WEBVTT - Instagram Goes Dark and Cryptocurrency Is Triumphant 0:00:02.920 --> 0:00:06.200 From the heart of where innovation, money and power COLLI 0:00:07.040 --> 0:00:11.600 in Silicon Valley and beyond. This is Bloomberg Technology with 0:00:11.640 --> 0:00:27.680 Emily j I'm Emily check in San Francisco and this 0:00:27.680 --> 0:00:30.200 is Bloomberg Technology. Coming up in the next hour. White 0:00:30.200 --> 0:00:33.199 House officials in early discussions about President Biden taking a 0:00:33.240 --> 0:00:37.720 trip to Europe, has Russia's assault on Ukraine only escalates. 0:00:38.000 --> 0:00:40.360 The US now calling on China to put pressure on 0:00:40.400 --> 0:00:43.440 Putin to end the war. This is an Instagram goes 0:00:43.560 --> 0:00:47.080 dark across Russia. The Russian government has now cut off 0:00:47.280 --> 0:00:51.000 access to Instagram, Facebook, and Twitter. Will examine how the 0:00:51.120 --> 0:00:56.960 digital Iron curtain is impacting everyday Russians and China dealing 0:00:56.960 --> 0:00:59.200 with a crisis of its own. Hong Kong facing the 0:00:59.240 --> 0:01:03.200 worst COVID outbreak since the pandemic began, China the worst 0:01:03.360 --> 0:01:08.280 since Wuhan. Why the technology behind the vaccine most widely 0:01:08.400 --> 0:01:20.959 used in China maybe failing. Russia's promised ban on Instagram 0:01:21.000 --> 0:01:23.399 has now kicked into full effect, with a social media 0:01:23.480 --> 0:01:27.560 platform inaccessible for the vast majority of the country's population. 0:01:27.600 --> 0:01:30.080 I want to bring in Bloomberg's Kurt Wagner now for 0:01:30.160 --> 0:01:33.200 more on this. Kurt, you know, what does this exactly 0:01:33.240 --> 0:01:36.000 mean for everyday Russians given that Facebook and Twitter have 0:01:36.120 --> 0:01:39.680 already been cut off. Yeah, I mean, I feel like 0:01:39.680 --> 0:01:43.800 we're moving towards a relatively dangerous spot here right where 0:01:43.840 --> 0:01:48.440 suddenly Facebook, Instagram, Twitter, these are services that were really 0:01:48.440 --> 0:01:51.240 connected tissues between the Russian people and obviously the rest 0:01:51.320 --> 0:01:53.320 of the world in a crisis like this. It's it's 0:01:53.320 --> 0:01:55.560 where a lot of people could get information and news 0:01:55.640 --> 0:01:59.320 that wasn't directly kind of approved by Russian state back media. 0:01:59.720 --> 0:02:02.280 And so you know, you look at what's happening now 0:02:02.320 --> 0:02:04.440 and you wonder, are we ever going to get back 0:02:04.480 --> 0:02:08.320 to this? Right? Is this maybe the beginning of Russia 0:02:08.400 --> 0:02:10.079 is kind of looking a little bit more like China, 0:02:10.560 --> 0:02:12.800 um with a with a closed version of the Internet. 0:02:12.840 --> 0:02:16.440 And I don't know what happens after this, but obviously 0:02:16.480 --> 0:02:19.239 it's a it's a pretty significant deal. Um, Russia is 0:02:19.240 --> 0:02:21.239 a lot smaller than China from a from a total 0:02:21.240 --> 0:02:23.400 population and user perspective, but it's a really big deal 0:02:23.480 --> 0:02:26.160 just symbolically what this means and what this might look 0:02:26.200 --> 0:02:30.720 like moving forward. Absolutely, China blocking Facebook and Twitter are 0:02:30.800 --> 0:02:32.960 around the Beijing Olympics in two thousand and eight, and 0:02:33.000 --> 0:02:35.919 never unblocking, and so you wonder if that's what's going 0:02:36.000 --> 0:02:39.640 to happen here. I'm curious in Russia, how widespread are 0:02:39.639 --> 0:02:42.680 the use of VPNs and other means to get around 0:02:42.680 --> 0:02:45.800 the firewall? Is that common? Well, it's the kind of 0:02:45.800 --> 0:02:49.480 thing that companies are trying to make accessible, right. I 0:02:49.480 --> 0:02:52.680 think we saw last week that Twitter, for example, created 0:02:52.760 --> 0:02:56.160 a version of its website for the tour browser, UM 0:02:56.160 --> 0:02:58.360 so that if anyone wanted to kind of get around 0:02:58.520 --> 0:03:01.400 this this band, they might be able to. They might 0:03:01.400 --> 0:03:03.720 be able to kind of use the quote unquote dark 0:03:03.760 --> 0:03:07.160 web to access these services. But Emily, that's not the 0:03:07.200 --> 0:03:09.560 kind of thing that's necessarily accessible to the vast majority 0:03:09.560 --> 0:03:11.760 of people, right. That's for people who are pretty tech savvy. 