SBF to Testify and Huawei Strikes Licensing Deal

that's blocked from selling its tech in the US. We speak to two of their key executives, and we continue our coverage of China's risk to dropping its COVID zero stance, plus changes to Tessa Shanghai factory amid slowing consumer demand. We have you covered first, though foremost it is the markets day for us. Of course, we are once again seeing the wind taken out of the sales of equities.

We're seeing down three quarters of a percent, so exhausting that this camera is getting all over excited by what's happening in these markets. Come closer, no back off. We're having a look at the nastack off by seven tenths percent.

Look these basically, these benchmarks are off by at least three and a half four percent on the week overall ed, and this in large part is because we're worrying about where the Federal Reserve is going and concerned, for example, about how far they have to hike, when we're seeing a PPIP producer price index that shows that prices are just showing such resilience, inflation showing such resilience in the face of what have been rapid rate hikes by the Fed.

Ten year yields have been climbing almost ten basis points. Let's have a look at what's happening overall in terms of our recession risks. As we are anticipating the warrior about a recession, we are seeing the entire market just getting nervous. If we can flip up the board, we really got this chart that has evidence of where we've been going in terms of the pickup now sixty chance. Basically, the market sees there will be in a recept so a contraction in this economy in the US come next year.

And we've just got to keep talking about this contagion effect, keep talking about what happens next week, what clarity. We get it for any because we know that the former ft X CEO ed Sam bankmin Freed, says he is actually willing to testify. How did he tell us? Of course, he told us through Twitter. He announced it in a series of tweets, in fact, saying he will answer questions about the fall of his crypto empire from the U S.

House Financial Service eximmity. Let's bring in Alison Verstraw from Washington, who has been all across this story, and of course so too has our own Shinali Bassett, who of course we'll be heading out to Washington and to that hearing next week. And Alison, just what did you make of the transparency we're getting them through the former Twitter. How are we seeing the actual senators trying to speak to Sam bankma Freed himself. You know, we're seeing everyone is

using Twitter. We see Maxine Waters from the House Financial Services Committee is increasingly used that to put pressure on Sam to testify. We've also seen Senator to Me came out with his own tweet today that said, Sam, if you do show up at the House Committee is hearing, you better show up? But are hearing the next day? Uh so, you know everyone's using social media. It's kind of painful. I mean, I think was it Czi put invest himself is like because like, no, I can't watch movies.

They're not exciting enough. I'm just addicted to crypto Twitter. And aren't we all in? Sali Bassaka is Mickey among them? Just talk to us about not only what you're going to be following through Twitter, but or you're gonna be following Shali on the ground because you're going to be there, you're going to be expecting testimony from who and all

think the right kind of people to be giving testimony. Uh, that's an interesting question because there are a lot of academics that are being called upon the House and the Senate hearings. Remember there's only one set of small witnesses posted on the Senate Commody side. We don't have everything from the House itself at all yet. And remember Sam Freed said he's willing to testify. Will he show up

and testify? There was no subpoena up to all this point as well, so a lot of questions about whether he will be there in person. Remember he does say that what he is trying to do is address not only f t X and the pathway to which term value to shareholders, but also it led to the crash. Will be looking at what he says versus what he has said before, as well as he says his own failings.

He also said he doesn't have access to much of his own data, personal or professional, so you have to wonder why he doesn't have that access and what kind of data he will not be able to allegedly provide to the lawmakers as they question him if he makes it there to the Hill next week, so again the House on Tuesday, the Senate on Wednesday, and remember the Senators have also been seeking to try to get them there as well, but they did not reply to them

in time for the testimony so far. So logistically, let's see if he makes it to both. Team Shannali has just gone to the exact point I want to bring up. In fact, super Producers, let's bring his tweet back up again and look at what he said, because what I'm not understanding, Allison, is what would we learn from SPF on Capitol Hill that we haven't already learned in the many, many, many, many many appearances and communications that he's made the last

seven to ten days. That's a great question, and I honestly, I feel like we're probably gonna hear a lot of the same things. You know. Uh, he'll say that he didn't intentionally need to commit any sort of fraud. He'll probably talk about the fact that maybe he made some managerial mistakes. UM So I'm sort of expecting it to be along the same Lise. I'm actually maybe more interested in hearing the testimony of John J. Ray, who is the furren CEO kind of helping with the restructuring of FTX.

