From Marhart where Innovation, Money and Power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hide and Ed Ludlow.
I'm Caroline Heide a Bloomberg's World headquarters in New York.
Ed Ludlow is off this week.
This is Bloomberg Technology coming up in the next hour. Wall Street eagerly awaiting in videos earnings due out tomorrow, will we get confirmation that shares can meet the sky high expectation set by the boom in artificial intelligence? Plus Apple loyalists, well, they're making a U turn on the Vision pro, some returning the device to get their thirty five hundred dollars back.
So as the headset truly the future.
And Bitcoin it climbs for four straight weeks, which means a record high could be in sight for the largest digital asset. Will have more this hour, but first it's checking on these markets and look just maybe some profit taking ahead of another big week when you're coming to the earnings expectations. S and P five found it actually below that five thousand dollar level we've had a run up in February. Are we going to be selling some
of that fact into the second half? Nasdaq off by more than a percentage point.
Is tech get sits the most?
It's interesting that I shine like some of the Chinese tech stocks that traded here in the US off by almost two percent. Look the riding to the rescue in the mortgage area, in particular the cuts to the mortgage rates, which are meant to be propping up the property sector. Not enough lookewarm response, and certainly the Chinese sector in terms of tech also exemplifying that.
Move on, have a look.
At so many individual movers and what's happening in crypto. Bitcoin, as we said, is marched higher for four straight weeks. We're up twenty one percent over the course of this year alone, and it is notable that we're almost at that fifty two thousand dollars level some balls some tech charts when you're starting to signal that we could eclipse that sixty nine thousand dollars handle we've had in the past. Move on and have a little look at what's happening
in the world of individual movers. And as I say, well, on the global founderies part, we're actually to up two point eight percent. One of the tech outperformers of the day. Why well, because they seem to be getting yet more funding from the government, yet more movement towards supply chain here in the United States and some building in Malta in particular. So we're up at fifty to four dollars eighty six Trade desk, pulling back on what was a
rampant rise on Friday. Numbers outperformed on the Thursday night. We saw really earnings flourish for this particular advertising company, and well they're just taking a little bit of profit today, having risen more than twenty percent on Friday. In VideA also sings some profit taking. In fact, chips across the board. We wait and we watch what will happen tomorrow when we get those earnings. I'm so pleased to say that our next guest can really dive into the world of
those stocks, in particular when it comes to video. Let's go to Multi Tetaman Global Cio Nancy Curtain. Nancy, it is great to get your perspective when you've got such an amount of money under assets sixty seven billion dollars and you've really seen round corners when it comes to AI, are.
You thinking we'll sell the news tomorrow? When it comes to Video.
Well, look, Caroline, first of all, lovely to be back again. You know, there's seven hundred and seventy one companies and now I've seen this week, but there's really only one that matters, isn't that? And that is in Video of course tomorrow after the close, and there's huge expectations built in. I mean, the stock is up nearly fifty percent, a little bit of correction today, but the stock is nearly up fifty percent, you know, nearly eighteen times over the
last five years. So it's been on our roll here two hundred and thirty percent last year, and of course last week it edged out Amazon and Alphabet in terms of you know, a size at one point eight trillion,
expectations are high, Caroline. I think probably they'll deliver. Who knows, really, I have no insight into that, but what I can say is the demand for in Vidia GPU chip seems insatiable at the moment, and I think it's going to be more about what Jensen says about the outlook, the growth and the product lineup as opposed to what he actually delivers in the earning.
Are you anticipating that really?
In Video as a winners takes all kind of scenario or do we see catch up with other chip makers able to make inroads into GPUs.
Well, look, anytime you have a market that's projected to grow eighteen times over the next ten years, where in video's ghost margins or seventy percent, you're going to have competition. And at the moment, AMD and Intel are producing chips that bit rival in video, and of course Jensen calls them the frenemies. Who are those Microsoft? Meta, Amazon? They're all developing accelerator chips as well. But look, in Vidio does not stand still. They continue actually to bring out
a lot of product releases. You know, we've got the H two hundred, We've got the so called Blackwell code name Blackwell, and of course we have the X one hundred next year. And in each of these what we expect is to see greater energy efficiency, more processing capability, and lowering costs as well. And this is going to be all about the volume story heading forward. But you know, don't write off in video. They have a pretty strong competitive mode face it. You know, in Vidia is more
than a hardware company. It's hardware and software and tools and development and trainee modules. This is really important for the development community Kuda. This is a very very important competitive mode that they have certainly Visa AMD and Intel, but also in Vidia is cloud and platform agnostics. So that's important for enterprises. If you're developing your large language model, may not want to be just hitched up to one
hyper scale or so. There's a lot of you know, competitive stuff that Nvidia still has in their favorite talk about.
