Tesla Cuts Prices Again and Goldman Says Apple a Buy

to ban TikTok. Senator Mark Warner plans to introduce a bill this week to allow the US to systematically ban Chinese technology. That's including services like the social media giant. All that and so much more. Coming up. The first, Tesla down two percentage points after cutting prices here in the US on Model lesque a Model X including the plaid varietals over the weekend. For more, Let's bring in bloombergs Dana Hoole, who is reporting, where are the price

cuts and what do we know about them? In the last twenty four hours? So Tesla cut the prices last night, they change the website, and the model S is now roughly five thousand dollars cheaper. Across both models, and the X is almost ten thousand dollars cheaper. Interestingly, now the plaid is the exact same for both the S and the X. And I think what significant is that we've seen Tesla tweak prices quite a bit. This is kind

of a significant change to come in March. We have roughly three and now four weeks left in the quarter. Tesla definitely changes prices. But is this a demand question or is this just Tesla trying to cut costs for consumers? Well, let's jump in on that. We every day go to our audience and ask what do you make of this story? And the question is do these price cuts push you

to buy what is a still very expensive vehicle? The results kind of mixed, actually, I would say, you know, almost fifty percent of respondents say no, these are too expensive. What has Tesla said so far in twenty twenty three about demand, because they tend to use price cuts as a lever, frankly fine, pockets of demand absolutely well. Musk said last week and Investor Day that demand for Tesla's cars is infinite and that the biggest, you know, the

limiting factor is priced. So you know, but again, I mean the vast majority of Tessa's sales right now are the three and the Y, and you know, he's even said that the S and the X are kind of like antique models that eventually will go the way. You know, there's sort of like legacy models that they make because people are fond of them, but they are still quite expensive cars. The fact that they are cutting at this point in the quarter, to me, means that they are

trying to stoke demand. They must have inventory that they're trying to move. You have a really terrific piece out newsletter or Bloomberg terminal piece, both newsletter and ternal piece value for money on this great deep bench of talent Tesla. I thought this was so important and worth taking a look at. Last week it invested day. Elon Musk is up on stage a site with familiar with that behind him. There you see it on the screen. Sixteen or so

executives six. Yeah, I don't think we have time to go through all sixteen, but there are sort of a top three that you've picked out. Who are these new names behind Elon Musk? Yeah, So this is the first time that so many people have been on stage with Elon, and I think it's a clear sign that the company is trying to be like, Hey, even though Elon Musk bought Twitter, we have this deep bench of talent. Tom Zoo is clearly a rising star, as you've reported earlier

this year. You know, Tom has kind of a growing remit within Tesla overseeing manufacturing not just in China, but in Texas and potentially in Mexico as well. I thought the presentation by Rebecca Tanucci, who oversees charging, was spectacular. She's like an executive that we've never heard of. And then Brendan Erhardt, who's the recently hired general counsel, came

to Tesla from Dish. He briefly appeared on stage, and he's the first sort of big outside higher that we've had a Tesla in quite a while, just showing those kind of less familiar names on the screen. Then you're right, we've reported Tom ju now has kind of moved away from China where he was really focused, to globally looking at manufacturing air Heart Interesting. You and I have reported a lot on the turnover of legal names in Tesla. You've covered Tesla for so long and you've done so

many of these events. Why was this one different? What was the kind of standout feature of it. Well, this was I mean, it was a four hour of it, so it was quite quite the long saga. It reminded me a little bit of a Battery day point two point er in which they were giving a lot of very detailed, highly technical information about their thinking, but there wasn't a clear product announcement. I think a lot of retail investors and Wall Street frankly were disappointed. They wanted

to see a concept of the car. They didn't want to see like a future car under a white sheet, which is what the slide showed. But we didn't get to hear from a lot of people. And I mean, you know, part of Tesla's talent is people, and it's rare that they showcase people. Part of our talents of people too. Here at Bloomberg. Bloomberg's done a whole terrific reporting and all things Tesla. Now, let's stay in the

world of evs and actually autonomous vehicles. Amazon's Zooks division is facing a federal inquiry into the self certification of its passenger vehicle as meeting safety standards. NITZA says it's launching an inquiry for more information on the data and testing the company used to certify it's a vehicle that was equipped with automated driver assistant software. The government didn't

cite any problems or violations in the announcement. Zooks's general counsel told me in a statement, this is a request to gain an additional level of detail and information on the self certification test Zooks performed, which have met or exceeded government requirements. We are committed to working closely with NITZA on the questions they have and we remain confident in our self certification process and data. Now another story we're watching, Goldman Sachs says it's time to buy Apple shares.

