Speaker 1: From the heart of where Innovation, money and power CALLI
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Jack in San Francisco, and this
Speaker 1: is Bloomberg Technology coming up in the next hour. US
Speaker 1: officials are discussing national security reviews for Elon Musk's various
Speaker 1: ventures from Twitter to Tesla. This after his Russia Ukraine tweets,
Speaker 1: especially given tesla strong presence in China and AI development,
Speaker 1: because the White House may put more restrictions on China
Speaker 1: technology from AI to quantum computing. And Apple design chief,
Speaker 1: who replaced Johnny I've is leaving the company. According to
Speaker 1: Bloomberg's sources, how she impacted the product lineup and what
Speaker 1: it means for iPhones, iPads, and the incoming mixed reality headset.
Speaker 1: Biden administration officials are debating whether the U s should
Speaker 1: subject some of Elon Musk's ventures to national security review. This.
Speaker 1: According to Bloomberg sources, this would include the Twitter deal, Tesla,
Speaker 1: SpaceX Is, star Link Network, and US officials are uncomfortable
Speaker 1: with what they see as Musk's increasingly Russia friendly stance
Speaker 1: and his plans to buy Twitter with the help of
Speaker 1: foreign investors. For more on this, I want to bring
Speaker 1: in Bloomberg's Dan Flatney and Sarah Frieder. So, so Dan,
Speaker 1: let's start with you. Tell us what we know at
Speaker 1: this point about this potential series of national security reviews. Right. So,
Speaker 1: I think that in many respects, the reviews are centering
Speaker 1: on Twitter and on the consortium of investors that Musk
Speaker 1: has lined up to help in his acquisition of the company,
Speaker 1: if that is what ends up happening at the end
Speaker 1: of the day, and those investors, some of which are
Speaker 1: based overseas. Because of the makeup of that consortium, there
Speaker 1: is a potential for the Committee on Foreign Investment in
Speaker 1: the United States to get involved in looking at the
Speaker 1: interests there. Now, the question is sort of twofold at
Speaker 1: that point, and one is whether the committee actually has jurisdiction,
Speaker 1: which sort of has to do not just with the
Speaker 1: financial stakes that these investors are looking at, but whether
Speaker 1: they'll have any controlling interest in Twitter, whether they will
Speaker 1: be on the board, whether they'll have access to non
Speaker 1: public information, things of that nature, and that will be
Speaker 1: sort of in the deal. So Cyphius does have the
Speaker 1: ability to potentially ask Musk or ask the the those
Speaker 1: involved in the deal for more information on that end,
Speaker 1: and then it sort of becomes a policy decision for
Speaker 1: the Biden administration to make as to whether they would
Speaker 1: want to step in and stop that deal or potentially
Speaker 1: more likely uh have some revisions or some some mitigation
Speaker 1: effects on that at the At this point, it seems
Speaker 1: somewhat unlikely that that's the course that they will take,
Speaker 1: but there is some interest in perhaps trimming musk sales
Speaker 1: a little bit in terms of his rhetoric out there,
Speaker 1: what he's saying publicly, and some potential risks with foreign
Speaker 1: investment in some of his companies. Sarah, we're a week
Speaker 1: away from the day that this deal is supposed to close.
Speaker 1: How big a wrench is this in in that schedule? Well, Emily,
Speaker 1: we have been on this show talking about the fact
Speaker 1: that Elon Musk wanted to buy Twitter, and then he
Speaker 1: didn't want to buy Twitter, and then he wanted to again,
Speaker 1: but there were some some stipulations that Twitter didn't want
Speaker 1: and just back and forth, all the legal filings, all
Speaker 1: the subpoenas. Finally we're reporting that that talks are cordial,
Speaker 1: that they're all on track to get this deal done
Speaker 1: by October. And if the Biden administration is the wrench
Speaker 1: that folved in its way, that would just be uh,
Speaker 1: such a perfect um climax of the story. It's it's
Speaker 1: really it's really been a bumpy ride for the company
Speaker 1: and and for Elon Musk here and for US reporters
Speaker 1: at Bloomberg as well. Um, but listen, you know, it's hard.
Speaker 1: It's hard to stay until they actually say they're going
Speaker 1: to do a review. Um, whether this is going to
Speaker 1: delay anything. As far as the folks involved in the
Speaker 1: deal are operating, they are. They are on track to
Speaker 1: meet the judges deadline, which is five pm Eastern time
Speaker 1: next Friday. If they don't meet that deadline for whatever reason, um,
Speaker 1: you know, it could end up going to court. Um.
