announcer: from the heart of where innovation, money and power collide. in silicon valley and beyond, this is "bloomberg technology" with caroline hide and ed ludlow. ♪ caroline: live from new york. i'm caroline hide. jackie: and i'm jackie in san francisco. this is "bloomberg technology." caroline: apple fights back in the u.k., removing its encrypted security feature. jackie: plus president trump is

expected to sign tariffs to counter digital services taxes despised by u.s. tech giants. caroline: and coinbase says the s.e.c. has agreed to drop its lawsuit that accused it of running an illegal exchange. first, a check in on these markets and we're pulling lower. u.s. economic data showing slower activity and there's also higher inflation expectations. the nasdaq 100 off by .5%. the key drags down from a points perspective. amazon, tesla. but we get to a key move on the day, apple. removing its most advanced end to end encrypted security feature. it's for cloud data, but it's to the u.k. user base. it's a completely stunning development that we're seeing after of course the reports that the u.k. government ordered apple to build a back door into customer data globally. the person who helps break it all down, bloomberg's mark, who sat with me in new york. this is quite the fight back from a political perspective. >> this is a stunning development. just to give context here. like you said, the u.k.

parliament ordered apple to build a back door to give it access to user data not only for users who live in the u.k., but users globally. and so apple essentially had an option. either build that back door and continue to offer services like advanced data protection, continue to offer i cloud in the region, but what they decided to do instead is simply remove their upgraded end to end encryption feature that's called advanced data protection. gives you extra security, right, for icloud data, icloud backups, text message backups, notes, reminders, they have an app called free form, safari web book marks, right? so they're removing that. so now in the u.k. you're only getting standard encryption for those features. but you still will get end to end encryption for imessage, facetime and other things like passwords and health data. that is a stunning development. they haven't removed advanced data protection in any other region and it remains globally elsewhere. jackie: the security of apple's products is a huge part of its brand as you know. where does this leave u.k.

consumers with relation to our products on the market? does if mean they're going to be substantially less protected? >> end to end encryption is really the gold standard. it means that nobody can access that data unless you're on what am calls those trusted devices. so your own apple i.d. logged in iphone, ipad, other products. so you're not going to get that full end to end encryption on your text message backups. on your notes. on your reminders. things like that. so that is a new privacy concern in the u.k. but the other option was removing all protection entirely and building that back door in for the u.k. government. so from a compromise standpoint, it is a big compromise. apple is making but it's also a clear rebuke against the u.k. government because they are not building that back door. so they say. caroline: give us the historical context here. how often does apple react in this region al-manar? >> in terms of regions, in china that is the poster child for these compromises. icloud in china's operate bade

local provider, not apple servers. and there are talks that this local provider in china for icloud is actually a state-backed entity with connections to the communist party in klein. so that means -- in china. so that means they probably have full access, unfettered access to the user data there. in china, to bring apple intelligence there, they're essentially building what amounts to a censorship engine in partnership with alibaba. so they'll be able to go in, chinese government, and basically monitor the output of the a.i. on iphones in china and have, via alibaba, apple make tweaks to that engine. jackie: thanks for joining us. meanwhile, president trump is expected to sign a memorandum today that could allow tariffs in response to digital services taxes, that some countries impose on u.s. giants like alphabet and meta. that's according to sources. let's get more with bloomberg's mike is helpadder. who does this memorandum direct to do and what could those actions look like?

>> so what they're looking for is a way to address one of president donald trump's and his administration's biggest bug boos over the years. they even took a look at this back in 2014, these digital service taxes that hit big american technology companies like alphabet inc., like meta flat forms, with -- lat forms, with fees -- platforms, with fees in europe and other countries that are charging for their services. and the administration has outlined this program of possible reciprocal tariffs, it's unclear whether it would fit directly into that or be parallel to it. but the idea is that trump and his team see these taxes imposed by france and about 30 other countries worldwide as unfair to american companies. the timing of this is fascinating. because we have the french president, manuel macron, coming to washington, already with an intense slate of discussions over ukraine.