0:03:11.840 --> 0:03:14.560 That's for people who are really going above and beyond 0:03:14.600 --> 0:03:16.520 to try and figure out how to still keep these 0:03:16.520 --> 0:03:19.440 services in their life. The vast majority of people, you know, 0:03:19.600 --> 0:03:21.680 unless they can simply get it on their phone, it 0:03:21.720 --> 0:03:23.400 means they're not going to have access to it. And 0:03:23.440 --> 0:03:27.200 so I think that this is something that to your point, like, 0:03:27.440 --> 0:03:29.919 are we seeing the beginning of of of a major 0:03:30.040 --> 0:03:32.440 change here that might not be rolled back? And I 0:03:32.440 --> 0:03:35.280 think the answer might be yes. We're also saying some 0:03:35.360 --> 0:03:39.880 major changes from the platforms themselves. Facebook, for example, relaxing 0:03:39.920 --> 0:03:44.160 the rules to allow Ukrainians to talk about violence in 0:03:44.200 --> 0:03:47.080 the context of Russia's war on Ukraine. And that's really 0:03:47.320 --> 0:03:50.840 what I seem to trigger the Russian government. Instagram was 0:03:50.880 --> 0:03:53.440 a place a lot of people had turned to to 0:03:53.640 --> 0:03:58.080 protest the war in Russia. Where will these Russian citizens 0:03:58.120 --> 0:04:02.760 go to next? What social media let's are available to them? Well, 0:04:02.800 --> 0:04:06.440 the one service that continually keeps getting brought up is telegram. Now, 0:04:06.480 --> 0:04:08.480 I don't know if that's the kind of place where 0:04:08.720 --> 0:04:11.400 people will be able to organize in the same way 0:04:11.480 --> 0:04:14.320 or to promote things publicly in the same way. Um, 0:04:14.360 --> 0:04:16.120 you know, it is a is a private messaging app 0:04:16.160 --> 0:04:19.000 obviously similar to what's app Telegram. There are there are groups, 0:04:19.040 --> 0:04:21.039 there are ways to broadcast that way, but it just 0:04:21.080 --> 0:04:23.400 it has a different vibe Emily, as you know. And 0:04:23.440 --> 0:04:25.640 so I think, you know, you talked about what the 0:04:25.640 --> 0:04:28.360 platforms are doing. I mean the Instagram thing in particular, 0:04:28.800 --> 0:04:32.440 um was announced by Russian regulators after Facebook came out 0:04:32.440 --> 0:04:35.920 and said, hey, Ukrainians are able to call for violence 0:04:35.960 --> 0:04:38.560 against Russian soldiers, and they said, you know this is 0:04:38.640 --> 0:04:42.200 this is a company basically allowing you know, people to 0:04:42.240 --> 0:04:44.839 attack our citizens. That's what the Russian regulators are saying. 0:04:45.279 --> 0:04:48.120 And and again, um, I think that it just has 0:04:48.560 --> 0:04:51.960 kind of snowballed here the relationship between Meta and Russia 0:04:52.360 --> 0:04:55.599 and the Russian leaders, and I just don't really know 0:04:55.600 --> 0:04:58.000 where we go from here. What does this mean for 0:04:58.200 --> 0:05:02.160 Meta and Twitter? You know, two companies that obviously their 0:05:02.200 --> 0:05:07.360 growth depends on new users and new ad revenue. So, uh, 0:05:07.520 --> 0:05:09.600 Meta said something interesting at the end of last week. 0:05:09.640 --> 0:05:11.000 Not a lot of people saw it because it was 0:05:11.040 --> 0:05:14.479 at one of those private banking conferences, but their CFO 0:05:14.600 --> 0:05:18.080 said that the ad revenue that they get either from 0:05:18.200 --> 0:05:22.680 Russian businesses or that's targeted at Russian users is one 0:05:22.720 --> 0:05:26.120 point five percent of their total advertising revenues. So while 0:05:26.200 --> 0:05:30.159 obviously that's not nothing, it's not insignificant, it's also not 0:05:30.240 --> 0:05:33.160 a massive business for for Meta. And I bring that 0:05:33.279 --> 0:05:36.080 up because when you look into the future and you say, well, 0:05:36.240 --> 0:05:37.960 is this the kind of thing