>> from the heart of where innovation, money and power collide, this is bloomberg technology with caroline hyde and ed ludlow. ed: i am ed ludlow in san francisco and caroline hyde is off. nvidia snaps its three-day route that right -- that wipes $430 billion off of its market cap. oracle warning of a financial impact should tiktok be banned in the u.s.. we go live to our bloomberg invest summit, uniting leaders in asset management banking, wealth, and private markets. let us go to the financial markets. the thing that everyone is

talking about is nvidia. we have rebounded up around 3%. it follows three straight days of declines which totaled more than 10% therefore a technical correction. also $430 billion of market cap shared. there is a lot of conversation narrative around valuation and predictability of sales. how much money nvidia will make. it has been difficult whether you are a sales side analyst or management to say how much revenue will come in especially with new generations of ai accelerator. from a market cap perspective this is what we are supposed to look at. nvidia down and market cap the point is that it is below apple and microsoft so in that time, nvidia has gone from being the most valuable down a few pegs. look at this chart because of all of the anxiety -- anxiety around the selloff there is some sanguine thinking from a technical perspective.

it is a stock that trades handsomely above its 50 and 100 day moving average trading at $122 a share and people see it $115 a share for those of you who follow the technicals as a key level of resistance. back from a short break and i am glad to be re-united onset. i want to go back to the idea of how difficult it is to forecast sales because over the weekend that is what we are talking about. in part it is because since this kicked off in 2023 every time they poke revenue it always comes in pretty handsomely above the midpoint of the guidance. and it is difficult for the sales side to say what happens next. >> you are absolutely right. they are overshooting expectations at every point and there are a number of factors that play into that including supply and demand because they only have a small number of large customers. all of those things make it very difficult.

at a certain point, things will even out and supply catches up with demand and these customers will decide that they have enough infrastructure. and then other factors come in. it is when we reach that transition for you. ed: the bloomberg summit is underway and what are some of the things they have been talking about? it is nvidia, listen to this. >> if you look at the chart you barely see the correction. on a percentage basis it is down 10% what you have to. carefully at the chart to see that move. i do not think it means anything. people who own the stock know that it is expensive but they are buying it to a story. as long as it is intact like nvidia is, the story will continue. ed: that is steve eisman of " "the big short" fame. he talked about the story. the thing i think investors are finding difficult is the story

of new products coming online. h200 is the middle ground generation ai accelerator. jensen told us that earnings at blackwell, the next generation will also ship this year. so working out where they are going and how much money to make is tough. ed: it is -- ian: it is, but those of the guys who run the spreadsheet have been doing a good job with. what is more difficult and causes more concern is the infrastructure being put into place. is it paying off and making money? or is it being thrown at the wall to see what stakes. if there is a fundamental concern we want to see ai translate into real revenue and profit at some of these guys who are paying all this money for all of this game. ed: ian who leads us in conductor coverage. but also who let our stocks teams and we will continue to look at nvidia.

bloomberg invest is underway where leaders in asset management banking, wealth, and private markets are connecting with world-class journalists led by sonali basak to track the future's greatest risks and opportunities. moments ago philippe laffont was asked by david rubenstein who would be the winner in ai existing big tech companies or smaller startups? listen to this? philippe: at the beginning of the new wave the new winners 10 or 20 years out, some of them are existing companies, and some of them were new. the new ones when they get big there is maybe one a year and no more. ed: delighted to say as if by magic. sonali basak and -- joins us now with more. it is a big event and it is not surprising about whether you are in the private equity or private growth equity area of the market or hedge fund or whatever it is

you are, everyone seems to be talking about artificial intelligence. sonali: it certainly does pervade a lot of the conversations we are having and -- and philippe laffont is one of those people perfect to talk about it. as he was talking to david rubenstein he asked if there was a lot of of hype around ai and he really in -- leaned into the opportunities happening to ai and downplayed a lot of opportunities say quantum computing. what is he seeing in ai? this up -- this idea of artificial brains being implanted in a robot that lives alongside humans, all that is probably 15 years away according to laphonza. he is seeing a lot of opportunity and power which is a lot of wall street is also watching, the banks and hedge funds. certainly in the morning return opportunity, a little

opportunity on the ai front. we talked to todd and he talked about how it is changing media and entertainment. i bring this up because you hear in different types of investors talking about the ai opportunity particularly in private markets as opposed to public markets and the growth opportunity you are seeing as well as the governance structures that exist around companies like that allowing for that kind of experimentation. ed: as regular viewers know i am a long-standing chelsea season-ticket holder and member of the club. i want to watch the early interview online. you put so much work into this along with our colleagues from the live events team. there are some big names to tom. sonali: shortly we will be talking to saba capital and one reason that is interesting because we are in the center of his dispute with blackrock.