You know, he has access to all of this data. He's sifting through these records. Though he's told this up they're not very good. Um So, you know, I'm hoping that maybe we get some some extra details from what we've seen in the bank from seed filing so far. Actually, Shnali, new headlines actually continue to come through about this story. I saw a tweet or thread of tweets from the editor at large of the block. Could you tell us

what the story is there? Please? Yeah, you are referring to the tweet thread by Frank Tapparo, otherwise known as syntech Frank, who four days ago released an almost two hour podcast speaking with f SVF about what had happened here.

But really what had happened is he said he did not know, and many employees at the Block did not know and felt really UH put in a dark here because what happened was an executive, the CEO of the Block, which is supposed to be an independent news site related to crypto, that was bought out by management about a year or so ago. Yeah, absolutely, gotta look at that

tweet right there. So what they are finding out now is that CEO had taken personal loans through UH, a entity here that did not disclose that SPF had given loans to the CEO that ended up being part of what helped that executive lead to the buyout. So listen, the CEO has stepped down. You are seeing the employees really from this, they are saying they did not know at all. This was really found out within the past couple of days, and as I was saying, just two

days ago, they had interviewed SPF himself. And it can, I mean, it can seem like inside baseball when journalists are talking about other journalists. But your heart does have to go out to people who feel completely undone, not only by their sector collapsing the industry that they've grown to love collapsing, but then their own CEO seemingly catching

them completely off guard and blindsiding them. I'm sure there's more to come from that, but overall, Allison, the transparency we're going to get from a regulatory perspective, from a lawmaker's perspective, and I asked it to Scenalia earlier. I asked it to you now, the people that they're going

to have in front of them giving evidence. I've seen some talk on Twitter again that people who feel very legitimate in this space haven't been asked, and some people who have been asked to speak, perhaps on deemed so legitimate just talked us about who we expect to hear from. So on the health side of the only person that's actually listed as a witness so far is John J. Ray So, the current CEO of FTX. On the Senate side,

we have a pretty smart list as well. One of them is a law professor who specializes in sort of financial regulation and in technologies. And then the other one is Ben mackenzie. So if you want the o C, then you would recognize that name. He was Ryan on the f C. He's more recently come out as a very anti crypto skeptic and sort of crypto commentator. But a lot of people were a little surprised to see that name on the list. T Mosey. I think we all better get some rest this weekend next week, said

crypto nervous sleep. Thank goodness that I do sleep Friday night through Sunday night. All right, bloombergs Allison Verse Brow and Shnali Bassek, thank you both. Coming up, Huawei expands on the patent monetizing game. We'll discuss that and much more with top executives from the company. Next, this is Bloomberg.

We wouldn't talk about. Another key story, particularly from a genio political perspective, Huawei Technologies has agreed to license some of its smartphone technologies well to an old rival called Opo. One of China's top smartphone brands now, Hwei is one of the biggest holders of five G patterns and many patterns in fact, and it's historically not been that aggressive

in monetizing those patterns. But the telecom giant now seeing itself perhaps in a need to look in revenues and other areas after it's a lucrative handset business was hit pretty hard by US trade sanctions that cut it off in terms of access to advanced chips. I'm very pleased to welcome, therefore to the show Huawei chief security Officer Andy Purdy, alongside Huawei's Chief Intellectual Property counsel for the United States, Stephen Geisler. Thank you very much, indeed, gentlemen,

for both being here. And let's start first and foremost where we're thinking about the new areas of revenue. And Steve and I address this question to you because how important now is the monetization of patterns. How are you seeing this driving in terms of percentage wise of revenue going forward? So are the revenue we will we will realize through patent licensing is not going to make up for or be in lieu of products sales UH in

any given year. We're talking about numbers that are in the hundreds of millions versus products sales, products and services combined being in tens of billions of US dollars. So certainly one is not going to be a replacement for

the other. We are simply trying to make sure that based upon the money we've spent through the years on R and D and then patenting that we're getting a fair return on our our patent expenditures for patenting our technologies and also using the patents to reach agreements with our competitors and peers to make sure that the innovation that goes into global standards such as four G and five G telephony, for WiFi, for the audio video codex that allow for streaming for for your viewers to watch

even today's show, that that is recuperated by not only Huawei but other large members of the ICT industry for what we spend on R and D. I want to bring Andy Purdy, Huawei's chief security officer, into the conversation. Andy, how much for a bitter pill to swallow? Is this? Huawei? You know, you once had a significant handset business that was a driver of revenue growth but also just accounted for a big chunk of revenue. Now you are pivoting

essentially again, is it a bitter pill to swallow? We deal with reality, and the reality is that we have certain challenges. Our survival is first and foremost. Our ability to work with partners and customers to innovate and bring five G enabled technologies to the world is what we're about. To help bring connectivity to the world. And so that's where we look at. We've got tremendous opportunities out there.