The hyperscalers and talk about what we've seen in terms of alphabet for example, trying to ultimately provide from the cloud perspective. But also when they have been offering the competitor to Microsoft's Open AI and being searched and they're like, have you been impressed with the way in which big tech has been able to ensure that they're not being innovated out by some of them will nimble stotups.
Well, I think it's really interesting, Caroline, is at the foundation level, the layer, the digital infrastructure. This is the home of big tech. These are billions of dollars just a small tech. Yeah, they can't compete, right, But I think what we're seeing is a really interesting trend, which is big tech and small tech working together. The poster trial for that, of course is Microsoft and open AI,
and then you've got Amazon and Anthropic. But remember last week we saw in video reveal a whole bunch of investments in small technology. What's going on there? That's because they need each other. Small tech is not going to have the kind of capital to build the foundation level, but large tech needs the innovation coming from small tech, the training of models in particular complex areas such as pharmaceuticals, drug discovery, autonomous vehicles ARM. You know, this is AI
on the edge. This is AI and everything we carry with us our phones, our tablets, the meters at home, etc. So I think this trend of big tech and little tech working together goes under a bit of the regulatory scrutiny, but it's also a win win for both sides.
Finnasi as Cio. Where do you gain that exposure? You're obviously going to be getting into the publicly traded stocks, but where have you found alternatives when you are looking at the private markets?
So three ways that we're looking to play this. Number one, we've got passive s and P five hundred exposure, thank you very much. It's very cheap so and it means we don't underperform, which is a good thing lots of people did last year. But the second thing is we're adding a global tech manager because we think there's a divergence. You know, last year was all about the Magnificent seven, you had to own all of them. Take a look at this year and Vidia is up nearly fifty percent,
Tesla's down twenty five Hello, So divergence in performance. We also think there will be a broadening in the tech space. We see with asml ARM, you know SAP by way of example, lots of companies are going to participate as they become part of the GENAI journey and opportunity ahead. And we also think, you know, smart technology managers focused on winners and losers can really think about areas that have not been priced in. So those are two things
we're doing the public market. I talked about big tech and little tech. We're going to play that through the private markets because we get exposure to leading, leading venture and growth managers that are investing in this space. And we think that's a phenomenal opportunity because if we get that right, those gains aren't like ten percent a year, they're absolutely enormous potentially. So we think that's interesting. But the final thing I'll say, Caroline is infrastructure. You know,
Jensen Satin Nadella. There's a trillion dollars of infrastructure spend to happen in the digital space. It's not just going to be data centers, you know, fiber optics, towers, edge computing power, and we think infrastructure very interesting. Uncorrelated to the equity markets, has a bit of an inflation hedge. That's quite nice given the numbers we saw last week, and we're under rutting that to about a ten to twelve percent return, so we think that's pretty nice as well.
Talking diversification, i'll see Tinaman Global Cio Nancy.
Great to have you back on the show. Coming lovely to be here. Thank you there.
Meanwhile, let's just talk about one of those Magnificent seven that we talk about less in the world of ai though. Apple's chief operating officer, Jeff Williams is on a reir visit to Taiwan to celebrate the fiftieth anniversary of fox Conn. It's a company that helped build the iPhone empire by assembling those devices to exacting standards in factories across China. Bluwags, Mark Gumman, Justice Now what's happening across the ball with Apple.
And how certain companies.
He wasn't the only executive to go along to this ultimately quite rare event happening in Taiwan. Often executives don't want to be making big, flamboyant trips like this.
Yeah, this is certainly a rare event, but like you said, it's a very important occasion. This is the fifty year anniversary of Apple's most important partner, and I don't even think that's arguable. Fox con builds ninety plus percent of the device's Apple cells, the core of the company's business, and Jeff Williams, as the company's chief operating officer, he really oversees that relationship, along with his top lieutenant, Sabby Kahan,
who's the senior vice president of operations. So the two of them we've reported are in Taiwan for that fifty year anniversary. Tim Cook, who really created that relationship a couple of decades ago when he became Apple's head of operations in the early two thousands, he is not there. Instead, we're told that he sent a video message. And obviously we're all well aware of the geopolitical challenges related to China,
and Taiwan. We're aware of the sort of the little dance that Tim Cook and other Apple executives have to play in terms of managing that relationship in China, and perhaps Cook and Apple felt it was more proper for Cook not to go to Taiwan for this event, but rather send two of his top deputies.
