Tesla's Investor Day and Coinbase vs. the SEC

We sit down with her to discuss the new role as the head of Google's growth investment fund. All that so much more coming up, but from private markets to public we check in on what was a slightly dour mood and the overall equity benchmark NASA one hundred off by nine tenths a percent. Worries about inflation, some of that manufacturing data here in the US showing that prices are still rising further than the federals ever want to see.

The tenure yield therefore pushes higher boring costs rise. Tech falls off. Interesting that at China managed to actually have a pretty strong day. I'm looking at the Golden Dragon at China Index, so we're up three percent. The reason is actually their manufacturing data came in stronger than anticipated. This is why perhaps we're seeing a weekly US dollar

flick it on. I want to see what crypto is doing versus US dollar because actually managing to hold its head above the water, up seven tenth percent over the last two days, even though the risk of risk assets have been selling off head YEP and from the macros to the micro we get straight to earning season salesforce frankly knocking it out the park. You see the shares

up more than fourteen percent in after hours. There's given us a four year twenty four outlook for both revenue and EPs pretty significantly above expectations, and in the near term looking at the fiscal first quarter, also looking at revenue n EPs above expectations. We had a little bit of reaction from sell side stating that this is evident this is a company now more focused on profit. The

cause about to get underway. Will give you those headlines as they come stock we have to pay close attention to is Tesla Tesla's holding its invest to day out in Austin after hours, we kind of modestly lower down three tenths of one percent. There is no one big headline to speak of yet, but they've teased two new evs in the works. They're covered in blankets on the screen, you know how Elon Musk does it, but also outlining what is a very clear path to a sustainable future.

Bloomberg Shaun Okaine covers Tesla for us and is in Austin. Sean, what have we learned so far? Well, we've gotten a pretty big, high level picture from Elon Musk and Tesla's SVP Drew Baglino about the macroview they have of how they think we could shift the entire economy to a sustainable economy, sustainable energy economy. They've said that they're going

to be releasing a white paper. They went through a whole bunch of big, impressive numbers, but we're only just now starting to get into what that's going to mean for Tesla as a company. So we have a couple of different executives on stage who are maybe hopefully going to talk about some new products in the next couple of minutes. Talk to us about the context here of a third master plan. Because you've written so eloquently before, Sean that well, the Second master Plan hasn't exactly been

enacted yet. Yeah. I mean this is the thing that Elon Musk likes to do. It's a way of guiding investors and potential investors on where they're headed. Why he thinks that the company could be worth twice what Saudi r Emco is worth. So you know, they haven't finished executing on all of the ideas and the second master Plan from twenty sixteen, and this is a way of him sort of pushing those concerns aside about you know, execution worries and saying, hey, there's a much bigger picture here.

We're trying to solve or contribute to solving something much bigger than just for what a company can do, and here's how we think other people can do it. There was also an emphasis on what it's going to take to get Tesla to its ultimate goal, and it was interesting that Drew Baglino went pretty early on to mining and access to raw materials. I think the line was that they're getting to require less mining in an electrified

economy then we currently have in today's economy. What kind of things are we watching out for, What redheadlines can we expect across the Bloomberg if all goes to plan. I mean, we know from our own reporting that they've been in talks to possibly acquire certain lithium miners. They have been working on potentially building a lithium refinery, either here in Texas or maybe other sites in the United States.

It's still not abundantly clear what their plan is at the moment with that, but they are looking at trying to get further down the supply chain. So if they're willing to talk about some of that stuff today in any kind of specifics, then that would be some pretty big news as far as how much they're willing to

stake themselves in this economy. We've had some executives outlining well, the talk about the battle skills they've had for a Model three, the famous production hell that they had around that, and of course about that the cybertruck is coming this year, so they have shown the production capabilities. What many want

to see, though, Sean, particularly this time, is their cost cutting. Well, their price cutting for some cars is a cheaper model in and of itself, right, Yeah, I mean, I think I would imagine part of the argument they're going to make is that whatever this new vehicle or this new

