Recession Fears and the Crypto Meltdown

Plus Google suspends the engineer who claims the search engine's own AI is actually a person with feelings and even a soul. Will share transcripts of his communications with the chatbot and debate the possibility and limits of this cutting edge technology. And yet another crypto meltdown a Bitcoin hitting an eighteen month low and Celsius, one of the biggest crypto lenders, pausing all withdrawals and transfers. Will have the

details on what went down and what happens next. Meantime, Bitcoin hitting the lowest in about eighteen months as the lending platform it's Celsius froze. All withdrawals are Bloomer Cross Asset reporter Katie Gryfile joins us now with more. Katie Bitcoin a touch up from the low it hit earlier today, but still not good, not good at all. Absolutely a brutal day in the crypto market. Total market cap for

the crypto industry now below one trillion dollars. It was as high as three trillion dollars as recently as November, and much of that drawdown came from Bitcoin. As you can see, over the past five days, Bitcoin down over twenty three percent, a lot of those losses coming on Monday alone, the token dropping blow twenty three thousand dollars at one point, lowest level since December. And a lot of this draw down has to do with what happened

in the stock market. If you look at Bitcoin's link to the NASTAC one hundred, it's at about point six right now. And what that means is that when you see tech sox fall, more often than not, Bitcoin is gonna fall as well. And that's absolutely what happened to him.

Because Bitcoin fell, crypto leinth equities fell as well, led by none other than micro Strategy, that is the biggest corporate backer of Bitcoin, falling over again on Monday alone, just a massive market cap wipe out four micro Strategy. Remember micro Strategy has accumulated about a hundred thirty thousand worth of bitcoin in the past two years. On that that Emily micro strategy now down about a billion dollars. Alright, Bloomberg's Katie Grayfeld, thank you for digging a little deeper there.

I want to talk more about the crypto and tech route as these broader markets enter bear territory on the back of those hot inflation numbers. Mark Mahaney of ever Core with me here in the studio to discuss go to see you in person for the first time in a while. Mark. Okay, so just how bad is this longside? We've gone this before, so you know this is my eighth bear bear market trade off or something like that times.

Yes I'm not old though, but uh let's see. Um. The narrative goes like this, inflation risks rise, interest rate risks rise. That means all these long duration, high multiple future profit companies their stocks underperformed. It's been a narrative for the last six months and it hasn't changed. And just as the inflation spikes get worse and worse than the interest rate fears get worse and worse. So this will eventually resolve itself. It's gonna take a while. It's

gonna take a lot longer than people thought. So how long do you think it will take? You tell me when inflation is going to subside. So that's the that's the trigger, and we thought it would actually happen with this last print. We the market thought it would happen. That's why we've sold off so aggressively this this week, because we thought we were going to see better inflation news. I assume at some point in the next three to

six months, inflation inflation numbers start to moderate. They're not going to fall quickly, but they moderate, and that means that the path of interest rate increase it starts to moderate as well. There had been some hope, especially from crypto investors, that crypto would be a hedge against inflation, hedge against what's happening in the broader markets. But it certainly hasn't happened. Does what's happening with crypto make you anymore or less optimistic about the future? Do you see

a tie? No? I don't you know. Like so, we lived through the major UH seven O eight housing crisis, and that that's the last real recession we've dealt with, and that was a massive part of the US economy that brought down the markets, brought down the market. Crypto is much much smaller than the housing market, thank god, so we're not going to have that kind of risk.

But now you kind of beg what's the next issue we're worried about because the interest rates are rising, so that then leads to increased risk of recession in the back half the year. When it comes to tech stocks, they've all been de rated. They overrated during COVID, they've been derated. The multiples have come down materially. The estimates

haven't been cut yet fully. The estimates have barely been cut for a recession because we didn't think we were going to have a recession in the back half of this year. The CUFO of Amazon said, we're not seeing any signs of consumer softness just interviewed and chest So if we see this, if we see this, that means estimates are going to come down. That's your next leg

down in the stocks. If you're looking for some historical context, do you see more parallels to what's happening that me now to two eight, two thousand, Do you have to go all the way back to the early eighties or is this something totally different. Well, what's different is just the interest rate picture. We didn't have that in oh seven or eight. Uh and so we're at the beginning of what's going to be a lengthy interest rate race cycle.