Goldman is taking a bye out of the Apple well Apple Shares. The firm is recommending the stock as a buy for the first time in nearly six years. To see what I did there. Analyst Michael Earn has taken over coverage of the stock, and he says Apple's large user base is going to help the iphonemaker grow its services business and because of its leading design fostering brand loyalty, Goldman think that Apple is able to reduce the number of users leaving the Apple ecosystem and to keep them

making repeat purchases. So back to the last time Goldman had the equivalent of a buy on Apple twenty seventeen, the stock has rallied more than three hundred percent since then. Goldman's price target one hundred and ninety nine dollars implies more than thirty percent upside from the last close. That's way above the average target of one hundred and sixty nine sixty one cents. So Goldman's done sitting on the

sidelines with Apple anyone else. An interesting piece we put out there in social media because the stock also got a bit of a bump just in the session alone from that Goldman call. As we said in the piece, up more than three hundred percent since the last time Goldman had the equivalent of a buy. So let's think

with that Apple. Because Apple is gearing out to launch it's next slate of laptops, desktops and including that new iMac Blue by Mark gum In here with those details you're writing in your news lesson this morning about what's to come? What do we expect? Yeah, so new Max, new Max are coming soon. There's going to be a new fifteen Inchmacbook Air. This is going to be the first time that Apple has made a larger size MacBook Air.

That's going to be appealing to people who want a bigger screen size but in a quite a bit cheaper and more portable package. There's people like me who have the biggest MacBook Pro you can get not because you want the performance, but because you want the screen real estate. So now you'll be able to get that in a

lighter and cheaper package. Also, a new thirteen Inchmacbook Air coming in the next few months later this year, the first update to the iMac right in about two two and a half years that will have an M three chip, their next generation processor. And speaking of new Apple products, there's also something coming sooner than these new max imminent, I'm told is a new iPhone fourteen color, so look

out for this week. It's interesting because you and I started the year kind of really focused on the upcoming AARVR headset, but you forget that the cadence of new products and releases is quite closely tracked. And you wrote in the newsletter the most frequent question I get ahead of my weekly column is something along the lines of when is a new iMac coming out? Why is everyone

waiting specifically on a new iMac. Yeah. The iMac is really what started Apple over again under Steve Jobs in the late nineteen nineties, right, And this all in one machine that now has become essentially an iPad with the twenty four in screen on a stand. It's not their most popular Mac those go to the thirteen inch MacBook Pro a base model as well as the MacBook Air. But it's very well received in schools, like in computer

labs and such. People like to put them in their living rooms, in kids rooms, people who work from home. It's been a really hot buy for work from home, remote work setups, hybrid work environments. And that machine, like I said, has not been updated since April twenty twenty one. Right. So Apple fans, you know, they all want to know when that new models coming out because they don't want to buy an M one iMac, which from a processor standpoint, has been outdated already for you six to nine months,

if not longer. They want to know when the new ones coming out. And I'm told it's reached an advanced stage called EVT. They're now doing test production of the iMac. They're gearing up for mass production in about three months from now it's going to look similar, have basically all the same features as the current model, but that faster M three chip, which is really going to dial up the performance, which is what you want for a machine with the twenty four in screen for people doing video

editing and such. Well, that's where I was going to go. Let's talk Silicon just really quickly. Which chips did the new jen I MacBooks have? The ones that did due out imminently, right, So the next chip for Apple is going to be that M three chip. I don't believe that's going to arrive until later in the year, with either that iMac or that update to the thirteen inch

MacBook Air. That this fifteen inch MacBook Air is going to come a bit sooner than the M three chips availability, So that's likely to have a variation of the M two or the M two pro chip that's already available in sort of those base MacBook pros and the thirteen inch MacBook Air today. But the M three chip, whenever that does hip, that's going to be a pretty considerable

upgrade for anyone coming from an M one. That's the first time Apple is going to move from a five nanimeter production technology to a three nanimeter production technology that's going to allow Apple to dial up the speed a bit on the CPU side. But also because of that new production process through TSMC, the efficiency and battery life is likely to improve as well. Thing begs Markham and thank you smile. You're remember to subscribe to Mark's weekly column.

