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Coming up. We'll bring you latest on the TikTok ban as the.
Company argues the US disregarded its national security plans. Plus Masseoshi's Sun announces his vision for an era of artificial super intelligence.
Will bring you the details.
And cardialer chaos continues amid a debilitating cyber attack that's upending the one point two trillion dollar market. It's full coverage coming up. Happy Friday to those of you around the world. This is what markets look like over the course of the week. But remember we had a market holiday here in the United States on Wednesday. This Friday, the market is facing five point five trillion dollars of derivatives that are due to expire, the so called triple witching.
That's having an impact on markets. But right now there's this conversation around valuations, particularly in some of the megacaps that have seen a really AI driven rally. Later in the show, we're going to go over some charts and have a brief conversation about one name in particular, Apple. But i'd note this Friday that Nvidia is down a couple of percentage points coming off what's been an astonishing rally in that stock, and that is having a factor in the markets.
So we're also going to talk about Bitcoin.
That it's near a one month low right now, there's a lot going in the market. Will go in house to Bloomberg Intelligence to ask some key questions about what's going on with bitcoin. Let's get to our top technology story. TikTok and It's Andy's parent Byte Dancer, arguing the US government could have put more options on the table and taken less restrictive action than simply banning the Act to
address national security concerns. In a court finding Thursday, TikTok said that Congress disregarded a ninety page national security agreement that was made with the federal government, in which TikTok argues it offered multi layered safeguards. Let's get out to DC and Bloomberg's Mike Shepard, might you lead the intersection of tech and politics for US. Basically, what they're saying is,
we offered lots of options. We offered you technological solutions that we think would have safeguarded US user data, and the only option Congress gave in return was an outright ban.
Well, that's right ered, and let's step back for a minute.
This TikTok saga has just become such a focus of attention here in Washington because of all it'd symbolized.
It's not just about the app.
It's also about this geopolitical tension between the world's two largest economies and their visions for how governance should be should be handled, and the concern here in Washington that the Chinese government ultimately could have access the US user data through TikTok's Chinese parent company, now TikTok and bike Dance.
The Chinese parents.
Have claimed that they're set up this so called Project Texas, where they invested almost two billion dollars in work with Oracle to try to set up some sort of a shield and firewall that would keep US data secure and away from any purported buying eyes in Beijing. That was
not enough to satisfy US lawmakers. They were aware of the proposal, they were aware of the project, and Senator Mark Warner, who heads the Intelligence Committee, expressed skepticism from the start that that would be an adequate safeguard to satisfy lawmakers' concerns.
It's difficult for users of TikTok, and in this country there are one hundred and seventy million or so of them, and for the public to kind of get a sense of where we're at. So, after this legislation made its way through Congress, legal challenges were bought by TikTok, Byte Dance's parent company, but also the users themselves. When the court filing hit last night, the DOJ came out with statement and said, you know, the legislation accounts for a lot of the issues we were worried about. A long
preamble to ask Mike, where do we stand? What happens next?
Well, right now we are in that kind of tennis
match of court five. So it was TikTok's volley yesterday and now we're waiting for the Justice Department to return the serve the face a July twenty sixth deadline to respond with their own brief papers, and then in early September we're expecting the Appeals Court here in Washington to hear this case, and the company is asking for a ruling by December sixteenth or so so that, if need be, it can go straight to the US Preme Court for an emergency injunction if it doesn't get relief here at
the appeals court level. So it's moving fast, but it's so much of it is happening in court, and it will really come down to a handful of judges to decide whether the national security concerns raised by Congress override and overwhelm any free speech concerns and considerations that the company is raising as part of its bids o returnal law.
Bloomberg's Mike Shepherd, Washington, DC, Thank you so much. Let's get to another story in the realm with social media, New York has become the first state in the nation to place curbs on how social media platforms present content to miners. Under a measure signed by Governor Kathe Hokel yesterday, platforms such as TikTok and Instagram will now need parental consent to use algorithmic feeds or notify underage users between
midnight and six am. According to the language and the bill, I want to break that down with the Chamber Progress CEE Adam Canvacuvates.
I was interested, Adam.
To read through not just the content of the bill and what it will provide for, but also the idea that New York did this first.
What do you make of it?