vehicle platform entails. It's going to be folding in all of these things that they've developed over the years that they've been building the Model three and the Model Why these sort of efficiencies that they've bolted onto the ideas as they were being put out into the world, like casting giant pieces for the Model Y and putting them together as opposed to use the hundreds of pieces that were bolted together like a lot of regular automakers, and

so being able to take some of those learnings from those programs, those vehicle programs, and do it from the ground up on a new vehicle platform, I would bet is going to be a big portion of why they think they can drive those costs down without losing too much of their margin. And especially scale. I mean, this is all going to be about scale, not just on the energy side of things, but how many vehicles they

can make in the coming years. And if they're going to be building a much cheaper car, they're going to need a much bigger scale to be able to keep those margins up. Sean so great to get the context for me. Thank you, Sean o'caine. Let's take even deeper the Wesley Group Managing partner Steve Wesley is with us now. The reason is so important because he was on the Tesla board when Elon must debuted the company's initial master plan, and therefore it is so great to get your insights.

We will also have plenty of time thinking about energy and efficiency from the government level as well, when we look at the master plan for sustainable energy economy. How much do you think that we have to take Elon Musk at his word here? Well, well, look he's our eline as a tendency to or over a promise a bit. But here's why this is a big deal. Today every auto company in the world is going all electric, and the reason is simple. They're safer, they're lower maintenance, they're faster,

we're fun to drive, and they're greener. There's only been one big head with and that's been cost, and Tesla is about to change that. So today I think you're hearing them announced a dramatic reduction in manufacturing costs. Again, that comes down to lower battery costs, mature stamping machines, tools. They can produced cars more quickly with fewer parts than ever. SI's alluded to more robots so on all this leads

to lower costs. I believe what's going to happen is going to be dramatic, and that is I think Tesla's going to trigger a global price for and it's going to rate for consumers deadly for some of the competition, or people don't quite understand yet about Tesla is the Tesla's already making cars in one third at the time of Volsaga as ten hours versus thirty hours. By using the battering techniques, this enables them to make over fifteen

thousand dollars in profit per car. That's twice with Volsagun makes yeah, three times toilet it makes five times with ford maas to Tesla's the only company with the room to draw prices. It's going to create major consolidation industry. I rate news for the consumer competitors. See how low can they go when you think of a cheap auto, when you think of what price point they could unveil, How I couldn't that be for Tessa's own margins. Well, look again, they've got quite a ways to go, but

they're leading the world in batteries. There's you know, batteries are roughly a third of the cost for their vehicle. They're also way ahead of the others what's called over the air software in this new next gen robotization of manufacturing, bigger stamping, fewer pieces, faster production. This all gives them an hedge. And the simple fact is they're about three years ahead of everybody else terms of manufacturing. Gm Ford

trying to build a new plant here or there. Justice got five plants up and running today, six just announced in Mexico. They have not only established themselves it is the fastest powering auto company in the world fifty percent growth last year, but the most profitable. What's not to like about that? Shares down about a percentage point now in off their eyes trading Steve, you may have seen my reporting last week that Russ gub had suspended his attempts to gain a board seat in part because Tesla

had moved to allay some of his fears. I'm looking at the speakers so far, Zach kirk on CFO opened up the show. Elon did speak, but so did Drew Bagnino, Franz von the Wholhausen and now Lars more of a How much do you think this is them trying to demonstrate that there is a plan outside of Elon musk a succession plan. I think the message is loud and clear. You don't invest in Tesla just because of Elon. You invest because it is the leading EV company and what

is an EV world? And again, just look at the fast everybody else one or two EV plants up and running. Tesla's got five heading to six. Nobody else has the capacity to grow like Tesla will this year. No other auto company in the world is coming close to fifty percent growth, add to the highest level of profitability. This is a tough story to be Now, there's one other story that almost nobody has talked about today you're going to hear Elon and the Tesla Group address, and that

is they're no longer just an auto company. They're an auto and an energy company. And what they have to sell is powerful, and that is Tesla and Tesla alone can sell you the electric car, solar panels for the roof, powerwall for your home. They can help you create a world where you'll never have to pit Hold on, Steve, hold on, hold on, because, as Caroline pointed out earlier, a lot of this was in master Plan Part one

