>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is "bloomberg technology" with caroline hyde and ed ludlow. caroline: i am caroline hyde at new york's at -- at bloomberg world headquarters in new york. from crisis to fundamentals we talk jobs, inflation. more job codes -- more job cuts

at meta. more on the company's restructuring ahead. ed: the latest on the collapse of silicon valley bank and private equity funds looking to snap up the banks assets. -- looking to snap caroline: day two of our new time with the show. we look at market repercussions. what a difference a day makes as we drive higher on the nasdaq. bonds rising. the collapse in bonds, the federal reserve had to pull back. inflation data, cpi running hot. the federal reserve still likely to hike, at least higher on the two-year. starting today just the repercussions of svb.

now we are dialing back our anxiety. up almost 5%. flipping on, almost up a second day. bitcoin it now trading the highest. the og on bitcoins since june 2022. ed: cpi print a real driver. policy index higher. nvidia, apple, uber and lyft both higher after reaffirmed a gig workers -- after california lawmakers reaffirmed gig workers are contractors, not employees. meta economy shares up 6.5 percent. let's bring in sarah frier from bloomberg news. 10,000 is a big number. what else have we learned about the specific round of layoffs? >> this is the second big round

for layoffs for meadow. what we are hearing for most of our sources, the morale is hitting a low point at the company and workers have had a lot of anxiety about what might come next. meta saying it is still working to restructure the company, including by flattening the company. they want to assure managers are not having a couple direction points. they want to make sure engineers to managers ratio is a little healthier in zuckerberg's eyes. giving them more ability to release products faster, to be more efficient, they think reducing the number of middle managers will help them get there. this is really about zuckerberg's year of efficiency. he is all about efficiency. that is what is driving the stock. wall street seems to like it. caroline: they do seem to like it even though many of those working at the company don't

know if they will be keeping their job by april, in groups. on the business line, not finding out by may. the buzzwords were interesting. he is still saying we are going to be investing in artificial intelligence. it didn't feel like he was doubling down on the metaverse, even though that is the focus. >> that has been interesting for us too. we really heard his eye -- ai has been prominence. some of us wondering if the metaverse mission is all-encompassing as he previously made it sound. oculus sales, he says they are strong, but they had to reduce the price recently. there are some indications it really isn't catching on among consumers at the rate they expected. going all in on ai is his next move here. it really relates to the business. they have to use ai to improve

their algorithm. they have to use ai to make up for the differences in their advertising work because of the changes apple made it to tracking. ed: shares up more than 6%. as you and i have reported by contrast, more row. inside meta. remind is why this is happening now. sarah: she wants to make sure they can meet lower extensible's. they want to make sure they can be a more efficient organization as new revenue growth slows. the context, these platforms that they have created, facebook , instagram, these giants are really not growing as fast as they used to. they are trying to grow the attention but the user base is already very saturated around the world. they have to come up with other ways to get their profits in

line with what wall street expects to keep that growth going. this is how they are doing it. meta really saw an opportunity. it is not they have two or there will be some dire consequences for their business, but they saw an opportunity where a lot of companies are doing this. we can do this and it won't reflect badly and it will make us look smart. caroline: in addition to his own family as well as his meta family going on leave. job cuts makes us think fundamentals, inflation, the cpi print keeping pressure on the federal reserve. kriti gupta, you have got more on it. : it has shifted away from the banking fall. this highly awaited report from the bureau of economics. this is really important because

you are seeing a deceleration in inflation. this is good news for the federal reserve in about the first time for a year. zero point 4% rise. services inflation still rising. goods inflation still coming down. shelter costs decelerating. the housing market has been in focus for a while. commodity pressures are coming back up. we see that in gas prices, food prices. that is what the -- the federal reserve is going to see as a danger. that is what you're seeing in the repricing into the market. after the svb fallout, all the way down to 5.1% over the summer. this tightening cycle is over in the last 24 hours, especially with the cpi report. now seeing the cpi report -- now seeing the terminal rate come higher. a 50 basis point hike to really

put the pressure on inflation all the way to the other side of the spectrum. talking about a rate cut or something that will bow well for the technology names. caroline: kriti gupta, great reporting. mel lagomasino, advisory firm overseeing assets. trying to work out the direction of interest rate cuts, what does it mean from europe respect on tech evaluations? mel: tech valuations are likely to increase over a longer period of time. over the next five to 10 years, a lot of the issues we are dealing with, like inflation are going to be solved through increased productivity. the answer to productivity are

all these tech companies and tech processes that are going to help make us a lot more productive. when interest rates were zero, people were willing to pay everything up. as interest rates have come up, the valuations came down. now we are towards the end of a cycle. i expect the valuations will increase, particularly because you have so many tailwinds with a lot of these tech strategies. whether you are talking about ai or electric vehicles, or we are talking about form line, you start to see activity in the space. i continue to be a tech bull. i am a tech bull over time. ink about the next 3, 5 years we are going to have much higher valuations with these companies. caroline: your liking caps and nvidia for the sector?

