We're from Marhart where innovation, money and power Collie in Silicon Valley, NBN.
This is Bloomberg Technology with Caroline Hyde.
And Ed Ludlow.
I met Ludlow in San Francisco. Caroline Hyde is off. This is Boomberg Technology. Coming up, we'll have full coverage of the sentencing of Sam Bankman freed as the FTX founder faces up to half a century in prison. Plus, Amazon boosts its investment in AI startup Andthropic. We're nearly three billion dollars of cash infusion. We sit down with AWS to discuss, and we sit down with the CEO
of Walgreens as the company enters its reinvention era. What does that mean for AI digital offerings and competition with Amazon?
We will discuss.
Welcome to your final trading day of the first quarter of twenty twenty four. The NASDAK one hundred is my go to a very tech heavy index, a high concentration of the megacaps and higher multiple software names. We are headed for back to back quarterly gains, two straight quarters of gains on the NASDAQ one hundred for the first time since.
June of last year.
You know, the big story and video is the best performer more than eighty percent game year to date, but also other chip names like Micron, where we're talking about the infrastructure build out that is supporting AI development and we're seeing more beneficiaries participate in this technology stock rally.
There are other names in there as well.
Door Dash, Meta and ASML are some of the top performers year to date on the Nasdaq one hundred. We will continue to check on the markets, but I'd note that in the session the Nasdaq one hundred is basically flat this Thursday, and what's a shortened trading week here in the United States. Let's get to our top story. The judge presiding over Sam Bankman Freed's sentencing will today
decide the future of the fallen crypto mogul. Prosecutors are seeking a sentence of forty to fifty years for what they have called, quote likely the largest fraud of the last decade. Bloomberg's David Gura is on the ground outside of the courthouse in New York City. David, what is happening right now as we speak.
And this is a pivotal moment. Sam Bankman Freed is on the stand addressing the court. We had a variety of litigation about sentencing guidelines, what the judge might or might not do. Prosecution and defense are allowed to speak, so is the defendant. He's taken that opportunity, and he's not speaking from notes. He's giving a discursive, off the cuff address to the court. And an open question going into today's proceedings was how much remorse is Sam Bankman
Freed going to show? And he started off by saying, I know a lot of people feel really let down.
I'm sorry about that. I'm sorry about what happened.
At every stage from there though, ed we were turned to the Sam bankmin Freed I think a lot of us are familiar with, and that's somebody who has been grousing about the way this company fell apart and what happened in the weeks that followed, the role that bankruptcy lawyers have been playing, and again familiar arguments about how they mishandled the way that the company was structured, handled the recovery of assets, and rebuffed his entreaties to help
with that restructuring process. So what began as sort of a glimpse of some remorse turned into that and was sandwiched at the end by him saying at the end of the day, I was responsible. But pouring over these sentencing memos post from the defense and the prosecution, again, what was so glaringly missing from the defense's submission was, and I'm sorry, an admission of the fact that he
in fact orchestrated this massive fraud. And so this is continuing out inside the courtroom behind me up on the twenty sixth floor in Judge Lewis Kaplan's courtroom. Again, we might hear from the prosecution on the heels of this. We have heard from the defense. Then after that it's up to the judge to sentence him based on, yes, the two submissions from these sides, and the federal guidelines that he has a.
Disposal guidelines, I mean, the defense wishing for a sentence of six and a half years, the prosecution want a sentence of between forty and fifty years. What are the fact is that the judge has to consider. You know, I've got some experience in the outcome of white collar crime or fraud trials where there are guidelines in place, But the judge is at the center of this and has some discretion, so to speak.
So let me catch you up on what he had to say about something that's said the crux of the defense's argument that is that there are effectively no losses here, that the bankruptcy recovery has gone so well thus far that the fraud has been kind of minimized in their eyes. He rejected that out of hand, rejected that argument from the defense, And we did hear very compelling testimony from Sam Bekminfried's new lawyer, Mark mccasey, about Sam Bekmanfried, who
he is, who he was, what's animated him? He said, really, he's an awkward math nerd. So again, this is a phrase that we'd heard from time memorial, going back to when he was running FTX, and he has this kind of social awkwardness. He said, Sam has lost everything. Losing the people in your life and being shamed by the
entire globe seems to me enough specific deterrence. So they're looking at him in compliment with other fraudsters throughout time, Ed Bernie Madoff, of course, Elizabeth Holmes, and they're kind of saying, look, he's a young man who had no criminal difficulties or issues before this. There's no need to be excessively punitive toward him. That's the argument they're making to the judge. It's the argument they made in that sentencing filing. It's unclear how resonant that's going to be
with the judge. I will say he has been palpably irritated by Sam Begmanfree throughout the course of this process, going to the beginning before the trial, to the pre trial hearings when we saw Sam Begmanfree kind of flouting the rules that had been put in place on his house arrest.
