From the heart of where innovation, money and power collive in Silicon Valley and beyond. This is Bloomberg Technology with Emily jay I rememerly Chang in San Francisco, and this is Bloomberg Technology coming up in the next hour. Well, it could have been worse. That's what analysts are saying about Netflix results. Shares jumping in late trade despite losing almost a million subscribers could add solve the company's problems.
We will discuss plus Twitter wins for now. A judge grants the company's request to fast track its lawsuit against Elon Musk. The trial now scheduled to start in October. We'll explore this particular judges record and what it tells us about which side has a better shot. And as a major crypto lender and hedge fund collapse, is regulation the answer? The head of US policy of coin Based joins us to talk about the way out of the
ashes of the crypto crash. Let's stay with Netflix now, I'm bringing down morgantin, your portfolio manager at sent Novis Trust. So Dan, explain this to me. Why are shares up if they've still lost almost a million subscribers. Well, it's kind of a confusing report, Emily, isn't it. I mean, if you think about it, it's kind of a sigh of relief, I think by a lot of people coming to the numbers. I mean, obviously, the projections going into the third quarter below expectations. In terms of number of
new subscribers. They're saying they're going to add a million. The street was looking for one point eight million. They did lose less, right than expected in the second quarter. I think there were a lot of estimates. Some people are saying as many as two million. They came in
losing seventy thousand. The other thing that's kind of confusing to Emily is that if you look at their guidance going into revenues and earnings for the third quarter, they are also below consensus, and yet the stock was up. And the only thing I can think of, Emily, is that they're kind of addressing a lot of their issues, right.
They talked in their shareholder letter about how they're going to address the issues with all these people a hundred million people you know that are using the service for free um and they talked a little bit about free cash flow and various other things. So I think maybe people are just saying they're addressing their issues. It was as worse as we thought, and hopefully things will get better in the future. And that's how we have to
leave it because the stock is up. Let's talk about this crackdown on password sharing, because let's be honest, Netflix has been giving Netflix away for free for a while to a lot of people who just haven't paid up. If they cracked down on the passports, how big an impact do you think that will actually have in getting
some of those people to pay up. Well's teteresting him because in the shareholder letter they mentioned they're going to test two approaches in Latin America and they're going to charge to nine a month, and they're going to try to work something to try to to get these able to start pain. So I'm kind of curious to learn a little bit more about that. That seems pretty low to me, right tone a month. I pay close to twenty dollars a month for my Netflix subscription here in
the United States. But so it's gonna be kind of interesting to see how they roll that out and put that together and and try to monetize these people and bring them in. How So, I think we need to just learn a little bit more about how they're going to do it. But that's a huge number, a hundred million, So advertising be the answer to Netflix's problems, you know, Emily, it's kind of interesting because I'm curious to see how that's going to play out. Right, they signed the agreement
with Microsoft to help them last week. On that. I'm just wondering. And I could ask you, because you're a big user Netflix, if they got to the point where they're offering an add you know, streaming service and there's not that many ads, maybe it's every fifteen minutes, which is you'd be willing to maybe just say, hey, I'm not going to pay the fifteen twenty dollars a month and just go straight for the free ad streaming service.
So that's interesting. And then the other thing component is they have two or twenty million people using their system right now. How many people do they add to this new ad streaming service and do they start competing against the like so let's say a Facebook or Google in terms of garnering all this revenue through advertising. So I don't know how that's going to come together for them.