and two, and much of that seems unfinished. That's why we are should we take some of this with a grain of salt, because we might not see it materialize for another decade. If that you're seeing it materialized now. And look, I'm not going to tell you Elon doesn't keeps the over promise that Livery does. But even when he finally gets there where they heck hand of the competition. So they've already offering ex turnkey solution around the country

energy realities from going up now producing mega packs. This is one point five mego stords to university's, large corporations, hospitals. It's all rolling out now. But I think the big picture today is going to be Tesla is creating an ecosystem. It's more than an auto company, but it's pretty darned fast an auto company as it is, and the extent they can cut costs while they go mobile with a pretty good product. Two is that's a hard story. Well

so difficult supply chain here time and time again. How will the movement be hindered by access to lithium to cobal takoppa. You know, I think that story has been really overreported. And get four or five years ago we all heard it by my lithium mind now, or you've got to go to mongolium. They're the only people wolved with rare earth minerals. This turned out not to be the case. Two quick points. One, lithium is actually one

of the most plentiful minerals on the planet. They're lithium minds all over California in the western half of the US. You nunited need to over the via or mon and the minds were opening up now in a response to wise the prices. Second, it was those weird earth minerals like cobalt, manganese, nickel, that we're going to be tough to get to. You can only find them in the congo now. So prices peaked for a little bit. You're now seeing cobalt particular, lowest prices we've seen in some time.

So the market is responding. Elon and the Tesla team were fairly stright to integrate earlier than the others. I think it's give them an edge. Yeah. Sources told me that actually they're looking at a number of mining options and weighing up what's best for them. The stocks are more than sixty percent year today. We asked our audience if this event right now is going to act as a catalyst for the stock. The audience relatively split right, some say yes because of what this is going to

be announced. Some of others, disagreeing, say no, this is a sell the news event. To your mind, based on how much you've heard, how high is the bar here for Tesla to prove the big things coming? Well? Look, last year was a bad year for Tesla. He was caught up in headlines about Twitter. He personally sold forty billion dollars with the shares mind modeling number that push the shared bries down. When it comes to smart investing, look at the boring stuff like the numbers fifty percent

growth twenty twenty one, twenty twenty twenty two. They're going to do the same thing this year, huge profitability, and the really boring part is inside the factories that most people can't see. You're going to hear again and again about state of the art manufacturing improvements, costs down curves that the incumbents for some reason haven't figured out. And

don't take my word for it. Just look at the average profitability per vehicle and they've got an edge, and I think they're going to be useless in pursuing it. They've just taken prices down roughly fifteen percent. If they take them down another fifteen percent, that is awfully hard for the other right. Wesley Group managing partner Steve Wesley, of course on Tessa's board back two thousand and seven when Elon Musk was getting Master Plan Part one off

the ground. And here we are at Master Plan Part three. We'll see how it goes. M The Chip Giant Banks Bicoft Bank will pause plans for a London Stock Exchange listing and focus solely on an IPO in New York. This according to Bloomberg sources. Bloomberg's Crystals joins us Now Chrystal, what is the thinking behind this? Yeah, So, as we know, ARM is based in England and it's one of the crown jewel of the European tech scene. So it was actually a really big loss for the London Stock Exchange,

for London as a whole. So we've always known that the plan is to have a primary listing in New York and perhaps to a secondary listing and London, And now the thinking has kind of shift and they will focus solely on a New York listing for the deeper investor, poor and high evaluation, and that's always been the appeal of the New York venue and obviously huge loss for London. And I'm sure they will have even more lobbying effort

to try to get them back. I mean, mushisunac, the Prime Minister has already been involved, so no much not sure how much harder lobbying they can get for this. What is a Cambridge based business when you say it's going to hire evaluation who in the US? For what reason? Why would a deeper market more investors automatically mean that they would value the company differently. So first of all, you can look at the peers. There are just more companies of this same background, of the same market, of

the same scale listed in New York. And if you look at overall market liquidity, you just have more investors that have a US pocket and they have more leeway to invest in US list a company and as a result, you just generate a little bit more interest. That said, a lot of most of this is still theoretical. There's

no IPO market right now. We were talking about how it could be another couple of months, a couple of weeks until things comes back so whatever this is, it will hold off and we will not know the actual valuation, but they're aiming for at least sixty billion, which is a very very big number compared to wear SoftBank got it. What's interesting about the reporting here is that London tried very hard to win this business and ultimately they weren't successful.

