♪ emily: welcome to "bloomberg technology." i am emily chang, in san francisco. coming up in the next hour, what may be the biggest hack on the u.s. and history is still unfolding. even microsoft on the finger types -- the fingertips. brad smith is joining us and what he is calling a moment of

reckoning for companies around the world. google is now the target of multiple lawsuits at the u.s. states and federal governments. experts say that the burdens of truth are high. what are the chances that the world's largest search engine could be broken up? the popular dating app bumble joins the ipo craze. first, lawmakers are still wrangling over a stimulus bill and talks are likely to continue into the weekend. cases of covid-19 are spiking across the country. anifornia has just issued emergency alert, urging bay area residents to stay at home. this has triggered a mandatory shelter-in-place. i went to get straight to bloomberg's abigail doolittle to marcus through the market moves of the day. rbc, all eyes are on the stimulus. abigail: all eyes are on the stimulus.

a technical, from standpoint, today, is something called a quadruple witching day. the expiration of a lot of different futures and options creates extra volatility. this creates a ton of volatility. most of the major averages, it was a bullish week. the nasdaq 100 climbing by nearly 3% by the week. investors are looking past the fact that we still do not have stimulus. you do have some of these technical factors at play along with the rising virus cases. sanwere mentioning francisco. andrew cuomo said that new virus cases in new york above 12,000 for the first time during the pandemic. despite that news, stocks are higher. helping the nasdaq 100 the most is apple up .5%. percent.

nike put out a bullish mentioning that they had plans to increase the iphone. that brought up the entire apple complex. this stock is truly on fire. we have it on the week up 40% ahead of a right at the close being added to the s&p 500. a lot of volatility there. some are wondering if that will be a sale on the 21st. all investors want in on tesla. airbnb in its second week is up 13%. that is what has worked and drove the markets higher. to finish, it is interesting to see that we have this positive news and the railroad with moderna and pfizer and the vaccine being distributed, it vaccineke the moderna is set to be approved soon.

moderna stocks are up. the question is whether or not that means some volatility ahead for the broader indexes. stocks, on the week, are higher. emily: both of those companies have still seen incredible rises over the year. we are waiting for that approval of moderna momentarily official by the fda. abigail doolittle, thank you so much for that roundup. hack onnto the massive the government. microsoft says that its systems were exposed to the russian linked hack. everywhere are still scribbling to better understand what happened. to discuss, we are joined now by microsoft president brad smith. brad, thank you for joining us. you had a lengthy blog post out calling this attack a moment of reckoning. this is not just espionage as

usual. why is this so alarming to you? brad: it is so sophisticated, its reach is so broad, and is reckless. it has put at risk the technology supply chain frankly for the global economy because malware was injected into software for network management company and then was installed in 18,000 organizations around the world. unlocked thet door, so to speak, so a foreign government can then attempt to enter. what we have identified is that it did in fact enter into more than 40 organizations around the world. this number will clearly rise because this investigation is in early days. that included agencies across united states government. it included think tanks and tech firms, petitions and eight countries. while it did not petri to

microsoft products or services, we have seen no indication that they were made vulnerable or used as a source of attack. we do have more than 500 security engineers this week working with customers around the world to identify threats and help secure -- help restore the security. emily: what makes us so scary is that folks who were updating their software, doing what they thought they were supposed to do to keep their networks up-to-date and safe, those were the folks who work compromised. do you see that the attack is still ongoing? what is still happening out there? brad: what is happening right now is that people are working to identify all of the organizations where the software may have been installed, this malware may have been injected. thereakes time because are so many organizations globally, and because this actor was so sophisticated, is so sophisticated. it takes time for security

engineers and threat intelligence analysts to sift through the network logs and all of the other sources of information that they need to inspect to determine whether there are continuing attacks within a specific organization. it is the kind of thing that typically in something like this would take some weeks. maybe it will spill into some months. it will require that many people are drive very long year now spend their holidays now working with our customers around the world. interstate men you found solar wind binaries in microsoft network. -- that you found this in microsoft network. does that mean microsoft downloaded this? or that hackers actually entered your system through that backdoor? brad: it is the first. in a few instances, we identified the malware in the