They're gonna let us know more and they're introducing some new services, I guess in two thousand twenty three, So it's going to be interesting to see what happens with this new ad streaming Netflix right. Time is precious, and so is money down. I mean, I think i'd have to look at the numbers and also the ad experience. You know, what kind of ads are these? How long am I watching them? Are they pleasing? Are they really tailored to me? The thing is, and and this point
has been made. You know, the companies that are brought up as competitors Disney Plus, m Hulu, Amazon, HBO. Disney Plus isn't necessarily a substitute for Netflix, is it? What Dosney Plus is interesting because they have about a hundred million subscribers, are the largest competitor next to Netflix. They're targeting about two hundred and forty million subscribers by two thousand twenty four, which seems like a really big number
for them. But I think you're right, Emily, Disney Plus seems a little bit more different in terms of their content than what we find on Netflix. You were talking earlier about the various uh, you know, series that they have and how people get hooked on them. A little bit of a different component as Disney has that huge library of movies and content through all the years of
Disney production, so it is a little bit different. But there's no doubt that Disney in terms of number of subscribers is the closest in terms of Netflix in terms of their having the you know, hundred million, which is pretty close to two or twenty million. The rest of the other players have much less subscribers. So here's the other thing. Is the return on content space spending, paying off or dropping off. If Stranger Things is costing reportedly
thirty million dollars an episode, is that worth it? Yeah? It's interesting, Emily. You look at their content expense projection for this year, it's about seventeen point nine billion, which is pretty much in line with they projected last year, which is around seventeen billions. So it seems to me like Netflix is getting a little more cautious in regards to this attitude We're just going to spend tons of money, create tons of content, and we're going to get the
subscribers and we'll be able to pay for it. Seems like they're starting to pull back a little bit in regards to their content budgets. And expectations. It's starting to be a little bit more careful on margins and so forth. So you bring up a good point, where do you just keep spending and spending and spending if you're not getting the subscriber growth because your subscriber growth is negative. Doesn't make sense to keep spending more and more money
on content. You need to bring it back in a little bit and kind of refocus, and it appears that they're starting to do that instead of this growth at all cost model, which is what they were doing in the past. All right, well, we're going to continue to digest these Netflix results to have a bit more later in the show, Dan Always get to have you here, Dan Morgan, Novist Trust. All right, coming up, Twitter gets the green light to take Elon Musk to court and fast.
We will talk about what's next in Twitter v. Musk with a Columbia law professor and our very own Kurt Wagner, Mr. Is Bloomberg. Round one goes to Twitter. The company was granted its request a fast track its lawsuit against Elon Musk as he attempts to walk away from the fort four billion dollar deal. Delaware Judge Kathleen McCormick set a
five day trial to start in October. For more, we're joined by Eric Talley, Columbia Law School professor and faculty co director of its Millstein Center, along with our very own Kurt Wagner, who of course covers Twitter for us. So what actually happened in court today? And by in court I mean virtual corp? The judge actually has COVID, Yes she does, so, I was listening on the dial in the public die Island, actually, which felt very interesting to listen to arguments that way. But both sides kind
of presented their case. Obviously they had already submitted written, um, you know, elements to this. The judge took a little bit of time to review and think about things and then and issued a pretty quick verdict. You know, she said, based on the evidence, based on the arguments that had been made, I feel that it makes sense to speed
this up. Not quite as fast as Twitter wanted. They were hoping to do a trial in September, but she still thought that, you know, the longer this thing drags out, the more chance there is for damage to Twitter's business and brand. And as a result, she said, we should do this in October. Versus the Musk team wanted to wait all the way till February. Now, Professor Tally, you actually know the judge here and know her record well. I understand she's a seller friendly judge, or at least
has made seller friendly decisions in the past. What can you tell us about her? Yeah, I think she's largely right down the middle in terms of her predilections. But she's very good. She works harder than just about any judge I've ever met, and it's extremely smart. Now, the thing to remember is that the Delaware courts have seen a fair number of these cases in which buyers get cold feet and try to walk away, whether it's because of COVID the financial crisis. So in many ways, this
is the most recent chapter. And Chancellor McCormick actually had one of these cases that came up during COVID about a year ago, and she did hold for the seller. Basically told the buyer, you know what, You're gonna be required to go forward with this transaction by the company that you're now trying to walk away from. And I don't even care that your financing has fallen through because you sort of made that happen. You sort of engineered
or sabotage your own deal. So during the argument today, there's a lot of argument from Twitter's lawyers about whether Elon Musk had similarly been trying to sabotage the deal. Now we haven't gotten to any of those matters yet. The key question is whether this deal, this this litigation was gonna get fast tracked or put on the slow track.
And we're definitely on the fast track. While Twitter lawyers didn't get exactly what they were hoping for, they ended up missing it by only about a couple of weeks, and she pushed what they had hoped to be a September trial into October. So largely one would chalk this up to a victory, at least as of today, to Twitter.
