♪ >> from the heart of where innovation, money, and power collide in silicon valley and beyond, this is bloomberg technology with emily chang's. emily: i'm emily chang and this

is bloomberg technology. a tale of covid winners and losers. a rebound boosting uber and airbnb. uber reporting it's first ever profit. airbnb reporting its best quarter ever. peloton plunging on agreement outlook. we have it all. the light at the end of the tunnel for the chip crunch, what investors seek with qualcomm's earning outlook, soaring on the back of the forecast with the ceo about whether the worst is over. the former ceo of google says the age of ai is here but should we be excited or terrified? he will join us for a conversation about the power of artificial intelligence, algorithms, and big tech and how humans can coexist within. we will get to all of that in a moment but let's get a look at the markets, tech and retail

driving the s&p higher while the nasdaq extended its rally into a ninth straight day. ed ludlow has more. happy birthday. ed: there is a lot for investors. the fed will wind down asset purchases, earnings top of mind. broad strength across equity markets with the s&p up .4% but tech lead the way with the nasdaq 100, ninth consecutive day of gains, it's best run since last year. a real strength and semi conductors with the philadelphia index up .3% -- 3.5%. if there is one pocket of weakness, the gloom -- bloomberg galaxy crypto index down 3% with a drop in bitcoin to $61,000. look at the earnings analysis and how those companies across the s&p 500 have done over the course of this quarter. we are seeing upside surprise when it comes to the beat the

earnings are getting with the tech sector where we see earnings harvest 9% on average above the market. real strong performance seeking out profit when input costs are higher. that is not universal. after hours, we are getting 25% drop in peloton. a complete revision of fy 22. higher input costs and lower demand. less time working out at home. all of that later in the show. huber finally getting an adjusted profit for a quarter within outlook for coming quarters not as strong and airbnb flat but doing well with a record quarter that you will dig into right now. emily: uber and airbnb beating expectations but no dramatic reactions. thank you very much for that. i want to stick with earnings and dig into cooper. the company has set its first product at a public company, boosted by the recovery with sustained demand in food delivery. tom white with us now.

they did it once. can they sustain profitability? tom: they have got into a second consecutive quarter. look, the quarter was mixed but it had more positives than negatives. on the negative side, they came in light versus expectations. revenues were better, even after backing out of a one time-ish item. revenues outperformed and then they beat the consensus. they are guiding to a sequential improvement and evens out between the third and fourth quarters. another quarter of positivity but it was less than expected for the fourth quarter. maybe that is taking a shine off the stock in the after hours. emily: writers or back but it is hard to find -- find drivers. how hard will it be -- much longer will it be until those

come down? tom: everyone has got an experience of having to wait and having high prices. the waiting will resolve itself for more people soon. lyft talked about strong growth and driver activations and that they would be able to start tapering incentives to attract drivers. uber talked about tapering already starting in the third quarter and the drivers are coming back. on prices, that is a question i get all the time. i see exact prices for uber rides. when will they resolve? that will take longer. uber and lyft are bringing back drivers, trying to make sure their earnings stay high but pulling back the incentives. they need to keep prices high so that if their earnings stay robust for the drivers who have just come back, over time, on the marriage and, prices will come in a little bit but i don't know that i'm holding my breath that writer prices will take a

swing down in the near term. emily: there is also a labor shortage and you have a company like amazon hiring thousands of seasonal workers. the question is if they will want to drive from uber -- for uber or lyft. i asked the letters co-founder this question yesterday. take a listen to what he said. >> if you look at their earnings of drivers and the flexibility, it is an atm in your pocket. lyft, you can turn it off whenever you want. there aren't any comparable jobs outside the gig economy where you can get 20 to $30 an hour on average and do it whenever you want. emily: when you talk to drivers, they say they are not paid enough. what do you make of those two perspectives? tom: look, i think for the next several years, the pressure on expenses relating to drivers for

these platforms is only going likely in one direction and that is up. either it is to satisfy demands from the drivers to be paid more, whether it is related to labor reclassification and costs related to maybe these workers being misclassified, i think there will be sustained upward pressure on driver related costs. it will put pressure on uber and lyft to reduce costs and other parts of the business like insurance and advertising and marketing, but you know, that is kind of the leverage. emily: tom white, lots to continue to break down, following headlines from this call. we will be joined by the ceo to talk about the surge in demand, the first ever profit for the ride-hailer and how they are navigating the labor market at 11:30 am, 8:30 am pacific.