Speaker 1: So I think that they're pretty head down on that. However,
Speaker 1: you know, scipious reviews could come still, uh, and I
Speaker 1: think that they would have to respond to that whatever
Speaker 1: it ends up being. Dan and you're reporting. You talk
Speaker 1: also about the Russia. You Crane tweets you on Musk's
Speaker 1: threat to cut off Starlink access to Ukraine. How much
Speaker 1: are officials really can concerned about this potentially Russia friendly
Speaker 1: stance from Elon Musk. I think that there's a couple
Speaker 1: of things that they're looking at there. Certainly there is
Speaker 1: the rhetoric that Musk and others have engaged in on
Speaker 1: this issue. In addition to that, I think that there
Speaker 1: is the Starlink issue, the satellite communications network that Musk
Speaker 1: has helped set up in Ukraine and is looking to
Speaker 1: set up in Iran as well. And I think that
Speaker 1: there's some concern from defense officials and from those in
Speaker 1: the administration that giving one private individual and a private
Speaker 1: company so much control over the kinds of communication and
Speaker 1: the ways of the methods of communication UH in these
Speaker 1: very sensitive areas is potentially a risk, both on the
Speaker 1: sort of redundancy standpoint in case that communication network were
Speaker 1: to be where to go down or to be cut
Speaker 1: off for some reason, and also just in terms of
Speaker 1: that giving one individual so much influence over US foreign
Speaker 1: policy to a certain extent, So I think that there's
Speaker 1: some concern about that. Beyond that, there's also generally some
Speaker 1: concern on the part of the administration on Chinese investments
Speaker 1: and involvement in in US businesses. And this is sort
Speaker 1: of separate from the Ukraine Russia issue, but it certainly
Speaker 1: enters into the cifiest discussions around Tesla and some other companies.
Speaker 1: So I think that there is sort of broadly a
Speaker 1: desire to more carefully scrutinize foreign investment in the US.
Speaker 1: Whether Musk runs a foul of that effort here is
Speaker 1: is sort of a separate issue, but that is definitely
Speaker 1: something that the administration is looking to be more active
Speaker 1: on in general. Meantime, Sarah, there's this reporting that Musk
Speaker 1: is planning to cut seventy of Twitter's workforce. This is
Speaker 1: a seven thousand company at this point. That's a lot
Speaker 1: of people. What's the real action inside Twitter about this news?
Speaker 1: It looks like we lost Sarah for a moment there, Um, Dan,
Speaker 1: while we get Sarah back quickly, Can you tell us
Speaker 1: the response from the White House so far on your reporting? Sure? So.
Speaker 1: Treasury Secretary Janet Yellen was asked about this today. She
Speaker 1: basically said she cannot comment on ciphious actions, which is
Speaker 1: a pretty common response, and that she's broadly supportive of
Speaker 1: what Musk has done on the communications front. The White
Speaker 1: House is saying they have no knowledge of these discussions.
Speaker 1: But I think our reporting is very solid in the
Speaker 1: sense that there are these discussions happening within the White House.
Speaker 1: There is sort of this broader overall question of what
Speaker 1: do you do with a problem like Elon Musk. I mean,
Speaker 1: this is the richest person in the world who is
Speaker 1: exerting an outside influence on foreign policy, and I think
Speaker 1: that there is a desire to rein him in a
Speaker 1: little bit, and there are some some ways to do
Speaker 1: that that are both political and sort of non political. Um,
Speaker 1: whether Syphius gets involved at the end of the day,
Speaker 1: I think is it going to be a policy question?
Speaker 1: And my reporting sort of shows that it would be
Speaker 1: a little bit of an outside chance that that Cipius
Speaker 1: would get involved at this point, though not totally outside
Speaker 1: the realm of possibility given some of the foreign investment
Speaker 1: in the in the deal structure. So it's just something
Speaker 1: we'll have to keep a very close eye on as
Speaker 1: things move forward. Okay, so, Ed, why don't you address
Speaker 1: the news that broke in the show yesterday that Elon
Speaker 1: Musk is considering laying off of Twitter's workforce, which will
Speaker 1: be thousands and thousands of people. What are Twitter employees saying, Yeah,
Speaker 1: my editor and dear friend Sarah had some technical issues
Speaker 1: there no worries. Look Sarah edited the story we put
Speaker 1: out on Friday, which is that it's been wellness Month
Speaker 1: at Twitter, and the company has been sharing messages about
Speaker 1: work life balance, looking after yourself. The messages coming out
Speaker 1: of Twitter a frantic. A lot of staff are very worried.