So the question is how big a victory. I mean, you talk about precedent here, but was that other case of forty four billion dollar deal, and did it involve taking on Elon Musk Unless there are cake decorating companies that are worth forty four billion dollars, No, it wasn't. This was a small deal. It wasn't even a publicly
traded company. And so there is a kind of an interesting question about whether when the stakes get ratcheted up like this, Chancellor McCormick is similarly going to be unsympathetic towards a buyer that wants to walk away. However, Uh, this particular deal, and everyone knew this because it was out there in the public domain. Uh, you know, Elon Musk went after Twitter. They were a reluctant seller. They finally signed up the deal when he said, hey, I'll
make this a really sell her friendly deal. I won't do any diligence on a bunch of these technical aspects. And only after the deal got signed up did he start to seem to have problems with bots. And I think a lot of people, including Twitter's lawyers, said, you know,
this is a pretext. This is essentially the beginning of an elaborate set of demands that was really intended to engineer an exit ramp for Elon must So one of the key um claims that he made was, oh, this bot problem is bigger than I thought it was going to be. But that was never really in the document itself. It was never in the agreement itself. It's sort of
something that he injected into the picture. And I think one of the key questions that people were looking at today was whether the judge was going to be willing to take a long term litigation approach, which would be kind of a signal that she might be more willing to listen to some of this bought count war, and instead she's fast tracted. There's still gonna be arguments about bots, don't get me wrong, but they're not going to be the sort of blown out thing that Elon must and
his lawyers wanted. You know, the professor makes a really good point. So much has happened you almost forget that Twitter didn't want to do this deal in the first place, and now here we are. What are you hearing from your Twitter sources about what they are going to be doing over the next few weeks. Well, obviously there's a
lot of preparation that will go into this. But I think this, you know, as Eric mentioned, like, this is a good win for Twitter because it shows that their argument is already being well received, right, which I think was the big thing. I think they've already sort of one a little bit in the court of public opinion here. I don't know, I certainly on on my Twitter feed. You know, there was a lot of support for Twitter from their lawsuit. I've I've certainly seen employees seem to
be happy with how the company has handled this. So I think at this point it's about trying to remove a lot of the uncertainty, right because the company has been in this weird state for months where they you know, they say, hey, it's business as usual, but you can't imagine that, you know, you're gonna be putting a six months twelve month product roadmap out the door when you
have Elon Musk covering there. So I think at this point again, they want to do this as quick as possible so that they can get back to doing things like shipping products, doing things like, you know, improving the business. Indeed, um Professor Tally, how do you think Elon Musk's larger than life personality, the fact that he has a hundred million Twitter followers himself. I mean, there's a pretty uh, you know, if if we're talking about the court of
public opinion, Elon Musk has a lot of fans. How do you think that will influence this trial? Well, there's a sense in which it already has. One of the arguments that Twitter's lawyers made today was that you just can't leave this deal in limbo when it may just be thrown into utter chaos if we're going to be going into another year's worth of litigation, and that may be in part due to their arguments about the amount
of damage that Elon must could potentially do here. Now, it's definitely true that that you know, there is this There has long been this kind of question about whether Mr Musk has some sort of I don't know, Elon exceptionalism that wouldn't that wouldn't make him bound to the same rules that applied everyone else. This is an early shot across the bow that suggests that this judge in particular is willing to treat this case just like she
would any other case. And when you've got a deal that has gotten signed up on very seller friendly terms with very little due diligence in what seems like, at least at present, to be a bit of a drummed up reason to want to walk away. Uh, you know that the the musque team probably has an uphill battle to climb here. Uh you know, I think there is a real sense as well that Delaware courts view this is kind of their um look in the mirror moment.
