emily: i'm emily chang in san francisco and this is "bloomberg technology." or about the plan to invest $20 billion to build new factories to build chips ordered by companies like apple, or so he hopes. analysts say he is just in a honeymoon phase.

thus, misinformation at the center of thursday's hearings on capitol hill. zuckerberg and dorsey in the hot seat. will it do any good, or is it a colossal waste of congress' time? we will discuss. and by a tesla with bitcoin? elon musk tweets that you can now. a seminal moment for the company and the currency. u.s. stocks slumping, with tech leading the declines as investors rotated out of stocks. >> let's talk about the tech underperformance. a stark contrast to yesterday. take a look at the chart behind me. we should mention this is guiding ahead of the big tech hearings tomorrow. a lot of that tech underperforming, in tandem with yields coming down. you know that tech and yields

have been moving in opposite directions. when you have surge in yields, use into sit -- tend to see tech underperform. let me show you that correlation where you can see that relationship, the idea that when you have the nasdaq 100 selloff, this is an interesting chart to look at. the idea that the dollar has actually underperformed. when you start to see a move like that, it does trade into the commodity space. want to bring back to tech, we had the idea that the tech trade isn't just here in the states, it really is a global phenomenon. momentum trades, a crucial thing to keep your eye on. you tend to see it happened globally and that was the case today. for more of the price action, let's go to ed ludlow. ed: we do get written testimony,

and though stocks are under pressure. facebook down almost 3%, twitter down re-.4%. alphabet shares have been higher for most of wednesday and then fell away toward the close. at issue is how to moderate content. section 230 of the communications decency act shields tech companies from any liability or content posted to their site. the question for investors is, why do we care? if you read bloomberg intelligence today, the answer is no. we look to see of us different shares have performed since the election. twitter was clearly the out performer since november. facebook lagging down there and alphabet shares somewhere in the middle. the volatility we saw around the election was rubs civilly easy, but facebook and twitter were under pressure because there was

concern that content moderation might impact the stock. definitely one to watch on thursday. the euphoria that we had in the last 24 hours over the new intel plan has definitely faded away. the stock closing down 2.3%. tsmc will keep its lead in the foundry industry. one of the best performers for the s&p 500 is applied materials. the company that builds the machines that makes the chips. that's what you need in the new factories. it has been an amazing 24 hours. we got this incredible spike, lots of positivity and enthusiasm about the intel news. by close of day on wednesday, we

had lost. maybe will hear about why from the ceo. emily: the ceo of intel unveiling plans for u.s. manufacturing revival with billions of dollars to be spent on new factories and foundry business that will make chips for other companies. earlier i spoke to him about why he's changing something that has been so fundamental to intel's previous strategy, which is building chips on its own design. take a listen. >> the core ibm 2.0 integrated design, manufacturing, were going to continue to build on the great heritage and also leverage external foundries in a more strategic way. a big shift underway and our ability to leverage the world's

best 3d packaging technology so that we can take the best styles from across the industry. it forms ibm 2.0 because i'm committed to the best products in every category we participate in. the best cost structure and the most resilient supply chain. we see this ability to leverage the industry and also become a major supplier of foundry to the industry. it is a wending -- it is a winning formula. we were getting more digital, and then covid happened. we need to step into this in a big way. our strategy is uniquely positioned for intel to be able to execute on. emily: investors love hearing you say intel fixed all its problems. you been back at the company for just over a month and we are talking about production deadlines that were missed over years. what makes you so sure that you have diagnosed and solved the

manufacturing problems? >> we've looked at the data quite extensively over the last month or so and came to the conclusion, we are back with our new ibm 2.0 strategy. as i've declared, intel is back. emily: you've suggested companies like apple and qualcomm would be your customers. why would that be your customers if they are your competitors? why should a fierce rival also work with you? >> i think you have written on the subject, clearly the idea that in some domains you might be competitors, customers, and partners as well. there are few companies that can step into advanced semiconductor technology. something we have only used for internal needs of scale before. now were saying we're going to open our fab doors wide for the

