>> FROM THE HEART OF HER
INNOVATION, MONEY AND POWER COLLIDE IN SILICON VALLEY AND
BEYOND, THIS IS BLOOMBERG TECHNOLOGY WITH CAROLINE HYDE
AND ED LUDLOW. CAROLINE:
ON CAROLINE HYDE IN NEW YORK. ED:
THIS IS BLOOMBERG TECHNOLOGY. CAROLINE:
FULL COVERAGE ON THE INFLATION PRINT CPI HARDER THAN EXPECTED
OPENAI BOARD MEMBER LARRY SUMMERS JOINS US TO DISCUSS. ED:
TSMC SALES SURGE AFTER RIDING THE AI CHIP BOOM.
WE WILL BREAK DOWN THE DETAILS AND DISCUSS IN TALES PROCESSOR.
CAROLINE: SPACEX PRICE STARLINK SATELLITE
PROCESS BURNING THROUGH MORE CASH THAN IT BRINGS IN GREAT
THE EXCLUSIVE BLOOMBERG REPORTING AND SO MUCH MORE
THROUGH THIS HOUR. IT IS A MACRO DAY IN THE MARKET
IS UNDER PRESSURE IS ONCE AGAIN PRICING INCREASES ARE STILL
RUNNING HIGHER THAN THE MARKET WANTS TO SEE. HIGHER THAN HAD BEEN
ANTICIPATED IN THE FEDERAL RESERVE ONLY GETS TO HIKE ONE
OR TWO TIMES THIS YEAR. THE MARKET IN THE FED SIGNALED
WE REPRICE THIS IDEA THE FED HUT -- THE FED CUT WILL BE
COMING. WE SEEN THE FALL ON THE NASDAQ
MORE BROADLY. WE ARE SEEING A REAL PUSHBACK
IN TERMS OF THE BOND MARKET. WE SEE YIELD SPIKING ON THE
FRONT-END ON THE TWO-YEAR BUT HIGHER ACROSS THE CURVE.
NOTABLY WE ARE DOWN FROM THOSE 21 BASIS POINT MOVE WE SAW
EARLIER BUT NEVERTHELESS WE ARE BASICALLY AT THE HIGHS OF THIS
YEAR. LOOKING AT THE BLOOMBERG DOLLAR
INDEX THAT STRENGTHENS INTO A FAR MORE HAWKISH TONE FROM THE
MARKET SIGNALING THE FED DOESN'T AND CANNOT HIKE AS MANY
TIMES -- CUT AS MANY TIMES THAT HAVE BEEN ANTICIPATED.
THAT'S UP SOME 7/10 FEELING PERHAPS WE HAVE TO REMAIN
HIGHER FOR LONGER SO IF YOUR RATE CUTS COMING FOR THE REST
OF THE YEAR HAVE A LOOK AT WHAT'S HAPPENING IN THE PRICE
OF BITCOIN. WE WILL SEE RISK ASSETS SELLOFF
ACROSS THE BOARD. 7/10 OF 1% ON THE BITCOIN.
AS WE REPRICE WITH THE FEDERAL RESERVE HAS TO DO AND REMAIN
HIGHER FOR LONGER WHAT YOU WATCHING? ED: THREE SEMICONDUCTOR NAMES
STANDING ON THEIR OWN TWO FEET RATHER THAN BEING CAUGHT UP IN
WHAT'S HAPPENING WITH THE POST CPI TRADE, META IS BASICALLY
FLAT, NEXT-GENERATION IS INFERENCE ACCELERATOR ITS OWN
AI CHIP THAT WILL NOW BE DEPLOYED, NOT DOING MUCH FOR
THE STOCK. INTEL IS DOWN. AI ACCELERATOR COMING IN THE
THIRD QUARTER. INTEL STAYS IT OUTPERFORMS IN
SOME TRAINING CASES. IT WILL BE COMPARABLE.
THAT'S DOWN 2.3%. TAIWAN SEMICONDUCTOR THESE ARE
SHARES THAT ARE 1% THAT SOFT SALES JUMP.
A BETTER-THAN-EXPECTED 16%. THAT'S THE BEST JUMP IN GROWTH
TO 2022. IS TSMC RIDING THE AI WAVE.
THIS IS THE WORLD'S BIGGEST CONTRACT MANUFACTURER
SEMICONDUCTORS. >> LET'S DIG INTO TSMC.
WE ARE PLEASED TO WELCOME IAN KING. IT WAS A SURPRISE BUT WE PERHAPS WERE ANTICIPATING A
REAL STRENGTHENING OF TSMC'S BUSINESS BECAUSE OF AI. >> ALL ROADS LEAD TO TAIWAN
RIGHT NOW AND IF YOU GO TO BUILD ANYTHING WHETHER IT'S
NVIDIA, ACCELERATORS WHO ARE DOING BETTER IN SERVERS THAN
INTEL. THERE ALSO GETTING INTO BROADCOM AND NETWORKING.
AND YOU ARE PAYING FOR THAT MOST EXPENSIVE STUFF. >> THERE ARE SOME SPECIFIC
NAMES THAT ARE INTERESTING. A STORY YOU'VE BEEN WRITING.
THEY ARE BRINGING IN NEXT GEN AND TIA CHIP. THEY WANT TO DEPLOY FOR THEIR
OWN TRAINING AND INFLUENCE PURPOSES PREYED WHAT YOU MAKE
OF IT? >> THIS IS THEM JOINING THAT
LONG LIST OR LENGTHENING LIST OF THESE COMPANIES SAYING I CAN
DO THIS BETTER IN TERMS OF WHAT I CAN DO.
THAT'S THE PROBLEM ISN'T IT. THEY DO NOT WANT TO BE PAYING
MASSIVE PREMIUMS THEY ARE PAYING TO NVIDIA.
WHEN IT COMES TO GENERAL-PURPOSE PROCESSOR LIKE
THIS ONE PERHAPS WE CAN DO IT BETTER THAN INTEL. CAROLINE:
ISN'T IT CAROLINE:FASCINATING THAT WE SEE THIS CAROLINE:
THE DAY AFTER THE CLOUD EVENT FROM ALPHABET WHERE THERE IS
THIS ONGOING TENSION OF THESE BIG PROVIDERS OF CLOUD BUT ALSO
RUNNERS OF AI AND BUILDERS OF LARGE LANGUAGE MODELS WANTING
TO DEPEND ON NVIDIA. IS THIS THE RELATIONSHIP THAT
CAN CONTINUE? >> IT'S BEEN GOING ON FOR YEARS.
AWS IS REALLY SHOWN WE'VE GOT THE SIZE TO MAKE THE ECONOMICS
WORK SO WE WILL DO THIS. AT THE SAME TIME THE ACTUAL
REAL SILICA AND COMPANIES ARE STILL JUST ABOUT IN THE LEAD,
THEY'RE STILL ABLE TO PUSH THE LIMITS.
THAT THE BALANCE IS STRUCK. >> INTEL HAS INTRODUCED ITS
LATEST AI ACCELERATING. IT WILL BE AVAILABLE IN THE
THIRD QUARTER OF THIS YEAR BUT LIKELY NOT AT SCALE.