The regiment, the international regime that was just talking about the idea that there are certain standards and certain companies may own patents relative that standards is the international system of making sure there's fairness that competitors can buy licenses from other competitors is a huge thing on the international stage. They help increase innovation and increase competition around the World's a it's a great tribute to hell well at Global

system Works in the I P area. Andy though those words, it's about survival. Just how threatened has your business model become through US China attentions and how non ending do you think that this shutdown will be? This access to the United States, this ability to sell into it. Well, when you look at our revenues from our revenue is dropped about thirty billion dollars, mostly because of our inability

to to buy ships for our five G phones. And so we are emphasizing tremendous investment of this past year in R and D or twenty billion dollars in R and D and thousands of partnerships to help RAN five digital transformation, the different industries such as smart mining and smart courts, and the ability to create safer environments and reduce sandergy consumption. And basically we are finding our way

on the road. And we're even doing hardcore scientific research on things like wars law and Shannon's limits so that the scientific challenges of five G, five point five G and six G can be overcome for the benefit of the world. So we take the world as we see it and we're working hard and innovating. I think we had while we're really proud of how we're moving forward

with partners around the world. Stephen, you're the US Chief Intellectual Property Council, although it is still a Chinese maker of handsets, cause you took us through how the deal came about and how difficult the deal was to get done. Certainly the deal was done through bilateral negotiations without the

need for litigation. That's important because times these deals are are only brought about through litigation because we need the intervention of courts to help decide things such as what is the proper rate and what products are are should be subject to a license agreement? Here that was not necessary.

We also view that this is a key step forward. Um, it's not our first Chinese cross license by any means or as it oppos but it is a major sign that the Chinese regime for patent protection it continues to mature. These are are two large competitors, UH bringing about a very important agreement between the two of us. Andy. I asked you earlier if having to license your tech rather than selling handsets is a bit of pill to swallow, and you said, it's the reality where we are. Now.

What is the reality of Huawei being able to sell not just handsets in terms of smartphones, but are the hard into the United States directly? When how does that

come about? Our emphasis for the foreseeable future is in those parts of the world, and there are many that are open to working with us, helping open the partnering from us, and so they're tremendous opportunities around the world, and so that's what we're focusing on right now, and frankly, as those of us in the United States, and we look at some of the things we're doing around the world to help bring connectivity to the under connected, we hope that in the United States there can be a

little more action and a little less talk about connecting the rural America in a resilient way and frankly, helping you connect and have appropriate devices for distressed communities or communities in urban areas of the country. Americans really need to get the benefit of connectivity overall. Is that argument Landing? And who are you speaking to here in the United States?

Are people do they still want in any way to grant access directly or indirectly for your technology they feel the need for it, because I was amazed to see just how many patterns you put into the United States, for example, p a year like you're number one. M Well, as I said, our focus is not to do business in the United States, and as we talk about the lessons we are learning and five G transformation around the world is not to enable us in new business. We

think there are lessons that we're learning. We think there are lessons as the United States can learn from success stories and other parts of the world. But I mentioned the smart mining and smart ports, But but healthcare and manufacturing consistency, reducing energy consumption, and telecommunications. The United States needs to step up and be much more active in these things to help the competitiveness of the United States

and help the American people. I'm interested, Stephen, and I'm wondering if you can take us in the money direction. In your focus as Chief Intellectual Property Council, you are not only just announcing, of course, to deal with oper but you made public for the first time that you're

also doing licensing five G Samsung. How much with some of these partners, particularly when it comes to Samsung, to Apple, to the huge players in this space, how much you're charging them in terms of patent use, and are you thinking about royalties in a different way. You're going to have to change the maths and be more aggressive. Well so, so, first,

we don't view ourselves as aggressive. We are certainly active in the licensing space, uh where third parties have done independent studies of our licensing, our rates for our patents versus many of our competitors. We actually are much more in the middle of the pack. So we are not looking to set the highest rates in in any industry

or technology. Um. The importance of of U S patents, for instance, which which you've mentioned previously, is still important regardless of whether we ever sell a product again in the United States. Our patents our technologies are being used by US companies. Many of those companies have have freely without litigation, have joined into license agreements with Whalwei to pay for the rights to use our patent of technology

in the United States. No one in the United States can use WiFi, particularly the new WiFi six which is the the a X version without using Quawis technology. Same things four genes five G. We are licensing car manufacturers and their suppliers all around the world, from Japan to China to the UK, to Germany to the United States on their use of our four G technology in connected cars.

