Restructuring at Meta, Ugly Day For Apple

Will share more of the transcript obtained by Bloomberg. Plus, Apple gets downgraded following Bloomberg's report about iPhone production, and now we're learning of a high profile executive leaving the company after a crude TikTok of him went viral. And we've got to talk about the sell off. Across financial markets, the S and P five drops to a twenty two month flow as the fed hawks circle, Big Tech takes

some beating. I want to get straight to that Micron conversation and bring in Joanne Pheeny and Advisors, capital management partner and portfolio manager Joe and give me a second one. I bring you some of the headlines Micron seeing first quarter of fiscal first quarter adjusting revenue four to five four point five billion dollars. The estimate, of course six billion dollars, but some of the commentary around the slow down in demand and supply catching up is pretty astonishing.

We're down much more considerably, and after ours, we've paired some of those losses. What's your read on what we're seeing from Micron. Yeah, you know, pretty clear investors really accepting a pretty weak guide from Micron, and that's what they got. But I think they are reassured that Micron is cutting capecks by That's what investors were looking for and indicates that micro is gonna be real careful about

adding to the problem. Clearly, we have a lot of supply from the memory makers and not enough to may have particularly because of the PC weakness that we're seeing. You know, they expect PC ship this' to be down related to memory, and so you know they're taking the right steps. But that just shows you memory is a very very tricky place to invest. It's very cyclical. But let's try and throw this forward. We kind of look to Micron as if it's a crystal ball of what's

to come in the global economy. What is the story when it comes to consumer electronics in which geographies are we most concerned about. Well, you know, I think we're seeing a worldwide slowdown in some consumer demand, and that's Micron is going to pick that up. The real question is what's happening beyond the consumer in particular. You know, we still have a lot of good data points and suggests auto and industrial remains strong. They're still shortages there.

It's gonna take probably another year to work those through. Uh So, you know, companies like Texas Instruments are wealth positioned for that. We continue to like them, We've held them for a long time of clients. The real question I think people are gonna be looking for on the call as it continues is what's happening to cloud and

data center. There's some concerns that firms seeing some consumer weakness might slow down their investments, But the long term fact in that world is that data usage across all sorts of devices is going to continue to increase. We need wider pipes, we need more storage. So ultimately, you know, companies that play into that area, while they might suffer a pause, are going to be really well positioned for the long term for investors, and a lot of them

have gotten cheap, whether it's a sienna or a broadcast. Joanna, how did we get this so wrong? I remember talking to you, talking to Iatan King, Bloomberg News Chip reporter about the vision for a multi multi courter cycle that would just go on indefinitely. This was going to happen

coming out of the pandemic. But that hasn't happened, has it. Yeah, you know, I think what we got wrong all of us was there was so much spending during the pandemic, and that really came on the heels of a very strong period from to nineteen really through until the pandemic. There are signs actually that inventory were starting to build before the pandemic hit, and then that got disrupted by

the demandering the pandemic for PCs and everything else. And so now we're starting to see that side really come off. But don't let's not misconstrue the implications. I think cloud and data sent A remains. There are concerns that firms might take a bit of a pause on when they do the installations, but that ultimately does still look like a very strong segment of the market. So you really have to pick and choose your semi conductor companies to

hold at this point. I love talking to you, Joanne, because you've spent a lot of time looking at the semiconductor industry, and you know you're an expert, but you're also looking at the markets more broadly. Right I'm looking at it and has that one hundred down significantly? Again? With four days into the week, we're going we're heading towards another tough week in global equity markets with a focus on tech. What is top of mind for investors

right now? Are we still not convinced by the direction of travel for the FED that we can concerned about global slow down spurred by inflation? What is the story for you? You know, there are some real solid risks out there for the global economy. I mean, the war in Ukraine is is not trivial. There could be bigger risks from that. The energy situation is a concern. The amount of that central banks around the world have to raise raids is a concern and will that lead to recessions?

