emily: welcome to "bloomberg technology." i'm emily chang in san francisco. new selloff in big tex shares. volatility continuing to be the only certainty. oracle earnings out after the bell. telcom revenue soaring on continued demand. oracle reporting strong sales that beat estimates on increased demand for its cloud products

with so many businesses working remotely. one of the biggest work from home names is slack, which has seen a flood of new customers as remote work continues. shares had been soaring, but got pummeled in the last few days after the company reported a miss on feelings expectations. ceo of us to discuss the slack. this is a pretty big move and one of the biggest selloff of slack shares in particular since you have been a public company. what is your take? >> it gives the backdrop of a lot of volatility. i definitely think the billings missed you mentioned is important. we were a pretty young company, 6.5 years old. we are coming into our sophomore year. there is rightfully a lens of

skepticism on whether this growth is durable. happened this quarter is different. we had the pandemic. record unemployment. new paid 8000 net customers in the quarter. that brings the total to 130,000 . 130,000 businesses, they are small and medium businesses around the world. they more accurately reflect the broad economic condition. when those companies freeze hiring, do layoffs, that shows up in our billings number more or less instantaneously. on the other hand, the positive effects take longer to materialize. what you will see happen over quarters, thee next couple years, we will continue to build credibility with investors and in the market. we are confident this growth is durable and the future of -- the

future that we are building is one that has a lot more opportunity than the one we are leaving. a little bit long answer, i apologize but i think it is important context. emily: for the second quarter in around, speaking of the backdrop, you haven't provided a billings forecast because of the uncertainty ahead. what don't you know about the future? how much volatility do you see coming forward? stewart: things are getting a little bit clearer now. probablyhey are still -- i think we will be in this situation longer than people anticipate and there will be thinking that is stuck. back ing we will be office is really soon. slackhis perspective of

as a business, now that people have for six months not had to commute, now the people for six months had the flexibility and --efits of working from home and i apply this to us as well -- their imagination has been opened. you have to acknowledge this is not normal life. cafe oncan't sit in the a the weekend or the amenities of life they are used to. nevertheless, we proved to ourselves that we could start working from home in a week's notice and continue operations. that signals a real shift. that is long-term. that is structural. that provided a lot of growth in our new customer adds. up 60% year on year. i am excited about that, but even more excited a lot of that

was driven by what we were doing. new products. people creating teams for the first time. especially slack connect. a portion of that is increasing the relevance of the category. those customers are going to grow with us and become the driving force of the business over the next couple years. emily: you have been very supportive of working from home. you said slack employees can work from home indefinitely. on the other hand, i interviewed the co-ceo of netflix. if he has any say, netflix are going to come back to the office as soon as they can. he used the word it will be just a little blip in history. what is your reaction to that? stewart: he is probably right in history. he is a pretty smart guy. maybe there is something i'm not getting here. what we have seen is a real change in the market dynamics and game theory.

we compete with netflix for employees. we compete with twitter for employees. that is literally for the last couple decades been an intense part of the competitive struggle in the technology world. a lot of people decided they want to move closer to family or don't want to live in a small apartment. or if they don't have to commute, maybe they will have a bigger house that has a yard. people are really moving. companies are hiring remote workers. that is not easy to undo. staff,see 30% of your 50% of your staff begin to make choices that will make it hard for them to come back in the office, it is a little bit of a one-way door unless you are willing to let go of all of those people. i think organizations who insist that people come back to the office will be at a competitive

disadvantage for talent. last week we launched a new organization. we are incubating it, called future forum. the mission is to reimagine management. 12% of employees say they expect to be in the office all the time at some point in the future. a junk expect -- chunk expect to work remote permanently. maybe we get together every other week for several days to brainstorm and generate work. when we are sitting at our computers working we don't need to be at the office. it changes from commercial real estate to the way offices are set up. that has yet to be worked out. it is going to be tough to stand against the current and still be able to attract and keep the people you have. emily: he filed an antitrust

complaint against microsoft with the european commission and warned microsoft could retaliate against slack. i am curious if their posture has changed since the complaint was filed. are they friendlier than they are on the surface? stewart: no change. it's hard to quantify. the important thing for us and them too is the market is so big is they will not be a limiting factor on our success, in the short term anyway. it does insert some friction in the buying process. the old-fashioned fear and uncertainty and doubt. on the other hand, our win rates are unchanged during this period. we have consistently won in environments where teams and slack go head-to-head.

