster or consumerism, But then also how you do it with the workforce, I think is probably the most important thing. So how tough things are done. And again I almost think that's a subtitle of the book, which is about doing hard things, but doing them in a good way doesn't mean you don't do it. I mean, Caroline, what jumps out at me is how quickly conversations change.

Ten days ago we're fixated on artificial intelligence SVB happens no one utters those words and the health of the tech sects to get it's called into question what do you, I mean, where do we go with this? Carrot? I know the focus has to return on ultimately business models. On a time where interest rates go higher, you have to do more with less. Do you pivoted IBM to focus in on artificial intelligence? On the rebirth of cloud? What do you make of this fascination with chat and

the hype cycle that was around it. Yeah, look, I think what it calls this is not going to be a technology issue. This is going to be a trust issue. So I feel like I've learned so much over the

last fifteen years. They're trying to bring AI into the world, and there's all different kinds of AI, and I'm a little bit afraid this gets all brushed with one brush of chat GPT, because while it can do some wonderful things, as I think we all already know, you can get things that are faction correct, but they sound authoritatively correct. So to me, what I'd love to see now, it's wonderful that everyone's thinking about AI, because I think it

can do so many good things. I just don't want the downside now to push it aside, which tells me that anybody both using it, anybody or building it to think about the up and the down at the same time, versus let's look at all the good things and a bad things to take care of. This would be different now bring it in thinking about both at once. And so you know, there was such an uproar on education around chat GPT. As an example, kids can cheat on

their tests. I would have loved even a small thing at the same time to have come out, which was an app. I said, you know this might have been created by chet CHPT. Now people are building those now and there's discussion of watermarking. But the point is that people understand what it's good for, what it's not, how it's trained. I mean, look, it's trained by the good

and bad of humanity. Now there's other kinds of AI that you can train very carefully, so they're such good and so this is now about my view building trust in that technology so we really get its benefit. We brought the discussion back Caroline our special intelligence just for a minute. Jinni remedi former CEO and chairman of IBM, thank you so much for your time and coming in and make sure check out Jenny's new book on leadership called Good Power, Leading Positive Change in our lives, work

and world. Now coming up more on Silicon Valley Bank, the fallout from a major player in the tech startup world, and how vcs are dealing with what to do next. Tray Stevens from the Founders Fund joins us here in SF this is bloom book. Over the weekend, all the firms, including US, we had put together plans to lend capital from our balance sheets to help these companies make pierol. You know, I think that would have at least over the crisis for a couple of weeks, while the right

you know, solutions were in place. That was General Catalyst CEO hem On teenager. They're talking about his firm's plans to provide funding to portfolio companies over the weekend and beyond, and as the Silicon Valley Bank meltdown was unraveling, other VC firms were also quick to react to protect themselves and protect their portfolio companies. For example, Founders Fund and I'm delighted to say Founders Fund that partner traced EVENS

is here with me on set. Let's go back to base six S. When did you realize something was wrong potentially with Silicon Valley Bank and take action. Well, I think it goes back for you know, over a month where some of the news started coming out about a

potential issue with the balance sheet at SPB. Wednesday night, obviously there was the announcement about additional funding, and coming into Thursday morning, I think there was this recognition that, you know, things were going to move very quickly, and it's it's really hard to overstate just how quickly things

moved in those first few hours of Thursday morning. So Bloomberg had reported that found his fund had pulled its own operational cash I suppose from Silicon Valley Bank, and then days the consideration around what port photo companies should do. What was the decision there the course of action that found his fun fault best. Well, the first consideration is

the fiduciary duty to our LPs. You know, we wanted to be in a good position with our with our cash, so we were doing the right thing for those those investors, and then also doing as much as we could on the portfolio side of things to shore that up and communicate that we thought there was some risk that they should be looking into the communication trade. It's such a difficult balancing act when Silicon Valley is ultimately a very

small space. What do you make of the criticism and the warry around social media and the amplification of the fear come Wednesday Thursday? Sure, I mean, I think obviously there's a lot of as you say, communication risk that you take in, you know, making sure that your portfolio companies are aware of what's going on, that they have the information they need to make the best decision possible.

