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Alibaba Raises $10 Billion in Record Hong Kong Share Sale · Bloomberg Intelligence

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  Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the
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  Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
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  Speaker 1: Business App. Listen on demand wherever you get your podcasts,
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  Speaker 1: or watch us live on YouTube.
• 0:24
  Speaker 2: Work tech out there.
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  Speaker 3: Ali Baba the latest big hyperscaler to hit the capital markets.
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  Speaker 3: They plan on raising ten billion dollars from just another
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  Speaker 3: ten billion yep, exactly right. I think they're doing in
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  Speaker 3: Hong Kong, which is pretty interesting. There's a lot going
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  Speaker 3: on in tech world, and of course Nvidia reporting their
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  Speaker 3: earnings Wednesday after the clothes Let's check in with Ed Lovedlow,
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  Speaker 3: Bloomberg Tech co anchor. So, what'd you make of the
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  Speaker 3: Ali Baba news? Just another big hyperscaler raising capital to
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  Speaker 3: fund their their capex.
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  Speaker 4: Yeah, it's interesting. You cool them the hyperscaler, right. I
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  Speaker 4: think that's the observation that most markets would make. They've
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  Speaker 4: shifted from being an e commerce company in China to
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  Speaker 4: a cloud computing company that are very focused on AI
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  Speaker 4: and the same way that lots of the analogous companies
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  Speaker 4: in America are. There are some questions being posed, like
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  Speaker 4: why are they doing a follow on follow on simply
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  Speaker 4: being you know, existing public fly traded company tapping equity
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  Speaker 4: markets and not using debt. You know, debt has been
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  Speaker 4: the financing mechanism of choice here in the United States.
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  Speaker 4: But either way, the net conclusion is the same that
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  Speaker 4: they are in need of capital to build infrastructure and
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  Speaker 4: invest heavily in AI development. And you know, Ali Barba
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  Speaker 4: is seen by many as being the leader of that
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  Speaker 4: pack in China because of not just their commitment but
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  Speaker 4: their competence too.
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  Speaker 5: Yeah, we're seeing all I Baba's shares drop on that
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  Speaker 5: placement here in the US, down one point four percent
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  Speaker 5: to one hundred and seventeen dollars. There's another headline speaking
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  Speaker 5: of companies raising money. SoftBank planning a record one trillion
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  Speaker 5: yen retail bond sale to raise funds for what else,
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  Speaker 5: investment commitments to AI in this case AI tell us
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  Speaker 5: a little bit more about SoftBank's relationship with open AI.
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  Speaker 4: Yeah, so really interesting because retail bonds, but also a
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  Speaker 4: trillion ends about six billion dollars six point three billion
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  Speaker 4: dollars and officially a spokesperson at SoftBank says they'll use
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  Speaker 4: the proceeds in two ways. One paid down existing debt
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  Speaker 4: and refinance, but also support portfolio companies. And the way
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  Speaker 4: that this is being interpreted is soft Bank is on
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  Speaker 4: the hook for lots of commitments to open Ai, and
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  Speaker 4: they've used lots of mechanisms to get the cash to
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  Speaker 4: support that. And open Ai is in a place where
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  Speaker 4: it's far confidentially for IPO, but is under no pressure
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  Speaker 4: to pull the trigger because it's able to get capital
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  Speaker 4: from all kinds of places, including its existing private market backers,
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  Speaker 4: and soft Bank, you know, is part of this deal,
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  Speaker 4: will set aside some funds to do that. Say, oh,
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  Speaker 4: open Ai, we said we give you some money, here's
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  Speaker 4: some money ed.
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  Speaker 3: We're going to get Nvidia reporting their quarterly results after
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  Speaker 3: the close Wednesday. What are you going to be listening
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  Speaker 3: for from Jensen Wang and team.
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  Speaker 4: Yeah, I mean inevitably, and I think your last guest
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  Speaker 4: was talking about this. It's come to the point now
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  Speaker 4: where somebody will ask Jensen about circular financing, you know,
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  Speaker 4: a to is this or is this not circular financing
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  Speaker 4: in any given a deal that's been announcing in the
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  Speaker 4: last few weeks, but also whether or not we should
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  Speaker 4: be worried about it. What's extraordinary is that you know
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  Speaker 4: sales will come in at around ninety two billion dollars.