where Meta is going 0:05:38.040 --> 0:05:40.839 to bend over backwards to try and get back into Russia, 0:05:41.520 --> 0:05:43.120 I don't know if they're going to be willing to 0:05:43.120 --> 0:05:45.400 do that for such a small portion of their business right, 0:05:45.400 --> 0:05:48.840 they don't have the financial incentives necessarily to make concessions 0:05:49.000 --> 0:05:50.400 in the way that they might know other parts of 0:05:50.400 --> 0:05:52.720 the world, and so um that to me is one 0:05:52.760 --> 0:05:54.960 of the many reasons why I find this this kind 0:05:54.960 --> 0:05:57.880 of you know, digital iron curtain you were talking about interesting, 0:05:58.200 --> 0:06:00.400 because I don't know if there's enough people in Russia 0:06:00.600 --> 0:06:02.680 for these companies to feel like they can compromise on 0:06:02.760 --> 0:06:05.600 some of the other parts of their policy that they've 0:06:05.680 --> 0:06:09.839 so far stood stood firm uh in a in support 0:06:09.880 --> 0:06:14.359 of Meantime, Mark Zuckerberg making a surprise appearance at south 0:06:14.400 --> 0:06:19.719 By Southwest later this week, my guests. Obviously all of 0:06:19.760 --> 0:06:21.520 these topics are going to be on the agenda, but 0:06:21.600 --> 0:06:24.440 of course the metaverse and his vision for the future. 0:06:24.520 --> 0:06:27.040 What do you make of Zuckerberg, who really hasn't been 0:06:27.040 --> 0:06:30.880 doing a lot of press getting out front. Yeah, I 0:06:30.920 --> 0:06:33.440 think I heard this was his first time at south 0:06:33.480 --> 0:06:36.159 Buy since something like two thousand ten or or something 0:06:36.200 --> 0:06:38.160 like that. Has certainly been a very long time since 0:06:38.200 --> 0:06:40.760 he had appeared at this particular conference, and and really 0:06:40.760 --> 0:06:42.520 a conference like this. Now he's doing it with sort 0:06:42.520 --> 0:06:46.000 of a familiar interviewer, uh, not someone who's you know, 0:06:46.360 --> 0:06:49.320 necessarily in the news industry, who's gonna sit there and 0:06:49.360 --> 0:06:51.440 grill him about all of the stuff that we were 0:06:51.480 --> 0:06:54.359 just talking about. So I do wonder how substantive the 0:06:54.360 --> 0:06:57.200 interview will be in terms of news about policy and 0:06:57.520 --> 0:07:00.160 world happenings. But for him, it's a way to talk 0:07:00.200 --> 0:07:02.000 about the metaverse, right, to get out in front of 0:07:02.000 --> 0:07:04.920 a crowd that has always been very interested in the 0:07:04.960 --> 0:07:08.119 new upcoming technology, and to pitch kind of his vision 0:07:08.200 --> 0:07:10.240 for for what he once met at to build. So 0:07:10.520 --> 0:07:12.120 I don't know if we're going to be fulfilled as 0:07:12.280 --> 0:07:14.920 as you know a hard eating news journalists from this interview, 0:07:15.160 --> 0:07:17.160 but I think for him it's a chance to again 0:07:17.560 --> 0:07:20.320 reached people who care about the future of tech with 0:07:20.440 --> 0:07:22.840 his vision for the future of tech. All right, Well, 0:07:22.880 --> 0:07:25.360 hopefully we'll get some probing questions there and maybe some 0:07:25.440 --> 0:07:29.040 reaction to what my next guest has to say. Kurt Wagner, 0:07:29.120 --> 0:07:33.280 who covers Meta and Twitter for us, thank you sticking 0:07:33.280 --> 0:07:35.920 with Meta and its biggest bet on the future, the metaverse. 0:07:36.160 --> 0:07:40.560 I spoke with former Nintendo America President and CEO Reggie 0:07:40.560 --> 0:07:43.400 fis m A at the south By Southwest Festival in 0:07:43.440 --> 0:07:45.840 Austin over the weekend, and I asked him what he 0:07:46.000 --> 0:07:50.400 thought about Mike's Mark Zuckerberg's vision for the evolution of 0:07:50.480 --> 0:07:53.400 virtual reality. Take a listen to what he had to say. 0:07:53.960 --> 0:07:56.760 I'm not a buyer of that idea. I don't think 0:07:56.800 --> 0:08:02.360 that their current definition is going to be successful. Why 0:08:02.560 --> 0:08:05.520 why do I say that? I say that because, first, 0:08:06.200 --> 0:08:08.440 you know, and I don't know if anyone from Facebook 0:08:08.480 --> 0:08:12.880 is here, but you you have to admit that Facebook 0:08:13.320 --> 0:08:17.840 itself is not an innovative company. Wow, they're not. I 0:08:17.840 --> 0:08:22.680 mean you you look at I mean you you look you. 0:08:23.960 --> 0:08:32.400 They have either acquired really interesting things like oculus, like Instagram, 0:08:32.520 --> 0:08:35.680 or they've been a fast follower of other people's ideas. 