You know, certainly, even on our end, it was about prioritizing the stack of our portfolio, like how do we communicate with as many of them as possible to give them a fighting chance. And I think our biggest regret in the whole situation is that we weren't able to talk to all of them before the situation and kind of already unraveled by the time the SBB CEO gave his pressference at twelve thirty on that day. Any regret around just how SVB was seen in that moment, you know,

I don't. I don't think any of this was about like a judgment of SVB. Obviously, they've been a great partner in Silicon Valley for a long time, and we have close relationships with many people at the bank, and you know, I think for us it was about being intellectually honest and having a conversation about, you know, what we needed to do to do the right thing, as I said, for our LPs and for our portfolio companies kind of by the amount of exposure that they had

to this as well. And you know, these people aren't responsible for, uh, you know, what happened at SVB and they just had to do the right thing to make sure that they can make payroll. As Hayman said in the video that you guys played at the outset, Yeah, interesting him on he's one of the collective event castlests that hope they can continue to do business specific and Valdy Bank and its reincarnated form to just found a

share that hope. I think we're certainly open to continuing a relationship with whoever ends up being the right player and partner in Silicon Valley moving forward. Obviously, the biggest concern at this point is that it seems like there's been a sort of a bifurcation that's happened as a result of the response of the federal government, where you know, there's like regional banks on one side and you have the you know, the big banks on the other side.

And making sure that our companies are diversified to the extent that they're going to have a good treasury plan that protects the deposits. Let's go back to what you're focused on. In some sense, defense and defense related technology. Is all of the energy in that subset to just stop now? Or do you continue writing checks? Do you continue to see rounds in that space and to take it up. I don't really perceive that there's going to be any shift in the way that we as the

fund to think about making investments. Certainly there's macroeconomic headwinds that we've been facing for the last eighteen months or so, but the government continues to be a customer the you know, the world must go on. And I think for the sectors that I'm personally most interested in, kind of these, the intersection of technology and strategic industry, these things are going to continue largely as they as they have been for a long time. Of course, your execution chairman co

founded and Jewel Industries. You're also on the board of Flexport, these critical infrastructure plays as well. I'm just interested in your experience with government. I mean, your career was started with a congressman. How do you think government has reacted. Are you specifically asking about SVB or to the changes in the tech ecosystem a better both ultimately to come in and support the situation, whether it be from the positives perspective and indeed just ultimately the view of government

and technology at large. Yeah, well, I think the most inconvenient thing about the situation last week was actually the name of the bank. You know, it got instantly politicized. I don't think this was political at all. I think the government did what they need to do to protect and shore up these smaller regional banks and to ensure that there weren't any further runs. And so it seems like they acted quickly, they did the right thing, and hopefully that stability is going to play itself out in

the coming weeks. Because it's your your area of focus. What is stopping the public sector the military from adopting the best in technology, the best in class technology from Silicon Valley in the other areas you look at. Sure, I mean I don't necessarily think it's about geography. I would say most of the best technology companies working with the government are not based in San Francisco. But you know, the primary thing that's been problematic is not policy. It's

not the authorities and the procurement system. It's just culture. The government hasn't been as forward leaning and understanding that they need access to the best talent possible to build things that are relevant to the fight in the future. And these are largely software problems, and I think most top talent software engineers are likely to be optimizing ads um and not sitting in concrete basements building you know the future of the DoD well. Here's to building the future,

even in this current scenario. We want to thank you so much spending time with us. Found as fun partner, Tray Stevens. Uber left, another gig economy company scored a victory after a California appeals court upheld the current law classifying gig workers as independent contractors instead of employees. Bloom They Joel's Rolls and Black covered the case. Joel explained

the appeals court decision. Yeah, the appeals court decision is actually it's complicated, but it's the upshot is that the voter approved initiative, that the Right Healing Company's bank roll in twenty and twenty is voter approved, and there's there's nothing, there's nothing to do about that. That's that's that's the ruling in the nutshell. Okay, Ultimately, is there any further argument to be had, any further changes that need to be made by Uber and Lift or is business model

free to run? The business model is they're arguing, and the ruling says that that's free to run. There will be other challenges there have been in other states and worldwide, including in London. So it's not it's not just over but in the state this is a this is a significant ruling. I haven't heard back from the AG yet, the Attorney General who has sued Uber over this and lift. It's not unclear if they're going to appeal to the State Supreme Court yet. They may be to God. But

to clarify job, that is an avenue open to them. Technically, that is that's opening to them. I think it's a voter approved initiative. Just to step back for one very brief moment, the Ryan hailing companies paid two hundred million dollars in the ad campaign to initiate this proposition to do an end run around state lot and they got. With all that money, they got the initiative passed. Right, I vote the initiative and there's not much to do about that. I thinkally goal you jure great to have

your analysis. We thank you. Joe Rosenblatt, is he waits for that call from the AG meanwhile, that does it From this day two edition of Bloemberg Technology at twelve ET nine AMPT. Yeah, and you can recap day two on the podcast iHeart Apple, Spotify, Bloomberg, wherever you get your podcast Carrot, and let's just check in on these markets, because once again we are ripping higher. This is a story of even though inflation runs hot head, the SMP,

the NASDAC on the highest side too to nes track it. Inflation, the Fed all impacting the technology sector. This is Bloomberg