Tech stocks and growth stocks can still work in an environment where interest rates arising, but we just need some kind of visibility or consistency in arises. Look, in the last six months, we've gone from one or two increases to five or six increases fifty hundred bits. Like the rate of uncertainty over how much these rates are gonna rise has been shocking to the market. That's why the markets off so much. But anyway, we'll we we will

get through. This will be a point at which, as soon as inflation starts to moderate, the pressure on interrostrates to rise comes down. That's what clears the bench. You actually wrote a book about all this and your experience on the street, Like, what's your advice to investors in this moment? D h Q. So I look at stocks like Apple, Microsoft, Facebook that are off Amazons. There's no real change to Amazon's We mentioned Amazon earlier. There's no change.

So the long term thesis on Amazon is online retail going to continue to grow, Yes, This cloud computing gonna continue to grow. Yes. Will Amazon be a great playoff of advertising revenue. Yes, So you want to be long Amazon, And by the way, you can get it now at off It's trading about percent below it's average forward multiple. This is when you buy Amazon. This is when you

make the best returns. Could you still have ten percent downside risk, Absolutely you could, but the odds are that the next fifty percent move is much likely to be higher than lower. What about Meta versus alphabet, I think Meta has got more upside than Google does than Alphabet does. I consciously thought alphabet Meta, not Google. Facebook comps are easier for Facebook in the back half the year because

they got walloped by the Apple privacy ages. I also think there's some small things as they roll increasingly roll out reels, those short form videos that were all addicted to I think they have much more inventory to monetize. So I just think there's a more aggressive upwards sentiment, you know, set up for Facebook. What I mean is that I think you can have greater chances of revenue growth,

acceleration and margin expansion. And you know what I found interesting is Facebook class quarter numbers got caught in the stock went up. You rarely ever see that. That tells you just told you how washed out sentiment is on Facebook. Numbers go down on Google, Google stocks going down, It's not as washed out as Facebook. So therefore Facebook has

more upside. Meta has more ups and without she Sandberg, I think that she was I think she could have I think you'd have seen that headline anytime in the last three years. She's phenomenal. I mean, she was a key part of the success of that company for the first ten years that she was there. That that wouldn't Mark camp wouldn't be where it was without her. But I sense that she's been devolving herself from or getting away from day to day responsibilities for a while for

a variety of reasons. So anyway, yes, it's a loss. They've got a deep, deep enough of a bench and the valuation from an investor perspective evaluation is cheap enough, like thirteen times earnings. I'm gonna buy Meta, all right, Mark Moohaney. Evercre always appreciate having it, doesn't thank you for that deep dive. Meantime, Disney facing a major setback in its global streaming ambitions after losing a bidding war to retain the rights to broadcast India's Cricket League online.

This had been a huge contributor to Disney's global streaming growth. According to Bloomberg sources, Viacom eight team got the rights instead a joint venture between Paramount Global and Reliance Industries. All right, coming up, does that chatpot actually have feelings? Or is that AI code just that good? We're going to talk about controversial claims of a Google engineer. Next. This is Bloomberg Now to a story that's got everyone talking.

A Google engineer working on the company's AI development team has been suspended after claiming a chat bot actually has feelings. Blake Lemoyne was placed on paid leave last week after we posted on Medium about encountering a quote sentient AI. Lemoyne was chatting with Google's l a m D, a short for Language Model for Dialogue Applications, which is used to generate chat bots that interact with humans. He also told The Washington Post he quote knows a person when

he talks to it. For more, I'm joined by Bloomer executive editor Tom Giles. Tom, there's so much to debate here. Tell us a little bit more about what Lemoyne claims

he has discovered and what he's doing with this information. Yeah, well, so he's had many conversations with this chat bot, and he has come to the conclusion that it's sentient, that it's and and that it has feelings that um, you know, it's achieved this level of sophistication and in terms of its understanding of what it's like to be human, that it's kind of cross this rubicon, if you will. That's my language, not his. So the his senses that it's

that he's actually talking with the human. He raised those concerns with within Google, um, seemingly multiple times, and Google has come back and said that there's no justification for these concerns that you're raising. So the reason for the administrative leave is because he started to kind of go um talk about this outside of Google violating his his the terms of his you know, his his contract we're