Probably so the rodd slowdown that I think folks are worried about this really has yet to resolve itself into sort of how big, how deep, and how long it will be and investors, you know, are concerned about how much volatility they can stand. But if you have a long enough time arizing, you have to look back at history and recognize that the market sells off the most tend to tend to do that before recessions begin, and they take to storm to recover before we even know

officially that we've had a recession. And so for a long enough term investor, and I mean a year, two years, three years, there are some pretty good opportunities out there, but one has to be able to stomach the volatility, which doesn't look like it's going to go away anytime soon. Stomaching the volatility. That should be my daily job title Advisers Capital Partner, Jo Anthony. Thank you. Let's get back

to our top tech story. Meta has announced a hiring freeze and warned employees and restructuring the Facebook parents first ever head count cut. Let's bring in Bloomberg's Kurt Wagner, who broke that story, but also Bloomberg Intelligence senior analyst Man deep Seeing to discuss. Kurt, I want to start with you set the scene for us. What do we

learn in the course of our repulity on Thursday? Yeah, so this was during a Q and A that happens weekly between Mark Zuckerberg and all employees that Beta, and he said, uh, you know, hey, I promised you I was going to come back with some uh you know, ideas about where the budgets headed for three. And the big news is there's gonna be hiring Freeze and that it sounds like most teams within Meta are going to

see their budgets reduced next year. And so how exactly that's gonna play out within each individual team is going to be different. In some cases, you know, when someone leaves a team, they're just not going to fill that role again. Some people are going to be moving from team to team, and then in some cases they're gonna be kicking out low performers, right, which is a pretty drastic thing that we haven't seen that Facebook in a

long time or ever. And so this really just feels like a moment, right this company that has been growing and expanding for eighteen years finally hitting a bit of an issue here. I want to show you life some of what Mark Zuckerberg told Better employees on Thursday, these comments obtained by Bloomberg News. There are a number of ways to reduce the size of a group. Some teams will transfer people to other teams that are growing. A lot of teams will choose not to backfill when somebody departs.

But ultimately he used the word shrink. Two questions. This is a company that historically has not reduced headcount. But what is the reality of what we're talking about here? Yeah, we didn't get specific numbers. You may recall last week the Wall Street Journal had a report that that met Him might cut cost by ten percent, but that wasn't

clear if that was just headcount or other things. But again, as you point out, this is not a company that has normally or historically ever done this kind of thing. So any idea of shrinking that headcount from is a huge deal because I think last quarter they added almost six thousand employees and in the quarter, right, so the idea that they're going in the other direction all of

a sudden is pretty notable. All right, let me bring in Bloomberg Intelligent Senior Tech annaly Man deep saying this is a company that face headwinds on the bottom line, actually the top line as well. What is your reaction to this news. Well, the one thing is we know every company in this space is doing that where you heard that from Alphabet Snapchat, So it's not a total

surprise that they announced the hiring freeze. The problem for meta is we don't have visibility to win that top line growth will resume, not only because advertising is going through a cyclical downturn, but also because of the challenges that are meta specific, which is the pivot to videos, the Apple's I d f A changes, They have the largest exposure to direct response ads and look the reality

labs losses. They are really hurting because Facebook's metas free cash flow went from thirty billion to less than ten billion this year. That's huge. If you're an investor, you're thinking when will that thirty billion free cash flow return? And I don't think we have the visibility. So on your screen I pulled up meta reality lads. Actually, I think I'm right in saying last quarter sales grew four and fifty million odd, but the loss was almost three billion.