ITS PERFORMANCE IS WHERE THEY ARE FOCUSED.
WHAT ELSE DO WE NEED TO KNOW. IAN:
IT'S THE ELEPHANT IN THE ROOM WHICH IS WHAT NVIDIA ANNOUNCED,
THEY HAVE THE NEW BLACKWELL ARCHITECTURE AND THEY WERE
FORCED TO BASICALLY ADMIT YESTERDAY WE DON'T KNOW HOW WE
WILL COMPARE TO THAT AND THE INFLUENCE PEOPLE ARE TAKEN FROM
THAT IS YOU WON'T BE ABLE TO COMPARE. CAROLINE: IAN -- ED: IAN KING A VERY BUSY MAN. THE CPI REPORT WITH TREASURY
SECRETARY AND AI BOARD MEMBER LARRY SUMMERS COMING UP.
WE WILL BE RIGHT BACK THIS IS BLOOMBERG. ♪ ED: COINBASE AND CIRCLE PENNED
LETTERS TO SENATOR SCHUMER AND MCCONNELL URGING CONGRESS TO
ENACT A COMPREHENSIVE REGULATORY FRAMEWORK FOR
STABLECOINS AND DIGITAL ASSET MARKET STRUCTURE ONE WEEK AFTER
THE U.S. APPEALS COURT REVIVED A LAWSUIT
AGAINST COINBASE ACCUSING THE CRYPTOCURRENCY EXCHANGE OF
FACILITATING THE SALE OF UNREGISTERED SECURITIES.
JOINING US IS THE CHIEF POLICY OFFICER AT COINBASE.
LET'S START WITH THE SUIT OR THE REVIVAL OF THE SUIT LAST
WEEK AND GET YOUR IMMEDIATE RESPONSE TO IT. >> THE SUIT YOU ARE TALKING
ABOUT IS A PRIVATE ACTION THAT HAS GONE INTO APPEALS.
WE DID QUITE WELL AT THE TRIAL LEVEL.
SO WE LOOK FORWARD TO GOING TO DISTRICT COURT AND SORTING
THOSE OUT. THE BIG ISSUE IS LITIGATION
REGARDING THE SEC AND WE FEEL GOOD ABOUT WHERE WE ARE ON THE
MAJOR PILLARS OF THE SEC'S CASE AGAINST US GETTING KNOCKED OUT
AT THE EARLY STAGE IN THE TRIAL. WE LOOK FORWARD TO THAT PROCESS.
>> WE ARE GOING TO TALK ABOUT YOUR RELATIONSHIP WITH TC IN
THE REGULAR TORY PATHWAY BUT ONE THING YOU REFLECTED ON LAST
YEAR IS IN YOUR INDUSTRY WE CONTINUE TO REGULATE THROUGH
LAWSUITS. WIT -- WOULD YOU SAY THAT'S A
FAIR STATEMENT AND IN THE CONTEXT OF THE CONSUMER SUIT
AND THE SEC THAT'S WHAT'S HAPPENING STILL? FARYAR:
ABSOLUTELY. OUR COMPANY GOAL IS TO GET
CLARITY. THE RIGHT WAY TO REGULATE
PARTICULARLY THE U.S. IS GOOD TO BE A DIGITAL ASSET
TECHNOLOGY IS FOR CONGRESS AND THE ADMINISTRATION TO DO WHAT
THEY SAY THEY WANT TO DO WHICH IS CREATE COMPREHENSIVE
FRAMEWORKS AROUND THE MARKETS AND STABLECOIN ISSUANCE.
I THINK WE CAN DO IT ON A BIPARTISAN BASIS AND WE HOPE
OUR LETTER IS ENCOURAGING OF THAT TO HAPPEN. ED:
YOU'VE WRITTEN THIS LETTER, WHY? >> WE HAVE SHARED TRAJECTORY
FOR LAW ENFORCEMENT. SPECIFIC POWERS THE TREASURY
SHOULD HAVE AND WE ARE SUPPORTIVE OF BUT WE ALSO WANT
TO REMIND EVERYONE THE BIG PICTURE IS WE NEED THE INDUSTRY
TO GROW IN THE UNITED STATES REFLECTING U.S.
VALUES AND OTHER U.S. LAWS. THE BIGGER THE U.S.
INDUSTRY IS IN THE MORE COMPREHENSIVE IT IS IN TERMS OF
DEFINING CRYPTO GLOBALLY THE BETTER IT IS FOR AMERICAN
NATIONAL SECURITY. >> THE LAWSUITS WE DISCUSSED IN
THIS INITIATIVE IS YOU'RE TRYING TO MAKE EVERYONE FEEL
BETTER, THAT -- LET'S BE HONEST, SAM BANKMAN-FRIED WAS A
BIG STORY THE LAST WEEK. HIS SENTENCING, THAT'S YOUR
JOB, ARE YOU MAKING ANY PROGRESS IN CONVINCING A WIDE
RANGE OF PEOPLE THAT THIS IS A CLEANER INDUSTRY THAT'S MAKING
PROGRESS? FARYAR: ABSOLUTELY.
MUCH OF THE BAD ACTION WE SAW WERE OFFSHORE.
FOR A LOT OF PEOPLE IT SURPRISES THEM THERE IS A
DIVIDING LINE BETWEEN THE U.S. INDUSTRY AND THOSE OFFSHORE
REGULATION. AT THE END OF THE DAY 52
MILLION AMERICANS HAVE BOUGHT CRYPTO PER THE AMERICAN PEOPLE
VOTED WITH THEIR FEET AND THEIR POCKETBOOK SO THEY WANT TO
UPDATE THE SYSTEM WITH THE CRYPTO ECONOMY AND REGULATION
TO KEEP UP WITH THAT. THERE'S A BIG GAP BETWEEN
POLICYMAKERS AND THE PUBLIC AND I THINK ONCE THE PEOPLE SEE HOW
MANY AMERICANS HAVE PARTICIPATED I THINK THEY WILL
UNDERSTAND. >> WE WERE AWARE OF SOME
LAWMAKERS THOUGHTS ON YOUR INDUSTRY.
IF THERE IS ONE AREA OF LINGERING CONCERN IT'S ABOUT
THE USE OF CRYPTO WHICH IS A BROAD TERM NOW IN FINANCE OR
WHITE-COLLAR CRIME. HOW MUCH PROGRESS ARE YOU
MAKING GETTING D.C. ON BOARD TO WORK TOGETHER ON
THAT FRONT? >> I THINK THE DEPUTY SECRETARY
SAID IT WELL THE TRADITIONAL FINANCIAL SECTOR IS BY FAR THE
LARGER THREAT. THAT'S HER MOST OF THE ILLICIT
ACTIVITY OCCURS. THEY LOOK AT CRYPTO AS AN AREA
OF POTENTIAL FUTURE EMERGENCE. AND THE AMOUNT OF BAD ACTIONS
IN CRYPTO IS TOO MUCH, COMPANIES LIKE OURS FOLLOW-UP
THE SAME RULES TRADITIONAL FINANCE DOES.
THE SECRECY ACT, REGULATED AND SO ON.
