And after yesterdays selloff where we saw bond market selloff and the yields higher and the pressure on the tech stocks, we have a reverse. Some of the big tech heavyweight on doing a lefty doing the lifting on the day. The adp number showing that there is softening in the labor market and maybe the Federal Reserve and maybe the Federal Reserve isnt going to have to go so hard so fast. We are seeing big going flat on the day as the dollar comes down from what has been a rapid run up. Lets look at the individual players. We have seen tesla, the outperformer of the toys on the day. We are seeing palantir higher. It is getting close to clinching that important deal with the u. K. With the nhs. Zoom on the downside, one of the worst performers. It has been announced, some new products and analysts were critically overwhelmed when they try to compete with the microsoft. Lets go back to the crypto story. A jury has been selected, opening arguments are said to start today for sam brickman freeds trial. He is accused of orchestrating one of the biggest financial frauds in american history. Joining us is but not joining us as sonali basak. Joining us is sonali basak. Sonali we are just getting an idea of what the jury will look like here. You are looking at a nurse, a physician assistant, a social worker who is currently unemployed and has previously served on a jury before and you are looking also at folks who are retired Corrections Officers and other High School Graduates and a mix of people and a number of jurors that have been questioned here over the last 24 hours about whether they had preconceived notions about cryptocurrencies. In other parts of Sam Bankmanfrieds world like affective all truism. That is another thing the jury as to a sure there wont there would not be negative vibes coming from the jury with serious criminal counts being faced by Sam Bankmanfried. The jury has been selected and we know generally who these people are, what they do for a living. How they have been questioned. Opening arguments power are starting imminently. We will hear from the prosecution for the first time to lay out their argument and we dont know how to make been freed from we dont know how Sam Bankmanfried prepares to defend himself against the charges and we will hear from him in a series of opening remarks. Charlie he was pleading caroline he has pleaded not guilty. It is quite a change, sam by conferring Sam Bankmanfried, he is slimmer and he is changed from a here perspective but how has his demeanor changed . Sonali in a a lot of ways, a lot of people have talked about the way his appearance has changed and he was noticeably in her thinner. He is buying suits from acs at a 40 discount. He was no for the tshirt and flipflops and shorts but he is suited up as he enters court. We will see we dont know if he will testify. He is not expected to testify and what tone he would take if we would . Much more silent and we are not used to Sam Bankmanfried being so silent leading up to the charges. You remember how much he had taken to the media to describe what happened to ftx and since then, it is nothing but silence and it will be a telling trial and after the opening remarks, we will hear from witnesses and that will get very important as we know a number of his closest friends and colleagues over time are expected to testify. Caroline important for the individuals and for the industry, liquidity in the asset markets only have what it was before the fcx collapse ftx collapse. You will get the outlook. What will we talk about if not crypto . We are talking about ai and why that apple ceo tim cook decided to sell shares of apple . It seems to be timed with the we Sales Outlook and analysts are worrying about the stock valuation as a large premium to the nasdaq and u. S. Sales are likely to struggle. Of a percentthe nasdaq ist 3 10 up more than one percentage point percent where the nasdaq is up more than one percentage point. This is bloomberg. Caroline time for talking tech. Apple ceo tim took cook some apple shares in his biggest sale in two years. It is coming after he took a rare pay cut, around 40 . Intel is planning to make its unit into a standalone business and take it public, the programmable chip business will be a independent entity january 1 and this is part of the efforts to bring more value to wring more value from the company. The softbank founder, it was his first public appearance. The billionaire compared humans without ai to go fish in a ball, unable to process information like language so lets talk about this ai euphoria. Ai necessity. James fishback is with us. You were macro investing at Greenback Capital in level with your focus on all the ways in which he could get long ai, is it about Smaller Companies or Bigger Companies . James it is a real pleasure to be here. To his point, my name is fishback. I am the goldfish in this equation. I am trying to figure that out but the way to look at this is to look at some of the companies that have the best Balance Sheets, the best markets and existing user workflows and ecosystems and monetize all of that. At the risk up sounding like ge steve jobs at the risk of sounding like steve jobs, the types of companies are that you want to look at are the hyper scalars combat amplifiers of the technology that can deploy a duty existing users and devices and the innovators, those either developing or deploying those developing. These are not three separate companies in many cases. They are one company in several cases. Microsoft is one of them and google and amazon or others as well. It is a unique opportunity to own a strong cash flow generating businesses that operate caroline it really seems to be owned by the u. S. At this time. When you are thinking about what is happening with microsofts partnership with openai, how do you see these primitive