>> from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. >> i am emily chang in san francisco. intel revved up plans to speed up its self driving car business. they could generate billions for the lagging chipmaker. is there a catch?

instagram addresses the outcry. the head of instagram is excited to be grilled by lawmakers on capitol hill. and microsoft says chinese hackers are using this tech to spy on and steal information all across the world. let's get a look at the u.s. stocks. major averages surging nearly 2% on optimism that the omicron variant want the real global growth. ed ludlow is here with more. >> tech is at the heart of that. the nasdaq 100 jumping up 3%. it was pretty broad-based, we saw semiconductors get in on this. also, some companies have been out-of-favor, they have not had much love recently.

this is a basket of stocks and ipo's over the last two years or so. they have had missed -- mixed fortunes. for an idea of just how broad-based risk appetizing is, come with me into my bloomberg terminal. this is the goldman sachs basket. companies that are not making that much money. this was a risk on mode this tuesday. also, we want to focus in on bitcoin. bitcoin is interesting at the moment. it is hard to see where we go after that flash crash over the weekend. you see that really sharp decline on saturday. we as higher tort $51,000 per token on bitcoin and now the most bullish elements of the crypto space looking toward 55,000. some really important corporate stories on tuesday. these are some of the stocks on the move, starting with peloton, announcing a new boxing class products that was not much of a

knockout with investors, it was one of only 12 stocks down. apple is up 3.5%. a fresh record high: toward $3 trillion of market cap. that was after morgan stanley gave it an equal street hi. they say the market is already. -- pricing and future products like augmented reality and even in apple card. it is going to spin off the self-driving unit but also retained a significant state. interesting what that means for that company. >> we want to stick with that intel news. the company planted taking it self-driving car unit public by the middle of next year. the chipmaker will remain the majority on after the shares are listed. since then, the unit has been consistently growing faster than its parent. dan, how big do you think the spinoff could be?

>> i think the momentum in this particular space is tremendous. we see the valuations that have gone into some of these startups. rivian, over 100 billion. we are hearing numbers like 50 billion, i think it could be larger based on the amount of success and just the secular trend of automotive and the acceleration of semiconductors and the role they will play over the next decade or the advanced automotive technologies. >> how will this impact intel given that this has been such a strong performer? is there a catch? >> at think intel's plans move forward without any disruption. i actually asked that question of other equities and analysts. if you listen to their plans, their strategy, their next

generation packaging, the fact that they will main -- remain the georgia shareholder, i see this in line with them recently. just last week, honeywell spun off their business and they're looking to unlock and make quantum or investable. all of these cases, the assets were not providing much value in terms of these multiples. nvidia whose automotive business is relatively small, there was momentum in other areas, qualcomm is at 16, intel is at 13. the other ones don't make any money yet. these 13 forward earnings for intel, there is something interesting here.

>> how do you see mobileye competing with other electric car companies out there? who will the main competition be? >> the nice thing is the tesla's, the rivian's, those are complete automotive solutions. they have assets, it is not just the semiconductors. they shipped 100 million of their iq chips. they are already in many of the well-known automotive technologies. they are doing rubber taxi. there technologies can be adopted. competitions -- companies that are building their own. there is a huge market to address of legacy and

up-and-coming av and ev manufacturers that will be looking for the technology that is available today. as we move into level four and level five self-driving, that is something that they will be well prepared to deliver solutions on and this will get more attention and get investors the opportunity to go directly toward investing in that asset. we see the prices in the market is nothing institutions and retail are very interested in. >> it sounds like a massive deal or it could be. we will continue to follow it. thank you for joining us. elon musk is blasting president biden's tax and spending bill. he told the wall street journal article that the build back better package should be defeated. take a listen. >> the federal budget deficit is

insane. it is like $3 trillion. federal expenditures are 7 trillion. federal revenue is 4 trillion. i don't know if we should be adding to that loss. that seems pretty crazy. quite coming up, the future of smart electric cars. we will have and asus of interview with the president of china's company. that is coming up. this is bloomberg. ♪