who were the companies that if you're going to allocate money now, you should be buying? mel: there is a lot more money in the private space than the public space. in the public space we have five thousand more companies. in the private space you have a million more companies. in the public space, they are buying these private companies to be able to have access to these technologies. when you look at pfizer buying cgn, or you think about google's investment or microsoft's investment in i, that is where you're going to see the growth. the opportunity is much greater in the private space. ed: we think about inflation, we think about the fed. i am looking at some of the movers in the market and earnings is such a big driver of

individual share moves, particularly in the technology sector. is the discussion we had around how the rest of the year looks to tech and whether they are recalibrating the strength of the economy? you some mark zuckerberg site his head when in the economy, do we need to think earnings when it comes to expectation? mel: yes, that is why we are seeing the layoffs in a tech company. a lot of the growth have to do with number of subscribers, new customers, new markets opening up. because a lot of these companies have huge market share, the name of the game is not going to be how many new subscribers or how many new clients, it is going to be how can you actually change your business model to create more profitability? when you're looking at a facebook or any of the media companies, the name of the game has changed. what people are really looking

for is profits and higher margins. ed: you are the former ceo of jp morgan's private bank. what have you made over the last five days in the banking sector, particularly how it has hit tech? mel: from the perspective of jp morgan, it has been like a birthday party because everybody has tried to take their money out of the other banks and put them primarily in jp morgan. that is good news for jp morgan. in terms of the tech sector, when it comes to the venture space, we are going to see maybe lower valuations. that is a good idea for venture investors. ed: what we are seeing is how we are threading what is happening with svb to what is happening with the global economy. the commonality is that large tech sectors are under duress. caroline: they're having to

think about cost, that means people. it also means people managing these businesses. someone who was pricing your jp morgan, also someone who is on the board of coca-cola or disney, what do you make of executive oversight or poor oversight? mel: board oversight has never been more important. especially issues like cybersecurity, for example. are more important than ink -- more important than ever. the kind of credentials you need to be able to have and the kind of work you need to be able to do to serve on these boards has increased dramatically. ed: we family offices, mel lagomasino. issuing new equity -- amc entertainment issuing new

equities to shareholders. caroline: more to talk about in the aftermath of silicon valley bank. still companies thinking if they can buy out. apollo, kkr looking to buy out svb's loans. on regional u.s. bank stops, across-the-board reprieve. pat west from western alliance after they were so heavily beaten down the past few days. this is bloomberg. ♪ (upbeat music) there's more to business than the business you're in. (robot whirring) want smarter factories? that's the internet of things business.

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caroline: we continue to watch the fallout of silicon valley bank's sudden collapse. we understand apollo, kkr, blackstone showing interest in svb's loan book. here to cover it is sonali basak. >> we have a loan book worth more than $70 billion. the question is will apollo, kkr blackstone start to bid on parts of it or all of it. more likely they will bill -- they will bid on parts of it. this is a loan book that has not lost a lot of money. there are a lot of questions about underpinning considering silicon valley bank was so aggressive. sometimes unprofitable companies. apollo, kkr, blackstone are credit experts.

the idea if they take on these loan books, they take on these clients and they feel they can do a better job at managing these loans. there are other assets as well, including the venture on the asset manager on the investment bank that worked on about $9 billion worth of deals last year. caroline: we still have to think about where the value is. we were just talking to mel over at we family offices. there is real due diligence going in and we are not doing it at this time. ed: the fdic made an effort at silicon valley bank. what happens in the action executives took? sonali: a few things to keep an eye on here. both the investigation when it comes to silicon valley bank, its executives actions taken before. so many critics in the market say it, some of these issues we have known about when it comes to their balance sheet management.