This is part of metas pivot to the metaverse. Is it just that it's becoming too painful the cost in the near term. Yeah, And as an investor you have to ask, what are these spending three billion a quarter on just they are taking the losses, but remember these are recurring and you know, is it going on? Product isn't going on just adding employees, which it looks like. I mean, they clearly over hired over the last two years. But the recurring losses is what is mind boggling here

and the scale of you know, the losses. And when you compare it to an alphabet or a snapchat, which are also investing in meta words or a R v R, it doesn't show up in their R and D spens. So that's where I think Meta really has to show two investors what is it that they're spending all this money on? What do we know about? What Zuckerberg to say for the reasons behind this? Why now? Why are

they doing this? Well, you pointed to the macroeconomic environment, right, and this is something that we've seen a lot of these tech companies, especially advertising based tech companies, talk about over the last couple of months and couple of quarters, which is, you know, there's inflation, there's a war going

on in Europe. Uh, you see all of these things kind of colliding and oftentimes when there is a recession or any hint of a recession, the first budget that tends to go with the marketing budget, right, and so when you're making money from advertising, it can be very cyclical with you know, that's why we see a spike

at the holidays, right, same kind of thing. When there are reductions in marketing spend because of other things going on, these companies usually feel at first, and so that's been a lot of the reasoning for why they're cutting back on these costs Mandate. There's also the other strategy, which is to go off to video in a crowded field with TikTok and YouTube and you and I've been discuss saying about how the ad side of that business is tough.

Explain to me why, Well, not only you've got you know, TikTok, there's also Netflix which is trying to get into ads, and we know Amazon has been, uh, you know, doing very well on the search side. So clearly this field is getting crowded and metals problem is not only are they losing engagement. Remember the time spent on beta, Instagram and Facebook properties is declining, even though their daily active user growth is holding up, but their time spantas declining.

So the impressions growth is going down and ad pricing is going down. So that's a double valmy. And that's why pivoting to videos is just the wrong time, because they are behind TikTok and all these other platforms and and it's just gonna take more time. They don't have the creator base that a TikTok has, so they have to bring the creators. Guess what. There has to be a revenue sharing model that's gonna eat into the gross margin. So a lot of problems in terms of making that pivot.

Now they should have done that before pivoting to ours. The battle for eyeballs continues. Bloomberg's Kurt Wagner and of course Bloomberg Intelligence senior tech analyst Man Deep sing thank you to you both. Coming up. An Apple executive is ousted after a viral TikTok details next, This is Bloomberg. More bad news for Apple this week. Shares plunged by as much as six percent Thursday, wiping twenty billion dollars

from its market value. Now Bloomberg has learned one of the company's senior executives is leaving after a TikTok emerged of him making an off color joke. Bloomberg's Mark German is here to explain, Mark, what did you learn in the course of your reporting. On Thursday today, we reported that Tony Blovin's, Apple's longtime vice president of procurement, been at the company for about twenty two years or so.

He is leaving the company after he appeared in a very viral video that aired earlier this month on Instagram in TikTok uh and in the video he made some crude comments. This is a TikTok and Instagram account by a creator named Daniel Mack. He goes up to people at car shows in Beverly Hills elsewhere in the world, goes up to people and asks them, if they're driving a fairly expensive car, what they do for a living.

And Blevin's response was clearly not in line with what Apple felt was acceptable, leading to his departure now from the company. As he said, Tony Blevins as a senior executive essentially head of procurement for Apple. That's a massive role. What projects has he been involved in? What deals has

he done for the company? Yeah? Absolutely, Blevin's has been headed procurement for Apple and what that means he does all the supplier agreements and partner agreements for many of Apple's products, particularly iPhone, the iPad, and some of their other mobile devices. So I'll give you an example of the Global Star deal that Apple did earlier this month or announced earlier this month as part of the new Satellite Emergency s OS feature for the iPhone fourteen and

fourteen pro that was overseen by Blevins. Blevins did the complex negotiations related to Apple sourcing five g qualcom modems for the latest iPhone units. He also did deals with Intel, uh Samsung, Display Imagination Technologies, any of the big suppliers that you've heard of. It was his responsibility to get those components ahead of the competition and at better prices