>> 2021 has invasion competition in the ev industry as -- has seen crazy competition in the ev industry. is xpeng ready to take on the world? let's talk more with the president in an inclusive interview. tell us more about this new suv and what sets it apart from the competition. >> hi emily, good to be on the show. this will be our flagship product. it is a full-size suv. if you think about the size, it is close to x five or q seven. it will have our leading

architecture that supports expo 4.0 which is an upgrade of our current version. that will also enable mpg driving. we also have a very powerful electric powertrain that allows fast charging using an 800 volt platform. this will be a charge up to 200 kilometers. more important is that this product will have smart cabin features that is the first phase. your house, your office and car

will be the first phase. smart features will allow you to be more productive and it will be more enjoyable inside the vehicle. emily: if i, buyer, why should i buy your suv over a tesla? brian: when we unveil the product, it will be positioned in this category. it will cater to chinese consumer demand as well as user features with this and charging capability. it would be a strong product to the consumer market. i think we have planned to unveil that product in europe. i think this design coupled with wealth features will be a powerful package to compete with tesla products. emily: we have been closely

following this listing in the united states. -- didi's listing in the united states and other chinese listings. could this lead to a delisting for xpeng as well? brian: we have been watching these problems and the accounting issue. while this is still ongoing, the timetable means that it will be several years before a final decision will be made. there is still time for the two governments to work out something but in the meantime, we actually already completed a dual primary listing in hong kong. that means that xpeng can be trading in hong kong. for us, we actually have the preparation already done to prepare for any eventualities.

this is something we are following closely. there will be a definitive decision until a few years later. emily: given the additional scrutiny from the chinese government, how confident are you that you will move forward with your plans to expand into europe? i know that is next. brian: that has always been our strategy at the core and the direction for us. expanding in europe is natural because it is one of the most mature and attractive ev markets and i think chinese products, if you look at smart phones, they have been welcome in european markets. we are copied with our leading technology as well as beautiful design. i think for the chinese government, i think they are supporting chinese companies to go abroad and go global.

there will be support from china as well as the consumers. emily: will that expand to the united states as well given the additional scrutiny coming from the chinese government? brian: i think the u.s. market will be a large one but it is one of the more difficult ones to tackle. we have to be fully prepared before we make that decision. if you look at the auto company's that have made the effort to go into the u.s., it took decades to make that happen. we will do that very lightly. emily: all right, thank you, brian. amazon packages piling up after an aws shortage wreak havoc on the e-commerce giant pause delivery operation. we are live in seattle with the latest. as we go to break, i want to take a look at stitch fix. shares falling after the second

quarter net revenue that mr. the analyst estimates. we will continue to keep our eye on this. this is bloomberg. ♪

emily: bloomberg news says it will continue to do all he can to help our colleague one year after she was detained in china. john micklethwait says 12 months of detention is a long time for anyone to endure and that the company remains very worried about her well-being. chinese authorities has said that fan was detained on national security law violations and that her interests are fully guaranteed.

the information is reporting that apple ceo tim cook signed an agreement with chinese officials, promising that apple would play a role in developing the country's economy and technology through investments, business deals and worker training. the five-year deal set to be signed in 2016 was worth over $275 billion. i am joined by bloomberg news. how significant is this? >> this is significant. it is a multiyear, multibillion dollar deal that apple did not disclose. particularly when you see a deal of this magnitude. they certainly did that for $700 billion deals in the united states. this is china. they knew this would be scrutinized if it was publicized but this is similar to what they do in the u.s. and other countries in terms of local investment deals. emily: in the meantime, the nikkei is reporting that apple

has scaled back production plans of the iphone and also we accelerated some of those production plans over the next few months. what are you taking away from this new information? >> something interesting is going on. those rebate deals that launched alongside the iphone 13 were very impressive. you could upgrade from an iphone 12 to an iphone 13 at no charge. those retail deals have faded away. that is going to bring in fewer customers than it did at the top. the 13 is not that big of an upgrade from the 11 and 12. that is the reason. we have probably seen a lot of the early adopters pick up those iphone purchases. they will probably see some sale increases into the next year. the nikkei does seem to agree with us about a

lower-than-expected unit count through the course of 2021. part of that is demanded part of that is supply. emily: i want to get your thoughts on this other one that the doj is focused on. apple's treatment of roadblocks. we know that this give roadblocks special treatment. roadblocks subsequently changed the name of its offerings from games to experiences. what is your take on this? >> this is an app that offers a multitude of different types of games and environments. this helps them circumvent some of the rules that apple has on games. we are here waiting for an announcement from the ninth circuit in california about whether or not apple will be granted a stay on these app store changes that the judge bold they must put into place by

december 9. that is a few days from now. we still don't have a final answer about whether apple will have to go through those changes or not. we will let you know as soon as we have an answer about whether apple hast those changes in or if they have a short-term stay on this. emily: thank you as always for giving us those updates, mark. and amazon web service outage is wreaking havoc on the delivery operations, preventing drivers from getting routes or packages and shutting down communications between amazon and the thousands of drivers it relies on. spencer, does this mean i will not get my christmas presents on time? spencer: they should have some time to recover but this is definitely a big impact on amazon. a lot of drivers that were already dispatched by this time,