And so that is the important thing is making sure people understand the difference between global use of standardized technology, which which always a leader in in providing that technology, versus product sales. Okay, Huawei chief Security Officer Andy Perdy and Chief Intellectual Property Council for the U S Stephen Guys that thank you both and concerns Linga that some of the biggest Chinese tech firms will be delisted in

the US. As of Wednesday, about one of j D dot com shaes was circulating in Hong Kong's settlement system. This is in Vesta's move to convert them from US exchanges. That's a near doubling from the end of according to Bloomberg calculation. Similarly, Ali Barber's Hong Kong listed share portion rows eleven percentage points during the same period, a steady shift into Asia, which shows traders are continuing to hedge risks associated with the US China spat. Now coming up,

everyone's doing it? Are you? Lenser Ai? It's the latest d ai application. You've got to take my word for it. That makes yourselfies look even better? Caroline and I, well, I don't want to give it too much away. Just wait and see all that next. This is Bloomberg. So that's us. That's Caroline right there, that's supposedly me using the lenser Ai app and all in one image editing app for your selfies. Don't yours are really good? You look really hot, really smart? Even it does this remotely

look like me, not in the slightest. I'm kind of a bit depressed that. I mean what I've just morphed into sort of an artistic Italian gentlemen. I've morphed into someone I really don't recognize, but they're kind of hot.

It was an interesting experience, like a lot of my photos were rejected, but we're back the real you and I. We just there's one photo where I look so unwell and miserable and completely unlike myself that I was kind of a bit a bit depressed by it, but probably, as I kept saying, it sort of felt like my insides after all the holiday parties. But I am interested

in that. Some people out there, right, one particular noted economist thinks this sort of AI, particularly chat GPT for example, is great strides in technology, right, I mean, is this the best thing since sliced bread? Is this a game change of revolutionary? As far as I can tell, it's just strange pictures of you and I, but you got to experience. Yeah, they've got to sew pll on it. Larry Summers says this will change us in terms of it's as important as the wheel and fire. Seemingly actually,

most think it is revolutionary. This is broom back. It's not like there's an incredible amount of money that's ready

to be deployed. I think the pace of investments in the venture ecosystem was masked a bit by capital that was coming from non traditional ventures and corporate balance sheets and so I think today what you're gonna see is a shift, probably not in terms of opportunity sets, in terms of how fast money gets deployed in the ecosystem, but I think you're going to see people look for complete different dynamics within the balance sheets and the capital

structures as the management team that they're investing in. That was pitch Books Director of Research needs are To Whooney, giving his take on the current dynamics at play in the world of VC. It's because someone else's take. Denish A. Kiers with us now general partner at Lux Capital, a firm focusing on investments in emerging technologies. Four billion dollars in assets under management. It's been a week. It's been a big week for markets, for the world economics. Karen

and I have been talking a lot about data. You know, there was various data sets, but the big takeaway is that whether you do it on a volume basis, deal count basis, dollar value basis, two is nothing compared to one in your world. Why, well, it's great to be here, Thanks for having me. I was expecting my lensa avatar to show up instead of myself, but delighted to be here. So no denying two was a roller coaster, and I think we're still in for a long ride with ahead

of us. Many would say the exuberance of one needed a correction, and that came with a bit of a jarring surprise to some but also met the expectations of others. It was, in anyway, is a long time coming. But I still think we're just at the precipice of understanding what the impact will be on valuations across stages, and certainly for us it's it's an area where we think there's a real exciting opportunity to continue being bullish on

long term opportunities. I am going to let Caroline have all the fun, and I'm going to ask you a slightly dull question about economics if you allow me to. It's never dullared well, I know it's important. The funny thing is that if you're a well i'm assuming if you're a venture capitalist, you assess a broad range of data, just as a public market analyst would or investor inflation in the FED. You know, in every day for US inflation in the FED. What does it mean to you

at this stage in the cycle. Well, you know we're VC, so we're long term investors were not day traders. Obviously, there's no denying the impact of the macer on the micro and we've seen that very clearly in terms of

the opportunities for exits for for venture backed companies. But when we're investing in deep technologies companies that we believe our market makers, we have to look with a longer perspective, and so you know three does not look particularly promising, although none of us are nostra damas, but we're looking ahead five to ten years from now and those opportunities are very exciting to be investing in their early days.

