From Mahard where Innovation of Money and Power.
Collie in Silicon Vallet NBN.
This is Bloomberg Technology with Caroline Hyde and.
Ed Ludlove.
Live from New York and San Francisco.
This is Bloomberg Technology coming up technology stocks.
They jump on cooling inflation, but.
City strategists still see a risk of a sell off.
We discuss Elon Musk pictures himself as government spendings are in an hour's long Glitchy spaces on X with former President Trump.
And Google's gadget game.
We discuss the search Giant's the latest handsets and AI goals were first. That's checking on these markets and we are on the up, up and the up. And when it comes to the nasgag in the NASA one hundred hy Cooling Inflation Science PPI data today signifies that tomorrow we have all liyes on CPI and.
We're managing to cush I know, up more than five point five percent. Let's call it. At the moment.
Over the course of the last four training days, Ed, what are the key stocks that driver us higher?
So these are three names that also just happen to be the biggest points drivers to the upside. On the Nasdaq one hundred, Tesla is higher. We will talk about the focus on evs between Musk and Trump in that space. Is also taking a look at Nvidia, on track for its biggest two day.
Jump since late May.
I don't think we can talk enough about this, even though earnings are still far away, almost twenty eight And then Starbucks, Okay, Starbucks is not necessarily a technology company. Laxman's out as CEO, the protele CEO has been brought in. Maybe there's a digital story there, but it is the biggest points gainer on the Nasdaq one hundred and frankly on social media, Starbucks is a lot of whatever one's talking about as well. And look at that gain twenty two percent on a new CEO.
Interesting, got to.
Talk about it.
Meanwhile, though, let's just get back to our core of tech stocks. They are jumping, but there is still this warning from City Group that called our rye stocks could come back under significant pressure basically on any negative economic data. That says investor positioning remains extended on the butish side, despite of course, what has been the past.
Month's set off for more on these markets.
That's bringing Cally Cox's chief market strateses that whit holds wealth management. So it's interesting City is pointing out here, there's twenty two and a half billion dollar worth of long positions still out there tracking the futures on the NAS that one hundred. Why are we still seeing these long bets? Are they right to be long at the moment?
So sure, I think we agree with City there. I mean, tech stocks have.
Had a stellar year so far minus the last month, and you know, with so many economic conditions changing, with the expectation for interest rates changing, we think there could be more volatility there just because tech has been a victim of its own success.
So to that end, to people reposition, how would you if you found yourself generally long some of the big mega while the Magnificent seven shall we still call them?
How do you reposition that? Should you reposition that?
So, look, we're a big believer in tech, it's hard not to be. But you know, we also believe in risk, in managing a portfolio that helps you get from point A to point.
B iNeST way possible.
So we've been talking to clients about rebalancing out of tech, you know, selling a little bit of those tech cheers that have done so well this year and looking at you know, potentially smaller stocks, mid cap stocks, and looking at those rate sensitive sectors outside of tech.
Kelly, I don't apologize this.
We were sharing shares of Nvidia earnings of August twenty eighth. How anxious a period of time will it be for financial markets until that earnings print?
Well, I apologize about that.
I think that's on a lot of investors' minds right now. I know that's something that we're watching just because Nvidia shows that it can just it can beat any kind of expectation you put out there over and over again. Is really the hot stock when it comes to fundamentals within the tech sector.
The bar is a little bit higher.
The bar in general has been higher for tech earnings this season. But the AI story is still quite real. I think my question is, you know, what kind of guidance are we going to get out of video? How are investors going to digest a sales and you know, earnings estament beat if bad guidance comes on the back end. You know, I think the AI story is just a little complicated right now.
I think it's lost a little bit of its luster.
I think I'm right in saying Kelly that you're probably in the camp of investors that look at the technology sector, particularly cyclical areas of it, maybe the chip space, and say growth cycles come and go.
I get that, but what if the growth cycle goes within Video?
You know, it's not like Jensen huang To, I don't know, give a modest outlook. I guess is the lesson we've learned so far because his company is performing, but there is a scenario where he says, actually things have slowed down.