Been both David Geris stay close to the camera. We will bring our audience real time updates as we get them from inside the courthouse. Let's keep a conversation going. Joining us now is Christine Adams, a partner at Adams, Dirk and Camenstein as health of experience as a federal prosecutor working across SEC investigations white collar crime. Christine, you heard the latest from David who is outside of the courthouse.
Based on what we know, the backstory that David outlined, what is your expectation for the sentencing in this case.
It's hard to say, because I think the challenge here is mister Bankman, Fred is such a young man.
He's only thirty two years old.
And when you look at the other comparable types of cases, including Elizabeth Holmes and Bernie made Up.
Elzabeth Holmes, she's forty now and.
She was sentenced to eleven years, so that gets for the promise of a life outside of prison. Bernie made Off was sentenced to I think one hundred and fifty years, but he was seventy one years all the time and only served ten of those years before he passed away. The thing I do note, though, is that mister bankman Fried is not helping himself. The court has already determined that the law succeeds five hundred and fifty million dollars.
There is this lack of remorse on mister bankman Freed's part.
It doesn't help that the bankruptcy trustee and others were able to recover the assets. You can't argue that, well, I did tell you that your customer funds would be safe, and then I stole them. But then look, I invested them really well and made all of this money.
That doesn't work under the law. The court is going to take into a lack of remorse. The court is going to has already taken into account.
It's belief that he committed perjury and obstruction of justice and connection with this child. So whatever the court does aside the sentence mister Bankman Freed, it will not be.
If the sentences at all.
In mister Bankman Freed's favor, it will not be because of mister Bankman Freed.
You know, having gone through law school myself and covered in my career at Bloomberg other fraud and white collar crime cases. There are guidelines and then there is the human element of the jig.
You mentioned.
Bernie Madoff and the prosecutors in this case with Sam Bankmin Freed in a court filing pushed for forty you to fifty years because of the financial loss they argued was suffered by FTX customers and investors, and they quoted that that figure was just below made off. Does the judge take that story, that historic story into account when forming the sentencing.
They just take it all into account.
The judge, I think, will take into account what the facts were with mister Madoff's fraud and how do they compare it in mister Begman Freez fraud. The challenger though, is again this lack of remorse on mister Megman Free's part. He's even at the hearing right now just saying he made some bad decisions, which is equivalents to mistakes were made.
He's not taking.
Well, Christine, that is on the final day of this story. Is it too little too late?
In that sense?
It's too little too late, and he's not even given any today.
It would be very different if he were to come and say, listen, I'm very sorry. I lied.
I told my customers one thing and did another. I told my investors one thing and did another. But he's not even doing that on this very day. So we're not even able to analyze whether it's too little too late because there's nothing today that he's offering.
Yes, Christine, again, we're speaking with you because of the eleven years you did in the US Attorney's office in Los Angeles. You're an experienced former federal prosecutor. How much of this is about deterrence, sending a message that the sentence is put in place to dissuade others from any future actions similar to those that Sam Bankmin Freed carried out.
Deterrence is especially important in this case because of the newness of the cryptocurrency industry and the fact that it is only just now being regulated. There obviously are a lot of companies in this space, and there is an argument to be made that with the elimination of FTX and Binance, many of the other cryptocurrency exchanges in this space have learned their lesson and are operating on a much more on board basis than these previous companies.
So it's really.
Important for the government to show novel industries, technologically complex industries that they can bring charges and effectively prosecute these cases in child by breaking it down into very simple facts that jurys can understand, which is, these companies said one thing and it turned out to be a lie and people were victimized and lost money as a whistle.
Christine web will Sam Bankman Freed's trial and this story rank in the history of mythol of US white collar crime and fraud cases.
I think it's going to be way up there.
We still talk about Bernie Madoff and that was decades ago.
I think the Bankman free case is going to be just like that.
Partner at Adams, Dirk and Chemi Seine Christine Adams, an experience federal prosecutor, reflecting on Sam Bankman Freed's trial and sentencing today, which we will continue to bring you updates from the ground on.
Thank you very much for your time.
