From Marhart where Innovation, Money and Power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed loved Love.
I'm Caroline heindet Bloomberg's World headquarters in New York and.
I met Lovelow in San Francisco. This his Bloomberg Technology coming up.
The FTX founder Sam Macmnfried is found guilty in his full trial, now facing decades in prison. We'll break down the decision to discuss what it means for the broader crypto industry.
Plus Apple shares taking a hit after the world's most valuable company warns of a sluggish holiday quarter and some weakness in China.
We have full coverage ahead.
And we'll have an exclusive interview with the CEO of Zieman's as the company invests half a billion dollars in new US manufacturing.
Let's check out these markets.
It is a macro picture one of a calling jobs market, which means maybe we're in Goldilock scenario. People buy on the fact that maybe the Federal Reserve can indeed rest on their laurels for a little bit. Now we're seeing the anaunsdak currently at one point one percent. I mean having an absolute phenomenal week, best week of the entire year.
So two is the S and P five hundred.
In fact, the thirty year yield dips down some some basis points on the day.
Last three days we've seen the thirty year.
Yield plunge the most since back in the pandemic, so notable moves in the bond market and the stock market.
We're looking at the.
Dollar index off by almost a four percentage point down against every major currency that we currently see because we start to anticipate a less hawkish FED.
Let's look at what means for.
The world of crypto, which were gonna be digging into much more this entire hour head And actually we saw a little bit of a pop over the last well they are training first and second and November, but in general we're range band once again below that thirty five thousand dollars level. It's notable that we're actually climbed just slightly over the last five days, but.
Really we do seem to have seen a peek in the buying. Maybe we now need.
To die what the ramifications of Sam Magmin Freed's guilty verdict means for broader crypto at large.
Ed what are you watching.
Well, the other big story, which is Apple.
You know, this was the one we were waiting for, and largely we got what we expected, the fourth straight quarter of overall sales to climb for Apple. We have to go back two decades, two thousand and one to the last time Apple had a slump like that. In the show, We're going to go deep on China in particular, they had very clear explanation for what Apple thinks is happening in China, but basically they missed estimates, saying iPhone was actually strong, a record revenue quarter for iPhone, but
weakness in iPad and Max. So much to discuss, and it's kind of strange because there's so much news. Thursday night was wild in the world of technology, right. Apple was a big story in the moment, and then it quickly became a clipse. But we will bring you that analysis throughout the hour.
We will. Meanwhile, though, let's get back to the discoy STUFFTX found the Sam Magman freed. He's been found guilty of seven counts of fraud and conspiracy following a month long trial that pitted the testimony of the former crypto king against those of some of his closest friends joining us now someone who is in that courtroom when we saw very swiftly this verdict decidedly most uti Yang, Just what was it like.
To be getting that sort of response that quickly.
It was a complete surprise. Nobody expected the result will come out so quickly. The verdict with the deliberation started shortly after three pm on Thursday, and some people just left the courthouse and went home because usually for cases of this skill, jury will take sometimes or even days to deliberate it. But it turns out regard the verdict shortly before a pm. So the jury really took a quick turnaround turnaround on this and we find out that Sam was convicted on all counts.
Very few people ultimately able to be there to witness that.
Momently.
Can you just tell us sort of what the realc action was of someone said himself of his own lawyers, for.
Example, Yeah, I will start by saying that earlier in the night, there's actually some lighthearted moments. The first jury note came out and the judge said there are only three words written on it, which is we want cars, and that's what the jury was asking for. They wanted to get transportation provided for them when they go home after finishing the night, and when the judge announced that,
the entire quruom just burst into laughter. Nobody expected that to be the first jury note, and even sent himself he was laughing. It was probably the biggest laugh of seeing him throughout this trial. But then I would say that the mood really darkened later into the night and when we find out that there's gonna be a verdict, the entire quurum was just quiet.
You could just.
Feel the sense of suspense, the sense of nervousness among people. And eventually the judge was the one reading out the verdict.
Sam rose up.
As he listened to the verdict, he was clapping his hands in front of him, standing very uptight, didn't really have much facial expression on his face, and as he listened to the verdict guilty, guilty for every single count, he just kind of had this uh serious look on his face. And that meanwhile, his parents were just you could tell they were devastated. The dad, Joe Bankman, he
kind of doubled down and looked down. And after the verdict was announced, the parents, at the end of this proceeding, they tried to approach sent back free from the back, but they really couldn't get to him because there is a barricade that kind of separated the courthouse quom between the gallery and where the lawyers are.