I THINK THOSE WHO KNOW KNOW THE INDUSTRY IS A GOOD ACTOR. >> IT'S CLEAR WHAT YOU WANT BUT
WE HAVE THIS HOUSE FINANCIAL SERVICES COMMITTEE PIECE OF
LEGISLATION, NO TRACTION THERE. WHY IS THERE NO TRACTION REALLY?
>> IT'S RARE FOR THEM TO PASS BILLS THROUGH TWO DIFFERENT
MINIS WITH STRONG BIPARTISAN VOTES. ANY LEGISLATION DONE IS GOOD BE
HARD TO DO BUT IF YOU TAKE A STEP BACK AND REALIZE YOU'VE
GOT DEMOCRATS AND REPUBLICANS COMING TOGETHER TO UNDERSTAND
DIGITAL ASSETS. I THINK THAT'S EXCITING. >> CHIEF POLICY OFFICER GREAT
DISCUSSION HERE IN SAN FRANCISCO. ED:
WE'VE -- CAROLINE: WE'VE GOT TO TURN BACK TO THE MICRO PICTURE.
HOTTER THAN EXPECTED THIRD STRAIGHT TIME THAT INFLATION
PRESSURES ARE COMING IN FASTER MONTH ON MONTH.
THIS IS AFFECTING THE MARKET. CHECK OUT WHERE WE ARE SEEING
BOND MARKETS. YIELDS OF THE HIGHEST SO FAR
THIS YEAR UP SIGNIFICANTLY HIGHER LOOKING AT THE TWO YEAR
YIELD SOME 18 BASIS POINTS. SOME OF THE KEY OUTPERFORMER'S.
META-OUTPERFORMING. AS WE SEE CHIPMAKERS MORE
BROADLY SINKING BUT I'M LOOKING AT THE BLOOMBERG DOLLAR INDEX
CURRENTLY UP SOME 8/10 OF A PERCENT.
THIS IS AS WE SEE THE BLOOMBERG DOLLAR INDEX AT ITS HIGHEST
SINCE NOVEMBER OF LAST YEAR SO DOLLAR HIGHEST WE'VE SEEN THIS
YEAR. YIELDS HIGHEST SINCE WE'VE SEEN
THIS YEAR. PUTTING IT INTO CONTEXT WE ARE
STILL NEAR THE HIGHEST FOR EQUITY WAGE MARKS WE'VE SEEN ON
RECORD. WHAT IS THE TAKEAWAY OF THE CPI
PRINT? WHAT IS THE FED DO IN TERMS OF
RATE CUTS. HIS JUNE ON THE TABLE.
SO MUCH MORE TO DISCUSS NEXT WITH DAVID. DAVID:
I'M DAVID WESTIN WE ARE JOINED BY LARRY SUMMERS OF HARVARD.
GREAT TO HAVE YOU WITH US ON SHORT NOTICE.
WE'VE BEEN TALKING ABOUT INFLATION ON WALL STREET WEEK
FOR SOME TIME. YOU'VE BEEN WARNING ABOUT IT.
WHAT YOU MAKE OF THE NUMBERS WE SAW TODAY? LARRY:
I WAS NOT HUGELY SURPRISED BY THE NUMBERS.
IN AN ECONOMY THAT'S GROWING FASTER WITH AN UNEMPLOYMENT
RATE THAT HAS A THREE HANDLE IN THE PRESENCE OF MASSIVE AND
GROWING BUDGET DEFICITS AND EPICALLY EASY FINANCIAL
CONDITIONS, THE IDEA INFLATION WOULD REMAIN ROBUST OR
ACCELERATE SHOULD NOT BE A SURPRISE TO ANYONE.
THAT'S WHAT THE DATA SUGGESTS. IT WAS NOT MERE SOME OBSERVER
FOR SUPER CORE INFLATION THAT IS TAKING OUT THE TRANSITORY
STUFF AND BY THAT MEASURE ABOVE 6% RATE AND THE THREE-MONTH
RATE EXCEEDS THE SIX-MONTH RATE. AND THAT EXCEEDS THE ONE YEAR. THIS CONFIRMS THE IDEA OF THE
NEUTRAL RATE IS WAY ABOVE THE 2.6% LEVEL THAT THE FED HAS
BEEN USING AS A NORTHSTAR. IN MY VIEW IT PUTS BACK ON THE
TABLE IT'S STILL NOT WHAT I WOULD EXPECT BUT YOU HAVE TO
TAKE SERIOUSLY THE POSSIBILITY THAT THE NEXT RATE MOVE WILL BE
UPWARDS RATHER THAN DOWNWARDS AND ANYTHING COULD HAPPEN.
MARKETS COULD CRASH, INDICATORS COULD TURN DOWN BUT ON CURRENT
FACTS A RATE CUT IN JUNE IT SEEMS TO ME WOULD BE A
DANGEROUS AND EGREGIOUS ERROR COMPARABLE TO THE ERRORS THE FED WAS MAKING IN THE SUMMER OF
2021 WHEN IT JUST DID NOT GET THE THREAD. ON INFLATION. DAVID:
CHAIR JAY POWELL HAS TALKED ABOUT SPECIFICALLY.
ARE THERE ABERRATIONS YOU SEE IN THIS DATA.
YOU'VE SOME PEOPLE SAYING THIS IS REALLY HOUSING AND AUTO
INSURANCE. THERE ARE A COUPLE OF OUTLIERS.
IS THAT RIGHT? >> YOU CAN ALWAYS FIND
PARTICULAR INDICATORS, THAT ARE UP OR DOWN.
WHEN YOU ARE MAKING UP A STORY MONTH AFTER MONTH THAT'S A
PROBLEM. WHEN COMMODITY PRICES ARE
SPIKING AND THOSE ARE BEING TAKEN AS A MARKET INDICATOR OF
INFLATION EXPECTATIONS, WHEN BREAKEVENS HAVE RISEN, WHEN THE
POLITICAL ECONOMY OF THE COUNTRY IS HEAVILY ABOUT
INFLATION TRYING TO DISMISS IT ON AN INDICATOR BY INDICATOR
BASIS, IS IT AN UP -- IS AN ODD THING TO DO. A TECHNICAL SUBJECT PRICED IN
FOR HOUSING. I DON'T THINK THERE ARE MANY
AMERICANS WHO FEEL LIKE HOUSING IS BECOMING MORE AFFORDABLE
THESE DAYS. WE REALLY DON'T. SO TO ARGUE THAT SOMEHOW
HOUSING ISN'T A SOURCE OF INFLATION PSYCHOLOGY SEEMS TO
ME TO BE QUITE A SURPRISING VIEW TO TAKE. WHY ARE WE THINKING ABOUT RATE
CUTS WHEN THE ECONOMY IS BELOW WHAT THE
FED THINKS IS THE NORMAL UNEMPLOYMENT RATE. WHEN THE ECONOMY IS GROWING FASTER ABOVE TARGET AND
PLAUSIBLY ACCELERATING, THE FED HAS ONCE AGAIN IN IMPORTANT
RESPECTS LOST ITS WAY OVER THE LAST SIX OR NINE MONTHS IN THE
SAME WAY MAKING POLICY AND MAKING FORECASTS BASED ON HOPE
RATHER THAN ON A HARDHEADED LOOK AT REALITY. I THINK THAT THE FED DID A GOOD
JOB OF CLEANING UP ON THE ERRORS THEY HAD MADE IN 2021.