You're on a hundre million Americans on TikTok ninety minutes a day. Even you guys would like that kind of return. Ninety minutes a day. They are taking data from Americans, not keeping it safe. But what worries me more with TikTok is that this can be a propaganda tool to basically the kind of videos you see would promote ideological issues. If you look at what TikTok shows to the Chinese kids, which is all about science and engineering, versus when our

kids see, there's a radical difference. That was Senator Mark Warner, who plans to introduce a bill this week to allow the US to systematically ban Chinese technology, including services like TikTok. Bloomberg's ky lines out in DC with more, Kaylee, what do we know about this particular bill, Well, we know it has bipartisan support because the co sponsor of Democratic Senator Mark Warner's bill as Republican John Thune from South Dakota.

So this in theory supported on both sides of the Aisle here at least by some members, and it gives the US the authority on national security concern grounds to ban or prohibit certain Chinese technology here in the US. And when he was asked on that Sunday program he was speaking on about that, he said, yes, that does include Byte Dances TikTok, as you saw in the clip there.

He has two concerns here, one about the potential propaganda element, the other about data security because as we're all swirling on TikTok, our data is being collected, and the concern is that Byte Dance, being a Chinese company, then would have that data being shared with the Chinese government. Now it's important to note Byte Dance has said it operates independently, that its data is secured through an alliance with Oracle

when it comes to US customers. But there's been a significant amount of pushback against that, including from FBI Director Chris Ray, who has said that China controls the algorithm and China can access the data. And so this is the concern here with yet another potential legislation being introduced to prohibit or restrict TikTok in some form, that does appear to be momentum behind this initiative. On this program, we've been talking about some form of legislation around not

just TikTok but Chinese technology generally for some time. Why is this bill different? I suppose well. Senator Warner has said he intends to design this bill so it can resist any kind of legal challenges, because we have seen other proposals put forward that have run into some resistance, like Republican Josh Holly's. For example, the No TikTok on United States Devices Act, would put a total ban on TikTok here in the US, prohibit allowing the President to

prohibit the use and download of it. There has been some criticism that that actually is a violation of First Amendment rights to free speech because you're restricting the content people could put out there. So there are some kind of legal questions here that make it difficult for a measure like this to get over the finish line. Will

have to see ultimately if it does. I will say, though, what we're talking about here is an expansion of bands on TikTok from the public sector to the broader US public, because you already have in place Congress spanning TikTok from government devices last year, in the White House last month mandating federal agencies remove it from phones and systems. Kaylee. The other big headline out of DC from a kind of oversight perspective, is what President Biden is considering doing

in terms of executive orders and restrictions on China. What do we know, Well, we know from Bloomberg reporting that this is in the works, and we are expecting that funding for this program we're talking about will be included in the President's budget on March ninth, so we could get full details on Thursday. But it's essentially restricting US investment in Chinese technology, specifically technology that advances intelligence and

military capabilities of the Chinese government. So while we don't know what exactly technologies are being specified here, we should get more details in the coming days. We don't know it from the reporting at this point, but think things like semiconductors or artificial intelligence chat GPT like products, as well as quantum computing. All of that is expected to

be included in the scope here. And what is noteworthy and important to me is that when in these conversations that Bloomberg had with those working on this policy for the administration, something that was raised was the idea that this isn't just about money. It is also about talent and expertise that US individuals can share with Chinese companies,

and they want to put restrictions around that. So, as you say, this is about a broader competition element between the US and China, and it's a story we're going to have to continue to follow and expect to get details from the President on in the coming days. Bloomberg's Katie lines Mountain DC, thank you now from TikTok to Twitter. This morning, the app suffered its second outage in a week.

In response, Elon must called the platform brittle. Bloomberg's cut Wagner is here, Resident social media reporter, all Things Social. It was one of those mornings where it just happens. It's Twitter down, people ask I did? I wrote hiku actually, because it's like, you know, when you go on Twitter and twitters down, everyone is on the platform asking is Twitter down? That was my tweet. Sad gloomy Monday, a busy Twitter breaking sigh, the outages. That was pretty good.

But this is more than just a sort of regular outage, right, yeah, I mean you have a first of all, you have a future here if the TV thing doesn't work out, writing poet, right. But yeah, I mean, look, we've I've been on this show. We've talked about this. Everyone who's fallow Twitter knows that over the last couple of weeks and months, the staff at Twitter has been slashed, right, I mean we're talking well over fifty percent of employees that were just a few months ago are now gone.