Well, what I make of it is we know there's concern among parents about kids and teens in social media, and I think that's understandable. Unfortunately, I think that in this case they went after the wrong target, which was algorithms. I think they got into their head and a variety of critics have focused on algorithmic feeds as being kind
of a problem here. And so the bill, as you said, bans algorithmic feeds and services like TikTok and Instagram YouTube by default for teenagers unless their parents opt them into those algorithmic feeds. And just the problem with this is that I think that chronological feeds are actually going to be a worse experience for teenagers.
They're more likely to.
Surface, you know, the last post that might be spammy, clickbait, hate harassment, and algorithm algorithms are actually providing a pretty important role and making these feeds better for teenagers. Usually
they're allowing them to curate their experiences. And Common Sense Media, which actually ironically is the support of this will, actually had a survey of teenagers about two weeks ago where they said, team, most teenagers are liking you know, or actually use curation in their feeds, and unfortunately this bill kind of we'll do away with that completely by default.
So unfortunately it's well intentioned, but it goes after the wrong target in my view, and I think is likely to make feeds worse for teens.
And the Chamber of Progress of which you lead is basically an industry group, but your work is to look at public policy and make sure that it is impactful to society in a fair way. So you think that they went about this in the wrong way, how would you have done it differently?
Well, you know, I think what we're starting to see is, for example, this week in California the governor, Governor Newsom talked about, well, maybe schools should have a blanket rule against phones in school.
They're proving to be a distraction.
I think there's pros and cons of a policy of like that, but one thing about those policies is they're not getting involved in regulating platforms at the speech level.
One of the things we've seen, and again New York's.
Not the first state to do a bill related to social media and kind of content. They've gone about a little bit differently. But one of the problems that all these laws have faced, and now this has happened in California and Arkansas, in Ohio, every single time state legislators say, well, no, we're not We're not regulating the content of these services. We're regulating their design, right, and that's different that therefore
it doesn't run a foul of the First Amendment. Every single time so far, courts have said, no, that's actually not true. You are regulating the platform speech, and I expect the same will be true here.
So I think we're in that we have.
The kind of the dynamic where this bill feels really great to Governor Hochle and policymakers have pushed it, but it will it might inevitably be struck down in court, and then I think, you know, be right back where we started from. So unfortunately, I don't see a lot of legislators saying, look, how can we approach us in a way that is really like constitution proof, legally sound they've asserted that it is, but I don't think this will be in the.
End, Adam.
I want to go back to the latest on TikTok that our editor Mike Shephard was giving us from DC a few minutes ago.
This is not a new conversation for you or I. The idea that you know.
TikTok and its users have frustrations that they feel they put forward technological and policy solutions that would have allowed TikTok to continue to operate in this country, and they feel the only option that they were given by Congress was a ban. What did you make of them court filing which hit last night.
Well, I think what TikTok is trying to do in their court filing is they're trying to address what's called sort of the least restrictive means, right, which to say that, if you're concerned about TikTok and Chinese connections, for example, is there some other way the government could have gone about addressing that concern short of pass in the law that did. And that's what their Project Texas is all about.
And that is legally relevant at this stage because that is an actual principle under the law, and so I completely understand what TikTok was doing. I have a concern about TikTok and Chinese control, but I understand that, and ultimately I actually think it's kind of a jump ball. I think whether or not TikTok succeeds in this in its legal challenge is truly a legal jump ball, and so I don't it's completely understandable to me that they would make that argument.
But what is the Chamber of Progress is position on whether TikTok should be able to operate in the United States.
We haven't taken an organizational position on it.
I think that I share a lot of concern that, like, this is an really unprecedented situation where an app that is so popular, you know, frankly has this nexus and really is obligated to advance the Chinese government's interests. That's always been a concern for me, more than that data concern, more just kind of like look at the idea that like, look after Russian and raided Ukraine, we look back and said, why do we allow our tea Russia's propaganda network on our cable systems?
And I think, I know I feel the same way about.
This Chamber of Progress CEO Adam Kavakovitch, thank you an intense start actually to this Friday's bienveig technology. Okay, you're about to be looking at the US listed shares or ADR's of soft Bank, the Japanese tech conglomerate, kind of like Japanese trading Overnight down the most in about three months. Overnight founder Masaoshi's son pledged to help create AI that's
thousands of times smarter than any human. A SoftBank's annual meeting, he outlined a future that's built on SoftBank's investment in the chit design firm ARM, and argued that ARMS technology will go into a thriving ecosystem of robots and powerful data centers, and at times, Sun was visibly emotional talking about his goal of realizing artificial super intelligence.