solar wind software on our computers. but we were able to do additional work, and we are still investigating. we found no indications that the attackers were able to go from that point to create vulnerabilities in our products or services. as you would expect, we have so many security precautions. in fact, to prevent an attacker from jumping from one place to another, we probably have more security in place than almost any organization public or private on the planet. we still are investigating very carefully ourselves, to satisfy ourselves, that we, too have no additional vulnerable to spirit -- vulnerabilities. emily: of the 18,000 customers, what proportion -- what proportion of those customers do you think could have been compromised here? where the hackers actually got in that backdoor that had been downloaded?

brad: we've have identified more than 40. we are going to see that go up. i will be surprised if this isn't something in the thousands. it is more likely to be between several dozen and several hundred. what these attackers are clearly interested in, it would appear, is the intelligence that they can extract on the united states government, from other governments that are american allies, from think tanks that are working on issues of interest to them, and his security firms. i think from that perspective, they are perhaps interested in what the security firms know about them, how they are trying to protect people's networks so that they can use that information in the future. this is the kind of attack that has a lot of potential ripple effects. it ultimately affects all of us, whether or not we work in one of these institutions. security,end on the

say, of the united states government. this is something that we all need to take seriously, regardless of whether we are directly impacted or not. emily: federal officials are saying that this same hacking group is using other vectors. based on what you are seeing, wind,ways besides solar have you identified yet any other potential vectors out there? brad: i think it is far too early and this investigation to conclude one way of the other about the applicability of additional vectors. it is certainly something that we are actively assessing. others in government are as well. i think, in my mind, that really points to one of the most important lessons that we should take away from it. one of the point that i made, we should all go back and redo the report of the 9/11 commission.

9/11 occurred in parts almost in principle part because there is not this broad sharing of intelligence data. we have done many things in the last 20 years to learn from that. we increase our ability to protect against traditional terrorist threats. i think this created a model for the protection of our elections, sharing data with the private sector. but we now have to apply that and take it to heart to cyber protection more broadly. we need better sharing of data across the federal government, more sharing between the federal government and the tech sector, when he took in we -- we need to collaborate more directly. that is the only way to strengthen the nation's defenses. saying that the united states, or the world, we are risk of another 9/11 at this point? or the 9/11 of hacks? brad: we live with that risk

every day. the sooner that we look back in the face with clear eyes and take the steps that we can to better protect the world, better served that we will be. emily: i think that we will need resources,ore especially on the civilian side of the united states government. i think that we need to put in place new policies and give the government more authority than they have today. when you take what we have learned from the past and create a culture of information sharing, so that we are not only sharing information as we do with the government, but that we get more information back in various parts of the government. obviously with appropriate safeguards for national security privacy.e's but only if we take this to heart and put these measures in place we have the basis that we are optimistic to do a better job. emily: russia has simply denied

this. president trump has not really said anything. youcurious, how much do believe that this particular administration has made the u.s. more vulnerable in cyberspace than prior administrations, given our relationship with russia? brad: i think that there are certain steps that this administration has taken that have made us stronger, including a more coordinated public attribution. we need to do a lot more. sharing,in information but by strengthening our laws. i think we need to recognize that this is not a world of technology, where any government can successfully defend itself by acting alone. andeed to look to a better more coordinated, multilateral response. this is, i think a priority of the incoming biden administration. that is good news. ii, we we won world war

try out during the cold war. if we are going to protect the nation and our allies from these kinds of cyber threats, we have to do more to work together. emily: what would you like to see from president-elect biden and the biden administration? brad: i think we would like to see several things. hower one, let's focus on intelligence is shared across the government and with the private sector. number two, let's look at where we need to put more resources in place, in particular, parts of the government, especially on the civil side of the government, so that there is greater capability. number three, that's ensure that these parts of the government have the authority that they need under the law to aggregate data across the government, with leadership in a centralized place. we do get very effective leadership on the national security side today. i think they have done a rote