And so when you know, we see that happen, and when those a lot of those people are engineers or site reliability folks, suddenly you you know, see these outages happening with more frequency. This is something that a lot of people thought would happen when Elon first took over. It didn't right away. You may remember, everyone was like, hey, look, Twitter seems to be working fine. Well, it's starting to catch up to the company. We did kind of get a response from Elon must that went some way to

explaining what caused the outage. I think we can bring the tweet back up. But the point is is they're trying to make fixes with a skeleton staff. A small API change had massive ramifications. According to Elon Musk, this is happening regularly though, I mean, what are they trying to do that's causing this? Yeah, well, I mean this is the thing, right, I mean, when you go from having dozens, if not hundreds of engineers working on something

to a very small group. You know, even just one little change, one little bug, you have to detect it, you have to go and you have to fix it. You have to push that change everyone like it's you know, maybe only down for an hour, but it's the kind of thing that might have gotten caught or fixed even quicker had there been more bodies in the room, right, And so I think we're just seeing the kind of price of all these cost cuts starting to happen to

the platform in terms of its reliability. Still a platform that people are using. And then they're talking this about on putting Westcote Wagner, Thank you very much. Thanks. Now, coming up, we'll bring you the latest in tech news from China. As President Jijing Ping is emphasizing the country's investment in the tech sector. That's all Next. This is Bloomberg time now for talking tech, and let's get over

to China. Baofan co founder of China Renaissance and one of the tech industry's star bankers, has vanished his firmish due to statement that he is cooperating in an unspecified investigation. The banker's disappearance is sending shutters through China's corporate class in spite of some pushback and some encouraging words from state media. Meanwhile, President Jijingping is officially backing the tech sector.

In his opening remarks at the National People's Congress, he said the country will take forceful measures to support the development of high end manufacturing and emphasize the country's need to ensure it's self reliance in technology and as part of that grand projects, China also plans to create a central agency to manage the flow of data within the country and abroad that according to The Wall Street Journal, citing sources, Beijing intends to set up a new National

Data Bureau that will become the top overseer of data related issues to strengthen its control over the valuable data generated by swaths of the economy, including the internet industry. I'med Ludlow in San Francisco. This is Bloomberg Technology now the private company's space races taking shape after venture capital firms spent more than six billion dollars on space related

tech last year. SpaceX continues to dominate the market for lawn jan is growing its own constellation of starlink satellites, but competition and customers are heating up between smaller players like Astuanis and Andresen Horrowist Backs light Stop, most recently valued at one point four billion dollars. Joining me now is just trying to ceo. John Gedmark, Let's go back to basics. Tell me about this company, because the reason on your show is that you have this big moment.

A satellite is built and it's moving from just down the road from where we're sitting now to Florida. Why yeah, thanks for having me here on the show. So at Astronauts, we built a new kind of satellite. So this is a microsatellite for higher orbits, starting with a special orbit called geostation orbit. So this is an orbit where we can put a satellite up into space and basically park it over a country, providing continuous service with just that

one satellite. So that allows us to provide service at very low cost compared to other types of satellite applications and compared to certainly the old school satellites that have come before. So today is a big day first because we're launching our We just shipped our first satellite out the door. Is arriving at Cape Canaveral as we speak, and there it's going to be integrated onto a SpaceX

rocket for its ride to space. We're just showing those pictures on the screen of it being loaded into the container back of a big reag and off it goes. How does it get to space? We're going to be riding as a ride share on a Falcon heavy rocket. So this is a big rocket. The zeri's eight set. Yes, SpaceX is looking at the week of April eighth, so we've got a launch window. We'll have a more definitive

datas we get a little bit closer. Yeah, and in this instance, this is a satellite that will provide capability for a commercial customer, private sect customer rights. Yeah, that's right. So we have a private customer in the US state of Alaska called Pacific Data Port. They're an internet service provider there. We specialize at astronos in providing trunking and back haul capacity, so more for enterprise customers and ISPs.