caroline: precisely. the timing around geopolitics, russia, ukraine, the timing around macron coming to the u.s. also, just push us forward in terms of how we see this is what meta had been setting out to do, reporting just yesterday that he was on capitol hill, mark zuckerberg, discussing some of his policy wishes. is this exactly one of them? >> well, they have made clear for a long time that they object to these taxes. they see it as unfair. on the other hand in conversations with european officials, what we have heard and with members of other countries that charge these taxes, france, for instance, has a goods surplus with the u.s. it's a trade deficit from donald trump's perspective. but france sees a services deficit with the u.s. so from their point of view this digital service tax is a way of evening that out and also charging for economic activity that they see happening in this country. it will make for a complicated round of discussions and the

questions out there are many. one is how soon could something like this go into snect we've seen how quickly -- go into effect? we've seen how quickly donald trump has tried to move with some of these other tariffs decisions and also what level they might set. and how they would fit into other levies, whether they would be stacked on top of other measures, for instance. that's another open question. jackie: we know that mark zuckerberg and other tech executives have been getting closer to president trump. has this been kind of one of the initiatives that they've been pushing forward? net, net, where does it leave companies? >> that's a great question on the regulation front overall. they have been pushing the administration to not only dial back rulemaking here in the u.s., it would hit them, but they also want the u.s. to be a better ambassador for their interests abroad. especially in europe, where we heard j.d. vance, vice president, articulating this at the munich security conference

and the a.i. summit in pars that i we followed so closely -- paris that we followed so closely. articulating that vision that regulation is really impeding innovation and that levies like the digital services tax which they have long opposed are just the sort of thing that is standing in the way of them making breakthroughs and investments in those countries as well. caroline: bloomberg's mike shephard, we thank you. tariffs, one of the things in the political landscape. how companies should manage this fluid environment. pivoted his. you have a wealth of political experience. you've been campaign managers. reminder to our audience, michael bloomberg is the founder of bloomberg news. i just want to put to you, how does a company you advise manage to move and navigate in this ever-changing environment? >> yeah, i mean, right now i

think first and foremost there's really a lot of disappointment amongst startoffs because the venture market has been dead for the last four years. it was an absolute dearth of liquidity both in terms of i.p.o.'s and m & a activity and last fall there was a tremendous amount of optimism that between reduced interest rates and a change in regulators at the from federal level, that market would open up and we'd see a lot of growth and all-american innovation really relies upon that market being free and open. and that hasn't happened at all. we have both chairman powell signaling what might be done with rate cuts, but i think far more important, the markets are so much in turmoil, there's so much kays could out of washington that a -- chaos out of washington, that a smooth, stable climate that would have paved the way for new tech i.p.o.'s, and new m & a just hasn't happened and so right now i think you just have to basically sit tight but i really do think that all the people in the venture community that

supported president trump right now are feeling some buyer's remorse. caroline: if we do see president trump being able to push back against the digital services tax, being able to push against european overreach as they see it by fighting fire with fire, is that not -- >> it doesn't help startups, it doesn't help v.c.'s. it might help meta, it might help apple or someone like that. but the reality is when you have companies that are worth anywhere from 1dz million to $100 million or even $1 billion and have revenue from $1 million to a couple hundred million, they're not paying service tax. they're usually not even profitable at this point. and so -- and the problem is this. which is innovation ultimately happens because you have all these founders sort of in a garage somewhere or the version of it who come up with crazy ideas and most of them fail but once in a while one of them succeeds which is what we saw with when we mentioned meta, mark zuckerberg or apple, steve jobs. if we don't have the new zuckerbergs and jobs and bezos

of the world coming up, then eventually we're going to have massive stagnation in our economy and when there's no liquidity in the venture market, venture capital funds like mine can't really deploy as much new capital, l.p.'s can't invest as much in venture funds and as a result start jumps either aren't being funded and not being created or they're going out of business when they don't necessarily have to, and so the ripple effect is severe. jackie: let's talk about artificial intelligence because that sector has gotten a lot of cash from venture capitalists so i don't think those startup founders are hanging out in a garage. but let's talk about the regulation in this space. it's virtually nonexistent at the federal level but there is movement at the state level. how do you see this shaking out and how are you advising startups in this space to navigate it right now? >> yeah, my advice is really exactly what you just said which is, we really have to pay attention to the states. all we see on the federal level was one tepid executive order from president biden that's already been rescinded by president trump. but last year over 800 billions