Yeah, it's a great question, and I have to remind people too that in Video is just one player in the semiconductor sector. You know, obviously it's fundamentals have been incredibly good, but we still don't know who the winner when it comes to AI, when it comes to the AI story, and we could see other chip makers take
some of that market share away from in Video. You know, I think if Jensen does come out and say that growth that isn't as great as we're seeing, or growth hasn't been as great as we've seen in the past, I think investors could get a little.
Bit worried there, and that's a reason why you.
Should maybe you know, rebalance some money out of tech. You know, the expectations for the tech sector are just so high right now that it's hard to see tech beating those for a while.
Kenny, It's interesting that while we have one side of Citi's mouth saying, look, we're thinking we've got a big exposure to a downside risk if we do get some worrying economic data on the other side of their mouth speaking about City Group analysts of basically buying the dip in chip names in particular.
They still like in video.
They're thinking maybe some other key names could be abroadening out because look, when you look historically, other banks have shown that we've had four quarters of an up cycle for chips, but actually usually with us about ten quarters. How do you remain exposed without perhaps just keeping on betting on the same things. How do you take profit but still diversify within technology?
You do it carefully, and look, before any conversation about rebalancing, you have to realize what your risk tolerance in time horizon is.
If you're looking at a five.
To ten year time horizon and you're really excited about AI, then hey, you know, any sell off that we see in the tech sector, especially here, could be an opportunity for you. You just have to, you know, potentially wait it
out a little bit. In terms of rebalancing, we like slow and steady, you know, maybe selling a little bit here and there, revisiting your targets when it comes to single stocks that you're owning and sectors that you're owning, and just understanding that there's a market outside of tech, and you know, there are some exciting stories in other sectors.
I know we're on a tech show right now, but you know.
Tech is exciting about Patti nothing else.
Nothing else matters.
But over the next year or so, we could see some other socks tape leadership, and in fact we're already.
Seeing that, you know here on Bloomberg Technology.
Cali I like to ask about the FED if I may. After PPI this morning, what's the CALI call on what the FED does? Because, as we say on this show, higher rates discount the present values of future cash flows, and when you're technology investor, that's important.
So the FED looks like it's going to have to cut in September. CPI data confirmed this this morning.
Excuse me.
PPI data confirmed this this morning. I mean, we saw quite a drop in services PPI or slowing down in services PPI, and that just boosts the story for inflation getting lower and lower and close to the Fed's target. And if the Fed does start cutting rates in September, we could see investors' behavior around tech stocks change.
I'll be honest.
Tech stocks are growth stocks, but I think that there are a lot of flavors in the tech industry and investors are looking at them quite differently. So if we see growth maintain but we see rates come down, I actually think that this rotate out of tech could continue this rotation in to rate sensitive sectors.
But you have to remember, if we do hit a rough.
Patch in the economy, some of the strongest stocks on the market are tech stocks, so investors could look at those as a recession trade of sorts.
We got all the flavors of technology here on Bloomberg Technology.
Take your pick.
Kellie Cox, chief market strategist Atridhol's Wealth Management, Thank you very much. Coming up from the show, Elon Musk sat down with Donald Trump for a wide ranging interview, which he called more of a conversation last night. On a next basis, we'll discuss this is Bloomberg.
I think it would be great to just have a government efficiency commission that takes a look at these things and just ensures that the taxpayer money, the taxpayers are harder money in a good way.
And I'd be happy to.
Help out on such a commission.
I'd love it if it were formed for you.
You're the greatest cutter.
That was Elon Musk taking the opportunity to pitch himself for a role in a second Trump administration on last night's Eventful Spaces with the former President. Bloomberg's Max Chafkin of Elon Inc. Joins us now, and I mean, there's so much to recap for me. That was in the context of an election cycle, important like this idea that Musk would maybe have a role if Trump were re elected to the White House, and Musk also was at
pains to kind of clarify his own politics. You tuned in for many hours as well.
Let's start there, Yeah, I mean nearly three hours long. With the lengthy delay, there were a long bunch of technical difficulties that caused it to start laid. I mean, in terms of the sort of must Trump relationship, what I heard was Musk being extremely deferential to Trump in a way that is pretty unusual for him. He's obviously a combative guy. I mean, not only was he kind of asking for a job, but he was nodding along during lengthy sections where Trump was seeming to downplay climate change.