And Sam was.
Immediately escorted out by US Marshals and on his way out, he took a brief glance back at his parents, and there's a slight nod and acknowledgement at his parents, and then he was gone.
Bloomboth Utu Yang incredible reporting of the events that took place in that New York courtroom on Thursday evening, and later in the show we will get more reaction from the crypto industry for what this symbolizes, much more broadly than the events of Thursday. The other top story that we have to get back to here on Bloombow Technology is Apple's earnings. We're going to bring in Forester Research principal analyst juliasc who I'm delighted to say is with
us here in San Francisco. You heard me at the top of the show. We kind of got what we thought was coming, four straight quarter of overall sales decline. But then you dig down by product and number and it's much more complicated.
We start with China. What was your takeaway there?
So, I said, I listened to most of the comments from Tim Cook, and I understand the elements about the smartphone. What I thought was interesting about and interesting about his announcements is Apple had growth in some of the largest economies in the world, right places they haven't traditionally been strong or had a lot of sales. And you heard him talk about China with record growth and smartphones. You
heard him talk about India. You talk and talk about Indonesia and three of the largest you know economies, well not economies but country you know, popular markets markets in the world. And I thought that was encouraging that they're looking for growth beyond their existing customer base and outside of the Americas, which have to really been their strength.
Okay, So in Greater China sales fell two percent year on year, but Apple said that on a constant currency basis, they would have grown. What they said was that in Greater China, iPhone had a record quarter and the drag in sales was principally in mac an iPad, where in that quarter there have been no refresh.
On the product.
What's the conclusion we draw, We just take it at face value that actually iPhone's doing fine.
There, So not being a financial analyst, I would have to take it at face value. But I think there's a couple of things in place. Like one of them is is this the upgrade cycles are slower. If we think back to when we first had phones or smartphones, we were upgrading those every eighteen to twenty four months, and that upgrade cycle is probably closer to three to four years now. The second thing I take into account when we think about, you know, the markets, is this
isn't their biggest quarter. You know, we're coming into holiday season, which is by far the biggest quarter for Apple and for every retailer that's there. And when we look at our data, we have twenty four percent of US online consumers saying they're going to spend more forty percent at least the same as last year. And we've got almost twenty five percent of ansumers saying they're going to spend
that money on consumer electronics. So I think also as we look forward, there's some optimism at least for this holiday season.
And yet the guidance wasn't one of optimism.
And to that extent, do you think this is just Apple being typically cautious in this respect.
Yeah, there's probably Apple being typically cautious. I think Apple in some ways also they hold their what do they call it, They hold their cards close to their chest. I mean Apple is play playing a long game here. When Tim Cook talked about the ecosystem of hardware, software and services, they had a new chipset come out about I think it was a week, maybe it was just this week, right, Their products get better with each generation of chips that come out. You look at more than
one billion active subscribers and two billion active devices. Those folks are spending a lot of money with Apple, and those are just the services we pay for, right. But it's payments, it's healthcare, it's maps, it's email, it's everything we do one hundred or two hundred times a day. And I do believe that they're playing a long game here.
That make it suddenly you know they're chasing acquisition. But also the switching costs off of Apple are very high these days for anyone who has bought into the Apple ecosystem, and I think that's a real place of strength for Apple.
Ultimately, this becomes there for a global narrative and one of which we are will worried about China, will worried about the implications long a term. But do you think that competition from the android sphere is getting more real, more ferocious, more clear, and the nationalism playing into this respect.
So I think I don't follow in the Chinese market as closely, but I think certainly that's an element in a market, you know, like China or India. You know, when we think about Apple and smartphones, they're certainly chasing the top end of the market. It's a very profitable device for them. And not every company that's selling smartphones is always selling is you know.
The goals and problem.
You know, some companies make money in other ways. You know, it could be the telecom providers, it's advertising, And there's a lot of different business models in China and Indian and some of these other countries that are less prevalent here in the United States that make the sale of the smartphone you know, I would say less important in some of those markets in terms of total revenue.
Judy, it's always.
Great to get your expertise and thank you for it for us, A research principal analyst, Judy Ask. Meanwhile, we're going to stick in the Apple verse. Fox Con is best known of course I building iPhones, but now it's putting big on gifts, what electric vehicles. We spoke exclusively with a fox Con chairman, NC young new about his belief in an electric future.
Take a listen.