They are widely reputed to be, and they embraced this as the place where sort of grown ups go to to to transact with one another. And if you put something down on paper and you promise it, um, they're gonna hold you to it. And so on some level, yes, Elon Musk has a has a larger than life presence, but that also has a countervailing effect that the Delaware courts might have an opportunity to say, even for this person,
we're going to hold into his agreements. Fascinating. Well, I'm sure there will be many more twists and turns between now and October. Eric Talley, Columbia Law School Professor, thank you, as well as our very own Kurt Wagner, who has a day in Delaware court in October. A newly released memo is raising alarm about competitive practices in Silicon Valley
and helping to shape regulation. An internal document prepared for Mark Zuckerberg by Facebook executives, now released by the House, reveals the company is more worried about threats from its own products like Instagram and What'sapp then threats from rivals. This memo has helped lawmakers put together the American Innovation and Choice Online Act that would curb some of Meta's powers.
Here to discuss Bloomberg's Lee and Nilan who covers regulation in washing too, and so Lea tell us exactly what
was in this memo and why it matters. Yeah, So this memo was written in twenty eight keen by a senior data scientist and economist at Facebook, Thomas Cummeningham, and he actually analyzed the ways in which Facebook's own products compete with each other, So the ways in which Instagram and Facebook compete against each other, the ways in which Facebook Messenger and What'sapp compete against each other, and how
um those were growing or shrinking. And that was really interesting because this entire memo is about how Facebook's own products are really cannibalizing each other and seen as like the biggest competitors against Facebook's main product instead of any rivals. There aren't that many external companies that are even mentioned in this memo, you know, like YouTube gets a very small shout out, Apple's I message gets a very small
shout out. TikTok isn't even mentioned in here, and that was what is so was so interesting to house investigators is it's sort of backs up the idea that Facebook had bought these properties to sort of extend its monopoly in social networking. So what's the impact that this memo could have on pending regulation and impact essentially on Facebook's laws that Facebook is ultimately potentially going to have to
abide by. Yeah, so Congress right now is considering this legislation, the American Innovation and Choice Act, that would prevent some of the big tech platforms like Facebook from self preferencing, so giving advantages to its own products over those of rivals. So one thing that Facebook does, for example, is make it really easy to cross post between Facebook and Instagram, right this legislation would force them to make it easier for other platforms to also cross post to their own
to their social networks. Um, this UH legislation has advanced in both the House and the Senate, but it still needs a floor vote, and so there's been a lot of pressure um in the Senate and for particular, for this to come up for a vote before the August recess and lawmakers sort of leave for the month and then when they come back they really are focused on
the November elections. So this is seen as like the really large and last window for Congress to actually act on the NHS legislation if something is going to happen this year quickly any response from Facebook about this, I mean Facebook is actually the one that handed over the memo to the House in the first place. Yeah, they said, you know this is old news, this is from you know,
the landscape has shifted since then. They do like to bring up now you know that TikTok Is is a very emerging rival, and um, you know they think that there's still a lot of competition in the social networking space. All Right, something will continue to follow Bloombergs Leon Nilan, thank you for that context. Welcome back to bloomber Technology
and Emily changing in San Francisco. I want to get back to our top story, and that is Netflix share still jumping after hours after the streaming giant reported lower a lower than expected loss in subscribers in the second quarter, but the forecast still slower than expected recovery in the current quarter. Ross Gerber, CEO of Gerbert Kawasaki, joins us. Now, Ross, do you like what you see? I know you're a big Netflix holder, but here we are having lost another
million subscribers. Well, yes and no, I mean obviously losing subscribers is not a great headline, but you have to look at it in the context of obviously rising prices in the United States and the fact that they don't have a way to monetize people who don't want to pay, which is turns out about people who watch Netflix don't pay, and that's really why I think people are so bullish. Is the strategy that Netflix is going to be employing to get these people to pay is a two pronged
strategy that I think will be very effective. One is the ad supported tier, which I think is a wonderful opera tunity to address a global market if you're an advertiser and a very engaged audience. So as an advertiser myself, I would definitely put ads on Netflix, and then secondly um from getting some add on sub revenue from the
people who use their mom's accounts. So you know, essentially this is a wake up call to millennials across America that they're going to have to watch ads if they don't want to pay for Netflix or their mom can pay another couple bucks a month. But the days of free streaming are definitely over for Netflix. What's your take on their content spending strategy. Yes, there are huge hits, they spend a lot on those hits, But it seems