around a.i. were introduced in the state government, it will probably be double by the time we're done with sessions this year and some of them are very specific around things like deepfakes but some of them are very compress hencive like how you regulate -- comprehensive like how you regulate apps. right now the problem with the lack of any sort of federal leadership is we're going to end up with a patchwork of 50 different states with regulations that companies have to comply with all of them. if at the moment if you're one of my portfolio companies, let's focus on the states where legislation is the most likely to move, let's focus on where those bills are going and make sure we have a seat at the table so that, a, it doesn't destroy us, and, b, if possible it can help us build a regulatory mode. jackie: what other sectors are you look at that you think you can add value when it comes to this regulatory advice? i'm thinking autonomous vehicles, cannabis, you know, startups in delivery, what are you seeing? >> all authorize foes sure. a lot in -- a lot of those for sure. a lot in digital health care.

health care is so big and fragments and regulated and so screwed up that there's so much room for improvement. that's a really big sector for us. ed tech is another one. i'm excited about nuclear and what's happening around that. gov tech sector has been growing a lot lately so that's become interesting. transportation, gaming, you know, the good news for a business like mine where you're investing in working with startups and regulated industries is government's reach for better or worse is very broad and the vast majority of industries are impacted by government one way or another and that iive goes us an opportunity to add value. caroline: so add value you've gone on to say that the moment your industry, the v.c. industry, the startup industry, is feeling buyer's remorse around trump. but we push back a little bit and say, it's only february. >> yep. caroline: and ultimately are we likely to see your advice going forward, that things will change from a federal perspective and things might open up from an i.p.o. perspective and companies can build the next zuckerberg, we can see the next $1 trillion?

>> i hope so because i have a lot of money at stake here, as do a lot of other v.c.'s. look, my hope is and what at least i'm telling myself when i'm up at 3:00 in the morning is trump came in with a burst of energy, that's who he is. they wanted te a lash. they have. and soon enough things will calm down and the markets will sort of feel better and we'll start to see -- caroline: markets are near record highs. >> yeah, but it's not -- it's so far not resulting in tech companies sort of listing i.p.o.'s. so that's what we need to get to. and on one hand it is possible that because trump -- by the way, to his credit just in terms of the work put in, had so much activity on opening day and in the first week that that -- there was a lot, but as a result they've also done a lot too. so there night be as much to keep them going forward. on the other hand, he operates in chaos, right? that is how he functions. and that's not necessarily what you want if you're trying to take young tech startups and either sell them to bigger companies or take them public. jackie: that's tusk venture

c.e.o., bradley tusk. thank you for joining us. coming up next, alibaba regains its spot as the number two company in china. more on that next. this is bloomberg. this is bloomberg. ♪ only the servicenow platform connects every corner of your business, putting ai to work for people. - hr? - yeah. - it? - yeah. - r&d? - yup. omg? uh... oh, i see. uh... yeah. that's the department i work in. alright, enough of that.

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to the moon! unbelievable. stop waiting. start investing. e*trade ® from morgan stanley. caroline: let's talk about alibaba's stock rally. it has catapulted the chinese tech darling back to the number two spot in the country. for more, bloomberg's henry joins us on this and the breadth of the buying of china tech. just why are we seeing this sort of rally in alibaba and can it sustain this number? >> yeah. so alibaba is part of the china tech rally that we have been seeing for the past few weeks, since deepseek's a.i. break

through and it is based on the optimism over the country's tech advancements. as evidenced by deepseek, of course. and then in the past few weeks, we have been seeing signs of more supportive stance toward the private sector by beijing as well, evidenced by president xi jinping embracing all those important tech leaders in a meeting in beijing and basically the supportive stance toward the private sector as well as the tech break through are all supporting the stocks. and most importantly, recently we have been having some companies reporting earnings, including alibaba yesterday, reporting some recovery in its core business of domestic ecommerce, as well as growing cloud business. so all those factors putting together, supporting china tech's rally in the past few weeks. jackie: what does this tell us about beijing's stance on regulation in a sector that really saw it suffer from a crackdown? does it mean that this pressure, this scrutiny is over?