industry. with that in mind, customers are looking and saying, i only have samsung and intel as the leading choices and only one of those is on western u.s. and european soil. i need a more balanced supply chain. i want to have at least two suppliers, and intel is saying we are going to be that. emily: what are the financial implications of the move? when does it all start paying off? >> it is a capital-intensive cycle. you invest well before you have that foundry capability up and running at scale. that said, we are seeing extraordinary demand signals from the industry for today's products. part of it is to flexibly build capacity that meets my products,

as well as foundry needs. it has some optimize for our products and some flex in between. we need to be at scale across the business. but we do think it takes a couple of years to build this out as designs take time to be committed to new process and then manufacturing. but we are already underway. we will start ramping up more rapidly, so this business will get underway. we will earnestly pursue a meaningful portion of that. emily: what does all of this mean to the chip shortage at a time when ships are so desperately needed? and when will the chip shortage end? >> the first thing would be, how did we get here? we were on this path and then

covid happened. covid caused everybody to step back and it induced a radical increase in demand. so you have supply chains scaling back a bit and demand scaling up radically. now we are in a position that there is a meaningful shortage. is going to be a couple of years until that is fully resolved. we are going to start helping on that as quickly as possible. emily: u.s. politicians, the biden and even the trump administration had been quite alarmed about the decline of chipmaking technology. have you gotten a reaction from the biden administration to your plan to double down on manufacturing in the united states? >> there has been a real outpouring of support, including

from the administration of the u.s. as well as from the e.u.. so there is great interest in what we announced yesterday. yesterday statement from intel, we put our chips on the table. we are making these investments without a penny of funding from governments or states. however, they can be accelerated and expanded by seeing increased commitments by governments in the u.s. and europe. so we are doing our part, but we hope to scale that up dramatically with strong support from the administration. emily: check out the full conversation at bloomberg.com. coming up, expect intel's ambitious plan to impact all sectors. will speak to our guest, next. this is bloomberg. ♪

emily: we just heard from the intel ceo, laying out his plan to double down on chip production in the united states and also make chips for other companies, based on their design. companies like apple and qualcomm would be customers, intel shares rallied after he revealed the big revival, but fell flat today. maybe just the start of something bigger for the chip industry overall. dan, you have a huge holding in intel, more than 500 50,000 shares. what is your take, is it a good move, and can he deliver?

dan: it is huge news. $20 billion to build two plants in arizona. as you were talking about before i came on, intel we know is a big producer in terms of chips that go into pcs. they are a big -- a major player in terms of chips that go into servers. now they are talking about building up capacity to the point where they can start producing chips or other companies to do the design work in producing the actual chip. most of the chip producers are good at design and marketing, but the actually produce there chip through another foundry. it sounds like intel wants to get in that game, and that will be really interesting. emily: it's interesting to watch the movement of shares.

we saw shares spiking after hours, as he was laying out this plan yesterday. then closing down today overall and erasing those gains. i spoke to an analyst who said this is the honeymoon phase, that will be short-lived. investors want to be optimistic, but these changes will take place over a long time, if they haven't. i asked him to react to that idea that he is in a honeymoon phase. take a listen to what he had to say. >> there has been a bit of skepticism. we've had the bulls and the bears around the stock and also had some fast money going through the shares, trying to figure out what is going to look like. i'm interested in long-term investors that are committed to the strategy that we are laying out. emily: it's one thing to say intel is back, and we can do this, we want to be competitive. it is another to actually execute.

what is your response to that? dan: you talked earlier about the production glitches they had. a lot of those led to them losing our could share. the other question is, can they deliver? this is a big change. i been at this a really long time. i remember when intel produced memory chips. this was before the 1990's. and competing against companies like micron technology. so can they execute? i think that's what you are talking about, this honeymoon or this skepticism. i think that's really where the doubts came in. i know we saw good trading today, the equipment manufacturers all did well. they will benefit because they are selling you equipment. but there is some skepticism