like Netflix makes a lot of stuff. Well, when you're serving the world, essentially, you have a huge audience to make happy, you know, so like a lot of content they make is really for niche audiences one way or another that they're trying to serve all throughout the world. But you have to look at it from this, you know, like how much goes out and how much comes in
versus and what they get for what they're spending. And I think one of the things in the report that I found really interesting was the fact that Netflix is now getting to a point where they're amortizing the same amount as they're spending on content, and they used to spend a lot more than they're amortizing, And so what we're really getting out of their financials there's a real number of profitability on the content spend that they have. So if any group of people that I trust spending
content is the group of people at Netflix. They just make amazing content and they have a great team. Now, obviously valuations have dropped out there, and I wonder what you think about M and A could Netflix potentially acquire some you know, new capabilities here. What about a Roku
or a theater chain. Well, I was kind of pushing towards the theater chain idea because I love putting Ryan Reynolds movie in the theater, which I think it could generate a hundred million plus that Netflix isn't going to get and as a user, I would wait another two weeks to watch it on Netflix. You know, it wouldn't matter to me. So, you know, it makes me sad
they're not moving that action. But I'm I'm in the gaming business too, and they're moving towards gaming, and their partnered with Microsoft, which is one of our top holdings in my fund g K and as well as Netflix. So I'm really happy with Microsoft and Netflix moving into the gaming area together. If you look at the way Disney is monetized i P at Marvel, that's what Netflix is really thinking about in their futures. How do we monetize our i P better? How do we get more
revenue dollars per user? Maybe it's live events, and we saw that with the Netflix comedy specials, which were actually live events that Netflix sold tickets to but then put on the platform as well, so I think that's really the thinking they're Um, we're a very big company with lots of subscribers, and we still want to grow, but
there's a huge amount of revenue and profits. We have a tapped from this audience that they're really focused on, and I think that approach is really, you know, attractive to me as a sharehold. I also want to ask you about Tesla and Twitter. I know you're a big Tesla holder. As I understand it, you held Twitter until Elon must decide and he wanted to pull out of
the deal. Now we're seeing this judge fast track the trial as Twitter wanted them to do, and there are certainly signs that this Delaware court could force Elon Musk to do the deal. What's your take. I'm not a lawyer, so I just want to say I have a pretty good understanding of law. But but I'm not a professional lawyer. But my take on this, and I've spoken to many legal people about this as well, and my own experience in watching mergers over my life, is that Elon has
made a big mistake and this is a mess. You know, there was a material effect on Twitter and you can't deny it, and pulling out of this deal has severely damaged Twitter and and you know, their future, so I you know, I think Ellen is at risk to potentially losing billions of dollars and damages. But I don't see a court forcing a person to run a company they don't want to run. I mean, that's not really the
solution to this. Twitter has been damaged, and the question is whether they find that damn is to be Elon's fault or not because of the information that he received from Twitter, which no question was questionable. But in my mind, they had a merger agreement and and he breached it, and it's going to be a costly encounter for Elon. I think doesn't damage Tesla too, I mean, doesn't make you concerned as a Tesla shareholder. No, it's a real positive for Tesla that he's not going to be the
CEO of Twitter. I mean, you know, as much as yet he's not going to be the CEO of Twitter. I can tell you that. I mean, he doesn't want anything to do with it. That's the bottom line. He's gonna lose billions of dollars, which he knows very wealthy man, so he'll survive. But from a Tesla perspective. Tesla's in massive growth mode right now. I mean, it couldn't be a better environment to sell electric vehicles, and they got two brand new factories and ramp mode at the same time.
His focus needs to be on Tesla right now because the next twelve months, the eighteen months are the most consequential months for Tesla's future that I've seen in the eight years i've been an investor in Tesla. So so I'm I'm you know, happy that I mean, this is still a waste of time, and it's still distracting, but I'm happy he's not gonna end up being CEO of Twitter, and hopefully he'll learn his lesson and really focus on what he's done great, which is Tesla, and and I
think that's what he's learned. Well, stranger things have happened, Ross, and I'm going to keep using that pun. Ross Kerberg or Wakawasaki CEO. Always great to have you, Thank you, Okay. Coming up, calls for clear crypto regulation are getting louder, but SEC chair Gary Gensler says there are laws in
place and crypto platforms aren't coming forward. Well on that, next, Mrs Bloomberg there's a lot of non compliance, meaning like if you raise money from the public and and that public is anticipating based on your efforts, UH, some profit that comes into the securities laws. We at the SEC are going to do what we can. But right now there's far too many of these platforms that haven't come in uh to basically comply with the law and register.