the more common case is teams and slack are used alongside one another. teams is a videoconferencing app like zoom. it does not do the same thing as slack, so they are not really replacements. would our sales life be easier if microsoft ceased to exist? absolutely. but 49% revenue growth from last year and an acceleration in the rate of new customer acquisitions demonstrates we are doing ok anyway. emily: we are less than two months away from the election. twtiktok has become a lightning rod in international elections. if president trump stays in office, what does that mean for silicon valley and what if biden wins? generic,this is not a i don't deal in hypotheticals, it is actually fairly hard to compute the ramifications. if trump wins, i think we will

get extra trump. he will have been emboldened. term so hee his last doesn't have anything to lose anymore and we will get a lot more of what we are getting. biden i think is going to be returned with -- be concerned with a real return to normalcy. as a business, i prefer the second path. as an individual citizen i do as well. i am feeling pretty confident this is not that going to be a disaster. the magnitude of the impact of things not going -- things going wrong is something to be concerned about. emily: looking forward, you made a partnership with aws on videoconferencing. curious what jason's you would like to build out -- adjacents

you would like to build out are. is education going to be a bigger sector on slack? what are some future product areas you are looking to explore? stewart: the big one for us is called slack connect. it allows two or more organizations to share across organizational boundaries. that may or may not sound impressive if you don't use the product. of the peoplet you deal with at work are vendors, suppliers, professional services, the whole web of relationships with other businesses. ini s a big movement collaborations, but for compliance. very attractive proposition for enterprise. the challenge we have as to figureoday is try

out how processes that today must be some goodness -- be synchronous could be replaced with asynchronous. how much of what we see on the consumer world with snapchat and instagram stories, how much of that could make its way to the enterprise and take the burden off the perpetual videoconferencing. emily: interesting. something we will be watching. ceo of slack, great to have you on the show. thank you for stopping by. speaking of educational technology, we will have more with the former secretary of education arne duncan about how the return to school is going so far, what he thinks needs to be done. that is next. this is bloomberg. >> kids have to be able to learn anything they want anytime, anywhere. find their passion, figure out

what they want to do with their lives. ♪

emily: the trump administration may give tiktok's chinese owner more time to line up a sale. are ben brody from washington, who has been following this story. what is the latest state of play between the president and tiktok's owner? ben: they are barreling toward that deadline. hold microsoft and oracle's in as bi -- oracle in as bidders.

is simply notit going to be possible to meet that deadline. the administration deciding whether they are going to give more time to tiktok and bytedance. it is looking like they are leaning toward it, but it hasn't reached the president's desk, so things are still scrambling. emily: what are the chances this continues to go on, that they missed the deadline and miss the deadline because bytedance really doesn't want to sell tiktok's u.s. assets? ben: it seems entirely possible bytedance might decide it can't please both nations. the reporting we have gotten is the review by the chinese authorities is going to take weeks, if not months. it seems almost guaranteed the u.s. will have to move that deadline out if it does ultimately want to see a sale rather than shut the app down.

is another 45 days before the formal shutdown from that national security process. the administration has given two or three different deadlines. they do have a little bit more time, but this was the immediate moment they were treating as if they had to get a deal. deadline butts up against the presidential election. you imagine politics are going to be playing some role. what do we know about the status of talks with microsoft and walmart and oracle? it seemed those talks were pretty far along. ben: our understanding is they had moved fairly far along. the chinese regulations came out at the end of august. it blind-sided essentially the three companies and sent everybody scrambling back to

their various partners to figure out who they can please and on what timeline. it is really rambling things -- scrambling things. it may not be possible to please both nations. things are going to get hotter in the u.s. right up through november 3. they will get more intensely political. that is the space they are operating in. it creates a real risk that this could all faall part amid geopolitical tensions. emily: ben brody continuing to follow the tiktok story. thank you so much for that update. diving back into our ongoing virtual classroom series focusing on how the pandemic has reshaped the way employees work, we socialize, and students learn. with some schools reopening, some staying remote, we have seen entire school systems having to shift to adjust to