You know, Musk has has a lot to potentially gain here, beyond, of course, potential employment. Tesla and SpaceX both have a lot to gain by a friendly regulatory environment, both in terms of subsidies government contracts, as well as you know, potential regulation or lack thereof, of things like the potential ROBOTAXI.
Let's just go into that awkwardness around climate change and the fact that he calls himself sort of well, you can be an environmentalist. You can still do good for the planet, but not have to sacrifice on ultimately a great car.
It was kind of his pitch to a whole new audience.
Well, you know, weirdly, that has been Musk's pitch for some time, almost from the very beginning. What was different was his willingness to kind of go along with the idea that climate change is not existential. You know, back during the early days of Tesla and even especially during the Obama years, Musk would emphasize that we're you know, the planner is running out of oil, that climate change
is a really big problem. Trump during this space said We've got five hundred years as long before we run out of oil. You know, climate change is not that big a deal. We don't need all electric cars.
You know.
These are all things that at an earlier time would have really set Elon musk off, and he has, you know, navigated to a slightly different position, a position that is definitely much more accommodating of kind of right wing skepticism of man made climate change.
Max electric vehicles would discuss. Actually, I want to bring some news this morning to an audience that in response to the spaces last night, the UAW, the United Auto Workers union, filed a labor complaint, a practice charge against both Trump and musk And I'm summarizing, but they basically said that during the course of that conversation, the two men illegally intimidated.
Union workers.
Actually must literally thirty seconds ago responded on x which we will show as soon as we got that in a second. To combine all that, please, it's difficult, but that news this morning of what was said about EV's and unionized work.
Well we actually heard it in that clip you played that that bit about him being a great cutter that went on. Trump said, you know, your workers went on threatening to go on strike and you just let them go.
The UAW has already cut an ad about that, And of course this could become politically difficult for Trump, who's who's trying to cater to working class voters in swing state, especially in the Midwest, where where unions definitely hold sway and where at times he's seemed to make up some ground.
And of course it could be an issue for Elon Musk because the UAW is trying to unionize electric vehicle manufacturers and has signals tension to do so, although it doesn't seem like has made a ton of progress yet.
So we know what we did here around EVS and around well, as you said, basically sort of a cozying up of mustera Trump.
What we didn't hear was anything about Krypto.
Did that sparzy Well, I mean, it's surprising in the sense that Elon Musk has kind of expressed affinity with the kind of crypto community. There's a lot of overlap between fans of Elon Musk and fans of bitcoin. But you know, Elon must never been totally a crypto guy. He's more somebody who seemed like he has a desire to kind of graft himself.
Onto a popular movement.
So in that sense, no, But what we did here was, you know, kind of a pitch for the boring company must tunneling venture, as well as Trump suggesting that he might be open to expanding the boring Company's operations, praising Musks tunnels in Vegas as well as Ed said this kind of more muted praise, kind of almost like backhanded compliment for Tesla's cars, Trump saying they're good, but not everyone needs an electric vehicle.
Oh the nuances there all over Elon Inc. As always our mix Chaffkin, we thank you, look as we reference at the very beginning, though, there were some technical glitches during Musk's conversation with Trump last night on xpasis, Mask actually blamed the delay on a cyber attack, and he didn't provide any evidence, and then went on when the event started to sort of suggest that Trump's opponents are responsible.
Gesticulously, we unfortunately had a massive, distributed anilo service attack against our servers. As this massive attack illustrates, there's a lot of opposition to people just hearing what President Trump has to say.
It's been an expert Undidos Brian Palmer, CEO of Trellis, Brian, did this look feel seem like it was a cyber attack?
It's possibly a distributed denial of service attack, which is a malicious attempt to disrupt the servers. That is one possibility. There's a lot of reasons why servers and a system could go down. I don't have any insight directly, but it is a possibility.
A senior source at X last night told me that it was definitely add US attack, but The Verge reported, citing staffers un named staffers, that it was not ADDUS attack. Regardless, what did it tell you about the strength or fragility of X's security and its systems.
Yeah, I wouldn't speculate on whether it was or it wasn't because I'm not involved in the investigation. What I can tell you is that around election time, fifty percent of.
The world is going to have elections this year.