When you look back, there was very little self regulation. Uh. There was inane risk management where companies took massive leverage, took asset liability mismatch, which means they had short term deposits they lent them out long. I mean, those are the two ways people always go bankrupt. Galaxy Digitals, Mike novograts they're saying crypto companies might have needed to better self regulate. He was at the Bloomber Crypto summer earlier in New York, along with coin bases out of the
US policy. Cara Calvert, who joins US now to unpack it all, also look a couple of competing narratives here, Kara. One that there is regulation, this according to the Chair of the SEC former Chair of the SEC, but that companies aren't listening, aren't coming forward. What do you think
well a coin base. We actually have really founded ourselves and pride ourselves on and on being compliant on being the trust and most secure, and so we are regulated by more than forty two state forty two state licenses. We have a bit license, we have a trust charter, so we actually view ourselves as very well regulated. We are regulated at the federal level by CFTC, by the SEC.
We have a dormant broker dealer license. Two of them actually were regulated by SINS and so we actually think that there is a regulatory framework in place that is that is pretty effective. But we think really what we need to do is make sure that we modernize those rules and bring them into into a space that can really and truly understand the technological capabilities of blockchain and
digital assets and actually help consumers achieve and understand those benefits. So, if those rules were modernized, do you think that the spectacular crash we've just seen could have been avoided? The collapse of you know, a major crypto hedge fund, a major crypto lender, could have been avoided. I think it's difficult to predict what may have happened, but I do think that there certainly if we had clear rules of the road for all different types of the all different
companies engaged in the crypto ecosystem. We certainly would have more clarity where it comes to disclosures or um certain requirements on how on you know, how you may address different business risks or different needs. What we saw through the recent volatility is that the issue is really a
credit problem, not a crypto problem. And so what we're hoping for again is these consistent rules that will help consumers understand what they're getting into when they have crypto, and that you have businesses and and innovators and new projects that can come to the table and instead of hiring a team of lawyers to comply with what can be considered some vague rules, and so they can go out and innovate and create the next big thing for consumers.
There's a crypto bill being pushed by Senators Lummis and Jilla Brand. I actually recently spoke with both of them about the bill and why they think this could be the answer to take a listen to this from Senator Lamas. The bill in one piece, as a total bill is more likely to be deferred until next year. Uh, it's a it's a big topic, it's comprehensive, and it's still new to many U S. Senators. Do you like this legislation and do you think it will pass? I'm so
really glad you yus this legislation for two reasons. One, I'm from the great state of Wyoming, so i hold all the work that Senator Lamas is doing very near and dear to my heart, and so does my grandmother, who turns on her and two and still lives there. She she very much believes in it. So I really appreciate Senator lemass work for the Cowboy State. Second, this bill is by far and away the most comprehensive, detailed.
Really the intellectual rigor that was put into building it is really impressive, and I think it will create very much a foundation for for future legislation. And I think she's right that at the end of the day, legislation can take a very long time to get across the finish line. And this is very complex. Her bill includes CFCC juristiction sec juristiction, tax reform, it includes UM sections on stable coins. It's very complex and putting this puzzle
together will take time. A lot of different committees leadership, It will take the administration. So once we get all these pieces together, I do think we're set up for success in the coming year. Coin Base is very much aspiring to be a global company, and cryptos, you know, certainly a global market. Are other companies, excuse me, other governments doing this better than the US or are they ahead of the US on regulation? Some of the countries actually are, I think ahead of where the U S is.
And part of that is is by just by by nature of the fact that they may be set up with a with a single regulator, for example in the UK or in in this instance of EU, they're actually
putting forward a very comprehensive approach to digital assets. We're seeing additional work in India, in Singapore, and Japan and Australia, so they're a lot of different countries that are coming to the table and working with stakeholders and industry participants and consumers to understand what the impact of digital assets are.