this new normal. earlier i spoke with arne duncan , the former u.s. secretary of education under the obama administration. i got his take on how the return to school has gone so far. i am trying to be honest how angry and frustrated i am with the lack of federal leadership, the dishonesty. they are playing things down. the lack of resources. this has gone from a natural disaster to a man-made catastrophe. we shouldn't be in this situation. you and i shouldn't even be talking today. tens of thousands of lives lost. millions of millions of children's special education around the country. it is extraordinary. tragic. just heartbreaking. having said that, at the local level, unbelievable leadership, empathy, compassion, urgency.

i am talking constantly with superintendents across the country to figure out food distribution, telehealth during these tough times, and yes, education. horrific leadership at the top. amazing, inspiring leadership at the local level. emily: i have four kids. as a parent i am feeling this. we are lucky we have access to technology. but even i am concerned. what are your biggest concerns about how this could play out? arne: unfortunately multiple concerns. one is the political pressure to physically open. the goal is to stay open. and higher k-12 education side, there is a rush to reopen. you further traumatize students and endanger battles.

the health risks are significant. have so many children across the country who are newly food insecure due to families losing jobs or hungry. schools have done an amazing job of keeping food distribution throughout the pandemic. schools are safety nets. it sounds a little odd, it was easier when everything was shut down. now in these hybrid situations where kids are coming two days a complicated.ore people are working so hard that the millions who are hungry have access to food. the telehealth piece is so important. teachers, counselors, psychologists reaching out to kids dealing with trauma before. many additional students now

dealing with trauma. figuring out the best ways to help kids learn, whether it is physically, virtually, or in many cases hybrid. there is a small percent of children who i think learn better in this situation, but there are many falling behind. i worry about those who fall the furthest behind. i would love to see a massive national tutoring program. there has been no appetite for investing in public education unfortunately. emily: what do you think the long-term impacts could be on our children? an expert from mckinsey yesterday said this would impact the earning power of our kids, which would impact gdp in the future. arne: it depends on how long this is going to last. we are in a worse position as a country than when this started in march because we have not taken it seriously. the very concerned about

social-emotional impact and academic learning loss. we had the covid slide in march and may and traditional summer slide. i think it is a fascinating time for you and i as parents to talk to our kids about empathy, about fairness, about how interconnected our lives are. my family is ok, but yours isn't, that isn't good enough. we have to take care of each other. the importance of science. hope over the, i next 30, 50 years, this next generation will be committed to solving problems and helping each other in ways that might be profoundly important for our country and the world. emily: how do you think this could change education, especially public education?

does the school system looked different on the others, assuming and hoping there is another side of this? arne: for me the goal is not to go back to normal, because normal did not serve too many kids well enough. we have to do something better. a couple places where this could go. one is the idea of kids learning in a brick-and-mortar building nine months out of the year. that doesn't make sense. kids have to be able to learn anything they want anytime, anywhere. find their passion. figure out what they want to do with their lives. whether you are in chicago or a native american reservation, we have to make access to the internet as ubiquitous as water and electricity. we have to empower kids. we should have done this five or 10 years ago, but now we have to do it. let kids pursue their passion. that would be a huge step in the

right direction. secondly, we need to focus on seat time to focus on competency. let's call it algebra. traditionally you pass algebra by sitting in class five days a week for nine months. i think you should pass algebra when you know algebra. that might be four months, maybe it is after 15 months. there is no right or wrong answer. you just need additional help. people should be able to move at their own pace. those are a couple things that should change. not going back to normal wear too many kids were not getting what they needed. what covid has done is expose the tremendous inequities across our country. and education is no exception, the kids who are the most marginalized and disadvantaged get hurt the most.

fighting for fairness, for equity. orther it is a physical virtual tutor, we can't behind these uncomfortable truths of how inequitable so many things are in our country, including education. u.s.: arne duncan, former secretary of education. you can catch the full version of that interview online. coming up, tesla under fire for its use of mandatory arbitration, a tool that effectively keeps harassment complaints quiet. we will speak to an activist investor pushing for a first of its kind proposal to tesla's board. this is bloomberg. ♪