This is Bloomberg Technology and coming up next on the show, Amazon invests even more money in AI startup Anthropic. We have all the details with AWS VI president Vice president of AI Products Matt Wood. Interesting conversational, a lot of emphasis on the semiconductor side of this story as well
as AWS and generative AI. This is Bloomberg Technology. Amazon is investing in an additional two point seventy five billion dollars in Anthropic, completing a deal it made last year to back the AIS startup and expand a partnership between the companies. It brings Amazon's total investment in Anthropic to four billion dollars. Joining us now is Matt Wood, who is the vice president of AI Products at Amazon Web Services. In AWS and Anthropic are becoming increasingly close and aligned
financially but also operationally. I just want to explain to our audience Matt, that in September the initial investment was one point twenty five billion, and there was a March deadline to invest the rest of it because you'd pledged as much as four billion.
You've followed through on that.
So what is it that that Amazon and AWS saw in Anthropic that pushed you to commit?
Well, thanks, Ed, appreciate you having me here.
It's great to be here.
You know.
Anthropic are provider of what we call foundation models, and they are the very center of the generative AI revolution. This ability for the first time to be able to reason and integrate across very large amounts of information, to be able to build assistance and chatbots, but also completely reimagine every aspect of the customer experience. And Thropic have some of the best foundation models available anywhere today and it has been a delight to get to know that
team more closely. And our investment really reflects the way that we're partnering very expansively with Anthropic to bring these remarkable foundation models that Anthropic caused Claud to customers across
every single industry and every single use case. It's really been remarkable over the past year to watch so many customers from financial services like ADP and into It, manufacturing with Siemens, transportation with Delta Airlines, Puiser, in life sciences, at and telecom, just every industry that you can imagine starting to use these foundation models in order to be
able to completely reimagine the experience. Now, Anthropic makes available Board three, which is currently the best performing set of foundation models available anywhere, and so we've been able to partner with them to bring those models to customers through AWS through a service we have called Bedrock, And we're also partnering to allow Anthropic, who have selected AWS as their primary cloud provider for their mission critical training workloads
going forwards to optimize their workloads for our own custom silicon that we use for machine learning, which we call TRAININGUM, which is a specific chip designed to accelerate machine learning and artificial intelligence model training, and Inferentia, which is a specific chip designed to accelerate the prediction or the use places map of the foundation models.
Let me jump in here. When this news broke yesterday on social media, for example, that the story and some people replied saying, this looks very much like a quid pro quo where Amazon or AWS invests in Anthropic, but Enthropic is required to use AWS compute and TRAININGUM and Inferentia. Can you kind of give me some numbers behind Anthropic's use of both of the proprietary chips from AWS have they started using this. How is the kind of onboarding of Anthropic operationally into AWS going.
Yeah, As I say, the Anthropic of selected AWS, we're collaborating both on model training, but also the work that we're doing with Anthropic is helpful in how we develop the next generation of these pretty remarkable chips which provide better efficiency and better post profiles for training these very large foundation models. The investment in Anthropic is an equity investment. It's a convertible. Note we don't have a C on
the board. We have no say in how that money gets spent, and so they can use that investment as they see fit.
What's really interesting, and Enfropic have told us this on the program very recently, is that they are getting a lot of.
Success through Bedrock.
In getting their claud models out to enterprise commercial customers. What is Amazon and AWS getting from Anthropic and their activity from a kind of business volume perspective, you know, what is the benefit or the sales boost to AWS?
Yeah, for sure. So Bedrock is our capability for making these foundation models available, and we make available models from Anthropic, and we also make available models from other providers including Amazon and other providers like stability for image generation. We have publicly available models from Meta and Mistrial and AI twenty one Labs and cohere and so on and so
and so. What we found is that customers want to be able to access the best performing, most remarkable models in an environment which is private and secure, where their data is not reviewed by humans, does not go into training the underlying models, does not travel over the public Internet, and have all the additional capabilities which make you successful with generative AI, such as grounding these models in your own business data so they can answer questions on information
that they haven't been trained on yet. And so that's what Badrock can enable the customers to do.
Let's talk about chips, because you know that I love to.
I think I'm right in saying you were at GtC, or of course you're aware of what was announcer at GtC, which is Blackwell and Thromics using Trainium and Inferentia.
But just give me your and you are.
An expert, give me your expert opinion and reaction to Blackwell and what you think you're up against there.