these frenemys continuing . How do you does that accelerate . Is that the way you want to see deals being done . James that is what you want to see, you want to see key innovators of this Technology Like anthropic, have Strategic Partners in amazon and microsoft to deploy that technology. Microsoft, there are 65 Copilot Program is open access to 160 million enterprise users who can use it to expedite workflows in microsoft word, excel and powerpoint. You take users who are already used to microsoft word and the existing workflows they have and you are supercharging it. If i wanted to go to at fortune 500 company and tell them fishback ai and say it is the best word processor out there, i could not do that because i dont have that relationship. Microsoft has the relationships and the trust and they will drive value for enterprise players and they can drive Pricing Power longerterm. Caroline do you think there is a risk that any of these really big and in many ways, companies trying to fight the monopoly name becky is being thrown at them . Is there any rest they get displaced at the same time as the. Com boom and bust in the same way we see this is models eroded, are they ahead of the curve . James you are right . There is reason to be skeptical by what happened in early 2000 with the dotcom bubble. There are a couple key differences, one is valuation, the p valuations of the dotcom bubble was 52 times earnings, the average ai text out today has a pe around 25 times and that similar test simple comparison is to say nothing about the strong fundamental position these companies are in. They are 3 Free Cash Flow generative. They dont need to rely on debt and equity markets, a debt market that is seeing Rising Interest Rates every single day to find the aggressive to fund the aggressive r d behind this. Google with the mind and its internal operations to power discord and the thing i am most excited about is these Companies Already have existing users that they can deploy this new technology to overnight. You dont have to make a lot of assumptions here to see how powerful and how impactful this technology can be not just for the end user before the fundamental share prices. Caroline it has allowed the nasdaq to week reap in the awards reports. How we tame inflation, how do you think these big tech bets can withstand a higher for longer scenario . James it is a great question and there is no doubt about it, the macro picture over the past month has been challenging. Look at what has happened to 30 your treasury yields in the u. S. And the higher test the higher for longer hawkish narrative from the Federal Reserve. The ai view is not a multiquarter view, it is a multiyear view. If you look at these companies, they have the potential to compound and for microsoft, a compounded 25 over the past decade yearoveryear despite the macro volatility in the real economy and the financial system. At the same time, it is important to look at with this opportunity presents longterm. A key assumption in the space that higher rates is negative for this type of narrative for big tech going higher. That cannot be further from the truth, Companies Like apple that issue 30 year debt at a mid to Percentage Rate in 2021 and turned down debt for 15 years have strong Balance Sheets, are seeing higher rates but are not seeing higher affective interest costs because their liabilities have been fixed, the large issuance in 2020 and 2021 that was aided by quantitative easing quantitative easing by the fed and by their assets that are increasing in value, in the case of marx, 100 million Balance Sheet in the case of microsoft, 100 billion Balance Sheet develop a longerterm view of where ai will be in five years. Caroline really thoughtful. Thank you for laying that out for us, james fishback. We will get the latest on the micro details of googles brandnew pixel line. Shenaz zack will be with us. Director, potter director and Product Management for who will. For google. This is bloomberg. Somebody would ask her something and she would just walk right past them. She didnt know they were talking to her. I just could not hear. I was hesitant to get the hearing aids because of my short hair. But nobody even sees them. Our nearly invisible hearing aids are just one reason weve been the brand leader for over 75 years. When i finally could hear for the first time, i could hear everything. Try miracleear hearing aids with no commitment during o limited time sounds of autumn event. Call 1800miracle now. Caroline we note that alphabets google has gone head with apple for many years but it feels head on right now, the new pixel phones are more iphone like than ever before. Mark gurman, who has all the inside track around these products, give us your thoughts. What did you make of the updates, the camera and the way they look and feel . Mark i think google is continuing to push out pretty impressive ai driven crop products, the new pixel phones, the pixelate, impressivw camera ftures, a g3 tensor processors and a few upgrades that makes it look like a iphone and the facial recognition on the previous pixel phones, they were not Great Security wise, high enough to be processed for payment using the banking apps. They up to the security for that. The design of the pixel phone continues to be some of the best smartphone designs of the market but the trend continues, google is pushing out night nice hardware and probably some of the best android phones you can get globally but that has not translated into strong amounts on market share. That is the problem google will grapple with at least for the foreseeable future, making good phones and hardware products that are not selling as well as their competitors from samsung and apple. That is what google has typical figure out. They have the right hardware, how can they sell them at