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  Speaker 4: The streets is quite a wide range, ninety two to
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  Speaker 4: ninety five billion dollars, but essentially revenues doubled from the
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  Speaker 4: same period a year ago. Adjusted earnings of doubled from
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  Speaker 4: the same period a year ago. The bar is so
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  Speaker 4: high and so often Wall Street is just wants Jensen
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  Speaker 4: to say definitively, this is what will happen for the
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  Speaker 4: next five years. And as you know, Paul, there are
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  Speaker 4: a few executives anywhere in the world that are willing
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  Speaker 4: to make that bet and get their crystal ball out
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  Speaker 4: for that kind of time horizon.
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  Speaker 5: Yeah. In video reporting on Wednesday after the market close
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  Speaker 5: of Ludlaw will be on hand to help sure break
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  Speaker 5: down the coverage of that before we let you go ed.
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  Speaker 5: Tesla also recalling three million evs in China overdoor handles safety.
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  Speaker 5: Topic of a market is China's still for Tesla?
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  Speaker 4: Yeah, So, China's the world's biggest automotive market, and actually
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  Speaker 4: in this recall there are about eight different players impacted,
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  Speaker 4: but Tesla's by far and away the largest single one.
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  Speaker 4: Three million evs of Tesla's are subject to this recall
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  Speaker 4: where the regulator is asking Tesla to enact a software
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  Speaker 4: fix so in the event of an accident, the windows
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  Speaker 4: automatically come down. But as you guys know Bloomberg's one
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  Speaker 4: so much reporting on this. In a Tesla you have
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  Speaker 4: a button electronic door release. There is also a manual override,
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  Speaker 4: and it has been the discussion of much debate of
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  Speaker 4: how safe that MANU override is, how easy it is
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  Speaker 4: for somebody in an accident to get out the car.
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  Speaker 4: So the regulators directing Tesla to put stickers like literally,
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  Speaker 4: this is where the MANU override is. This isn't unique
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  Speaker 4: to China, like this has been something that regulates looked
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  Speaker 4: at in this country too. But it's a big one
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  Speaker 4: and like you know, it's it's the result of a
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  Speaker 4: year's worth of discussion about how EV doors are designed.
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  Speaker 2: All right, just real quick.
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  Speaker 3: I know over the weekend ed you were probably sitting
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  Speaker 3: at the Starbucks on sand Hill Road. Amongst all the
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  Speaker 3: I was the Venture Capitals pe guys, when are we
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  Speaker 3: going to get an IPO of one of these? I
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  Speaker 3: guess it's Anthropic is probably the first one in the pipeline.
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  Speaker 3: You think that's going to happen when we get back
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  Speaker 3: from Labor Day.
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  Speaker 4: This was actually a pickleball weekend, so show up with
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  Speaker 4: pickleball people. That was a good one. I think we're
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  Speaker 4: still in a place where, you know, Brace Andthropic could
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  Speaker 4: flip its its S one public in the next two
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  Speaker 4: weeks and that would put it on track for an
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  Speaker 4: IPO late September early October. We don't know that definitively,
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  Speaker 4: but that's the latest reporting. The soft Bank story on
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  Speaker 4: open Ai is just more evidence that open Ai is
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  Speaker 4: not in any rush right and that the latest reporting
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  Speaker 4: was that they had kicked an IPO target to next year.
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  Speaker 4: I think there's been some reporting that the CFOs acknowledged
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  Speaker 4: that internally meetings that you know it will happen in
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  Speaker 4: twenty seven.
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  Speaker 5: So do you see a lot of companies kind of
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  Speaker 5: steering clear of late September early October because of this
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  Speaker 5: massive Anthropic IPO.
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  Speaker 4: You know, it's whether you believe that a big IPO
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  Speaker 4: pressages a starting gun for an IPO window in which
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  Speaker 4: one everyone follows suit, or if you look at what's
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  Speaker 4: happening in capital markets.
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  Speaker 2: The Ali Barber follow on offering.
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  Speaker 4: For example, you know, there's lots of activity in the
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  Speaker 4: equity market. The market is flooded with equity at the moment.
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  Speaker 4: Can it sustain lots and lots of IPOs at that scale?
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  Speaker 4: That is a debate for the bankers and in the
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  Speaker 4: demand of those big institutions that would buy the shared.
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  Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.
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  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 6:51
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 6:54
  Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
• 6:57
  Speaker 1: you get your podcasts, or watch us live on YouTube.