What we do know is that distributed denial of service attacks are on the rise, and they are used to disrupt campaigns. They're used to disrupt elections, So it is plausible.
Like I said, I don't have.
Any details on the investigation or why this particular incident.
Happened at x RAN.
I'm sure with Trelix, your job is to ensure that fight such events, websites, live streams remain impenetrable.
And I'm interested as to whether this can.
Be a case because this isn't the first time that we've seen some really awkward, embarrassing delays to certain spaces, and I'm wondering what could have been done to prevent a denal of distribution service attack occurring in this particular way.
Yeah, Look, these attacks are very serious. They happen at scale. They happen a lot of different ways. They can happen through volume by just sending so many packets and by using botnets and zombies. So these can be very powerful and many companies have suffered. We know just recently on July thirtieth, the Azure platform suffered at a distributed denial service attack and was down for about six hours.
That impacted the Starbucks app and outlook and Minecraft some other things as well.
So these attacks are pretty sophisticated, especially when they're being played out by adversaries very skilled.
Brian the FBI said that it's investigating allegations made by the Trump campaign team about documents access from the campaign during attack in the last week or so. Have you followed that case study and what do you make of it?
I followed it. I heard the reports. I think what we have to do is let the FBI do their work. They've got some great cyber professionals who are going to do an investigation.
Again, we know that in election season, all elections.
We saw it recently in France there was a distributed denial of service attack launched by Russian activists on the French government during their election. So this is something that's happening, the specific cyber attack that you talked about over the weekend. I'll be interested to see what the FBI uncovers in their investigation.
I mean, Brian, we're also fresh in our mind of how a lot of our lives and flights got put on ice a few fridays ago because of a CrowdStrike issue. When that happened, Elon Musk went on to X and said, look, he's ditched crowd strike. And I'm interested that you actually said at the time, you told Bloomberg that you understand why and you'd welcome Tesla CEO as a customer.
Have you been approached by your musk wanting you.
I haven't talked to haven't talked to him at all, but obviously we're a leader in cybersecurity and if they need some help, my offer stance we can do.
We'll do whatever we can to help. Bad X and Eli.
Brian Palmer, CEO Trelix, thank you very much.
Time now for talking tech.
The first up, well Polish billionaire Afile Roska takes aim at deep fakes, holding Meta accountable for fake ads on its platform.
These are the likenesses of famous people.
Look.
The founder and CEO of InPost won an injunction last week temporarily banning Meta from publishing fake ads using the likeness of him and his wife, who's a local TV celebrity opponent. Rodka is now waiting on a similar order in Europe from Land's Data Protection Commission plus Singapore's c Limited.
It raises its outlook on e commerce strength.
The company is actually saying they expect sales of goods to rise in the mid twenty percent range, exceeding.
The high teens they saw in March.
Second quarter Profit and sales also top anist estaments and investors that anxiously awaiting Alphabet's Google Pixel event is happening today. The tech giant is set to debut new hardware and software. Look traders are hoping that the introduction of a new AI features to the redesigned Pixel phones, we could help stop what has been a massive sell off.
It's wiped off three hundred.
And sixty billion dollars in market value of Google in just one month and more on it.
Yeah, this is worth talking about and thinking about what we can expect from the Google Pixel event. Let's get to Bloomberg Intelligence and Lissena Rana. We have this pie chart and it tells the story of where the Pixel or handset sales sit within the biggest, bigger picture over the last four quarters. In Frank piannareg the ar they are a small percentage of revenue. So why is success with the Pixel important?
I mean it really has to showcase the software. I mean the hardware doesn't really matter because remember most of the phones in the world are Android phones at the end of the day. So if Google can showcase what Gemini can do on their device, I mean, it really changes the narrative for high end Samsung phones over the long term. I mean, this is a this is something that an Apple has to deal with, you know, next month.
What's interesting, of course, is the fact that that tie up between open Ai, CHATCHBT and Apple is somewhat delayed.
And how much therefore integral how much.
Of a boon to Google is it that they basically.
Have their own underlying large language models.