0:08:36.640 --> 0:08:41.079 That's Facebook. So I inherently they are not an innovative 0:08:41.080 --> 0:08:45.160 company other than the very original social platform that was 0:08:45.240 --> 0:08:48.200 created many years ago. So what do you think Mark 0:08:48.280 --> 0:08:52.839 Huckerberg is getting wrong here? Well, I I believe that 0:08:53.040 --> 0:08:57.720 in order to be innovative, you really need to be 0:08:57.840 --> 0:09:01.800 thinking about the consumer or first, and I don't think 0:09:01.840 --> 0:09:07.480 they do. I think you need to be looking at first. Uh. Well, 0:09:07.520 --> 0:09:11.120 I think they think about advertising revenue first, because that's 0:09:11.120 --> 0:09:15.839 of their revenue. I mean, that's that's the fact, um, 0:09:15.920 --> 0:09:18.160 But you have to think about your consumer. You have 0:09:18.200 --> 0:09:20.760 to think about your customer. You need to think about 0:09:20.840 --> 0:09:24.000 bringing new and different ideas into the marketplace. You need 0:09:24.040 --> 0:09:27.120 to reward that within your culture. You know, these are 0:09:27.120 --> 0:09:30.560 the things that drive innovation. Uh. You need to have 0:09:30.600 --> 0:09:34.319 a culture of innovation. Anything that you do within an 0:09:34.360 --> 0:09:39.360 innovative company, whether you're in accounting, whether you're in UH 0:09:39.480 --> 0:09:42.000 product development, whether you're in marketing, you need to be 0:09:42.080 --> 0:09:46.600 challenging yourself to be doing things differently versus doing the 0:09:46.640 --> 0:09:49.920 same old, same old, or copying someone else's idea. So 0:09:50.360 --> 0:09:55.000 you know, that's why I look at the vision that's 0:09:55.040 --> 0:09:58.040 been to date articulated and I'm not a believer. The 0:09:58.080 --> 0:10:00.480 other thing I would say about Face Look is they 0:10:00.480 --> 0:10:05.480 don't have a great history with physical products, all right, Portal, 0:10:05.920 --> 0:10:12.280 you know, not a big idea. UMIs they bought Oculus 0:10:12.480 --> 0:10:14.280 and you know they've been working on it for a 0:10:14.360 --> 0:10:18.120 number of years. Last number I saw was that in 0:10:18.320 --> 0:10:22.640 total and not just Oculus, in total, about twenty million 0:10:22.760 --> 0:10:26.400 VR devices have been sold. Million. You know, when I 0:10:26.400 --> 0:10:29.880 was running Nintendo, that was a good year one year 0:10:30.160 --> 0:10:34.400 in terms of hardware. Hoping we're gonna hear Mark Zuckerberg 0:10:34.440 --> 0:10:36.679 respond to that conversation when he speaks at south By 0:10:36.760 --> 0:10:40.280 Southwest Now. My convo with Reggie Feza May later turned 0:10:40.320 --> 0:10:43.440 to game Stop Fisa. May joined the game Stop board 0:10:43.440 --> 0:10:47.439 in April, just months before the state of Its roller 0:10:47.600 --> 0:10:50.439 coaster started its roller coaster meme Stop Gride that saw 0:10:50.480 --> 0:10:52.319 the stock go from just a few dollars a share 0:10:52.400 --> 0:10:55.920 to over five hundred Peasay left the board after less 0:10:55.920 --> 0:10:58.679 than a years, saying he was unhappy with the strategy 0:10:58.720 --> 0:11:02.199 of Chairman of the board Ryan Cohen. Take a listen. 