service to the world this week the kind of information that they have shared. but we need more of that kind of expertise on the civil side as well. number four, was look at our laws and how we can strengthen them, and finally, we need a strong, broad, comprehensive foreign policy so that the administration will have the right tools to appropriately others and hold accountable, when these attacks take place. that is a broad agenda, but it is a critical agenda, and i think that it needs to be pursued with a sense of urgency. emily: what is your understanding of what the current administration is doing? has the trump administration reached out to microsoft at all, or vice versa? brad: we have reached out to multiple parts of the federal government. as we see agencies that have been attacked and compromise, we notify them. we have been in closer contact

with key parts of the government. where there are capable of dedicated people hard at work. as aearly need to be more nation, as a government, in a more coordinated and copperheads of way. i think we should recognize -- in a more comprehensive way. this is not a problem that will be solved in a couple of weeks. i think this behind on the list or president biden on january 20 when he is inaugurated. emily: all right, brad smith. thank you so much for taking the time to join us and for your blog post, microsoft president brad smith, on this hack that is still unfolding. coming up, bitcoin's rally continuing. we will get one investor's outlook next. this is bloomber

♪ the $20itcoin bluecrest mark this week and seeing its biggest rally since 2017. in exclusive front row interview, we heard about the outlook on the crypto market and the technology behind it. >> we are extremely bullish. our confidence and it has gone up since 2017. what we saw, as it dropped from 20,000 to below 4000, it s,tually got well into the 3' ecosystemshare of the net wortherms of

values into the low 70% range. our minds thatin bitcoin is the reserves currency of the crypto acid ecosystem. ecosystem.sset it is the flight to safety currency. technology, or bitcoin's blockchain is the most secure of any other lock chain. makes sensee -- it that that claim would be the reserves currency of the crypto ecosystem. emily: you can check out more of the interview at bloomberg.com. with holiday shopping info swing, we are taking a look at how retailers are handing all of the usual gifts are just not going to cut it. we have to find something else. good luck! what does that mean? we are doomed. [laughter]

that's it. i figured it out! we're going to give togetherness. that sounds dumb. we're going to take all those family moments and package them. hmm. [laughing] that works.

♪

emily: shoppers in the united states are in the final sprint of a record year for spending. public health concerns are keeping folks away from physical stores. with us to discuss how to 20 has has for -- how the year been for retail, we have deborah weinswig. going this holiday season so far online, and how do expect the last few days to play out? i think everyone is done now as far as packages being delivered in time. we have the highest level of consumers expected to spend versus last year. curbside pickup, we have many retailers seeing that many packages are being fulfilled out of the stores right now. that is a positive.

we are seeing people go to the stores and stay in their car and pick up at curbside. i barely have any nails left thanks to all the nailbiting waiting for these packages. more online shopping could mean more returns. without go smoothly? -- will that go smoothly? deborah: that is my biggest concern. we are saying potential for returns. we have seen many retailers make returns incredibly easy. where we will get the product back in the store and back on the shelves quickly. i think that is sort of the icing on the cake. thatoncerns is the items cannot be resold. where's saying that retailers are doing everything they can to be as accommodating as possible. and with customer service associates being helpful to

inform customers before they buy. emily: how does the retail look 2021?ent for2021 -- four deborah: i think we will see strong online. yet consumers who had never shopped online before. what has also been unbelievable is a significant increase in penetration for millennials who are now buying every category online. i do think we will see stores more as showroom e -- showrooms where you are using your store associates as salespeople online with more data, more intelligence, able to give customers what they need when they need it. i think we will see this idea about artificial intelligence driving greater sales. will see in 2021 we less returns as a result. founder and ceo

deborah weinswig, thank you so much for coming by. . will talk about how great the risk of cyberattacks poses to u.s. national security, what companies can do to better protect their system from future threats. that is next. this is bloomberg. this is bloomberg. ♪