there are couple of funds that he is targeting and they have proxy voting going on in the last couple of weeks and in the next couple of weeks so we do not know yet if he is winning. we will learn what he things on stage and in the afternoon we will have private credit conversations as well. i am looking forward to gary gensler, the chairman of the sec with annmarie hordern. we know that presidential debate is days away and hearing about what a change in administration could mean if there is a change for the policies that he has set forward today. of course, a lot of people intact and general markets looking for the potential for an a theory am etf. there is potential for news later this afternoon. ed: an incredible lineup. stay tuned. the summit is taking place all of today and tomorrow in new york city. do not forget to tune in and check it out. we will be right back. this is bloomberg technology. ♪

so this is pickleball? it's basically tennis for babies, but for adults. it should be called wiffle tennis. pickle! yeah, aw! whoo! ♪♪ these guys are intense. we got nothing to worry about. with e*trade from morgan stanley, we're ready for whatever gets served up. dude, you gotta work on your trash talk. i'd rather work on saving for retirement. or college, since you like to get schooled. that's a pretty good burn, right? got him. good game. thanks for coming to our clinic, first one's free. you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank. for nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled... which is pretty un-boring if you think about it.

so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track. when you're planning for it all... the answer is j.p. morgan wealth management.

ed: china's president is urging the nation to step up innovation because other companies -- countries dominate certain technologies. while he said that china had made great progress he added that original innovation ability is relatively weak. some key technologies are controlled by others and there is a shortage of top scientific and technological talents. sticking with china, after initial reporting in may at huawei was secretly sponsoring a research competition run by

optic and a review of internal record shows that the alliance ran far deeper than publicly known loss of lean over decades, even as u.s.-china tensions over technology intensified. let us bring in mike sheppard who leads our coverage at the intersection of politics and technology. the original report was astonishing, frankly, and the further details in this political environment and the headlines of the last 12 months are almost unbelievable. what have we learned? mike: let me commend you on the segue into this segment because it really highlights the importance of the story. it shows that china is on the quest and hunt for the technological advances that it needs to bolster its economy and gain the technological edge in key areas. this shows one way it has been doing it. hauwei is an industrial champion

in china and was not only sponsoring secretly this competition at forging a deeper relationship with optic up and it was a two way street. it is a century old organization whose 24,000 members do research in sensitive areas of life that apply to things like semiconductor's which are essential to everything in the modern economy. the consequences of this are significant. and o'keefe, who is report broke the ground of this and her latest reporting advanced the story further. she found there was a whistleblower who flagged to the risks that some of the work being done by u.s. scientists could be exported to china as a result. ed: i do not want to simplify too much but money came from hauw andei -- hauwei and because of reporting the spokesperson,

optica is confident that they acted competently in good shape -- in good faith. we are showing the response of the ceo on the screen. what happens next when stories like this develop. sometimes lawmakers and regulators take notice. mike: lawmakers have taken notice and the top republican and democrat on the house science committee are looking into this. they expressed grave concern that u.s. scientific research could be exposed or exported unwittingly to china as a result of a relationship like this. the organization is saying it acted in good faith. to be fair it did not violate any rules per se in allowing this competition to be funded anonymously. and yet the appearance was complicated for the organization but also a risk for the scientists who accepted the money without knowing that it came from huawei.

many researchers had to come from -- have to expose where there other sources of money are coming from. if they do not tell those other funders or disclose that i am getting some money from huawei, that could create a problem down the road as well. ed: mike sheppard, we really appreciate your insight and reporting. thank you. we continue to talk about china. bytedance is facing a ban in the u.s. in the form of tiktok and oracle's warning that that would adversely affect its revenues and profits. this caught my eye pretty late yesterday and i want to bring up our intelligence analyst and you have constantly crunched the numbers on what the impact would be. it is not straightforward. for our audience's benefit, oracle was at the heart of tiktok's compromised by

onshoring u.s. data in oracle servers. if that is banned, what is the report of the relationship? >> it is hosting the application. their infrastructure has been used. if it goes away they will not get that much revenue out. they have not disclosed with the exact amount is, but one thing that is happening on the oracle side is that there is a massive demand for their infrastructure and service business. they are helping out microsoft and google. so that business is growing over 40% and is running at about $2 billion right now. so an annual rate of $8 billion. it will be a setback for a quarter or two but they can make that up with other demand. ed: the stocks are down in a session at the moment, up more than 30%. we do not have a number or know what the value of the lid relationship is.