Yeah, I mean Blackwell is a remarkable artificial intelligence plan form that combined GPUs and CPUs it's likely to be the absolute best beast providing machine learning training. And so what's really important, and our approach here maybe differs from others, is that optionality of compute and models really matters with generative AI, and so we make available in video GPUs. We were the first and we were the first to
bring those GPUs to customers through AWS. We've got a very long, deep partnership with Nvidia that goes back nearly thirteen years. I've been on stage with Jensen, Jensen joined our conference. We've worked closely together for over a decade now.
And in Vidia also run their own AI supercomputer on AWS that we're partnering to build together, which will have tens of thousands of Blackwell platforms connected together with very fast interconnects, which is going to deliver over four hundred exaFLOPS of compute power, so that n Video can build their own foundation models, simulate the Earth and so on and so forth, and so optionality really matters, and we're going to continue to build our own chips, We're going
to continue to bring chips from other providers, and we're going to continue to invest and partner with n Video.
That word Vice president of AI products at Amazon Web Service is really grateful for your time. And you know, I always love talking about AI accelerators and chips. Elon Musk's X is testing a feature let's users create or join community, so the focused on adult content or other not safe for work material, joining us with more as Bloombos Kirk Wagner, we talk about X wanting to be the everything app.
This is a new area for them. What have you learned?
Well?
I think this sort of aligns with this idea that we've heard from Elon that you know, nothing is off limits really when it comes to.
X unless it's illegal. Right.
It's sort of a way I see to differentiate X from some of the other platforms. Now X has had you know, not safe for work content, usually we're talking about pornography, sexual content. It's had this for years. I had this well before Elon showed up. It didn't necessarily lean into it in the way that it seems like Elon is comfortable and willing to do. And again for me, I see this as a way for him to sort of differentiate X and and you know, hold the flag
high that hey, look, anything goes here. That's been my mantra this whole time, and here I am to prove it.
So, K, let's just WP me through the methodology of how we learned about this testing and feature. Right, this is not something that X is announced. Just just bring me your reporting.
Sure, So got a tip from a guy, a researcher at Watchful. He is basically his is you know what he does. He goes and he finds unreleased features within these apps, and so he reached out with some screenshots and showed us that they're testing this. The way that it works is that if you're a user that's creating a community on exit, community is essentially just a group.
You could go into settings and you could, you know, hit a button that says, hey, this group is going to contain adult content or not safe for work content. The group then gets a label to specify that. What we don't know is if they're going to age gate these groups. So X has rules that if you're under eighteen,
you're not supposed to have access to adult content. Presumably that will apply to groups as well, But when we reached out to the company, they declined to comment and share any of the specifics with us.
We just have fifteen seconds or so, but just remind me about your book.
Oh thank you, Ed, Battle for the Bird, the story of Twitter and Elon Muskt's out right now. You know, it explains a lot of why we're here right now talking about this, so I hope people will pick it up.
All right, bloom Vis Kat Wagner, I just wanted to make sure that you've got the opportunity to tell us that thank you very much for your time. Welcome back to Bloomberg Technology, Ed Lovelow here in San Francisco. As we said earlier in the show, it is the final trading day of the first quarter of twenty twenty four in the moment, this Thursday, this is what it looks like. And remember it's a short week here in the US Good Fridays a markets holiday. Then, as that one hundred is completely flat.
There's some slightly better performance.
Up three ten percent in the Philadelphia Semiconductor Index. Names I can VideA names like AMD and Intel pushing higher. Remember that in Nvidia is the best performer year to date both on the NASDAK one hundred index and the Semi Philadelphia Semiconductor Index.
There are some news items going on.
Walgreens is up a tenth for percent, had a strong quarter in the quarter gone, but trimmed its outlook for the fiscal year. The CEO of Walgreens will be joining us in just a few minutes time. What do you guys think about Walgreens? Message me on social media. I'd
love to field your questions to the CEAE. We're also looking at the ADRs or the US listed shares of Chinese technology company Jaomi, because it's just unveiled a twenty nine thousand dollars electric vehicle and that enters an already competitive market in China domestic market where there are many more ev players and many more models. But investors like what they've seen, and perhaps in the coming weeks we'll talk a bit more about the Joomi story. Bitcoin is
one to watch. We're above seventy one thousand US dollars per token. There is a lot in the news cycle this week about the continued momentum of spot bitcoin ETFs, the net inflows of money into those ets. We had Mike Novagrats on the show yesterday making the ball case for bitcoin, and in the background, Sam Bankman Freed is awaiting sentencing in New York City and he is facing the prospect of between forty and fifty years of prison time.
Let's get the latest.
We're Bloomberg's David Gura, who joins us from outside the courthouse.
David, what is happening.