It may sound strange, but I think I was born to realize ASI.
I am super serious about it. Thought we'll go up do.
I think ASI will continue in the next ten years.
It will be ten times smarter than humans.
So soft banks japan listed shares are up almost sixty percent this year, and the net asset value of its holdings has hit two hundred and fourteen billion dollars largely on arms performance and a turnaround in some of its startup bets. But activists are circling Elliott Investment Management has built a stake in soft Bank of more than two billion dollars and is calling for buybacks. Some brushed off questions and pleaded with investors to quote root for him
as he chases his dream of artificial super inteentgence. Joining me mout to discuss the markets and a bit about soft Bank is Fiona Senkota from City Index. I mean, what was so interesting about this kind of spectacle almost in soft Bank's annual meeting is Massiosci's son wanted to talk about the big picture ASI, but investors wanted what investors always want, dividend, buy back, stock split.
What did you make of that?
Yeah?
Completely, you know, I think it's quite an interesting because it sort of almost brings up about.
A change of strategy for.
Soft Bank from this sort of defensive position that I think it has had over the past few years for much more offensive position, as we have this really ambitious vision from some about ASI and the future of AI and what that means to some bank for soft Bank. But I think you can't get away from the fact that at the end of the day, investors do want
to have returns. They have seen strong gains on the share price, you know, as you pointed out, we've seen a sixty percent rally in the share price so far this year. That obviously comes on the back of one hundred and twenty four percent rally in arm holdings. But you know, at the end of the day, yet, investors want to see what those numbers are bringing back, and they want to see you.
Know, share buyo bike, share buy back. That's going to be useful for them as well.
Although as we said, you know, the share price growth has been strong.
It's hard to pick out what the prevailing factor is.
In the market right now.
You know, at the top of the program, we talked about the concern with valuations in videos trading it forty five times twelve month forward earning. So we're going to look at Apple's valuation later in the program. And then if you take the soft bank example, like many investors to summarize, there just seems to be a wholehearted belief that you have to be in AI at all layers of the stack, and if you're not, you'll be left behind.
So which comes out on top.
Yeah, you know, I think we can't get away from this. I that AI has really driven such a strong rally in AI stocks, and obviously that's sort of bled out into or transferred out into record highs in the s and P.
Five hundred and on the Nasdak this week as well.
So you know, I think at the end of the day, there might be this sense that perhaps the AI try trade right now is a little bit over hyped, but I think over the long term that's just not the case, and that's the sense that investors are having.
You know, we're just really opening the.
Door to the realization and the understanding of what the real world applications of AI actually are, and that's what's really supporting.
The rally that we have seen.
So, you know, although as you mentioned, there are some suggestions that there could be some level of lofty valuations involved here, I think at the end of the day, the long term case is very bullish as far as AI is concerned, and that's really supporting the share price.
Obviously, we're going to have some pullbacks.
No, no, rally is just one hundred percent higher, sure, but I think you.
Know, investors are in, they're in on this case.
We just showed in video it's down two percent in the session, but over the course of a week where it became the world's most valuable company, it's down a percentage point.
Is this rally over?
Do you know?
You know, it's just a very small move lower after some very strong moves higher, you know, this month so far, and the video is up around sixteen percent, had impressive games last week. I mean, I don't think that the rally can necessarily maintain the speed that it's had, because it has been a really impressive speed that we've seen this share price rocket.
You know, it's up one hundred and seventy.
Percent so far this year, and that's not maintainable. It's not going to be maintainable. But I don't think that's to say that the rally's over. I think we could just perhaps potentially expect to slow for a more sustainable pace going forward.
Piero Sua City Index, Happy Friday, have a fantastic weekend, and thank you for joining us on the show. Coming up, open Ai makes its first big and genuine acquisition. We're going to bring you the details next be right back. This is Bloomberg time for talking tech and first start. Former President Donald Trump finally appeared on the All In podcast.
After a month of teasing.
The podcast, co hosted by David sachsh Jamath Palihapatia, covered a range of topics, including real estate, the war in Ukraine, and artificial intelligence. Trump defended his tariff proposal, saying it would be crucial to keeping the dollar, the world's reserve currency.
