>> from the heart of where innovation, money, and power collide in silicon valley and beyond. this is "bloomberg technology" with emily chang. emily: coming up our, shares of zoom plunge almost 17%. it has been a lifeline for workers, students, friends, family during the pandemic.

with workplaces and schools reopening, what will zoom's new normal be? the return to work not happening for everyone just yet. alphabet added to the list of massive companies pushing that back to 2022. so many changing plans as the kent varient takes its toll. we will bring you the latest update. wildfires continue to rage across the pacific northwest. the caldor fire approaching california's lake tahoe. how firefighters are using ai and machine learning to fight these fires faster than ever before. let's bring in ed ludlow. ed: the market is really taking a pause after that news from the federal reserve on friday. the s&p 500 down about a 10th of a percent. evaluations of course, the s&p

500 index at the highest level since 2000. the process is what happens to those tech stocks as the federal reserve unwind. an area of outperformance, the nasdaq golden dragon index, companies have their business in china up 3.9%. it has been choppy trading recently, and with bitcoin falling around tuesday, we saw some pressure on the bloomberg crypto index. crowd strike reporting earnings after the bell. you can see the stock is down 3.6% despite the company upgrading its full-year forecast. let's look at some of the biggest points movers of the day. apple down 0.8%. there was news of course about difficulty in producing the apple watch. we'll cover that later. crowd strike snapping nine straight days of gains. also, weakness in some other

stocks. emily: zoom shares taking a big tumble after the company gave a forecast that fell short of some analyst estimates. this raising concerns about how the videoconferencing platform can maintain revenue growth as schools and businesses returned to in person operations. i am joined by the cfo of zoom. life is far from normal still. investors are concerned that, -- what is your message to investors today about where growth is going? >> to understand growth in the future of zoom, you have to understand that we have two core segments of our business. the upmarket, the direct part of our business is doing very well. first of all, we crossed over our first billion-dollar

quarter. we had 54% year-over-year growth. less of momentum in zoom phones. we also had a big upsell in a financial services company that moved into being our new largest. we are very excited about the growth. the headwinds, which is what you are seeing reflected in our rest of the year guidance, is in our mass-market system. this is an area, pre-pandemic revenue in q2, this is a segment of our business is where people are starting to move around the world again, where individuals and small business owners are traveling. hopefully many of you are moving around the world and being able to socialize in person, doing in person happy hours and enters

rather than over zoom. emily: i know you have been on the phone with investors all day including cathie wood, whose ark has a big stake in summa. what does normal look like? what is your outlook for new normal and how much people will be using zoom on a regular basis if normal operations return for a sustainable period of time around the world. kelly: properties like google are delaying their back to work. this is what we are hearing from many of our out of market customers. seasonality, we saw a very strong performance. we -- companies thing about,

what will it look like when we go back to work? they are really preparing for a hybrid work approach. an opportunity for zoom rooms, comforting. you need that technology in the office to make it work. we are excited about the potential as well as phones doing well. that is what we are really focused on for the long-term strategy. emily: speaking of long-term strategy, you just made a huge acquisition, 14.7 dollars -- $14.7 billion customer software maker. will we continue to see you do that more to build out what zoom can offer? kelly: we are in that critical transition phase, from being a meeting company to a platform company. i just talked about the product

that can provide, phones, and the contact center. we are excited about the potential of 59 going to the zoom family. zoom apps, we have 50 more apps in the marketplace today. that really extends the way you can work if you use the platform every day. emily: facebook meantime just unveiled some interesting new virtual reality its vr workrooms. they think this is the future of not just video calls, but meetings. what do you think about that and how it zoom about -- how is zoom thinking about virtual-reality? kelly: we don't consider that really competition.

we look at the opportunities for virtual-reality. we like to see how others are innovating around the space. we have worked another virtual-reality companies, ai, for things like surgery training, people u virtual-reality to do that. it is really exciting to see, especially at these times when everyone is working more remotely, how you can extend the capabilities of the platform. emily: you are adding some new features like gesture, reactions for the ipod, so if someone raises their hand or does he comes up, that icon will show up in the screen. talk to us about that or more features like that? kelly: the goal that eric has always had for zoom is to make zoom meetings even more effective and better than an in person meeting. i think you have already seen

that happen in terms of efficiency, using ai for things like transcription. then things that are missing, what you are highlighting, how you turn a natural gesture. one that we always talk about, how can you give somebody a virtual hug, even the smell of someone's coffee. we are constantly think about ways to bring those interactions or experiences in the meeting. emily: zoom cfo kelly steckler berg -- kelly steckelberg, thank you so much for joining us. jury selection has begun in the found -- in the trial of theranos founder elizabeth holmes. she faces up to 20 years on charges of defrauding investors and patients. the company and homes claims