And this will actually be the first time that the state of Alaska has had a satellite dedicated just for them. So the satellite is it's not trying to cover all of the US, it's not trying to cover all of North America. It's actually just dedicated for that area of Alaska and our customer there. And that's what we do at Astronots. We put up dedicated satellites for our customers

and provide really brought really low cost broadband communications. John one point four billion dollar evaluation in your last round, and you have some big name back as they clearly see potential in your business. This is just one satellite. But is this revenue generating? Does this mark sort of a substantive step forward for the business side of what you're doing. Yeah. Absolutely, So this is a fantastic proofpoint

for us. Obviously this is our first satellite. They'll be generating substantial revenue and recurring revenue on a on a services basis, which is what we do, like a subscribe. What is the model for you, I mean long term, how to make money based on the satellites that you're building. Yeah, we put up these satellites, we own and operate them, and we least capacity so gigabits a second on an ongoing lease spaces. So that's what we do for our customers.

And we have projects like that in work all over the world US about what might be coming next, and we have actually five satellites launching this year. This is just the first one, and then we're spooling up our satellite factory here in San Francisco as we speak, to get to get to the point where we can build actually two satellites a month, which is a huge production scale for this type of satellite. I want to get

into production. But first he talked about the kind of cadence of satellites you how you to deployed for the rest of the year. Are those SpaceX as well. We have procured a dedicated launch on a SpaceX Falcon nine for later this year for a four pack of satellites. That'll be a first for us. This first time we've gotten a whole dedicated rocket just for us, So that'll be four of our satellites flying together on that just

us and nobody else. So first time we'll be moving away from a rideshare launch and then for future launches. I guess, I guess we'll see from there. Well, what was that experience, like, you know, doing business with space X. How far in advance did you have to commit to securing that file from nine launch classity? Yeah, I mean you typically buy these rockets pretty far in advance, a

couple of years in vance. Although they've been very flexible with us, and I'd say, honestly, they've been a fantastic partners as this new piece of space infrastructure that's been opening up space for companies like ours and other applications all over the space ecosystem. How much did it cost you to secure that file in nine? Oh, I'm not I'm not going to go into pricing here, but SpaceX has I think, you know, all things being equal, the

rockets are incredibly affordable. Certainly, you look at what has come before some of the old school rockets, you know, the Atlas and Delta rockets that came before SpaceX. They were unbelievably expensive on just a dollars per kilar basis. So we found SpaceX to be incredibly affordable and they've been a great partner for us. You know, so that's one part of your business servicing private sector customers. The other side is the public sector, right, and you have

existing relationships with the DoD or the military. How important is that to you servicing what are basically public requirements for connectivity in satellite pacity. Yeah, it's it's an incredibly important mission. And you know, the world has changed, and just the last year we saw a huge change in the global dynamic and now we've realized just how important it is to be able to serve these national security needs.

I mean, just to give you one example in the Ukraine, when the Russians invaded, one of the very first things they did, I think it was actually on day one of the invasion, is they launched a massive cyber attack against one of the very large geosatellites and they took out this satellite in one fill swoop that was providing

broadband coms all over Ukraine. So you know, when something like that happened, I mean that that was a real turning point I think in our industry, and it made the point of just how urgent a lot of this was for us to get better space infrastructure up and in place. It sounds like there is demand for your satellite saying no, Obviously your restriction is how quickly you can build them and deploy them into orbit. Is there a need to raise more funds to kind of bridge

that gap, either privately or going to public markets. Sure, I mean we're right now. We're heads down getting this first satellite up and getting that to be successful. Certainly there'll be plenty of room to have that conversation later this year, after we get that up in operating, there'll be a big moment for us. All right, string John Gedmark, good luck getting to orbit. Thank you for joining the program. Now coming up, A key tool of the crypto industry

is suspended as the silver Gate fallout continues. We'll discuss all the next This is bloom bag. AI is real. This is not not cryptone, that's not crypton. This is a technology which is staggering and we're fully engaged. And the other thing you have to keep about AI you need to be in the cloud to use the compute power fundamentally that you need for AI, and so that's why the cloud digital AII all kind of related that way.

Some of JP Morgan Chase CEO Jamie Diamond's thoughts on AI speaking to the other British head, Ed Hammond, now earning more about Microsoft's generative AI strategy to take on the likes of Oracle and Salesforce, Microsoft plans to build a copilot that can answer customer calls, summarize sales meetings, and build marketing pitches. Bloomberg's Rachel Mets is here to explain. Rachel,

welcome now for the audience. This is Rachel's first day at Bloomberg, long time artificial intelligence reporter, and while it's new to all of us, it's not new to Rachel's. So let's start with the basics. What on earth is Microsoft talking about. It is wanting to use AI to help companies do a whole range of tasks that could be answering some customer service questions or using it for

