Tech at Davos and Coinbase in Court

From Mahart where Innovation, Money and Power Collie in Silicon Vallet Nbon.

This is Bloomberg Technology with Caroline Hide.

And Ed Ludlow Imed Ludlow in San Francisco. Caroline Hides off this week. This is Bloomberg Technology coming up on the program. Full coverage from the World Economic Forum. As tech heavyweights continue to descend on Davos, we hear from the CEOs of Cisco.

Qualcom and many more.

Plus the SEC and Coinbase face off in court today over the regulator's crypto authority after.

Suing the exchange last July.

Will bring you the latest from the trial and AI startup Amthropic is building out technology for its chatbot to analyze images as it seeks.

To catch up with big competitors.

We'll bring you the details and so much more throughout the hour. Let's focus on the technology sector. In financial markets, the story of the week continues to be FED speak, and what we're seeing this Wednesday morning is traders pair back their expectations for FED rate cuts in twenty twenty four. How that manifests itself is a lot of red on

There's a lot in the news cycle as well.

Tesla continues to be a driver to the downside in major indices. That is a stock that is down by two point seven percent. Price cuts on Model Y in Europe, Netherlands, Grants, Germany, other markets mid single digits, pulling back on the price of Model Y, which they just confirmed in the last

Listen to this.

We work with regulators all over the world. Are the regulars here in the US. I think I'm a reasonable person to get along with. But unfortunately the SEC under this chair has taken a regulation by enforcement approach instead of creating a clear rule book in the US that can allow this industry to be built in a safe and trusted way.

Joining US now is Bloomberg Shinali basegad in New York.

Can look.

It's an interesting Wednesday morning. I think there's a lot of eyeballs on this, a lot of anticipation on the battle between coinbase and SEC.

Give me the basics of the dispute.

The base six of the dispute was that you had the SEC in the middle of last year sou Coinbase saying that they had operated as an unregistered exchange and broker, and they also targeted more than a dozen assets listed on the exchange, saying that they were listed as unregistered securities. So you had the fight back from Coinbase saying that they should be dismissing this. They foul a motion to dismiss,

All right, BLOOMBOGTIONALI basseg that is one you will be watching closely throughout when and I'm sure we'll discuss twenty four hours from now, Thank you very much. We've got to head over to Davos and what's happening in Switzerland.

Cisco CEO Chuck Robin.

Sat down with Bloomberg's Jonathan Ferrow to discuss Cisco's transition to being a software company amid an AI boom.

Listen to this.

There's still more to do. There's still more software assets we can build organically, probably some men organic stuff we can do.

But at the same.

Time, with the AI explosion, we're a significant recipient of the infrastructure benefit underneath the GPUs in both the web scale as well as ultimately in the enterprise. So our hardware business, which in some cases has subscriptions associated with and some cases do not, we think that both of them can grow over the next few years.

This is a tough question to answer, but do you think investors have fully internalized your view on where things are going and your message.

I think they've internalized the message. I think they're just looking for. One of the things that we've talked about is that this transition to software should give us more predictability and less volatility. And we've seen that come into play, but we still probably have a little bit too much. And so we've been rewarded for what we've accomplished, and I think as we continue to do that, we continue to deliver, you'll see that in the future.

You know, from bankre for a couple of days, everyone wants to be a part of the AI story. What surprised us, I speak for myself. What surprised me last year is how quickly it became real. It wasn't just a story that companies were selling. It was something they were monetizing. And the growth was exponential in some cases, and VideA a great example of that. Can you walk us through on way you're seeing actual, real tangible growth right now off the back of what's developing.

Yeah, I've actually told my team you're not allowed to espouse about AI unless you follow it with a tangible way that we're implementing whatever you were talking about, because there's so much noise in the system. Look, I think if we're building the infrastructure that's going to support underpinning all the AI networks. So that's happening today. We're running

That was Cisco CEO Chuck Robins add in a snowy Davos. Meanwhile, another story we're tracking computing, quantum computing create a cyber security armageddon is the question. The answer yes, According to one executive from IBM. Quantum computers, which accelerate processing power by performing calculations in parallel rather than sequentially, will make

You can't predict how long this will last, but even if it lasts a long time, I think you'll see that the ocean market kind of stabilized and gets to a relatively normal pricing environment versus long term historical averages. Of course, it'll be higher than it was going to be if this hadn't happened, but I think the world will recover.