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emily: welcome back to bloomberg technology. a fresh selloff and make a cap tech shares for the fourth loss in 5 -- in five days as investors remain concerned that valuations are stretched too far in this five-month rally. for more, i want to bring in abigail doolittle who has been covering all the ups and downs. one of the highlights you pulled out? we were looking at slack, oracle and peloton earnings. abigail: after the bell, some earnings reports to take a look at before looking at the volatile day -- that is our

keyword, volatility, uncertainty, and that was the case on the day. that was a case on these movers after the bell because we see mixed results -- oracle up 3.4%. which analysts were not expect. on cloud sharing, that is a big deal. this may be my own opinion but i feel like there is some tiktok optimism on oracle, the fact that they want to diversify, that seems to be helping. she we put up a great quarter and boosted their outlook. the stock is down 1.4% and looks like the company may be saying something about uncertainty, that keyword so many are using around online sales. perhaps that is why investors are selling that off. peloton up 7%, a stay-at-home darling. they are saying they're cheaper bike is going to help. as for the day it was, it

started off promising. 1% and thenasdaq up s&p 500 had been up .8% but midmorning, there is disappointing news around exit and it seemed to encourage with offeem to have a big risk close. applega cap down 1.8% and and amazon yesterday getting a nice bid after that mega cap route. it suggest there could be more technical selling at hand. has in holding its 50 day moving average and that tells you the near term buyers that bought the dip yesterday are still there -- if that support fails to hold, there could be much bigger declines and had. but today, there is still some hope. let's talk about

potential silver linings ahead. there have been some bright spots -- we have seen tesla somewhat recover from its massive slide. what do you see ahead and what are you watching? abigail: one possible silver lining to the mega cap selling -- it is a real trade-off because these mega caps are nasdaq andf bed about 20% of the s&p 500. what if the world does return to normalcy and there's a recovery and no longer stay at home, some of these stocks should give up some of the big gains they have seen. we are seeing that with some of the other stay-at-home stocks like microsoft and netflix. we did not see a big bid for recovery stocks, but that is something that could happen. one analyst said he thinks all of this volatility has to do with the disruptive action as we

move toward the cyclical and recovery stocks. and you were mentioning tesla -- somehow, this stock has gotten thrown into the stay-at-home bag. i'm not sure what makes tesla stay-at-home, so if we call tesla a big momentum stock in the direction of recovery, the last few days, not bad. itself% hold a stock big into not being involved in the s&p 500 but nonetheless recovering some of those losses. i have that same question and what investors are telling us is if people have to commute, they have to commute in a private car, which means they are optimistic about tesla is one of the few lower cost ev options out there. definitely when we are going to continue to watch. thank you so much for that round up.

continuing our conversation about tesla. ,hen it comes to transparency tesla trails behind some of it silicon valley neighbors. the electric car is being criticized for its used of forced or betrayed for sexual harassment and racial discrimination complaints among employees. a practice that activists have asked other big tech companies like facebook, microsoft, and uber to end. joining us now is the cofounder of night a impact capital, an investor in tesla. he's asking the companies board to consider this. you make the point that tesla seems to have gotten a pass here . what are you asking tesla's board to do? >> thank you for having me. are asking them to

examine their use of forced arbitration for their employees. the reason we are doing this is because they have a poor record on both gender-based and racial discrimination. emily: what do you know about the record? done quite a bit of research and what is tricky about arbitration is it keeps many of these documents hidden and secret, so you can look to the state of california to see what are their records and employees have gone to the media to report different incidents. i would definitely encourage tesla and their board and shareholders can vote on this on their meeting coming up on the 22nd and i would encourage them to do a diversity report because it is a material issue during these days. emily: are other investors on board with your resolution? kristin: they are, and so we will see -- elon does own 19% of