whether intel can execute. emily: i'm curious on your thoughts on the chip shortage. he told me he thinks it will be a couple of years to resolve. when we spoke with the ceo of qualcomm, he thinks is going to be resolved by the end of next year. what do you make of those conflicting interpretations? dan: i would agree with the ceo from qualcomm. based on what i'm seeing, by the second half of this year, probably fourth-quarter, a lot of those will work through. we went through the pandemic and shut down auto manufacturers, a lot of chip producers went over to producing chips for things that were helping people work from home, pandemic oriented type of things. all of a sudden auto manufacturing ramped act up, and there were no chips. i've seen comments that things are getting better. i think a lot of people who ordered ahead, which causes a

lot of shortages, are starting to get more comfortable. i think by the second half of this year, things should start to work out. the shortages will not be as big an issue as they have been the last 12 months. emily: so you see the big capital investment of intel proliferating at other, competitors companies. how do you expect this to play out? will qualcomm want to have intel make its chips? dan: the ceo broderick some interesting points. you have qualcomm -- he brought up some interesting points. amazon talking about bringing out their own chips. even google has their own unit and they make chips. will lowe's companies then take those designs and give them over to intel?

how is taiwan semiconductor and samsung responding? i believe samsung is about $118 billion over the next 10 years. they are responding by adding capacity also. to be able to produce these highly specialized chips that come from apple, amazon, qualcomm, all these companies that we talked about. emily: i'm curious about your thoughts for the broader rotation out of tech. we're in this sort of middle period are we still need tech to work remotely, but people are starting to go back to the office. vaccines are rolling out. investors are dumping some of the tech names that had been rising.

is that a momentary blip, or do you see a longer-term rotation out of tech stocks as we move into a new normal? >> i think the tech fundamentals are still in place. look at the i.t. budget, expectations came up from gardner. looking at 6.2% growth. we talk about the chip sector really executing on all cylinders at this point in time. we talked about this before, in terms of the stock, up 130% from a year ago. so we've had a huge jump and the overall benchmark is right now at about 35 times earnings. it is not huge, compared to 70 back in 2000.

the fundamentals are still very strong. adobe reported numbers last night in the cloud space. early there is no fundamental breakdown, it's just money naturally rotating into more cyclical groups and getting away from the huge run up have had. i don't see anything like we saw back in the summer of 2000. emily: always appreciate your thoughts here. coming up, elon musk doubling down on bitcoin. will he now accept this as a form of payment? and bit -- bitcoin prices jumping on that tesla news. it has fluctuated wildly since 10 days ago. we will continue to watch how it

moves. more next. this is bloomberg. ♪

emily: some tech stories we are watching, tesla going all in on bitcoin. it stunned the market last month. elon musk says you can buy one of his electric cars with bitcoin itself. also saying it will not be converted to a traditional currency, but will be held as bitcoin. gamestop is hoping to bounce back from disappointing earnings in the fourth quarter. the videogame retailer warning to make good on a comeback plan that helped turn it into the years hottest perhaps most controversial stock.

it has appointed a trio of executives with tech experiences. they will be a big part of the plan to make the company and e-commerce powerhouse. an kkr and music company bmg rights management are teaming up to acquire song catalog, following blockbuster deals by bob dylan, stevie nicks, neil young, and others. the value of music rights has soared, due in part to the growth of streaming sources. coming up, misinformation run rampant. we are taking a look at what we can expect from the ceos of facebook, twitter, and google. another hearing from capitol hill on thursday. later, why single women are avoiding buying homes in america's tech hubs, and what

cities they are flocking to instead. that is ahead. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." i am emily chang in san francisco. in what is becoming a familiar scene, tech ceo's will appear virtually in front of lawmakers thursday. here is a rundown of what hearings are expected to cover, and those in the hot seat. another tech hearing is on the horizon. the ceos of facebook, alphabet, and twitter will testify virtually on capitol hill as washington continues to crack down on big tech power. this hearing will continue the committee's work of holding online platforms accountable for the growing rise of misinformation and disinformation.