You cannot predict how long the impact will last, but we're doing everything we can on Bloomberg technology to track that impact in real time. That was Ryan Pederson of Flexport with us the other day with his outlook for the supply chain impact amid the Red Sea crisis. Earlier today we heard from the CEO of MASK who says these events will hamper transit for a few months.

Now.

Joining us now is Core Kose, chief industry officer at Everstream Analytics, a leading supply chain insights and risk analytics company. And you also have the latest data. The latest is that around two hundred billion dollars worth of goods or volume of goods have been diverted to new routes because of the Red Sea.

Just explain that that data and that math to us.

Yeah, absolutely, thank you for having me yet today.

So when we're looking at the current shipping decisions, a lot of companies have decided to take the longer route. Until that decision was made, of course, some of it was halted before going the longer route. So the amount that volume of trade that has been delayed not stop

Yeah, I spoke to a source at Tesla at the end of last week and the way that the source explained it to me was that Tesla had to divert ships that were carrying components destined for its Berlin plants. But it's not that those components won't get there at all, they're just going to take longer to get there. And you would have seen the reports, including from Bloomberg that as a result, they're going to have some downtime at that plant to make up for the shortfall and product.

But there's also a cost.

Consideration in how much a technology company has to pay to move those goods. What are you saying on that side, So.

We're looking at, of course a cost increase from the

Okay, Corey KSEEV everystream analytics with the real time data impact of what's happening in the Red Sea.

Thank you. Let's head back to Dabos.

Christiano Ramon quowcom CEO, spoke with Bloombergs, Jonathan Ferrer and A Marie Horden about business in another key market, China.

Our business actually with China actually increase as we diversify, you know, our company not only into phones but into PCs and cars and industrial we expanded our relationships with China. Here's my simple answer. I think to that question, any company that has a leading technology product and is a product that becomes very important for the digital transformation of many industries such as automotive and others, you're going to

Does that monitoring get more challenging if you were to see a former President Trump went back to the White House next year.

Look, we're just focused on our technology and we want to have markets that we can sell our technology. I think at the end of the day, one important thing to understand is certain certain technologies are globally interconnected. So you're going to have customers in different locations. You have customers in Europe and Japan, they will have a business in China as well, And you want to be a global supplier to them.

I can see the cull calls saying, just round a corner. Very happy with that response that you didn't take to buy and talk about the form of President Christna. I want to tell about the direction of traveling the global economy for chip maker, just for the industry. Do you think we're close to the point where they have to pick a country, have to choose a side. We're either going to supply China or we're supplying Europe in America. How close are we to that moment?

Look, I don't think we are right now at this point in the industries that we serve, and it's one of those things that, yeah, if it changes, I think companies have to adapt. We have seen that some industries had to face that.

You have some.

Industries that that's kind of the reality for different reasons, whether it's a cloud company or social media company at et cetera. We have been not at this space. So it's something that we're going to have to worry about in in the future.

What industry do you think is going to be the biggest area of growth for you?

We are very pleased what's happening with automotive. We're now working with virtually every car company. The car is becoming a new computing space, and we are jobs to provide the digital part sometimes to go alongside electrification. That's an exciting it's going to build revenue for welcome over time. The other one that was really happy about it.

And it's new to us.

We're entering the PC space. We just build now in the fastest processor for any laptop, and we think that could be a great opportunity for us.

Call com CEO Cristiano I'm on earlier and another key conversation from Davos, and let's stay in Davos. The looming presidential election in the US this year will face risks with the rise of artificial intelligence. Leaders in AI, including open Ais, Sam Outman, and Microsoft founder Bill Gates wade in this week on the matter at Davos, and all said they took the threat of artificial intelligence on elections seriously, but there was a split in whether they thought a

Rachel metz Ai, Reporter.