the company and this is interesting because it is not included in the s&p and because of the population -- the popularity, it is a fun stock too old for some people, so there are quite a few individual investors and i'm not sure how many investors will engage with their proxies. there are other investors that will join us with this and we .ave the approvals fund, tell us about your the investment strategy and impact you want to make. is a swahili word that means intention and purpose. so we are investing with intention and purpose into those means,es that meet our which is what is meted for the people and planet. we have a gender and racial

equity lend throughout all the work that we do. some ofalk to us about the other investments you are making and how it all ties into that mission. kristin: absolutely. we are here to help empower women and people of color with their investing and yet a lot of smart men see this as the way to generate alpha because we are investing into solutions and urging each one of them to do a little better when it comes to diversity and inclusion. side,t on the recruitment the retention side, as well as who makes it to the leadership team and board of directors. this is important because we are investing into innovative companies and the research says to keep that innovation and that mode, a diverse team can be helpful for the bottom line. according to one study,

firms owned by women and minorities are just -- own just assets, which is absolutely dismal. why do we need more diversity? do we need to improve the bottom line? kristin: it makes a difference. if you think about it, 98.7 percent of the investment decisions being made on that $70 trillion are being made by one group. groupthink is not what we are needing so adding a little diversity of thought, women and people of color to bring something to the table. there is a morning star study that says female managers are outperforming. so we might be leaving alpha on the table if we are not investing in allocating assets to women and people of color. tesla, we are just

speaking with abigail, it did not end up being included in the s&p. quite a polarizing stock. you've got fervent believers and folks who are very skeptical. what do you make of the recent selloff? is the: volatility nature of this week. it's actually the nature of this year. it didn't surprise me. the people shorting this company are happy. those of us long-term investors really see there's a lot of runway, a lot of potential, particularly it is a controversial ceo and an interesting set of products and services. price down,t eb love him or hate him, few argue he has disrupted the entire automobile industry as we know it. adding to that solar panels and this interesting battery play, there's a lot of upside for this company if they can get their

organization and promote positive company culture at the same time. kristen hall, thank you for joining us. we will be following the progress of your shareholder proposal. we have been listening to the president. he has been speaking with reporters at andrews air force base. he has just said there will be no extension of the tiktok deadline. we were speaking about this earlier. thisrody indicated potential for the deadline to be extended had not reached the president desk. president trump saying there will not be an extension of the deadline. the deadline is september 15, that the president has said to sell tiktok plus u.s. assets to u.s. company or risk being banned in the united states. something we will continue to follow, the confusion, it seems, continues. coming up, we continue our

education technology series, the virtual classroom, with a look at how robotics are changing the education landscape. could ai be the answer to remote learning? ♪

emily: tech has seen a surge in the last few months with the s&p info tech sector seeing some pullback in the last week. however, there is another sector within tech that has not gotten the attention apple and tesla have -- robotics and ai seeing a growing demand amidst the pandemic. roboticsere focused on company, relying on increased use of ai everywhere from the food industry to education.

joining us now is the director of contextual robotics professor -- a continuation of our virtual classroom series. thank you for joining us. let's talk about demand in general. what impact of the pandemic have you seen on the fund and the companies you follow investing in robotics, ai, etc. >> first of all, thank you for having me. consistentn a very growth because we are seeing manufacturing slowly coming back. we see manufacturing leading -- leaving china and going elsewhere. we have seen robots are being used -- so before, if you were a doctor and were going to see a patient, now you would like to stand 25 feet away while you examine your patient and operate

an ipad or similar. so we see distancing with health care and a tremendous amount of growth in the logistics sector because people do home deliveries now. i don't think about going to the grocery store. seeing it has tremendous growth. growinguring is consistently, even through this time and finally, we see surveillance operations, so across the entire sector, we see very broad interests. being an educator yourself, you know how hard the pandemic has hit the school system across the board. i'm curious what role robotics cam play in remote learning and is playing in remote learning? henrik: we are starting to see in remote learning that you can get the equivalent of a robot

companion. think about it as a doll, one or two feet tall, that you can interact with. so we have seen companies like embodied in l.a. that are bringing in these companions. so we have kids sitting in front of the screen doing five hours of zoom calls and this is really boring. why do i have to do another five hours of zoom calls? what if i could give them a companion they would be complete -- they would be playing with and interacting with. say we are doing a math lesson -- i can have the robot look at me, read my facial expression, say is he happy, sad, frustrated, engaged? for some time i would be engaged and then thank -- then the robot will say i can see maybe we should do a dance or song instead. you are interacting with the people as you do this and