theranos -- claimed theranos could run tests from just a small amount of blood. the defense will argue that she suffered a campaign of abuse from her former partner. coming up, apple facing delays over the production of one of its newest devices. we will find out why, next. this is bloomberg. ♪

emily: south korea has become the first country to force apple and google to open up their app

stores to other payment systems. the move could potentially set a precedent for their operations in other countries. both companies face legislative measures here in the u.s. over dictating terms in marketplaces, including the exclusion of alternative handlers. apple responded to the korean ruling by saying it undermines protections and puts users at risk of greater fraud. apple may need to delay the release of its newest smartwatch due to production issues. the manufacturer is facing challenges over the design. for more, we are joined by mark gurman. what issues is the apple watch actually facing? mark: my colleague and i were hearing that there were production issues related to the new screen. right now, they are 40 and 44 millimeter configurations. these will be going to 41 and 45

millimeter. there will be some interface updates. but, it has caused some production headaches related to a new material, a new layer to bring the actual display component closer to the screen so it looks much clearer. they are looking through that right now. the question i have is how this will impact consumers. does this mean a further out announcement, more supply constraints? what is the big picture here? emily: we will keep posted for your reporting on that. you had an explosive scoop over the past 24 hours that apple is considering adding satellite capabilities to the iphone that could be used in emergency situations. as a mom, i have had the situations where you are in the middle of nowhere and think, what if something happens right now? how would we get help? mark: this is not turning your phone into a michael douglas

wall street satellite phone to call in stock trades. this is a feature specifically for emergency situations. the first component is called emergency messaging over satellite. if you are in an area with no cellular coverage and you are able to connect to a satellite, you will be able to send short emergency text messages to your emergency contacts. or, to emergency response services. the second feature is more all-encompassing. this is a mechanism to report an actual sos emergency. whether you win a plane crash, a boat crash, -- whether you are in a plane crash, a boat crash, a car crash, on a mountain. it will be interesting to see how apple rolls this out. but i think this would give the iphone a leg up for a certain array of users in those

situations more frequently. emily: mark gurman, thanks so much for that update and great scoop. coming up, as wildfires continue to destroy large swaths of california, how satellites in ai are playing a crucial role in fighting the new normal for the west's deadly fire season year after year. this is bloomberg. ♪ ♪

emily: firefighters are continuing to battle flames that are pushing closer to lake tahoe in northern california. the caldor fire has been burning since august 14, destroying more than 187,000 acres and sending thousands of people fleeing after evacuation orders were put in place. for the latest, i am joined by mark.

give us the update. what is the latest and how big is the fire going to get? mark: as of this morning, the fire was about three miles south of south lake tahoe, which is a resort town that borders the southern edge of the lake. fire officials i spoke to this morning were quite concerned that the fire could spread into the city today. there is a forecast for very gusty wind and dry conditions. that forecast extends through tomorrow. the main concern here is that the winds could blow embers into the city and start spot fires that could then turn into their own places and burn through the town. so far, there is no report of any fire burning in south lake tahoe city itself.

emily: at this point, what is the likelihood that the fire will get to south lake tahoe? mark: it is hard, calfire officials have not been able to say, given an estimate of their ability to keep the fire out. they have a whole army of crews stationed throughout the city and throughout the southern part of the area. it is very much touch and go, kind of a wait and see situation. they have been able to keep the fire out of the out sets. that has been a good sign. emily: thank you so much for that update. one of the biggest issues facing firefighters is knowing where

the flames will head. the department of energy's pacific northwest national laboratory has developed a system with artificial intelligence and machine learning to protect wildfires early and predict the path they will take. i am joined by the product manager for radar fire, this new technologically advanced system. thank you so much for joining us. as i understand it, traditionally, firefighters are flying over blazes at night, drawing maps of where the flames are, then using that in the morning to determine where to fight the fire. how would your technology change that? chris you are correct that today there is an -- >> you are correct that today there is an interagency fire center to capture images overnight, they feed not so much hand-drawn but computer-aided maps to incident commanders.