than the competition, leading to Apple's strong margins. Some people in the company say he's even irreplaceable given how important he was to Apple's bottom line and their product roadmap. Mark what do we know about how Apple dealt with this issue internally and what has Apple's response been to our reporting? So the video was first published on TikTok

on September five and on Instagram on September six. After the video became public, which, by the way, it has well over a million views on TikTok and over forty comments on Instagram, so I'd quantified it as fairly viral. People within the Apple Operations and Procurement organization reported the video to Apple's human resources department, which then enacted an

investigation into the situation. We're told that this month Jeff Williams, Apple's CEO, chief operating officer, made the decision that Blevins would be leaving the company. And today I spoke to Blevins. He issued a statement which is in our story. It's a formative an apology that can you can read in the article itself. And I spoke to Apple as well, and Apple confirmed that Blevins would be leaving the iPhone maker. All right, those are the latest details on that report.

Bloomberg's Mark German, thank you very much. Amazon is boosting pay for hourly workers in the US. The online retailing gilet says the move will raised the average starting wage for most frontline employees in warehousing and transportation to nineteen dollars an hour. Bloomberg has learned that Amazon will close all but one of its US call centers and shift hundreds of office employer ease to remote work. That's a move that would help save money on real estate, but

there are headwinds for Amazon's m and A ambition. Senator Elizabeth Warren of Massachusetts says she and other lawmakers have asked the FTC to reject Amazon's proposal to buy i Robot that according to a report from Axios, last week, the FTC asked Amazon and I Robot to send additional information about the proposal. On Wednesday, Amazon senior vice president of Devices told me he feels confident the deal will go through, and soft Bank Group has begun laying off

employees at its loss making Vision Fund. Sources say that soft Bank expects to cut at least thirty of its staff. The London based Vision Fund unit had about five hundred employees. It recently posted a twenty three billion dollar loss, with most of that coming from a plunge evaluations of portfolio companies. Now, Porsche is confident despite a lackluster I p O in Germany. On Thursday, Porsche just eked out again during its trading debut, with the I p O valuing the company at around

seventy three billion dollars. It's CFO told Bloomberg the company can meet its revenue target of as much as forty billion for this year despite the difficult macro economic situation. Here's some of that conversation. We have successfully mastered one of the biggest largest ip yours in Europe ever. And yeah, so far we are very proud and yeah, and I would like to say thank you to our entire team.

Horsberg has ensured said b Knstantia today and I cast my mind's eye back to four years ago and you flagged. You came out and said maybe we should I po Porsche with a market cap of around eighty billion euros. There was a bit pushback internally externally when you came out with that. Do you feel vindicated? Yeah? Absolutely. It was a tough fired over four years now, but we succeeded. Now we can't stand here. We are very happy. Yeah, and we see further potential for the future. Is our

strong brand? How are you going to cooperate between the parent company Volkswagen and Porsche. You have a little bit more independence now, but we know historically there's been tension between the brands and the portfolio. How you can incorporate and make sure there are synergies that work for you at Porsche. Yeah, we have negotiated an Industrial Corporation Contract b c W and has clearly regulated that Posher has

autonomy in future. The Posher board will decide in future completely independent from b W. And yeah, that's a great situation for us. We want to unlook Portia's full potential, of course, but we have also the possibility in future to work together vis W group brands. We are beneficial for Porsche. That's that's the case when it comes to sharing technologies like the tai Kan used also for the Audi Eton GT, fooling emissions, bundling, purchasing volumes are to

using production capacities like Ccaen and Bratisla. Okay. And talking about production, so you have the factories in Germany, you're producing Germany, you're producing in Slovakia. Where do you build out the factories of the future for Porsche. Yeah, hopefully in Germany and in Slovakia. There's no as a plan that was Porsche CFO Lutes Meshka. And what's interesting, I mean, last year the Taykan electric Porsche out sold the traditional