Speaker 1: The worried that the restricted stock unit award that was
Speaker 1: supposed to happen early next month will either not happen
Speaker 1: at the same date they thought, or it won't happen
Speaker 1: at all. They're looking into legal options, according to sources,
Speaker 1: about what happens if they are laid off, do they
Speaker 1: get the right kind of severance. They're also pretty unimpressed
Speaker 1: with management. We're told, you know this communication that Elon
Speaker 1: Musk was considering laying off percent of the workforce, That's
Speaker 1: not even what's upsetting Twitter staff. I'm told that's what
Speaker 1: what is upsetting Twitter staff is that actually Shawn Edgett,
Speaker 1: the Chief Legal Council, said they had discussed cuts and layoffs,
Speaker 1: but that they ended in April when they had that
Speaker 1: definitive murder agreement. Well that's a very different message to
Speaker 1: what Start management of told staff previously. So it's a
Speaker 1: pretty unhappy praise, and I'm told, along with my colleagues
Speaker 1: Kurt Wagner and Max Addler, that morale across San Francisco,
Speaker 1: New York and London is understandably pretty low right now
Speaker 1: at Twitter understandable indeed, Okay, Ad Ludlow, thank you, along
Speaker 1: with Sarah Fire and Dan Flatteney flatly. Of course, we're
Speaker 1: gonna continue to follow all of your reporting on this
Speaker 1: through the weekend. Anxious investors are selling out of social
Speaker 1: media stocks, with thirty five billion dollars in market value
Speaker 1: wiped out just at the open, this following Snap reporting
Speaker 1: its slowest quarterly sales growth on record. For more honest,
Speaker 1: I want to bring in Craftsman Plus founder and CEO
Speaker 1: Alex Uruku. So what is what Snap reported here signal
Speaker 1: to you, Alex Well, I think there's a different like
Speaker 1: macro environment that we should talk about where advertising in
Speaker 1: general is shifting from brand advertising spend to performance spend,
Speaker 1: and the problem with Snapchat and a few other social
Speaker 1: platforms it's more geared towards brand advertisers with the lack
Speaker 1: of first party data um that Apple has recently changed
Speaker 1: with their A T T framework really relying on first
Speaker 1: party day to drive that value. The issue with Snapchat
Speaker 1: is it doesn't have that first party data, and opposite
Speaker 1: of TikTok, which is a very sticky platform driving a
Speaker 1: lot of engagement, doesn't have that stickiness factor either. That's
Speaker 1: why it took a big head today in the markets.
Speaker 1: How much do you think these are short term issues
Speaker 1: or are they long term issues? I think we're going
Speaker 1: to see more long term issues here in just this
Speaker 1: social space. So what what the trend is happening right
Speaker 1: now is retail media. So going back to first party data,
Speaker 1: there's all these other smaller platforms that are coming up
Speaker 1: in the space right now. I think of Marriott, think
Speaker 1: of Lows Home Depot, They're all building ad businesses. Amazon
Speaker 1: and Walmart's kind of already paved the way for that.
Speaker 1: So because they have this first party data, the advertising
Speaker 1: dollars are no longer just spent on Facebook and Google.
Speaker 1: So you're gonna see kind of like a deteriorating spend
Speaker 1: across all the social platforms leveraging these smaller audiences. So
Speaker 1: what does this mean for What does this mean for
Speaker 1: alphabet What does this mean for Twitter, which obviously has
Speaker 1: another unique storyline going on as well. So Google has
Speaker 1: a lot of first party data on Gmail, YouTube, they
Speaker 1: have a lot there, so they're gonna be fine. They
Speaker 1: have a lot of search intent, so I'm not worried
Speaker 1: about Google. Twitter is more one of the platforms like Twitter, Pinterests,
Speaker 1: and Snapchat are kind of the three that I'm more
Speaker 1: worried about and concerned about their ability to drive performance
Speaker 1: for advertisers. Uh. Meta they still have a lot of
Speaker 1: first party data, their algorithms are really robust. Uh. I
Speaker 1: think they're going to still be able to be a
Speaker 1: player in the space and drive a meaningful value and
Speaker 1: continue to have a prosperous business. Even if Mark Zuckerberg
Speaker 1: isn't as focused on Facebook and Instagram as he is
Speaker 1: on trying to pivot into the metaverse. I mean, Facebook
Speaker 1: is just a machine, so that coming has a lot
Speaker 1: of great talent behind it. A lot of folks have
Speaker 1: built that up. So even if he is focused on metaverse,
Speaker 1: I still think that platform is still where majority of
Speaker 1: advertisers spend their money and that's not going away at
Speaker 1: least anytime soon. Now, and we just happened in New York.
Speaker 1: What are the big themes that big takeaways about advert
Speaker 1: rising more broadly is changing. Yes, so there's there's a
Speaker 1: different framework. So Apple just announced their scan for update,
Speaker 1: which is kind of their framework of how to handle privacy.
Speaker 1: And what's what the big changes are is we need
Speaker 1: more data and so how do you get more data.
Speaker 1: You have that first party data, but you also have
Speaker 1: attribution windows, which is the time you can actually take
Speaker 1: credit for an impression or a click. And so what's
Speaker 1: happening is they're opening up those attribution windows to feed
Speaker 1: more data to these algorithms that are these AD platforms,
Speaker 1: which is ultimately going to boost the whole space. So
Speaker 1: we actually should see from this new release with Apple,
Speaker 1: the scan for Update, that there will be an overall
Speaker 1: boost in general and just AD dollars flowing to these platforms.
Speaker 1: So do you see a hierarchical shift here and where uh,
Speaker 1: you know the biggest AD dollars are going or you
Speaker 1: know the recipients of the big AD dollars, Like, how
Speaker 1: does this marketplace look different, let's say in five years. Yes,
Speaker 1: So right now what's happening is, you know, Facebook still
Speaker 1: a big player in the space, Googles to do well.