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  Speaker 3: Back to the tech story, but not necessarily the Nvidia
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  Speaker 3: and the AI story, but just kind of some of
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  Speaker 3: the infrastructure plays, the networking plays that are really benefiting here. Hardware, yeah, exactly,
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  Speaker 3: that are really benefiting from just this increased AI spend.
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  Speaker 3: Wood you know, Joints is here, senior technology annels for
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  Speaker 3: Bloomberg Intelligence. Talk to us about just the PC business
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  Speaker 3: in general, wooje and what that means for the folks
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  Speaker 3: like the Dell's, the Apple, Lenovo's, those kinds of players.
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  Speaker 2: What's the outlook for that business?
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  Speaker 6: Yeah, Hey, Paul, I'll tell you the one area in
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  Speaker 6: hardware that really isn't that hot. It's the PC market. Well, look,
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  Speaker 6: it's actually done better than we anticipated in the first half, right,
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  Speaker 6: And the way we're looking at it is that companies
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  Speaker 6: that handled their memory supply chain really well, like the
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  Speaker 6: Dells and the Lenovo's, they actually did very well, but
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  Speaker 6: from a uniershipment basis because they were able to hold
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  Speaker 6: back pricing. Now, when we look into the second half
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  Speaker 6: of the year and from a back to school as
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  Speaker 6: well as a holiday spending standpoint, if you haven't gotten
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  Speaker 6: your p seed now you're kind of in a rock
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  Speaker 6: and a hard place because PC prices are going up
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  Speaker 6: around twenty twenty five percent, whereas unit volumes are going
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  Speaker 6: to go down by about twenty percent in the second half.
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  Speaker 2: And overall, we do.
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  Speaker 6: Think that PC shipments are going to be down roughly
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  Speaker 6: about three percent for the year I'm sorry, fifteen percent
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  Speaker 6: for the year, twenty two percent in the second half
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  Speaker 6: of this of this year. So you know, margins are
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  Speaker 6: thin in the PC market and companies that have not
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  Speaker 6: a good supply chain on the memory side are going
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  Speaker 6: to be struggling.
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  Speaker 5: Have we seen any kind of ramp up in demand
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  Speaker 5: before the price hikes take effect. I mean, was there,
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  Speaker 5: you know, kind of a rush to lock things in
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  Speaker 5: now from consumers and from companies.
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  Speaker 6: Yeah, and that's a good points, Carl. It We saw
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  Speaker 6: a really sharp uptick on the on the corporate PC
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  Speaker 6: side as well as on the consumer side because of
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  Speaker 6: the memory spikes. First quarter was a fantastic quarter for
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  Speaker 6: companies like Dell, Lenovo as well as HP. Second quarter
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  Speaker 6: was surprisingly better than we'd anticipated because all of the
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  Speaker 6: news on the memory side. But you know, I think
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  Speaker 6: there is going to be some exhaustion, right There is
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  Speaker 6: a lot of price sensitivity, and the PC market is elastic,
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  Speaker 6: quite elastic, and there is going to be a second
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  Speaker 6: second half slowdown. And from a corporate PC side. From
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  Speaker 6: a corporate side, there's only a certain amount of it
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  Speaker 6: dollars that you can spread around. So you know, I'm
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  Speaker 6: going to spend it more on the AI side and
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  Speaker 6: let my PCs, my employees run their PCs a little
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  Speaker 6: bit longer for at least another year.
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  Speaker 5: Here's a hack, Paul, go to Japan, spend your strong
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  Speaker 5: dollar by laptop there, bring it back, use it there
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  Speaker 5: so that it's not brand new.
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  Speaker 2: Perfect. I love the play there the arbor.
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  Speaker 3: You knows, I've been telling Scarlett with ninety dollars oil,
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  Speaker 3: I'm going to go down at Texas and start drilling
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  Speaker 3: some oil. I think I can make some money there,
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  Speaker 3: but I think I might just get into the memory
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  Speaker 3: chip manufacturing business. Talk to us about the shortage there
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  Speaker 3: and how that plays.
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  Speaker 2: Out and how long it takes to play out.