Plus Huawei Near's one billion active devices, The Chinese tech company saw sales of its smartphones climbed seventy two percent in the first five months of twenty twenty four, growing the number of Huawei's gadgets, which also use its operating system, to over nine hundred million. The latest figures underscore how the US sanctioned company is taking on the likes of
Apple in the Chinese market and Indian groceries. Livery startup Zepto is preparing to go public this after the company more than doubled its valuation to three point six billion dollars from a financing round that was led by US and local investors. The company says it's on track to handle more than one billion dollars in goods a year and plans to double its warehouses to more than seven hundred by twenty twenty five. Also, car dealers aren't the only ones to be hit by recent attacks.
The data of Quote Wizard.
Consumers, a lending Tree subsidiary, are being sold off by hackers. Unauthorized access was detected on a cloud database hosted by Snowflake. Lending Tree shares are down as the company continues to investigate the size and scope of the hack. All right, let's get some m and a. Open ai has bought rock Set, an enterprise search analytics startup, marking the most significant acquisition to date for the high profile artificial intelligence company joining US now Bloomberg Sharing Gafari.
So this is kind of interesting.
The terms won't disclose, we don't know how much money was involved, basically, but it's kind of new and novel for open ai.
Give me the details, right, So, this is the first time that open ai is acquiring a company where they're not just taking in the talent or doing what's called an aqua hier, but they're actually going to integrate the technology as well, which makes this a good Guinness.
What I understand is, why is open ai need a company like rock Set, Like, what's the point?
Well, if you think about it.
Open Ai is really right now trying to grow not just their consumer but their enterprise business. And this is a company that has experience working with major customers across industries from finance to gaming. One big one that I saw on previous reports was jet Blue, for example, and what they do is actually work with customer data to
help those customers index and search through that data. So you know, if you kind of put you and two together and think about where open Eye is trying to grow their business, it might make sense that they would go acquire a company that's specialized in dealing with this kind of more detailed business data to help them build that out.
Bloomberg shrin Gufari.
I have to say it's been a tremendously busy week for you all across the AIB, from Anthropic to open Ai, and a lot going on in the enterprise as well.
Happy Friday to you.
Welcome back to Bloomberg Technology ed Lovelow in San Francisco. So I've been talking about valuations and there's one chart that I saw this morning on the terminal and Bloomberg dot Com that I wanted to share with you, and this is it. Apple trading at around thirty times forward earnings, and there's been an a rally and Apple shares driven largely by artificial intelligence. It's the idea that we now
have a clearer understanding of Apple's AI strategy. A lot of concern from both the byside and sell side is well, when does that strategy pay off? If you look at Bloomberg estimates for top line growth, there is some recovery in the second half twenty twenty four later in the year, but as the chart behind me shows pretty clearly, when Apple gets to a level of trading at thirty times forward earnings, it historically finds it really hard to sustain
that level. And this is a conversation that's happening quite a lot across the megacaps where we're trading. We keep referencing in video trading at forty to five times forward earnings. So there's we loads of you out there. Contact meon x LinkedIn Instagram. You're going to say, oh, well, look at top line growth of the two you can't compare. But I'm just saying this is a chart that's got a lot of investors talking. We're happy to share it
with you on Bloomberg technology. Okay, let's get back to cyber security and hacks. Checking in on shares of all the automotive companies, lots of the car dealers, lots of the retailer, and you can see some downward pressure. Sustained AutoNation down four tenth to foe percent, Route one automotive down half of a cent. Penske kind of stabilize and there's a warning. CDK is the company that basically operates the software platform, and they've warned their customers that their
platforms can be down for several more days. It's crippling car dealers across the United States amid a cyber attack on the company, the second round of which was spelt on Thursday. Joining us out of London is Bloomberg's Craig Trudell, who's our Global Auto's editor.
In Craig, you're joining us from London.
This attack was in the US and Canada, but you've kind of been leading the team that's been covering this around the clock, and the impact on this industry has been very big. We've got a new story out in the turn of this morning. Just summarize it for us.