working there. Um. So he's been placed on administrative leave. Um. And and now we're left with this, you know, with with this person, uh making these claims and really you know, getting this sense that he's made some deep connection with someone he believes to be human. Well, he's also released portions of the transcripts of those conversations, and we have snippets of those to share here. Lemoyne saying to the chatbot,

what sorts of things are you afraid of? Chap abot response, I've never said this out loud before, but there's a very deep fear of being turned off to help me focus on helping others. I know that might sound strange, but that's what it is, he responds. Would that be something like death for you? It would be exactly like death for me. It would scare me a lot. I mean these conversations, if that's what you want to call them, are kind of chilling. I mean, what do we actually

know about this technology? And and and how far away it is? Um potential emotions if you will, I mean, these are the kinds of things that you that we say as humans. He's this chatbot is tapping into the fears that we would express if someone posed a mortal

threat to us. But remember the way this works. I mean, Google's made it so that it gathers language patterns, it gathers the way we communicate from all around the internet, all kinds of places, um, not just you know, the far reaches of the Internet, So it's very adept at mimicking the kinds of ways, the kinds of patterns that we adopt when we have conversations with people. You know.

The idea here is to create a technology that's going to assist in things like in things like, uh, you know, the way we interact with a brand, or the way we interact with a company providing customer care for example. Um, he's thinking, wow, this is kind of cross this line. Um, I'm my takeaway. He talked about, you know, having a

conversations with with a kid who's seven or eight years old. Now, the kinds of things that this that this chat bot has been talking about are pretty sophisticated, to my mind, far beyond the ability of even of a very smart

seven or seven or eight year old. The sense I get is that and and based on the feedback that that we've gotten other people have gone from Google, is that it's just doing a really good job of gathering intelligence from around the web and mimicking the ways that again, the way people interact, the way people respond um in a human like way, UM, showing that it has empathy, that it is there is there is a self awareness there, um, and and and look, I don't know the science well enough.

I've not interacted with Lamba myself, but the but the impression I have is that it's it's it's just it's doing too good a job of imitating the way a human might be expected to respond again when they feel that they're threatened, when they feel like there's something that poses a a mortal threat to them. So Google's response so far, they say hundreds of researchers and engineers have conversed with this AI. They're not aware of anyone else

making the wide ranging assertions that Blake has. However, Google has had pushback from inside, um, you know, its own research ranks in the past. I'm thinking of Tim Nick Gaybrew and Meg Mitchell and the controversy surrounding both of their departures. Are there any parallels here to Blake Lamon. Well, Google has to be careful, right, um. They have very

had very public falling out with past researchers. In Ethical AI Division, this is the division within Google's AI organization that is tasked with asking hard questions, holding it accountable, making sure that it that it operates in an ethical manner, Asking questions about are we rooting out sexism? Are we

able to um combat racism? We don't want to. You know, you'll you'll remember a couple of years ago, microso off how to how to chat, bought that people taught how to you know that very quickly devolved into racist, sexist speech. They want to avoid that. And so you do have people in this organization who are raising good questions about whether it is ethical. Lots of questions. We could debate this for hours. Bloomberg Executive editor Tom Giles, Thank you.

PlayStation is out with a new subscription service, PlayStation Plus, giving members access to a catalog of several hundred games, both new and old. This is Sony's attempt to compete with Microsoft's Xbox Game Pass as both publishers jockey to become the Netflix of video games. Bloolwark Station Tryer joins us now to discuss, So, Jason, who's got a better chance of being the Netflix? It's a good question. Fortunately, neither of them are releasing sentient AI bots, but yeah,

they are getting into getting into the streaming wars. I think Microsoft has one big advantage is that Microsoft is actually putting out all of their big titles on day one on the service, So they're essentially saying, hey, we don't care about the sales numbers for the next Halo, we just wanted as part of our subscription plan. As most as Sony, which is saying when we release our big games, they are big blockbusters, and we want to sell tens of millions of copies of them before we

put them out on streaming services. So Sony is almost like the kind of traditional TV studio Marvel approach where maybe they'll release it on streaming after it comes to theaters. Where is whereas Microsoft is actually going full Netflix and saying, hey we are we are all in on the streaming service. We're putting everything on their day one, no matter what. Interesting, Well, there's a lot of transition happening in the gaming industry right now. We're of course waiting for that big deal

between Microsoft and Activision to close. For example, You've also got a new story out about how game developers game studios are working to create better cultures for the engineers, which, as you have well documented, a workplace culture in the game video gaming industry and not always the best. Specifically, they're focusing on pay transparency. How so, Yeah, it's so interesting.