♪ emily: welcome back to "bloomberg technology." i am in lee chang in san francisco. hundreds of companies are still -- i am emily chang in san francisco. under the companies are still dealing with the cyber hacks. we have george kurtz with us now. we are up on that note. first of all hearing that this

attacked represent a great risk to national security. how vulnerable are we right now? george: i think it is a watershed event for security. we have talked about supply chain risk for quite some time. the mosthere sophisticated attacks that we have seen ever, incredibly patient, incredible tradecraft, and lots of countries impacted, including the government. i think it shines a light on how interwoven our economy is in the physical world and digital world and how important cybersecurity is in our daily lives. emily: now, i think it is very hard for regular people to understand the threat. it seems like this is always happening in cyberspace. what makes this hack in particular so pernicious? george: the hard part for most

folks to really understand and the optronics world is what is happening. -- in the electronic world is what is happening. if there was a nuclear explosion in summer, people would see that and they would have a reaction. what happens behind the scenes, this is a massive attack, a long sustained campaign, with tradecraft that was superb. it is hard for the average person to really understand it but to have this level of access for so long across so many companies is probably unprecedented. i think it shines a light on how important cybersecurity is. it is not a just about having a system that is infected. it really gets into the business resiliency question the companies are often grappling with. emily: we are still trying to get a handle on just how many companies, agencies, entities, were impacted here.

solarwinds has that 18,000 customers potential he downloaded the software, a smaller subset of that that actually hackers got into -- in through the back door. i just spoke to microsoft president rod smith. microsoft -- microsoft president brad smith. microsoft said that they did not get through the back door. take a listen to what he thinks is the scale of this. >> we have identified more than 40. we will see that go up. i will be surprised if this is something in the thousands. be betweenlikely to several dozen and several hundred. would you agree with that, that the number of entities where the hackers actually got into the back door would be somewhere between several dozen and several hundred? george: i think that there is a bit of good news here. you have 18,000 potential

governors -- customers that solarwinds has. i think the vast majority will not seen activation of the malware. obviously, everyone is encouraged to upgrade. solarwinds has been very transparent and trying to get this fixed and work with their customers. i think it is going to take some time, weeks or longer, to figure out if there is an impact for to figure out a people actually had this vulnerable version. i think it is important for companies to have the right level of security on their workflows to understand ways actually happening there and go back in time forensically if the need to to investigate if there was a potential incident. i think it will be an evolving situation over the next coming weeks and perhaps months. time: given the extended when, president trump has not commented on this issue at all. president-elect biden has said that it will be a priority. he is not taking office for a

month, is that too late? george: i think that the government folks are doing the best job that they can in identifying this and working through the various agencies. again, as was such a sophisticated attack. it takes time. how the vulnerable versions been activated? it all takes time in an investigation. investigative power to do that. i know, a lot of folks are going to be working over the holidays to figure out if there is any impact. hopefully it is much lower than we think. we will know over the coming weeks. strike shares have been up every day the last week, in part because of the role that you can play in helping protect companies from future attacks. what does this actually mean for your business? george: i think what it shows, in terms of security in general, is that it is equivalent to shelter.

is aer or not there vaccine, whether people are working from home or not, it security is only going to get bigger and bigger in terms of a necessary element for companies. digital transformation by keeping their customers safe, keeping their data safe. i think what also shows is that the threat environment continues to evolve. his hand in hand combat with the adversaries. they get good, and we have to be better. with back and forth technologies that leverage artificial intelligence. a muchith the cloud have better advantage at identifying this. was so part winds the primary vector here. doesn't this mean that basically any company that provides software could be a vector for a hack of this nature on this scale? george: that is the hard part on a supply chain attack because it

supply chain, the and it is very difficult to detect these. vendorscumbent upon all to make sure to have things locked down. inve seen a similar attack 2017. a glimpse oforld what can happen in a supply chain attack. that is why it is so nasty. they were very patient. they activated it when they needed to. they blended in from an identity perspective like every other user. ides the d security is very important as well. -- identity security is reported as well. i think it shows how important it is to companies. it is not only about the malware, it is about the identity and the directory, that has to be protected. impact,n terms of the

the understanding is that these hackers have no stolen such a large amount of personal data. that means a potentially huge disinformation campaigns at a super targeted scale. what are the actual consequent as of a hack like this? what consequences will this a particular hack have? george: i think that remains to be seen. it is one of those -- and the fight of war, you understand one particular battle. know what the war will look like. as more information comes out, on the size and scale, we will see a greater impact. with data and ip stolen and other supply chains, arise. it is too early to tell. there is not an i.t. group on the planet who is not looking at their systems out and trying to see where the impact was and whether or not their data was stolen. that is a hard part about this.