See, at the end of the day, people are not buying phones so quickly or moving around because of one large language model or the other. But this is really a fight between the two biggest large language made sets out there. Once Open Ai the other one is you know,
Google's Gemini. And at the end of the day, Google has to showcase that they are actually better, not even closer to open AI, and these kinds of events are a chance for them to showcase that, at least when it comes to on device inferencing.
Let's focus on that.
Bloom Meg Intelligence has done deep analysis into generative AI. What is the future of using generative AI tools or smaller models on device ANARAG it really.
Makes it what I would call is the hyper customization of smartphones, where you know your smartphone behavior is going to be very different than mine. You can do a lot of things that an assistant can help you with, do you know, from anything from booking airline tickets to maps, all those things, but you require something that's on the device, and both of these companies are really championing that they will be the first ones to achieve it.
Now Apple's going to launch a new phone.
They really have a long poo.
Catch up Bloomberg Xana rab Brana of Bloomberg Intelligence, thank you so much. Welcome back to Bloomberg Technology. Ed Ludlow in San Francisco.
And I'm Caroline Hide in New York.
Quick check on these markets because we are up into the right when it comes to the Nasdaq. In fact, about a four straight days of gains. That's the longest winning streak since July the tenth, more than a month of the Nasdaq. So we're managing to see once again a bit of a risk on attitude to the market after last week's absolute turmoil. But bond market's really getting a bid as well, yields crushing.
Down on the front end.
Two year yields as we see off by about six basis points. Why is that the PPI print basically inflationary data is.
Coming in and giving us the.
Comfort that inflation is being tamed. What does that mean for CPI print tomorrow? What does it mean for the economic market re reactions? That we're seeing bitcoin currying up more than a percent because the dollar is down, Move onto the individual movers for a moment, because.
That's the macro.
On the micro side of things, we are looking at in video just on the higher side more than five percent. Of course, all the eyes on that's earnings. But really we're seeing and by the dip moment in some of these chip makers, we're also seeing it spread out to the likes of broad Com up more than three percent.
We're seeing some.
Thirty NEFT filings come out, some hedge funds and buying into this particular name. And I'm looking at Tesla because we are still more than four percent, even though you singled out what ultimately is some fighting talk coming from the overall association that focuses in on United Workers for Automobiles saying that we don't like what was said between Trump and Musk yesterday on that spaces ed. But we
are seeing at the moment Tesla getting a bid. Maybe Republicans are going to be buying eves more.
Let's listen in.
Yeah, I think there's a lot of discuss in the markets in the short term and the long term. Let's get into it with Gil Simon, chief investment officer the two billion dollar hedge funds Soma Equity Partners, which makes concentrated long and short bets on tech, media and telecom companies. The funds up about four percent this year through June. I'm also joined by Bloomberg's Hemma Palmer, who covers this space very closely. Good morning to you, Welcome to the
San Francisco studio. I want to start with AI broadly because it's what everyone's talking about. But you have this like thesis that in terms of earning t revisions or something tangible, that all the investments worth it that shows up in hardware names. I don't see too many hardware names that you're holding. Explain that to me.
Yeah.
So our focus has really been historically on software and internet companies. That's primarily where kind of our source of differentiation have been, just in terms of our own research and experience. We've owned some hardware over time, but one of the things that we've found difficult is just with the predictability of this early AI investment wave, and so we're looking for really durable beneficiaries of AI, and so we think we've found many in both the infrastructure and
application layers. And so while it's been unfortunate to miss, like saying Nvidia, we think it's very difficult to predict just how their fundamentals play out over the next couple of years. And so, you know, we're happy with our strategy and focusing on what we know best.
And Gil, you know one company that you invested in that your long is Rivian. Now, this is a stock that's been under pressure, down forty two percent so far this year. You think over two years of stock and had fifty dollars a share is currently trading around thirteen. Explain to us your blishness on this company and how much of it is writing on this deal with Voldwagen.