But what do we know about those efforts. Yeah, like Caroline said, Sooner personally actually try to pitch a company, and as we know he was a former Goldman person and Goldman was on the listing, so it wouldn't be

surprising if he went to his own firm TAPESO colleagues. Also, the London Stock Exchange Chief executive officer had very publicly said that they have worked very very hard and they want to they want the energy, they want to win this deal and they would say young sextapp say hungry to when the arm listening and more technology listing hopefully would have come after, But so far it seems like

it's not been a huge one. Is that any way that this is related to Brexit or anything like that, or is this purely a size of market situation So we haven't heard anything about that, but it wouldn't be you know, outrageous if Brexit was one of the consideration.

It definitely limits investment coming into the UK, especially when you have investment professional having to real ocay into continential Europe and you just have a little bit more outflow and just just separate the markets more and overall again like comparing to New York, it's just not as deep a market, and it would make sense for them to focus on New York, which always has been the plan, but now they're just scrapping the secondary listening AH Corporates,

Pretty nice, Crystalcy. Great to have a covering this potential IPO coming up at some point in the US at least coming up. Well, Athletes get in the VC game and Stripe is cutting its valuation. All this and more in the VC round up next d Yeah, and I want to get back to those shares of Salesforce and now for hours pushing even higher now actually we're up sixteen percent. Ny Off on the calls, saying that the company is completely fully disbanded its M and a committee.

It looks like a big part of this story Caro is Salesforce doing what the activists investors wanted to hear which is focusing on profit with that big outlook for four year fiscal twenty four revenues going to be thirty four point five to thirty four point seven billion dollars in fiscal twenty four, way above what the street was looking for. That call underway, will continue to track it.

This Spoonberg time now for our VC round up, and starting with Stripe, which has just cut its share price for its fundraising round, increasing its implied valuation by about ten percent to around fifty billion dollars. Now it's all according to the information it's citing to people familiar with the matter. The payment software company is now setting the per share price and around twenty dollars. That's down from

twenty three a share previously. Meanwhile, Tennis icon Venus Williams's joining private equity firm Top Spin Consumer Partners to tackle health and wellness business investments. Now, the seven time Grand Slam title holder will take on the role of operating

partner at the middle market investment shop. This is as of course, peas an industry scrappling with slowing economy, with tightening credit markets, and keeping with the athlete's theme baseball legend Alex Rodriguez, You knows a Rod and his business partner Mark Law have raised another twenty million dollars in their funding round for the new ticketing and fan experienced business Jump, bringing the total funding to thirty minu million

dollars now. The round was led by four Run Adventures and joined by Courtside Adventures, Will Ventures and Mastery Ventures. Additional investors include Meta Lab and Drive By DraftKings. And

you've got a key story. We've got to be witching in well the public markets, right, Yeah, we've got to get back to salesforce and what we've got coming up, because he only's calls ongoing real push higher in after hours in I think the focus right now for investors is Benioff's doing exactly what we asked him to focus on cost cuts, focused on profit, and that stock really pushing higher carrict Yeah, I mean more than fifteen percent

jump on the higher side. Many really feeling that he's addressing the fears that many an activist investor put to it the fact that they might be still spending on MNA, the fact that they'd be worrying about, you know, the splurging the marketing spend. Of course, in many ways put Sam Francisco and all other hubs on the map. But ultimately this is appeasing the new narrative of this economy that it has to be profitability first, right, Think about Slack,

think about MuleSoft. The single headline on the Bloomberg terminal from ben Off Salesforce has fully disbanded our m and a committee. We're getting a much more severe decline in the earnings and that's going to happen across the economy. Are the evidence is already overwhelming. It's been most apparent in the tech space because that's where the overinvestment was