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  Speaker 6: Yeah, so, and you're right, and my colleagues Jake Silverman
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  Speaker 6: and Masahiro Wakasuki have done a fantastic job on the
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  Speaker 6: memory side. Look, DRAM prices have tripled over the last
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  Speaker 6: first half of the year to now, and the way
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  Speaker 6: that we're looking at it is that it's going to
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  Speaker 6: continue to rise sequentially up until twenty twenty eight. You know,
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  Speaker 6: the AI servers, the hyperscale cloud guys are just sucking
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  Speaker 6: up a lot of memory, and you know, because of
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  Speaker 6: the lower capacities and the lower volumes, it leaves less
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  Speaker 6: for everybody else, whether it's going to be the PC makers,
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  Speaker 6: whether it's going to be automotives for the cars as well.
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  Speaker 6: So price is going to continue to go up until
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  Speaker 6: twenty twenty eight, until Microns, SK and Samsung have the
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  Speaker 6: fabs up and running.
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  Speaker 3: See, I'm going to go to the swamps of Jersey
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  Speaker 3: build them, build your own factory, yep, my own fab
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  Speaker 3: as they call it, and just start cranking O chips.
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  Speaker 5: Are these chip makers dragging their feet on creating new facilities,
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  Speaker 5: like building new manufacturing capability because they're enjoying the record
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  Speaker 5: prices right now?
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  Speaker 6: No, As a matter of fact, you know these these
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  Speaker 6: fab these chip makers, I've actually committed to making adding
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  Speaker 6: capacity the beginning of this year. So look at the
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  Speaker 6: end of the day, it takes about two years for
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  Speaker 6: them to build a facility, bringing the equipment and the
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  Speaker 6: clean rooms to get the capacity up and running. And
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  Speaker 6: even then, by twenty twenty eight, we're still going to
• 11:42
  Speaker 6: be short of capacity.
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  Speaker 3: It's amazing they didn't anticipate it, But I guess you didn't.
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  Speaker 3: You couldn't really anticipate the.
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  Speaker 5: AI right and the scale of demand. I mean, once
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  Speaker 5: the price goes up, can it come back down? Hujin?
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  Speaker 5: Or like it's never going to come back down to
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  Speaker 5: what it was pre AI boom.
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  Speaker 6: From a memory standpoint, when we start having more volume,
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  Speaker 6: we should expect memory press to come back down. I mean,
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  Speaker 6: quite frankly, KAPEC is good. Well, Kapex can only go
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  Speaker 6: so far, right, and when we did our HGD modeling, yep,
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  Speaker 6: we do expect it to slow in second half in
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  Speaker 6: twenty eight.
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  Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.
• 12:26
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 12:30
  Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android
• 12:33
  Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever
• 12:36
  Speaker 1: you get your podcasts, or watch us live on YouTube.
• 12:41
  Speaker 5: Let's talk a little bit about time travel and time travel,
• 12:44
  Speaker 5: not insofar as you know the Outlander movies, and not movies,
• 12:49
  Speaker 5: TV shows and books or sci fi or anything, but
• 12:52
  Speaker 5: time travel when it comes to your resume. That's a thing.
• 12:56
  Speaker 5: And Beth Cohen has been writing about it. She's one
• 12:58
  Speaker 5: of our Bloomberg Opinion column And Beth, what you say,
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  Speaker 5: or what people have identified as time travel is when
• 13:05
  Speaker 5: someone edits the descriptions or titles of jobs that they
• 13:08
  Speaker 5: had left years earlier with you know, new information or
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  Speaker 5: you know, something geared towards a reader. In twenty twenty six,
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  Speaker 5: and we're noticing, at least on LinkedIn that that's happening
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  Speaker 5: more and more frequently, Beth. This is all about incorporating
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  Speaker 5: AI into your job description or your job title, isn't it.
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  Speaker 7: Yeah, it's really interesting because you know this, this practice
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  Speaker 7: has been going on forever, right, people have been polishing
• 13:35
  Speaker 7: their resumes for as long as there have been resumes.
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  Speaker 7: But what's interesting here is that, you know, after the
• 13:41
  Speaker 7: introduction of chat GPT, we really saw a surge in
• 13:45
  Speaker 7: words associated with AI, so lm AI, GBT. People were
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  Speaker 7: going back and adding these two jobs that they had left.
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  Speaker 7: And this is not sort of like fresh you know
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  Speaker 7: in their memories. This was like a medium of four
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  Speaker 7: of jobs left four years prior. So something really interesting
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  Speaker 7: happening happening there.