you have covered this enough and you know that if a company issues a statement saying this is substantiated material, than it is worth looking into. >> fair, i completely agree. what i am saying is that the demand for this kind of work is so strong. maybe has a setback for six or nine months but they will make up that revenue from other sources. it is not as if it is lost forever. in the defense of oracle, they are really becoming the fourth-largest cloud provider out there right behind amazon and microsoft and google cloud platform because this kind of work is really the biggest thing in demand. application software is struggling but infrastructure software is doing well because of the resources. ed: that was a focus of the research out for you narrowing the gap when it comes to the cloud. thank you so much. staying with china.

it spacecraft carrying spandrels -- samples elected on the far side of the moon return to earth marking an important milestone in china's path for further lunar exploration. the spacecraft landed in a grasslands region of inner mongolia and was a second mission to the more distant part of the moon following the 2019 landing. no other country has sent it spacecraft to the far side although nasa has plans to support missions via u.s. spacecraft. coming up, function health co-founder joins us to discuss the recent 53 million dollars series a funding ramp-up, you will be right back. ♪ ok coming in.. big orders! starting a business is never easy, but starting it eight months pregnant.. that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right.

and so did our business needs. the chase ink card made it easy. when you go for something big like this, your kids see that. and they believe they can do the same. earn unlimited 1.5% cash back on every purchase with the chase ink business unlimited card from chase for business. make more of what's yours.

ed: it is time for talking tech.

first up yesterday we discussed the wall street journal report that meta and apple had held talks on an ai partnership. after the show mark reported or clarified the real situation. apple dismissed ai from apple months of -- from meta years -- days ago. they ultimately decided not to move forward citing privacy practices that were not stringent enough. openai issues a warning to china. it will begin blocking access to tools and software in the region beginning in july. it is unclear what prompted the move. while openai is not -- is officially available many can access the features through vpn. anduril have secured new capital boosting its valuation to about $14 billion according to a

report by the information. it was backed by peter thiel and makes drones and autonomous weapon systems and won a major contract to develop unmanned fighter jets for the u.s. airports. the health platform function reached $53 million in its funding round. it focuses on preventative approach is to help individuals manage their world -- their well-being. the cofounder mark hyman joins us now. it is a significant sum of money and congratulations. but actually what caught my eye in the first instance is how many users you have on boarded and how big the waitlist is relative to those. please explain that. mark: thank you for having me. this is an incredible moment in medical history because we are seeing consumer driven health care exploding and we had a pain point where people want access to their own data and biology and to look under the hood and

not provide the health care system to access the -- at their own information. we have gone to 50,000 -- 2000 people on the waitlist. it is a hunger for people to know about their health and to have their own agency using their data on their own body and having ownership of it. right now it is held within the health care system in a way that is hard to access and understand. we it easy and accessible. it is the first personalized health platform that allows you to access your data for $499 which is $15,000 with of lab test and deep insights from top-notch experts and provides guidance on things going on with you and what to do about them to change your behaviors and your lifestyle which is the aim. ed: explain the basics of the technology. every time we hear about a data-driven platform like this

we immediately start talking about artificial intelligence. in this case function has a more simple function. explain the basics. mark: it is hard to believe but medicine is still in the dark ages, very analog. we have electronic medical records but it is essentially pendent paper put into a pdf with no relational content or understanding of the interaction of the data points and no correlation. it is really a unique moment in history where we can gather your own data from the blood and bio sensors and wearables from your electronic records and into your own health platform to understand what is going on with your body. it is five minutes. you can sign up and you get a scheduled appointment for your lab tests and one of the 2000 laboratories. your blood is drawn and it takes about 15 minutes. it gets away from that system

and allows people to be agents of their own health. and given the epidemic of chronic disease that is now facing america. ed: i want to jump in on the insurance point. i come from the united kingdom whether health care system is different. i am used to the insurance here. how does your bid is -- business model work within the confines of the system? mark: people are going outside the system to learn more about your health and get data whether it is home testing or wearables. now this is a successful blood test and you do not have to go through insurance. this is $1.37 a day. it allows you to have insights about your health across your spectrum, nutrition, hormones, cardiovascular risk to all of the biomarkers that replicate to your own well-being. that was never accessible to people before. when you go through your insurance there is a big