Yeah, things are wrapping up here.
Ed.
The judge is now speaking.
So we heard from Sam Bankman Freed, as he mentioned just a moment ago. He didn't explicitly apologize to everyone, but acknowledge that people were upset and had been hurt by things that he did in his past. And then we heard from the prosecution who kind of rejected all of the arguments that both Sam Bankman Fried made and
his attorneys made. Nick Rose, who was one of the lead prosecutors, saying he lied to banks, he lawfully transferred money, lawfully transferred money, he interfered with the bankruptcy collection, the acid protection process, obstructed justice, and committed perjury.
Judge Lewis Kaplan now speaking.
Kind of summarizing, yes, what transpired during the course of the trial, but also the conclusions of the jury.
They reached their vertice a.
Few months back, and he said, SBF is what one would call a very high achieving autistic person. Something that had come up during the sentencing memoranda had to do with the way that Sam Bankman Freed acts, his parents, talking a lot about what they call his ahedonia, his inability to feel happiness. The judge addressing that head on, but he said the goal for Sam Bankman Freed was
a always power and influence. He got into this argument that the prosecution tried to make during the course of the trial about extraw donations, about the campaign meddling that sam Beglefrid tried to do with customer money.
This was going to be part of.
A second trial if the prosecution chose to have one this year. They elected not to do that in light of the guilty of vertic they had. But again Judge Kaplan seizing on the fact that in his view, Sam Begmnfried wasn't kind of bumbling into this. He had a very clear objective fear of getting political influence and power across the world.
End all right, Bloomboos David Gurez, you can see is outside of the courthouse, and the moment that there is a development, we will bring it to you live here on Bloomberg Television and Bloomberg Technology. There is still much more to discuss about what happens next and whether there is a lasting impact on this industry. Bitwise, Asset Management CIO Matt Hogan joins me for his thoughts on what's next for your industry.
Matt, you know I have Mike no regrets.
On the show yesterday, he gave some very interesting thought it's about the legal system in this country, but essentially described it as a bookend, the sentencing, whatever happens.
How are you approaching this, Yeah, I think that's exactly right. Look, the crypto industry has moved on. We're past FTX, we're onto ETFs, we're past Sam Bankman Free, We're on to Larry Fink and others. So we've entered a new institutional moment for the crypto industry, and that's for the better, for the vastly better. I like the idea of this as a bookend. We need to deal with these issues that we encountered in the last crypto market cycle and
put them aside. Hopefully this is the last time we're talking about Sam Bekmin Freed on National TV. That would be the best thing for crypto and the right thing for crypto. So I'm optimistic about closing this chapter and moving on.
Matt Our guest earlier in the program was Christine Adams. She spent eleven years in the Los Angeles US Attorney's Office, you know, an experience federal prosecutor, and she explained to her audience that what happens with sentencing, one of the biggest points of it is deterrence to dissuade others from acting in the same way as Sam Bankman freed in
the future. The reason I outline that to you is that this is still an industry where we're trying to assess the investment in startups who are working at the technology level blockchain for a general description, how much stress and anxiety do you think that the leaders and entrepreneurs in your industry are under to get it right to not take risks?
Absolutely, if you operate in crypto, you're operating in an emerging regulatory environment and it can be challenging. I do hope the sentence is harsh enough that it provides a deterrent to other fraudsters. But this was classic financial fraud. There was nothing crypto specific about this. It was classic financial fraud. I think the big thing that it points
out is we need more regulatory clarity here. In the US, so a lot of the sort of worst things that have happened in crypto's past, the ghosts of crypto past, happened because of this lack of regulatory clarity, because of efforts to make it difficult for crypto to interoperate with the traditional financial system, to get exposure to banks, to benefit from regulation.
I'm hopeful as we bookend this.
Past chapter and turn to the new chapter, it's not just relying on crypto to be good, which of course it should be, but we get more regulatory clarity that provides the benefits of regulation. I think, for what it's worth, the ETF is a great example of that. ETFs came to market, they lowered costs by ninety percent, they increased investor confidence, and everyone is in a better place.
Hopefully that's the playbook we.
Get moving forward, more regulatory clarity, more investor protections, and a bigger, better crypto industry.
Matt, as your industry fully regains the trust of investors.
I think we're working through that.
I do think pro regulatory environments like the ETA are part and parcel of building that trust. It's absolutely true investors shouldn't trust offshore exchanges that they don't know they want. A lot of investors want the benefits of regulation. It's been difficult to get those in crypto, but we're making great progress. I do think there is a crypto of today and a crypto of the past. We're in a new institutional era of crypto, and I think that trust
is building significantly. You can see that in prices, you can see that in the type of investors who are moving into crypto for the first time. And I think that momentum is going to build for the foreseeable future.