Yeah, so great question. So I've noticed a lot of the conversation this morning has been about Elon and EVS and Tesla specifically. I think the market has really started to look at Tesla as kind of the only real winner in EVS in this country. There are some big Chinese companies like BYD that are successful as well, but we've really kind of tainted any other secondary players and evs into like this. Uh you know, dust been of unlikely,
you know, kind of unviable companies. And we think Rivian is emerging into its promise as being the number two EV player after Tesla in the West. And so this deal that they just announced with Volkswagen about six weeks ago, we think is a massive validation of their position. Volkswagen is investing in aggregate of about five billion dollars that will flow to Rivian. Ravian's only a fifteen billion dollar
market cap today. Compare that with Tesla at seven or almost eight hundred billion dollars, and you know, ed just being here in San Francisco, we see a lot of Rivians out on the streets. It's very reminiscent of when Tesla started to get traction with the model S. Rivian's roadmap is very much following in Tesla's footsteps, going from selling one hundred thousand dollars kind of you know, high
priced cars to a mass market. And the R two and R three models which Rivian announced are going to come in twenty twenty six.
I'm just gonna jump in here so as you know, our covered rub being ready closely for a few years.
The VW deal was big.
You know, I've written that AUJ scare has been to speak, unreliable boyfriends. You know, the Mercedes deal didn't last long. Ford never materialized, But it indicates that Rivin can't do it on its own.
Is that fair? So I actually think.
It's slightly different. I think the view that we have is that the legacy car industry is really struggling with a transition to modernizing their vehicle production. And so there are a couple of aspects of that. One is, the legacy car companies are really good at a couple of things. They're good at outsourcing, and they're good at marketing. They're not good at vertical integration, and they're not good at software.
And so if you look at even Ford's last earnings call, one of the things that their CEO called out is that Tesla and Rivian, those are the two companies that he called out, are really the only two companies that have developed a kind of new technology infrastructure that really modernizes the experience for customers. One of the important things now as a customer is and I have both you know,
I've had a Tesla for a long time. You expect to get over the air updates to your car to be able to access your car through your mobile phone. And those over the updates are not just to the user interface. There to the suspension system, the braking system,
which requires a lot more integration. So we think the Volkswagen deal is a is like a real turning point for the industry in that Volkswagen, which owns Audi, Porsche, Volkswagen, Lamborghini, they want to infuse all of those platforms with Rivian technology. And so it opens up this new paradigm in the automotive industry where you see that the legacy oms might need Rivian as a supplier of technology and software, which is a new angle to this story.
And given you know the developments that we've seen, has still been a pretty volatile stock. How do you hedge against that volatility in your portfolio.
Yeah, so we've used the volatility to our advantage. So the company, if you remember it came public in twenty twenty one. It was one of the biggest IPOs in history. I think came out of one hundred billion dollar valuation because people perceived that it could be the next several years later, that promise the roadmap is starting to come into view. Obviously that was very early for people to think that far out, but we've used that downside volatility
to our advantage. So we've just purchased the stock in the last six months at around these levels, and so we're very happy taking a position in Rivian using the downside price action to our advantage to be long term investors to see what this company can become.
Gil's interesting one of your other key holdings is also well impacted by Tesla in many ways, and that's Uber. That was the ROBOTAXI read across. I'm really interested in your ethus and focus on Ober and why you're so committed.
To the name.
Yeah, so it's a great question. This year, in spite of Uber putting up tremendous fundamentals, one of the big overhangs on the stock has been Elon's commentary and plans
around robotaxis. So this has been a big debate in the stock market, and we actually think we're very convicted in fact that av's autonomous vehicles actually will go through Uber's platform, not around Uber's platform, meaning that today the biggest player in avs is actually Weimo, and Weimo is partnering with Uber and Phoenix, and we are anticipating potentially expansion of that agreement because if you think about Weimo going direct to consumers on its own through its own app,
it doesn't have nearly the exposure or distribution that they get through Uber, and so to better utilize their fixed capacity of cars, they are partnering with Uber to generate better utilization. We think that that is a very important understanding to really understand how av companies, companies that have autonomous functionality will leverage Uber's distribution to achieve better economics.
Now with robotaxis, one of the big knocks that we have is, again as a Tesla owner, the dream that I can push a button and let my car drive around and generate revenue for me so great, and we love Elon's long term visions, but we also think that it's a bit naive and that the number of customers that are likely to push that button and let their
cars drive around with strangers in the backseat. There are just a lot of real world kind of considerations that we think make it still very far from happening.