>> yeah, interesting question. i felt, the fact that president xi jinping himself inviting all those tech leaders to beijing for a talk this time is pretty telling, isn't it? in the past two or three years, all the headlines, top headlines we've been seeing about more scrutiny into all those companies, not just about those tech giants, but also the companies, but also the food delivery company, but this is important, this is a clear sign of pivot. however, we still need to caution a little bit here. because the expectations is this scrutiny on the tech firms will continue. and the priority of beijing is pretty clear as well. because if you see the seat map of that meeting, the co-founder of alibaba and the c.e.o. of ten cent, they're not sitting at the front row facing president xi jinping. the tech darlings from beijing's

eyes are still about the hard tech, including huawei as well as e.v. maker, b.y.d. so we have to keep that in mind. caroline: it's interesting who has been buying some of these chinese a.d.r.'s. ryan cohen, as reported by the "wall street journal." who else has been winning? >> yeah, so a lot of hedge fund trading activity these days and apart from ryan cohen, also billionaire investor david tapper as well. famous for his buy everything china call. we're seeing more trading activities among onshore mainland traders as well these days. so all those factors boosterring chinese stocks -- boosting chinese stocks. jackie: thanks for joining us, henry ren. coming up, we're talking about the horse race of quantum computing approaches. this is bloomberg. ♪ ♪ vment

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katie: investors are showing renewed enthusiasm for quantum computing off the back of breakthroughs. startup quera has raised $230 million from backers including google and softbank's vision fund. the company's interim c.e.o. andy ory joins us now for more. we just had microsoft on the show this week unveiling their quantum computing chip and it just feels like the field went from like an episode of star trek to all of a sudden real world applications. you pulled together this funding fairly quickly. talk to us about what happened over the last couple of months that allowed this breakthrough to happen. >> well, it's an overnight success that takes about seven or eight years. it's just that everything's coming to fruition at once and so from the investor point of view, you're seeing all these exciting activities and you're thinking it's all happening now but it's been going on for a long time. we're now just reaching the surface where people can see us. we've been for seven years,

probably use 50, 60, 70 million classer to get to where we are and now -- dollars to get to where we are and now having sold quantum machines and pushing the boundaries of the technology, we're three to five years away from useful quantum computing as an industry, as a society, in my opinion. and i think that we're going to be one of a small handful of companies that are going to demonstrate and deliver useful quantum computers. and that is going to be transformational. caroline: how much does the retale investor, the institutional investor need to understand the differences in methodology here? because people are doing -- willow is different from what we've just seen from microsoft. >> yes. so we call them modalities but they're really approaches. they're underlying technological differences. microsoft just announced a new one so we'll say there's five different modalities or technological approaches that people are using to create a quantum computer. there's neutral atom, there's eye ons, that's -- ions, there's

photons. i think that you're probably going to see several different modalities focused on specific use cases initially and so i don't think you're going to see one that's going to iranian supreme. if -- reign supreme. if i had to guess, i would think the supercomputer we're building is likely the ticket that is going to win. but -- caroline: funny, that. >> yeah, well, it's funny how you like where you are. but it's not just building the underlying quantum computer. it's the algorithms that are required so that you can do something useful with them. caroline: tell us about the usefulness here. because we had a great discussion with microsoft really talking about how we could end forever chemicals, for example. where are your applications about to work in that three to five-year time frame you talk of? >> yeah, well, it's going to be baby steps. one way to think about it are things like life science, material science, drug discovery, new materials, superconducting materials at room temperature, new forms of encryption. these are applications.

the methodologies are simulation, optimization, and machine learning. these are the things, the techniques that quantum computers can, with unique power, bring to bear to solve those kinds of problems. i think initially three to five years from now you're going to see the very beginning of quantum supremacy where very small niche-based problems are going to be solved that classical computers are never going to be able to solve. and then very quickly, the handful of years after that, you're going to see whole industries start to be transformed. jackie: that's andy ory. thank you -- andy ory. thanks so much for joining us. coinbase says the s.e.c. will drop its lawsuit against the company. we speak with coinbase chief legal officer next. this is bloomberg. ♪

caroline: welcome back to bloomberg technology i'm caroline hyde under new york. jackie: i'm jackie debellis and san francisco. caroline: off by .4% the last five trading days. tesla one of the points drive spirit we will close to one of the most talked about stories today when it comes to tech and electric vehicles. nissan's fire it and hire percent, tesla on the downside to .4%.