resistance where you said you do not need this or that test or they want a small number of tests. it is better to look at things early on. we have seen that we have saved lives. one man was in his 40's and did the panel and found out that he had prostate cancer and was able to treat early and live a long and healthy life with his young kids as opposed to being at risk for death. we are seeing an incredible uptake and results from users and incredible stories of lives change. ed: the cofounder of function health. thank you for joining us. coming up we are joined by the ceo of x on how the start up plans to take on nvidia. that is coming up. a quick look of shares of microsoft. the european commission issued a statement of objections alleging that microsoft's teams and 365 thou -- fell foul of the competition rules. this is bloomberg technology. ♪

what about zocdoc? so many options. yeah, and dr. xichun even takes your sketchy insurance. xi-chun, xi-chun, xi-chun! you've got more options than you know. book now.

ed: welcome back to "bloomberg technology." broadly speaking, u.s. equities are higher. a big part of that story is nvidia, now up 5% in this session. is the rebound from that technical correction, three straight days of declines exceeding 10%? until now, there's no real news flow around nvidia. this is about some serious gains. it was about a 43% jump from may 22 when nvidia reported earnings, and the conversation around how hard it is to predict sales growth. you are jumping from h100 to h200. blackwell will ship at the end of the year. the street is saying we can't keep up with management forecast, what's going on? look at bitcoin.

trade at 24.7. we focused on it big time in yesterday's show, but we're back nearer to 62,000 per token, noting that there's been pretty stunted outflows from dedicated bitcoin spot e.t.f.'s. i want to linger on this for a moment. etch is a young a.i. chip company making a big bet on a.i. they spent the past two years building the world's first specialized a.i. chair for transformers, or so they claim. and that bet is paying off. the company just announced a $120 million series a round, led by primary venture partners. let's bring in one of the company's chief co-founders and its c.e.o. ok, let's go back to basics on this. there were a lot of big claims in that introduction. your main point is that the specifically designed chip for the development is better than the g.p.u., but what is it

you're building? >> this is a kind of a.i. chip that's only able to do one very specific thing. an accelerator from nvidia or google is flexible. it can be programmed to run many different kinds of a.i. models, like networks or transformers. our chips are different. they are only able to run this one very narrow class of model, which we call transformers. when running these models, they are vastly performers, more than 20 higher through put. ed: what is it from an intellectual property standpoint or technology standpoint unique to etched that allows for that? what is the secret sauce that makes it any different from a performance perspective or design perspective relative to h100, h200? >> we're able to burn the transformer allege realm into the the chip. we're building our own silicone and our own servers this. gets more than 20 times higher

through putt in words of terms per second for models like chat gpt. you're also able to get much better lay tenancy numbers. you measure the time to the first token, we can cut that by a factor of 20 as well. ed: you told my colleague that you think etched can be the world's biggest company. that's quite a claim to make. outline the pathway to that for me. >> we are taking a bet, unlike every other company in the market, our chips can only run transformers. so if transformers change dramatically or go away, then we'll be in a bad place. but if we're right and they keep being the dominant way a.i. models work, we'll be the most performing chip on the market by an order of magnitude. ed: let's talk about your target customer, because transformers, or let's use another term, large

language model in the natural language model. >> misconception, actually. ed: fix the misconception for me. >> transformers used to be just for large language models. other kinds of models, like image generators and video generators used to be something. that's changed. over the past year, it's turned out that transformers worked better than other kinds of a.i. models for generating images and videos too. i don't know if you saw open a.i., but that's a transformer as well. powered by the same underline model as chat gpt. ed: the point i'd like to get to, who your potential customers would be, some transformers have transformers in the hundreds of billions. what's happening now in a.i. transformation is lots of companies working on models with

scale, much lower scale in terms of parameters. where do you want to go? >> we are selling to the big transformer models. we have tens of million dollars of preorders from the customers you'd expect. i expect that we are going to get much, much bigger a.i. models. the way we've gone from gpt2 in 2019 to gpt today is not by inventing new algorithms. the transformer algorithm is almost the same. instead we have made the models far bigger. it's 1.8. ed: testryl i don't understand. >> 1.4 trillion. ed: $120 million series a, it seems like an eye-watering sum of money, but we've learned that this is a capital-intensive perspective. one thing that was of interest to me and wanting you to come on the show is that your contract