AND I THINK IT IS REASONABLE TO THINK THAT THEY WILL PAVE IT
OFF OF THE ERRORS THEY MADE LAST FALL THAT LED MARKETS TO
BE LUDICROUSLY EXPECTING SIX CUTS THIS YEAR.
AND I AM HOPEFUL THAT THAT WILL HAPPEN. BUT I THINK THE FED NEEDS TO LEARN SOME IMPORTANT LESSONS
FROM THIS EXPERIENCE. I'LL SAY ONE OTHER THING IF I
COULD. THERE'S BEEN A LOT OF TALK
ABOUT 1995 AS SOME KIND OF USEFUL ANALOGY. I THINK NOT. THE UNEMPLOYMENT RATE IS 5.6%
IN 1995, EQUITY MARKETS HAVE SHOWN BY THE FACT THEY MORE
THAN DOUBLED SUBSEQUENTLY WERE NOT FROTHY PARTICULARLY IN 1995.
WE HAD JUST COME OFF OF A MAJOR PROGRAM OF DEFICIT REDUCTION
RATHER THAN BEING IN A PROGRAM OF UNPRECEDENTED FISCAL
EXPANSION. AND WE HAD REALLY CLEAR
EVIDENCE OF A KIND WE DON'T HAVE NOW OF PRODUCTIVITY
ACCELERATION. AND INTEREST RATES WERE HIGHER
THAN THEY ARE RIGHT NOW. SO THE CASE THAT SOMEHOW THIS
MOMENT LOOKS LIKE 1995 AND THAT'S A REASON FOR CUTTING IS
SOMETHING THAT I FIND INEXPLICABLE. ANOTHER THING THAT SEEMS TO ME
IS PROBLEMATIC IS THE NOTIONS THAT ARE INCREASINGLY ROOTED
ABOUT THAT THE FED IS GOING TO SLOW QT.
OF COURSE ONE OF THE THINGS THAT TODAY'S MOVEMENTS IN
INTEREST RATES, THE INTEREST RATES MOVES THAT WE SEE OVER THE LAST MONTH MEAN IS THAT THE
FED EFFORTS TO DO PERRY TRADES IN THE BOND MARKET HAVE PROVEN
TO BE EXTREMELY EXPENSIVE. FOR TAXPAYERS.
AND THE LENGTH OF TIME FOR WHICH THE FED IS GOING TO BE
SHOWING ANNUAL LOSSES OR MARK TO MARKET BASIS, LARGE BALANCE
SHEET LOSSES, THAT LOOKS LIKE IT IS LONGER THAN WE THOUGHT
SOME MONTHS AGO. WE NEED A FED THAT STAYS
FOCUSED ON WHAT IS VERY CLEARLY THE FOCUS OF THE AMERICAN
PEOPLE WHICH IS PRICE STABILITY AND I'M AFRAID THERE ARE SOME
SIGNS IN THE LAST FEW MONTHS THEY HAVE LOST THEIR FOCUS IN
FAVOR OF MORE AMBITIOUS ECONOMIC THEORIES ABOUT
PREEMPTING SLACK THAT'S NOT HAPPENING OR SOME SUCH. >> YOU ARE THE FIRST TO WARN US
THAT THINGS CAN CHANGE. WE CAN'T PREDICT WITH HIM
HAPPEN IN THE FALL NEXT YEAR. YOU THINK IT'S DEFINITELY A
MISTAKE FOR THE FED TO CUT IN JUNE.
BUT GIVEN WHERE WE ARE RIGHT NOW AND WHAT YOU KNOW RIGHT NOW
IF YOU HAD TO MAKE A DECISION WILL WE SEE ANY CUTS THIS YEAR
AND WHAT'S THE LIKELIHOOD OF AN INCREASE. LARRY:
JUST TO QUIBBLE WITH WHAT YOU SAID, I SAID ON CURRENT FACTS I
SEE NO CASE FOR A CUT IN JUNE. BUT FACTS CAN CHANGE.
INFLATION INDICATORS COULD COME IN MUCH LOWER THAN MOST OF US
ARE EXPECTING. THE ECONOMY COULD TURN DOWN. SO NEVER MAKE ABSOLUTE JUDGMENT
ABOUT POLICY SEVERAL MONTHS FROM NOW BECAUSE ALL KINDS OF
SURPRISES COULD HAPPEN. I THINK THE ODDS ARE THAT THE
NEXT RATE CUT WILL BE DOWN RATHER THAN UP.
BUT I THINK YOU HAVE TO ASSIGN A GREATER PROBABILITY TO THE NEXT RATE MOVE BEING UP THEN
YOU DID SEVERAL MONTHS AGO. I DON'T KNOW WHETHER IT'S 15% OR 25% BUT SOMEWHERE IN THAT
RANGE IS WHAT I WOULD SAY FOR THE NEXT RATE CUT UP.
I STILL THINK THE ODDS PROBABLY FAVOR ANOTHER RATE CUT THIS
YEAR. BUT NOT BY VERY MUCH AND NOT BY
AS MUCH AS IS PRESSED INTO THE MARKETS EVEN AFTER THE
ADJUSTMENT THAT WE HAVE SEEN. SO IN REALITY, MARKETS ARE
ADJUSTING TO REALITY. THE FED IS ADJUSTING TO REALITY
BUT I THINK THE PROCESS IS SLOWER THAN WOULD BE IDEAL.
DAVID: DOES THE FED HAVE THE POWER TO
GET THEIR ARMS AROUND INFLATION AT THIS POINT THROUGH MONETARY
POLICY OR THERE ARE OTHER FACTORS LARGER THAN WHAT THEY
CAN AFFECT. >> I THINK THE FED HAS
CONSIDERABLE INFLUENCE OVER INFLATION EXPECTATIONS WHICH
ARE AN IMPORTANT DETERMINANT OF SUBSEQUENT INFLATION AND
MONETARY RESTRAINT DOES INFLUENCE THE ECONOMY WHICH
FEEDS THROUGH INTO THE INFLATION PROCESS.
WE OUGHT TO BE DOING EVERYTHING WE CAN ON THE SUPPLY SIDE
ANYTIME ANYBODY SEES IT A MONOLITH WE OUGHT TO BE GOING
AFTER IT. I AM ALL FOR EFFECTIVE
COMPETITION POLICY THAT RESTRAINS PRICE INCREASES.