Speaker 1: Apples probably do emerge into it in a meaningful way.
Speaker 1: So we should look at for Apple. TikTok's got its
Speaker 1: stickiness and get a continue to drive kind of those
Speaker 1: like high flyer advertisers that are looking for that like
Speaker 1: Mega win, they can find that on TikTok. So that's
Speaker 1: they still have the dream. The ad business hasn't been
Speaker 1: totally proven out, but they have the stickiness factor. Uh,
Speaker 1: it's all these other platforms what we're kind of seeing
Speaker 1: in the space that's interesting as well. That was brought
Speaker 1: up an ad weeca is connected TV and so you're
Speaker 1: gonna see a shift from you know, these digital platforms
Speaker 1: that are just on your you know, your phone and
Speaker 1: the smaller device is shifting over to larger screens connected
Speaker 1: TV with Netflix, Disney getting into this space. And what's
Speaker 1: really happening is with all this extra inventory on the space,
Speaker 1: advertising is about supplying demands. So there's advertiser demand and
Speaker 1: there's the inventory of the publishers supply with all these
Speaker 1: other platforms opening up their businesses for ad dollars. And
Speaker 1: again this is from the macro environment of Hey, our
Speaker 1: business is hurting, we need to make money. What's an
Speaker 1: easy way to make money? Turn on ads. So everyone's
Speaker 1: turning on ads and building it that way. But you
Speaker 1: see these companies, the more inventor you have in this space,
Speaker 1: and demand is ready lowering that we're we've talked about previously,
Speaker 1: So lower demand, more inventory, We're actually gonna see global
Speaker 1: costs of AD impressions probably decrease over the next five years. Interesting, Okay,
Speaker 1: Alex Maruca, CEO and founder of Crafts and Plus, thanks
Speaker 1: so much for bringing your perspective to us this Friday. Alright,
Speaker 1: coming up, another top Apple executive stepping down. How this
Speaker 1: departure opens a major hole in Apple's design team. Next,
Speaker 1: this is Bloomberg. Apple's head of hardware design, Evans Hanky,
Speaker 1: is leaving the iPhone maker three years after taking the role,
Speaker 1: creating a significant vacancy at the top of the company, known,
Speaker 1: of course, for its iconic designs. This according to people
Speaker 1: familiar with the matter and our own Mark German's reporting. So, Mark,
Speaker 1: what do we know about her depart archer and why
Speaker 1: she's leaving now? So this is a pretty significant departure.
Speaker 1: Evans Hankey is the vice president of Industrial Design, reporting
Speaker 1: to the CEO. She essentially replaced Johnny I've, Apple's former
Speaker 1: chief design officer in upon his departure. So she's been
Speaker 1: in charge of the look and feel of the iPhone,
Speaker 1: the Apple Watch, the iPad, the Mac, all of Apple's
Speaker 1: products for the last three years. The departure was announced
Speaker 1: internally within Apple uh this week, and she'll be departing
Speaker 1: in about six months. The notable news here is that
Speaker 1: there's also no replacement for her, so Apple hasn't been
Speaker 1: able to come up with since she announced her departure
Speaker 1: internally who would replace her at this point, Well, filling
Speaker 1: Johnny I's shoes was always going to be a difficult
Speaker 1: job for you know whoever, I was gonna try to
Speaker 1: do that. But do we know why she's leaving after
Speaker 1: just three years? Yeah, at this point, it's unclear to
Speaker 1: say for certain why she is leaving. She's certainly not
Speaker 1: at the point of retirement. She's only been in that
Speaker 1: role for three years, though she has been an Apple
Speaker 1: for about two decades. She was basically the manager of
Speaker 1: the industrial design team under Johnny I've right, so her
Speaker 1: background is in product design, but she ran the team
Speaker 1: as a manager and it was pretty much a natural
Speaker 1: succession for her to take over for Johnny. He was
Speaker 1: her number two in that respect. There are some other
Speaker 1: senior designers that still remain, but to tell you the truth,
Speaker 1: many of them, many of Johnny Ives close collaborators. Most
Speaker 1: senior designers over the past two decades, the ones responsible
Speaker 1: for the designs of the products that we see today.
Speaker 1: A lot of them have either left to start their
Speaker 1: own firms, left to other companies, and some of them
Speaker 1: have joined you know, i've's love from company as well,
Speaker 1: But there still are a few top designers there. There's
Speaker 1: Richard Haworth. He temporarily had this role between seventeen, still
Speaker 1: reporting to I'VE, but he's not someone who wants to
Speaker 1: manage a team, so I think it's unlikely that he
Speaker 1: takes that role again. But certainly this is a major
Speaker 1: development for anyone who's a fan of the can feel
Speaker 1: of Apple's devices. How do you imagine this will impact
Speaker 1: the product line up? Yeah, I mean the way Apple's
Speaker 1: product development process goes is they could be working on
Speaker 1: things in their design labs right now that we won't
Speaker 1: see for two to seven years at this point. Right,
Speaker 1: if you take a look at the current Apple product lineup,
Speaker 1: the Apple Watch Series eight has the same design as
Speaker 1: the Apple Watch from four or five years ago. Right
Speaker 1: the iPad pro same design as four years ago. Uh.