Do you know you've just made general partner congratulations And you focus a lot in the health space, in particular, very much focused on female focused businesses. To what is that more recession proof than other areas healthcare? Many have turned to in the public market saying that this is wanting to be investing for into at the moment with higher interest rates and with a slower growth prospect. What

do you see in terms of the smaller, now growing industries. Absolutely, I mean I've often said that health and digital health is recession proof. Now that's not to say that it's immune to the macro conditions. That's definitely not the case in any look at the public markets, no matter how well they're faring um, you know, respectively, it's it's very

clear that they're not. That being said, people will continue to get sick, they will continue to have babies, we will continue to have needs for therapeutics and for interventioning care, perhaps more so in the future even than we do today. And I think as a result, what we're seeing is really expanded interest and also a bit of of a slightly better opportunity than you're seeing, certainly not just on

the public side, you know. Pitchbook, I think just yesterday published a report showing that the media deal valuations for venture backed healthcare companies is actually up thirty three percent year over a year, which is a really interesting take visa of you where the rest of the market seemed to be sitting. You know, one of our companies was was on your show just a few weeks ago for their series E, and that was a really exciting one

in women's health, where there's a lot of continued interest. Yeah, shout out to Maven Clinic and were so pleased to be able to stop the new show with that and I with joining the show in that respect to bring us that series E. But I'm gonna ask a sensitive question now, Dia, and I know because you don't want to shy away from these sorts of things. Lux Capital, of course, has been enbrolled in the ft X situation. You roat checks, not you per me, of course, and

you're not. Therefore, I'm not going to ask you about

your own due diligence in the space. But what do you think internally the lessons you've learned are when you're looking at writing checks in a diff more difficult situation environment that we currently are, how are you looking for companies to be building their corporate governance to be ensuring that they're giving you all the accounts that you need and the growth stories really there, you know, I think this is something that's not necessarily just unique to that situation.

There are other cases across healthcare in the recent months and years that have also really put a lens on the importance of due diligence, and so there's no doubt that that continues to be very important across the board. And I think perhaps some of the slowdown that we're anticipating in terms of the exuberance of because of you, what we're expecting in three will give all investors more time, um and more space to be able to do that, which you know is certainly a positive thing. Dina. Come

back in the new year. Tell us how that is starting to unfold for you, Dina Shoka. We love having our run. Thank you general partner, Ever it lacks capital. Wishing you happy holidays. We don't get to chat before me while Let's talk exits now because we were just going there and then and there's some are still happening

in the global startup space. In fact, let's go global because Istanbul based quick commerce platform that's getting just for its rival Gerrillas Technologies in a deal that was valued at one point two billion according to sources. Now it marks the increasing consolidation and what we all thought at one point was an absolutely booming industry you couldn't move for quick deliveries. But Guerrillas raised funds valuing the company at about three billion before and I've been exploring its

options after. Investors just became so much more cautious over the industry's path to profitability. I mean ed we were all talking about how quickly one could order their various groceries and they'd be coming within twenty minutes or so. But it just became ever more evident that these companies were not going to be able to head to profitability

with this many players in the space. So there's a fantastic quote in the story from the founder of the company saying, markets go up and go down for consumers love our service. Convenience is here to stay. You know, whether that's true or not, we don't yet know. You know, the proofs in the pudding, but you know it's holiday season and go to a lot of drinks with vcs and you know they do say it's a case by

case basis. There are some fantastic startups that are borne out of recession, that grow out of recession, and there's opportunity right now if you can pick them out. Yeah, and I think that this is what's going to be interesting. Where are the exits being made? Are you doing exits from acquisition one private company to a private company or ed? Are you still managing to get to the public market if that dreaded word, well, dreaded is not fair, but