the most egregious. And now we're seeing companies deal with that, but we think they're going to be woefully slow to get those costs down to a level where you think they need to to get the margins to stabilize. Welcome back to Boboy Technology. I'm Caroline had in New York and now med Lovelow in San Francisco. And that was Morgan Stanley, Chief US equity strategist Mike Wilson speaking earlier

this morning. Let's turn though, from the public markets to the private markets in tech were some big news Capital g Google's growth investment fund has named Laylas Sturdy as its new managing partner and leader the Movements. Sturdy one of the only women actually to lead a major venture firm, and I'm delighted to say Leila joins us now here

in San Francisco. I asked you this off caram Im and ask you again, Well, your industry peers surprise by this appointment, bearing in mind your history at this firm anyway, Well, I've been investing for ten years, so I have a number of amazing colleagues and peers in the industry, and I'd say it's been amazing to see the support in the outreach today. So I don't know if they were surprised, but they were certainly supportive. And we can get into

the portfolio some of the investments you've made. I think you know this is an interesting firm, a lot of capital to play with. Would you say that in your new position of leadership, will you change the investment thesis the strategy from how it has been. Well, we will keep building on the success we've had. So Capital D we're focused on investing in generational growth technology companies, so we typically invest in Series B, the Series D of

hypergrowth companies across consumer enterprise. So some of the companies us in our CrowdStrike, UiPath, Stripe, Dual Lingo, so really amazing founders, amazing companies operating in big markets. And we make very concentrated bets. So we do a lot of work to really find and develop investment theses in the world's most exciting technologies and markets and companies, and then we make big investments. So we typically invest fifty it up to two hundred million in these companies and partner

with them over the long haul. So that's what's worked really well for us, and we'll continue to focus on that strategy, keep building a great team and keep having a global focus. You back them, and the anecdotes, the stories of how you back them and evacts the co founders, the CEOs and selves. I think of Jue Lingo, how much they've said that your support, in particular Lela was so integral to the building of the strategy of the

business and of course the eventual really successful exit. And I think a UiPath as well, which again you wrote a check at a small valuation and it just apts went parabolic. But the way you have to chase UiPath down for example. That's not the environment we're currently in, is it. Or are you still going to have to

be that much more competitive than others? Well, that's what's fun about the investing world is with the macro things are constantly changing, and I do believe that you will still have to compete and work to invest in the very best technology companies. So you cited a few that I've been very lucky to partner with UiPath due lingo, and the process of finding these companies does take a

lot of work. It doesn't always mean chasing founders around the world, but it means digging deep into the investment, theces and the opportunities that we think are going to generate the biggest returns, and then it means adding value

to those companies. So once we partner and make an investment, we work really hard to be very active board members and to find different ways to support the companies, which is something that's quite different about Capital G. Because Google and Alphabet are our single LP at Capital G we have a really large network of advisors inside of Alphabet, and these are technical advisors, go to market advisors, operational advisors that we can bring to partner with our companies

on issues or challenges of scaling and is a unique thing that we can do to add value. So we've helped companies on pricing, studies, on We've actually started the inside sales team for CrowdStrike in our office at Capital G. So lots of different creative ways that we keep trying to be the best partner and that we can and I think that will help us continue to be able to invest in partner with the best founders. And now you've got to help companies scale with profit not growth

at all cost. I think of Stripe. Of course you wrote, well you cod led the Series D when it was worth nine billion and still even when the down potential down round was seeing it's it's well, their own readjustment of their pricing is still fifty billion. It's extraordinary growth for this payment's company. And I'm interested as advice you now need to give needs such as the Callison Brothers. So it's obvious everyone that the macro environment has changed

markedly over the last eighteen to twenty four months. So I think it is true that companies are much more focused on profitability. But a Capital G and all the companies we work with have always been very focused on the business model and on the unit economics and not only growing quickly, but growing in a way that builds

a sustainable, enduring business. And so I think they'll the capital will be more expensive and harder to find for most companies, but those that have really strong business models will be able to continue to raise and we'll be able to continue to grow at really accelerated rates. So I think when you look back historically through the last few downturns and through capital markets that were harder, you see that some of the best companies were founded and