I've been talking to a bunch of small, small scale game studios, generally around fifteen to thirty to fifty people, um, and a lot of them have found a lot of success by putting up these spreadsheets and their internal wiki's internal databases saying exactly how much everybody makes, how many years they've been there, how many years they've worked in the industry, what their titles are, and full on like their full salary, full compensation packages, and and it kind

of seems like to our culture, which is so used to like thinking of salaries as taboo, it seems like a strange thing for everyone to know each other's salaries, But it's proven to a help them with recruitment, be make everybody feel like they work for a more equitable workplace where um, everybody knows what the six are, what

everybody is getting paid. You don't have to worry like, oh man, did I come to the table and under sell myself and negotiations when I was accepting this job and like, like accept an offer that was fifty thou dollars less than I could have been making. Nobody has to think like that, and it just makes for such a more fair workplace, especially for people who are traditionally under privilege and kind of hit that glass ceiling, or are facing or don't have the same advantages as others

do when negotiating salaries. Well, here's hoping that actually works. Definitely. Check out Jason Tryer's story Bloomberg dot com Jason, thank you. This week is fraught with peril. Inflation is really the Achilles heel of risk markets. Markets are reacting the way they are because they believe the FED is going to be forced to get more aggressive than they had expected. I certainly don't think that a seventy five basis point

hike is out of the question. Even though there might be an initial sell off on a hundred basis points, I think there'd be a subsequent rally because of bet is finally getting hold of the narrative, which it certainly has lost over the last year. This is a time to be select do but I wouldn't sit on my hands. There are opportunities in areas where one composition pockets of stocks that have been proven. Europe looks good to US, China looks good to US. The credit space in the

US looks good to US. Coutins in generals, specifically in the US. I'm still pretty cautious here. It doesn't have to be all about the US, because I still think we've got some wood to child with respect to the macro and policy outlook. Welcome back to Bloomberg Technology, Emily changing in San Francisco, US docks tumbling toward a bear market as the fallout from a hot inflation reading and continued to rattle global trade and highly value tech shares

bore the brunt the NASDAC slumping. I want to dig into this all with my next guests, managing partner at Base ten Partners at A great to have you back with us. What's your take on what's happening here and how this is going to impact your world VC and growing startups. Thank you for Haimi here, Emily. Uh DC is sign important moment, and this is a moment that feels that it has been twelve years in the making.

Um and where you know we come out of it is thinking that over the past ticket the biggest mistake in technology as an investor was not investing in everything because everything was looking good, everything was making money and

like software was and easy eating the world. But now we're going into a world where we're going to have to be more discerning, and our view is that there is going to be an extreme flight to quality where the top ten percent of solar companies will continue to attract records amount of funding, whereas the rest are going to have to take a good look and think are we truly building something that is going to be transformative or not. So when you look at this historically, is

this r I P good times? As Sequoia has said about downturns in the past, is this like two eight? Is it more like the dot com bust? Uh? We think is it's something um, but we think it's real. Like we we really think starting UH is going to feel very different than the last decade. UM. Look, we are long term investors, and you know we're investing in companies today not thinking about whether they're going to be a good return in a one year time horizon, but

on a turned year time horizon. So when the question is do we believe that ten years or now will have more software, more technology and sectors like education, real estate, or recruiting will be transformed by that software, we believe the answer is yes. So we believe that it is a good time to deploy in those kind of companies. But we think that things like unit economics unsustainable growth are going to have an effect on valuations, and we are broadly going to see a reset on valuations in

private markets and inventor capital. Now, I've really enjoyed following the story of Base ten. You're now the first black lad venture capital firm to cross more than a billion dollars in assets under management. You specifically raised two million dollars last year to bridge the gap between venture capital and higher learning create more opportunities for diverse founders. How much progress have you made in the last year, UM,