through this, we are almost game ifying the- gam learning experience. at the same time, we can extract metrics. how much time was the people paying attention? how much where they happy? this is essential metrics you can give to the teacher but also metrics you can give to the parents so that they know where you sitting in front of the computer and resting your eyes or were you paying attention? what can we make it -- what can we do to make it an individualized experience? we think this is going to take off big time. today, we can look your facial expressions and we are starting to get to a place where i can read eeg through my earbuds. through this, i can measure what is your rain activity. are you paying attention and i can bring this into my

educational experience in such a way that i can make sure i catch you when you are motivated to learn your knowledge. but i can also see it in the university classroom where if i explain something and everybody sort of -- then it is time to say i should explain this again. there's a lot of really cool opportunities -- emily: i don't know whether to be scared or delighted at the out of companion robots with my children, but it is a mind blowing thought. we have to leave it there. roboticsof contextual at ucsd. thank you for joining us. we will continue our tech series throughout the week. coming up we will hear from the ceo of master class on tips of how to improve at home learning and talk about his personal struggles in education while growing up. that's tomorrow on bloomberg technology. dell had, impossible foods and

part ofent -- they are a biology start up. the ceo joins us next. ♪

president trump: we will either close up tiktok in this country for security reasons. i'm not extending deadlines. september 15. there'll be no extension of the tiktok deadline. emily: president trump unequivocally saying the deadline for tiktok to sell to a will not be extended. it's coming up quickly, september 15. we will continue to follow how that plays out over the next few days. meantime, the synthetic biology start up has raised $300 million in a new funding round,

signaling confidence biological science can be harvest in novel ways to manufacture products. this comes after softbank led a 400 lien dollar around in the company. now.hoffman joins us talk about the science because it sounds a little weird. ferment microbes, like making bread, but they make the components to make products. how does it work? josh: you've got it exactly right. microbes, like they used that you used to make bread, beer, or wine, can be engineered to make molecules which can make products. so you put the microbes in a vat with some sugar, you make that molecule and we are able to use it to make high-performance optical film that you can use for touchscreens and printed electronics, things of that sort. we are able to partner with nature to make products that have much better performance than anything out on the market

today. emily: when will i as a consumer be able to see the materials in the products that i buy? josh: i would expect sometime in q1 of next year. we are selling to industrial suppliers right now. we expect stuff to be on the shelves probably not for the christmas season, but we don't know, but definitely in q1 of next year. tell us more: about your customers. josh: our customers are tier two and tier three suppliers in the electronics supply chain. samsung, apple, lg, they will buy a large component of screen from samsung display corp. and that will in turn by from anyone

of a number of smaller companies, most of whom you've never heard of who are selling pieces into that stock. the very typical, high-performance materials sale. what is the biggest challenge facing the company? we are in the middle of a pandemic, which has been disruptive to the supply chain. josh: i think the point about supply chain friction because of covid israel. not just covid but climate change. we manufacture in japan and in a facility in oregon. there are fires in oregon. so far, no one in our facility has been harmed but we are monitoring the situation carefully. that creates friction in our ability to get product to customers as quickly as we would like and that is our biggest

challenge at the moment. long does $300 million last? josh: for a good long time. emily: [laughter] good to know, given all the uncertainty ahead, the fires you are grappling with in oregon and happening here in northern california as well. joshgen cofounder and ceo, hoffman. thank you for dropping by. that does it for this edition of bloomberg technology. we are livestreaming on twitter. you can also follow our global breaking news quicktake. stay tuned for bloomberg daybreak australia, next. i'm emily chang. this is bloomberg. ♪

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♪ the big events are back. xfinity is your home for the return of live sports. ♪ >> good morning, welcome to daybreak australia. we are counting down to asia's major market opens. stories. our top the rebound -- u.s. stocks turn lower, treasuries rise along with the dollar, investments seeking haven. no deadline delay for tiktok.