After four years, we're becoming more and more excited because the more we learned about this new industry, the more we believe this is the right industry for FASCA to go into because with fastcas experience and its scale, and it creates big enough entry barriers for our competitors in the ICT industry to go into.
How big is the opportunity for fox Cone in terms of the market size and also for the company's capabilities.
For the market size, We did a study when we started about three or four years ago. At that time, the market at twenty twenty five was estimated at six hundred billion US dollars big, So this is big enough. If we can and get you know, like ten percent of it, it will be sixty billion and fast kind of running it about two hundred seventy ash you know that kind of market, that kind of revenue. So with sixty billion, it's about two points some twenty five percent around that figure.
You're building a factory from the ground up in Thailand. You bought a factory for this project in Ohio. First of all, what did you think when you visited the facility in Lordstown, Ohio.
Well, it's huge facilities, with a lot of histories and a lot of capabilities. We think we can do a lot by converting that factory to a EV factory. And also because the surrounding environment they used to do I would say five hundred thousand cars a year at that kind of capacities, Definitely, you have to have enough supply chain in the area in order to support that kind
of production. And with the supply chain almost there, with the location with the space that is big enough, so we think it will be very good now for the EV production there.
Fox CON's chairman and CEO Young Lewin's a pretty incredible exclusive coming out of Asia from Loombog's reed Stevenson Semen's announcing more than five hundred million US dollars in manufacturing investments in the US to support rapidly growing industries like data centers, semiconductor, and battery manufacturing. And that includes a new one hundred and fifty million manufacturing plant in the Dallas Fort Worth area in Texas. Semen's global CEO Roland
Bush joins us now from Dallas. Big News, Doctor Bush, thank you for your time on Bloomberg technology. How much of this is being pushed by the IRA and the incentives that were on offer to establish a supply chain here in this country.
Well, I mean our five hundred million investment program the United States has two reasons. Of course, it's attractive environment on the one side, but it's also our market. It's our customers which we're asking for our technology. So you know that. Earlier the year we announced on a twenty million investment in North Carolina and Lexington. This is our brand new rolling stock manufacturing plant and this is definitely pulled by our customer. I mean, our customers are really
buying rolling stock trains for locomotives from US. And now today we announced on a fifty million investment in Dallas for Worth and this is about electric products. We are basically supporting the data center industry and large language models data centers with electrical products and that's a reason for investing. And of course an attractive market environment is an add on too.
Do you have a clear line of sight to the funding that is available from the IRI. One of the things I've heard from CEOs all over the world is that on paper it's fantastic, but getting hold of the funds and getting going on the project actually has some latency to it.
Yeah, well, you know, the point is number one is the funds. But for me, the most important point is really people. When you talk about a manufacturing site, you talk really about a fully automated and digitalized manufacturing site. So you really have to get the right people on the shop floor. We are training and educating people at the same time, so will little of people in a market which is fully scars of labor is one of
the biggest advantages. This is what we find here. And if you're doubling down basically on our investment, which you have already in Grand Prairie. Team did a great job in really bring our business within three years on electoral products and a strong customer demount comes together. So that is a nice fit for investing in the United States and particularly here in Texas.
Well, let's talk about Texas. You join us from Dallas, the Dallas Fort Worth area. What was it about that location that made it an attractive place? For you to set up your supply chain there.
Yeah.
I mean, as I said before, it's a very attractive environment from the government, what kind of support they provide. Number two, it's forty miles away from Grand Prairie, where we have already a full fledged manufacturing site for electoral equipment. We have the people there, we have the supply base there, we have the management, so it's easy to double down our investment on already a very great team performance. And then we found a nice place here, a very good place.
It's an existing site which was used for a warehouse convert We are going to convert it now for manufacturing. So it all comes together. And again this is a very business frontier environment that you find here in Texas.
You talk about Delta Bush, your focus on an end user, the client demand coming from the United States. Compare and contrast that to Europe at the moment.
How much are.
You seeing clients having to dial back some of their demand because of the macroeconomic environment.
What we do see is, let me start with the energy intensive industries. They are really looking into the United States because you have very low energy crisis, and that's a big advantage on top cons your Inflation Reduction Act, which is really supporting investment in the United States. So this is where our customers. I mean, it's a chemic industry, batrem factual data centers, but any kind of energy intensive industry is moving to the United States. They're looking into
that market. And it's a market too, it's a big market too, and we are in many many cases you're following our customers to these markets and investing there. So this is a very very positive environment. And you see also semiconductors of following so all the energy intensive critical infrastructure of businesses, they are coming to United States. This is a clear trend. We do know that also Europe is putting some support in subsidies for companies. This will
also get some investment. But the competitive edge on low energy prices is a clear advantage for the United States.