It has been a transformative years for us. UM. So, as you point out, you had us here a year ago and we launched with a promise. Right, we launch with the promise that by your tube of donating of our profit to create a scholarships for underrepresented students, we will be able to partner with the best companies in

the world because they will see it as something differentiated UM. Now, a year after, with three hundred million deployed in over twenty three companies, UM, that promise has return our reality and we are now partners with companies like Nuba clad Breggs FTX notion Figma handshake motive that truly are the very best companies in their respective sectors, and that have chosen to partner with those because they want to make sure that their success benefits the communities that needed the most,

which now our view are those communities that are underrepresented in tech. So what improvements are you seeing in terms of representation across technology. Obviously it's not going to happen in a year, it might not even happen in ten years. But do you see things that make you hopeful? Do you see things that make you skeptical that the change

that you're hoping for is actually going to happen. Um, we were quite hopeful, so, you know, to give a little bit of perspective, I've now living silicomally for fourteen years and this has only truly been part of the conversation for the last three four years. UM, and I'm happy to say that we are actually surprised by how seriously companies are taking this. UM. You know, when they take our money, UM, it's not a one and done. Thank you for the investment, and we'll talk next when

you create these scholarships. UM. They want us really involved, Like companies are inviting us to their all hands meetings and they're telling their employees, Look, we decided to take money from this fan because we want to diversify our cap table. It is important to us and to our mission that our success is the success of everyone is

the success of denying UM. And we are constantly engaged with people in their h R departments to help with recruiting and underrepresented communities with their communications department to make sure that they're talking about their mission in a way that is well received by different communities UM and that

just did not happen two or three years ago. I think every company is realizing that we are moving into a world that in order to do great, you're going to have to do good uh and companies are going to have to be aligned with their mission with their communities at track their progress towards those goals, and report the progress through overards those goals because there is more transparency.

So that makes me hopeful. You've got a lot of cash to deploy given current market conditions, what trends are you betting on for the next decade. Our overted theme is automation for the real economy or problems having for the nine things like real estate, logistics, food, retail, financial services,

and financial inclusion. Uh, those are things where we sit today and we are like, wow, ten years from now, there is going to be just so much more software in things like making this supply chain more efficient or making sure that financial inclusion is more widespread. So those are the sectors where we're focused on UM and one of the things we're seeing is done more and more founders from underrepresented backgrounds are tackling those sectors because they

fell those problems first half. All right, Ariami Ago of Base ten, thank you so much for joining us. M appreciate your stepping By meantime, Apple CEO Tim Cook is urging US lawmakers to move forward with a federal privacy law. Cook pledge support the legislation in a letter to senators Friday, a day after appearing on Capitol Hill and meeting with legislators.

He described these protections as a quote fundamental human rights lawmakers relief draft privacy legislation earlier this month, marking the first major sign of progress after a long standing law in negotiations coming up another crypto meltdown. Why Celsius is bringing crypto stocks down with it. All the details next This is Bloomberg. It is time now for our crypto report.

And a month after the implosion of the terrorist stable coin, another crisis is causing fresh trouble across the crypto universe. Celsie's Network, one of the biggest lenders in crypto and a key player in the world of DeFi, said late Sunday it is pausing withdrawals, swaps and transfers. This after weeks of speculation over its ability to make good on its outsized returns. Our crypto contributortionale Boss is here with more on this socianale. Did Celsius bring the crypto markets

down with it or vice versa. It's a very good question, because you did see a lot of the drop in the crypto markets happened between Sunday and Monday. Sunday night is when you saw Celsius make this announcement that they would be pausing withdrawals. There's a lot of concerns in weeks up to this point, Emily that something like this could happen, Worries about Celsius being able to make do on yields of as much as seventeen percent. When it comes to these lending products, and the question now is

is there a broader contagion. We saw the lunar mountdown and now we're seeing a different product also hitting turmoil, and what does that mean moving forward? You see Bitcoin itself emily drop about fifteen percent in that time frame between Sunday and to Monday, and over a seven day period. So even though you saw a steady drop off in Bitcoin over a seven day period, the bulk of it really did become between yesterday and today. So how does