airbnb reporting record sales and earnings that beat estimates proving the giants resilience even as the delta variant triggered new lock downs around the world. -of jeffries to-. big jumps year-over-year. it is the worst behind it? brett: i think so. we continue right now to see a steep uptake and expedia booking a number of companies with great numbers. we are all sick of being on zoom. . the world is ready for us. what is key now is europe's opening so the cross-border travels happening, the return to city is happening. this is going to continue to fuel good demand. there is certainly a lot of consumers that are now looking out further and making plans. no one went to europe this

summer and more people are getting into the planning mode already. effectively, the challenge our prices. we talked to hotel operators who have raised prices by thousands of dollars for night. they have little impact on demand. the challenge right now is going to be prices have gone up. can consumers consume that level of pricing and terms? things are feeling a lot better and the key to this was the u.s. led the recovery and europe is starting to open. we have even heard from companies like match this week. japan covid cases are down but people still are not moving around quite as fast in japan. india is starting to see an improvement, but is a little bit uneven, so i think we have another revenue mention for the rest of the world and asia, parts of asia and europe, but overall, the demand signals look really good. stocks are reflecting it. airbnb is up 22% and expedia is

up after hours. emily: do you see airbnb having an advantage over expedia? they are all fiercely competing for inventory and of course airbnb would argue it has leadership in this category. brent: i think airbnb separates itself for a number of reasons. number one is alternative combinations. there are a lot of families concerned about going to a hotel. the work from home or i call it the work from screen movement. we can live wherever we want. jackson hole, aspen, wherever. as long as we get the job done, you can be where you want. that is helping airbnb. i think the third is --it has the best and they don't have the best inventory. no doubt, expedia has a great

opportunity, but i think there is an incredible opportunity in experiences as they open up and you want to do backpacking and ski guide and other things to go around the trip. they understand this better, how to create a suite of travel solutions versus a hotel. that is not what you want. you want a suite. airbnb knows to add those experiences with a place to stay. emily: when you cover uber and i'm curious as we move into the holidays, is vaccines have been approved for kids in the united states. do you see covid risk ahead if new variants, or waves of covid come? are we passed that? brent: i don't think we are past it. just north of you and not that far and there has been a break out in a school just north in marin in covid cases. if you think about this is still

happening and people have been vaccinated and you are hearing and seeing cases that things are getting canceled. the block party we were supposed to have got canceled. a bunch of covid cases broke out recently. i do not think the worst is over and i hope it is but there is lingering concern it that we see some kind of flareup and what does that due to consumer behavior? the bulk of this is under control but we have lingering cases and again, i just ran into the situation not myself but through a community today, where we see this exist in northern california in a way that you don't want to see. it is still out there and you have to be careful. emily: reminder to stay vigilant. my neighborhood not too far from years. brent phil of jeffries. i will sit down with airbnb ceo brian chesky to dive into the results at 7 p.m. eastern, 4

p.m. pacific. the new mayor of new york city is betting big on crypto with big plans for the city. that is next. also, as we had to break, check in on peloton, a nightmare for the company as the pandemic sales boom turns to bust. shares down nearly 25%. the company cutting its annual forecast by as much as $1 billion. we will bring you the latest as it comes. this is bloomberg. ♪

emily: cathie wood's etf so $255 million. that happened a day after she bought $25 million in shares. zillow pulled the club on its operation, triggering the share

plunge. nintendo has cut its sales target. the company blaming shortages and a logistics bottleneck saying there is no sign of relief ahead. nintendo upgraded its operating outlook. new york city mayor elect eric adams will take his first three paychecks in bitcoin when he takes over city hall in january. he said he wanted to turn new york into a crypto friendly city, saying he wagered up "friendly competition" with the mayor of miami, the first to set up a crypto city coin cryptocurrency. coming up, the chip shortage seems a problem for almost everyone but qualcomm reporting better-than-expected earnings results in the stock soaring. i will speak with the ceo next about how he is navigating supply chain issues. how does he think? he will join me coming up. this is bloomberg.