not only can data be stolen, but these sorts of attacks can be incremented in a way that you can actually destroy systems or data. this again gets back to my point about business resiliency. it is not just about data theft, it is about keeping your data safe and up and running which is top of mind for all boards right now. emily: you released a report earlier this month talking about the staggering volume of attacks this year. what awaits us in 2021? what with the threat landscape look like? george: unfortunately every year we go through these predictions, and it keeps getting worse. ofgets worse and the area sophistication of the adversary. we have seen is that the adversary has been able to take a lot of the nationstate tradecraft and even exploits have been links on the internet and rubber nose eyes -- and

weaponize those and deliver them in the form of ransomware. there is a massive business and the ransomware business, taking business down and asked -- extorting companies. it is to remain dollars, five made ours, $10 million ransoms. i think we'll see more of this because it is big is this an low risk. louis seymour on the nationstate. this quote -- we will see more on the nation states. this will wake more people up. emily: george kurtz, ceo and cofounder of crowdstrike. we really appreciate having your perspective on this hack as it continues to unfold. come out, we are looking closer at the state that are banding together against google and why so many are accusing the search giant of wrongdoing. that is next. this is bloomberg. ♪

♪ 38 states have filed lawsuits, including colorado and new york. i spoke with the attorney general and the state of massachusetts and asked her to make the case about google's alleged wrongdoing. >> unfortunately what we have seen from these two big tech companies, facebook, and then recently google, effort to engage in any competitive conduct, monopolistic conduct that has the effect of killing competition, hurting consumers. hurting small businesses. emily: joining me now for a closer look at these lawsuits and lost so many states are banding together against google.

we have michael wolf. this may be the biggest threat that google has ever faced to its business. how big of a threat is it, in your view? michael: i do not think that these are threat to the business. i think to a large extent, these will end up as fines. this is not like microsoft having two separate off from internet explorer 20 years ago. in a lot of cases, consumers can just decide to use another browser. some of the issues come down to their control, and google's control of advertising. over time, that could be impacted. the bigger issue is, when you look at google, facebook, amazon, they only have a third of all internet traffic. but today, they captured two thirds of all internet advertising. some of these efforts will chip

away at it. but i do not think that they will be totally harmful in the long run to google. emily: google makes the case that customers can simply choose to use other products, but they choose to use a google. do you think the government has it wrong here, is google not a threat? michael: i think google is a threat, i think the question is how much will the justice department or these state lawsuits really impact google practices? we have to recognize that google dominates the search, it is an activity that people use every day, multiple times a day. there there -- although there may be some practices, it will ultimately not change google's businesses googles stranglehold on the search. emily: lawsuits have also been with against facebook

their scrutiny against apple and amazon. do you think any of these companies is in a worse position compared to others? michael: i think some of the suits will really undermine people's confidence. i think the suit that was filed yesterday by texas and 10 other states about facebook and google colluding. i think those will be issues that could ultimately impact advertisers, as well as consumers. i think overall, i doubt that there is any one of these in particular -- i think the bigger issue is not just the lawsuits. i think the bigger issue is the conflicts. facebook and apple now fighting over apple's requirement that people give permission to be tracked across apps. these are issues as these companies get bigger, it will be squabbles that swing them, not just from the government. constantly you are

looking at trends, trying to figure out what is here to stay and what is just a flash in the pain. based on -- a flash in the pan. 2020 will certainly lead to a change and behaviors. what do you think is here to stay the is a new trend that we have seen in 2020? michael: if you look at shelter-in-place during this time, usage of real gaming has gone way up -- usage of video gaming has gone way up. people have wanted to be in a cyber world, have gameplay, and be social. i think that will continue to increase. all the major tech platforms but what to be in the game business even more. i think we should expect to see mergers between the biggest companies and gaming companies. thing, the second