0:11:03.679 --> 0:11:05.960 I asked to be part of the team to develop 0:11:06.000 --> 0:11:09.679 a strategy. I knew the business. I knew it as 0:11:09.720 --> 0:11:12.800 a consumer, I knew it as a vendor. I had 0:11:12.840 --> 0:11:16.080 pretty strong opinions on how the business needed to be 0:11:16.559 --> 0:11:23.679 uh pivoted. But I was rebuffed. Right. The perspective was, Reggie, 0:11:23.760 --> 0:11:27.560 we want to keep the team small, um, and so 0:11:27.640 --> 0:11:30.240 it's going to be you know, myself and a few 0:11:30.240 --> 0:11:32.960 of the people that I brought on board, who you know, 0:11:33.040 --> 0:11:36.360 by the way, don't know this business, uh don't understand 0:11:36.360 --> 0:11:41.000 the players, etcetera, etcetera. I took that as code as 0:11:41.840 --> 0:11:44.840 you know, thank you, but we really don't want any 0:11:44.880 --> 0:11:49.560 other ideas and and for me that was that was 0:11:49.600 --> 0:11:52.320 not acceptable. So what do you think of the strategy? Well, 0:11:52.320 --> 0:11:55.360 there there isn't There has not been an articulated strategy. 0:11:55.520 --> 0:11:57.800 I mean, if you could go on the GameStop website 0:11:57.840 --> 0:12:01.240 try and find a strategy, there is no artculated strategy. 0:12:01.679 --> 0:12:04.600 Leadership says, well, we don't want to articulate our strategy 0:12:04.679 --> 0:12:08.560 because we don't want anyone to steal our strategy. You know. 0:12:08.880 --> 0:12:16.520 So I come from the business perspective that you need 0:12:16.559 --> 0:12:20.800 to articulate your strategy to all of your key constituents. 0:12:21.320 --> 0:12:25.559 You need to communicate to your business partners, your vendors, 0:12:25.960 --> 0:12:32.360 your employees, your shareholders. You need to communicate your strategy. 0:12:32.760 --> 0:12:37.360 M Former Nintendo American President and CEO, Reggie Fisa May 0:12:37.480 --> 0:12:42.360 there at south By Southwest in Austin. Coming up Disney 0:12:42.360 --> 0:12:46.120 SEO about Japeck breaking his silence on the controversial Florida 0:12:46.200 --> 0:12:50.720 school bill. We'll discuss how it's impacting employees across Disney, 0:12:50.760 --> 0:12:54.760 Pixar and more and what it means for Chapec ahead 0:12:55.160 --> 0:13:14.959 Mrs Bloomberg, just two years into his role as Disney CEO, 0:13:15.080 --> 0:13:19.320 Bob Kpeck under scrutiny following his response to a controversial 0:13:19.679 --> 0:13:22.160 Florida school bill. For more, I want to bring in Bloombergs, 0:13:22.200 --> 0:13:24.720 Chris Paul Mary who covers Disney for so, Chris at 0:13:24.760 --> 0:13:27.520 the stage, what is this Florida school bill and why 0:13:27.720 --> 0:13:32.160 is it so uh controversial? What Bob Japeck didn't and 0:13:32.280 --> 0:13:35.800 now does have to say about it? Well. The bill, 0:13:36.160 --> 0:13:39.080 which was passed by both houses in Florida, would prohibit 0:13:39.480 --> 0:13:44.760 schools from discussing sexual orientation or gender identity in kindergarten 0:13:44.760 --> 0:13:48.680 through third grade. This was designed for parents to be 0:13:48.720 --> 0:13:51.480 able to control the discussion of these issues with their 0:13:51.600 --> 0:13:54.840 younger kids. A lot of people in the gay community 0:13:54.840 --> 0:13:58.000 obviously don't like it. It's been called don't say gay. Uh. 0:13:58.120 --> 0:14:02.079 They feel like like this this is really stifling uh 0:14:02.320 --> 0:14:05.760 kids who may be just trying to discover where where 0:14:05.800 --> 0:14:09.560 they're going in life. And so um Spick is trying 0:14:09.600 --> 0:14:12.880 to wrote more broadly, sort of keep Disney out of 0:14:12.920 --> 0:14:16.600 these political topics. He tried to sort of like work 0:14:16.679 --> 0:14:18.680 behind the scenes on this issue, would not take a 0:14:18.720 --> 0:14:22.480 public stance, uh, and set that what he wanted to 0:14:22.520 --> 0:14:26.400 do going forward. The rank and file of Disney revolted 0:14:26.520 --> 0:14:33.000 essentially openly on social media, employees saying they disagree with 0:14:33.040 --> 0:14:38.120 this policy. A letter from Pixar employees animators union set 0:14:38.120 --> 0:14:43.680 out statements uh. And so Chapig reversed position a couple 0:14:43.720 --> 0:14:46.400 of days later on Wednesday last week, saying, you know, 0:14:46.520 --> 0:14:50.040 we we are openly opposed to this bill. Uh and 0:14:50.120 --> 0:14:51.880 then a couple of days later even to look it 0:14:51.960 --> 0:14:56.840 further and publicly apologize to all those employees. A lot 0:14:56.880 --> 0:14:59.960 of employees were not happy. And you also had leadership 0:15:00.120 --> 0:15:04.320 within Disney, for example at Pixar releasing their own statements. 