Talked a bitch.
I'd love to discuss that competitive edge. Your home nation, Germany and its economy is being debated by the technology industry and at the same time, the EUS kind of response to the Inflation Reduction Act as a place to do business and incentivize investment. Talk to us about the equation for you of Germany versus the United States.
I think you have to differentiate what kind of sectors you're looking into. As I said, energy intensive industries, it's very hard to defend. At the same time, we have a very strong ecosystems, and Germany in particular, it's not only the big companies, but it's all the whole ecosystem of small and medium sized enterprises in machine tools, machine manufacturing, but also for example, the medical industry, car industry, but
also to some extent from acehutical chemical. If you look forward in the way how you can deploy new technologies in these markets, that gives you an idea which kind of industries you are able to defend or even expand. It's all about technology. I mean, Germany is an export countries and in the innovative countries, in the industrials country, and this is the strength that we have to play
and we have to strength. And there's a reason why I very much support also the subsidies which we're giving into for Intel for example, but also for all Speed and TSMC to invest in semiconductors industry in Germany because we do have the right environment, the right people, educated people, a good environment to really also go for this kind
of industry. So you have to look in a differentiated way, and there's still industries which I believe have a great future, but we have to build our strengths, produce ecosystems and technology.
Zemian's global CEO Rolandish, thank you for your time here on blue Bed Technology.
Caroline.
Meanwhile, let's talk a little bit more about some of the companies that are out performing on the day, Yelp being one of them. We're going to be speaking with the CFO next on the company's earnings and they're managing to post double digit growth and revenue. This is Blombag Technology.
Time now for talking tech. First up, Jeff Bezos says, well, he's moving to the East coast.
The Amazon founder is relocating from Seattle to the Miami region in order to be close to his parents. The Blue Origin operations of course as well in Cape Canafron. Meanwhile, Xai will finally introduce this first AI model this weekend to select group of people and the billionaire Elon Musk started the bench over the summer. This comes million a day after Mask reiterated that AI post is an existential
threat to humanity. That was over in the UK at the AI Safety summit, plus a new bipartisan bill would put the National Students Standards and Technology in chatter deploying AI safety standards. The bill, proposed by two US senators would direct this to provide federal agencies with safeguards for AI, of which they would be required to adapt. Similar bill is expected to be introduced in the House.
Ed all Right earnings Yelp shares popping after the company reported earnings, boosting its net revenue and adjusted EBITDA forecast for the full year. Joining US now delighted today CFO David Schwartzbark David. Analysts are basically saying.
You're a juggernaut.
Tenth straight quarter of double digit revenue growth. I think what's missing is the answer and what keeps that going.
Ed, It's good to be here. Is the tenth straight quarterer of double digit growth for US. That's been against the backdrop of what has certainly been a challenging environment for digital advertising.
How have we done it well? It certainly starts with consumers.
Tens of millions of consumers come to Yelp every month for our trusted reviews. We're obviously a household brand. When they're making those critical decisions like going out on a first date.
They want to go to the right restaurant.
But if you're spending a lot on remodeling your kitchen, you really want to choose someone who's going to do a great job for you. And around services in particular, we've really leaned in. Fourteen percent growth in the third
quarter for service is twenty percent in home services. We think we're taking market share and we're doing that while driving Adjusted at EBITDA is a record quarter for us at twenty eight percent adjusted EBITDA, and we think our product led strategy is really working very well for us. We think it's the best quarter in the company's history, and we think that we're set up to have the post here in the company's history.
David, We love the numbers.
I love digging deep into the financials, but with Yelp, I just always want to know what the story is right in this economy, with the priorities that consumers have, what is the the psychology or driver that makes them go on Yelp. What is it that the consumer is doing that helps your business grow.
Well Against the backdrop of high inflation where things are more expensive, it means people can't go out as often, they can't do as many home projects, so they really want to make sure they're making a good decision. And what we found actually is that consumers are doing even more research than ever before making those purchase decisions. And the folks who are coming to you help, they're high intent.
They're actually ready to purchase their affluent. They are the majority of folks have gone to college, they have advanced degrees, and so they want to do that research before they make that purchase decision.