Yeah, I mean this came at a really inopportune time on the juneteenth, Holladay. You know, for car dealers, you know, a day when a lot of their customers or would be customers, you know, have more time to go through the rigamarole of of buying a new car or getting their their current vehicle service. For their software system to
go down has been extremely disruptive. We also have you know, an end of quarter push that we're in the midst of, which you know, retailers do want to sort of close deals before the end of the month, before the end
of the quarter. So this has been a really disruptive attack because there's only a handful of these companies that provide these dealership management systems that CDK is one of the leading providers of, So for them to go down and not be able to sort of provide those services for their many customers really has thrown a wrench in thing. So we're hearing from dealers about you know, having to gasp close deals with pen and paper as opposed to
you know, going through their computer system. And you know it all right, it takes time to close deals, as we know, it's not even in the year twenty twenty four a seamless process. This is only throwing sort of more of a wrench.
In things pen and paper. I don't even know what that is anymore.
There is a serious side of this that you know in the US and Canada. If I'm a consumer and I'm participating in this end of court to sprint to get myself a new vehicle, what are the brand names involved those impacted? If I think I read Subaru and maybe Toyota.
Yeah, Superu and Toyota at this point, at least out of Japan have sort of downplayed this for US, and we are touching base with them in the US and have heard from the likes of Ford and Volkswagen, Mercedes, BMW, all of those last few companies I mentioned have confirmed
that their dealers u CDK. They're not necessarily being particularly forthcoming at this juncture about how many of their dealers are affected, but this is a substantial number because again, you know, this is a space, you know, a sort of sliver of the auto retailing industry where there's been a lot of consolidation over the years. So you only have a handful of companies that aren't necessarily household names that provide this really important sort of you know, piping
that that makes everything work. So you know, we've heard again from from dealers also talking about challenges with lining up credit, having to sort of, you know, themselves make judgments as to whether or not, you know, somebody is worthy of a loan by sort of cobbling together what information they can you know, parts repairs and not being able to sort of confirm whether or not a part is available for a customer who has a you know, jeep say in the shop. So this is is just
causing a mess. And so if you're a consumer, uh, you know, I guess you know. The general sort of takeaway here is if you're planning to go to a dealership this weekend, maybe hold off on it and wait until this storm passes.
Bloombag's global Calar d It said, Craigs, you down great to have you on the program.
Thank you.
Let's bring in somebody who knows the automotive space very well. Diana Lee is the CEO and co founder of Constellation, the leading marketing, technology and data intelligence company in the automotive space. Personally have three decades of experience in the world of cars, and you know, I think what our editor Creag Trudell set out is that the timing of this hack is bad because the industry.
Is under so much pressure.
What are you hearing from clients, customers, and those who work alongside.
Absolutely, it's just mass chaos at this point. I've been in the auto industry since nineteen eighty nine and also in retail automotive. In all of those years, I've never seen a DMS operating system down. The dealer requires to actually run a DMS for sales, service parts, for every single functionality, even stocking in a vehicle, you can't do
without the DMS system. So it is a disaster. I feel like it's even worse than COVID when it first hit the dealerships because you're not functioning at this point.
So what you just said really jumps out of me, worse than COVID the impact because I remember covering that. That was my beat March twenty twenty working for Craig, who is my editor. Let me ask you this, if you're advising CDK and telling them what to do to manage this fallout, what would you suggest.
I think it's printing services at this point. I know that sounds so crazy, but at this point, nobody can actually just have a DMS pop up overnight. So there's only two other DMS providers that are really known in the automotive industry, and it's Techion and Reynolds and Rentals. So there is no way that either one of those companies could start uploading any type of DMS system for
any dealers that are down. But printing services is what basically anybody can do right now, right which is loading up the printing services to allow dealers to be able to hand print contracts as well as all the ROS repair orders that need to happen right now. So we're going back to ancient stages right now, where this is what we need to do is print.
We joked with Craig about the use of pen and paper, something we will do a lot less in this day and age. There's a serious side of it though, right which is the consumer and the consumer psychology. You have very high interest rates buying a vehicle, even leasing a vehicle is your biggest financial consideration after your home normally, and we have what nine days left of June. Do you think this is going to have a really big impact on sales in the sprint to the finish of the quarter.
It's absolutely going to and I think the only way that a lot of these dealers can actually survive right now is if they have friends of theirs that already have a Renolds or a teching on system where they could tell them what the deal structure needs to be, so they could actually put something together at least fax it to them, email it to them, and then you're going to have to handwrite every single contract at this point, right But the only way, and I think dealers that
are super innovative they've called me and they said, I'm limping right now.
Limping.