I THINK THE MOST IMPORTANT COMPETITION POLICY IS
MAINTAINING ECONOMIC OPENNESS. AND ALLOWING COMPETITION FOR
U.S. GOODS FROM LESS EXPENSIVE FOREIGN GOODS. THAT'S THE MOST IMPORTANT
COMPETITION POLICY, THE MOST IMPORTANT ANTI-GOUGING POLICY,
THE MOST IMPORTANT CONTAIN EXCESSIVE PROFIT MARGINS POLICY
AND SO I AM SORRY TO SEE THE EXTENT OF BIPARTISAN CONSENSUS
IN FAVOR OF POLICIES THAT ARE RELATIVELY PROTECTIONIST. DO
PEOPLE REALLY THINK THERE IS AN OVERWHELMING DANGER BUT WE WILL
HAVE EXCESSIVE PRODUCTION OF BATTERIES IN THE WORLD GIVEN
CLIMATE CHANGE? DO PEOPLE REALLY THINK THERE IS
AN OVERWHELMING DANGER THAT WE WILL HAVE AN EXCESSIVE EFFORT
TO USE SOLAR POWER. IF NOT, I WORRY IN INFLATIONARY
TIMES ABOUT POLICYMAKERS DECRYING THE GROWTH OF CAPACITY.
THERE'S BEEN A CERTAIN AMOUNT OF THAT ON SECRETARY YELLIN'S TRIP TO CHINA AND IN U.S.
RHETORIC ON A BIPARTISAN BASIS. WE SHOULD COMPLEMENT THE FED
WITH FISCAL POLICIES THAT ARE ORIENTED TOWARDS RESTORING
CREDIBILITY, RECOGNIZING THE DEFENSE SPENDING THAT'S GOING
TO NEED TO COME AND ALLOWING FOR IT AND WITH MICROECONOMIC
POLICIES THAT ARE COMPETITION BLOATED, THE MOST IMPORTANT OF
WHICH IS OPENNESS TO THE GLOBAL ECONOMY WITH RESPECT TO GOODS, WITH RESPECT TO LABOR, WITH
RESPECT TO THE FLOW OF CAPITAL. DAVID: YOU MENTIONED 1995 AND
PRODUCTIVITY. IS THERE HOPE WE COULD GET HOPE
FOR INFLATION BECAUSE OF GENERATIVE AI.
WE HAD JAMIE DIMON THIS WEEK SAYING IT'S LIKE A STEAM ENGINE.
IS THERE A PROSPECT THAT WE COULD GET SOME DOWNSIDE RISK
WITH INFLATION FROM GENERATIVE AI? LARRY:
I THINK IT IS A QUESTION ABOUT HORIZONS. AGAIN, I NEVER MADE COMPLETELY
CONFIDENT PREDICTIONS BECAUSE THE ONE THING WE KNOW ABOUT THE
ECONOMY IS THAT IT SURPRISES US. I THINK IT'S POTENTIALLY A VERY
IMPORTANT FACTOR IF YOU LOOK THREE OR FOUR YEARS OUT.
I WOULD BE VERY SURPRISED IF IT WAS AN IMPORTANT FACTOR IN THE
NEXT YEAR OR TWO. I THINK THE FACT OPENAI -- NOT
OPENAI, ARTIFICIAL INTELLIGENCE IS A POTENTIAL COMPETITOR FOR
COMMENTATORS LEADS THIS TO KIND OF HAVE MORE SALIENCY IN
COMMENTARY THAN IT OTHERWISE WOULD.
SO FOR THE LONG RUN I THINK THIS COULD BE A HUGE EVENT FOR
INFLATION, A HUGE EVENT FOR PRODUCTIVITY GROWTH BUT I WOULD
BE PRETTY SURPRISED IF THE EFFECTS WERE REALLY LARGE IN
THE SHORT RUN. DAVID: I THINK YOU FOR SAYING
COMMENTATORS AND NOT INTERVIEWERS. ONE LAST QUESTION IMPORTANT TO
BLOOMBERG AUDIENCES, FINANCIAL CONDITIONS YOU REFERRED TO THE
SIGNALING OF CUTS LAST FALL. FINANCIAL CONDITIONS HAVE BEEN
OFF TO THE RACES. TO WHAT EXTENT DO YOU THINK
THEY PLAYED A SIGNIFICANT ROLE IN THE NUMBERS WE GOT TODAY?
LARRY: I THINK THERE'S NO QUESTION
THAT THE $12 TRILLION OF WEALTH HAVE BEEN CREATED, HAVE
CONTRIBUTED TO GREATER SPENDING WHICH CONTRIBUTED TO THE
INFLATIONARY PRESSURE. I THINK THE AVAILABILITY OF
CREDIT HAS HAD SIMILAR KINDS OF EFFECTS.
I THINK IT'S HARD TO QUANTIFY PRECISELY BUT THERE'S NO
QUESTION THAT FINANCIAL CONDITIONS HAD A ROLE. SOMETIMES THE INDICATORS ARE
DIFFERENT INDICATORS ARE POINTING IN DIFFERENT
DIRECTIONS. THIS TIME ACTIVITY IS
SUPERFAST. UNEMPLOYMENT IS VERY LOW. FISCAL IS HIGHLY EXPANSIONARY,
FINANCIAL CONDITIONS ARE VERY LOOSE.
AND ON THE GROUND INFLATION MEASURES ARE ABOVE TARGET AND
POSSIBLY ACCELERATING. WHAT IS THE THEORY OF A RATE
CUT INTO THAT CONFIGURATION. I DON'T THINK THERE IS ONE. I THINK THE FED HAS MUNICATION
CHALLENGE IN KEEPING IT ON THE TABLE BECAUSE ANYTHING CAN
HAPPEN. IT CAN BE FINANCIAL ACCIDENTS,
THERE CAN BE SUDDEN CHANGES REDUCED TO EMPLOYMENT.
THERE COULD BE GLOBAL DEVELOPMENTS.
NEVER RULE ANYTHING OUT. I THINK THERE IS A
COMMUNICATION CHALLENGE AROUND THE FACT IN THIS SCENARIO.
WE DO NOT NEED RATE CUTS RIGHT NOW. DAVID: THAT'S A LARRY SUMMERS OF
HARVARD. BACK TO YOU. ED:
LET'S GET A QUICK CHECK IN ON MARKETS.
THROUGHOUT THE COURSE OF THAT INTERVIEW WE PAIRED DECLINES
FROM A SESSION LOW 1.3% TO AROUND 1% WE ARE TREADING WATER
AT THE START OF THIS WEEK TO THAT HOT CPI PRINT.
NOT SEEING ANY MOVEMENT IN THE SHORT END OF THE CURVE IN THE
BOND MARKET WITH CPI FRONT AND CENTER.
IN TERMS OF THE NEWS CYCLE WE CONTINUE TO MOVE INDIVIDUAL
NAMES. AI AND THE IMPACT ON INFRASTRUCTURE BILL WHICH LARRY
SUMMERS WAS TALKING ABOUT THERE CONTINUES TO BE STORIES IN
TERMS OF INDIVIDUAL NAMES WE ARE LOOKING AT.
THREE MAIN STORIES IN THE CHIP SPACE TODAY AS THE DIRECTOR
SWITCHES UP THE BOARD. ALPHABET SHARES DOWN 1%.
HELPING THE CLOUD NET EVENT WHERE THEY DEMONSTRATED THE
GEMINI PRO 1.5 GENERATION MODEL IS READY FOR THE ENTERPRISE USE
CASE AND WE DUG INTO THAT THROUGHOUT THE SHOW. DOWDY THREE COMING IN THE THIRD
QUARTER. THE MARKET NOT TRADING IT MUCH.