I'm interested in these being record sets of numbers. You say, perhaps the best quarter in history, yet your market capitalization is half of where its best was back in twenty fourteen. How can you can convince an investor base that you are worth more, that the value of what you're bringing is more to an investor right now?
Well, we really have transformed the company over the past five years, and we moved from what was a sales headcount driven growth model to a product led growth model, and that product led growth model is paying off. We obviously saw very strong adjustedy ebit don margin in the third quarter, but over the long term, we think that that product led model enables us to continue to deliver
profitable growth for the long term. You know, we're just going through our planning process for twenty fourteen twenty four and we're very excited about what we can achieve next year that will enable us.
To deliver these types of consistent results.
How about globally speaking, David Hay, why can you pull on leavers in terms of growth? We were just speaking with a European based company, Zeeman's, which of course is having a harder macro picture in Europe than it is in the US. How do you see your ability to continue to ride a wave of US outperformance?
US economy certainly has held in there and we've been and very relevant to consumers that they made those decisions as I was saying around inflation. But fundamentally, what we want to be able to do is to really leverage technology to continue to deliver value to consumers and to advertisers. At the end of the day, we have to give them value and they have to find us relevant.
We obviously generate that content through these user reviews.
We think it's really important for those to be trusted. We want to be that trusted brand for folks, but we also want to be the best possible place for consumers to go to make purchase decisions, particularly around services, so we're continuing to invest there. We're continuing to differentiate the experience. We grew home services about twenty percent in the third quarter. We think we're taking market share and we think that that sets us up very well.
For the future.
David, great to have some time with you.
YEPCFO David shots back, really giving a really great macro picture there for us.
Ed to you.
Yep.
It's Friday, which means for the final time this week that's going to check in on those European markets. The stock six hundred Europe it's the gauge we've been checking in all week long because it's kind of cross. European has had its best week since March, really rebounding. A big part of that is the central banks story all over the world, but also some European earnings feeding into it.
Kind of countering that. On the other side is the geopolitical risk story and the Israel Hamas war has been impacting Brent crude, which is kind of the global benchmark for oil separate from WTI. We're down four percent on the week. We've seen yields come down a little as well, the German tenure burned two point six three percent, off twenty basis points over the course of the week, and euro dollar the euroeup one point six percent against the dollar.
It's been a fun week. We've been showing you European markets because of the time difference at this time of year, but.
That's it, and those European markets end, as fun as they are, have been dictated in large part by macroeconomic policymaking over here in the United States, and of course a lot of that's to do.
With a FED yesterday, well on Wednesday, indeed, but.
Also what's happening in terms of the data, the rich data we're getting, and the cooling that we're getting in the macroeconomy here in the USTAM of jobs perspective. Goldielock scenario is on the stocks they rise. Here in technology, we're up NAZAK one hundred and one point three percent, basically best week for the big benchmarks since last year.
So clearly a.
Desire to be getting back into some of these stocks that have been sold off. I'm looking at a two year yield as you'll see currently dipping down. In fact, across the board, we've seen bonds rallying, yields falling.
As we anticipate a less hawkish FED.
I'm also looking at what's happening in the world a bitcoin and actually, interestingly, even though we've got a week of dollar, significantly week of dollar, we're still seeing bitcoin just to the downside. That seems to be a read across more and what's happening in the world of court decisions around Sam Bankman freed and FTX the guilty verdict dead.
Yeah, and that is the biggest story of the day, one of the biggest stories of the year, and we'll get back to it. Sam Bankman freed, convicted of a massive fraud that led to the collapse of the FTX exchange follows a month long trial where we heard from Sam Banker and freed himself from some of his closest friends and confidence. We want to go back and look
at how the trial played out. With Christine Adams, partner at Adams, Dirk and Stein, who was over twenty five years of experience as a former federal prosecutor specializing in sec investigation and white collar crimes. Our reporter earlier in the program painted the picture she was in the courtroom the moment that the verdict was read out. Was the verdict and the seven guilty counts that came a surprise.
To you, Honestly, No, I was a bit surprised that the verdict came so rapidly, But I think everyone who was watching this trial with some background and expertise saw this.
Ship sinking rapidly.
It was clear that Sam Bankman Bridge's testimony was going to be what it ended up being, a hail Mary passed that was not successful. There really wasn't a question when the government kept being so simple and just simply showed that Sam Bakeman Freed said one thing and did entirely another, and that his image was basically a ruse as part of this whole cryptocurrency.
Fraud, Christine.