it happened in the late morning east coast time. they were able to continue and put their phones into airplane mode and not logged off any means because they would not be able to log back in. a lot of drivers had not been sent out yet. they were sitting around, waiting for direction and not sure what to do. similar to amazon's flex app. they simply could not log in and get assignments. there will be a lot of packages backing up. if it lasts, this could be a big problem. emily: what is amazon saying about this? spencer: not a lot. they have been posting things on this aws help dashboard. they said they don't have any kind of vta about when they will be fully recovered. they did some mitigation measures and things like that

but even when they get to the bottom of the problem and fix it, these things can linger for hours. they are not out of the woods yet. emily: what do we think is the root of the problem? spencer: i don't know. we usually get a postmortem from amazon later. generally, these things are learning opportunities. amazon should be transparent to have the whole industry avoid a similar problem down the line. emily: we will see if they can get it together before the holidays. thank you so much for joining us . coming up, changes are coming to instagram. the platform announcing new parental controls and encouraging users to take a break from the app from time to time. the statement coming one day out before the appearance before a subcommittee.

the head of instagram will be testifying. here is a portion of our interview from just a few months ago. what he had to say about having kids on the platform. take a listen. this is bloomberg. >> i want to recognize that it is important for any organization to do what he can to protect -- do what they can to protect children. ♪

mom, hurry! our show's gonna start soon! i promised i wouldn't miss the show and mommy always keeps her promises. oh, no! seriously? hmm! it's not the same if she's not here. oh. -what the. oh my goodness! i don't suppose you can sing, can you? ♪ the snow's comin' down ♪ -mommy? ♪ i'm watching it fall ♪ watch the full story at www.xfinity.com/sing2

♪ emily: welcome back to bloomberg technology. i am emily chang it seems everything that. again --that is old is new again. ed: we are off the back of two successive weeks of decline in the nasdaq. we have a fed meeting next week and outlook for tightening and rate rises has not changed.

take a look at this chart. there is deja vu here. see the white circle? that is the last three weeks of 2018 where the fed had its tightening cycle. rates rose and the nasdaq 100 sold off in a big way. we ended 2018 in negative territory on the nasdaq 100 for the first time since the year ending the 41st december, 2008. there are voices and the market that we should be careful. what we see around tech stocks that stretch valuations is similar to what we have seen in 2018. i have either my hat because we had a great day. on the nasdaq. 100. this is crowd strike and zoom, companies trading at crazy multiples. crowd strike had 200 times over 12 month earnings, 22 times for zune. interesting to see apple get its

price target upgrade from morgan stanley and one of the things they said, you might see a blight to quality and the change of sentiment in the market because apple trades 22 times future earnings, pretty reasonable. that is a reasonably priced stock so you could cheat -- see shifting in the market because the fed has a save in the things going on in the world. emily: thank you. instagram encourages users to take a break if they spend a lot of time looking at a particular topic, one day before the head of the app is scheduled to testify before a u.s. senate subcommittee looking into the effects of social. media on kids. . naomi and david with us now. i will start with naomi. one of the changes instagram is making to address these concerns about teen safety? naomi: one thing is important to

mention. this is an opt in feature. starting now, for all users, instagram will give you the option to receive a reminder and a nudge when you spend 10 to 30 minutes on the app itself and remind you that there are other things to do, take a walk and deep breaths. they're going to give you a nudge if you spend a lot of time looking at one particular topic, diet related content or even what has been happening in fashion week. the third category they announced is around teen safety. this is giving the option to teens to let their parents in on seeing how much time they spend on the app and give their parents the freedom to set those limits. these are of a robust set of features but they are up in. it will not apply to everyone.

emily: looking at the reviews so far, you have to choose as a user to turn this feature on and it has to be one, continuous session or you will not get these nudges. do you applaud this move? is it too little too late or not enough? david: anyone who uses instagram nodes you can stare at your phone and suddenly use -- lose 45 minutes or longer. they are considering 20 minutes along session, which i found interesting in naomi's article. it is impossible to fault them. are they truly significant? probably not, because my suspicion is not that many people will opt in to use them, particularly teenagers and those that do very likely will ignore the nudges. to me, it is more significant the timing before a serious testimony tomorrow. emily: what will lawmakers press

tomorrow? what do you expect the line of questioning will be? naomi: i expect to hear some skepticism. we have heard it from lawmakers over the changes announced today, saying the company is not going far enough to protect teens on its platform. i would expect to hear questions around facebook's decision to pause its plan to build an app specifically for preteens. they said they were pausing at but did not say they would abandon it altogether permanently. you might hear lawmakers ask adam to commit to doing something like that. we should probably also hear questions around some of the documents that were surfaced, you know, by a whistleblower not too long ago around the company's handling of teens and particularly how the platform affects their mental health. we obviously saw some revelations about instagram, you

know, hurting body image and confidence, particularly for vulnerable teenagers. those are a lot of pressure points facing adam as he heads into its first congressional hearing. emily: i am curious what kinds of moves you think instagram should make. if they are nudging teenagers toward other topics like travel or architecture, is that a good thing? do we want instagram to be making those kinds of choices for our children as well? what will pass the bar? david: i think to nudge people regardless of age toward more variety is a healthy thing. the kinds of changes that more and more people are looking for from instagram and facebook and even youtube and other social media is algorithmic transparency. i think he is going to be resistant to that sort of thing.