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>> we have constraints across the board and you need to see how the demand would play out across the industry but we are comfortable with supply playing out as we had planned. emily: qualcomm's cfo expressing confidence about the plans to navigate the chip shortage. revenue up for the world's largest maker of chips. i am joined by the ceo of qualcomm, cristiano amon. great to have you back. the stock is surging and a number of analysts upgrading. the stock struggles this year and i'm wondering if you think -- cristiano: we have always been

confident. we know this company --what the company is capable of. we win based on technology and have an incredible engineering culture and we see demand for technology across of a number of markets. i think it is largely playing out as we expected and we are very happy with the proponents of the company -- performance of the company and how we navigated the supply chain crisis. more important, we are happy we are winning and have growth opportunities across a number of industries such as how to compute. emily: how much of this is better supply and how much of this is blooming demand for qualcomm products? cristiano: we talked at least 2-3 earnings calls ago, when we said we saw the supply crisis. we took action early and prepared for it and moved to source all of our products and

are one of the few companies, if not the only, that moved its source and deleted son i conductors across --deleted semi-conductors across premium processors. we launched multiple products as a part -- a result of multi-sourcing and put capacity expansion in place and made commitments to our suppliers because we believe in the demand for qualcomm technology and we indicated we will see material supply improvements coming at the end of the calendar year. that has reflected in, if you look at our guide, supply is as we expected. we see improvement and a lot more balanced demand. if we had more supply, we would see more but as we enter 2022, around the first half, if we are going to see the end of the

supply and balance and demand will be supplied through the rest of the calendar year. emily: are you saying at that point there will be an end of the supply and demand imbalance for qualcomm only and if so, how much longer does this drag on for other industries? it seems qualcomm is navigating as well, but others say this could go on for years. would you agree? cristiano: that is correct. i have seen reports that companies will soon be seeing shortages of supply in 2023. that is not the case for us. you can find pockets of areas where we will have demand and supply --more demand than supply but we will see a lot more balance between supply and demand as we navigate into 2022. emily: you mentioned android being a demand and i would love to get the color on what is happening in that market. would you say and china that android is growing faster than ios? cristiano: i think what we see

right now is an opportunity for qualcomm to grow much faster than the market. the mobile market, the mature market, still grows single digits. we saw a different oem landscape, an opportunity for devices with android for qualcomm and customers such as samsung and devo see incredible high demand. that is driving a lot of the growth and driving growth faster than the market itself. there are new factors and i think the samsung phone, the flip, higher speeds with 5g, and the market is moving up. consumers are becoming more dependent on smartphones with higher capabilities. that is driving the growth. what we said in the earnings call, which from a seasonality standpoint is traditionally a

high quarter when we sell modems to one of our customers, most of the growth in the quarter is coming from the android. they started to see a correlation of the qualcomm business being indexed toward premium and high androids. emily: we care about foams -- phones but everybody cares a lot about the meta-verse right now and do you think the meta-verse will be as big as mark zuckerberg seems to think? what will qualcomm's role be in it? cristiano: that is a great question. i love to answer this question because we invested over a decade to enable virtual and augmented reality and have talked about exar for a long time. the way i see it is the success of oculus, especially the quest to significant scale, this business really getting scale, that success drove facebook to

think about changing the company name and believing in the meta-verse. what is unique about this for qualcomm is we are enabling those devices. even if you have different versions of what the meta-verse will look like across multiple ecosystems, but you see across those different devices is there are over 50 devices commercialized today of virtual and augmented reality and all of them have qualcomm's xr. it could be as big as phones. it could be as big as phones. i believe that connection of physical and digital space will be a reality. i don't necessarily believe you will spend your life on the digital space, but it will be a normal thing of day-to-day life. we will connect with other people and other spaces to those connections. i would like to see all of us in addition to smartphones carrying a pair of glasses.