we get a push back to an f2 report japan is courting tesla on a nissan investment in exchange for u.s. factories. somebody who denies any involvement under the reporting is somebody that used to be on the tesla board, denying the report by the ft that he is leading a japanese group that aims to persuade the ev maker to invest in nissan. tesla off by 2%. the ev sector more than 3% for rivian morning about its first annual sales declined, policy risk, ev tax credits may be coming to an end, regulatory policies that could weigh on sales more broadly. keep an i on the ev and okta space. it is a busy one. u.s. prosecutors and regulators are investigating a $32 million deal between crowdstrike and tech distributor carahsoft.

jake bleiberg has been reporting the story since october. what do we know? luckily no -- we know sec investigators and doj investigators begin interviewing people to -- that used to work for crowdstrike and the irs asking them what happened to the deal. something curious happened after crowdstrike closed it. the irs did not ultimately by the software subscription caroline: what is at stake? what does this mean for crowdstrike? what has the company said about the investigation thus far? jake: the company says they stand by their accounting of the deal and what is at stake for them is to dente -- scrutiny on transaction that came at the close of the quarter in 2023 and was big enough it could have made the difference between them

meeting or falling short of market expectations on a key metric for that quarter. though, we should say, the company has not detailed just how it accounted for the deal. but they say they stand by what they did. caroline: u.s. crypto trading platform coinbase said that the sec agreed to drop its lawsuit that alleged it ran a legal exchange. all this pending commissioner approval. standing by with the corn-based chief legal officer. sonali: thank you for joining us on the heels of this news. it is a five to have been fighting for a while. now that you have the agreement what does just free coinbase us to do? paul: today is not just a big day for corn-based, but crypto

and the united states. which just case in our rearview mirror coinbase will be are they a stronger position to not just push for permanent legislation we think will provide clarity to the market, but also double down , may be triple down on innovation in our own products and services that we think will serve our customers very very well. >> -- sonali: you had an initial excitement around the agreement when it comes to your stock performance. you are seeing your stock at the moment down on the day. a question i have is what this means for investors in coinbase. presumably, you have been spending a lot of money on legal fees. how much have you been spending through the course of the fight? what does it now for you up to spend on instead? paul: the last four years of the gary gensler regime meant his war on crypto have been nothing short of a disaster for america crypto writ large. in the case of coinbase we had to spend over $50 million just

on outside law firms and other advisors alone. if that doesn't even include the cost internally. it does not include the tax on innovation that gary gensler's misguided campaign imposed. with that now lifted, we are able to focus on the future. as i said, i think legislation in congress on the market structure and stablecoins will be critically important. and of course there is the whole point of legislation and rulemaking at the sec, to bring new listings to our platform, to develop new products and services that provide a real alternative with financial services and ultimately a foundation for innovation's too well beyond -- dots will be on speculation, investing, and financial that we think will be tremendously important to the u.s. economy. sonali: i question is what does this mean in terms of unlocking new products and token listings.

could this unlock a new wave of listings? paul: i think we will see an exhilaration on listings on the platform going forward. our approach to listings has remained consistent over many years. to look at the state of the law. to understand where the courts are, and frankly, where the courts are likely to go if and when issues are brought before them. with the resolution, we can consign to the as sheep of history the sec's misguided view that somehow every digital asset other than, perhaps, bitcoin, was a security. that was the view of the sec during the gary gensler regime and it has been firmly rejected by new leadership in charge. sonali: what does this mean about investments in the future? you mentioned $50 million in a span of so many years when it came to legal costs, hiring outside lawyers. does this translate to $50

million in the future for new engineers and talent at coinbase? paul: i think it translates to an even bigger investment going forward in software development, in technology, in basic science to support the advancement of cryptocurrency and crypto and digital assets more generally all over the world. the gensler regime may have been great for lawyers like me, but a disaster for innovation in the united states. fortunately, with new leadership at the sec turning the page, we think we will be able to look forward and focus much more on building and less on litigating. sonali: you mentioned rulemaking being a critical part of the push moving forward. how soon do you expect more rules that would clarify a lot of uncertainties in the crypto industry, particularly when it comes to registrations with the sec, when it comes to listings, and otherwise. paul: coinbase has been focused on regulatory clarity and especially rulemaking for years.

