Biden Drops Out and CrowdStrike Plunges | Bloomberg Technology

Kamala Harris's Presidential Candidacy

• The Bloomberg Technology segment discusses the impact of President Biden dropping out of the 2024 presidential race and endorsing Vice President Kamala Harris.
• The segment highlights the endorsements of Harris by prominent Democratic leaders, including former President Bill Clinton and Hillary Clinton, as well as key governors.
• The segment emphasizes Harris's financial advantage, with access to the Biden-Harris campaign funds and a significant amount of grassroots fundraising.
• The segment notes that the Democratic Party appears to be rallying behind Harris, but the nomination is not yet secured.
• The segment mentions that the Democratic National Convention, where delegates will vote for the nominee, will take place in Chicago on August 19th.
• The segment also discusses the potential impact of Biden's departure on the technology sector, particularly the role of key Democratic donors like Reid Hoffman.
• The text discusses the potential impact of Vice President Kamala Harris becoming the Democratic nominee for president.
• Reid Hoffman and George Soros have endorsed Harris, suggesting they believe she is the best candidate to continue the Biden administration's policies.
• Harris will need to define her own policies and differentiate herself from Biden, as she has been a key part of his administration.
• Steve Wesley, a California state controller and former Obama campaign co-chair, praises Biden for stepping down and endorsing Harris.
• Wesley believes the Democratic nomination process will be exciting, with the possibility of other candidates entering the race.
• Steve believes Kamala Harris is a strong candidate for the Democratic nomination, citing her high voter ID, experience as a prosecutor, and strong debate skills.
• He also suggests that Gretchen Whitmer of Michigan could be a contender, and that the Democratic party needs new blood to run against a 78-year-old candidate.
• Steve expects Silicon Valley to continue supporting the Democratic candidate, citing the current administration's support for the Chips Act, the Inflation Reduction Act, and the historically low unemployment rate.
• He acknowledges that Elon Musk is supporting Trump with a $45 million monthly donation to a PAC, but believes that wealthy Democrats will match or exceed that amount.
• Steve believes that the Democrats have a strong story to campaign on, including historically high stock market rates and low unemployment, and that a strong new candidate could lead them to victory.
• Vice President Kamala Harris is attending the NCAA Championship Teams gathering at the White House.
• This is her first official event since announcing her candidacy for the Democratic nomination.
• Harris will also be visiting the campaign headquarters in Wilmington, Delaware, later today.
• This event is not intended to be a campaign event, but given the recent developments, it is becoming one.
• Harris is expected to make remarks about sports and competition, but she will also likely use the opportunity to promote her candidacy.
• This is the first time Harris will be addressing cameras since announcing her candidacy.
• While she is unlikely to outline her entire policy platform, she will likely emphasize her qualifications for the presidency.
• Many strategists believe Harris will need to formally announce her policy platform before the Democratic Convention in August.
• The conversation discusses the potential impact of Joe Biden's passing the baton to Kamala Harris on the Chinese community and government, as well as the crypto market.
• The conversation also touches on the financial support for Kamala Harris's potential presidential campaign, with Act Blue raising $50 million from grassroots donors in the seven hours following Biden's announcement.
• High-profile donors, including George Soros, have also contributed, while others are waiting to see if Harris will officially announce her candidacy.
• Kamala Harris, speaking on behalf of Joe Biden, emphasizes his accomplishments during his presidency, highlighting his legacy and commitment to the American people.
• Vice President Kamala Harris spoke publicly for the first time since President Biden ended his re-election bid and endorsed her as the Democratic nominee.
• Harris chose not to speak about her own qualifications for the presidency but instead focused on praising President Biden's legacy.
• She described Biden as having surpassed the legacy of most presidents who served two terms in office, highlighting his honesty, integrity, and faith.
• Harris did not use the opportunity to make a case for her own candidacy, suggesting she may save most of her campaigning for later events.
• She announced she would be heading to Wilmington, Delaware, to meet with the campaign headquarters, acknowledging the upcoming election in 105 days.
• President Biden's decision not to seek re-election suggests he may not be actively involved in the presidential campaign, focusing instead on completing his term as president.

CrowdStrike Outage and Cybersecurity

• The conversation begins with a discussion about the Biden administration's stance on green energy and electric vehicles. Steve, a guest on the show, believes that the Biden administration has been a strong advocate for green energy and electric vehicles, and that this policy will likely continue under a Democratic nominee.
• The conversation then shifts to CrowdStrike, a cybersecurity company that recently experienced a major outage affecting millions of Microsoft Windows PCs. The outage caused a significant drop in CrowdStrike's stock price, with the stock trading at its lowest point of the year.
• Sanjay Mirchandani, an industry expert, joins the discussion to provide insights into the impact of the outage. He emphasizes the interconnected nature of the modern world and the long-term consequences of such incidents. He also notes that the fix for the outage was manual and time-consuming.
• When asked about potential concerns regarding prior CrowdStrike updates, Sanjay states that there were no specific concerns before this particular outage. He acknowledges that while security companies are generally trusted, there is always a level of concern about potential issues.
• Sanjay, the CEO of CrowdStrike, emphasizes the importance of resilience in business continuity, particularly in the face of catastrophic events like the recent Delta Airlines outage.
• He highlights the need for companies to test their ability to recover from disruptions through repeated testing and scaling, rather than relying solely on theoretical plans.
• Sanjay suggests that the recent widespread impact of the CrowdStrike vulnerability serves as a wake-up call for businesses to assess their reliance on specific technologies and ensure they have sufficient controls in place.
• He encourages companies to adopt a more calculated approach to building their IT landscapes, ensuring they are not overly dependent on any single environment.
• Caroline, the Bloomberg Technology host, notes that analysts are adjusting their price targets for CrowdStrike in light of the recent events.