manufacturing partner is tsmc, and not only tsmc, but their emerging business group where they say, ok, you're just starting out, but we can help you scale this product. what's that experience been like? >> it's a pleasure to work with. working on their noticed, one of their state-of-the-art processes, same one nvidia is making their blackwell. and we're building a very big chip. that is a complicated kind of chip to build. ed: in blackwell's case, they literally split it in two. >> for blackwell, normally what happens in chips, as you move from generation to generation, you move to a more advanced kind of chip technology. from the h100, they moved from seven to five nanometer. but that's changed. they couldn't move to the new technology for the blackwell chips. and as a result, they had to put two of them together.

if you look at the progress of g.p.u.'s over the past four or five years, they haven't gotten better, they've just gotten bigger. performance per area has stayed constant. ed: you are an incredibly confident founder, co-founder, c.e.o. it's a pleasure to have you on the program. you are clearly ambitious. the difference between nvidia and etched is nvidia is producing at volume. you have $120 million in the bank now. what do you need to use that cash for, and how capital-intensive is the process of scaling this product, even if you have a partner like tsmc? >> this is a capital-intensive business. a majority of our series a is going to go into building these products and scaling up the business. that is where the money goes. and i think the big difference, too, again, we are very specialized. they are taking a bet on the transformer architecture.

a lot of people will say, just like transformers were invented, there could be something else on the horizon to put us out of this. and we are gambling that's not the case. ed: we have 10 seconds. have you shown jetson juror product? >> i imagine they've heard of us by now. ed: a lot of fighting talk, a lot of confidence, thank you for joining us on the program. coming up, we're going to tune back in to bloomberg invest with this next interview, the founder and chief investment officer at sava keep management. stay with us. ♪

all-day energy starts with clean hydration. lmnt. more electrolytes. zero sugar. you feel the difference when you get it right. stay salty.

ed: this is a live look at the principal room. you can find it on the terminal, as well as online at apple, spotify, and iheart. this is bloomberg.

ed: back to the story we were discussing earlier. open a.i. has warned developers in china it will begin blocking their access to its software from july, according to local media reports, suggesting the chat g pt creator is taking a more active stance to bar users from nations where it doesn't offer services. bloomberg's jackie leading the a.i. beat, joins me out of d.c. this is really interesting, because it's kind of an old-school tech thing that a lot of the access to open a.i. in china was through vpn. that's what people do to stream things in different places, but give me more details on this story. >> what we know, ed, is that chinese developers will have this access cut off starting in july, as you mentioned. this really originated through local media reporting, which cited screen shots that had this open a.i. memo to developers saying they were going to have this access removed. open a.i. has now confirmed the decision to bloomberg news earlier this morning that it is,

in fact, taking "additional steps to block a.p.i. traffic from regions where we do not support access to open a.i.'s services." now, this is not the first time that china has come against the crosshairs of american tech companies, and even regulators here and u.s. officials, who believe that china is using this technology for more nefarious purposes. now, open a.i. really started ratcheting up its own actions against who it believes is bad actors and using its technology perhaps to manipulate public opinion, for example. remember that report in may, ed, that said russia, china, iran, and israel were using open a.i. to manipulate public opinion. so you really see these actions really starting to take shape here. ed: the two sides to the story, there's the use of the technology by malicious actors or unauthorized actors, and also i think data access point.

but there's also a competition side to the story. you have domestic champions in china that are building large language models, big large language models to support generative a.i. technology. give me that side of the story. >> well, they were quick to pounce on the fact that now there's this wide swath of developers who need a.i. technology to turn to. and so what some of these local reports were saying is that they started appealing to developers and saying, hey, come switch to our tech. really goes to show that there is this, not just this technology battle, but there's a need to really start ramping up its own internal a.i. capabilities. this is exactly what lawmakers here in washington, ed, are concerned about, that a.i. is really ramping up their efforts, not just to have a.i. play a role in economics capabilities, but military. so of course this isn't just about what consumers have access

to, but how it can be used against national security, and this is exactly what we're seeing here in washington, actions on behalf of, for example, the treasury department imposing rules to curb investment that would support a.i. investment in some of these areas, and also, of course, curbs on chip exports. we're really starting to see both things come together. ed: i think what they are doing from a technical standpoint, i'm just reiterating what a person told us, they are taking additional steps to block a.p.i. traffic. i still find it astonishing that the origin of this story is people being able to access open a.i. from china through vpn. give me more on what you just said about the d.c. side of this. joe biden, president biden, has some policy toward restricting chinese products entering the united states or tariffs, and the treasury department, you mentioned as well. are we expecting a sort of expansion of that activity? >> that's a key question.