spack interesting. So let's get more from another guest, Sam's id CEO of get Around, which just went public on the New York Stock Exchange or listed is shares. Get Around is a company I know, you know I've written about Get Around. We've reported about broadly, this platform in which owners of vehicles can list their cars to be rented out. It's like Airbnb for cars, Sam, why list

via this mechanism? I mean for us, you know, we were in public be as you know, we had great partners, We found committed capital capital that really allows us to x you on our business plan, and it was really about just continue to create long term value um and to get out into the public markets and able to have access to that, you know, uh, the public markets directly. We felt it was the right thing for for us

in this particular circumstance, in this particular category. What sort of with the money coming in, what does that now create you in terms of space to build? Where are you able to now drive forward? Get Around, particularly at a time when more people might be incentivized to share their car to get money in that way. Yeah, I mean it is that type of time. I mean, I think a lot of consumers are looking for options to make extra money potentially, you know, drive extra income or

offset costs. And we you know, we just felt that opportunity is right given what we see in the category and in the market and some of the trends with our partners and in more generally with the shift to more consumers, you know, moving towards mobility and continuing to shift those those those patterns of mobility. Um, you know, we felt the time was right. Hey Sam, really quick, you're pipping your great rival Turo to the public markets.

The reception interesting, What do you make of that? Yeah, Look, I think there's no denying the macro is. It's just a challenging market environment. But we aren't really optimizing for that as much as optimizing for you know, really giving fuel to the business in order to really execute on our plans. And so you know, the way we think about that is, really we want to continue to execute create long term value, and over time we think that you know, the market will respond and start to value

companies properly on fundamentals. Some thanks for spending some time with us from the floor. Then I see Sam' side CEO again around Meanwhile, coming up, we're gonna talk much more about all the ongoing fall out in the collapse of f t X lawmakers questioning officials over a silver Gate Capital. It's a small bank that's facing some big pain after a decision to really take on cryptoclients. This is Bloomberg. It was once pretty obscure, smaller bank, and

then it got into crypto. Silver Gate Capital is and what I'm talking about. It found its niche when it started providing banking services to some pretty major crypto clients, including well some background Freeze, f t X and Alameda Research. Now it's of course facing scrutiny from regulators and lawmakers

on the back of that decision. Joining us now on a great set of reporting Bloomberg's banking reporter Max Rays, and Max just talk to us a out how solve gate first of all, got in to servicing these sourts of clients. Sure, first of all, thank you for having me, and I think it might be helpful to back up for a second sort of explain sort of the the value proposition here for a bank. For for banks that aren't dealing with crypto, you know, they're not helping to

exchange um tokens or anything like that. They're literally just holding deposits for crypto customers and sending them, helping them to send them back and forth right between themselves. The value there is that you can bring these deposits onto your balance sheet and you do not have to pay out interests, right, so you essentially have a very affordable

way to fund yourself. And that's sort of what drew company, a company like silver Gate into this, and other banks have done it as well, Customers Bank, ORPS Signature Bank, but obviously a few of them have had banking relationships with f t X and Alameda. That has folks raising concerns. Short sellers are kind of dog piling the stock, and you have bombmakers who are asking questions and it's a result of these relationships. From your early reporting and digging

around just how exposed has silver Gate become. What sort of areas within the financial services they offered made it more difficult to extricate themselves. Now, Yeah, I think the biggest level of exposure is just the deposits they held

on their bound sheet. Silver Gate has said that they did not lend to ft X. They made it very clear that their only relationship with f t X and related entities including Elomated Research the Hedge Fund, was a deposit relationship, and so if you have to deposit with silver Gate, you can send money to other clients who also have those deposits on a platform they call the

sent the silver Gate Exchange Network. And what are reporting indicating was indicated was that customers had been directed to buy f t X to send money to Alometer Research, and that was to in at least one case, a silver Gate bank account, and that has raised concerns and

questions from lawmakers. Are reporting doesn't go any further and saying sort of how that tied into the kind of commingling of funds and so on that have been alleged when it comes to at X and Alameda, But it does mean that silver Gate is part of these really difficult questions being raised by lawmakers, by regulators, by investors. You know, how how did no one spot us? Right? You raise a good point, Max about the short interests on the stock in that it's publicly traded, right, it

almost has its own rise and full story. I was looking my Bloomberg to the end of one when the stock was above two dollars a share. Now we're down at twenty one dollars a share. I mean, what was the invest anxiety here. For Silvergate, it was just their exposure to the contagion. So you would you what would be helpful to do with his zoom out right, because around this time last year we were talking about digital assets being at all time highs and that's when the