META UP HALF A PERCENTAGE POINT, INTRODUCING THEIR OWN
AI, THEY'RE ARE STARTING TO DEPLOY, THAT SHARE HAS PUSHED
HIGHER SINCE THAT NEWS CAME OUT. THOSE OF THE PUBLIC MARKETS.
LET'S TALK ABOUT THE PRIVATE MARKETS. SPACEX IS PRICED. STARLING SATELLITE BUSINESS
STILL BURNING THROUGH A LOT OF CASH. SOURCES FAMILIAR WITH THE FINANCES OF THE WORLD'S MOST
VALUABLE STARTUP SAY STARLINK HAS LOST AT TIMES AS MUCH AS
$450 ON EACH OF THE MILLIONS OF GROUND TERMINALS IT SHIPS.
AND THE COMPANY'S TOP BRASS THAT THE BUSINESSES IN QUOTES
FOR TRAJECTORY. BUT COULD STARLINK BE TURNING
THE CORNER. >> THIS IS WHERE I ASK FOR YOUR
EXPERTISE ON THIS. THE JOY OF BEING A PRIVATE
COMPANIES YOU DON'T HAVE TO MAKE PUBLIC STATEMENTS ABOUT
YOUR FINANCES THIS IS A COMPANY THAT PROBABLY HAS TO RAISE
MONEY IN THE PRIVATE FIELD. ULTIMATELY WHAT IS REVENUE
DOING AT THE SAME TIME AS PROFITABILITY IS STILL NOT
QUITE THERE. ED: WE KNOW THIS IS A KEY YEAR
WHERE REVENUE FROM STARLINK, CONSOLATION BASED INTERNET
OUTPACES THE LAUNCH BUSINESS BUT WHAT SOURCES ARE TELLING US
IS SPACE X CAN BE QUITE SELECTIVE IN THE FINANCIALS IT
PUTS FORWARD WHEN THEY DO A FUNDING ROUND OR INVESTORS
ASKED. THEY'VE ZEROED IN ON MANUFACTURING JUST LIKE TESLA
DID TO IMPROVE THE MANUFACTURING PROCESS FOR THE
SATELLITES THEMSELVES AND THE GROUND RECEIVERS.
THE MARGINS ARE IMPROVING AND WHAT I HEARD FROM SOURCES IS AT
THE END OF 2023 THEY HIT THIS PROFITABLE METRIC AND THAT'S
CONTINUED IN A MORE MEANINGFUL WAY INTO 2024. CAROLINE:
IT IS NOTABLE, A GREAT STORY YOU'VE WRITTEN WITH COLLEAGUES
AS WELL, THAT THE CFO ISN'T HINTING THERE WILL BE AN IPO
ANYTIME SOON. YOU WANT TO BE SEEING WHEN
STARLINK IS SUCH A LINCHPIN FOR SPACE X IN TERMS OF SEPARATING
OFF AS A BUSINESS. >> THE SIMPLE EQUATION IS THIS,
OF THE LAUNCH AT STARLINK UNITS NEED TO BE PROFITABLE AND THAT
PROFITABLE FUND DEVELOPMENT OF STARSHIP WHICH WILL GET
HUMANKIND TO MARS. LET'S KEEP THE CONVERSATION
GOING. JOINING US IS A MANAGING
PARTNER , BUT ALSO TRANSITIONING GENERAL PARTNER
AT MANHATTAN VENTURE PARTNERS. THAT'S A FIRM INVESTING IN
SPACE X ACROSS MULTIPLE FUNDS UNDER THEIR MANAGEMENT.
YOU'VE INVESTED AND TRACKED THIS COMPANY FOR A LONG TIME.
HOW ZEROED IN ARE YOU ON STARLINK AND ITS PROFITABILITY? ANDREA:
I WOULD SAY OVERALL AS WE LOOK AT SPACE X VALUED AT NORTH OF
$180 MILLION AT THIS POINT IN TIME AND HAS DEPLOYED 5600
ACTOR SATELLITES WHICH IS TREMENDOUS.
THOUGH OBVIOUSLY BELOW THE SINGLE TARGET OF TENS OF
THOUSANDS OF SATELLITE THAT THEY CAN ACHIEVE. OVERALL, WHAT THAT SAYS ABOUT
THE PROFITABILITY MARGIN CAN INCREASE BUT THE MONEY THEY
SPEND ON SATELLITES AND SPENDING MONEY ON GROUND HAS TO
CONTINUE DECREASING. WITH THAT BEING SAID WE KNOW
STARLINK WILL ALWAYS BE THIS AMAZING HARBINGER FOR ALL THE
LAUNCHES THEY ARE DOING. WE SAW THIS WEEK THAT SPACE X
CONTINUES TO BUILD GREAT MOMENTUM TO THEIR CUSTOMERS
WITH THEIR BANDWAGON TEST FLIGHTS AND INTENDING TO SEND
HALOS WITH ALL THEIR CUSTOMERS BUT WITH STARLINK THEY HAVE
REALLY BUILT THAT MOMENTUM, THEY CONTINUE REDUCING LATENCY
OTHERWISE THEY ARE IN A WORLD WHERE THEY SEE THAT CONSUMER
TRUST DIMINISH. >> WHAT ABOUT TRUST A VIEW, THE
PEOPLE WRITING THE CHECKS. WHEN YOU BEEN WRITING CHECKS AT
THE VERY BEGINNING OF SUCH A BUSINESS, IT WAS ALL ABOUT
MAKING THE VISION A REALITY LET ALONE PROFITABILITY BUT WHEN WE
SEE THE NUANCES PROFITABLE TERRITORY DOES IT WORRY YOU
PERHAPS SOME OF THEM ARE HERE AND NOW IT'S LIVING UP TO THE
SORT OF STATEMENTS. >> I WOULD SAY OVERALL THERE'S
BEEN TREMENDOUS GAINS HAPPENING AT SPACE X.
WHAT THEY'VE ACHIEVED, WE HAVE A LOT OF TRUST IN SPACE X
BECAUSE ELON AT THE HELM HAS ALWAYS BEEN KNOWN TO MAKE
BOISTEROUS STATEMENTS AROUND THE NATURE OF PROFITABILITY
GROWTH OF HIS COMPANIES. THE MOMENTUM AND THE TRUST WE
HAVE IS SHOWN BY WAY OF VARIOUS COMPONENTS OF CUSTOMERS ACROSS
BUSINESS AND WITH THAT BEING SAID WITH STARLINK WE HAVE SEEN
THE CONTINUE EXPANDING THEIR COVERAGE.
AS WE KNOW THERE'S A LOT OF ENTRANCE COMING INTO THE SPACE,
WHAT THEY ARE DOING WITH THEIR KUIPER PRODUCT FOR EXAMPLE.