it could be as big as the mobile market. we are very excited. emily: thank you for the bullish forecast. qualcomm president and ceo. always good to have you there on the show. may be we will meet in virtual reality next. a downhill ride for it peloton with shares plummeting after third-quarter results. we will break down the numbers next. this is bloomberg. ♪

emily: i'm emily chang we have to get earnings and the biggest disappointment coming out of peloton down in late trading. ed ludlow is here to paint a picture. >> this is a big downward revision. part of it is the psychology of the consumer. we are getting out of the home. how much are we working out at home?

the downward revision in subscriptions, the range has been revised to 3.4 5 billion. downward revision at the bottom end of the scale. simply put, there are a long list of factors at play. this is never ending. they are getting a one-two punch. recovering economy and supply chain crunch. they are getting hit by rising commodity prices, rising container prices, we know about the supply chain crunch in los angeles and other parts of the world. compare them with uber. these two companies have been winners of the pandemic, but

uber diversified into uber eats. pellets on has -- peloton has underperformed your today. what happens to these pandemic winners? do they become post-pandemic losers? emily: i want to work out some of those issues with our own reporter who has been following peloton results. they have the hardware and software tied together. >> >> they are selling less hardware and their costs are going up. their subscription business is just not reaching the targets the people had expected to reach. emily: why not? >> the cfo on the call spelled out. she said we underestimated, we

were not able to get right the effects of the economy reopening. it is everybody's worst fears which is this is the start of the show during the lockdown. everybody stays at home and buys the fancy bikes. what happens when we can go back to the gym? here we are. emily: you noted something unusual struck you about the results. >> this is a new company. either they're honest or they're naive because they put out a group of charts and the take away from most of the charts was we have peaked. emily: [laughter] wire they being so honest? >> they are giving a lot of information to their credit, but that's not helping them on the call. people can be talked around, things can be explained. the more detail they have given on this call is that stocks are trending lower. emily: i'm curious what is the

management saying and what are the numbers telling us about the path to profitability? >> they have said we need to grow, we need to get more subscribers, this is a landgrab situation. you look at the massive increase in the amount of advertising spending and what that went to profitability. the short term answer, they are still in a landgrab profitability gets hurt phase. emily: meanwhile, breaking ground on a manufacturing facility in the united states. they have been dealing with issues around consumer safety. how does the story at up one year from now? >> it's very difficult and i think all they have done is add to the uncertainty that was already there. they said were going to reduce fixed costs, that normally means cutting jobs. all kinds of things we have to be answered right now by those executives. emily: they will have to depend on a lot of people working out to get into a holiday shape.

coming up, the growing power of official intelligence. eric schmidt will join us next to talk about his new book and how to not let ai get out of hand. that is next. this is bloomberg. ♪

emily: artificial intelligence

is playing a bigger role in everyday lives. without most of us even noticing. whether your commuting to work, booking a flight for thanksgiving, positing a check, ai is making all that happen. with the power of ai soaring, can we agree on what is limits should be and even so, do we have a choice? eric schmidt, the cofounder of schmidt futures has an answer in his latest book age of a.i. which he cowrote with henry kissinger and a computer scientist. it is wonderful to have you back on the show. thank you so much for joining us. your book tells us that we are entering a new epic. the age of a.i.. the world seems calm about this big transition. do you think most people don't understand the gravity of what is happening at this moment?

eric: we wrote the book because precisely we don't think people understand what this will do to society both the good and bad. as a prologue, what i would tell you is most people when we talk about ai, think about it in terms of killer robots. that's not what were talking about. dr. kissinger talks a great deal about the transition from the age of faith to the age of reason hundreds of years ago. where all the sudden after the dark ages, the notion of us having our own ability to reason and think about points of view and argue them was a new concept. it became the new definition of what humans could do because other animals couldn't do it. it couldn't reason through the situation. we believe the development of these ai partners will in fact usher a new age of ai which will be both extraordinarily powerful but also extraordinarily

uncomfortable because we are not used to having as partners intelligence that is not human. emily: the potential is amazing and also terrifying. you have said that ai could help us better teach one million children. it could also tell us how to kill one million people. should we be excited or terrified? eric: i think the correct answer is both. the reason you should be excited is can you imagine solving the diseases that have been around for thousands of years because of the next 10 years or so. can you imagine the economic and if it's of efficiency, the overall benefits from technology are well understood. the companies that wealth created, many of you will be wanting to be a part of that. many should be terrified that

they will be optimized for the wrong. i will give you an example. you have a kid. the kids best friend is one of these objects in the presence of a bear or a toy and it starts getting instruction from the maker that it should start advertising a product. then you find out it's in back -- addicted to licorice because the bear told it to. these are the kinds of scenarios that we have to think how are we going to handle this? are they going to handle forms of regulation? is this something where the computer industry can get it right without regulation? this is coming. it's also going to affect our national security, the way we do our diplomacy, elections, misinformation. emily: i'm glad you mentioned children, because i want to know what this means for my kids and their kids who talk about talking to robots, learning from robots, befriending ai. will our children prefer digital

friends over real ones? what are the consequences of that? eric: the general questions is, are humans sufficiently malleable that they will decide the digital friends and the digital world is more satisfying? i don't know about you, you have enormous responsibilities. raising a family is hard. would it be easy free to take the time off, put yourself -- put your oculus on and have great fun? will the arrival of these digital world and digital partners cause us to retrench and do what it means to be human or will it change the definition of humanity in such a way it is not necessarily so good? emily: will it also change our conception of reality? generated ai is becoming so much more common. what are the consequences if the

line between fake and real becomes instinctual? eric: if we don't do anything, you're going to have this explosion of software which will be open source which will allow you to create disinformation and misinformation campaigns that are profoundly effective. we know that exposure to even known falsehoods especially in video can change behavior. it's really important that we understand how far we want to take this. the technology is going to get to the point where you can have a massive misinformation campaign and you can target individuals. furthermore, the social networks are organized around revenue. more revenue from engagement, more engagement from outrage. that you have fake stuff, outrage, are you surprised that people are not upset? shouldn't be. the system is geared to produce this. emily: your book is calling for

ai arms control. do you believe that ai is developing at a rate that it will get too far ahead of us and could it become impossible to regulate? eric: you can imagine a scenario where ai and it's just imagination where the ai is -- it eventually becomes general intelligence and also becomes able to write its own code. this is science fiction today. a shorter-term statement would be if there's going to be the development of more general ai and the systems are going to be powerful and dangerous. an example is you can ask the system tell me how to kill a million people who are of a different race than me. it might try to answer that question. those systems are going to have to be protected and secured for the betterment of all of us. furthermore, there will not be that many of them because they're going to be incredibly expensive to build. that is a proliferation problem. we're going to work in the same

sense that dr. kissinger in the 1950's worked on nuclear proliferation. we need to find a way to deal with in a dialogue and a sense of principles around software proliferation where the proliferation can hurt millions of people. emily: yet you say that ai is going to be harder to regulate than nuclear weapons. we see how hard it's going to be to get any law passed. are we going to see an ai nuclear event before we can come to agreement on these terms or realize the urgency of the need to do so? eric: that is incredibly perceptive on your part. it seems to me that we want to avoid having to blow up the bomb in order to regulate it. as we get closer to these points , let me give you another one. if you go to the movie dr.

strangelove, they had a launch on warning. a bomb that was guaranteed to take out the other side. that is incredibly destabilizing. now let me explain why we might end up in that situation. the systems may have to make decisions faster than humans can't. yet the systems are in precise and they are still learning. i don't want to state the future of the human race -- to stake the humans race on something that is unreliable. emily: stick around, we're going to continue this conversation. more coming up. we will talk about the role of ai on massive cultural and societal shift. what we can and should do about it next.

this is bloomberg. ♪

emily: we want to get back to our conversation with eric schmidt. here to talk about his latest book, the age of a.i.. you have a chapter that talks about the influence companies have on groups of users bigger than countries. do you think that companies like google like facebook have too much power and how should they be reined in? eric: i've never been in favor of regulation of the tech

industry because it is always too soon or too late. what i would rather have is restraint and the well-managed corporations that i think these companies will become. looking at what's going on, it's clear that facebook went a little too far on the revenue side and not enough on the judgment side. you can see that from the facebook leaks that have been occurring. the problem here is that most of the people who said let's rake these companies up, the breaking them up is not going to solve the problem. it is really an incentive issue for what they're trying to do. in defense of these companies, the greatest export of america are our people and values through these companies. when google shows up in an arab country or a developing country, it brings american values, american liberal values in the treatment of employees to a place that doesn't have it. be careful not to kill the whole thing.

emily: we are going to get to facebook, but i want to start with google. you shared that when you first met henry kissinger, he said he was worried that google would destroy the world. eric: he said it was a threat to humanity. emily: now that you have left google, do you believe that google is a threat to humanity today? eric: i do not, and i did not agree with him at the time. his concern is that a private company run by the best of people is not where such extraordinary responsibility should lie. it should properly lie in the democracies or non-democracies and their governments. what we have seen since his visit 15 years ago is that governments are stepping up and they are pushing back on the things they don't like. many countries are upset about american values. the export of american values

and the globalization of the principles of the tech industry is on balance net positive but there are places where people overreached, the most recent being facebook. emily: do you think facebook is a humanity -- threat to humanity based on what we have learned especially in the past few weeks? eric: people have said a long time ago that facebook was doing this but they didn't understand or didn't measure it. what we have learned in those exposures is facebook new what it was doing. that is pretty concerning. i will tell you in general as i am from this industry that the tech companies know who their customers are. they know what they're doing. they may not release it to the public, but they know. it's important to stand up and say we are proud of what we did for this reason and they should be appropriately reviewed by their constituencies. it's very easy to get confused as to what your goal is.

in my case, i was fortunate to work with someone who had a higher principle mission and helped us. emily: mark zuckerberg is making a big bet on the metaverse. how encompassing the you think it will be and do we want facebook to own that big of a piece of it? eric: the metaverse is a term that was coined in 1992 and it means different things to different people. i believe what he is referring to is distributed and untrustworthy networks that are graphically signed that are the next generation of web services. he wants to build worlds that are interactive on top of that. i think that is a great goal. it is not promised that they have built so far. there's a set of startups building this as well and i look forward to the competition between the facebook model of a multi-verse and the startups model of a multi-verse. that competition is how we all

win. the incumbent is typically given quite a scare by the startups and the startups grow into the next big company and i look forward to a variant of that. emily: do you think google does or should have a play in this multi-verse and if not, what will the biggest innovation be? eric: i don't know how to speculate on google's future, because i'm not part of the management team anymore. except i think it will do well. it is well-run. look at the performance of the company on every measure. the google model is different. it's information and search and question and answer and giving you better answers. my guess is the leadership will be in other places i don't know. emily: i would like to end on tiktok. he talked about the upstarts that are levying these

challenges to the incumbents. tiktok has these powerful algorithms that are very controversial. china may well have insight into these algorithms. i'm curious if you are concerned about the rising power of tiktok and what you make of it? eric: tiktok is super impressive. this group out of china figured out a way to build a new kind of entertainment and they also developed a new ai algorithm. the social network algorithms were based on who your friends are. tiktok's algorithms used your preferences and the world you choose to live in as opposed to your friends to make similar recommendations and they have done it well. now, they are really driving a new form of entertainment. that's amazing. i don't mind that at all. what i do mind is since it's a chinese company, you can imagine the chinese government may start

asking questions that in america we might think are inappropriate. the chinese company might say give me information about this person or let's modify what you're doing for this political view. i don't think that's a good american value. it has to get addressed. emily: 30 seconds, are you worried that china is outpacing the u.s. on innovation or not? eric: we know that china is outpacing on some markets but not all. america needs a strategy to continue to be focused on synthetic biology, quantum ai and so forth. lots of money, lots of investment and can win. emily: we could continue this conversation for hours. those who want more should read your book age of a.i.. thank you. that does it for this edition of bloomberg technology. we will continue to be across all earnings. you don't want to miss my

conversation with the ceo of uber. talking about the labor market, supply chain issues, we will have it all right here. i'm emily chang. this is bloomberg. ♪

>> good morning and will come to daybreak australia. we are counting down to the major market opens. shery: the top stories this hour, bond yields tumble. after the boe surprise decision to stay on hold. >> opec-plus rejects president biden's call for