funded and grew rapidly in those stages. The third party data shows a drop in activity or dollar deal value twenty twenty one to twenty too. But we had Matt Harris from Bain Capital Benches on twenty four hours ago. He says, this is a buying opportunity right now. They want to be out there writing checks. Basically, are you

in a similar position to him? I completely agree. I mean, the reality is the macro environment has brought prices down, but there's still and valuations down, but the quality of companies is still extraordinarily high. So we see whether it's these secular trends like cloud computing, data AI driving really exciting opportunities in transforming businesses and creating large new opportunities.

And you see so many more businesses out there looking for funding that are really adding value to customers, that are growing in more efficient ways, and the valuations have gone down. So we look even though it's a harder macro environment, we look at this as a time where we think we can make some of our best investments. Caroline mentioned it a moment ago, and it would be remissive me not to ask, but the information reported twenty four hours ago the Stripe has cut its value by

about ten percent, still at fifty billion. You are involved or have done prior rounds with that company, What is your sort of response to that report? So I won't comment on any particular fundraising round of any of my portfolio companies. I will say that Stripe is an incredible company, and so I've been love being involved since we co led the Series D in twenty sixteen, and I believe that it's one of the biggest markets and best teams in technology. So excited to be a part of it.

And I think there's a long, long, long runway ahead. I hope you appreciate why we have to ask the question you mentioned at the beginning, global, and Caroline and I are really zeroed in on that. Yeah, where are the opportunities outside the United States right now? Geographically speaking? Absolutely. So one of the exciting things is that technology teams have been going after global markets and growing globally for

a long time. So if you look at some of our most exciting investments of capitol G companies like UiPath, Calibra, these are actually software companies that were founded outside of the US. UiPath was founded in Romania, moved their headquarters to New York, but has been a global operation from the beginning, so has access to markets in Asia, Europe, the US, and I think you see most big software

markets for example. Those companies are all growing their teams internationally and growing customers internationally much earlier in their growth cycle than they used to do. So we look for those founding teams wherever they're starting, in India, in Europe, in the US, and we help partner with them to grow their organizations and their markets globally. So that's one example. We've also invested in several companies in India, China, and elsewhere.

So we see opportunities in lots of different markets throughout the world. China still, so China we've been spending less time on. We have made investments there in the past, but we've been spending less time there. And therefore, from geography into industry group because the breadth of your portfolio, the fat that you all B to B B two C, whether you're in cybersecurity and an enterprise infrastructure, in language learning. In many ways, I'm interested in where you're looking right now.

Everyone talking about utificial intelligence. Is that a particular sweet sport or what else? Do you think it's enticing? Yeah? So luckily for Capital g A, we have a large fund and we have a diverse and fantastic group of general partners, so we're able to cover a wide variety of sectors within technology. So we spend a lot of time in cybersecurity, data, business process automation, as well as consumer marketplaces, commerce and as you just mentioned, artificial intelligence.

So we see opportunities in lots of different places. And the data side, we've invested in data data, coup data bricks in the business process automation space, a theme we're really excited about is the growth of no code software, which is visual application platforms that make it easy for people without technical backgrounds to come and build software different applications, whether it's a website or a more sophisticated business process applications,

So a company like Webflow. In the AI space, we've been spending a lot of time and that's an area that we're really excited. We can dig into advisors we have within Google to help us build and test our investment theses, and we think that AI is such a big opportunity. It's going to be a platform shift where probably the next next Google, the next Microsoft is going to be born, as well as incumbents who have real

strengths are going to incorporate I AI into their business processes. Well, when you find that business, you'll have to come back onto the show and tell us about it. I can't believe, Caroline, we didn't even get fully into AI in this conversation.