This is interesting because I hear about Anthropic all the time as the kind of LLM and chatbot number two behind open Ai, a big competitor. But this takes it from text into the image domain.

What did you learn?

Yeah, so I looked to add some of the code that you wouldn't see if you were on the website itself chatting with Clod.

But it's really easy.

Anybody can do this by using some tools that Chrome enables, they're called developer tools. And looked at the code that is used for the website and it indicates that they may be working on an image analysis feature. It says there are things like chat with pod about images, tell me more buildings by this architect, things like that that we expect will be coming soon to users of class.

And so that puts Anthropic into a battleground with who, with.

Open Ai and also with Google. Right now, there are an increasing number of what are often called multimodal models. These are these large language models that can take in not just a text prompt from a person, but also an image and maybe an image plus some words and then give you a result describing the image. Maybe you could give it an image of a dog and say what kind of dog is this, or what kind of plant is this?

Or two images.

That was one of the things that we found on the Claude website that is invisible to useurs yet describe the differences between these two images.

That sort of thing.

Bloomberg's Rachel Metz, who analyze the company website's underlying code in that reporting, thank you very much. Meanwhile, another story we're tracking, Apple's iPhone has dethroned Samsung devices to become the best selling smartphone series over the course of twenty twenty three, and Samsung's gearing up for one of its most anticipated phone launches in years later. On let's bring in Bloomberg's chief correspondent Mark German for more on the

Certainly a victory, right, given everything going on, It's a.

Really big deal.

I think they got a little bit of a boost on iPhone sales across calendar year twenty twenty three because of the production hiccups at the end of calendar twenty

All right, Bloombos, mark Gum and thank you.

Victory for Apple with the shares still under pressure in recent sessions. Now, coming up on the program, we'll get an update on the tech job's landscape with Lettis Lattice CEO Sarah Franklin. Okay, welcome back to Bloomberg Technology ed lovelo here in San Francisco, checking on the markets. That the themes are kind of familiar to us. Right, the market has been cutting its bets for FED rate cuts

Why do we care on bloomber Technology.

We care because higher rates discount the present value of future cash flows for tech. In other words, you're a higher multiple stock on the NAS that one hundred, You're very sensitive to the rate environment. We're soft by one percent on that index, which I always go to.

Interesting.

Twenty four hours ago, the megacaps were giving us some buoyant See if you look at most of the names and then as that one hundred, we're in the red. Twenty four hours later, some of those megacaps continue to see downward pressure. Alphabet Pairent of Google, Apple, Amazon, all

I want to bring in Sarah Franklin for more.

She is the CEO of Lattice, a people management platform which also just put out its own report taking the pulse of HR teams across the country. All of that preamble to say, in tech in particular, there is some uncertainty in this jobs market.

It is crazy what the job market has gone through in the last few years. You saw incredible surgeon hiring and then massive correction, and so it makes sense that people are fearful because it's been huge ups and huge downs. Now at the start of the new year, and what I'm happy to say is that we're seeing more stabilization, more return to normalcy, more back to basics, more back to fundamentals. And if you look at the numbers last year, we were looking at one hundred and sixty seven thousand

What many technology employees find hard to understand, and they voice this on social media and LinkedIn, is that that was the start of twenty twenty three. Big tech was pulling back because of over exuberance in hiring in twenty twenty three, twenty twenty two. But the same logic's applying now, so they're asking, well, hold on, why didn't we get through this in twenty twenty three. I guess the question is did tech right size enough? And the answer seems to be no.

Well, what you're seeing now is back to basics and performance management. What you're seeing is that companies care about managing their people and their performance and they're making smart business decisions. This is normal part of business.

Pre COVID.

We were back to levels that are below that now and so it's still business which is having change and people are managing their performance, but it's not the massive, massive layoffs that you saw in twenty twenty three.