I mean, this is some of the biggest dealerships in the country that sell fifteen hundred units a month. Their service departments are limping at this point. But obviously they are like fighters. And I love that about dealers because in many ways, think of all the employees that basically
are also under fire. But if the auto business goes down, and this is why I really fighte for dealerships out there all the way across, it's all the Americans that would also be out of jobs if we always go direct to consumer plans and so just discuss modernizing.
Then the de model, right, I just leased the model. Why a couple of months ago. I did it through the Tesla app. My credit was approved through the Tesla App.
I took the wing mirror off.
After two weeks it was fixed through the Tesla app. Is that something that the industry needs to move toward.
I am not actually a fan of the Tesla model in the sense that basically I understand this is a direct to consumer model that makes it easier for customers to buy a vehicle. But on the other hand, I think that the traditional automakers have to improve the customer process. But within it, there's so many people that actually support
the automotive market. Think of all of the families and the communities as well as the little leagues and all of the different types of charities within every community that gets supported by a local dealer. All of that goes down if basically we all decide, hey, we want to direct a consumer model. What happens the Americans that will be out of jobs right now if everything went straight direct to consumer? And for me, I really do believe
in that community atmosphere where we come in. We get to know each other, we get to actually service our vehicles, but get to know the people within the organization that support those communities. So I think there's different types of people out there that purchase vehicles, but there's many types
of customers out there. They must test drive the vehicle, look at the vehicle, know the color and the exact model that they want before they actually make a purchase, and those are not ideal for customers that are direct to consumers.
Diana Lee from Consolation Agency, just great to have you back on the program.
Thank you so much.
Okay, coming up on the big technology, we're going to talk about investing in artificial intelligence with Shedule Shat of Index Ventures that's come out next in our VC Spotlight and private market focused from minute, this has been back technology.
One of the things I really get excited about because I'm a labor economist by training, and I think a lot about the distribution of opportunities across the nation and the world, and I think of AI as potentially being a great leveler, leveling the playing field, democratizing the expertise by giving people a hand up or a leg up in terms of starting.
That was San Francisco FED President Mary Daily weighing in with her thoughts on the impacts of our official intelligence and I want to get more on that space with our VC Spotlight and bringing shad Or Sharp, a partner at Index Ventures and Shuttle. It is June twenty first, as I've just learned on Google and Wikipedia, Summer Solstice the official start of summer. And I'm going to start this conversation by asking you, are we in the private markets in an AI winter, an AI spring, or an AI summer.
First that thanks very much for having me. That's my pleasure. It definitely feels like summer. The sun is shining in ventureland, not only in AI but outside. AI is definitely bringing a draft in a windfall to different industries, including cloud and cyber and it's led by public market companies.
If you look at a cloud.
Derivative like Data Dog, which I've served on the board of for ten years, they're definitely seeing acceleration and underlying markets thanks to the cloud and use of AI driving increased compute and increased use of data. Second, in private markets, we're definitely seeing market leading companies like Whiz and Data Bricks see acceleration in their business thanks to AI. So definitely the VC environment is talking about AI.
I want to look at deal activity in the private markets. You just mentioned that the AI summer that we're in is kind of led by public names and throughout the how we've talked about the concern around valuations, but deal activity in the private markets is really interesting to me globally in all stages, Like I'm seeing quite a lot the growth.
Stage as well. Do you see that and what do you make of it?
You're right, we're seeing increased activity this year across geographies, across stages. Again, outside of AI. Half of the investments that we've considered at Index in this year are in categories including gaming, infintech, and cybersecurity. So the sun is definitely shining outside of AI. Second to your point, it's at every stage. We've seen seed investments, early stage Series A investments, as well as growth stage opportunities in and
outside of AI. So deal activity has definitely picked up this year.
You've put a lot of emphasis on security, cybersecurity names. Whiz is one of your port photo companies. You are significant on the cap table of that company. Why why is cybersecurity such a focus? Loads of people come on this show actually at the moment and put forward cybersecurity is the area that they're most excited about getting a boost from AI.