even beyond that, stock sales from management, leading into a lot of the disclosures on information we had seen before the collapse of silicon valley bank. in addition to that i would also note, while you have the doj and the sec forming investigations around the collapse of silicon valley bank and the management of it, you also have the federal reserve doing its own investigation of how it self has handled the situation. really questions all around the board here. ed: the reason we are tracking bolt threads of the story, even 24 hours ago we had a key venture capitalists on this program saying we want silicon valley bank to survive in some form because we have always done business with them and we want to continue to do business with them. caroline: people juxtaposing the decisions made in the u.s. with the regulators versus the u.k.. u.k. very swiftly getting a bottom -- getting a buyer. what have you made of the differences? sonali: it is a smaller armor

looking at the u.k. arm. a lot of questions. on friday morning we all woke up, about half of wall street circling these assets. there has been dripped and of plans announced on restructuring but there has been no bank restructuring filing. had there been one there would be jurisdiction of a judge in that sort of situation. now that you have these assets slowly coming up for sale, it makes it a little easier for different parts of wall street to absorb these things, particularly in a way compliant with regulations, and could help them avoid a lot of the 2008 eire liabilities that cost forms -- cost firms like jp morgan a lot coming out of investigations. ed: how do the banks look this tuesday? there is still concern about the sector. sonali: there is still concern

about the sector. there was acknowledgment silicon valley bank was an outlier in the way its deposit bank looked and the way they manage their assets. we have to look at other sectors as we wait the lagged impact of interest rates, commercial real estate is not as front and center and emotional is silicon valley bank is, but certainly it is a slower bleeding problem. we are certainly not out of the woods. regional bank stops talk back up , some banks on the west coast that some of the market was concerned about yesterday. caroline: how many cups of coffee are you on today? sonali: i won't discuss that on air. caroline: sonali basak, we thank her so much. ed: coming up, we continue the conversation. the u.k. says the bbc has to change. talking tech, we look at some other innovators out there. arkk up around 2.5%.

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♪ to guide you through a changing world. ♪ ed: time for talking tech. the bbc has got to change says miller needles, the head of communications regulator. saying the public broadcasters should lead freelancers not involved in news reporting have more freedom of expression on social media. this after a high-profile row of popular host gary lynn mr. over his tweets. in weather that tweed breached the board agreement on confidentiality.

eight dollars 50 cents a share. blackstone has received a fully committed a part of the -- it is six to close this year. the etf attracted close to $400 million friday according to data composed by bloomberg. the largest since april 2021. the time the firm hit its all-time high. caroline: coming up, we are going to be talking about what comes next for silicon valley bank's leadership after its fallout. we are going to be turning to a key focus of leadership with ibm former ceo in chair, ginni rometty. mastec having its best day since the beginning of february. currently up more than 2%.

ipo index, recent companies that they bank with svb. in the era of bitcoin, -- currently seeing 25,800, the highest since june of last year. this is bloomberg. ♪

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ed: 4:30 p.m. in london stop stocks fitting -- stoxx finishing up the session. recovery in banking shares also getting a boost from energy. euro-dollar, 107. after a little bump trading the monday session, we see that kind of yields climbing higher. germany 10 year yield, guilt of .15 percent. not just the fed, but the ecb as well. we continue to track european markets. here is the first word was mark

crumpton. >> president biden plans to sign and -- sign a new executive order for gun violence. president biden will visit the site of a school shooting in monterey park, california. background checks, something he has been unable to get through congress. although it remains popular in voter surveys. emmanuel macron faces parliament and protests over his plan to raise the retirement age. wednesday a group of 14 lawmakers from the national assembly and senate will meet jan -- meet behind closed doors to be presented for a vote of both houses. unions will gather their forces for another day of strikes and protests against the proposed changes.

credit suisse ceo says the bank has seen inflows of client funds on monday after markets in u.s. banks were pummeled by the collapse of silicon valley bank. >> so far it is pretty calm. material of good inflows yesterday. i had a client meeting which was very positive. so far it is calm. >> he spoke exclusively with bloomberg francine. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark this is bloomberg. ♪ caroline: welcome back to bloomberg technology, i am caroline hyde in new york. let's keep ourselves up-to-date with u.s. authorities.

currently examining the collapse of silicon valley bank. including whether stock sales by executives violated trading rules. want to bring in a big-name from silicon valley. for her take on all of this. ginni rometty, former ceo and chairman of ibm. she is out with a new book called good power. what you make of the focus in particular of oversight of board membership, executive management at this moment? ginni: something i have learned over a long time and working with boards, it has never been more important and the importance it can have on your board, people with all different disciplines. you had mel on earlier talking about the importance of cybersecurity. it goes to show it is a job everyone needs to take seriously. caroline: you sit on the board

of jp morgan. the only big bank with still the same ceo from the big crisis era. i am interested what your perspective is from a banking perspective. and what that means for the sector in general. ginni: there will be many quarterbacking events taking place after that. from a regulatory side, 200 billion. what changes as a result of that, a bank that size versus a systemically important bank management decision. it will be interesting the discussion the role technology played, whether it was in quick version of facts and things that were not true. the same technology that brought silicon valley bank to life. at the end of the day it says a lot about what we all have to do now with the venture cap community. it is going to make difficult for some parts of the d.c. world.