the challenge is always for incident commanders to know, where is the fire right now and where is it going in the next hour, two hours, three hours. you heard mark mentioned spot fires, how fast can i know if they are jumping out of the fire , whether it is into infrastructure or just into another part of the forest? the faster i can get to the spot fire, the more i can handle the damage. starting to be used by the forest service and for some of their selected and more advanced incident commanders, take satellite imagery from a variety of satellites, public access, open access satellites, that is higher resolution than most of the geosynchronous satellites and use for the weather and what have you today, and feed that data coming from the satellites into some algorithms come into

some machine learning, that pulls out where is the fire right now. better, faster, higher frequency observation. and in the future, use that information, that higher frequency input information to predict where it might go, including additional information about wind and other features, fuel conditions and what have you. emily: in the future, could you tell us with a relatively great certainty whether the fire will get to lake tahoe or not? >> within a certain time envelope, likely. it is a little bit like predicting the weather. the weather predictions today are pretty good for let's say 72 hours out. beyond that, it is a little bit to speculative. predicting where the fire will go for the next three, four, maybe eight to 10 hours,

possible within a certain bound of circuit -- bound of certain people. -- bound of certainty. beyond that, harder to say. it tells people, this fire really will get to your city boundary. you need to set up a protective line or get two evacuations quicker. looking at a map of california, there are something like 100 fires at any given time. of course, we are dealing with climate change. but in terms of resources, why can't we seem to get these fires under control fast enough? mark: that is clearly the challenge. regardless of the cause, the scale of the firefighting problem now, in the last several years, has dramatically increased. they just don't have the resources in terms of both aircraft-supplied fires or firefighters to get to them all. the question is, can we scale the observational capabilities and protected capabilities up.

this system aims at doing that. we take a look at the entire western united states using these satellites. i don't have to put aircraft in the air. they are already up there, they are bringing data as often as they fly over. we can get data from them for spotting these fires and giving the ground crews information about where they are and potentially where they are going to go. emily: this technology is being used in all kinds of natural disasters from floods to hurricanes, and is being used right now in response to hurricane ida, as i understand it, to assess the damage. how is it helping there? mark: that is correct. i work with a team of researchers led by a person by the name of andre coleman. right now, you would be talking to andre probably, they are currently involved in extracting certain information for flood

extent, road closures, and more specifically, because of the department of energy program, what is the damage to critical infrastructure? there are a million people out of power in louisiana. the question is, where is the electrical grid damaged such that we can send

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emily: welcome back. i am emily chang in san francisco. let's get to the financial markets. ed ludlow take a look at the money pouring into chinese hardware startups. ed: chinese hardware -- 5.6 billion dollars flowing into china, hardware startups for the first six months of the year, already eclipsing the hole for

2020. we also see this kind of illustrated in the public markets as well. the i.t. stocks actually outperformed drastically the communications sector. as we know, the munication sector includes names like tencent, some of the targets have seen outflows go into it. if you come back into the studio, what is really interesting is that overall, the venture capital flowing into china is still significant. $56 billion in the first half of this year. we had $75 billion on the total of 2020. we have talked about investor concerns for companies in china but if you look at the private market, there seems to be a lot of opportunity. emily: meantime, as cloud computing continues to push boundaries, they are pushing to the big three. the market for new cloud startups or may not with new opportunities abounding.

greylock just came out with a new report looking at all things cloud. gary shen, partner at greylock, joins us with more. what are the up-and-coming in the cloud right now? >> the castles project started with, how can you beat amazon, google, and azure in the cloud game? is there room for startups, is there room for vc's investing in these markets? we have seen companies raise huge amounts of money and compete head-to-head. data breaks, snowflake, elastic, security companies. there is a ton of companies out there able to do something like compete head-to-head against amazon or just multi-cloud across azure, google, amazon.

a couple of ways to play, either choose a market or strategy. emily: i will be interviewing the ceo of data bric right after you. when it comes to the big incumbents, do you see the likelihood of real disruption, one of them being dethroned, if you will? >> to dethrone the castle metaphor, i don't see a fourth or fifth hyper scale cloud provider anytime soon. clearly, other geographies will have local, but in terms of these hyper scale clouds, the big three are pretty much entrenched. oracle of a digital, etc.. i think the next two years start to look very different. there is a bunch of talk of blockchain, decentralized clouds. vertical clouds. financial services, gaming, health care.

third, the decentralized edge computing can be a trend as well. companies do very well at the edge for their own network. cato networks, a company that does a similar approach. i don't see a hyper scale cloud coming anytime soon but there are certain ways to play against the big three in certain strategies. emily: where do you think the money is at? where do you think the most innovation will come from when you look at startups navigating this new world, or disrupting this world? >> either you pay market that is super interesting. we are betting on a company called kronos fear. you have heard of companies called data dog or's blog. credit sphere is one of these plays that goes head to head against existing leaders also gets large -- gets large out vendors. the cloud vendors have huge

reach, scale, developer attention. but if you build something that is deep ip qamar technology, i think -- that is deep ip, hard technology. you see things like confluence, on another company, real-time analytics. you see companies taking an approach saying, where is a great market, where is really hard ip to have technology? i still believe you have deep ip, you can still win against the big goliaths out there if you are more david. emily: the market is obviously huge and getting eager, in part -- and getting bigger in part because of remote work and hybrid work. i am curious how you think this is going to change silicon

valley for the long term. i spoke to your partner, reid hoffman, about how over the past few months, you have been doing some deals where you are never meeting the entrepreneur in person. now we are seeing all of these huge companies pushing back there returns to work. i spoke to venture capitalist bill gurley about how he thinks this will change silicon valley for good. >> the competitive pressure to not go back amongst engineering is huge. and so, i don't think anybody will be able to mandate it other than very small companies. emily: he is basically saying almost any company will not be able to get engineers back in the office. would you agree and what does that mean going forward? >> i think it will be a mix. i think with ceos back in the

office, people want to be around the ceo or the founders. there will be a large workforce that will not want to go back to the office. i think what happens, the skills that you need to succeed is very different. before, maybe in person communication was a skill to have. now, written communication, asynchronous communication, video communication, that becomes more powerful. before, a great powerpoint presenter was rewarded for his or her ability to communique. now writing memos, communicating through slack or other ways, businesses will learn on these type of tools. we learned on email and microsoft office. the new workforce will be on slack, zoom, a whole new set of tools that will be key to their day-to-day jobs. i think there will be a cadre of folks back in the office but day-to-day folks who do not come

in. i think the skills to succeed will be different than today. emily: interesting. brave new world. jerry chen, thank you for taking the time. coming up, speaking of highflying cloud startups, databricks just raised new funds at a $38 billion valuation. we are going to ask about plans to go public and the data bric road ahead. this is bloomberg. ♪

emily: databricks is a data

analytics platform powered by artificial intelligence. it just announced it has raised $1.6 billion, valuing the company at $38 billion. joining us now, the databricks ceo. the numbers are huge. why are you still a private company. why not go public now? ali: we kind of see this is going public. we are allocating big blocks to the investors that are going to invest in us for many years to come. in january, we raised a billion dollars. that is reshaping our cap table. in this round, we are super excited to have the round be led by morgan stanley. kind of like a small ipo at the time. we will be public at some point. this is something that is really advantageous to us to do in this way. emily: you were last on the show to talk about that billion dollars you raised.

at what point will you not be able to do this privately? what could you do as a public company that you were not able to do privately and vice versa? ali: the main reason to go public is to provide liquidity. for that reason, we will at some point ipo. it is nice to be able to spread out the allocation of capital through the company. emily: when you are saying you are doing this to supercharge innovation, what does that mean? ali: we announced we are going to open up sites in germany for r and d. we already have our amsterdam site. we have san francisco, southbay. we announced that we are going to start aci -- start a site in seattle. 20 offices worldwide, each of them to make sure we are staffed up, that you can take 10 years,

make profits and reinvest it, or if you have a lot of access to capital like we have, you can just do that extremely fast. emily: we were just talking with greylock's jerry chan about the castles in the cloud, if you will, the giants that are there and the startups that are disrupting that hierarchy. do you see one of them or a couple being disrupted longer-term? or do you see them generally holding down the fort, and data cloud startups like databricks widening out the pie? ali: i think that these cloud vendors are here to stay. the numbers are large. they are still growing fast. with i.t., all moving from on

premises to the cloud, i think all three will do well. some will do better in some areas, others will do better in others. there is an interesting trend that more and more software companies or enterprises are thinking, which one should i pick? let me hedge my bets. i will have my software work on multi-clouds. lots of tailwinds for companies like databricks and others that are multi-cloud. that is something that i think you will see more and more of. they want to have negotiation leverage because it can be pretty costly to spend all the money on infrastructure. if you have multiple vendors you can negotiate with, that is better for you as an enterprise. emily: i know that companies can use both databricks and snowflake products and services but you actually compete. some of your product overlap. why would you choose databricks over snowflakes?

ali: i think it is a great company and the numbers speak for themselves. it is a data warehouse, a multi-cloud data warehouse. databricks is different. it actually enabled me to build what is called the data lake house where you can sort all of your data, do machine learning, you can do real-time on it, or you can do more and more data warehousing. i actually think the data warehouses will be replaced by these data lake houses. emily: you think a company like salesforce and the way they do business will be replaced by the way you do business? ali: no, i think companies out there will kind of readjust. in terms of which cloud vendor will win, i think it is a big enough market. frankly, other players we have not heard of yet.

jerry mentioned some. i don't think there will be a place for -- they need to do something with it. i don't think it makes sense to have it around in the long-term. emily: give us a sense of your revenue and growth projections in the years to come. revenue, is that on target, and what is next? ali: we shared that we passed $600 billion annual recurring revenue, and growth rate is about 75% year-over-year. we should remember, we are just scratching the surface. a google, a facebook or twitter, but they will be in 10 years.

i think the growth potential here is massive. it will go on for a long time. marc andreessen famously said that software is eating the world. you have software in your phone, thermostat, carpet i think ai will eat the software. we are a company who actually combines data and ai, so i think we are well-positioned here. emily: all right, ai is going to eat the software. thank you for joining us and congrats. south korea's largest online payment system has lowered its targeted ipo offering. regulators are asking the startup to revise its perspective after questioning tech valuations and comparisons with its peers overseas. south korea has been enjoying an ipo boom driven by a retail frenzy with $13 billion in first timeshare sales. the company behind the unofficial footwear of silicon

valley has filed for an ipo. they direct to consumer sustainable shoe manufacturer listed the size of its offering as $100 million. the filing said net revenue for the first half was up 27% year on year but the net loss widened from $9.5 million in the first -- in the same period. coming up, the pandemic may have accelerated our use of technology but tech company workers are still not back in the office. google pushing back its return to work date yet again as covid cases continue to search. shares of religion galactic rocketed. it closed up -- virgin galactic rocketed, hitting the highest level in nearly three weeks. additional spaceships driving of capacity to 660 flights per year from 36 today. one of the flights this year carried the company's founder,

richard branson. this is bloomberg. ♪ ♪

emily: google has joined a growing list of tech companies delaying its return to the office until 2022. no specific date has been given but in a memo to staff, alphabet ceo cinder pichai said it is optional to work until at least january 10. google's decision mirrors several other tech companies. all of them have pushed back their return dates to 2022. for more, we are joined by sarah holzer. google actually late to the game here, given that the other tech companies have already announced this. but, not a surprise.

i am sure this is giving managers and executives a lot of headaches with how to navigate this. do we know what drove this decision in particular? >> it seems that a lot of companies are looking to peers in the space to determine their back to office decisions and timelines. google already pushed back the plans to october and has pushed it back again. google was already -- was always one of the office cultures that other tech companies looked. now, with this return to office pushback, others are looking to google again to say, we want to compete for staff, engineers. if people don't want to go back to the office yet, they may be looking to a company like google. emily: will have talked about how some venture capitalists say

they will not be able to mandate at all, if one company is offering remote work and another is not, you know who will win and lose in that equation. what does it mean for metropolises, the city of san francisco, new york, which have been lagging even the workers just do not have to be here right now. >> i was speaking for people who work for the public transit system, the city comptroller's office, and they were really excited for the returns. they felt small businesses would have more clients. we are seeing reports that a lot of that growth is stalling. bridge traffic across the golden gate bridge is at 90% of pre-pandemic levels. part is still under 20% -- bart

is still under 20%. all cities are down in recent months. small business owners are feeling less optimistic and what that means for their clients' health. emily: when workers do go back to the office in january or after that, what can they expect to see? sarah: it seems like a lot of companies have spent the pandemic thinking about their physical office space. when people go back to google's campus, they will find a physical workspace reimagined. working for reading rooms where people can connect. a lot of companies have shed office space entirely. google has been investing in real estate. it has plans to extend and

expand in san jose. it will be interesting to see who and what the office will look like when people actually do and upcoming back. emily: a question, what happens to the real estate market. bill gurley thinks something big will happen. other companies doing the same. sarah: a lot of employers like twitter, salesforce, airbnb, have been putting up office space for lease. open that other subtenants will come in and pick up that. it seems like in surveys of employers and employees, it does not seem like people necessarily want to come back, received

10,000 applications to work hybrid. a lot of things will change in terms of how many people want to be in these office spaces, which might be a switch up in who is occupying downtown san francisco especially but also new york. emily: we have seen a massive population redistribution. we wonder how much of that will be permanent and how much will continue. bloomberg citylab reporter sarah holder, thank you for giving us that a view of what is going on. tomorrow, we will be speaking earnings with the crowd strike ceo. plus, we will be joined by russ from headspace health, talking about the mental health crisis across the country, and ginger, to talk about their merger and the road ahead. this is "bloomberg technology" on bloomberg television. this is bloomberg. ♪

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♪ >> a very good morning. welcome to "daybreak australia." we are counting down to asia's major market open. >> good evening. i'm kathleen hays. the top stories this hour. the s&p sees its longest winning streak since january of 2018. >>