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  Speaker 3: So employers, I guess, the folks that actually use LinkedIn
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  Speaker 3: to find employees, are they getting hip to this? Are
• 14:12
  Speaker 3: they are they dealing with it recognizing it?
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  Speaker 7: So I think there's a couple of ways to think
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  Speaker 7: about this one. This whole thing came up because researchers
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  Speaker 7: who study the labor market use LinkedIn now as data.
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  Speaker 7: It's a treasure trove for them. But this paper examines
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  Speaker 7: this idea of how much do these edits actually change
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  Speaker 7: our understanding of the labor market. So they found, for example,
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  Speaker 7: that if based on the edits the time traveling that
• 14:38
  Speaker 7: people have done, we would be overstating people's AI skills
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  Speaker 7: in twenty twenty two by thirty percent.
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  Speaker 2: So it doesn't so.
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  Speaker 7: Much give us a great understanding of the labor market
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  Speaker 7: of the past as much as it does maybe an
• 14:53
  Speaker 7: understanding of what employers are looking for today or what
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  Speaker 7: they're not looking for, because that's what people are acting too.
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  Speaker 3: Right.
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  Speaker 7: It's like, Oh, I think I think that employers want
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  Speaker 7: AI skills, so I'm going to make sure that it
• 15:06
  Speaker 7: looks like I have.
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  Speaker 5: Those capabilities, rewriting history in the process. I'm totally to
• 15:12
  Speaker 5: pause point. I wonder how employers are looking at this
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  Speaker 5: when we don't even know if human recruiters are looking
• 15:18
  Speaker 5: at this, or whether bots are looking at people's resumes
• 15:21
  Speaker 5: and kind of filtering out and filtering in resumes that
• 15:26
  Speaker 5: they think are appropriate for jobs that they want to
• 15:28
  Speaker 5: have to feature AI experience.
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  Speaker 7: I think we are in this AI doom loop where
• 15:35
  Speaker 7: we have people using as we know AI to write
• 15:40
  Speaker 7: their resumes, write their LinkedIn profiles in order to apply
• 15:43
  Speaker 7: for jobs that will be screened by AI to make
• 15:47
  Speaker 7: sure that they fit the job. Descriptions that we're also
• 15:51
  Speaker 7: written by AI. So I don't know that we're I
• 15:54
  Speaker 7: don't know what this is telling us. We're not getting
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  Speaker 7: a lot of really good information. But I do think
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  Speaker 7: that employers, as we are seeing an increase in jobs
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  Speaker 7: that are posted that are related to that, are asking
• 16:05
  Speaker 7: for human capabilities, right, empathy, creativity. The problem is that
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  Speaker 7: I don't know how AI assesses that, right, So we're
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  Speaker 7: we're in a very difficult cycle right now.
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  Speaker 3: So Beth does LinkedIn assume any responsibility or liability for
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  Speaker 3: making sure.
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  Speaker 2: Stuff is actually accurate.
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  Speaker 5: They're just a platform.
• 16:27
  Speaker 2: They're just a platform, right, just a platform.
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  Speaker 5: There's just a platform.
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  Speaker 7: And I should say I'm not making any moral assessment
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  Speaker 7: about this, right because I do think again, like people
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  Speaker 7: have been tailoring their jobs to whatever the job they're
• 16:41
  Speaker 7: applying for. There's obviously different degrees of that. So it's
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  Speaker 7: and again I don't think people I think it is
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  Speaker 7: hard to go back and say, hey, I had all
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  Speaker 7: these AI skills ten years ago.
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  Speaker 2: Right, But I do.
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  Speaker 7: I do think that the practice itself is not is
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  Speaker 7: not new, but the way it's so public think is
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  Speaker 7: very new. You're not just sending it to one employer.
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  Speaker 7: You're putting out out there for everybody to see.
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  Speaker 5: And the interesting part of this research study was that
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  Speaker 5: this is happening in particular to the tech industry. People
• 17:14
  Speaker 5: in the tech field who are looking for jobs, where
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  Speaker 5: I guess it's more credible that they might have been
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  Speaker 5: doing something with AI and large language models four years
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  Speaker 5: ago or five years ago than say Paul or I
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  Speaker 5: put it in our resumes.
• 17:27
  Speaker 7: Totally, totally, Yeah, I was like one, I think for tech.