Capital G managing partner Layla Study and Caroline just frankly a really big moment for this industry actually, with Layla taking the reins at Capital G. Yeah, extraordinary, and we thank us so much for coming on discussing all of it and I'll wisher, Well, we're going to dig in so much more to the world of VC, particularly with plenty of diversity of thought throughout. But let's stick with executive changes for a minute here, because PayPal, you know,

it's on the hunt for the next CEO. Dan Shulman is planning on his exit at the end of this year, and look, the company is now working hard to try and find his replacement. They've got away whether to seek a cost cutter or another visionary. Meanwhile, the payments firm is also trying to recover from a year long slide that's raised to get this two hundred and seventy nine billion dollars in market value. But coming up, or we're just talking about a AI, let's get into the world

of chap GPT. It's sparring a wave of investments as companies from Meta but also to Tapes Street to a home depot flood Ernie Schools were commentary about their artificial intelligence efforts. Zed we've got to dig in, yeah, and also another company using AI Tesla. I'm looking at shares and after hours we're actually getting a little deep and

now down two point seven percent. We knew that this master plan Part three would be a sell the news of then we haven't really had any subset onted product update, and that seems to be what's happening for that event ongoing, Carra will track it, will be talking about it for the next decade. I'm told this is Bloomberg. I want to make your invest sacking. Well, apparently you just need to start joking up artificial intelligence in your earning schools.

Get this references to AI relatable terms. This earning season up seventy seven percent compared to this time last year. And sure the big tech juggernaughts are doing it, the likes of Meta, Microsoft, Alphabet Zoom for example. For some of our companies, fashion giants like Tapestry, equipment makers like Caterpillar. You're getting banks like Wells Fargo getting in on the actual and two no wonder this is happening. Just think of the companies with AI expertise and what their stops

have done of late. In Nvidia, the chip making company that helps you with the computing power for AI tasks, It's stock is the best performing one this year in terms of megacats. Got AI on your name, Bingo, think of big Bear AI. It's up three hundred percent C three AI. It's more than doubled so far this year. But how are you going to distinguish the height from

the reality. While the advice is state discipline, understand what the business actually does, get to know the management, get to understand the competitive mode that they have, and also get to understand what the valuation really is. Ed. Let's give you the visual. I mentioned a few of those companies that have AI in their name, Big Bear AI, check it out. So we around thirty six percent up so far this year. You think of the likes a

C three AI. We've interviewed the CEO of late more than double and I'm looking at BuzzFeed, which quard announced its own aim musing within some of its quizzes up one hundred and twenty five scent. And if we take a look at which sectors mentioned AI, most of course you're going to be thinking about the technology companies, so they're going to be leading the charge and the orange here.

But actually just everyone is piling on in financials as thinking that Wells Fargo was out there giving its turning of focus of AI. Really, is there any company I wonder that isn't talking about it? I absolutely love that chart far right hand side of the screen. Your left hand side says it. All the recent fura in the first quarter of our bonkers this has all gone. But you are right to point out there are sectors that, by right you don't think should have anything to do

with AI. Yeah, but actually when you dig into the

nitty gritty, they do. The fact that you know you might be using artificial intelligence to be able to ensure that you're selling the right handbag at the right price point in the way right visual, the way in which we're seeing Home Depot, even Caterpillar and a company that is so ahead of its time in terms of trying to have autonomous tractors, it too is trying to understand how AI can develop the way in which they produce a manufacture equipment and attracting all of these names on

a daily basis. Thank you very much, Caroline Now. Coin base CEO Brian Armstrong says he is prepared to defend the company's staking products in court. Shares of coin base it down more than sixty percent in the past year is regulators have cracked down on cryptsite practices. Here's some of the conversation he had Whip Blomberg Shnati Bassak. We recently saw there was a settlement with Kraken who that's another exchange out there, and they have what they called

a staking product. It was kind of more of a yield product. But you know, in coin basis case, our staking product is not a security. There's many differences. I mean, we customers never turn over their assets to coin base, for instance. They're they're always in the customer's possession and we're really just providing a service that passes through those coins to help them, you know, participate in staking, which

is a decentralized protocol. So that's an important part of you know, the cryptoeconomy that we want to make sure that we ensure that that's out there, and you know, we're prepared to defend that in court if we need to, but you know, we never we're never looking for a fight. We want to work collaboratively with regulators all over the world. But you know, we have to follow a rule of law, and in this case, I think we're well within the law given the stands the SEC has been taking regarding