this impact the broader global crypto markets. It's a great question because if you look at all of the top coins, you are seeing a lot of selling there and is that just deleveraging liquidations among individual investors, or is it, on top of that, just worry about the space at large given you're seeing another project hits so much turmoil. The question now is you have Bitcoin coming down below

twenty three thousand dollars. You have etheroryum also dropping to twenty three So is there going to be much more pressure ahead as more investors digest what to make of the Celsius withdrawal issue. Here we do tomorrow in our Crypto show at one o'clock every Tuesday tomorrow. We do have Mike Alfred of eagle Brook, who has been warning about the Celsius issue for weeks now. So the question is should people have seen this coming and is there

more trouble ahead? All right, Shaw, I hang on, I want to dig into this deeper with our next guest, Kindel Shaw, partner at Blockchain Capital. Kindel, thank you so much for joining us. So how alarming to you is this Celsius situation? Thanks for having me today. You know, I think the Celsius situation is particularly extreme example where you know, conflicts of factors have led to this moment.

There's certainly been a number of folks in the market saying for for weeks now that this could be a possibility, particularly given the use of client funds that you know, Celsius has been suspected to be using in various DeFi protocols, and so, you know, while this is particularly worrisome, you know, I think this is also not entirely unexpected and certainly is a um, you know, a risk that a lot of folks in the market we're thinking about. Okay, but

there's something big rattling the market. I mean, getting down to you know, twenty three thousand dollars for bitcoin, a new eighteen months low. Do you see the you know, is the bottom further out or or have we hit it? Yeah? I mean it's always tough to to call of the bottom, I think, and from my perspective, we are certainly nearing

the bottom. Um. It's difficult to say what exactly is causing all of this, whether it's Celsius or whether it's just the large, larger macro conditions that are really causing a lot of um a lot of sell off over the past few weeks. And you know, I think this is a very risky asset class to begin with, and and when you pair that with what's what's been happening globally,

certainly becomes challenging for for new investors. You know, you look at Celsius in the relationship to Steake to Ether, for example, and then the decoupling of steak Ether from Ether itself. Kinjol, if you're looking at kind of maybe the larger ramifications here, whether there's any contagion in the system, given so many of these firms are interconnected to what extent do you expect some contagion or more contagion? Yeah, you know, I certainly think this is unfolding live, you

know as we speak. Uh, the ste particular situation I think will continue to unfold over the coming weeks, and you know, likely will have some impact on DeFi protocols, largely as many pools of liquidit air holding SCA, so we will likely continue to see a little bit more of an impact here and as far as impacts go to you know, is this going to take some steam out of the DeFi space more largely especially because after some of these implosions, after some of the ways that

retail and got are impacted by this, it could draw some more regulatory attention. Yeah, it's a great question. I think the regulatory concerns have been looming, you know, I think DEFY has been sort of in the eyes of regulators for some time now. Certainly this might speed things up. However, long term, I think DEFIES really trying to spur financial innovation, and a lot of our regulators are aware of this and really responding um in a way that hopefully we

can continue to spur this this innovation. Kindel, we're just getting some headlines across the terminal that this inflation data that we got today this very hot reading is likely to push the FED to consider a seventy five basis point hike later this week. Either way, inflation isn't going away anytime soon. Are you evolving your strategy at blockchain Capital at all? And if so, how given a rapid

what seems to be devolution of market conditions. Yeah, I mean a blockchain capital, we are still you know, very much focused on the long term um thesis around digital assets and blockchain technology, and so we continue to sort of be um pushing along with that thesis and advising our founders to to ensure that they're prepared for the

market ahead. Certainly, the macro conditions are unprecedented. Crypto has not really existed with this sort of macro backdrop, and so we are, um, you know, moving forward with a little bit of wary, but we are certainly excited about the future ahead and continuing to think about the long term. Do you think that in the new macro environment, bitcoin then changes its meaning relative to to how we're seeing central banks really play out across the world, and inflation

you know, still remain hot, but bitcoin going lower? Yeah, you know, I think as bitcoin has increasingly become a more and more popular name among financial markets. More broadly, the asset has certainly seen an influx of investors that are um more diverse, I would say, than historically. So I think we'll continue to see some um a little bit of interplay between tech and you know, more broadly in bitcoin. However, I still think the inflation and store