campaigns like email based campaigns. It's going to be releasing it in a preview version, and it sounds like quite a number of companies are trying it out, or we'll be trying it out. This is called Dynamics three six five copilot. I don't want to put you on the spot, but why do all of these tools have such ridiculous names? Oh gosh, I wish I knew. A lot of the time you hear a name for one of these and

you're like, what does that even meaning? Like like Google's barred no offense, and or like Meta going with Lama, which is an acronym, But even so it raises a serious point that you know. For a few weeks now and even longer for you, we've had a lot of folks on the show interested in generative AI. What's striking is so many of them are quickly pointing to sort of the enterprise application rather than some of the sort

of consumer facing chat GPT things. What are you hearing about why enterprise is such a key battleground for AI? I mean, I think if we look at technology over the years, enterprise is a great space because that's where money tends to be from the start, right if you want to popularize the technology. A lot of the time it is companies that are willing to make those initial investments, and that's where you're going to be getting recurring revenue

as well, So it's probably a good place to start. Finally, what's on your radar? Day one at Bloomberg covering our special intelligence What are you kind of looking at at the moment. Oh gosh. I mean everybody is looking at chat GBT and chat barts in general right now. As we know, they're not brand new, but we're going to be seeing I think a lot more of that, and

generative content in general. Images videos are slowly, maturely coming on the horizon, or should say quickly at this point, so it should be an interesting year for generated content. Day one done, check check check. You can follow Rachel at Rachel Mets on Twitter Bloombo's Rachel Mets, Thank you very much. Let's turn to crypto, which just lost a key piece of financial plumbing for moving money in the industry. Silvergate Capital's exchange network has been suspended. There's the crypto

bank frankly struggles to survive. Here to explain why that matters. And again Bloombog Shinali Basset shares under pressure this Monday. What's going on? Listen? Shares are further under pressure. Nothing like we saw last week ed when that going concern warning was brought up, a regulatory filing. But what is

happening now? You see banking partners, you see exchange partners, you see more of the industry having distanced themselves in recent days from Silvergate, the closure of the Silvergate exchange network here the halting of this. Listen, Silvergate itself used to bring in deposits this way. It was essentially a way for the industry to almost instantaneously send money denominated in US dollars and europe sorry euros through what was known as SEN. It was really an essential piece of

plumbing in the crypto industry. It's not really shocking now to see this step back in such a drastic way because we are talking about Silvergate here, which is almost like a commercial bank. It's a consumer bank that has advances from the federal homeloan bank and who operates under the jurisdiction of any typical bank in the United States. Would It's just there are just dozens of headlines on the boom bag terminal, the pension silver Gate to start

the week. How did the bank get into this mess? Listen. Remember, so SEN was handling like a couple hundred thousand worth of transfers in the last couple of years and things started to come under pressure. Last year. Remember they bought that kind of a stable coin business that Facebook was working on. They had to delay that as well. You saw Silvergate go from two hundred twenty two dollars under

pressure for real. But then you saw FTX happen and FTX had say, less than ten percent of its deposit base at silver Gate, so it was as meaningful client, but less than ten percent of the total, and all of a sudden, problems started to exacerbate. The industry became more concerned, and then that deposit pulling happened at a

faster rate after that November event from FTX. Bloomberg has also reported about the investigations that now Silvergate is under as well because of its relationship with sam Bank and Freed, so investigations underway as well as a financial problem here with deposits being reined in, and you have Silvergate fighting a two frong war here when it looks at how

it maps out its path forward. I bring this point up again that I made to you last week, that we've been talking about silver Gates issues for weeks, months actually, and it continues to get worse and be a surprise. What is the caution retail? I thought, actually first time around a few weeks ago, it was a caution retail. What is it now? Listen, people have certainly had their eyes on silver Gates since the FTX debacle had blown up.

But now you have the White House even saying that they're aware of the situation and looking at the situation, And it goes back to that point that I was making ed that this is a bank like any other bank. This is part of the traditional financial system that took a chance on the crypto industry and now has to sell assets very cheaply just to pay advances from the

federal home loan bank system. So you are looking at this firm where regulators gave it a pass to enter the crypto industry, and through its own potential missteps as well as broader industry issues here, you have a lot of questions among regulators about whether they will allow this kind of thing again. So it's about confidence in the future from US banking regulators as well as silver Gate itself and the removal of critical infrastructure for the crypto

industry that enables so much trading to happen. BLUEMOTIONALI basse just terrific reporting constantly on top of this story. Thank you. Grinder reporting is fourth quarter earnings rising revenue year over year. They're adjusted a bit, dat fell by about four million dollars. Some of the other headlines top line growth of forty one in twenty twenty two. It's forecasting top line growth twenty five percent or greater in twenty twenty three. Let's

bring in the CEO, George Harrison for more. You see there the stockdown almost eight percent. George, your was just wrapped. Is there something that the street's getting wrong? Well, I don't really pay much attention to what the stock does on in any given day. That's not where we should focus. We're in here for the long Hauld building I really awesome company for our users to use and creating a lot of shareholder value core stockholders over the long term.