0:15:04.440 --> 0:15:08.160 You've got Bob Iger, the former CEO of Disney, also 0:15:08.240 --> 0:15:11.640 speaking out about this. What do you make of the 0:15:11.760 --> 0:15:16.720 pushback from other executives, Well, this is this is part 0:15:16.720 --> 0:15:18.760 of a sort of a broader issue that Check has 0:15:18.800 --> 0:15:21.720 found where he doesn't have the same support from the 0:15:21.760 --> 0:15:25.920 creative community at the company that his predecessor Bob Iger did, 0:15:26.560 --> 0:15:29.360 uh and um. And so you know, he's made some 0:15:29.480 --> 0:15:32.400 decisions that are very unpopular. For example, he's relocating a 0:15:32.400 --> 0:15:36.280 lot of employees to Florida's uh you know that work 0:15:36.320 --> 0:15:39.320 in team park design in that from California. They're not 0:15:39.360 --> 0:15:42.760 happy about being told they have to move and uh, 0:15:42.800 --> 0:15:47.000 and so we had a weird situations. Now we're Florida. 0:15:47.040 --> 0:15:50.640 Governor de Santis just slam Disney last week saying, you know, 0:15:50.680 --> 0:15:53.240 they don't care about human rights in China, and then 0:15:53.640 --> 0:15:56.960 Governor Gavin Newsom Ary California is saying, oh, why are 0:15:56.960 --> 0:16:00.400 you moving your people to California? So as has shade 0:16:00.400 --> 0:16:03.960 they predicted away by taking these political stands, he's opening 0:16:03.960 --> 0:16:07.960 the company up to firing fired people attacking him from 0:16:08.000 --> 0:16:12.720 both sides. This, of course, as Disney Shares themselves have 0:16:12.760 --> 0:16:15.560 been struggling. Chris Paul Mary, who covers Disney for US, 0:16:15.600 --> 0:16:19.760 will continue to follow here. Meantime, struggling carmaker electric car 0:16:19.760 --> 0:16:22.640 maker Rivian has hired a new CEO from Magna, one 0:16:22.640 --> 0:16:26.160 of the world's biggest automotive suppliers. Frank Klin will take 0:16:26.160 --> 0:16:29.920 the roll on June one, Rivan announced Monday, confirming in 0:16:30.000 --> 0:16:34.400 earlier Bloomberg scoop kind led Magna's carmaking unit before that 0:16:34.680 --> 0:16:38.880 at Mercedes parent company at Dymler years. Rivian stock has 0:16:38.920 --> 0:16:42.200 been crushed in recent days after the company's forecast building 0:16:42.320 --> 0:16:44.880 just twenty five thousand e v s this year, about 0:16:44.920 --> 0:16:47.320 half what it's factory in Illinois is capable of due 0:16:47.360 --> 0:16:50.400 to a shortage of parts and trouble with production. Rivian's 0:16:50.440 --> 0:17:02.640 former CEO, Rod Corpus resigned and the last year welcome 0:17:02.680 --> 0:17:04.920 back to Bloomberg Technology on Emily Chang in San Francisco. 0:17:05.040 --> 0:17:08.000 The Chinese city of shen Jen, home to seventeen and 0:17:08.000 --> 0:17:11.199 a half million people, is locked down as COVID cases 0:17:11.240 --> 0:17:15.520 have doubled to roughly thirty four hundred. This as China 0:17:15.520 --> 0:17:20.160 faces its biggest COVID outbreaks since Wuhan in early fox 0:17:20.240 --> 0:17:23.920 con Apple's biggest suppliers now halting operations in shen Jen, 0:17:24.000 --> 0:17:27.400 and this could have massive global implications. Are Mark Room 0:17:27.400 --> 0:17:29.680 and joining us now with more Mark give us a 0:17:29.760 --> 0:17:33.439 status update on what's happening at fox kN and what 0:17:33.560 --> 0:17:37.160 the impacts of this more broadly will be. So as 0:17:37.160 --> 0:17:40.320 of now, the office the main headquarters for fox kN 0:17:40.320 --> 0:17:44.600 and shen Jen, as well as their iPhone factory UH 0:17:44.800 --> 0:17:47.200 within shen Jen, those are both closed right now now. 0:17:47.240 --> 0:17:49.919 Fox Kon isn't saying when they're going to be reopening. 