And the real world driver is of course artificial intelligence as well. Gil I go back to that as a as a driving force of what names you get in and get out of, because where are we undervaluing the impact of artificial intelligence in certain applications and names.
Yeah, So you know, we own many companies, so you know, Ed pointed out that we don't do a lot of hardware, but we own a lot of companies that we expect
to benefit significantly from AI. You know, obviously in the automotive space, AI really talk about autonomous driving, and that's why it's important for us to have a view on Uber and whether AI is a benefit or a hindrance over it to But there are a lot of names that we own in the infrastructure space, you know, really in cloud infrastructure like Amazon and Microsoft, names that are known to everybody, but also Data Dog in the software space, which is a little bit of a tie on to
companies that are investing in their cloud infrastructure. We also own a company that you wouldn't really think of as an AI beneficiary, which is Roadblocks, which I saw Bloomberg Intelligence actually put out a piece this morning talking about how Roadblocks is embracing AI to help their developers build games and experience on the platform. So there are a lot of companies that are in the market, both enterprise
and consumer facing. We just want to make sure that we're with management teams and companies that are on the front foot that are looking to embrace AI in all the different potential ways that they can.
Gail Joy to have you on come back seeing we have thanks so much, Gil Simon, chief investment Officer at Soumaer Equity Partners, and we've got to thank our own Hemma Palmer.
For helping bring that interview to bear I.
Meanwhile, coming up, we're going to be joined by well key focus of VC right now Isabelle Freedham is going to be joining us founder managing partner.
Over at the Capital how to take on the IPO market. This is bringing back technology.
The IPO market is open and if you look how the companies that have gone public Rubric and some Instacart and some of these other ones have traded, they've actually done remarkably well. But yet you wouldn't know that based on the volume which is like almost dried up to next to nil.
That was Lead Edge Capital managing partner Mitchell Green on the show yesterday, saying the IPO market is back or open, but not everyone agrees. Let's bring in Isabelle Friedheim for more. She's founder a managing partner of Athena Capital, which is currently raising a five hundred million dollar fund focusing on private companies preparing to go public or considering another exit like M and A. So make sure, says the IPO market is open. Do you think the IPO market's open?
I do think we are starting to see a recovery.
The IPO volume in the US is up in twenty twenty four Q one Q two up about twelve percent. Proceeds are up as well, which is encouraging, and we're starting to see larger deals such as Reddin, Stripe on File in Nvidia, and those are This is an indication that investors are starting to indicate interest in companies going public and deploying capital into tech companies in particular.
But they're nonetheless prudence and that's.
Why we're only seeing at this point still larger sized companies because they have a better chance of success. And I think we're going to continue to see that for the remainder of the year, with likely a higher velocity of deals in twenty twenty five after the elections.
So election is an interesting point. Something that Mitchell reflected on yesterday is it's very difficult to be a private company planning to go public from a regulatory standpoint. You know the paperwork involved. Frankly, what do you make at that, particularly with your focus on taking companies that are currently private but thinking about jumping to the equity markets.
It is very difficult.
Unfortunately, we are in a regulatory environment in which it is hard and expensive for companies to go public. In fact, we've seeing over the last thirty years or so about ninety percent decrease in the volume and the number of publicly traded companies, and unfortunately Chairman Gensler has enacted almost forty rules recently, and it is making it harder.
It is making the US.
Less competitive, and it has repercussions that are both geopolitical and repercussions on our standard of living.
I'm interested than what to be done because you've got such a wealth of experience when it comes to periv equity IPOs, but also SPACs, and many would say that the whole problem with SPACs was that there weren't enough investor protections in place. How do you make it less onerous, less expensive, but still necessarily protective, particularly retail investors.
For companies to go public.
What spas were there were a symptom of retail investors demanding access to tech returns. For the last two decades, tech returns have been hoarded by the venture capital industry.
So the Amazons and the facebooks and the Googles of the world, those returns took place for the most parts privately before the companies went public, and that's the case for many tech companies, and retail investors wanted access to those investments, and they are difficult to risky to make in the venture capital acid class.
And therefore facts were just a symptom of that.
But beyond that, there needs to be easier access for capital formation for tech companies that are innovative that improve our standard of living, because the venture capital that we provide is the lifeblood for innovation, and we in the venture capital industry.