A bit wise Asset Management COO Matt Hoger, and thank you for your time and your reaction to what's happening in Sam Banguin Freed's sentencing. Now coming up on the program, we're going to sit down with the CEO of Wolgreens to discuss the company's future Wallgreens in the reinvention era. Right now, that conversation is coming up now we will be right back.
This is Bloomberg Technology.
Walgreen shares a touch higher on the day after the company reported earnings, with profit and sales topping estimates.
In the court of gone.
However, the company narrowed its fiscal twenty twenty four guidance and cited a challenging retail environment. Delight to say that joining us now is Walgreen's Boots Alliance CEO Tim Wentworth. Let's get right to that consumer point. You outlined a picture where there is some hesitance from the consumer, retail spending perhaps not as strong, and that was based principally at the core of your outlook.
What is happening?
Well, I think what you see is that the consumer continues to behave in ways that show that they're challenged, they are seeking value, they are willing to bulk purchase and do other things. So when you look across the retail spectrum, you'll see some folks doing better than others if they're in the super high value part of the ecosystem.
In our case, obviously we count on folks to come in and to not only visit our pharmacies, but also come in by impulse items, get last minute items, get seasonal items, and a lot of those things our purchases that you've got to get the value equation right on or else they feel discretionary to folks.
And so we have.
Been re engineering our experience, our SKUs and our product line and our pricing strategy and promotion strategy to bring back those that we've lost and to keep the ones that we've got. And what you see is we are anticipating the second half that is not going to meaning if we dissipate, although I also don't think it's going to get worse.
I think we've got.
Ourselves position to now build from the second half of this year back to a place where cans Us will begin again to prefer Walgreens more often than they do test.
Say, Tim, does that consumer behavior extend to both your store footprints and your digital offerings or are you seeing any discrepancy in those two marketplaces.
No, it's interesting. Our digital offerings have really proven to be not only robust, but important parts of holding up our underlying value, both value to our shareholders but also value to the consumer. So we see meaningful increases of same day delivery. You know, eighty percent of our deliveries are actually done within an hour, not a day, not two hours, eighty percent within a day, slightly over eighty percent.
And so we have seen the investments in both the underlying technology to enable the consumer to interface with us that way, and then the underlying ecosystem to get it reliably to them has meaningfully brought consumers back into the fold.
Tim, A big part of that technology is built and executed.
On by door Dash.
I know that you are only a little period into your ten year CEO of Walgreens, but what have you made of door dash and the relationship there.
Yeah, we are really pleased.
I will confess to you coming in, I wasn't certain how to sort of think about that. Obviously, we were not in a position to build a distribution system store door all the way to people's houses with our own vehicles and so forth. It's not necessary. DoorDash has been a great partner. They deliver it, they communicate phenomenally. If you haven't actually used the experience, I recommend everyone give
it a try. The communications from both Walgreens and from DoorDash throughout the journey of the product that you've ordered is phenomenal, and so they have been great. I am super happy with the results that we're getting with them.
Tim.
I scanned through the transcripts of you were earning school a few times and I was looking for one thing artificial intelligence.
I saw the word automation.
How big was the temptation to try and tell Woolgreen's AI story, and frankly that has been the pressure of this earning season for CEOs across all sectors.
So ed, if you know me at all, you'll know that I won't use buzzwords if I can possibly avoid it, and I won't say things that don't have deep meaning. And as it relates to AI, there are some very very interesting things we are doing in our business, both within our own four walls and working with others that we are super excited about in terms of everything from load balancing to inventory management. Ultimately too, I think some
of the work that people are doing in stores. So there's a there's a fairly wide landscape of things that
we are using AI as a tool for. But it's a tool and it needs use cases that we're and by the ways, you know, we have got we've got years of machine learning applicability to certain things, right, But as we look at predicting consumer behavior, as we look at meeting consumers where they want to be before they even know that we're we're going to be there, those sorts of things, and again in terms of a very complex operating model where we can actually improve service improve
working capital, integrate our stores with our micro fulfillment centers.
We think there's some really interesting things that we can do there.
I just spoke with Alex Karp this week from Pallenteer, who clearly is doing some interesting things there, and that's one of a number of folks that we're working with to actually again really get at meaningful things that we can do in the business leveraging AI.