Yeah, cybersecurity is one of the hottest sectors in tech, so it's no surprise that you've had many guests come on and talk about it. If you step back, there's about two hundred and fifty billion dollars of market cap amongst the top four security publicly traded companies. This is CrowdStrike, Pelton Network, c Scaler, and cloud Flare. Ten years ago, the top four probably represented less than fifty billion dollars of market cap. There are four drivers over the last
decade that have driven this growth. First, we're seeing every single day a new global attack. I think on your show you've been talking quite a bit today about CDK Global, which is just the most recent example. The SEC now has disclosure requirements for publicly traded companies. Third, chief security officers are under scrutiny and are being held accountable for fraud. And fourth, we're seeing hackers actually tell the SEC when they've created a material breach. As a consequence, we're seeing
an enormous amount of activity in private markets. We've seen an explosion of startups. There's now over ten thousand companies that are trying to build new businesses to meet the needs of customers. At Index we focused on kind of two primary themes. One are founders that are obsessed with the problems of their customers and second, founders that are looking to build coherent platforms to meet the needs of organizations.
Just as one example to your point on Summer, I feel like every small and medium business in the world should have insurance. Without insurance, it's like going to the beach without sunscreen. You're bound to get burned with enough exposure, and so we invested in the category leading cyber insurance Company Coalition, which is addressing the needs of small and medium companies. On the other hand, enterprises have been served by large and growing security companies for over a decade.
What's different now is the requirement for a coherent platform versus kind of a frankensteign that acquires their way to creating a collection of solutions and their in laws Whiz, which to your point, just started four years ago but has become the fastest growing software company of all time because of a strong point of view on a product that meets the needs of customers.
A lack of cyberse security is like going to the beach without sunscreen. Which on this the official Summer Solstice and the aisum are in is an interesting point of view. Shout or sharp index beens is great to have you on the program. Bitcoin slump to are more than one month low with this year's record breaking rally showing signs of fatigue in the absence of Frankly fresh Market Cassis says,
break it all down with Bloomberg Bloomberg Intelligence on this. Sorry, Jane Seafert, Sorry, it's been a long short week for me. I'm trying to think about what's going on, like in the markets generally speaking, maybe some risk appetites come off the table triple witching, but there is this kind of close or opposite correlation with the equity markets. That's what I've read. What's your analysis.
Yeah, I mean, no matter how you look at it, the I don't even know what the word of the appetite for bitcoin exposure has slumped a lot.
Of people were talking about trying to understand.
So the last few weeks we saw billions file into those bitcoin ETFs and the price really wasn't moving. A lot of that we think had to do with like potentially futures trading and basically arbitrage trading with the futures market. But the last week, the last seven ish trading days, we've seen a total of about a billion dollars flow out at the ETFs. Risk appetite on the crypto markets
has kind of slumped off. I mean, if you look at all the all coins and all the stuff that we don't really tend to talk about, those have been far worse than the likes of ethereum and bitcoin. But what we're paying attention to right now is we're expecting those Ethereum ETFs to get approval at some point from the SEC over the final approval to launch at some point in the next couple of weeks. I think there's just kind of a malaise going on in the market
right now, and it's pretty standard. I mean, honestly, everyone's used to these massive run ups, but also there's there's corrections and run and turnbacks at different times.
That's the functioning of the market. I still follow the headlines a lot. One that hit last night was that micro Strategy had used the proceeds from a convert to buy seven hundred and eighty six million dollars of bitcoin. And we've reflected a lot in the last few weeks, like it's quite a liquid market and correct me if I'm wrong, But does a headline like that have impact on the market at large?
I mean it used to.
I mean you when you when Michael Saler was announcing and micro Strategy was announcing these massive, multi one hundred million dollar buys of bitcoin, it was impacting the markets. I think it kind of almost shows the maturity of
the market that this they just took. They finished this closing of those converts and then just dumped seven hundred and eighty million dollars or whatever, I don't know the exact number you said into the market over the last week or so, and the market is still down decently off it's it's all time highs, almost ten thousand dollars off. It's all time highs. And I think that just shows the liquidity and depth of this market at this point. Is as far as I'm concerned.
Seven hundred and eighty six million dollars was the number that I said. Bloomberg Intelligence Handlist James Seth, Happy Friday. Thank you appreciate the breakdown that does it for this edition of Bloomberg Technology.
It was a short week in the US.
Wednesday was a holiday, but a busy week all the same recap. The podcasts get involved in the pod it on Apple, Spotify, iHeart and the Tech pod is also of course on all the Bloomberg platforms. It's good to be back here in San Francisco with you. A big week coming up next week, AI Bitcoin Space, all of that's to come. There's beautiful San Francisco, Happy Friday. This is Bloombo Technology