The lead headline of Bloomberg this morning is SBF faces decades in prison after swift guilty verdict. The facing decades in prison part help our audience understand how that sentencing process will work from this point.
So there is a set of guideline factors out there, the US sentencing guidelines, but.
Those are entirely discretionary.
So the core is required to consider those various factors and then make a determination in his own discretion how those factors will apply to mister Bateman Freed's sentence. What's driving the sentence that everyone's describing as possibly life is the loss involved here.
Obviously there's millions, if not billions of.
Dollars lost here, So that's one main consideration. Another consideration will be his leadership in the organization.
So what will happen is mister.
Bateman Freed will be subjected to an interview by pre Child Service, by the Probation Office, and they'll prepare what's called a pre sentence report and make a recommendation based on his personal background, information and the factors around these crimes that the defense and the government can then respond to and the court will take all of that into consideration in sentencing mister Bateman Freed.
His own legal team, of course, showed their disappointment regarding the verdict.
Will they appeal and what sort of grounds might they use?
For example, I've seen lots that there was concern around lack of well ability to access certain medicines for example.
Yes, for apps, I'm certain that they will appeal and that will likely be one of the grounds. Another ground will possibly be the fact that the court limited his defense that he relied on the advice of lawyers as evidence in his case.
I understand that the defense was.
Objected to specifiously by the government during the defensive cross examination of the cooperating witnesses, and that those objections were sustained by the government.
That might be another grounds for appeal as well.
And what about those that gave evidence, those that in many ways predd guilty themselves. How do we anticipate that they too will will face punishment, potentially prison time.
They will this again will be in the court's discretion.
They will be sentenced after mister Bankman Freed is sentenced, and the court will take into.
Consideration the cooperation in this case.
The court will also take into consideration the fact that they were all leaders in this organization as well.
One was a head of engineering, one was a co founder, one was the CEO at FTX.
The court will also take into consideration the value of their testimony. You know, it's very difficult oftentimes to prove someone's intent. There was obviously a lot of creating evidence in contemporaneous text messages and documents, but certainly having the people that were in the room talking about what mister Bankmanfreed was saying, is very valuable. The CORP will also take into consideration that they cooperated.
Essentially after the fact. No one took a risk in war or wire while this was happening.
So these are all things that CORP will take into consideration in sentencing the cooperating witnesses.
Christine Adams, really great to get your expertise. We thank you partner on Adams, Dirk and Cammernstein decades in that expertise as a prosecutor. Meanwhile, let's continue the conversation what the ramifications are for.
The rest of the industry, the crypto industry.
Nick Carter, founding partner at Castleleilen and Adventures, pleased to say, is with us VC firm focused on public blockchains?
And Nick, I mean, is this good news?
Is this like a sigh of relief for the industry that this has sort of been done and dusted, or does it still have a spillover effect that well, crime could have been committed within this industry group.
No, it's a moment of relief. And I saw a lot of self clebration jubilation on crypto Twitter last night. Practically everyone in the industry was harmed by SBF by FTX, no one escaped unscathed, And of course there's a secondary effect where the collapse of FTX gave regulators air cover to go after the industry really harshly, which we've seen
in the last year. So I think virtually everybody is pleased at the guilty verdict here and grateful that this is over and we can put this sortid episode behind us.
Nick, Good morning from San Francisco. Good afternoon where you are. Look, we are careful to draw a causal link right over the trading of crypto markets this week and the trial, but that's what we're writing about in Bloomberg this morning, the headline red hot crypto rebound calls as bankman Freed is found guilty. Did you see that, you know, the tension of the trial play out in the markets that you're focused on.
I don't necessarily see a strong connection between the outcome of the t and price action. I mean, ultimately, virtually everyone thought this would be the outcome. I think it was very clear over the prior few months that Sam didn't have much of a defense, and frankly, it was very obvious if you'd followed any of the books written about FTX that he didn't have much of a case here.
I mean, his defense that he'd mounted in the initial weeks after the insolvency after the bankruptcy was pretty weak. I mean, they siphoned the funds, and the margin trading excuse didn't really make any sense. So I can tell it seems like everyone kind of expected this outcome. I thought some people thought there might have been a hung jury or small likelihood that he wheaseled his way out of it, but ultimately it was pretty forecastable.
Now you mentioned how basically no one was left unscathed in the industry, and I bring up a post coming from Alfred.
Lynn, of course, a sequoia, and he had said.