Please keep us posted on Bloomberg Technology about the relationship with Palenteer in the future. You know, I recently spoke with DOTR Karp as well. Listen, this is the early innings of what people are calling the reinvention era of Walgreens. You have your strategic business review next month, but pharmacy does seem to be kind of a core pillar of that in our world. It's a world that Amazon is
increasingly moving into. Just explain the strategy, the early stages of it for pharmacy for our audience.
So I think what you've got to look at to understand our pharmacy strategy is what are the possibility and the things today that we're doing in the back of our stores. So it's more than just delivering acute meds to folks when they need them because they've they've got a short term problem. It's more than just filling long term maintenance medications, neither mailing it to the patient or having them come in and pick it up. It's more
than vaccines. Even now we're doing test and treat, we're doing some other things, not to mention some workflow changes that just free up pharmacist time so they can consult with patients. And I think that's the big difference when I look at it, Tim the other player.
Yes, Tim, I'm sorry to interrupt to you. Tim Wentworth, all greens Boots Alliance CEO. We have some breaking news. Sam Bankman Freed, the FTX founder, has been sentenced to twenty five years in prison by the judge in his fraud and white collar crime case. I will repeat that Sam Bankman Freed has been sentenced to twenty five years in prison. He was convicted of fraud as a reminder over the collapse of FTX. The prosecution had been pushing
for a sentence in between forty to fifty years. The defense had been pushing for six and a half.
The result is.
That Sam Bankman Fried has been sentenced to twenty five years. That's bring in Bloomberg's Max Chafkin, who joins me and has done deep reporting on this.
Max.
Your reaction, Yeah, I mean I think this is sort of within kind of what a lot of people were expecting. You know, the prosecution asked for forty or forty to fifty,
defense had asked for five. What we've seen from Judge Kaplan based on the reports that we're getting from Bloomberg reporters in the courtroom, you know, he excoriated bankmin free, you know, said he lied repeatedly, causing a huge amount of harm, and yet said he didn't think the forty to fifty years was he thought that was too severe.
So we've seen a bit of a compromise.
Now.
Now twenty five years in prison is a very long time. You know, Sam Bankmin freed is you know, in his early thirties now he's going to be in his late fifties when he comes out of federal prison. And so this essentially we'll put an end to the case, barring, of course, the inevitable appeal by his lawyers, which will come when this is all concluded.
Max, stay with us.
First of all, a headline that Bank Sam Bankmin Freed has been ordered to forfeit more than eleven billion dollars. Let's get out to the courthouse in New York City and Bloomberg's David Gura David the latest, please.
Yeah, so twenty five years, as you said, Ed, and I'll just summarize her of what we heard from Judge Lewis Kaplan here ahead of that sentencing. He said from the get go he thought that what the prosecution was asking for was too high. Again, they were asking for
forty to fifty years. But he emphasized that was not for the purpose of diminishing the seriousness of those crimes, and emphasized several times in his statement that he was quite critical of what Sam Bankman Freed had done and that there needed to be something here that would deter both him and others from these kinds of crimes. He said, theres absolutely no doubt that Sam Bankman Freed's name pretty much is mud around the world right now. But he said, there is a risk this man will be in a
physician to do something very bad in the future. So again there was a fear of recidivism here, something that the prosecution brought up several times in their sensing memo and was obviously very compelling to Judge Lewis Kaplan. He lingered on the words this was a very serious crime, he said, though slowly, according to our colleagues who are
in the courtroom and watching all of this unfold. So I'm not diminishing in any way the enormous harm that he did, the brazenness of his actions, his exceptional flexibility with the truth, his apparent lack of any real remorse,
and the need to deter others engaging in comparable behavior. Again, I think what so many people were looking for here the prosecution, certainly the victims of the crimes that were committed by Sam Begmanfreed, was a concrete apology at and that was something that we didn't get from Sam Bankman Freed when he spoke to the court this morning, and the judge very aware of that fact as he issued the sentence in just a moment ago. Twenty five years in prison for Sam Bankman Freed.
Okay, I'm going to recap the headline. Sam Bankman Freed sentenced to twenty five years in prison. He has been ordered to forfeit more than eleven billion dollars. We will dig into the mechanics of how that's going to work eventually. I'm sure we need more detail. Bloombo's Max Chafkin is with me out of New York City.
Max.
You know, the story that BusinessWeek told, that we told through our podcasts was complex. But let's go to the basics of what happened to FTX and why Sam Bankman Freed has actually been sentenced to twenty five years in prison.