0:17:50.160 --> 0:17:53.600 It isn't definite for now, but the order for closures 0:17:53.600 --> 0:17:57.199 for factories in other places is in effect in that 0:17:57.359 --> 0:18:00.800 area until March twenty, so it's possible it'll open around 0:18:00.800 --> 0:18:03.119 then or after them. But we know the fluidity of 0:18:03.160 --> 0:18:05.240 COVID and how these things can go on for longer, 0:18:05.320 --> 0:18:08.080 and that's the real fear here right As of now, 0:18:08.200 --> 0:18:11.399 a week of one iPhone factory being shut down is 0:18:11.440 --> 0:18:13.199 not going to have much of an impact. This is 0:18:13.200 --> 0:18:15.680 a slow season for Apple, right They did just release 0:18:15.760 --> 0:18:18.399 new products, but they really need the factories running at 0:18:18.400 --> 0:18:20.879 full steam for the fall and late in the summer 0:18:20.920 --> 0:18:24.200 for the iPhone fourteen, new iPads in the fall augmented 0:18:24.200 --> 0:18:26.840 reality headsets early next year, that's when it would be 0:18:26.920 --> 0:18:28.920 danger territory. But right now I think they're going to 0:18:29.000 --> 0:18:33.280 be okay, given that their main iPhone plants called iPhone City, 0:18:33.720 --> 0:18:36.080 is in another region of China, you know, many many 0:18:36.119 --> 0:18:38.480 miles away from here, But we don't know what is 0:18:38.520 --> 0:18:41.840 going to do and expand it exactly. The pandemic is 0:18:42.520 --> 0:18:45.800 China is hitting a new peak in COVID cases. This 0:18:45.880 --> 0:18:49.000 is not just happening in shen Jen. What is Apple 0:18:49.040 --> 0:18:53.040 doing or what can Apple do to mitigate this? Given 0:18:53.080 --> 0:18:56.040 that there are already global supply chain issues that have 0:18:56.200 --> 0:18:59.639 now been reverberating for two years Yeah, it's very much 0:18:59.640 --> 0:19:02.880 whack bowld. Right. Fox Con has many factories across China 0:19:02.880 --> 0:19:06.440 where they produced the iPhone and other Apple products, right, So, 0:19:06.520 --> 0:19:09.920 as you know, limitations go up in some factories, right, 0:19:09.960 --> 0:19:12.920 they'll have to reallocate that to other factories, and as 0:19:12.920 --> 0:19:15.320 other factories reopened and they'll have to move production back. 0:19:15.359 --> 0:19:17.359 So I'm sure that's what they're you know, on the 0:19:17.400 --> 0:19:20.200 scene in China figuring out right now, right, I think 0:19:20.200 --> 0:19:22.720 they want to see how bad this becomes. Obviously, we're 0:19:22.720 --> 0:19:25.640 in a very different place today than we were basically 0:19:25.720 --> 0:19:29.800 exactly two years ago now with vaccines and masking and 0:19:29.840 --> 0:19:33.080 people used to these protocols. So my hope, right, not 0:19:33.200 --> 0:19:35.720 only for you know, Apple and China, but for globally, 0:19:35.760 --> 0:19:38.600 that this gets resolved, you know, pretty quickly. In fox 0:19:38.680 --> 0:19:41.159 Con is able to work through it at a faster 0:19:41.240 --> 0:19:43.560 pace than they were able to two years ago. If 0:19:43.600 --> 0:19:46.359 you remember, however, even at the height of the COVID pandemic, 0:19:46.400 --> 0:19:49.240 Apple really in fox Con, they were able to figure 0:19:49.280 --> 0:19:51.480 it out. In the middle of everything, Apple was still 0:19:51.480 --> 0:19:55.639 able to ship the iPhone twelve in November of right, 0:19:55.880 --> 0:19:58.360 that was a two month delay for their flagship product 0:19:58.480 --> 0:20:01.600 in the middle of COVID pre vaccines right at the 0:20:01.680 --> 0:20:03.399 at the height of things, right, So if they were 0:20:03.440 --> 0:20:06.000 able to figure out then with only two month delays, 0:20:06.240 --> 0:20:08.680 I'm quite optimistic they'll be able to figure it out 0:20:08.960 --> 0:20:12.320 with you know, more vaccines and masking regulations and such 0:20:12.600 --> 0:20:15.880 at a slower period for the company. All Right, Mark 0:20:15.920 --> 0:20:18.240 German will continue to watch a reporting on this. Thank you. 0:20:18.560 --> 0:20:20.520 I want to stay on the topic of COVID and 0:20:20.560 --> 0:20:23.480 the resurgence we're seeing across China and in Hong Kong 0:20:23.520 --> 0:20:26.760 and bringing Ali Erman. She's a genomics analyst with our 0:20:27.040 --> 0:20:30.280 invest You know, Ali, we are seeing the spike in 0:20:30.359 --> 0:20:33.679 Hong Kong and China as the World Health Organized Station 