this after a year of falsehoods, from covid-19 to vaccines and, of course, the presidential election running rampant online. while tech platforms have implemented policy after policy to curb the spread, some claim it is more censorship than moderation. sen. cruz: who the hell elected you and can say what the media can report and the american people are allowed to hear? >> we realize more accountability is needed to show our intentions. emily: in addition to misinformation, section 230 is also bound to come up. >> section 230 is the most important law protecting internet speech. removing section 230 will remove speech from the internet. >> we have heard resoundingly from our community that people do not want to see misinformation and believe it is a problem. people also believe they do not want facebook to be the arbiter

of truth in deciding everything that is true and false. >> google is deeply conscious of the opportunities and risks it creates. we feel a deep responsibility to keep people who use our products safe and secure. emily: still, the chair of the antitrust subcommittee says a major reckoning is in order. >> these companies as they exist today have monopoly power. some need to be broken up. all need to be properly regulated and held accountable. emily: it is the first major congressional antitrust investigation by congress in 50 years. thursday's hearing on big tech's staggering influence will not be the last. we have gotten the prepared testimony from zuckerberg, pichai, and dorsey for the hearing coming up in 24 hours. among the quotes that caught my eye, mark zuckerberg saying, quote, instead of being granted immunity, platforms should be required to demonstrate they have systems for identifying

unlawful content and removing it. here to help us figure out what to watch at the hearing is as an associate professor at ucla, safiya noble. great to have you back. i want to start out with facebook early investor turned critic roger mcnamee, who says this hearing might be a waste of time. in a recent op-ed, he said, if past testimony is any guide, ceo's will dissemble and not answer anything they want to answer in front of the cameras. nothing will change. what is your reaction to that? dr. noble: i think roger is a formidable critic and knows from the inside out, as an early investor in facebook, what he is talking about. i had a chance to review the testimony, too. it is a bit of a business as usual position the companies are

taking, which is to somehow get ahead of reforms they know are coming from congress and potentially other agencies, and to articulate the terms of the debate around the reform, for example, of section 230. we want to watch what it is they are calling for. that will tell you they are indeed trying to position and frame any legislative changes in their own interests. emily: let's talk about what they are calling for with regard to section 230. mark zuckerberg is calling for reforms, but also says if content is not caught by their content moderation systems, they should not be held accountable. sundar pichai is cautioning against any reforms. he says regulation has an important role to play in ensuring we protect what is great about the open internet.

we are concerned that many recent proposals to change section 230 would not serve that objective well. and then you have jack dorsey, who does not mention section 230 at all, but has indicated in the past he is open to some changes. he says, we recognize that addressing harms associated with innovation requires innovative solutions. content moderation is, in isolation, not scalable, and removing challenges fails to meet the challenges of the modern internet. what do you make of their different approaches? dr. noble: obviously, each of these companies occupies a different monopoly status in the internet and big tech sector. facebook, google, alphabet in particular. it is interesting, the proposition here, let's take them one at a time. facebook saying, if we demonstrate that we tried, that should be good enough. that is the headline of mark

zuckerberg's testimony, that if we provide evidence, we are employing content moderators and software and reporting to law enforcement. they already do these things and we see what a failure there is. they are calling for the status quo, to do the bare minimum, which is what they are already doing. in the case of google, it is interesting. they are facing the antitrust monopoly challenges now. their problems are bigger than section 230. none of the three platforms are interested in having to take responsibility for the kinds of content that move through their platforms. they will all try to gesture at

some good faith cooperative relationship with the public. they have each expressed their own mea culpa -- sorry, we want you to trust us, but let us handle it with different solutions we are providing. twitter, in this case, is proposing algorithmic technology, its own internal watchdog organization, bringing in more experts to spot propaganda, for example. but i think we should be wary of letting the sector and these three companies in particular set the terms of the debate. i really think it is not appropriate for them to come in and tell congress what the terms of the debate should be. we are hopeful members will be prepared to ask very tough questions. emily: the kinds of content we are talking about is so vast.