i think if there's one area where lawmakers here in washington have really come together, it's around the national security argument that china has capabilities and artificial intelligence, and it will continue to bolster them. now, you saw this with tiktok, the concern that chinese influence is coming through somehow in tiktok and influencing public opinion. but then you look at artificial intelligence and what can be done with drones, for example, things on the battlefield. this is where a lot of that concern is coming from. and so, of course, you're seeing chip manufacturing as kind of the hallmark example for the biden administration really starting to take the leap here. it's all a part of this broader strategy to really undercut beijing's efforts to have a.i. kind of bolster its military capabilities. ed: this is a pretty fast developing story. grateful for you keeping us honest on it out of washington, d.c. thank you.

we're going take a quick break, and we'll be right back. stay with us. ♪ to me, harlem is home. but home is also your body. i asked myself, why doesn't pilates exist in harlem? so i started my own studio. getting a brick and mortar in new york is not easy. chase ink has supported us from studio one to studio three. when you start small, you need some big help. and chase ink was that for me. earn up to 5% cash back on business essentials with the chase ink business cash card from chase for business. make more of what's yours.

were you worried the wedding would be too much? nahhhh... (inner monologue) another destination wedding??

>> ultimately what is it that you want out of this strategy? these are funds that you're locking up, or blackrock has locked up capital for a longer period of time, forever in many of these funds. so what is it that you're trying to accomplish by targeting them? you understand you target them when they're trading below their value. you want them to bring investors home, but what's the end game here? you won at one fund. what else do you want? >> e.t.f.'s, as we all know, can be sold at asset value or the market maker can redeem them, and then manager, blackrock, will sell the assets. close in funds, you're trapped. many of these funds have no majority. they can be around 100 years, 200 years. there are periods where the investors don't want them, and for some reason there is not a manager more than blackrock the investors don't want. i'm not looking to not be besties with larry fink. i'm not looking to be besties with him. i'm looking to make my investors

money. and if the discounts are persistent and they're there year after year, and you can buy it a literal dollar for 85 cents, you have the power, unlike in normal activism, to turn it back into a dollar, because if you change the fund structure to being open-ended, or the manager agrees to buy back shares that net asset value, just like franklin templeton did this month in three energy funds, the investment has a chance to go from 85 to 100, and as you all know, that's not even just 15%, because it's 15 over 85. that's an 18% return. and it's a fund that lit its investors on fire. i say that, it sounds dramatic, the last three years we've in more or less a big market, but big z has lost more than 50% of its capital from the stock prices going down and from the discounts going up, and so it lost billions of dollars, and

here we have investors saying we want change at the board level, but the part that many of you would be shocked to hear, i mentioned the quip about putin, they've decided to set election rules such that in order to replace their board, you have to actually get 50% of all the shares. in big z, eliminate, they got about 51 to vote, so winning 35-15 wasn't good enough. so that kind of math makes it literally impossible, but ironically, it makes it impossible for them to put anyone else on the board, because they would have to go through their own arcane rules, so as a result, the blackrock nominee each sits on approximately 70 different boards. how can they do their job at 70 boards? at j.p. morgan, each nominee sits on one board. it's horrific governance from a firm that's an incredible firm that actually prides itself in raiding money to invest in good governance. >> i think importantly, as we mentioned, this is one fund that you know the outcome from. yes, the big fund for you to be

investing in, at a large discount, but what about the rest of them? if you were on course to lose, how would you react? you don't know anything about those votes. >> i can't announce what's going to happen to the other big funds. big z is something like a billion seven, it's really large. that's also why this captivated the media attention. there's a lot of money at stake. just a few weeks ago, it was worth $1.4 million to mostly mom and pop investors. we manage money in these very strategies for three different state pensions, millions of pensioneers. the results are in limbo, even if we win, because we've taken them to court this year for this election scheme, and last year we did it for a different election scheme, and we won in summary judgment against blackrock, and i have a lot of respect for our former panelist from the last session, but blackrock, to be fair, is not the only one, but they are by