0:20:33.720 --> 0:20:37.040 has been considering declaring an end to the pandemic. Does 0:20:37.040 --> 0:20:39.679 this signal to you that it could get worse or 0:20:39.720 --> 0:20:44.119 maybe a lot worse before it gets better. Thanks Emily 0:20:44.160 --> 0:20:46.639 for having me. It's nice to see you again, you know. 0:20:46.960 --> 0:20:50.280 I I think obviously we've had these spikes before. We've 0:20:50.320 --> 0:20:54.479 seen you know, multiple mutations arising from COVID nineteen, and 0:20:54.480 --> 0:20:57.440 this continues to be an ongoing issue that we're monitoring 0:20:57.520 --> 0:20:59.960 here at ARK. One of the things that we're thinking 0:21:00.000 --> 0:21:03.560 about is disruptive technologies that are in our portfolios that 0:21:03.600 --> 0:21:07.680 could potentially help the crisis. So you know, one such 0:21:07.720 --> 0:21:12.240 technology is Crisper, which is essentially working to look at 0:21:12.880 --> 0:21:17.080 different cases and potentially being a diagnostic tool, but it's 0:21:17.160 --> 0:21:20.960 also used as a therapeutic tool as well. Now, China 0:21:21.000 --> 0:21:25.720 has had a zero COVID policy, shutting down versus vaccinating 0:21:26.040 --> 0:21:30.440 on a broad scale. They've been using the Cino vaccine 0:21:30.480 --> 0:21:33.280 when they do vaccinate, but that's a vaccine that doesn't 0:21:33.400 --> 0:21:36.560 use m R and A technology and appears to be 0:21:36.680 --> 0:21:40.800 not as effective. Are we seeing that vaccine and that 0:21:40.920 --> 0:21:46.240 technology breaking down. It's possible that are We've been very 0:21:46.320 --> 0:21:49.040 focused on the m R and E technology and so 0:21:49.080 --> 0:21:52.560 we know that we've seen pretty great um results from 0:21:52.600 --> 0:21:55.800 it from the US UM and also from Israel where 0:21:55.800 --> 0:21:58.840 we've gotten this substantial amount of data. And so you know, 0:21:58.880 --> 0:22:01.679 this m R and A technol oology is a novel technology. 0:22:01.720 --> 0:22:04.720 It hasn't been used prior to the COVID nineteen pandemic. 0:22:05.119 --> 0:22:07.600 Um you know, we're following very closely what the companies 0:22:07.600 --> 0:22:10.840 are doing and how they're utilizing that technology, including you 0:22:10.880 --> 0:22:14.520 know Maderna, but also our tourist Therapeutics UM and several 0:22:14.520 --> 0:22:17.320 other companies that really are focusing. You know, of course 0:22:17.359 --> 0:22:20.000 we can talk about Visor and the partnerships that they've 0:22:20.160 --> 0:22:22.640 started there, but also just the the amount of sheer 0:22:22.680 --> 0:22:24.040 data that we're going to get from m R and 0:22:24.080 --> 0:22:26.919 A and be able to compare that to the adenovirus 0:22:27.040 --> 0:22:30.520 vaccines as well. How is the pace of innovation in 0:22:30.880 --> 0:22:35.000 m R and A and biotechnology accelerated during the pandemic 0:22:35.080 --> 0:22:38.679 given the role we've seen it play in vaccinations along 0:22:38.680 --> 0:22:43.560 with Crisper as you mentioned. Yeah, so the piece of innovations, 0:22:43.680 --> 0:22:47.879 Emily is really interesting because we're seeing that. You know, 0:22:47.920 --> 0:22:51.080 I think Crisper is is an excellent example as you mentioned, right, 0:22:51.119 --> 0:22:54.920 So we're seeing these amazing examples. So prior to Crisper, 0:22:54.960 --> 0:22:58.000 you know, zinc finger nucleus is another gene editing form. 0:22:58.040 --> 0:23:01.840 Also talents we're going to exist and essentially those took 0:23:01.840 --> 0:23:04.879 a really long time to move from discovery to the 0:23:04.920 --> 0:23:07.960 first human dose. So that happened for same fingers in 0:23:08.040 --> 0:23:11.960 roughly eight years, whereas Cristopher took less than half that time. 0:23:12.200 --> 0:23:15.840 They were at three years. They also can target many 0:23:15.880 --> 0:23:19.000 more unknown diseases, and so what we're seeing is there's 0:23:19.000 --> 0:23:22.760 a proliferation in terms of the piece of innovation. An 0:23:22.840 --> 0:23:26.000 example for that could be Crisper Therapeutics. They're working on 0:23:26.119 --> 0:23:30.679