nine eleven. But what's also interesting out the news on Thursday, Porsche promising you purists out there that the nine eleven will remain a gasoline vehicle. The nine leven will still be running on gasoline for years to come. An interesting one. What do you make of that? Tweet me? Welcome back to Bloomberg Technology. IMD Lovelow in New York, India plans to boost the financial incentives it offers makers of tablets

and laptops to manufacture them in the country. It's part of Norndra Moody administration's effort to wou companies like Dell and Apple, and a challenge to China, has the main tech production base. The plan is to offer as much as five and fifty million U S dollars per manufacturer, According to a document seen by Bloomberg News, Apple recently started making the new iPhone fourteen in India earlier than expected. Following a smooth production rollout and sticking with Apple, the

iPhone makers shares dropped again Thursday. Apple was hit by a rare downgrade with Bank of America seeing the tech giants dominance at risk. Here with the details bloom Bugs

Bailey Lipshelves Bailey. Yeah, and we saw Apple fall almost five percent after that downgrade from Bank of America, wiping out close to a hundred and twenty billion dollars in market value, really sounding the alarm over concerns surrounding a weaker consumer demand over the next year, as well as concerns really around the fact that the US dollar is trading so strong. Apple is a company that generates more than half of its UH sales from overseas. That really

hitting shares today. But there was a bank that came out kind of disagreeing with that downgrade. That was Rosenblack at that company, or that firm upgrading shares on Apple or it's rating on Apple to buy from neutral, saying that they're seeing strength and demand from iPhone fourteen purchases, primarily the I four, iPhone fourteen pro and that ultra watch, so really kind of seeing value over the near immediate medium term and then looking at it though from a

broader standpoint. Over the last week, we've seen Apple shares really falling under market pressure that coming after that Bloom report that the company was pulling back on plans to potentially ramp up production of that iPhone four team. But Wall Street really has been disagreeing in the past few days about whether consumers are shifting towards buying iPhone fourteen pros and the pro Max more high end models as opposed to that low basic entry level at the iPhone fourteen.

All right, thanks to Bloomberg's Bailey Lipscholtz, Apple was just one drag on equity markets Thursdays then has that one hundred fell almost three percent. Global investors are bracing for central bank policy tightening and a slowdown across economies around the world. Private market investors a bracing to for more on the state of tech and venture capital. That's bringing Andrea Lamari, general partner at Manhattan Venture Partners, and Andrew,

Let's just start with a big picture. What is going through your head right now when you sit at your desk and you look at the world, what do you see? Well, and I definitely see a change in excitement across the venture market. I think generally what US enture capitalists believe

is that we're bracing for winter yet again. But this time around, it's really that the crystal ball going into Q one and Q two of next year is quite unclear for most of us, and some of us are just breathing a side of relief that many of our companies just have a war chest of cash sitting on their balance sheet for now, so I think we're all just bracing for winter. We aren't exceptionally excited about any of the I p O prospects, so we want to

remain bullish. Ultimately, it's an assessment of where will companies go and how will they control spending money going into the rest of the year. I'm taking a look at some of your firm's portfolio companies, interesting names, you know, that's another perspective. When you speak to the founders and executives at these firms, you know, many of them sizable.

What is your advice to them in this market? Well, many of the companies in our portfolio are very late stage and preparing for an I p O. Quite frankly, we believe that there's a three step formula for the comp bunnies that are preparing for I p O s going into the remainder of the year, as well as Q one and Q two, and those three things are first and foremost that they have to have a really compelling tail wind story that will project them really high

going into being a public company. So, for example, Trip Actions is going to ride those very deliberate tail winds and prepare for their confidential filing and I think overall that tells a really compelling story that for number two on the list is show value creation to retail investors that once they buy into an i p O that

there's only upward mobility from there. And then number three is that they actually can control spend and remove the obvious nature of being unprofitable and show that path of profitability, if not right before the i p O but after. So those are really the three things that we're going into our late stage companies and directing them on. Andrea your a venture capitalist, and we're always thinking about the