I think that's where we need to get in terms of the United States, is really creating a rulemaking process and going through a regulatory process that's transparent, that is engaging stakeholders. It's thinking about both retail and institution and really how we can move for in a way that's really includes all of the different viewpoints. That's what we're missing in the United States right now. Alright, Coin based head of US policy Karat Calibert, thanks for giving us
your view. In this week's Teconomics, Controlling a computer with your brain. This might sound like something out of a sci fi movie, but the technology already exists, and for the first time, a brain computer interface device has been implanted into the brain of a US patient. Sanchron is the company that makes it, and its founder Tom Arksley joins us now with more So, who is this patient
and why did they decide to do this? Tom. We're not talking too much about the patient, Emily out of his respect for privacy, but I can say it's a patient that has a severe paralysis due to a LS and he is not able to use his hands, he's not able to speak, and he depends on assistive technologies to communicate with his family and friends, and he's looking for a way to improve that capability. So how will
this implant help him? The concept with a b c I is essentially the idea that we have become dependent on digital devices to engage with the world that there's a part of the brain that controls our fingers. We use our fingers to do point and click. And if we can go straight to the source in the brain that controls the intention to do point and click, put a sensor in there. You can decode the information out of the brain and then control point and click without
the need for your hands. Do that comes ditically from the brain. What are you hoping to learn from this patient's experience? This has been a long journey the we became the first company to get a IDEA approval from the FDA to conduct the study of a permanently implanted b c I. We're still primarily focused on safety, but we're now starting to test out the how we measure efficacy.
So the FDA has publicly stated that it's not obvious how we would quantify the effectiveness of the b c I, and we're starting to test out some of those parameters with a view towards preparing that packet for FDA approval and then going to commercial launch. Now, as I understand it, your technology is ahead of what Elon Musk has accomplished so far at Neuralink. How how much farther ahead, and how is what you're trying to do different than what
he is trying to do. I would say we're at the beginning of a renaissance of brain science, and I think this is going to be a huge problem that's solved for many, many patients, and there are many ways to try to solve the problem. The way that we're doing it is going into the brain through the blood vessels. Were on a particular path with FDA, and we've been able to leverage decades of knowledge around safety of leaving devices in blood vessels um and the way that we
can expect the body to react to that. So it's a different approach. It's a big problem, and I think there are going to be many approaches needed. But we're excited to be finally getting into the clinical stage in the US, after you know, five years of discussion with FDA and demonstration of safety and testing about our technology. So who do you imagine we'll be doing this in the nearer term future and in the longer term future. Is this something that you see anyone opting to do well?
I think paralysis is a massive problem. We probably all know someone who's lost the ability to use their hands, strokes, spinal cord injury, als, muscular distribute multiple sclerosis, um many condition and make our body ineffective while our brain is still working. So our big focus is to show that this technology is effective for the for a patient population initially, and I think the way I think about where this technology is going, it's going to be something like lasic.
It's an elective procedure. It helps you engage with technology more, you reconnect with the world, you overcome physical disabilities, and you re establish a digital um digital your digital world. So you think that in the future, putting a device inside your brain will be as easy and simple and desirable as getting lasic eye surgery. Well, lasic eye surgery is a minor procedure, still a laser on your eyeball. It comes with risk, and it takes a couple of hours.
It's in a day procedure unit. That's the type of position that are putting in stents and pacemakers are using the same technology that would be putting in a brain computer interface if it goes through the blood vessels. So that's a cat lab and they thousands of them across the country, tree with many many physicians who can perform
the procedure. It's a day procedure. It's invisible to the outside world, and it helps you reconnect and it offsets our you know, all of the things that come with the human body that can fail for a number of reasons. Absolutely fascinating. I understand you've done this a handful of times in Australia to date, but your first US patient now has a syn chron brain implant. We'll we'll keep following your progress, Tom Sinn Chrong founder Tom Oxley, thank
you for joining us. That does it for this edition of Bloomberg Technology. Don't forget to check out our podcast. You can find it wherever you get your podcast. As always, I'm Emily Changing in San Francisco. This is Bloomberg