Speaker 1: Some of their other products have legacy designs. The iPhone
Speaker 1: fourteen same design as from to three years ago. Right,
Speaker 1: So we are in for a big change to Apple's designs,
Speaker 1: probably over the next year or two, just because those
Speaker 1: designs have lasted so long. And I think we're going
Speaker 1: to only see the fingerprints of evans Hanky, evans Hanky's
Speaker 1: leaderships over the design team in the next year or two,
Speaker 1: and then maybe four or five years in the future,
Speaker 1: we'll see how the design evolves. All right, Mark German
Speaker 1: as always thank you. Meantime, insta Cart is reportedly holding
Speaker 1: off on plan to go public until at least next year.
Speaker 1: The food delivery giant had been planning to put its
Speaker 1: S one filing out this week, but is said to
Speaker 1: have reconsidered given the turbulent market. Instacart slashed its valuation
Speaker 1: to about thirteen billion dollars and had decided not to
Speaker 1: go public until market conditions improved. Reddit says it now
Speaker 1: has more n f T wallets than the popular trading
Speaker 1: website open ce. Reddit Vault, which lets users create wallets
Speaker 1: to use his avatar, says it's got more than three
Speaker 1: million such wallets open see the largest n f T
Speaker 1: marketplace by all time sales volume has around two point
Speaker 1: three million active wallets. Reddit is preparing for its own
Speaker 1: public debut sometime in the next year. Welcome back to
Speaker 1: Bloom're Technology and Emily Chang in San Francisco. Sources tell
Speaker 1: Bloomberg the US is looking into new rules that would
Speaker 1: limit China's access to powerful emerging computer in technologies, potential
Speaker 1: plans focusing on quantum computing and artificial intelligence software. For
Speaker 1: more on these escalating tensions between the US and China,
Speaker 1: let's bring in Strategy Risk founder and CEO Isaac stone Fish.
Speaker 1: So tensions, Isaac have been ramping up for a while,
Speaker 1: and this yet again, where is this leading? So if
Speaker 1: we step back and look at how negative things have
Speaker 1: been between the United States and China and the very
Speaker 1: real possibility that China invades Taiwan as soon as this year,
Speaker 1: again not likely but possible, possibly the US and China
Speaker 1: are leading to war. Wow. I mean, that's a that's
Speaker 1: a profound statement. Why go that far? We are not
Speaker 1: in a world that's past geopolitics, and I think we
Speaker 1: had this nice global mental break of big power wars
Speaker 1: from the fall of the Soviet Union and from after
Speaker 1: the Korean War, in the Vietnam War, the Proxy War.
Speaker 1: Now we're waking up to the fact that great powers
Speaker 1: do fight wars with each other. They have throughout history,
Speaker 1: and they're very likely to again. And China has been
Speaker 1: very explicit about its willingness to retake Taiwan, even with force.
Speaker 1: The US has been very explicit about its willingness to
Speaker 1: defend Taiwan with force. And so if China calls the
Speaker 1: United States bluff that very much could lead to a
Speaker 1: active hot war between the world's two most powerful countries.
Speaker 1: How hot does this war get? So it depends on
Speaker 1: how lucky the world is. It could go anywhere from
Speaker 1: a limited regional ish war to something that was similar
Speaker 1: to the Korean War to World War Three. And it's
Speaker 1: stunning to meet as we talk to people in the
Speaker 1: investment community that the US government and certainly the Chinese
Speaker 1: government are awake to this possibility, but the investment community
Speaker 1: seems to want to keep pretending that things will go
Speaker 1: back to where they were in the Obama era of
Speaker 1: friendship with a sprinkle of competition between the US and China.
Speaker 1: And those days are over. M. What do you think
Speaker 1: this would mean for the tech industry. It would be transformative,
Speaker 1: catastrophic to many, and very positive for some who plan ahead.
Speaker 1: I think Apple, Tesla, other major companies are recognizing the
Speaker 1: difficulty of sourcing from China and trying to explore other
Speaker 1: supply chain alternatives. I think the absolute cratering of the
Speaker 1: Chinese market would be cratering for a lot of businesses
Speaker 1: bottom lines, and I think, frankly, a lot of companies
Speaker 1: haven't started thinking about this from an ethical perspective, which is, Okay,
Speaker 1: I'm a major US company, I have thousands of staff
Speaker 1: in China. If China invades Taiwan, will be aging view
Speaker 1: my staff as enemy combatants and how do I deal
Speaker 1: with that? Now? There's a lot of action with Afghanistan
Speaker 1: and with Ukraine of tech companies taking care of their
Speaker 1: employees when those countries descended into war and chaos. What
Speaker 1: plans do tech companies have in place to take care
Speaker 1: of their own in China? If China is to invade
Speaker 1: Taiwan well, and if indeed that does happen, how does
Speaker 1: that play out? Especially given the way we've seen the
Speaker 1: US come to Ukraine's aid to a certain extent um,
Speaker 1: but Taiwan being you know, you know, very also unique situation,
Speaker 1: so with the caveat that, it's impossible to predict the future.