Yeah.
I mean, the basics are that Sam Bankman Freed started what, in retrospect was a fraudulent cryptocurrency exchange, an exchange that poses a place where you'd send money and buy these
crypto assets. But in fact what happened is your money went into Sam Bankment Freed's pockets and in the pockets of people close to him, and they spent it on all number of things, including some sort of very interesting in retrospect investments, some investments in uh strange tokens, and uh, you know, investments in real estate and the Bahamas, some payments, payments to his parents and uh, you know, really wide and broad portfolio, and of course huge amounts of money
spent on marketing and and and you know, one.
Of the most difficult parts of this story.
And the thing you see in these in these victim statements is that the marketing said this was safe. Key point to Sam bankman Fried's sort of the way he presented, the way he marketed himself was that he was more responsible. He was the kinder, gentler version of crypto. He was the version of crypto you know that that hung out with Gizell and Tom Brady, that you know, was comfortable around democratic politicians and so on.
And of course he was.
He bought that, and he he bought that with customer funds, and and and many of that much of that money
was gone at the time that Fts collapsed. Now now, since the collapse, the bankruptcy attorneys led by John Ray, have managed to recover you know, a significant part of the money that was lost, and that's some relief for the victims, although as we saw today and as we've seen from victim statements in the past, you know, it's kind of small comfort people even if they've gotten their initial investment back, even if they expect to get their
initial investment back one day. Many people's lives were ruined by this episode, and they're never going to be the same.
Let's go back out to the courthouse on the ground with Bloomberg's David Gura. I mean, the numbers here are staggering when you look at the charges. The totality of it was one hundred and ten years, the prosecution forty to fifty. We end up with twenty five years. There is so much happening, and we're getting more information. What is top of mind for you, David.
Yeah, So we're at the point now and the hearing where the judge is sort of indicating where he thinks Sim Bankman Freed might be remanded to prison. He said he's going to recommend a prison in the San Francisco Bay area.
Course.
Sam Bankman Freed grew up very close to the Stanford University camp.
Both of his parents, who are.
In the building behind me in the courtroom today are members of the Stanford Law School faculty. So by virtue of that geographic proximity, it seems logical he might end
up there. The judge saying he doesn't think there's the need for any sort of maximum security situation for Sam Bacon Freed when he goes to prison, but we'll wait to see if we hear anything from prosecutors after this hearing concludes, after the verdict was entered, we did hear from US Attorney Damian Williams, and he wants to send
this verdict to send a message. The speed of this case to send a message, something we've been talking about a lot today is just the resonance of that message and how the strength of this sentence, the length of this sentence will make that message work forceful.
So we'll see if we.
Hear anything from them, but it'll be a matter of weeks, if not months, before Sam Begmantry moves from jail in Brooklyn where he's been for the last few months, to prison wherever that may be.
At our team coverage here with Bloomberg's Max Chafkin and David Gurra, I mean, Max, as we come towards the end of Bloomberg Technology, this is a historic moment in the context of white collar crime, fraud, but also the industry.
You're closing thoughts.
Yeah, I mean, we've seen why collar criminals get big sentences. A lot of people have compared this this episode to Bernie Madeoff, which I think is a fair comparison. Madeoff got a much larger sentence. But as you know, both the defense, the prosecution, the judge. Everyone sort of acknowledged he was very elderly when he got this like insanely high, you know, one hundred year plus sentence. I don't think anyone expected him to serve it in its totality.
I do think it is staggering.
I mean, you know, just a couple of years ago, Sam Mangminfried was seen as one of the wealthiest, sort of most respected, you know, one of the pillars of the business world. And you know, really in a very short amount of time he has you know, not only lost all that money, not only become as the judge said, his name is mud, you.
Know, because of the anger that people feel.
But he's going to prison, and the speed with which that has happened, as David said, is remarkable. I mean, it was a incredibly rapid rise and an even quicker font.
Bloomberg's Max Chafkin of Business Week, Bloomberg's David Gura hosts a big take on the ground in New York City.
Thank You Now.
Reminder coming up on Bloomberg Television a full hour of Bloomberg Crypto, a special that will focus on the sentencing of Sam Bankman freed who has been sentenced to twenty five years of prison, with the judge recommending prison in the San Francisco Bay Area. Please tune in for that special and Bloomberg's team coverage that does it. For this
edition of Bloomberg Technology. It has been an incredible show recap on the podcast We're publishing on Apple, Spotify, and iHeart No BTech tomorrow though in a short US week. This is Bloomberg Technology.