OF COURSE ON A MUCH SMALLER SCALE THERE WILL BE A LOT OF
WORK DONE BUT TOOK SPACE X QUITE A LONG TIME TO GET TO THE
POINT WHERE IT IS. BUT OVERALL I WOULD SAY SPACE X
HAS SUCH A LEG UP IN COMPETITION BOTH TO MASTECH AND
INTERNATIONAL AND IT'S REALLY ELON AT THE HELM. >> REALLY SORT OF OPERATING AT
THIS SPACE X PRESIDENT SHE HAD A GREAT LINE ON A PODCAST
SAYING THERE'S PROBABLY 150 ROCKET CUSTOMERS OUT THERE.
THERE'S 8 BILLION POTENTIAL CUSTOMERS OF STARLINK.
WHAT DO THEY NEED TO DO NOT ONLY IN TERMS OF REVENUE
PROFITABILITY BUT EASE-OF-USE AND RELIABILITY TO MAKE SURE WE
SEE MORE THAN THE CURRENT USER BASE. >> OVERALL THEY HAVE TO
CONTINUE OPTIMIZING SATELLITE POSITIONING WITHOUT LIABILITY.
THEY HAVE TO IMPROVE THEIR GROUND INFRASTRUCTURE, THEY
HAVE TO ADDRESS TECHNICAL ISSUES PROPERLY AND BE RELIABLE
WITH THEIR CUSTOMER SERVICE. I DO SAY AMAZON OVERALL HAS HAD
A TREMENDOUS CUSTOMER SERVICE ARM AND AS THE PROJECT COMES IN
IN A NEW ENTRANCE TO THE SPACE OVERALL WE HAVE TO SEE THAT
SPACE X WILL KEEP UP WITH THAT RELIABILITY.
STARLINK THEY HAVE TO CONTINUE COVERAGE.
INVOLVE TARGETING SPECIFIC REGIONS BUT STILL HAVE
SATELLITE DEPLOYMENTS THAT ARE NECESSARY AND MARKETING THOSE
EFFORTS TO POTENTIAL SUBSCRIBERS.
WE KNOW THAT AS AMAZON CONTINUES , THEY HAVE A CAPTIVE
AUDIENCE OF POTENTIAL CUSTOMERS WHICH WILL MEAN INCREASING
COMPETITION ACROSS THE BOARD. ED:
SPACE X IS A FANTASTIC COMPANY, THE STARLINK TECHNOLOGY WE'VE
DISCUSSED ENDLESSLY AND THE FINANCIALS ARE WHAT THEY ARE.
THEY WILL BE PROFITABLE, THEY WON'T BE AND WE WILL GET HUMAN
CLIENTS TO MARS ON STARSHIP MAYBE.
YOU'RE AN INVESTOR, THERE IS INTENSE INTEREST. HOW DIFFICULT
IS IT TO GET A HOLD OF SPACE X AND SAY WANT TO INVEST IN YOUR
COMPANY. WHAT IS THE COMPETITION LIKE TO
HAVE A PIECE OF THAT PIE. >> I WOULD SAY IT'S A VERY
COMPETITIVE TABLE. THE EQUITY LEDGER OF SPACE X IN
GETTING INVOLVED AS AN INVESTOR YOU HAVE TO MOVE TO BE A VALUE
ADDED BACKER AND BE WILLING TO STAY WITH THEM OVERALL.
WITH THAT BEING SAID BECAUSE OF THE ENORMOUS AMOUNT OF CAPITAL
THAT SPACE X HAS RAISED TODAY YOU HAVE TO PROVE IF YOU WANT
TO BE AN INVESTOR IN SPACE X YOU ARE WILLING TO ALSO DEPLOY
QUITE A LARGE CHECK OF THE PRIVATE MARKET INVESTOR.
WITH THAT BEING SAID SPACE X HAS BEEN QUITE SELECTIVE AND
YOU WILL SEE THE NEWER INVESTORS THAT HAVE JOINED THE
TABLE ARE ONES THAT CAN REALLY WEIGH INTO THE COMPANY NOW WITH
A LARGE CHECK VALUE ADD AND MOST LIKELY BE THE SAME
INVESTORS WHO WILL ANCHOR THE COMPANY GOING INTO THE IPO AND
CONTINUE INVESTING ONCE THE COMPANY GOES PUBLIC IF AND WHEN
THAT HAPPENS. ED: GREAT TO CATCH UP AND TALK
SPACE X. AN ADDITIONAL THREE UNDER
MILLION DOLLARS SECURED AND FUNDING FOR HIS VENTURE FUND.
WE SIT DOWN WITH THE FOUNDER AND GENERAL PARTNER.
STAY TUNED, THIS IS BLOOMBERG TECHNOLOGY. PRIME MINISTER WILL BE HOLDING
A JOINT NEWS CONFERENCE LIVE AT 12:30 P.M. EASTERN TIME.
THIS IS BLOOMBERG. >> TOYOTA VENTURES HAS RAISED
$300 MILLION FOR HIS VENTURE FUND 150 MILLION FOR ITS
FRONTIER FUND AND 150 MILLION FOR ITS CLIMATE FUND.
JOINING US TO DISCUSS WHERE THEY WILL BE INVESTING IS THE
FOUNDER AND GENERAL PARTNER AND YES THEY ARE IN THE EARLY STAGE
VENTURE ARM OF TOYOTA WHICH HAS $8 MILLION IN ASSETS UNDER
MANAGEMENT. THEY ARE TALKING A LOT ABOUT
THAT FOR THE LAST YEAR IN THE CONTEXT OF EV OR NO EV.
THIS IS MORE MONEY FOR YOU TO PLAY WITH.
HOW INVOLVED IS THE MOTHERSHIP. IN JAPAN, IN EACH INVESTMENT
OPPORTUNITY YOU LOOK AT. >> I THINK OUR MISSION IS TO
DISCOVER WHAT'S NEXT FOR TOYOTA. >> THERE IS A DECOUPLING
BETWEEN WHAT THE CORPORATE PARENT IS DOING.
WE VIEW TOYOTA AS A LIMITED PARTNER.
WE ARE A VENTURE CAPITAL FUND AND THE START UP IS OUR
CUSTOMER AND SO THERE IS I THINK A HEALTHY DECOUPLING
BETWEEN WHAT WE ARE DOING WHICH IS INVESTING FOR THE VERY LONG
TERM, THE GOOD NEWS FOR US IS WE HAVE A VERY ENGAGED, A
THOUGHTFUL AND PATIENT LIMITED PARTNER IN TOYOTA AND THEY HAVE
CONTINUED TO SUPPORT US AND OUR CONNECTION WITH THE STARTUPS
THAT ARE BRINGING THE DISRUPTIVE INNOVATION TO THE
MARKET. >> A LOT OF THE LEGACY ARE IN A
VERY SIMILAR WAY AND THEY ARE LOOKING FOR SOMETHING TO ADD.
WITHIN THAT IS A HUGE RANGE. SOFTWARE, BATTERY TECHNOLOGY,
TOYOTA'S ARE FOCUSED ON HYDROGEN AS I UNDERSTAND IT.
JUST OUTLINE WHERE YOU ARE LOOKING. >> WE HAVE TWO FUNDS, ONE WHICH IS FOCUSED ON AI IN MOBILITY
AND ROBOTICS. FINTECH AND THEN OUR CLIMATE
FUND WHICH IS FOCUSED ON CARBON CAPTURE AND STORAGE.