Speaker 1: I'm actually quite heartened by the US restraint towards Ukraine
Speaker 1: because I think the message that sends to Beijing is
Speaker 1: not We're going to treat Taiwan like Ukraine, but we
Speaker 1: are preparing for the possibility of you to invade Taiwan,
Speaker 1: and so we're fighting a two front war. We're not
Speaker 1: going to fight both Russia and China at the same time.
Speaker 1: If you invade Taiwan, we as a country will be
Speaker 1: ready for you, and we're supporting what the Ukrainians are doing,
Speaker 1: but we're keeping a lot of our powder dry, so
Speaker 1: to speak, and hopefully that turn. So you think the
Speaker 1: US would be much more hands on if China were
Speaker 1: to invade Taiwan. I don't think Congress would let the
Speaker 1: United States not go to war with China if China
Speaker 1: launched a full scale invasion of Taiwan. This is all terrifying, Isaac,
Speaker 1: I mean really terrifying, especially given the thirty years of
Speaker 1: relationship building. I know you and I both spent um
Speaker 1: many years in China and it's it's a it's a
Speaker 1: very different relationship. Um, you know, it's it's evolved into
Speaker 1: a very different relationship over the last several years. You know,
Speaker 1: what about a new administration. You know, we've got a
Speaker 1: presidential election in a couple of or is this something
Speaker 1: that you see carrying on no matter who's in office.
Speaker 1: The U. S. Navy chief just talked about the possibility
Speaker 1: of a war with Taiwan this year next year. I'm
Speaker 1: much less worried about how things are going to play
Speaker 1: out in the medium term. I'm far more worried about again,
Speaker 1: if if I had to bet, I'd say it's less
Speaker 1: than fifty percent chance going to happen. And I think
Speaker 1: it's possible that a future Trump administration, if that happens again,
Speaker 1: Trump is more likely to sell out Taiwan for other concerns.
Speaker 1: I think another Republican or another Democrat would be far
Speaker 1: less likely to do so. I think it's possible that
Speaker 1: Beijing would think that right after the election, before the
Speaker 1: new president takes power, is the ideal time to strike.
Speaker 1: Hopefully they don't. Hopefully they decide never to try to
Speaker 1: seize Taiwan by force. But we haven't been having this debate,
Speaker 1: and we haven't talked about what should the US do
Speaker 1: now to both prepare for war with China, but also
Speaker 1: how do we make sure that we act ethically as well.
Speaker 1: I'm quite worried about our atrocious history with Japanese Americans
Speaker 1: and World War Two and German Americans and World War One,
Speaker 1: and we're already seeing bubbling of that with Chinese Americans.
Speaker 1: And I think so much the conversation about war is
Speaker 1: how do we prevent the war as opposed to regardless
Speaker 1: of what we do, the US might go to war
Speaker 1: with China, and how do we conduct that war in
Speaker 1: a way that's most ethical and most adheres to our values? Uh,
Speaker 1: certainly an interesting perspective. I do want to get your
Speaker 1: thoughts on the latest Blueberg Dues reporting on TikTok. We
Speaker 1: did some analysis of the deal that the US government
Speaker 1: has struck with TikTok and its parent Byte Dance to
Speaker 1: store US users data on Oracle servers, but Bloomberg News
Speaker 1: has concluded that this would still leave US data vulnerable.
Speaker 1: What's your take on this. TikTok in a time of
Speaker 1: good relations between the U S and China is barely
Speaker 1: a threat compared to other big social media platforms. You
Speaker 1: could put it roughly in the same category as Facebook.