far the worst. it's those legal victories that have helped us in order to get good results with other managers who don't want to be on the wrong side of the law. that's why this year, i was very proud that we won institutional investor activist of the year back-to-back years. and so activist has ever won it before, and we were voted the best activists. >> you're no longer just activist, you're also a manager, given that you've taken over some funds. those funds are actually not trading at asset value. so how then do you turn around and attack blackrock when your own funds are trading at a discount? >> firstly, there's two measures. how much money did investors make or lose? there's a lot of blackrock funds that we went after. there are 10. nine of them the last three years have lost investors money. nine out of 10. think about the market where the s&p is, even where the the russell is. nine out of 10 are in the red.

our fund that we've been managing for 2 1/2 years, that fund has actually made quite a bit of money. and in 2022, the first year we managed it, it was ranked number one out of 257 funds where the motive was income-based funds, and we came in first. so blackrock can say, well, their fund trades at a discount too, but what they leave aside, when we took it over, we said to the investors, if you want to get out, we will let you. we conduct a tender. and then there were more people that wanted to get out, kind of like looking at it from capturing a discount, and we did second tender. we let them on it. blackrock is not willing to do anything like that. >> one critique is the idea of lowering fees here to attract more investment. but for these funds, they tend to run at higher fees in the e.t.f. structure. would you consider lowering fees for your own fund? >> right, so our fund that we

took over in january, the ticker is one of the lowest fee funds. the other funds is more normal. it charges right around 1%, but you also get what you pay for. i think most investors appreciate that if the fund is going to do interesting things, you mentioned wizardry or whatever you said in the beginning, and we are doing really neat things in those funds. we're not just putting together a long portfolio and letting it sit. so i think our fees are actually very modest. it's not for me to say, it's for the investors to say. >> i want to read you blackrock's statement. of course, they have fought back. they have not let you just attack their funds. they said that blackrock on the funds boards remain focused on delivering value through concrete action, such as discount management programs, looking to arbitrage funds to capture quick profit. this acan't is about executing

the playbook, buying and controlling positions, and forcing short-range changes to benefit saba and it'll hedge fund investors. what is your response to that, and what few do after these campaigns? -- what do you do after these campaigns? >> when i think throw your best at me, they send you a question, just please, give me your toughest question. i'm not here to be, we don't have some friendly arrangement. ask me anything you want. i fear none of their questions, because they're so absurd. when they say that we're using some purported playbook to help investors in the short term, where is the long-term pain of making investors money? usually when you say you have a short-term motive, there's a long-term consequence. where is the negative in that? i'm not going to use my words. a success, which is independent, which stands to tell it the small investment how they should view this kind of rough contest

that we're having, here's what i assess about this year, ok? the board is deeply entrenched. a direct intervention remains necessary. it is rare to witness a board so brazenly in and out the most basic of shareholder rights in furtherance of their own enrichment. i'll read one more. board actions are so grave that they would warrant adverse vote. what they said is afternoon if we didn't run against blackrock, they would have recommended against their nominees. that is literally how bad it is. blackrock is amazing. they manage $10.5 trillion. this might be big to us. this is tiny, small potatoes, and it will someday be a case study of a strategy failure that for $5 billion of buying back funds at a discount, including their own employees, including their own shareholders, we're going to treat you the way others are treated.

they wouldn't have this problem on their hands. they have amazing products, but for closed end funds, they pacifically have tan a position no one is going too tell us what to do and we're willing to do whatever it takes to squash the rights of the shareholder, which is enshrined in the 40 act. the 1940 act, the investment company act, is from to protect small vises. you can released a install muff. don't trust me word? a judge said it last we're. >> they did not support you, i.s.s., that is, to terminate blackrock ads the investment advisor. is your ultimate end game to take over these funds? >> this is want my first rodeo. we've been in about 80 campaigns, and across 80 exons, only two times did the end result come that we took it over. in the first case, the manager

said we'll let you stay on, we won't resign. we want to investment or people money. they don't have to pay the legal fees we're paying. by the way, blackrock has spent tons of mailers. you saw the graphic, that mailer went on you five or five calls, robocalls, and i received them h. i seed these milers. they only got one out of 10 share holders to vote for them. it's just incredible. so what is my end goal? my end goal is to turn the funds not because i am some kind of management wizard because it is a billion three away. >> has this gotten personally? -- personal?

>> i am definitely feeling it on the