it was already difficult for women back vc's, 20% of the community, now it is even less. people then tend to do business with who they know. typically that has less women in them. there will be unintended consequences. ed: 24 hours ago we had someone on saying that but also pointing out for many founders, divers founders from minority groups, women, it was silicon valley bank that would often write the first check. you know the world of technology, do you have an experience working with svb and what their role was in the valley? ginni: certainly worked with many and bought many companies they have launched. there are so many great firms, another, re-think, of the largely -- one of the largest women run companies, women invested. my experience has been positive and there have been many great

companies. ed: it appears the world of technology is under duress. there are not many positive headlines. do you share that assessment? ginni: to paint it all in one brush is probably not exactly right. i talk a lot about it in the book that everybody eventually has to have a chapter to. that is what you are seeing with a lot of companies. we have had chapters 2, 3, 4, 5, 6 and had that balance and growth that has to happen. for me, this is just chapter two. it can be dangerous when someone attacks your profit pool. this is a bit of a growing pain. that is what you're seeing in the markets. caroline: there is one opinion piece that i saw that caught my attention for more reasons than one and i wanted to get your perspective on some of the criticism that has been leveled at so-called diversity distraction on the board of svb. what do you make of that as

someone who basically thinks a lot about diversity on boards and management teams? ginni: in the book, good power, which i named in retrospect, i have a whole chapter i dedicated to something called good tech, assuring new technologies in safely like ai. you had a lot of discussion about chet gpt. and the other point, i don't use the word diversity. diversity is a number, inclusion is a choice. i lived exactly at the intersection of society and business, i need a good workforce. a diverse workforce is the best workforce that gives you the best products. i don't view this as anything other than doing what is, yes, right for society, write for community and right for my products and the customers. it is a shame to miss place that focus on it. it is all about having a better company. caroline: it is about culture.

we look at the headlines coming from meta having to lay off another hundred thousand. -- having to lay off thousands. having to lay off people, what do? you think --? think ginni: whenever you have to lay off people, it is hard. this is asked to for many companies. people often think of what they do. the how they do their work, i wrote a lot about this in the book, it is just as important. how you do it with the workforce is how -- is probably the most important. how tough things are done. i almost think that is a subtitle of the book. doing hard but doing them in a good way. ed: what jumps out at me is how

quickly conversations change. 10 days ago we are fixated on artificial intelligence. svb happens, no one utters those words. the health of the tech sector is called into question. where do? we go with this? ? caroline: the focus on business models. at a time when you have to do more with less. what do you make on this fascination with chat gpt and the hype around it? ginni: this is a trust issue. i have learned about trying to bring ai into the world. there is all kinds of ai. i am afraid this gets brushed with one brush of chat gpt. it is wonderful everyone is thinking about ai because i

think it can do so many good things. i just don't want the downside to push it aside, which tells me anybody using it or building it, to think about the up and the down at the same time. let's look at all the good things, bad things to take care of. bring it in thinking about both at once. there was an uproar in education around chat gpt. kids can cheat on their tests. i would have loved even a small thing at the same time to come out, an app that says this might have been created by chet gpt. people are building them now and the discussion of watermarking. the point is people understand what it is used for. how it is good, how it is not. you train ai very carefully. there is so much good. building trust in that technology so we really get its benefit. ed: ginni rometty, former ceo

and chairman of ibm. thank you for your time coming in. check out her new book, good power. coming up, more on silicon valley bank. fallout from major players in the tech world. and how they are dealing with what to do next. trae stephens from the founders fund joins us next. this is bloomberg. ♪

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>> over the weekend all the firms, including us, we have put

together plans to land capital from our balance sheets to help these companies make payroll. that would at least avert the crisis while the right solutions are in place. ed: that was general catalyst ceo talking about his firm's plans to provide funding for portfolios over the weekend. as the silicon valley bank meltdown was unraveling, also to protect their tech companies. founders fund trae stephens, share with me now. trae: a potential issue with the balance sheet at svb, wednesday night there was the announcement about additional funding.