I think after the results that today's swift and unanimous verdict confirms what we already knew that SBF misled and deceived so many, from customers and employees to business partners, investors, including myself, a sequoia. In fact, he said, basically, they did their own eighteen month working relationship, they evaluated that, and they concluded them been deliberately misled and lied to.
What are the learnings from this?
The positive's got to be how things change due diligence, of course, being one of them. But ultimately how people investigate founders and indeed what's being built in the ecosystem.
Have things changed, Yeah, I mean I don't know precisely what Sequoia's diligence processes, but it is the job of a venture capitalist to ascertain whether you are being lied to. I mean, we passed on FTX. We felt that the risks the juice wasn't worth the squeeze there. It was an unregistered offshore exchange. We passed on it twice. Many of us were skeptical of SPF throughout his whole history in the crypto space. I'm not saying we knew there was a fraud going on, but the signs were certainly
there us. And the take from it is, you can't be taken in by these wonder cans that become the main character in crypto, and don't be taken in by outrageous growth. And you know, things like boards and governance really matter, alignment really matters. So there certainly was a way as a venture capitalist to decide that the opportunity wasn't worth it.
Nick Carter, founding partner of Cast Island Ventures, giving his perspective on his interactions with FTX and the outcome of this trial. Thank you very much for your time here on Bloomberg Technology. Now, It's not the only crypto situation that's under Washington's scrutiny. Yesterday, the FTC released a less redacted version of its anti trust complaint against Amazon, alleging the big tech giant doubled the number of junk ads to boost profits and deleted internal communications to thought a
federal anti trust pro. FTC Share chair Lena Khan spoke to Bloomberg's Emily Chang at a tech and anti trust event in San Francisco.
Have a listen.
I mean, what's really interesting is how be it in this case or a whole bunch of other cases relating to platforms. We see like a monopoly playbook, and so in the early years, the firms are chasing gross and share, and so they'll actually compete to make their products good
for people. But we've seen how in digital markets, once the market tips and these firms start enjoying monopoly power and able to start protecting that power, we see that they start becoming too big to care in a basic way where they can kind of make their product worse,
they can make it more expensive. Corey doctor Rowe has written about this really effectively, about the kind of life cycle that we see where at the kind of end stage of the monopoly cycle, these firms are just in extraction mode where they're really not having to compete or make their products better. And sometimes it can be hard to kind of imagine what the counterfactual would be, right, like,
what would have happened if we'd had more competition. But what's so interesting that we were able to find through our investigation was that, you know, you don't have to They weren't being subtle about it, right. These were tactics that very overtly had the effect of overcharging people by upwards of a billion dollars, actively degrading their services in
ways that they recognized was making the product worse. And at various points, you know, there were folks at Amazon saying, hey, like, we think these practices are actually bad for people, let's not do it. And at each juncture they were overturned by the executive. So it's you know, all laid out in our lawsuit, and you know, we think we have a strong case.
So in your view, Amazon is a monopoly.
Yes, that's what our lawsuit a legislate FTC chat Lena Kam.
Meanwhile, look, the sea of TikTok will visit Brussels next week to discuss data protection and disinformation with representatives from the European Commission, and the meeting will be the first since the EU and a number of countries there fans government officials from using TikTok on their work.
Phones and.
All right, coming up on the show, it's the race for memory in the LLM space. We're going to break all things memory chip down with Urrogit Raye Choldry of Georgia Tech. This is going to be a deep, nerdy, but important conversation.
This has blimbo technology.
So it's been a big week for the technology that's powering AI. AMD Earning showed significant demand for its MI three hundred AI accelerator, which is set to take on in Video's h one hundred. We also heard startups who need the chips to build large language models, raising money or in some cases failing on a near daily basis
a technical challenge for all of those memory. As AI workloads increase, there's an intense demand and need for high capacity memory Chips presenting a technical challenge known as the memory war, joining us to discuss Professor Arrojet Ray Choudry at the score of Electrical and Computer Engineering, Georgia Institute of Tech and an expert in all things memory ships.
So let's start with the memory war, Professor, what is it?
So if you look at the performance of a processor and that of a memory, So the processor performances increase or keeps on increasing every year at much faster than the performance of a memory increases. So that creates a sort of a wall that we call the memory wall, which is the gap between the processor performance and the memory performance. When a top of the memory performance, it's
a couple of things. One is the capacity that you mentioned of the total memory that you need to perform that work, as well as the as the rate the bandwide that which you can read and write from the memory.