FED higher rates. How brave a decision is it to sit on the sidelines right now and not deploy capital. I think right now, overall we all are kind of bracing to say we can wait just a bit longer. I think that there will be a lot of questions coming from the limited partner community that are investing in these venture funds going into Q one of next year if many of us do not deploy capital for the

remainder of this year. But for now, I think we're all just really comfortable sitting tight and saying, hey, we're here to just support our portfolio companies so that the end the year really strong and focus less on where the FED is going with the higher interest rate hype, and say, listen, let's just control where the balance sheet is going. Sit tight, many of them still have hiring freezes that are in place, and stop spending money on

crazy R and D projects. To wrap up a beer, are we talking about this is being sort of a multi courtA not phenomenon the process. I mean, do you think that we get to the end did this year first quarter of next and things change or are you kind of battening down the hatches a bit A bit longer term than that. I would say we're all battening

down the hatches a bit longer than that. I don't see much of the dismay going into Q two of next year, but at least Q one, because I think we're all going to have a really retrospective look on once we get into the first quarter overall companies, at least we'll be able to display that they controlled spend, they cut costs where they needed to, and show that

the growth can continue. But I don't know if I see that it's going to be any more than quite frankly neutral until we go to Q two or companies say, okay, now that we have a handle on our balance sheet, we could really rev up where we had controlled all of our costs in two. So I'm much more bullish about a Q two A trajectory from here. There's a term that we've bandied around a little bit, the I p O winter. Is there an I p O winter,

particularly for tech? I absolutely think so. I think we're all really excited, And of course we obviously have a bit of a bias to say, okay, we might have prospects such as Instacart that will really be a shining star, maybe even a trojan horse for some other companies that are comparable to go public at that time frame in Q four, But really that I p A winter, it's gonna be freezing, it's gonna be chilly, and it's gonna

go until the second half of December. If we don't see any I p O s by November, late November, and then the first week of December, I really would say it's quite maybe quite a cold winter going into Q one. I kind of like your sort of refreshing honesty, you know, if you're being honest with yourself, And we think back to say the beginning of well, we just really overvaluing growth. We were overvaluing growth at all costs

in lieu of profitability. I absolutely think so. I think companies we want a hundred x are growth because that's what startups are fueled to do. However, now we're really seeing what the after effects, the aftershocks of that are going to be. And right now companies are pricing you know, well below ten x forward revenues, and I think that

that's a healthy place for us to be. And I think that that's going to take, you know, another two three quarters to recover from when it comes to valuation stabilization. And at this point in time, companies are just absolutely terrified of taking a valuation haircut, so they're agreeing to some pretty aggressive investor friendly terms in new rounds of funding today. Alright, Manhattan, Benja Partners General partner, Andrea Lamary, what a pleasure to have you on. Come back, Thank you.

All right? Coming up, as voters head to the polls in November, how will the results impact blockchain policy? Will share the results of a survey all about that. Next, this is Bloomberg alright, time for our daily crypto report. Bloomberg Snelly Bassett take it from him. Thank you. Ed. We're going to talk today about the intersection of crypto, Web three and politics because there's a new pull out from Hound Ventures and Morning Consults, and for more on

those findings is Hound Ventures chief policy Officer. To Mike and Tillman, thank you so much for joining us. I'm really curious here because you have about eight hundred people are so that you surveyed through this with Monty or more in consult But was there anything really surprising to you? We know more money has been going into crypto lobbying, We know that this is going to be seen as an issue for lawmakers. But what was different here that

you didn't expect to see? Well, there are a couple of real standout issues going into these critical midterm elections. We recognize that the next Congress is very likely to write the rules that will define policy architecture for the next generation of the Internet, and it's critical for those policymakers to know what Americans are thinking as they embark on that process. The first big takeaway for us is that the Web three voter is now a very significant constituency.