bigger quantities . Caroline google has 3 of the smartphone shipments in the second quarter. Great analysis from mark gurman, we thank you as always for running us through on what the product is like and he liked it and lets talk about the product. Shenaz zack is with us. You are fresh off the stage where you presented what are these big upgrades to the form. I have had pixels and iphones and i am interested to whether you like or dislike the idea of it coming more of an iphone. Shenaz i would not compare that because i think pixel are the best phones for google, especially bringing the hardware and the software and the best of ai from google into peoples hands. That is how we tnk about our phones, it is bringing the best of google in peoples hands. Caroline what about the best of ai, it seems to be something we are referencing far more in product the threat detail. The consumer understands it. How will that be interwoven to make it an easier product to use . Jon when pixel started seven years ago, shenaz when pixel started ai seven years ago, ai was a core product and we continue on that line and we have ai with us with our tensor g3 across the phone. Caroline it is interesting, you have pushed up the price point, the iphone 13 pro the same as the pixel april. 999. Is the consumer ready for that price point . How do you test and field that is the right amount to charge . Shenaz there is a lot of testing but we have upgraded the hardware, we have a completely new camera system and he had a lot of software and we are supporting the phones for seven years that is surprisingly low considering the integration of software and hardware . Shenaz from pixel and googles perspective, we want people to use their phone longer and we see that people are using their phone longer. Sustainability is important. Best support was natural for us to help our users support their phones for a longer period of time. Overall, when you think about some of the natchez sustainability but security that people want to be seeing some of the not just security for sustainability that people want to be seeing what goes into needing to ensure that you can qualify for those levels of security . Shenaz in terms of the phone, our phones always were secure. We had a titan chip and security was supported for five years so we are upping that to seven years and we are one of the most secure phones out there. Caroline what do you think it will take to get the market share higher . Why do you think there has been reticence . Has there been because people are used to the iphone ecosystem, it is harder to drag them out . It is that you focus on a International Consumer and you make real inroads on japan. Shenaz pixel is the fastestgrowing smartphone in the market and it is the only phone that grew in units is sold yearoveryear and we are looking over to mark that with ai features and the amazing hardware and software. Caroline how are you thinking internationally about the supply chain . Shenaz in terms of supply, you mentioned that pixel is available in International Markets and japan so that is a core focus on how do we make sure users across the road in our markets are getting our phones. Caroline what about building the phone because there is an apple where they had to rethink where there were product is made in this Global Landscape where china and the u. S. Are getting along in the same way. How do you think about sustainability and supply Chain Resilience . Shenaz sustainability is a big focus and it has been years in the making. As we announced on stage, on sustainability, this is the first phone free of packet plastic. Sustainability, where and when it is may is a key focus for us. Caroline a lot of this is focus on the entire ecosystem, not just the supply chain but what youre offering with the earbuds and watch and what you can track across all the software and you have been at google for 17 years. What is it that makes you so addicted to continuing to build with this company . Shenaz shenaz the people, i have been at google for seven and i grew up with google and in my sound cliche but i do love the people that i work with. They push you to think well, they push you to do the right thing and that is what i enjoy about working at google, the people around us. Caroline one thing about your product, thank you for joining us. We have the director of Product Management for pixel at google. Shenaz shenaz thank you for having me. We will caroline we will take a post of thevc industry we will taking a pulse of the vc injury industry. We will have elgin Baylor Morgan baller joining us. Morgan beller joining us. This is bloomberg. Caroline welcome back to Bloomberg Technology. Lets get you up to speed where the markets are because we are bouncing back after yesterdays 1. 8 drop on the nasdaq 100 and we are back up 1. 1 . The jobs they could the jobs data plan hot yesterday and runs cooler today and does that mean we are driving back and is the pacing driving back anticipation on how far Federal Reserve has to bow back rates has to dial back rates. It is big tech doing the better heavy lifting, the twoyear yield screams lower and that is the Pressure Point and this has been the anxiety we have through the past through few days. Having a look what is happening. It is bitcoin and i am seeing it treading water up a quarter of a percentage point and the u. S. Dollar easing off a little bit. This has been range bound, seeing 27,000 of the level of bitcoin. We know the pretty has been far thinner than it was a year ago and we are thinking about crypto given the start of Sam Bankmanfrieds time in court. Lets turn our attention to the vc spotlight and bring in Morgan Beller who was one of the founders of facebooks cryptocurrency project. She was building one of the first stablecoins and you have written out the highs and the lows of how