there is misinformation, disinformation. we have been focusing around misinformation and disinformation around covid and online hate. there was a study today pointing out 41% of those surveyed have been victims of online harassment. 27% experiencing severe harassment, sexual harassment, stalking, threats. folks in the lgbtq community reporting the highest rates of overall harassment. and a huge surge against asian americans, which is not surprising, given the violence against asian americans we have been seeing in the broader community. much of this has occurred on facebook, followed by twitter, instagram, which is owned by facebook, and youtube. i know this is the focus of your work, but what is your response to that? dr. noble: it is undeniable that facebook has played a significant role in the spread of racist propaganda that is

also an incitement to violence against asian and asian american communities. my heart goes out, being black american and part of a community that is also subject to racist violence. i think what we want to remember is that the scale and speed to which facebook and twitter can amplify, and alphabet with its product youtube, can spread harmful incitement to violence, is a very serious issue. i don't think it is limited to that. we also have facebook implicated in discriminatory practices, precluding job and housing advertisements to be equally shared. we know these civil rights

violations, fair housing violations -- it is a much more complex ecosystem than hate speech. i want to make sure we keep the lens wide on ways that so many organizations, news organizations, civil society organizations, are forced to engage with facebook if they want to have reach into the public. one thing i try to remind regulators and policymakers, we cannot just regulate tech companies and simultaneously defund every democratic enter -- mechanic institutional -- every democratic institutional counterweight to these organizations. we cannot defund education, higher education, public media, public health, public libraries. those are important knowledge and information resources that are struggling in our society. we need to keep the lens wide on what is happening.

of course, we condemn hate speech and the way in which facebook allows its platform to be used to organize violent militias and mobs and individual actors who exact crime against our communities. emily: i want to zero in on what dorsey said, that removing content is not necessarily a good solution. of course, twitter booted trump from the platform temporarily, and facebook has done so indefinitely, but that decision is now going to the facebook oversight board to decide whether he will be banned permanently. you have been named to the unofficial facebook oversight board. do you think we need to see more removal of content on a large scale, or is that not the answer? dr. noble: content is one of

these industry words used to flatten and make it difficult to understand what we are talking about. what people think is we are talking about commentary or free speech. let's be reminded, content, the way we think about it in the tech sector, includes incitement of violence. it includes nonconsensual, pornographic, sexual material. i am proud to be part of the cyber civil rights initiative which has brought laws in 48 states around the removal of nonconsensual pornography or what we think of as revenge porn. that is part of the content. bullying, defamatory, dangerous, reputation-destroying information and content also has to circulate through these spaces. it gets flattened when a platform says, we can't manage

all the content. some of the content has real life-or-death consequences. life-impacting consequence. i am not sure it is ok for them to disavow their responsibility for that. emily: we could talk about this for hours, days. thank you for helping us distill some very complicated topics. of course, we will be following the hearings tomorrow. safiya noble, thank you so much. coming up, single women are leaving silicon valley and other tech hubs in droves. we are going to look at why the exodus, what cities they are going to now. this is bloomberg. ♪

>> women in the last 30 years were coming out of poverty in the globe, and now we see a huge setback. we see a setback in the labor force. the number of women who stepped back from the labor force in the u.s. 2/3 of jobs lost in south africa were women's jobs. i think we are in crisis. emily: my conversation with melinda gates, where she stated the pandemic has thrown women into a moment of crisis, though not all news is grim. a recent report by redfin finds that single women have seen twice as much purchases of new homes as single men, and purchases are up by 9% more homes in the fourth quarter compared to a year ago. the hottest market for single women looking to take out a mortgage, boston, providence, and detroit. but they are not buying homes in tech-heavy cities like san francisco and san jose. joining me now, daryl fairweather.

women are buying more homes. then we hear melinda gates say women are in a moment of crisis. what is the disconnect? dr. fairweather: the economy is so unequal right now. people who were able to buy homes before the pandemic started, for the most part, are still able to buy homes, especially if they kept their jobs and are in a tech heavy field. now is the time to buy. women are included in that. they are taking advantage of low mortgage rates and buying up homes. emily: they are going to detroit, providence, boston. they are leaving san francisco and san jose. why? dr. fairweather: san francisco, san jose, to begin with, had a low share of women buying homes. it is tech heavy, software heavy. those tend to be male-dominated fields. the people with the most money there tend to be men, and they