If you think historically, for example, about the role that organized labor has played in US elections, and it's been a very consequential role. We now have more voters in these key swing states that hold digital assets than hold an organized labor card a union card. So this is a very substantial swath of the electorate we're talking about. The second big takeaway for US is that this is

an issue that is prepartisan or bipartisan. There are substantial majorities of voters that say they will vote against They'll be less likely to vote for candidates who aren't in favor of or supportive of constructive policy making around the future of Web three. On that really quickly, because you know, you think about this is either a bipart is an issue, but you know, on one hand, voters seem to be more likely to post standidates who standard with policies, but

they're slightly leaning towards Democratic senators. Why is that the case. Traditionally the Democrats have been tougher on the financial industry and technology, So why in this instance are you expecting that not to be the case. Well, as a group, Web three voters tend to be younger, they tend to be more diverse, and they tend to be solidly middle class and at least in a couple of those categories

you do see close alignment. Broadly speaking, with the Democratic Party. Again, the fascinating thing to us on the whole is the degree of unanimity that we find across party lines and across ideological lines when it comes to these results. This is one of the last bastions of true bipartisanship in American public policy today. And the other critical thing which I would highlight is over mind percent of the voters that we surveyed were in favor of the core principles

that underlie Web three. So specifically, there we're talking about digital platforms that are community owned, community governed, and give individuals a greater say in how their data is used. That's a big deal, yea. And on that exact note, here are we talking about crypto more largely? Are we talking about tokens? Are we talking about Web three? What part of the spectrum here are voters really interested in

and seeing more policy being thoughtful towards well? Over sevent of voters feel the big tech has too much power in their lives. They are looking for an alternative to a digital framework that frankly isn't working very well. It's neither desirable nor sustainable, and growing numbers of the electorate

are I think cluing into that fact. What we see is that there is a broad appreciation of the potential that Web three has to create an Internet that gives more opportunity to more individuals and democratizees access to a lot of the financial and digital tools that have historically been the domain of very small numbers of people, and voters are responding to that in a big way. Now, do you think that in any fashion this will be

a single issue voter kind of situation here? Given so much else is happening, especially in the economy when you see a lot of people really burn from inflation here. Do you the a a war going on in Europe? To what extent does this fall into all of the other issues that are happening in America today? Well, we know that for a subset of these voters, these are very strongly held views, and they are passionate about the

potential of this technology. And they're also passionate, frankly about the need to build a better Internet, the need to develop a new digital architecture that is going to meet their needs a lot better than what we have today. Beyond that, this is I think the early days of what has the potential to become a very large and

very powerful constituency in American politics. Uh. And it is unlike anything we've seen before, and that it is simultaneously an industry, but it's also a community, and that convergence is creating some big opportunities to think differently about how we define policy in this space. You know, this is the mid terms right around the corner here, the second

part of Biden's term. To what extent do you expect to see a serious movement on a lot of the crypto regulation that has been promised from from lawmakers now for many many months. Well, we already today are in a pretty remarkable position when you consider where we were just two years ago. The fact that we have multiple very serious bipartisan pieces of legislation working their way through Congress, a very serious executive order that's forging a whole of

government approach to digital assets and web three. All of these are promising signs. We've certainly got a long way ago. And my assumption is that a lot of the legislating at least is going to fall on the shoulders of

the next Congress. But the fact that there is a real opportunity to create the cornerstones, to establish the cornerstones of what this new digital policy framework will involve, is something none of us should take lightly and frankly why these elections and the voters that decide them are so important to Mega Tillman Pound Ventures Chief policy Officer, thank you so much on the heels of your new survey

out with Morning Consulted back to you. This week, the company Illumina is hosting the Genomics Forum in San Diego. It includes speakers from Barack Obama to Bill Gates, and Thursday, Illuminate announced its first new sequencing technology in more than two years. The company says it can read a person's entire genetic code for as little as two hundred dollars a pop. Here for a bloom Bag exclusive on the