And maybe he's focused in on the sales or in terms of a certain new product that's hit the market with Apple. You're talking about with power on this weekend.
Yeah, the Vision Pro. I mean, first of all, I don't think Tim Cook is boarded up in a conference room in Kupertino at Apple Park because of this. I don't think Apple is at a crisis or anything with the Vision Pro. But we have heard that the vision Pro return rate is somewhere between average and above average,
depending on the store the device itself. We've had some people complain about the bugginess of the operating system, the battery life, and more importantly, the comfort actually being able to wear it for long periods of time. So people have been setting it back for that reason and why that's interesting. Obviously, people buy Apple products and return them all the time, but if you're buying the Vision Pro
at the current price. From the get go, it means you're a very early adopter or a massive Apple fan.
Those are the.
People who typically are not returning your Apple products, and so those are the people doing it this time. That's why it's so interesting. In terms of me, I love it. I'm continuing to use it. It's buggy, it gets uncomfortable from time to time, but it's great for watching video. My hope is that it gets better soon. I don't anticipate the bugs really dropping into a big Vision OS update.
That's the operating system till the fall, but I am banking on some improvements and they're not two distant future.
This is version one.
Mark Gumman, we thank you so much for bringing us all across the board of things.
Apple.
Bitcoin is the exit strategy. It is the strongest asset. So what we see right now is the bitcoin is just emerged as a trillion dollar asset class, and it's alongside names like Apple and Google and Microsoft. But the difference between Bitcoin and the Magnificent seven is Bitcoin's an asset class.
It's not a company.
There's not enough room in the capital structure of those companies to hold ten trillion or one hundred trillion dollars worth of capital.
Of course, that was micro Strategy chairman co founder Sailor there of course pretty long bitcoin. His comments come off Bitcoin's recent rally to fifty two thousand dollars, It's price actually tripling since the start of twenty twenty three, and now what Bitcoin might even retest a new record high
according to some technical analysis. Now consider this, The rally includes four straight weeks of increases through February eighteenth, and according to data compiled by Bloomberg, in the past five years, the cryptocurrency has climbed on average almost fifty percent over three months after following a four week winning run that
would take bitcoin two or seventy eight thousand dollars or thereabouts. Now, let's move away from just price points to get a read on where people are putting money to work in VC and flowing into the wider crypto space. Right now, despite last year's downturn, the crypto focused firm hack vc is actually just managed to raise one hundred and fifty
million dollar fund dedicated to the digital asset industry. Let's bringing Alex pack On, co founder and managing partner of hack vc, and this isn't your first time raising money and you've raised two hundred million in the past. This is sort of a follow on for what part of the ecosystem and what size of companies, what kind of problems do you want to see fixed here?
Yeah, thank you for having me on. Yeah, it was a bit of a challenging fundraising environment now versus prior years, of course, but for us, we're hyper focused on early stage Web three venture capital. I know web three also is maybe a word that isn't as common on this
program than in the last few years. But the thing that excites us the most is basically this sort of duality in our industry where on the one hand, we've been in sort of this prolonged bear market for a couple of years, but we're starting to see all this upswing in terms of prices and surge of interest from the ETF inflows regulatory clarity around the world. But the thing that excites us the most is that fundamental usage
is still growing and still doing really well. So there's millions of people using blockchains and using Web three around the world, and stable coins are a real killer use case, so they're a highlight and our job is to invest and goals to invest in sort of the infrastructure that's being built right now that can catabult these use cases to the mainstream over a multi year period.
Might surprise you to know that we do have the odd person on talking Web three from time to time, and a lot of them in your portfolios or indeed some unicorns that you've backed in the previous ye is Alex. The reason we turn to you is because you do have experience, You have back some winners. I think of Avalanche, I think of what's happening with DYDX, I think of some of the protocols that you've been back in, and indeed some of the intersections of Web three and crypto
and DeFi and ultimately artificial intelligence. How are you thinking about access to compute now when you're backing companies like crusocloud or a jasper AI.
When it comes to application of generative AI, yep.