are the ones buying homes. in a place like boston, it is more biotech focused, more medicine focused. there are more higher earning single women who buy homes there. emily: does this have to do with silicon valley being a bit of a brotopia? dr. fairweather: that is right. and i think there are a lot of people, women included, who only really live there because of job opportunities. remote work is opening up new opportunities for places to buy homes. some women are looking to the suburbs to get more space, and some are going to sacramento, or austin, phoenix, secondary tech hubs. emily: looking at the real estate market more broadly, there is record low inventory. you say this is a horrible time to buy a home. why is that? dr. fairweather: it is tough out there for buyers. you might be facing multiple offers. you have heard stories, buyers coming up against 12 other

offers and the home going over $100,000 over listing price. it is hard as a first-time buyer, getting your first home. if you are putting down less than 20%, it will be tough. people with all cash are really winning right now. experienced buyers are the ones who are winning. emily: i would love for you to share your personal story, because you lived in seattle, where redfin is based. you now live in wisconsin, where i can assume you can buy more for less. you thought it was temporary. it has become permanent. i wonder how many are like you and if we will see a population redistribution, or if things will drift back to the way they were, which is congregating to cities over time. dr. fairweather: i was one of the people able to keep my job through the pandemic. i had a baby at the beginning of the pandemic, so i was on maternity leave for the first half. i came back to work, was working from home, and liked it.

with a young baby and toddler, i wanted to be close to family. me and my family moved to wisconsin, where my in-laws are. we live in this lake town, a beautiful resort area. i get to enjoy scenery, because to family, work from home and spend more time with my family, so it is a win-win. i know other people are struggling through this pandemic, but we found a way to make the best of this strange situation. emily: yet with folks going back to the office, the demand, the pressure to return to office is going to start creeping up. i know people are already feeling it. will we see a fundamental population redistribution or not? are folks going to return to cities in droves as fast as they left? dr. fairweather: i think it will be a split, a bifurcation.

some people want to work remotely, especially in an in-demand field. they will be able to continue. if not, there are plenty of job openings right now in tech heavy sectors for remote workers. if you want to work remotely, you can keep doing it. there are offices that really want people in the office and some people prefer that. they will sort into those jobs. i don't think it will be one or the other, but remote work will be a larger portion of how people work going forward. emily: daryl fairweather, redfin's chief economist, thanks for sharing your story with us. tencent feeling the heat as beijing continues its tech crackdown. we will look at the chinese tech giant's rise and what is next for the company. this is bloomberg. erg.

emily: shares of carmakers moving on the back of concerns about a worsening shortage of chips for cars. carmakers like tesla, nio, gm, ford all down amid the expanding shortage of chips for automakers and u.s. automakers extending production cuts as a result. we will continue to follow. meantime, tencent, american depositories, received lower after reporting quarterly revenue that barely met expectations. uncertainty remaining about what a beijing crackdown on tech companies means for tencent about which had many different kinds of businesses. bloomberg's david ingles took a

look at what is next. david: tencent is china's most valuable company with over two point 3 billion accounts registered across all its platforms. to understand how it got here, a quick glance at its past. founded in 1998, it turned profitable in three years and by its ipo in 2004, had more than 290 million users on its messaging service and online games platform. the biggest turning point was arguably the introduction of wechat 10 years ago, which coincided with the explosion of smartphone adoption across the country. this thrust of -- this thrust the app into the hands of hundreds of millions of chinese people, with many active users, to more than 1.2 billion people. shares are up over 80,000% and revenues have grown a staggering 400 times. in the third quarter of 2020, it

delivered profits of $6.8 billion, giving it a profit margin of 35%. all this cash allowed the company to place bets on many horses. some don't align with its core businesses. according to one estimate, tencent has put over $23 billion into more than 800 companies, 160 of which have reached unicorn status. some, like kuaishou and nio, now command multibillion-dollar valuations. together, tencent-backed companies are worth a combined $850 billion. but, with chinese authorities stepping up scrutiny of the internet sector and cracking down on monopolies, it is not clear if the company will have the same freedom to expand. so, what does tencent's future look like? the company could find itself at another major crossroad. analysts are overwhelmingly

bullish on the company's future. emily: bloomberg's david ingles from hong kong. that does it for this edition of "bloomberg technology." tomorrow we will cover the big tech hearings in washington. do not miss our full coverage. ♪ >>

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