coming into thursday morning there was this recognition things were going to move very quickly. it is really hard to overstate how quickly things move for a few hours thursday morning. ed: bloomberg reported founders fund had pulled its consideration from silicon valley bank. then there is consideration what portfolio company should do. what was the colts -- what was the course of action founders fund? thought best trae: we want to do in -- we want to be in good position. also doing as much as we could on the portfolio side of things to shorten that out and communicate we thought there was some risk there should be looking at too. caroline: the communication is such a difficult balancing act when silicon valley is ultimately a very small space. what do you make of the criticism and the worry around social media and the application

of the fear come wednesday, thursday? trae: obviously there is a lot of communication risk that you take. making sure your per folio companies are aware of what is going on and they have the information they need to make the best decision possible. even on our end it was about prioritizing the stack of our portfolio. how do we communicate with as many of them as possible to give them the fighting chance? our biggest regret in the whole situation, we were not able to talk to all of them before the situation had unraveled by the time the svb ceo gave his press conference at 12:30 on the day. caroline: any regret around how svb was seen in that moment? trae: i don't think any of this was a judgment of svb. they have been a great partner in silicon valley for a long time. we have close relationships with many people at the bank.

for us it was about being intellectually honest and having a conversation about what we needed to do to do the right thing for our lps and our per folio companies by the amount of external -- and our portfolio companies by the amount of exposure. these people are not responsible for what happened at svb. they had to do the right thing to make sure they could make payroll as he said in the video you played at the outset. ed: he is one of the collective capitalists who hope they can continue to do business with silicon valley bank in its reincarnated form. this founders fund share that hope? trae: we hope with whoever continues to be the big player with silicon valley moving forward. there is regional banks on one side and you have the big banks

on the other side and making sure our companies are diversified in the extent they are going to have a good treasury plan that protects their deposits. ed: let's go back to what you're focused on. defense-related technologies, does all of the energy in that subset dirt just stop now or do you continue writing checks? do you continue to see rounds in that space in particular? trae: i don't perceive there is going to be any shift in the way we as a fund make investments. there is certain macro economic headwinds we have been facing for the last 18 months or so. but the government continues to be a customer. the world must go on. for the sector, i am most personally interested in the intersection of technology and strategic industry. these things are going to continue largely as they have or a long time. caroline: cochairman founded

industries. you're also on the board as well. i am interested in your experience with government. your career was started with congressman. trae: are you specifically asking about svb or the tech sector? a bit of both. from a depositor's perspective and ultimately the view of government and technology at large. trae: the most inconvenient thing about the situation last week was the name of the bank. it got instantly politicized. i don't think this was political at all. i think the government did what they needed to do to protect these smaller, regional banks to ensure there were not any further runs. it seems they acted quickly, they did the right thing and hopefully that stability is going to play itself out in the coming weeks. ed: what is stopping the public secretary -- what is pop -- what

is stopping the public sector, the bird -- the best from silicon valley and others you look at? trae: i don't think it is about technology -- i don't think it is not geography. most of the best tech sectors are not based in san francisco. the problem that has been problematic, it is not policy, it is just culture. the government hasn't been as forward leaning and understanding that they need access to the best talent possible to build things that are relevant to the fight in the future. these are largely soft problem. top talent soft engineers are not sitting in basements building the future of the dod. caroline: here is to building -- here's to building the future. founders fund, trae stephens. coming up, uber, lift, doordash

shares all jumping up. more on that next, this is bloomberg. ♪

ed: uber, lyft and other gig economy companies.

workers as contractors instead of employees. explain the appeals court decision. >> the appeals court decision is not as complicated. the voter approved initiative that the right handling companies bankrolled in 2020 was voter approved. there is nothing to do about that. that is the ruling in a nutshell. caroline: is there any further argument to be had? any further changes that need to be made by hoover and -- by uber and lyft or is the bridge -- is the business model free to run? >> it is not just over but in the state, this is a significant ruling. i haven't heard back from the

attorney general who sued uber over this. and lyft, it is not clear if they are going to appeal to the state supreme court yet. ed: that is an avenue open to them, technically? joel: that is. a voter approved initiative. the ride-hailing companies paid $200 million in their ad campaign to initiate this proposition to do and -- to do an in run. they got that past, got voter initiative. there is not much to do about that legally. caroline: joel, thank you for that. that does it for this day to addition of bloomberg technology. ed: recap day two on the podcast. bloomberg, spotify, wherever you

get your podcast. caroline: even though inflation runs hot, s&p, nasdaq on the high side too. ed: continue tracking inflation. the fed impacting the tech sector. this is bloomberg. ♪

matt: live from bloomberg world headquarters in midtown manhattan, i'm matt miller. kailey: i'm kailey leinz. welcome to bloomberg crypto, a look at the people, transactions and technology shaping the world of decentralized finance. matt: bitcoin is booming -- markets stabilized after a dramatic week that saw three banks collapse. we will have an in-depth look at how crypto exposure help to unravel signature bank. kailey: with th