stock hit two just about that period. But over the last year we've had more events than just f t X. We've had the blow up of the Terra Luna ecosystem, which in turn led to the collapse of Three Arrow Scare Capital, the collapse of Celsius, so publicly traded stocks with the exposure to crypto, that's silver Gate, that's other companies, that's you know, names like micro Strategy, which literally just

hold a bit corn on the balance sheet. All of those companies have taken a beating in the last year because of this anxiety, and just the blow up of f t X sort of accelerated and worse than that impact, I would say, max would have silver Getting said about

all of this very quickly. Certainly, silver Gate has been pretty clear in saying that the controls that they had in place were sufficient, that they again had no sort of lending or any other kind of relationship, and that they were in one statement to NBC, they describe themselves as victims of SPF and is misleading practices the same way everyone else's. So the company has been pretty frank in denying any claims of wrongdoing. And it should be

made clear that authorities have not alleged any wrongdoing. They have been accused of wrongdoing, yes, by authorities. It's just there are questions circling. Yeah, thank you for your reporting. Bloomberg's Max rays there coming up. The world's most populous nation rapidly pulling back on its COVID zero policies. We'll tell you what this means to the health of people in China, but also, of course the tech companies doing

business there. Next this is Bloomberg. While Hong Kong has served as a blueprint for China's opening up from COVID, it's also a huge, huge cars canary tale. Now. When the omicron variants swept through this modern city of seven and a half million earlier part of this year, the city's sophisticated healthcare system was simply overwhelmed. At one point, Hong Kong had the world's highest death rate due to COVID. There simply wasn't enough space to put all the patients

or bodies. Some of the sick were put outside on bourneys as body bags, with the deceased stacked up in some words, next to the infected living mords two were inundated. Most of Hong Kong's nearly eleven thousand total COVID deaths happened between February and April of this year. Like Hong Kong, China has a largely under vaccinated elderly population, but on a much much larger scale, and China too doesn't have

the more sophisticated mRNA vaccinations available. We have to remembered as China has been protected to public for so long, there has been no hurt amenity in China. Uh so um. This is going to start, and this process is not going to be smooth. It will be quite difficult. With a sudden dismantling of COVID restrictions, including mandatory PCR testing to enter public spaces, China is bracing for a surge in infections and death more than two million fatalities by

one estimate. Criticism of COVID zero is rapidly being replaced by concern that the rapid policy shift away from the all out eradication of the virus is happening too fast, and that China is ill prepared like Hong Kong was back in March for a health crisis of unseen proportions. Stephen Angel, Bloomberg News, Hong Kong, I mean, clearly a very tough story to continue to have to talk about.

We forget the health impacts, of course, the death impacts, and but also we have to talk, because we do a bloom Berg time and time again, the economic impacts of all of this. We want to thank our Asia G correspondent Steven Angle for that piece, because you've been doing some really thoughtful leadership in terms of what's happening from companies such as Tesla, companies that are desperate to get into China and then find for the demand is

being eroded, but in some ways the supply too. You know, we may have stopped tracking the virus um in Europe and in North America day to day, but in China. You know, look how quickly have we gone from COVID impacting production or impacting the ability of tech companies like Tesla to carry out their business to now the impact on demand. Right, and even though there's this reopening and easing of restrictions. There are lots of questions about that.

The most recent report from Bloomberg. According to sources, they're actually going to shut down the assembly lines imminently in Shanghai and then later in the Chinese New Year in January do the same. Some of that, according to sources, is for maintenance upgrades, but there's still this question about demand. It's a really difficult situation I supposed to understand and how hard is that going to be to peel apart?

What is just the usual way of things during the beginning of January for China and what actually is the COVID impact here? Well, usual things for the beginning part of January when you had the Chinese New Year and normal for Tesla to do maintenance. It's just that Tesla doesn't communicate and say here's our plan, and so investors, if you look at the share price this week, have got a little nervous despite a positive end for the stock on Friday. I have a feeling we'll be talking

about both China, both Tesla planning more next week. But for today, Ed, that's it for this addition of Bloomberg Technology. Hey, yeah, that does it? Don't forget to check out our podcast. You can find it on the Bloomberg Terminal of course, on Apple, Spotify and always on iHeart Radio, Big Week Carrow. But that's it for us. This is Bloomberg two.