virtual reality has now hit the mainstream. first look at with the five months of shelter-in-place, headset were sold. a vr headsetowns today, it 56% of them were bought during shelter-in-place. we will see the vr world really exploded this upcoming year. it will be exciting to see the number of applications there. overall, the amount of time that people are spending with technology and media has increased cometh it has increased by almost one hour per day, and it is going to continue. people are not going back to old habits. finally, online grocery has grown. in five months, it grew ahead five years. everyone is going to be buying more of their groceries online. more people are going to be using online for every type of

shopping that you can imagine. emily: well, i know unfortunately, we have been playing more video games and this household and definitely ordering more groceries online. we will be watching for all of that. michael wolf, activate founder and ceo. they do so much for joining us to share your thoughts. up ahead, and the latest addition of bloomberg studio 1.0 will bring a special conversation with bumble cofounder whitney wolfe herd as that popular dating app has filed to go public. that is next. this is bloomberg. ♪

♪ emily: the popular dating app

bumble is the latest filing for an ipo. some say that the listing could come around valentine's day next year. i recently caught up with bumble cofounder and ceo whitney wolfe herd for the latest edition of bloomberg studio 1.0. she weighs in on empowering women and the lessons learned as an entrepreneur. our partnership with blackstone is absolutely incredible. i've so much inspect and admiration for the team there. support andcredible championing of us, both as a team and as a business. it has really been the highlight of my entire career to work with blackstone. it has been a remarkable success story, it from a private equity and high-growth tech standpoint. match, but itque

has been absolutely sensational. they have really given us a wide range of resources and support, ranging from helping us scale our talent, from placing our dig deeperelping us into data analytics and doubling down on privacy and security. coming in and helping us further accelerate the business from every side. and i have a great partnership with the folks over there. at has been a remarkable opportunity. emily: there have been talks about an ipo. does blackstone's involvement now change the path forward? comment on theot future prospect of a potential ipo, i can tell you that we are working hand-in-hand everyday, blackstone and bumble, to pursue the best future outcome for the business. we love our partnership, and

restate very close on all future potential opportunities. we are at high-growth business, so we are exploring all of her options. emily: tender, along with other dating apps is now your competition. why should people use bumble when there are now, pick your flavor, coffee meets bagel, the hinge -- the league, hinge, all these other options? whitney: we fundamentally believe that the way that a relationship starts is very suggestive of how it will end. we are trying to recalibrate how relationships begin. they can become more healthy, more long-lasting. when a woman makes the first move, she really establishes control. an equal footing from the very first hello. that is what we really fundamentally believe sets us apart from a product standpoint. even if you saw the same person

on five products on bumble, saying hello first, it changes the way that conversation will go. it promotes more healthy and equitable relationships for all. emily: any dating app has the problem that once you create a successful match, as people do not need the at anymore. they do not need to pay for a christian anymore. whitney: cap -- they do not need to pay for a subscription anymore. whitney: that is an issue for many apps. reference so much more than just dating. we see that our users come from more than just dating. we have a large sector of art database that comes and uses all three modes, business opportunities, dating, friend fighting. emily: does not mean that you are competing with instagram and snapchat and tiktok? how do you compete? whitney: your commuting -- you're communicating with your

friends. that is the place that you are keeping a test with the network that you already have. you are commenting on french photos and exchanging updates with one another. --, think on each other's photos. bumble is what comes before social media. this is what is getting you and network, expanding your opportunities of who you know. this is introducing you to new people. and then down the road, you can engage with those folks on other social media platforms. facebook is the people you know. bumble is the people that you do not. emily: my conversation there with whitney wolfe herd, bumble founder and ceo. you can catch the full interview on bloomberg studio 1.0 eric tonight at 11 of 5 p.m. eastern time -- that does it for this edition of "bloomberg technology." we are livestreaming on twitter of course. you can always check us out and follow our global network news

quicktake. i am emily chang in san francisco. this is bloomberg. ♪

david: a u.s. stimulus a deal is almost done and a brexit deal seems within reach. we know that we have a vaccine. this is bloomberg "wall street week." i am david westin. this week, special contributor larry summers of harvard. orwe need to have an economy the dominant theme is jobs trying to find workers, rather than the dominant theme being workers trying to find jobs. david: congressman of virginia. illuminatedhas