Speaker 1: TikTok in an era of tensions between the U S
Speaker 1: and China or an era of war between the U
Speaker 1: S and China can easily function as a basically national
Speaker 1: sleeper agent for Chinese intrusion into US homes, US hearts
Speaker 1: and minds, and as such as very dangerous and I
Speaker 1: think any sort of deal that gets struck between the
Speaker 1: US and Oracle and TikTok won't allay those concerns. And
Speaker 1: so if tensions reduce between the U S and China,
Speaker 1: I'm not worried about TikTok. If you have a Chinese
Speaker 1: app on tens of millions of phones and the US
Speaker 1: and China are going to war, that's a huge national
Speaker 1: security concern and one that I don't think investors or
Speaker 1: the administration has fully unplugged unplugged. Okay, Uh, that is
Speaker 1: a bleak assessment indeed. UH Strategy Risk founder and CEO
Speaker 1: Isaac stone Fish, thank you for joining us. Obviously a
Speaker 1: major topic we're going to continue to follow. Now. In
Speaker 1: a lighter note, Google chips not the ones in their
Speaker 1: chromebooks or smartphones, quick takes karam More sheds light on
Speaker 1: the company's latest marketing push. Google is getting into chips,
Speaker 1: the crunchy kind that you can actually eat. You can
Speaker 1: probably tell from the package that they're only available in Japan,
Speaker 1: and here they're part of the marketing push for the
Speaker 1: latest Pixels seven phones from the Internet Giant, designed to
Speaker 1: remind us that Google also makes the other kind of chips,
Speaker 1: the ones made out of silicon. The Pixel has Google's
Speaker 1: own Tensor G two chip, the company's most advanced AHI
Speaker 1: powered cameras, and it's literally of Internet services, from Google
Speaker 1: Maps and Photos to YouTube and Chrome. It's hard to
Speaker 1: imagine Apple resorting to the potato to ploy, but that's
Speaker 1: because people already know and love the iPhone, whereas Google
Speaker 1: is running ads in the US saying did you know
Speaker 1: Google makes a phone? It says something about both the
Speaker 1: ongoing failure of Google's Pixel phones to sell in big
Speaker 1: numbers and the company's opportunity in Japan. In the US,
Speaker 1: Apple and Samsung account for seventy four of the market,
Speaker 1: whereas in Japan Samsung barely scraped together seven percent. That's
Speaker 1: a missed opportunity for Google, who's Android operating systems run
Speaker 1: Samsung concepts. There's scope to take chunks out of its
Speaker 1: Silicon Valley rival by sealing business in a way that
Speaker 1: Samsung has so far failed to do. And if it
Speaker 1: takes spice see savory cheesy gimmicks to help bring attention
Speaker 1: to the cause, so be it. So how do they taste?
Speaker 1: M It's not bad, but there's a far taste your
Speaker 1: meal on offer and Google wants a piece of it. Crunchy.
Speaker 1: That was quick, takes karum more. All right, coming up
Speaker 1: the great resignation bleeding into the crypto industry, this time
Speaker 1: shaking up the c suite. We'll talk more about this next.
Speaker 1: This is Bloomberg, turning now to today's Crypto report and
Speaker 1: the Bloomberg Big take. Cryptos two trillion dollar wipeout has
Speaker 1: recently cut a path through the c suite. More than
Speaker 1: two dozen high ranking executives have vacated their posts in
Speaker 1: the last two It's Loan Brett Harrison of f t
Speaker 1: x U S and Jesse Powell of KRACK in just
Speaker 1: two names in the shakeup. Bloomberg's Hannah Miller joins us
Speaker 1: now with more Hannah, who else? Yeah, I know it's
Speaker 1: been a deeply unsettling slew of announcements of ceo stepping down. Um,
Speaker 1: I can think of Alex Matschinski over at Celsius, Brett
Speaker 1: Harrison over Everrett f t x US, and Sam Tribuco
Speaker 1: over at Alameda. So it's been a lot of big
Speaker 1: names making big changes and stepping back from their companies.
Speaker 1: Why is this happening now? Obviously there's a huge there's
Speaker 1: a ton of altility in the market. Is that it? Yeah,
Speaker 1: there are a number of factors here that are contributing
Speaker 1: to change some of the office at major crypto companies.
Speaker 1: So yes, Uh, the huge downturn that's affecting the market
Speaker 1: and causing crypto winter is a major reason why CEOs
Speaker 1: might be stepping back. Some are at companies that have
Speaker 1: had serious, serious issues. I'm thinking Bank to see, like
Speaker 1: with Celsius and others are just looking to kind of
Speaker 1: save their sanity and have even talked about taking time
Speaker 1: uh time off to see friends and family and spare
Speaker 1: their mental health. We've also seen growing regulatory scrutiny as well.
Speaker 1: How a venture capitalist crypto venture capitalists approaching this or
Speaker 1: maybe are they behind a number of these departures? Yeah?
Speaker 1: So uh you know, crypto vcs are some of the
Speaker 1: industry's biggest cheerleaders. We have seen a drop in funding
Speaker 1: for bockchain startups, though it was a thirty seven percent
Speaker 1: declined to four point four billion dollars during the third quarter.
Speaker 1: I think they're trying to see the bright side of this.
Speaker 1: In some cases they're looking to They're saying that actually
Speaker 1: more experienced CEOs who might be coming from traditional finance
Speaker 1: or have actually helped companies go public might be filling
Speaker 1: these roles. So it's a new level of maturity for
Speaker 1: the crypto industry and kind of an optimistic take on
Speaker 1: what's happening here. How much more pain are we expecting?
Speaker 1: We were speaking with Caveta groupd of of Delta Blockchain
Speaker 1: earlier this week. She thinks bitcoin is gonna fall to
Speaker 1: twelve or thirteen thousand dollars um, you know, even further
Speaker 1: than it's already fallen. And if that happens, I can
Speaker 1: assume there's gonna be a lot more attrition. Yeah, I
Speaker 1: have talked to people who have said we should expect
Speaker 1: more layoffs down the line. That's been a huge issue
Speaker 1: for the industry. Um we're seeing startup s buckled down
Speaker 1: for the next eighteen to twenty four months. Speaking sure
Speaker 1: they have enough cash on hand to last crypto winter.