So at the moment, what's happening with these large eye models, particularly these larger language models or elelems, is that the amount of memory that you need in order to store all the models, the activations, and all the intermediate data, as well as the rate at which you need to access all the data are both becoming a huge bottleneck
in the entire workload or the computing spectrum. So that's kind of the memory world, the difference in logic performance and the memory capacity and bandwidth that you need in order to keep on feeding the logic.
Er j this is your error expertsise.
This week, a MD talked up them I three hundred x is having sort of superior high bandwidth memory, but the g H two hundred, the Gracehopper is coming from Nvidia. What is your assessment of those two GPUs.
I personally think they would be very comparable. So if you look at age one hundreds now compared to the AMD offering that we have. Of course, the HPM three that AMD has has more capacity, has more bandwid But at the same time, if you look at the announcement from Nvidia, which happened a few months back, the Gracehoppers, the super chip that's going to come out, which is a CPUGP pair that's kind of that will have the same kind of HBM three with you with as much
memory capacity and higher bandwidth. So I think it's kind of a race between the multiple companies at the moment, which are all kind of gearing towards more bandwidth, more memory, more capacity, denser memory. So I think we are in some exciting.
Times, Professor, you've argued in your research.
So what we need is denser, more energy efficient, higher capacity memory.
What's the solution? How do we find that it's there?
So the solution can be at multiple layers of the stack. So there's a lot of war going on in new technology, which is essentially going beyond. Let's a charge to look at other kinds of material properties that can be used as memory. The next is, of course circuits. How do you addage those bit cells or just memory elements so that you can read, write, and access them with the
lowest amount of energy the highest performance. Then, of course the architecture like how do you put the whole thing together? And that also includes today more advanced packaging solutions. The idea would be to keep on bringing the memory closer and closer to the GPU or the logic as possible. So HPM three is an example where you essentially would use something like what we call the two and A have integration technique to bring the logic the GPU or
the CPU close to the memory. Going beyond, you know, people are looking at researching three D solutions where you stack the memory on top of the logic or even bring a little bit of the logic into the memory so that you can do what is called in memory compute or processing in memory. So there are multiple research avenues that are being explored, both in academy and in the industry, and one or multiple of these will become
the solution of the future. But I think the mantra is have more memory, denser memory, more energy efficient memory, higher capacity, and at the same time you need this memory to be as close to logic as possible.
Professor, We've been showing images of d d R five from Samsung, HMB three E from Micron. You take an academic perspective, but there's work in the private sector around the world on this.
What excites you most? Who is doing the cutting edge of memory?
I think different companies are doing different things, and you know, innovations are happening all the layers of the stacked. Micron has some very interesting solutions. You know, we have one of the large conferences in the device technology world, which is called the International Electron Device Meeting, happens in San
Francisco every December. So there are some there are some announcements that Micron is going to make on some you know, some very interesting exciting memory technologies which are post kind of based on three D integration. Looking at Eskhaynix, looking at Samsung amazing solutions for flash as well as for d M, so at multiple layers of abstraction. You know, from the technology, from the circuits and architecture, we see
a lot of exciting things happening in the memory. And as I mentioned, you know, it's not just the memory and isolation, but the packaging, the integration, the coupling with logic.
That's that's you know, that's kind of making the entire space more more vibrant.
Professor rach Awdry of Georgia Institute Tech, thank you so much for your time.
Shares of Apple still lower by about eight tens of send after of course earnings last night. Let's get to Ana rag Ran on Blueberg Intelligence to really well articulate that this is a China problem. It feels like, first and foremost.
Yeah, you see bag MAC sales, iPad sales not that good. So the China number really was the biggest surprise on the negative side, and you know that remains the concern. And I think that's going to be the most important factor when we go into the next earning season also because that, in our view, is going to dictate how Apple's next twenty twenty four shapes up.
Sure, sweet to the point, always looking forward to the next set of earnings, even while we still seem to be.
Recovering from this set.
Anna rag Rana, we thank you so much of BLUEBG Intelligence really with well the push forward there on Apple, and of course it does it for this edition of Bluebog Technology.
Yeah.
Yeah, it's been an incredible week.
We've covered European markets, We've had earnings, we've had the trial of Sam Bankman freed, and don't forget you can recap every episode on our podcast wherever you get your podcasts. We have all of them on the Bloomberg platforms, but also Apple Spotify. As you can see that over Caroline's shoulder in New York City and over here in San Francisco, Happy Friday. This is Bloomberg Technology.