• 17:29
  Speaker 7: So it was twenty percent for the overall popular you know,
• 17:33
  Speaker 7: LinkedIn user population in the US, but it was one.
• 17:35
  Speaker 2: In three for tech workers.
• 17:37
  Speaker 7: But you know, I think that it can tell us.
• 17:39
  Speaker 7: It does tell us information about the labor market, even
• 17:43
  Speaker 7: if it's not so much.
• 17:45
  Speaker 2: A historical artifact.
• 17:46
  Speaker 7: Right, we could say, you know, if we saw a
• 17:49
  Speaker 7: surge in people update so people do tend to update
• 17:53
  Speaker 7: their their LinkedIn profiles before changing jobs, there's a correlation,
• 17:57
  Speaker 7: you know, there's a high connection there. So what they
• 18:00
  Speaker 7: found what you know, I think one way to think
• 18:03
  Speaker 7: about this is if we see a surge in people
• 18:06
  Speaker 7: updating their LinkedIn profiles, or does this foretell the next
• 18:10
  Speaker 7: great resignation? Or could you tell something about a company's health.
• 18:14
  Speaker 7: If you were looking at a particular company and saw
• 18:17
  Speaker 7: a lot of employees updating their LinkedIn profiles, does this
• 18:20
  Speaker 7: mean we're going to have a mass exodus of employees?
• 18:23
  Speaker 7: So this data is still useful, just not in the
• 18:26
  Speaker 7: way I think a lot of economists had anticipated.
• 18:31
  Speaker 5: Stay with us more from Bloomberg Intelligence coming up after this.
• 18:38
  Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live
• 18:41
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• 18:48
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• 18:52
  Speaker 3: Here's something I didn't know. It's now easier than in
• 18:56
  Speaker 3: any time almost twenty years to get a national bank
• 18:59
  Speaker 3: charter thanks to Trump administration's deregulation push. And then, also
• 19:03
  Speaker 3: in the same story, Donald Trump's family is on the
• 19:06
  Speaker 3: verge of having its very own bank.
• 19:08
  Speaker 2: That sounds good for them.
• 19:09
  Speaker 3: Page Smith joins us here Connumer Finance, consumer finance reporter
• 19:13
  Speaker 3: for Bloombergen News here, joining us life on our Bloomberg
• 19:16
  Speaker 3: in Actor Broker studio. Page Talkers. This is a big
• 19:19
  Speaker 3: take story. We love the big takes stories on the terminal.
• 19:22
  Speaker 3: Deeply sourced deeply reported so talk about Donald Trump, his family,
• 19:26
  Speaker 3: business associates and their interest in banking.
• 19:30
  Speaker 8: Certainly, so, we have been looking at this trend for
• 19:33
  Speaker 8: the last I would say honestly since the since Trump
• 19:38
  Speaker 8: took office again last year, and we've really, of course
• 19:41
  Speaker 8: been watching very closely the deregulatory push across agencies. But
• 19:46
  Speaker 8: the deregulatory push when it comes to financial regulation has
• 19:50
  Speaker 8: been particularly interesting as it comes to banks and how
• 19:54
  Speaker 8: many new banks are being formed, and who is being welcomed.
• 19:59
  Speaker 2: Into the u US financial system and maybe who's not.
• 20:03
  Speaker 8: Certainly, the data shows that the OCC or the Office
• 20:07
  Speaker 8: of the Controller of the Currency that's a regulator that
• 20:10
  Speaker 8: Trump can pick the leaders of. They have proved twenty
• 20:16
  Speaker 8: two bank charter applications, more than the number it gave
• 20:19
  Speaker 8: out during the five years combined since in the first
• 20:24
  Speaker 8: nineteen months of the president's second term.
• 20:26
  Speaker 2: So that's a change in pace to be sure.
• 20:28
  Speaker 3: Okay, now that the Trump family's entry is World Liberty
• 20:33
  Speaker 3: Financial the name of their bank, what's the regulatory process
• 20:37
  Speaker 3: to get and to see if this President Trump is found,
• 20:40
  Speaker 3: do they have conflicts of interest?
• 20:41
  Speaker 2: How who decides all those things?