Tech Diplomacy and National Security

• Morgan Stanley downgraded key AI chip names like TSMC from their focus list, citing concerns about tougher curbs on U.S. tech sales to China and an overheated AI market.
• This is the first time Morgan Stanley has downgraded the sector since its overweight call in October 2022.
• Michelle Giuda, an expert on technology innovation and adoption, believes that the U.S. policy towards China regarding technology is stable and bipartisan, despite recent political volatility.
• Giuda emphasizes the importance of U.S. technological leadership, arguing that it dictates global values, standards, and regulations across various sectors.
• She stresses the need for faster and smarter innovation to ensure U.S. companies do not contribute to China's technological advancement, particularly in areas like artificial intelligence.
• NVIDIA, a major AI chip manufacturer, is reportedly preparing a product that would comply with current U.S. restrictions on tech sales to China.
• Tech Diplomacy and National Security: Michelle Giuda, from the Institute for Security and Technology, emphasizes the importance of companies working with governments to ensure national security while remaining competitive. She believes that companies need to act in the best interest of the United States' national security, and that this can be achieved without sacrificing business success.
• Collaboration with Allies: Giuda highlights the importance of international collaboration, citing the previous administration's efforts to secure 5G networks by working with 60 countries and 200 telecommunications companies. This collaboration ultimately hindered Huawei's dominance in the 5G market. She expects this collaborative approach to continue with the current administration and into the future, particularly regarding chip manufacturing.

Crypto Market and Election Uncertainty

• Market Reactions: The conversation shifts to the financial markets, with Caroline Hyde noting the Nasdaq 100's recent performance. She highlights CloudStrike's significant decline, attributing it to a recent outage caused by a software upgrade.
• Crypto Market and Election Uncertainty: The discussion briefly touches on the crypto market's reaction to the potential of a Harris versus Trump election, but the text does not provide specific details about the market's response.
• The crypto market is currently leaning towards a Trump victory, as it is perceived as more pro-crypto.
• Bitcoin has seen a significant rise since Biden's withdrawal from the nomination, indicating a positive sentiment towards a Trump presidency.
• Bitcoin miners have also surged, suggesting a potential increase in activity under a Trump administration.
• The Biden administration has been critical of the crypto community, imposing regulations and hindering the passage of pro-crypto bills.
• Despite the Biden administration's stance, Bitcoin has reached new highs during this period, making the impact of a Trump presidency on crypto unclear.
• The market is awaiting Vice President Harris's first remarks since Biden's withdrawal, hoping for insights into her stance on crypto.
• There is a lack of information on Vice President Harris's views on crypto, making it difficult to predict her potential impact on the industry.
• The text discusses the potential impact of the 2024 US presidential election on the cryptocurrency market.
• It highlights the possibility of Kamala Harris becoming the Democratic nominee and the potential for her to echo Biden's stance on crypto.
• The text emphasizes the importance of the heads of regulatory agencies, such as the SEC, FTC, OCC, IRS, and FTC, in shaping the future of crypto regulation.
• It suggests that the Trump administration's stance on crypto has been more favorable, potentially making crypto more investable.
• The text concludes by stating that the appointment of individuals to key regulatory positions can significantly impact the crypto market.
• The speaker believes that President Biden has learned from his past stance on crypto and is now ready to make it an investable asset.
• The speaker believes that crypto is about financial freedom and choice, which are values both political parties claim to support.
• The speaker notes that there is a power struggle between traditional banks and crypto, with Trump being more supportive of crypto and Biden more supportive of the existing banking system.
• The speaker believes that the crypto market reacts to news events, but it is difficult to interpret short-term movements.
• The speaker believes that a Trump administration would be more favorable to crypto, while a Biden administration would likely be less supportive.
• The speaker notes that Trump is expected to speak at a Bitcoin conference in Nashville, which could lead to more donations from the crypto ecosystem.
• The speaker believes that many in the crypto community are single-issue voters and are focused on making digital assets better for the United States.
• The speaker believes that there is still a lot of momentum behind Trump in the crypto community.
• The current administration has been punitive towards cryptocurrency, but the recent bipartisan vote on a bill supporting cryptocurrency is a positive sign.
• The speaker believes that J.D. Vance, with his Silicon Valley connections and understanding of technology, is more in tune with the younger generation's interest in cryptocurrency than older politicians.
• The speaker sees a potential tension between a state-by-state approach to cryptocurrency regulation and a federal level approach.
• The speaker compares the current debate on cryptocurrency regulation to the historical debate between Thomas Jefferson and Alexander Hamilton, with one side favoring federal power and the other favoring states' rights.
• The speaker acknowledges that even state-chartered banks are subject to federal regulations, particularly through the FDIC, which has been reluctant to embrace cryptocurrency.
• The speaker believes that more competition across states could be beneficial for the development of cryptocurrency, but ultimately, federal influence remains significant.

Bloomberg Technology Video

• The video discusses the potential impact of Joe Biden's health on the upcoming election, particularly regarding Kamala Harris's role as Vice President.
• There is speculation about whether Harris would want to be closely associated with Biden's administration, given the potential for Republican attacks linking her to his policies.
• The video then transitions to a discussion about upcoming tech earnings, focusing on companies like SAP, Spotify, Google, and Tesla.
• The key question for investors is whether these companies can justify their high valuations given the expected slowdown in earnings growth.
• The video highlights the importance of artificial intelligence (AI) spending and its impact on tech companies' performance, particularly for Alphabet (Google's parent company).
• The video concludes with a reminder about the "Bloomberg Technology" podcast, which will cover the week's tech earnings and the recent major outage.
• The video is titled "Bloomberg Technology."
• The video is about technology.
• The video is produced by Bloomberg.