I want to know the data that you have the HR team survey. What are the kind of three key takeaways that you learned from that exercise.

So what we've learned is that half of companies are saying that they think that their teams are going to be back to about pre COVID levels. So again we're seeing this normalcy of shakeout in the data. And then also from the data, as I mentioned, one hundred and sixty seven thousand last year compared to sixteen thousand the year before, So this is very different in terms of what you're seeing year over year, and we're back to

So what Bloomberg reported in the context of Apple, for example, was very curious. It was that they were shutting down a San Diego based team that was focused on AI and Siri. And if you look at the news flow, actually AI seems to be a real driver of hiring right now because they're looking for skill specific people of you know, in terms of computer engineering, and my goodness to some of those jobs pay well.

AI is definitely what everybody is doing right now in tech. It is all about innovation and helping everyone manage their people better and manage their businesses better. And people that have AI skills are in huge demand, and that is why you see so much reskilling necessary for AI, not just with people that are in AI themselves, with people that are employed in marketing and sales and HR people that need to understand how to use AI to help make them better at their job.

And so then on the other side of the debate, is AI is going to replace jobs? Are you seeing any evidence of that?

So far?

Not seeing evidence of AI being replacing jobs. What you're seeing is AI is helping us be better and helping people rise to the level of performance that you want as a leader within your company. And so AI is here to help us and it's our job as leaders to deploy these technologies in a safe and responsible way.

We're talking about jobs. Could we talk a little bit about your job? You in the role you know, Jack Altman, somebody familiar to this program, how has that been and just give us the background of the change your I guess promotional or addition to that role.

Yeah, so I'm so excited to be CEO now of Lattice and as you mentioned, incredible companies solving the problems that every leader is facing today how to manage your people and their performance. I saw this in the market and I was excited to take this opportunity. And Jack is an incredible leader, an incredible visionary. He created this company blitz scaled it to the levels at now and it couldn't be more thankful or humble to work with him and the team to take it to the next level.

That's a CEO, Sarah Franklin.

Terrific to have you here in the San Francisco studio and jobs starting.

The year as we did twenty twenty three.

The story in the technology sector now another story that we're following. Google DeepMind said it's taken a crucial step towards making artificial intelligence as capable as humans. It involves solving high school math problems. Deep Mind introduced a system called alpha geometry that proves complex geometry theorems better than

Thanks Ed, It's great to be here. This is really exciting for me. Axiom Space. It's a commercial company. This is their third mission to the International Space Station. It's the first all European crew. So there's a couple of big firsts here. First astronaut from Turkey, first astronaut with the European Space Agency. Axium Space is looking at getting into a cadence of about two of these launches a year. And again, this is not a government doing this. This is a commercial space company.

So if you look at the crew, they are essentially personnel from different European space agencies. But Axium also has this kind of tourism element to it, where a private citizen or civilian for one of a better word, can take a future mission. Where do you see the most potential the private sector basically becoming a service for international space agencies or the tourism element, so I.

Would envision their business model is a bit of both. And what's really interesting about what's happening in the commercial space arena right now is that it is allowing an increased access to space, so both by nations or foreign governments that maybe couldn't affec forward or didn't have the technical capability to build rockets and space stations themselves, but also.

For private citizens.

It would have been unfathomable even ten years ago, say, for this many private citizens to be able to launch into space spend a week or so on a space station, it's pretty amazing.

Carrie, are you able to reflect when at what point you kind of suddenly realized that SpaceX had kind of changed the game for access to lower for a bit, the human access to space.

You know, I'd have to say it's been really within the last couple of years.

And let's look at last year alone.

So SpaceX with their Falcon nine space launch vehicle I believe launched was it sixty six times? That's more than once a week. And I come from a community working in the US national security enterprise or as we were talking, maybe one launch a month. So the fact that SpaceX is getting down to less than one launch per week is extraordinary. Plus they've announced plans I think at over one hundred and forty launches is what they'd like to do going into twenty twenty four. That's by my envelope

So the question is whether the SpaceX is the only game in town now and for how long? And you know, a big story in recent weeks has been ULA and Vulcan, something a launch system which you have some history and experience with your reaction to that ULA test.