defining certain assets of securities. Is there anything that you think we'll need to get to that point. Well, you know, the SEC has expressed their view about what is a security, and they've taken kind of an expansive view of that. I think, you know, coin Base, we've evaluated over a thousand different assets, and as I mentioned earlier, eight hundred of them we've rejected and we do think they have some properties of being a security, so we don't trade

those today. Another two hundred or so of them we do trade today, and we feel that those are commodities. So you know, look, I think as a as a CEO, we want to basically just have a clear rule book, right and if a clear rules are published, we're happy to follow it. And if and if those rules change,

you know, we're happy to follow those. But I think you know, when we when we became a public company, we explained to the SEC and our S one filing and in dozens of meetings that we've had with the SEC. I think we worked pretty collaboratively with them. We've explained into our business to them many times, including in our S one and you know, they approved us to become a public company. So we'll continue working with regulators all over the world about where the boundaries are on what's

a commodity. What's the security or what is something else we're setting once more for our Bloomberg radio and television audiences. In conversation with coin base CEO Brian Armstrong, you know we're talking about the SEC and state regulators as well. You know, in regulatory filings you've noticed that you've received investigative subpoenauts from the SEC and state regulators. How and

when do you get those resolved? Yeah, well, subpoenas are really just requests for information, right, and so we're in dialogue with regulators not only here in the US at the state and federal level, but really around the world. I mean we're in Europe, European markets, and you know, in Singapore and Australia, et cetera, Canada, many different markets around the world. So I think subpoenas are an important

part of the process. That's that's them asking us a question and saying we'd like more information on this, and we're happy to do that. That was coin Base CEO Brian. I'm strong and believe Bacnalty Bassak, who can doucte that end joins me. Now for more. You went really deep on the relationship Shinali with the sec they've got history,

Gary Gensler and Brian Armstrong. My question really though, is moving on from that, what do we learn about the health of that business coin Base right now and actually the crypto market more broadly. Well. I think one thing interesting that he said to us too was the idea here that a lot of the assets that are associated with coin base, they have really the CFTC as a main regulator, and a lot of these assets are kind

of viewed as commodities as well. It's the definition and that we were looking at for a lot of the crypto assets in the universe, and he was pretty specific

about how they choose not to list assets. I think another interesting point here is as the SEC moves on and as other regulators move on beyond tokens and securities, here you're also asking about staking, and you're asking about stable coins and other part of the crypto ecosystem that helped provide liquidity to the system and help move assets

from one place to another. I think the stable coin question is particularly relevant because, of course we know coinbase has a close relation ship with Circle and USDC and holds a bit of it on its own kind of treasury here, so you know, the relationship with the regulators

here is super interesting for a lot of reasons. But you know, even though we've seen that decline over a year in coin basis stock, they've been on a tear this year, even with the SEC really taking a hard look at things like staking across the industry and stable coins across the industry. Yeah, I'm strong saying he was quite bullish. Quote on USD coin just so much coming out of that interview, blue MOTIONALI base, thank you so much. Oh, there's some big changes coming to this show, ed, and

I'm so excited to be doing it with you. This same tech coverage, you know, but a new time frame twelve pm Eastern little earlier few nine am San Francisco. Yeah, no worries. This is worth getting up for bank smack in the middle of the markets day. And you and I have learned so much in recent weeks about how important the interplay is between public and private markets, and

this new time we can really own that space. Yeah, market moves in the public, but also the moves that are happening in private and the people behind this, the innovation behind it, the diversity of thought and leadership. I cannot wait to get into all of it. Yeah, and a quick look at Tesla because the investiday is ongoing. Perfect example. We're talking about innovation, we're tracking the market moves. It's a crazy story about master Plan Part three. We're

revealing our own masterplan on this show. Character very nicely done. After hours, still training lower for Tesla by two point seven percent. We will digin into it more tomorrow. But that does it for this edition of Bloombo Technology. So much to recap. Check out the podcast, iHeart Apples, Spotify, wherever you get your podcasts. Big news out of b tech, This is Bloomberg