Speaker 1: I haven't talked to anyone who thinks this is going
Speaker 1: to resolve anytime soon. Um, but yeah, people are still
Speaker 1: invested in blockchain's long term prospects. All right, Bloomer's Hannah Miller,
Speaker 1: thank you. Continue to follow another week over, but brace yourselves.
Speaker 1: Next week is a big one with fifteen point three
Speaker 1: trillion dollars of market cap reporting earnings results, lots of
Speaker 1: that big tech to break it all down, Bloomberg's and
Speaker 1: Ludlow so ed we're watching a lot of big names
Speaker 1: next week walk us through it. Yeah. I feel like
Speaker 1: we've just been dipping our toe really this week, right
Speaker 1: with Tesla and Snap. Next week it's the big ones,
Speaker 1: you know, the mega caps who have an important role
Speaker 1: to play in markets because of their waiting on major indices.
Speaker 1: But it's just such a big lens on the world.
Speaker 1: Microsoft alphabet, the parent company Google. On October, Twitter, look,
Speaker 1: we can expect a press release potentially. We don't know
Speaker 1: what's going to happen with the Elon must deal, but
Speaker 1: they're not going to do a normal earnings. You hope
Speaker 1: for some commentary from them around the macro advertising environment
Speaker 1: meta as well. You know, after Snap, I think we
Speaker 1: very quickly turn our attention to Meta and wonder if
Speaker 1: the things that hurt Snap, which weren't just to pullback
Speaker 1: and advertising, but the iOS add tracking changes from Apple
Speaker 1: that really hurt them. You'd imagine that's analogist for Meta
Speaker 1: as well. And then we finished strong, and we finished
Speaker 1: strong October twenty seven with Amazon and Apple. You know
Speaker 1: those are our favorites, Yeah, favorites. Indeed. You know, obviously
Speaker 1: we were talking earlier about the big ad slowdown. Um,
Speaker 1: let's talk about that as it pertains to Google Meta.
Speaker 1: Our guest earlier seemed to be pretty confident in Google
Speaker 1: and metas results, much more concerned about names like Twitter, Pinterest,
Speaker 1: and Snap as we saw what are you looking for?
Speaker 1: I think what's interesting in Google's case, And he talked
Speaker 1: about this right in terms of searches that we learned
Speaker 1: earlier in the year, as we kind of came out
Speaker 1: of the pandemic. Um even in the changing economy, Google
Speaker 1: still attracts eyeballs because consumers, even if nets they're spending less,
Speaker 1: they change their spending habits, they start searching for experiences.
Speaker 1: Travel plays a big part in that. Even so, they're
Speaker 1: not immune right to to what we're seeing. The stronger
Speaker 1: dollar is also really in resting. You know, you and
Speaker 1: I have talked about that less over the last couple
Speaker 1: of years. But if you think about the names we're
Speaker 1: talking about, these are big global technology companies, and in fact,
Speaker 1: when you consider the S and P five hundred, it
Speaker 1: is the technology sector and the communications sectors most exposed.
Speaker 1: Why they do business all around the world. They are
Speaker 1: bringing in international revenues that are are going to get
Speaker 1: hit by that stronger dollars. So it's certainly something will
Speaker 1: play attention to. And I know and you are, you know,
Speaker 1: you're an eternal optimist. Give us some give us some hope.
Speaker 1: What are the what are the signs of light the
Speaker 1: silver linings. Yeah, there are some people out there who
Speaker 1: think the end of the world is inevitable. Not naming
Speaker 1: any names, but there is a view in the market
Speaker 1: that the tech sector could hold up better in this
Speaker 1: third quarter. Right, you think about these names, they're global
Speaker 1: players within trench market positions, strong balance sheets, they can
Speaker 1: weather the storm. Apple, Amazon, they are able to be
Speaker 1: nimble because of their size. Whether they pull that off
Speaker 1: or not, it's yet to be seen. But City Green,
Speaker 1: for example, overweight global technology right now. They're optimistic that
Speaker 1: in the long run, some parts of tech can weather
Speaker 1: the storm. So we'll see if that happens. All right,
Speaker 1: Bloomberg's ad Ludlow, thanks so much. I know you'll be
Speaker 1: across it all next week, and that doesn't For this
Speaker 1: edition of Bloomberg Technology. On Monday, we're talking about Meta's
Speaker 1: new advertising strategy with Brad ericson of RBC Capital Markets.
Speaker 1: Of course, we'll dive into the broader trends we're seeing
Speaker 1: in the social media add turmoil as well, given what
Speaker 1: we were talking about when it comes to Snap, Twitter,
Speaker 1: Google and more. And don't forget to check out our
Speaker 1: podcast wherever you get your podcast. I'm Emily Changing in
Speaker 1: San Francisco. Have a wonderful weekend everyone, This is Bloomberg