And I think the company had a really amazing year last year, you know from financials and or engagement metrics, when we had one hundred and eleven billion chat in one year, it's really incredible, and I think we're set up for a relief hypacit year this year. I've continued to really drive a lot of growth in the business with very strongly but the for the year one of the best in classy bit of frankly, and I continue

to really focus on building a really great product. You talk, it's a lot on the earning score, and at least at the beginning of the earning score about your international users, and I'm really interested in that. How big is the opportunity for you globally and in maybe some markets that we discuss less here on blom Bow Technology. Yeah, I mean,

Grinder is a very pat of product. Obviously, we are very big in the United States and in some of the developing developed world, like in Europe, but we also have a lot of users all over the world, in one hundred and ninety countries around the world, and a lot of these countries society is changing the same way that being LGBTQ today in the US is a lot

more acceptant than as say, twenty years ago. Parts of the world are now going to that same change today, and that's going to be a huge secular tale Grinder as we scale in the future, because there are countries now that are on the vergion, for example Magic Quality. After that Grinder will be a bigger presence in those countries inevitably, and so that's something that we're very much

excited about to take advantage of. And Grind has always been a kind of important connective tissue or gay by and trans users, and it will continue to be in a lot of these countries in the years to come. A big theme for the industry in recent months has been the premium tier of subscription. Many of the platform forms experimenting with pretty high prices, right I know that you also talk about premium the removal of ads as an example, But how big a strategy is that for you?

Is there demand for kind of a higher end product right now? So for us, I think it's both lower end and higher Because grinders historically had two price points and nineteen nine nine price point and thirty ninety nine price point. The nineteen nine nine price point is probably a little bit too high for a set of our users, and it doesn't make sense to have that be the

entry point. So offering something on the lower end as the entry point, maybe with less adds than a couple of additional feature to some people really want us to do. We hear that from users directly, we hear it in our research, and then on the higher end there's definitely

an opportunity. I think the reality is that finding the long term mate if you're gay or your buy is a lot harder than the US face persons and So there's a lot of really awesome mL based matching that we can do across the world or in the United States country as you're in, that is not available to you today, and I think people will be more willing to pay a higher price for that. So I would not be surprised if we do something on the lower end and we also do something on the higher end.

What's so interesting about Grinder, George, is the LGBTQ database essentially, right, if you think about your users globally, I know you talked about artificial intelligence and machine learning on the call. How well positioned do you think you are to leverage those tools to boost the top and bottom line? But we have incredible data about our users, right. Like I mentioned earlier, there are one hundred and eleven billion chat messages sent and Grinder last year. That's an incredible database

of user behavior and what they want. We haven't really built anything to take advantage of all the information yet, but there's a lot of really great mL, machine learning and artificial intensure they can deploy, whether it's for generative purposes to help users compose the right messages or from matching perspective, matching people better and helping them find the right relationships, or from the customer service perspective, managing the product to have less spam and less you know, not

real profiles through mL. These are all huge opportunities and something that will be investing resources into in the quarters to come. George, real quick, have you spoken to open AI as an example? You know, people are trying to find tools for them and get moving on this. Who

are you talking to We've not spoken to them. I mean, we're going to try to build as much as we can on our own, but there's some really awesome companies out there doing really cool things in AI and suddenly partnering with them as a possibility for us, But long term, we'd want to own all the AI we do ourselves because that's a proprietary people grinder. We're also super conscious

about our users data. We have a lot of users, why they discrete and we need to get private with their information, and so we generally tend to do more things internally and then externally. Grinders CEO George Arrison, straight off the call, thank you so much for your Thank you very much. Great. So that does it for this edition of Bloomberg Technology. Don't forget check out the podcast, so much to recap from this show alone. You can find it wherever you get your podcasts, on the terminal,

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