that is one of the reasons why even as we were defending ourselves against the bogus, meritless case by the sec we sued the sec ourselves to get rules for crypto in place. i am confident that with acting chair ueada and at the announcement of a crypto task force at the sec we will see rules that allow coins like -- companies like coinbase and many others to come in and register to list crypto assets, security stomach transactions, appropriately on our platform and move past this phase, this era where decisions were made in courtrooms rather than as part of a deliberative process between industry, regulators, and other stakeholders. sonali: paul, thank you for your time. paul grewal the cord chief legal officer. jackie: and the ex fortune facelift.

how the once struggling social media platforms is seeing improved financials.

caroline: this is bloomberg technology looking at a live shot of the principal room. check out the bloomberg technology podcast on the terminal and online at apple, spotify, and iheart. this is bloomberg. caroline: let's look at the social media platforms x. it's in talks with investors for a fresh equity fundraising valuing at $44 billion. but it is still mired in debt. it has improved fortunes due to heavily adjusted financials and investors potential fear of missing out. max chafkin joins us on some of the opacity that undermines the reliability of the financial information we have ultimately been drip said. max: elon musk and x, really since elon musk bought x, has

been trying to tell the story that the finances are improving. that things are getting better. we seen a lot of reasons to doubt that. though there have been over the last few months some positive signs. maybe some advertisers perhaps coming back, partly because they want to keep somebody that is a close advisor to president trump happy. in this fundraising, you see some of the ways that they are trying to cover up the advertising losses, or what most of us believe our huge advertising losses including deals with x ar, elon musk say our company, ownership stake in xa i, a deal with chips provided from x to x ar. we are seeing a kind of interparty transaction that for most investors would probably be a bit of a red flag or at least a yellow flag. for elon musk it is just sort of part of how he does business. he has always done this with his companies. combined them in ways that are not necessarily conventional.

jackie: how much revenue the company generated is still substantially less than what it generated party must coming in -- elon musk coming in. why are investors still so confident? max: i think a lot of it is fomo, the fear of missing out, the sense that elon musk is in a hot place at the arm of the most powerful person under the world, driving at least some of the excitement. we have seen similar run ups at a value at tesla and elon musk's other companies where people think this will work out one way or another. then you also have the ai angle. there was a lot of hype around ai. x is related to this checkbox -- chatbot thing called grok that is inside x. it is a bet on that and a bet on elon musk and any time investors want to do business with an elon musk company you have to think

about the larger elon musk empire. spacex ort starlink one day, one of these companies will have an ipo and a lot of these guys will want in on that. there are a lot of reasons to stay close to elon musk even if you aren't a true believer in any particular deal. jackie: the doge staffer who resigned after a report linked him to racism and eugenics has been reinstated at the social security administration. he reportedly advocated for "a eugenic immigration policy" and argued against mixed race relationships in posts onx received support from musk, president trump, and vice president pence after his departure earlier this month. caroline: let's talk about nonprofits that target online extremism with them -- extremism. they are cutting off employees

after elon musk stopped vital support to many. jeff stone is one of the reporters on this link the -- lengthy piece. jeff: a small but significant portion of u.s. foreign aid has come up for years, been dedicated to projects that are often independent media projects. but what they do is fight extremism online. they flag and refute russian propaganda, particularly in u.s. allied countries that are thinking about closer relationships with the kremlin. so, these are small organizations that have a really vital part of the way people around the world are consuming. jackie: what resource do these

organizations have? is there any other place where they can fill in the gap in funding they were previously receiving that is now being cut? jeff: it really depends on the organization. some are closing entirely. others are laying off staff. most of them are scrambling to find different sources of funding, whether it be asking other investors for more cash. a lot of them are trying to figure it out now and the short answer is that there is not an immediate path to sustainability. >> caroline: it's not all about money. jeff: that's right. disinformation has become an incredibly loaded word, obviously. a lot of the right-wing side of things is often conflated with censorship. these organizations are little different. they flag extremism and they flag threats, often potentially violent threats to law enforcement around the world. under that political aspect of