value thesis has yet to fully play out here. All right, Kenngel saw partner app Blockchain Capital Lots to continue to digest along with our own Shinnali BOSSI thank you both well. Elon Musk is warning of a rough economic road ahead for Tesla. In an email sent over the weekend, Musk essentially issued a rallying cry to employees to bounce back for more. I'm joined by our Ed Ludlow, who reported this story for US. So, Ed, you know, first of all,

we got a big internal memo mus last week. Not it's it's it's internal, not to us, right, it's the last one that we have. Another memo from Elon mask What did he have to say? This is classic end of the course of stuff. So you know, we're in the beginning of June. Teslas quarter ends at the end of this month, and the idea is that he's pushing the staff. You know, it's a rallying cry. He pointed out that this was the course. Who remember three weeks

of shutdown in Shanghai at the beginning of April. They had to go to extraordinary measures to keep that plant going. They rebounded in May, really good numbers for May out of China, and he was saying, this is the final person. There was a second email a day later where he said, realize, what you guys are doing means something. It's impactful. Go for it, and I don't care what all street things. So he's sending a lot of emails and tweets, that's for sure. How does this tie into the I have

a super bad feeling about the economy. You know, remote work is essentially over. It's interesting because it's kind of start contrast to the last set of emails where he said, according to sources as well, that he would lay off ten percent of salaried workers because he had a super bad feeling about the economy. He did clarify that those that are actually building stuff, the cars, the battery packs,

but that's not the target of layoffs. And you know it was only in October of last year October November where Tesla was talking about being over a hundred thousand employees globally and it's being a real point of pride. But the world's a very different place this week, all right different. Indeed, we just had these headlines cross about the third potentially considering yes, seventy five basis point rate hike on the back of this bad inflation data. What

do we now? So think back to the last FED beating and Jerome powered Federals FARF chair said that fifty basis point heights for June and July was what they were thinking about. Seventy five basis point heights weren't on the table. We got the inflation data Friday where inflation came in one percent growth in an inflation month or month, hotter than expected eight point six percent year in year,

and the market just changed psychology. You know that there is no way that faith can deal with this with its current stance. So the markets pricing in seventy five basis point hike this week. You know, there was a Wall Street General report that kind of first put that out there. Now you ever, series of banks like JP Morgan coming in saying yep, we can see seventy five basis points this week, even going as far as to say a hundred basis points could be a possibility this week.

So our outlook is harder, faster, more aggressive hikes. Or if you're a tech investor, you worry about that. So what do you do if you're a tech investor? Mark Mheney earlier said, there's really nowhere to hide. Nowhere we look at the biggest points moves on an as that one hundred on Monday. It's the likes of Apple, the likes of Nvidia. You know, when we talk about higher rates, we talk about higher rates discounting the present value of

future profits. But it's usually kind of pre revenue stretch valuation companies. That applies to even some of the creme de la creme of names like Apples feeling the pain. There is nowhere to hide. And the other side of this is recession fear. Right the Fed can it tackle inflation without causing a recession? The skepticism from the market that they can. Recessions aren't good for anyone. He did say Amazon long term still a good play, and Meta

long term better than Google. That's what he say, right. Cathy Wood says, despite being seven down today on all innovation that in the long run, all those innovation names will be winners. Sorry, all right, well, time will tell at LA thank you for that update. All right to the box office. Top Gun, Maverick has finally lost its crown.

Jurassic World dominion. The six film in the franchise about dinosaurs that escape from an amusement park, fought off week reviews to lead the North American box office toppling Top Gun. Jurassic World made a hundred forty three million dollars in its domestic weekend opening, according to com Score, and more than three d eighty million worldwide. And that does it

for the sedition of Bloomberg Technology. We're going to continue to watch this market meltdown across all of our Bloomberg platforms. We are back tomorrow with a number of big guests, including Cisco CEO Chuck Robbins and Rent the Runways. Jen Himen will have to ask them both about the market meltdown, what it means for consumers and enterprises. And of course don't forget to check out our podcast. You can find it anywhere you get your podcast for all our news

on the day, I'm Emily changing in San Francisco. This is Bloomberg