announcement is a luminous CEO Francis to SUSA. Frances talked to me about the technology that's gone into this latest iteration of sequencing tech. What have you actually done to update it? This is a huge movement step forward in our technology platform. We really redid every part of the sequencer so we've invented an entire new chemistry called Exley SPS. We invented a whole new optic system, including the glass

we needed for the lens. This didn't exist anywhere in the world, so we had to invent new glass to use in the lens. We've invented a whole new data path with high performance compute on the machine itself. So really this has been just a ground up redo of our sequencer platform so that we could get a major step change in terms of performance and really bring the price of sequencing, of genomic sequencing, you know, down to the market. We're also able to make this more sustainable

product and eliminate the need for the cold chain. So before that you needed dry ice to ship the reagents to run the machine to the labs around the world, and you don't need that anymore. And so this makes a sequence are accessible to countries around the world that don't have access to cold chaine. So it's a big step forward in accessibility. For instance, your ultimate goal is a one hundred dollar genome, you're at two hundred dollars.

It's it's just you playing it safe, you know. Our path, our strategy as a company has been to drive the prices down, and we've done that over the course of many years. When we first launched our sequence or in two thousand and seven, the price to sequence one genome was a hundred and fifty thousand dollars and that was

a breakthrough price in the market. We've gone from a hundred and fifty thousand dollars or genome to two hundred dollars a genome in that time for two thousand and seven until today, so greater than price reduction, and we're not stopping there. We believe to make genomics accessible to everybody and have to differ prints in healthcare that it can we need to keep going. Does this once again make you the market leader, the tech leader? Do you

leap frog back to that position of leadership? You know, we do. We really believe that in order to move the market forward, we need just to drive more innovation to make sequencing accessible. At this point, we do believe that our products represent the best sort of value proposition

to customers in terms of performance and price. But look, the reality is were very early in this market right If you think about the market opportunity in front of us, we still have largely untapped the medical need for genomic sequencing, So the vast majority is of the market is still in front of us. A lot of innovation to do to really open up the markets, as do we think they need to be. I want to ask you about the reality of this for your customers. We're talking about

labs right, complicated, sophisticated lads. You're talking two D genome, but it's an expensive cost for them. What have your pre order has been like, what does the initial interest from your customer they's been well, the earlier response has been phenomenal. You know, we gave a sneak beak to a few customers before we made the variety of the announcement this morning, and every single one of them pre ordered.

So we're at this stage now we're taking orders. We ship the instrument in Q one of next year, so a few months from now, and we're gonna be taking orders between now and then. The response has been strong

on the number of fronts. People really appreciate the price reduction, People love the sustainability features, so reducing the waste and the plastic and people we had a couple of customers come to us in tears about the fact that you no longer need a cold chain so this product is now available in parts of the world that just didn't

have access to hide through with sequencing. Francis, your seven billion dollar deal for Grail was vetoed by the European Union this stage of the process, do you give up? You know, the deal for Grailer's an important one because, as you know, we invented with Grail was a blood test that can find fifty types of cancer across stages.

That's life changing because we know that ten million people a year die of cancer, and we also know that if you catch a cancer early, your arts are surviving are so much higher than if you catch it late. Now of the people who die from cancer die from cancers that are caught at late stages. So by doing the blood to die, rolling out Grill's blood tays more broadly. You know, we believe that that has the potential to save many lives around the world, and we can roll

out more broadly than Grailed with on its own. So it's important. We're going to continue through the process to see if we can win on appeal with the European Commission. Alright, Iluminous CEO, frances to Zoza, a pleasure to have you on the program. That does it. For this edition of Bloomberg Technology Friday, we'll have Katie Horn of Horn Ventures to talk about her bets for the future of the Internet. Don't forget to check out our podcast. You can find

it on the terminal, on Apple, Spotify. Of course, I heart this is Bloomberg.