It's a probably multi trillion dollar topic right now.
So I think broadly, where.
We are in the space is sort of like the mid nineties equivalent of where the Internet was is where we are in crypto today, which is to say, like a lot of users and a lot of things happening, but the experience of using crypto is really poor.
From an infrastructure perspective.
There are it's like slow, it's insecure, there's packs happening all the time, and steps and things like that. And then the one that you're the area you're talking about, which I think is really huge too, is this question about how web three can help support AI and the reverse.
What web three does really really well is it provides like democratized access to when it comes to bitcoin or DeFi, provides democratized access to financial services, and people around the world can get access to dollars and lending and things
like that. But the other thing it does really well is democratize access to resources, right, And so one area that's really interesting in crypto AI specifically is this opportunity to basically provide AI compute like GPUs, you know, hiring the chip stack to AI startups and AI developers around
the world. That's something that blockchains are great at. There's already several multi billion dollar companies in the blockchain industry like Crusoe Cloud which is in our Extended Portfolio portfolio, and core Weave a few others that are basically big. They started as bitcoin mining companies that and they provided
cheap compute, and it was also very climate friendly. You would get compute and entered, you would get energy from like in a very cheap way from Exon and Chevron that was being wasted and you would use it to provide power that would support like the bitcoin ecosystem and mining.
But now a lot of these companies are also providing AI compute and it's democratized, so we can live in a world now, I hope once it's successful where it's not just open Ai and Microsoft that hog all the AI compute and the GPUs.
Some pivoting there and some app pivoting. Alex It's great to have some time with you, of course, back by Sekoe Capital Fidelity, Marc Andreesen. It's great to have some time with you on the new fund, co founder managing partner over at hack VC. Meanwhile, coming up that we're going to dive into all the news coming out of well another KEYVC player, soft Bang. Of course with the Vision Fund, we'll get into that. Meanwhile, watching shares of Ford. Now,
keep an eye on the price points of evs. We're talking Mac three here, we're talking about what's happening with Ford having to cut the cost ultimately of their Mustang version of the EV. And this is all as we see sales really being pulled back an EV, but also the supply really ramping up in terms of inventory, so Ford slashing the price of its electric Mustang Mustang the Mac E after sales plunged.
It's a bluemotechnology.
Time now for talking tech, And first up, it's a coalition of international law enforcement agencies, including the FBI the UK National Crime Agency that have said they have disrupted a lot bit one of the most prolific hacker groups of all time, including shunning down websites the organization used
for some ransomware payments. Meanwhile, EU regulators announced a formal investigation into TikTok's alleged failure to protect miners who use the video sharing platform, which could result in some heavy penalties for TikTok owner bike Dance. EU Internal Market Commissioner Tierre Breton announced that the social media platform will face a formal investigation under the.
Blocks of Flagship Digital Services Act, which.
Empowers regulators to levy fines of as much as six percent of annual sales or ban repeat offenders from the EU plus SoftBank Vision Fund. America's managing partner, Lydia Jet is leading the investment firm.
According to sources.
Now Jet has represented SoftBank on boards of we of Fanatics, a flip Card, of Coupang, among some other companies. There's a lot of news surrounding SoftBank at the moment, and let's go to the parent company now. The founder, Masayoshi Son is considering the creation of a one hundred billion
dollar chip venture that would supply AI enabling semiconductors. Interesting thing is where he's doing this and who with bloemmegs alex Web has a story and we should perhaps have no surprise at SoftBank, having taken money from Saudi Arabia into the Vision Fund, is equally willing to build a new chip reality with the country too.
Yeah, it's obviously a huge opportunity when it comes to investments. Saladi's are sitting on a huge amount of capital. They're trying to, of course, diversify their economy away from oil. This is not news. The fact is that you have to wonder whether Saudi's are once bitten twice shy in terms of the money they put into the Vision Fund and that fund didn't seem to deliver quite as much as it promised from day one. But at the same time, we are still seeing Saldi plowerhead with efforts to bolster
their domestic manufacturing efforts. Whether this chip chip venture that you know, Bloomberg sources report mass Yoshi Sona is exploring with some vigor whether that forms part of it will be fascinating given the requirements of to manufacture such a thing in terms of intellectual resources, people, you need to actually set up these sort of fabs.
It's interesting because we've had a lot of reporting that.
Of course, one Samultman has been going back and forth to the Middle East and indeed to Massily or She's un discussing the future of chip making and manufacturing.
Saudi Arabia has.
What one hundred billion dollars in terms of an investment firm. They have a load of deals that they're announcing and one hundred and fifty million with soft Bank is going to be into what fully automated manufacturing. What sort of focus can we see coming from Saudi Arabia.
So we hear talk of this, and that's what's been announced just recently that they are building a new sort of one hundred billion. Well, they're building a new manufacturing and research and development conurbation. Essentially much of that is likely to be in slightly old school manufacturing things like cars, Lucid motors, right in the middle of Saudi's manufacturing ambitions, alex.
Web with all the inside. Such a global story. We thank you. Email coming up.
We're going to continue to do again to what earnings mean for more broadly the market. This is Blue meg Technology. Welcome back to BLUEMG Technology. I'm Karen Hide in New
York and Ludlow he's off this week. Let's get a quick check in on these markets because we're seeing a little bit of profit taking, perhaps as we anticipate FED speak, as we anticipate FED minutes come Wednesday, but also the micro is becoming macro here, and we anticipating earnings from Nvidia weight with bited breath as to where they can live up.
To the high expectations.
NASDAK is currently off by a percentage point. Tenure yeld just down about three basis points. We're still training in that four point two five let's call it on the tenure for that sort of a handle. Bitcoin actually just coming down a little bit, but only a tiny bit, by three tens percent. We're still near that fifty two
thousand dollars level, having exceeded it recently. Move on and look at some of the micro pictures, because in factually, across the board it feels that we're seeing some profit taking today, whether it be in Nvidia as an individual name off by five point six percent, but remember it's tripled since the beginning of twenty twenty three in terms
of market capitalization. But the socks more broadly, of course, the Philadelphia Semiconductor Index is actually seeing its worst day since the end of January, as we see just chip makers fall across the board, AMDs on the downside as well. The only one out performing is Global Founderies after its recent deal to build more manufacturing here in the US.
But let's just talk about what micro is macro.
How much we are all focused on whether the AI hype is real, particularly around in Vidia. I'm so please to say Liz Young is with us so far ahead of investment strategy, and I mean, is.
It all about in Vidia?
Do we sort of care much about the FED when we come to more of a focus on AI right now?
Well, I think we always care about the FED, and last week was a good indication of that. We're starting to see the data stack up in a way that says inflation maybe isn't solved entirely.
And now we've pushed.
That first cut back to June, so markets are trying to grapple with the idea that the cutting cycle might start later than we originally anticipated. But this week number one, there isn't a whole ton of macro data, at least not loud macro data for the market to queue off of. And in videos, earnings are going to be the story that we all anticipate and wait with baited breath, like
you said, to find out. The risk that I see in this and not necessarily in the company itself, but the risk that I see in this is that in twenty twenty three we had such concentrated performance, and so far in twenty twenty four, we've.
Had a lot of the same.
We've had a few fake outs of broadening out in the market that you've got things like small caps that can't quite get above a certain level. We've seen some sectors broaden out, but others not participate yet. And we've seen that Magnificent seven turn into more of the Magnificent four.
So the concentrated performance is still present. And the risk that you have when we have so much attention on one name is that the entire industry group or the entire sector ends up trading just based off of what might happen in that one name. Now, that could be good or bad in the short term, but it does present another type of concentrated risk to investors that are invested in whether it's semiconductors or the AI theme.
Okay, lis So being that diversification is basically everything, do you diversify within where AI can propel, either it's application in different industry groups or indeed the picks and the shovels we're talking to Nancy Curtain a little bit earlier about ultimately the infrastructure spending that's going to happen here in the US, or do you have to get out of the section and just sink diversification more broadly in other industry groups.
Well, it's a tough conversation. It's a good question because it's a tough conversation to have with investors today when really the experience they've had is that diversification hasn't worked right they've had concentrated performance, and if you were in the right names, you would have done better than if you were in a diversified portfolio of stocks. So it's
a difficult thing to convince people of today. But when you invest in a theme, and this is just broadly how I approach themes and what I would say as a principle of investing, just the way that I think about it, When you invest in a theme, and AI is a theme today, one you have to expect that that theme is going to take two to five years, maybe even longer, to really come to fruition, to really mature into what we're expecting it to be. And over
that timeframe, things are going to change. So the way that we see the theme today, the way that we're expecting things to be optimistic about that particular theme today.
Are probably going to morph.
And you can compare it to something like the Internet in the late nineties early two thousands. The original way that we expected the Internet to be profitable and exciting was not actually how it ended up being.
Later, or at the very least, there were other things that were born out of that Internet boom. Right, we didn't know that e commerce would be a big thing. We didn't know that ad spending would be.
A big thing for all these companies, So that same thing is likely to happen with the AI theme. So I would suggest when you're investing in a theme, I would suggest investing in it in a diversified way, and then keeping in mind that the timeframe for a theme is much longer than one year, and right now I think we're queuing off of really short term periods.
And Liz, what's so great about having a voice on is that we all can get very myopic about equities. This is different asset classes that gain us exposure as well. How many of your clients are asking you, well, what about the bond market exposure? I can get hit what about corporate Bod's not just US treasuries.
Yeah, that's another good thing to think about that. Obviously, over the last three years or even just since the pandemic, equities have taken center stage, and there's been a lot of juicy stories about things that have happened in the equity market, meme stocks, AI, the Magnificent seven. I mean, the list goes on and on. But the thing that's happened in the last year, because rates are higher than
they've been in forty years. People started to wake up to the fact that, oh, maybe treasury bonds are not as boring as I thought they were. Maybe it's okay to sit in something and get paid well, I wait, get paid a dividend, get paid a coupon, and realizing that maybe there's even capital appreciation opportunity in some of those spaces that seemed so boring and vanilla before.
The thing that I would warn people about.
Though, I do think that there's good opportunity in the treasury market, particularly on the shorter end of the curve. But I think yield volatility is here to stay for a while, especially while we sit through this period where we cannot figure out when the FED is going to cut, and it continues to be more and more volatile every day. I'd also point to some of the relationships on days, at least in twenty twenty four. So far, the relationships
aren't working the way that we would expect today. Yields are down, the Nasdaq is also taking it on the chin, so are small caps. You'd usually expect the opposite, So there is still risk out there. Investors are obviously waiting and looking around a corner for something that might come out of left field and shock them, and I would tell people to invest with that mentality.
So if I head of investment strategy, so I love having you on the show. Thank you, Lizzy Young, Thank you a good rest of the week. Meanwhile, let's talk about Tinder for a moment. It's expanding its identity verification program. With crime on dating apps on the rise, and of course artificial intelligence actually making it more and more difficult.
To figure out who's real who's fake.
The dating platform will roll out the system in the US and the UK, Brazil and Mexico over the coming weeks and months. It's already been testing the feature in Australia and New Zealand, where verified users get this a sixty seven percent increase in matches compared to those who weren't. Coming up, we're going to discuss the latest in the VC space. Portage partner Stephanie Chu is going to be on with us, and in fact, she's got a real laser focus on all things fintech. Well, here's a fintech
flavor for you. Big deal happening and it is big, enormously moving Discover Financial. We're up fourteen percent Capital One agreeing to buy Discover Financial Services and the thirty five billion dollar all stock deal. It's going to create the largest US credit card company by loan volume. And the kicker is the CEO of Capital One, seventy three year old Richard Fairbanks, saying this is a singular opportunity to bring together two companies that can compete.
In the largest payment networks. This is blumbag technology.
Time to turn to the VC space, starting with and Recent Horowitz, because well, this firm has up the anteam when it comes to lobbying in Washington to help the defense focused startups it invests in particular. Now, last year, according to disclosures, the firm spent almost one million dollars on lobbying. It's first official spending on it and easily the most paid out by a VC firm.
Let's bring in Bloomberg's Anda Juton for more on this.
And I love your story with the zette because you go into the details of Espresso Martini's being sipped on branded glasses while they sort of talk with various lawmakers and their startups and on what has and Resent Horowitz been doing that's different from other venture Well, you know.
It's not just different than other venture affirms, but also different than other industries and other tech companies because a lot of industries lobby in Washington, a lot.
Of people are kind of walking in the quarridors of power in Washington in DC.
What's different about this is that it's not just the companies themselves that are developing their relationships with lawmakers, it's.
Their financial backers.
So you see this American dynamism practice from Andres and Horst really trying to kind of create a culture in Washington, d C. That is optimistic about technology that will benefit their investments. So a really kind of interesting strategy from these companies' financial backers.
And given the manifesto published across social media at the end of last year by Mark Andrews, and we should perhaps be unsurprising that he is really optimistic and probably slightly bored of all the pulling up in front of Congress of prior bets that he's made, particularly when it comes to.
Social media and the like.
But ultimately, what do they want out of these government discussions. Is it a light to touch regulation. Is it an understanding of who the players are at this time that can make us more competitive in a new geopolitical landscape.
Yeah, it's really a few things.
You know, they're almost, like I said, trying to create like a new culture in Washington, d C. That's part of about technology EU seeing the so called tech lash where you have lawmakers of both parties really being suspicious to some of the consumer brands like Google, Meta, Apple, and Amazon.
But what we have now is kind of smaller.
Defense minded startups in some cases kind of you know, advanced manufacturing and other cases companies that are actually building stuff, that are doing things, you know, using technology, using innovation in a way that could benefit US.
National defense and domestic economy.
So that's really where Andrews and Horowitz has focused as American Dynamism Practice, and they're trying to kind of change the calculation in Washington that technology is not something to be regulated, something to be feared, something to be hauled in to Congress, like you said, to testify in front of committees. But it's something to be celebrated and something to be used as a national advantage. And that's something we see especially in relation to the competition with China
and things like AI kind of computing. You know, some of these you know cutting edge technologies that will really shape the economy and the geopolitics of the future.
Healthy sprinkling of space to Anna Edgerton, brilliant story.
Go read it dot com. We thank you so much.
Meanwhile, let's stick with the world of VC and perhaps while where regulators may or may not be playing when it comes to big M and A in the world of fintech.
I'm please to.
Welcome to the show Stephanie Chew for today's VC Spotlight, partner at the Fintech Focus at VC firm Portage. You've got to have a two billion dollars in assets under management, and boy, you must have woken up today and been like Capital One and Discovery, this deal might get through. How is this going to shake up fintech investing and M and A more broadly in the space?
Do you think?
I think this is a really exciting announcement because we've been waiting to see some big M and A news for a little while. If this, I think this is going to be a big question mark for antitrust and the regulators around whether or not this deal will actually go through.
But with the public markets.
Being fairly closed for the last couple of years, the exit options from an IPO perspective have been pretty limited in the fintech space, so seeing a marquee acquisition on in the incumbent area will certainly spur I think a lot of discussion on what the M and A opportunities will look like for FinTechs going forward, and I hope
it'll potentially bolster the market environment. And we're seeing this on top of a pretty good public markets run in early twenty four and late twenty three, so we could see multiple exit avenues open up for startups this year.
And what about also the competitive the competitive landscape and how it changes up. When I think Capital one and Discover, I think of, well what does that mean for Visa and mask caard. But you must be thinking, Okay, where do my portfolio companies gain an edge here? Where are they going to be needed? Where are they going to be necessary? Where can they disrupt what areas you're trying to invest in it At the moment.
I think we've been spending a lot of time. Consumer credit I think has been a pretty no go space for the last little while for VC investors, just given where the market environments have been and cost of capital and interest rates I think that there are still really interesting investments.
To be made in that space.
In the consumer space specifically, we've seen a number of large rounds, like builds like Manzo get done in the past year or in the past quarter really and so I think that there will be hopefully some renewed interests on the consumer side.
I think we've been talking to.
A lot of our financial services corporate clients, so banks, wealth managers, insurance companies, many of whom service our portfolio companies actually service, and there's been a huge amount of interest in AI. So we're spending a lot of time looking at the intersection of financial services and some of the new advances in JENAI.
It's obviously very new.
We're spending time in fraud ten billion dollars of fraud, which is a record amount of fraud lost in twenty twenty three. Lots of new fraud vectors coming up with JENI as well, so an evergreen space that were many of our corporate partners interested in learning more about as well.
And then finally, in the wealth.
Management space, the democratization of alternatives is an area that we're looking at quite a bit.
It's interesting, of course, you mentioned Monzo which is UK based. You mentioned some of the other areas of the rounds that built here in New York. How are you seeing the talent growing and where it's growing from at the moment. Has there been some sort of regulatory arbitrage ATOL that you see globally.
I'm not sure that there's been a huge I actually think fintech has been a generally under invested category in the last two years. I would say there was a big spike up and down, So I'm not sure that there's huge differences and where talent flows are going. I think certainly AI is the big story of the day, and so a lot of the talent that we're seeing want to work on problems related to AI.
I do think we will see.
Financial services oriented AI solutions where that is is I think where we've seen a lot of really interesting new seed companies and many of our existing portfolio companies hiring for and or implementing new solutions in the AI space that leverage AI with existing text acts.
We'll see how it impacts us the user as well, rather than just in support conversations with various chatbots. Stephanie Cho just always so great to have your expertise on the show Thank You Partner at Portage Now, the ex account of the widow of opposition leader Alexi Navalni in Russia was briefly suspended a day after it was used to help her challenge Russian President Vladimir Putin over the
death of her husband. Now In a video posted on her account on Monday, Julia Novalnier accused Putin of killing husband as she announced that she was taking over Navalni's role as opposition leader after his death in a remote
Russian prison on Friday. We want to talk about the roles and responsibilities of Elon Musk's platform right now, because this brief suspension comes just a week after the same platform published at full unedited interview of the Russian president with former Fox News host Tucker Carlson.
Who else to discuss.
In our very own Kurt Wagner, whose book Battle for the Bird, which dives deep into the social media platform, is out today. He joins us now and Kurt. All of this concern about the way in which x as was Twitter gained a new leadership suddenly changed up basically.
Most of its employee base.
There were concerns about content moderation first and foremost, How does these sorts of day to day headlines make you think about how it's occurring over there right now?
Yeah, I mean, clearly this is something that they are struggling with to do at scale.
Right.
I'm told that this particular suspension was done automatically, so it's both flagged automatically, suspended automatically, and then ultimately reversed after a human review. But again, you know, these are the kinds of complicated sort of issues that these types of companies deal with. And it's sort of interesting because, of course, when Elon Musk was on the outside, this was the exact kind of thing that he might complain about, right that he would say, hey, Twitter is being biased
because they took this account down. And now he's on, you know, the inside, and we're seeing that they're still struggling with the same kind of stuff. So I think this sort of just you know, highlights how difficult it is to do this content moderation at scale.
I mean, your book really chronicles then Twitter's struggles with content moderation when it came to former President Trump as well, And I want to gauge your perspective of what you learn through that reporting out and writing and how it pushes us forward to potentially run off in an election here in the United States.
Yeah, I mean, it's so interesting to think about, right, because that was a huge portion of the company, like a huge part of the company's history was sort of this run up to the twenty twenty election, how they dealt with President Trump, how he used the service to you know, complain about the voting, complain about the election results and things like that, and ultimately Twitter at the
time ended up banning him, as we know. But President Trump is now back, right, and there's a new regime at X that has been very hands off and basically said they don't want to enforce any of those types
of things. So it'll be really interesting to see we as we head into twenty twenty four to one, does President Trump, former President Trump really start to use X more regularly, And if we get to a point where he starts to complain about the same stuff he did in twenty twenty, right, a rigged election, for example, will X step in and do anything about it? And we know that was a huge deal, you know, four years ago.
I'm really fascinated to see if this is going to sort of play on repeat again and how they're going to handle this time around and talk.
About alternate universes here or what might have been, Because what's so interesting is some of the really juicy details you reveal in the book. For example, who could have led the business other than Jack Dorsey at the time, and before Elon Well took.
It over, who was that?
Yeah, this is one of my favorite details. That's right at the front of the book. When Jack Dorsey returned as CEO in twenty fifteen, the board was actually considering another candidate, Andy Jasse, who at the time was running AWS. We obviously all now know he's the CEO of Amazon today.
And it's just a really interesting, you know, thought process or a thought experiment, I should say, to think about what Twitter would have looked like had the board decided to go with more of a business minded CEO versus Jack Dorsey, who was a product minded CEO. And that was ultimately the deciding factor, I'm told is that they thought Twitter was a product a company that had a product problem, so they just decided to go and bring
back Jack Dorsey back. But again, it's just really interesting to think, like where would the business have been had they brought in someone who was, you know, maybe a little bit more traditional in terms of their their business chops.
Well, we know how much work Blood Sweiners you put into this book, and congratulations on it going on sale today. Appreciate all your expertise day and day out in the show. We thank you, Bloomberg's Kirk Wagner. Go buy the book. Meanwhile,
that does it for this edition of Bloemberg Technology. You do not want to forget to check out our podcast that there is going to be so much to be digesting, and you can do it on your terminal, online on Apple, Spotify or iHeart all of this as we anticipate the all important numbers coming from Nvidea after the bell tomorrow. Will they live up to expectations? Will we see AI height become a reality? Will we see that revenue continue to double on triple We'll see this is Bloomberg Technology,