RENEWABLE ENERGY, BATTERY ELECTRIC. EVEN FAR-REACHING TECHNOLOGIES
LIKE NUCLEAR FUSION. SO WE ARE REALLY DISCOVERING
WHAT IS NEXT FOR TOYOTA LOOKING IN PLACES THAT ARE OFTEN NOT
LOOKED AT BY A BIG FORTUNE GLOBAL COMPANY. >> A LOT OF ROBOTICS IN THERE
WHEN I'M LOOKING AT PORTFOLIO COMPANIES. WHAT ABOUT EXITS? ARE YOU ANTICIPATING THAT YOU
WILL BE ABLE TO SEE THE REAP -- REAP SOME REWARDS FROM THESE
INVESTMENTS THIS YEAR. JIM: WE OPERATE AS AN EVENT -- A
CAPITAL FUND. RETURNS ARE IMPORTANT.
WE ARE STRUCTURED ALONG A DECADE LONG GPL P TERM.
SO WE DO EXPECT TO SEE FINANCIAL RETURNS ALONG THE
WAY, WE ARE PATIENT. WE WORK WITH OUR STARTUPS EVERY
DAY TO SEE THEM COME UP WITH THEIR INNOVATIONS AND BRING
THEM TO MARKET, GROW THEIR VALUATIONS AND ULTIMATELY END
AN EXIT THAT WORKS FOR THEM. THE OTHER INVESTORS AND US AS
WE COUNT OURSELVES AMONG THOSE INVESTORS. CAROLINE:
HOW COMPETITIVE IS OUT THERE IN THAT SPACE? >> IT DEPENDS ON THE SECTOR. WE LOOK INTO DEEP TECH, AND
PLACES WHERE WE THINK THE WORLD IS GOING BECAUSE WE ARE SO
PATIENT. WE CAN ACTUALLY DEEP TECH THAT ARE NOT NECESSARILY RUNNING THE
TYPICAL EVALUATION BEING VERY -- POPPING IN VALUATION.
IN CERTAIN AREAS IN AI. CAROLINE:
STARTED YOUR CAREER AS A ROCKET ENGINEER, FASCINATING TO SEE IN
THIS AREA. THANK YOU SO MUCH FOR YOUR TIME.
WE WILL TALK ABOUT CHRISTIE'S VENTURE ARM.
THIS IS BLOOMBERG TECHNOLOGY. ♪ CAROLINE:
CHRISTIE'S VENTURES HAS NOW REACHED 10 INVESTMENT SINCE ITS
LAUNCH BY ADDING TWO NEW COMPANIES TO ITS PORTFOLIO. WE ARE NOW HERE WITH THEIR
GLOBAL HEAD ALONG WITH NICK ADLER.
YOU ARE INVESTING IN AREAS WHERE ART MEETS TECHNOLOGY.
TALK US A LITTLE BIT ABOUT SOME OF THESE INVESTMENT ROUNDS AND
HOW COMPETITIVE IT IS. >> THANK YOU FOR HAVING US.
ALWAYS A PLEASURE TO TALK HERE. AS YOU KNOW WE INVEST IN FOUR
AREAS OF TECHNOLOGY STARTING WITH FINTECH BECAUSE PEOPLE
THING -- WE'VE BEEN DOING THAT FOR 257 YEARS AS AN ART COMPANY.
WE STARTED PIONEERING TWO YEARS AGO.
AI MORE RECENTLY AND FINALLY WHEN CALLING HUMAN COMPUTER
INTERFACES OR HARDWARE. CHIPS ON A MACRO PLAY ARE
INTERESTING, THEY ALSO CONNECT PEOPLE IN INTERESTING WAYS. CONSERVE WORKS WITH
INSTITUTIONS LIKE MOMA AND THE SMITHSONIAN LIBRARY AND
ARCHIVES TO TRACK HOW THEIR CONSERVATION IS PROGRESSING.
ARE THEY HAVING SOME CRACK'S DEVELOP.
ALL OF THOSE ARE IMPORTANT IN CHIPS.
CHIPS ARE VERY INTERESTING INTERFACE.
THAT'S INTRIGUING FOR US TO INVEST IN. CAROLINE: TALK ABOUT NFC CHIPS. WHY? NICK:
IT'S A CATEGORY WHETHER IT'S THE RARITY OR THE TRAITS, BEEN
A COLLECTOR, WELL-KNOWN KNOWN AS A DESIGNER. WHEN HE AND I CONNECTED WE SAW
THIS WORLD 2024 HAS A 20 $50 MILLION
MARKET. 10% OF RETAIL RIGHT NOW. THEY WANT TO FLEX IT.
THEY WANT TO LEARN MORE ABOUT IT. >> YOU'RE ALSO ON THE
INTERSECTION OF WEB THREE AS WELL.
YOU'VE GOT SUCH AN INTERESTING CAREER BACKGROUND IN LAW HAVING
SET UP FILM FESTIVALS. WHO IS BIG IN THE NFT SPACE.
WHY PAY NFC CHIPS. >> WE STARTED BY THINKING BUT
HOW COULD THESE PHYSICAL ITEMS MANIFEST THEMSELVES IN THE
DIGITAL WORLD. ABOUT DESIGNERS WORKING TO
DESIGN DIGITAL NFT IS AS CLOTHING.
HOW CAN THEY WORK WITH GAMES LIKE CALL OF DUTY OR GTA.
THE MORE WE EXPLORE DIGITAL THE MORE WE REALIZED THAT'S ONE OF
THE BEAUTIFUL THINGS THAT THEY OFFER SO THIS HAS JUST OPENED
UP A WHOLE WORLD FOR US TO EXPLORE. CAROLINE:
THEREIN LIES THE UNDERLYING TECHNOLOGY.
BACKING A HYPE CYCLE WHEN IT COMES TO CRYPTO.
HOW DO YOU SEE THE WOOD THROUGH THE TREES? DEVANG: WE LOOK AT IT FROM TWO
PARAMETERS. WE HAD A DUAL MANDATE, ONE WAS
A POTENTIAL FOR RETURNS AND WHERE THE TRADITIONAL VENTURE
WOULD LOOK LIKE. WE LOOK AT INVESTMENTS AS
POTENTIAL AVENUES OF BRINGING NEW CAPABILITIES.
SIMILAR TO WHAT THE PREVIOUS HOST WAS TALKING ABOUT. OUT OF THE 10 INVESTMENTS FIVE
OF THEM WERE ACTIVELY INSIDE OF CHRISTIE'S.
WE CAN BRING THEM TO CUSTOMERS. THE FEEDBACK YOU SAW BRINGING
THOSE TECHNOLOGIES. THIS YEAR, THAT GIVES US A REAL
POSITIVE TECHNOLOGY WITHOUT DEPLOYING CAPITAL AND RESOURCES.
CAROLINE: FASCINATING HOW YOUR RELATIONSHIP BUILT AROUND THAT
PARTICULAR EVENT. WE THANK YOU. THAT'S IT FOR BLOOMBERG
TECHNOLOGY. ED:
