>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. emily: i am emily chang in san francisco and this is abloomberg technology.a coming up, a tale of two

failures, zillow and the hot -- i travel rebound boosting uber and airbnb. uber reporting its first ever profit on renewed ride-hailing demand, airbnb reporting its best quarter ever. peloton plunging on a grim outlook for the exercise bike leader. we will have it all. plus, a light at the end of the tunnel for the chip crunch. that is what investors seem to be seeing. the chipmaker soaring on the back of a bullish forecast. i will talk to the ceo about whether the worst is over. and the former ceo of google says the age of ai is here. should we be excited or terrified? eric schmidt will join us for a wide-ranging conversation about the power of artificial intelligence, algorithms and big tech and how we humans can coexist with it. we will get to all of that in a moment but let's get a look at the markets, tech and retail.

ed ludlow has more. >> there is a lot for investors to take on board. we know the fed will start winding down asset purchases. earnings are top of mind. the s&p 500 is up by .4%. the ninth consecutive day of gains. the best run since december of last year. also, real strength in semiconductors. there up by 3.5%. if there was one pocket of weakness, it was in cryptocurrencies. come with me as we look at the bloomberg terminal. look at the earnings analysis. what we are seeing is upside surprise when it comes to the beat the earnings are getting.

particularly in the tech center. real strong performance. that is not universal. after, we are getting some 25% drop in pellets on after-hours. higher input costs, lower demand, less time working out at home. the outlook for the coming quarter is not as strong. airbnb is basically flat. >> uber and airbnb both beating expectations but not shocking. there was sustained's demand in food delivery business. tom white is with us now.

they did it once, can they sustain profitability quarter after quarter? >> we will see. i think the quarter was mixed but i think there were generally more positives than negatives. gross bookings came in a little light verse expectations but revenues were better, even after backing out. ravens you -- revenues outperformed. it was a little less than the street was expecting. that is taking the shine off of the stock in the after-hours. course it is still hard to find drivers. how much longer do you think it will be until those come down?

>> anecdotally, everyone has experienced on high prices. they would be able to start tapering incentives to distract drivers. drivers are coming back. on prices, that is a question i get all the time. i think that might take a little bit longer. i think uber and lyft are bringing back his drivers. they are also pulling back the incentives. over time, on the margin, i think prices will come in a little bit but i don't know that i'm holding my breath.

>> more broadly, there is a labor shortage. you have a company like amazon hiring thousands of seasonal workers. are those workers going to want to drive for over or left? i asked john simmer this very question. course if you look at the earnings of drivers, it is like an atm in your pocket. there are not any other 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. a huge quarter for airbnb. you are seeing huge 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 and a number of companies with great numbers. we are all sick of being on zoom. we are ready to get out. the world is ready for us. what is key now is europe's opening so the cross-border travels happening, the return to cities 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 -- right now are 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? -- terms of the hike? 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 ui and they don't have the best inventory when you go to a lake home. 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 you want a ski guide and other things to go around that 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. >> you also cover uber and i'm curious as we move into the kids, vaccines have been approved here in the united states. do you still 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. i am just north of you and not that far and there has been a breakout in one of the schools 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 appreciate you stopping by. 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 head 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. ♪

>> 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. ♪

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emily: i'm emily chang we have to get earnings and the biggest disappointment coming out of peloton down in late trading. down more than 25% 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. 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. is one more a problem than the other? >> 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 it 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. -- artificial 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 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. ♪

>> the following is an important