Exists for the exits.
We fund companies because we know there's an exit on the other end, and if companies stay private for too long, we jeopardize the volume of the venture capital acid class.
So what therefore, should we brace ourselves for post November.
Is it all AI names.
It's larger size companies in the short term, and it's going to be more innovative companies probably in the next cup of years. We're still seeing a recovery. We don't
know when exactly, but it will happen. That there's a big backlog of companies that want to go public, investors that want to deploy capital into those tech companies that are going to find solutions to climate problems, to drug developments, to payments to many of the technologies that we use that again improve our standard of living.
So we will see that happen.
Whether it's six months, a year, two years, doesn't really matter, but it will it will happen.
Well, we'll see as and when that IVO window really does fly open as well. Freedha, I'm great to have some perspective, particularly on the sec founder and managing partner of Athena Capital, thank you.
I'm looking at the crypto markets, Bitcoin in particular trading just below sort of sixty thousand US dollars per token because it was expected to but did not come up in that spaces between Musk and Donald Trump. But Donald Trump has been talking about crypto a lot recently. At the Bitcoin twenty twenty four conference a couple of weeks ago, he even promised to create a national bitcoin stockpile with the cryptocurrency being held by the US government as part of his platform.
Have I listened to this?
If I am elected, it will be the policy of my administration United States of America to keep one hundred percent of all the bitcoin the US government currently halls or acquires. Into the future, we'll keep one hundred percent.
I hope you do well. Please.
BA July twenty seventh statement alarmed a few former prosecutors, and that includes Amanda Wick, now principal with Insight Consulting, who served as a federal prosecutor for the USDOJ for nearly a decade, and you specialized in money laundering and cryptocurrency. Why did that Trump position alarm you?
Unfortunately, it's one of the many things that he says that's either wrong, illegal, or not possible. And when he says he's going to keep one hundred percent, I don't know that he realized that some of that money is from the victims of scams, hacks, ransomware. It has to go back legally, and it's been stockpiled largely because it
couldn't go back due to some contracting issues. I think the concerning part is that Trump has a tendency to say what people want to hear, and not necessarily what's even remotely feasible or legal.
Of course, it's called is for a stockpile, LEUS holds what about twelve million dollars worth of crypto at the moment, variously Bitcoin eighth, as well as Tether's stable coin. How just go through the motions of how the US government decides as and when it should sell its crypto holdings to repay those who are the victims of scams or have had runsoms for example.
Well, there's a process, and it's called the asset forfeiture process, and it's been established for years. The issue was that for several years, the process by which those funds would be liquidated or sold was held up due to a
contracting issue that the US Marshals was having. And only recently, on July first, I believe, was it announced that the contract had gone to coinbase, And so this perception that the government was purposely keeping the funds was actually a contracting glitch, likely in the sense that they were stalling it was stalling.
In terms of their ability to liquidate it.
But normally that process would be they would be sold and the funds would be returned to victims as part of the normal process of either a civil or criminal case.
Yeah.
Man, I just want to level with our audience.
We're talking about this because we thought it would come up last night between Musk and Trump and and it just did not.
Sec and Gensler.
You know, that's the other side of this that you talked about firing chair Againstler.
You know, the.
Mechanics of that working and then trying to get a bitcoin reserve. I'm just trying to understand process why it would work.
Yeah.
Professor Tanya Evans did a phenomenal article on this and Fortune Lead where she talked about the actual impossibility of firing him on day one. And I think, look, there were people actually placing bets on whether Trump would say bitcoin or crypto last night, and I think it's a disturbing trend that he tends to take money from people who are willing to give it to him. And the crypto community has been battered for four years by the Biden administration and they are only too happy to head
towards somebody who's giving them positive indicators. I think the Harris campaign has been slower.
To give positive indicators.
There is a group Crypto for Harris that is working on that and is gauging on that. But there have been positive indicators from the Harris campaign privately, just not as publicly as Trump. But I think the crypto community has to decide do you want somebody who's saying what you want to hear but it's not possible, or do you want somebody who's taking their time and deliberating what the policy should be because it actually.
Has a chance.
Manda Wick Insite Consulting Principle, a former federal prosecutor. We thank you does it for Blombag Technology