• 20:43
  Speaker 8: Certainly, so, the OCC decides who can get a bank charter,
• 20:47
  Speaker 8: and in this case, the OCC was the entity that
• 20:51
  Speaker 8: granted conditional approval to President Trump's family's venture, which is
• 20:56
  Speaker 8: called World Liberty Financial, And in that docum that essentially
• 21:00
  Speaker 8: said yes, you have preliminary approval, they actually acknowledged your
• 21:05
  Speaker 8: question and said yes. There were some commenters that asked
• 21:09
  Speaker 8: the question of hey, are there conflicts of interest here?
• 21:12
  Speaker 8: And to that the OCC essentially said senior staff approved
• 21:17
  Speaker 8: this application and reviewed it, and it was sort of
• 21:20
  Speaker 8: an acknowledgment of the question. But it was I would
• 21:23
  Speaker 8: say fair to say, scant on details on how exactly
• 21:28
  Speaker 8: those conflicts of interest would be avoided, if there are any.
• 21:33
  Speaker 3: Has there been any pushback from say Democrats or other
• 21:36
  Speaker 3: parts of the government.
• 21:38
  Speaker 8: Well, I would say it's been very quiet from trade
• 21:42
  Speaker 8: groups and other entities that were much louder about other
• 21:46
  Speaker 8: charter applications, which, of course, I mean, you know, you'd
• 21:49
  Speaker 8: be going up against the president's family in this environment
• 21:52
  Speaker 8: there it's important to maintain ties for existing regulations. But yeah,
• 21:58
  Speaker 8: it's been quite It's been quieter then I would have anticipated.
• 22:01
  Speaker 3: Interestingly, do we know what the Trump bank here, the
• 22:07
  Speaker 3: Trump family bank, what they intend to do with this
• 22:09
  Speaker 3: charter with how active they intend to be?
• 22:12
  Speaker 8: Yes, So the long term trajectory, of course isn't known.
• 22:15
  Speaker 8: We'll have to see where it goes. But when upon
• 22:19
  Speaker 8: a receiving conditional approval, the Trump family and their business
• 22:24
  Speaker 8: associates essentially said that the primary focus of the bank
• 22:27
  Speaker 8: charter is to further grow the reach of their stable coin,
• 22:32
  Speaker 8: which is USD one.
• 22:33
  Speaker 2: Okay, So this is.
• 22:35
  Speaker 8: That was their primary primary reason for requesting and receiving
• 22:41
  Speaker 8: approval for this bank charter is that stable coin venture.
• 22:44
  Speaker 3: So I guess the question what is their stable coin business,
• 22:49
  Speaker 3: what is the strategy there and how did they expect
• 22:51
  Speaker 3: to do all that?
• 22:52
  Speaker 2: Have they provided details on that?
• 22:54
  Speaker 8: Again, I think it remains to be seen. I would
• 22:57
  Speaker 8: say that we will have to watch very clear to
• 23:00
  Speaker 8: see how they expand. But they're certainly not alone in
• 23:03
  Speaker 8: terms of FinTechs and other firms seeking similar charters. We've
• 23:10
  Speaker 8: seen Coinbase has received conditional approval. Circle has received conditional approval.
• 23:15
  Speaker 8: These are a lot of digital asset firms that are
• 23:17
  Speaker 8: kind of in the same space in.
• 23:19
  Speaker 3: The Office of the Control over the Currency that was
• 23:22
  Speaker 3: at appointed by President Trump.
• 23:24
  Speaker 2: Indeed, the head of that department.
• 23:26
  Speaker 3: Yes, Okay, so some potentially some concerns there. What's kind
• 23:32
  Speaker 3: of the next next step for the story for you guys.
• 23:35
  Speaker 8: Honestly, for us, it's just a matter of watching who
• 23:38
  Speaker 8: else gets approval, what happens to the firms that have
• 23:42
  Speaker 8: received approval already. I mean, we note in the story
• 23:46
  Speaker 8: just how this is going to be sort of approving
• 23:48
  Speaker 8: ground for a lot of firms that actually some of
• 23:50
  Speaker 8: them have never operated before and they're receiving approval to
• 23:54
  Speaker 8: be a bank in the United States. That's a pretty
• 23:56
  Speaker 8: big jump, and they're doing so sort of interesting different
• 24:02
  Speaker 8: things in the US financial system. So we'll have to
• 24:05
  Speaker 8: see how successful they are, how risky they are, and
• 24:09
  Speaker 8: if regulators are prepared to enforce the rules of bland.
• 24:15
  Speaker 2: We'll have to see.
• 24:16
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