disinformation, these other projects are also folding. jackie: bloomberg's jeff stone thanks for joining us. coming up, stacy brown philpot talks about her new project back a diverse founders in tech when others are pulling back from d.e.i.. this is bloomberg. this is bloomberg. no. i can do some research. ya know, that's backed by j.p. morgan's leading strategists like us. when you want to invest with more confidence... the answer is j.p. morgan wealth management you think those phone guys will ever figure out how to keep 5g home winternet from slowing downh more confidence... during peak hours? their customers have to share a wireless signal with everyone in their area. oooh. you know, it's kinda like when you bring a really big cake

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jackie: at a time when d.e.i. has fallen out of favor in washington and some big tech firms, stacy brown philpot 's new fund is targeting diverse founders. the former task rabbit ceo raised $172 million for under invested startups. she is here to tell us about cherry rock capital. tell us more about your company's investment philosophy and how you managed to bring investors, institutional investors especially, that now is the time to bet big on underrepresented founders? stacy: cherry rock capital is focused on investing on it this

theory -- the series a, series b phase four under invested founders. they all want to see great returns. we see a real opportunity to focus on under invested founders who generally lack access to capital. jackie: did the anti-der climate, especially over the last couple weeks that really intensified, did that affect your ability to fund raise? it just closed in january, right? stacy: you can see the names of the lps we have and are limited partners are focused on generating return. this is long-term. i'm building an institution that will last more than 20 years. they see opportunity over that duration to generate outsized returns, not just for them, but our founders.

caroline: where are the particular sector points for the areas likely to bring outsized returns? stacy: our first company was called coactive a multimodal ai company that helps companies analyze audio and video data. that sector is exciting and we also invest in a digital held company that provides health insurance to small businesses that employ hourly workers. at that sector is exciting. jackie: you were a founder of the softbank opportunity fund that had a similar mission. what did you learn their investing in similar startups that you would do differently at cherry rock? stacy: we learned focus brings clarity. we did not have a problem with the pipeline funding -- finding

underinvested entrepreneurs with softbank. we focused on series a and series b where we see a big opportunity to generate alpha and all our lps want to see us generate great returns and of -- of the way to do that is through alpha. caroline: talk about conversations you have had with founders. when you seek them out what it's their environment like to raise funds at the moment? are they quietly see more support at the moment or less? stacy: we love the founders at coactive and cody, will, and joseph at vita bowl focused on their strategy, go to market, hiring the best people and they chose to work with cherry rock capital because we did that. we joined andreessen horowitz on the table. we joined first-run capital and the city impact fund. they were looking for a great set of investors. bringing cherry rock capital in was about -- helping them scale,

like i did when i was the ceo of task rabbit. the founders we have found have found early product market for it. they have a few million dollars in revenue and now they are looking for help like we bring over 60 years of operating experiences to scale their businesses. jackie: let's talk about what lps want to see as well. there have not been that many ipos over the last couple years. what catalyst do you think the market needs in vc to catalyze the trough we have been in? stacy: timing is everything. i think this is a great time to invest. when you look at the economic cycle for venture, 2024, 2025 vintage it's a great vintage. i think we raised $172 million at a great time and our lps also want us to create differentiation. we come in at the best valuation we can come in because that determines our exit and returns. we are very disciplined in our diligence process and we want to

make sure we are disciplined to generate the best possible return for them. caroline: stacy brown philpot great speaking with you, the founder of cherry rock capital. breaking news. post tim cook meeting with president trump, trump is currently saying apple will build plants in the united states, not mexico. he says apple is shifting plants because of the tariffs he has been imposing. trump says, we will have a lot of chipmakers coming to the united states. president trump speaking after he met with tim cook yesterday. apple currently remaining up .4%. there is a lot to navigate when it comes to the white house and doing business here in the united states for technology giants such as apple and the like. from new york and san francisco, that does it for this edition of "bloomberg technology". check out our podcast on the terminal online as well as on apple, spotify, and iheart.

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