It's been a while coming. So I would like to congratulate ULA for.

That successful launch last week.

You know, one of the things that I think got lost in some of the headlines last week because there was so much focus on the Peregreen Lunar Lander and the issues that they had and ultimately and now has led to a failed mission. What was lost in all of that is this was the first time that ULA was now able to fly an American made rocket engine. Up until now they've been relying on RD one eighty.

For our industrial base in the space launch arena.

Carry for the Vulcan in ula. What would represent progress and success for you?

This year?

You got to get a couple launches under their belt. You know, one launch is good, but they now have to get into a good cadence of launches really prove out that technology. I believe that the Department US Department of Defense has said, hey, we want to see two more launches before we can fully certify this to launch government payloads. So I'll be looking for repeatability and consistency and I'll say, I mean that's an area where SpaceX, with there hundreds of launches, they really got that down

Carrie, we really enjoy having you on the program. I just ask if you could tell our audience what you've been working on and where the focus of your study and research is being.

Of late, so I lead the Aerospace Security Project here at the Center for Strategic and International Studies. I am a space nerd from early in my youth, so I love.

Working these space topics.

Some of my big focus areas have really been on space security. The growing with the increased commercialization of space, greater use of it for national security, for economic benefit, there are also growing challenges, so the threats to space are increasing.

I'm looking at that, looking at what.

China is doing in particular, both within their military and national security arena. But they're also making some interesting strides on the commercial front, and you can question whether, well if it's truly commercial, but there are making some interesting strides there that I've been watching closely.

Carrying in director of the area Space Security Project at the Center for Strategic and International Studies just terrific to have you on the program.

Thank you.

Electric Boats startup Navy is partnering with payments process company Stripe to ferry employees to work before year old startup has already hosted some pretty high profile.

Names like Elon Musk on its boats.

Navy A CEO san Pritti Batacharia joins us to discuss a big step for this startup. You and I have spoken a lot about the underlying technology battery electric hydrofoil boat. This is the kind of first big commercial deployment. Yes, what are you doing with Stripe? Where does it run and how does it work?

Yeah?

You know, So we are starting off with a pilot program with Stripe to shuttle their employees in not Bay from North Bay to their headquarters in Oyster Point. So it's starting in March and it's really first off its kind, you know that it has ever been done.

It's about a twenty mile trip point to point. Yes, what will the experience be for a Stripe employee, you know in the morning getting into work in that method of transport?

Absolutely, you see. The biggest disruption I feel that naviebe vessels can bring is transportation in coastal cities where we are, you know, so frustrated by the traffic and traffic I mean when you think about it is mostly due to employees going to work in the morning right by driving their own cars. So in Bay Area also the number of supercommuters, which means like people who are doing a round trip of three hours, is quite high. So large

Let's talk about the technology.

Then you are doing production. You know, you're at the early stages of building out the fleet. What is it that's unique about Navia from the drive train or powertrain perspective and the design right.

So you know, forty six person of the world I mean lives in congested coastal cities, and you know, we are talking about, well, how do we attack you know,

And you've cracked that.

That is exactly the two key problems that we address is like operational cost and right quality. And how we do that is electric and hydrofoil. So hydrofoil takes a boat just like you know, it's it's like airplane. So we have wings underwater at a certain speed, the boat you know, rises above the water, it has left and with electric, you know, it's quiet, it's smooth, so you don't have this, you know, gas guzzling engine noises. So

Bay Area is the start. Where do you expand to just thirty seconds?

Yeah, I mean New York, Seattle, I mean Miami, La, you name it. I mean many areas in US, but globally the market is even bigger.

All right.

That was navy A CEO Sam Pritty Badacharia on the expansion of Navia to run a pilot here in the Bay Area for Stripe. That does it for this edition of Bloomberg Technology, My goodness, a busy week so far.

Don't forget to check out the podcast.

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