he will sound better typically than zuckerberg sounds i think and will come off as less defensive because he is a savvy and emotionally intelligent person more than zuckerberg. i doubt he will offer anything fundamentally useful to legislators and unfortunately, i think algorithmic legislation makes sense but it is not imminent and i don't know whether this hearing will do much beyond setting off a lot of sparks and going back over those same studies that facebook supposedly concealed about teens self image naomi mentioned. emily: there is a question of whether instagram should be the sole focus. executives from other companies have testified tiktok and youtube but is the scrutiny that instagram is getting unfair, given you ask any parent and

some other kids are beyond instagram? you know, it is for older users. they are on snap or tiktok. david: i don't think it is unfair. anything they are asked to talk about i think is fair following the facebook revelations and they have been concealing a lot of what they knew. there is a little elemental unfairness here and that the study that got so much attention about facebook studying teenagers who self-reported they felt worse about themselves, that was a very small study. it was not terribly scientific and they may be got more than their share of criticism for that. the reality is there are plenty of good reasons to call these people up for questioning and to really insist that they bear more responsibility for a wide range of factors. instagram is very closely

related to facebook. many of the same questions apply to all of them. emily: we will watch with testimony tomorrow and naomi, your reporting on it. naomi makes, david kirkpatrick, thank you both. emily: peloton is adding a boxing program. the training classes can be delivered by the app or the bike and treadmill touchscreen. it is struggling with sales low after the pandemic eases but many of its existing customers have been doing fewer workouts. coming up, the state of cybersecurity. we will talk about the latest survey on cybersecurity in 2021 and his outlook for 2022. that is next. this is bloomberg. ♪

♪ emily: google is suing to russian nationals for an organized crime scheme. a criminal enterprise has infiltrated one million computers around the world it alleges. it says it has created a botnet to seal users. cybersecurity has been a growing concern for the biden administration. cyberattacks multiply including from countries like russia and china. microsoft says they see control of several websites used by us chinese government backed hacking group to target organizations in 29 countries including the u.s. we will dive into this with george herz. what do you make of this news for microsoft that they

disrupted the chinese hack or network of hacks? george: whenever security. together and disrupt the atmosphere, that is a good thing. china has been active in this area. if we can make it more expensive to disrupt them because we take advantage of dismantling infrastructure, that is a good thing for the security industry and for consumers and businesses alike. emily: you have a new survey on the sire overt security landscape. a major trend --what are the major trends in what is happening for us in 2022? george: a big part of it was asking i.t. decision-makers about their current technologies and wag her -- whether legacy technologies will protect them. they are losing trust in their security vendors like microsoft, 63% say. we see the attacks so sophisticated that existing signature-based solutions and legacy technology cannot keep up.

we have seen interesting stats around ransomware. ransomware actually growing, almost doubling. 63% increased from 1.8 million. to top it off, even one customers -- corporations are paying these ransoms, they actually are getting double extorted. instead of getting your data back, forgetting extorted so your data does not get dumped to the internet. emily: you do make a comment about microsoft, saying users are losing trust in the company. microsoft itself has been the victim of cyberattacks. what is your response to that? george: i think we are just presenting the facts. we can come up with the math on this and when you talk to customers out there and you know

, the feedback is they are being attacked. these technologies are not being able to prevent them. one of the biggest areas is customers fatigued with constantly passing all the latest affordability. the bad guys are taking advantage of that. i simply hope microsoft is able to address some of their issues. we want the best security for the entire landscape, but at the end of the day, it is a big problem in that a lot of the software they had is causing issues and their technologies are not able to keep up with those impacts. emily: you're saying microsoft software is causing the issues. what evidence do you have? george: if you look at the zero day attacks, they are against microsoft. a multitude of attacks against exchange service as an example. if you take an example on their authentication mechanisms, credentials are used to get into companies and move laterally, part of the microsoft ecosystem.

they're trying to address that but at the end of the day, that means vulnerabilities are relentless and it is fatiguing customers. to top it off, you have microsoft saying let's use our technology to prevent vulnerabilities we have created in the first place. emily: there have not been as many high profile ransomware attacks in the second half of the year as we saw in the first half. do you see the volume or severity of attacks declining and if so what do you think the next big threat will be? george: ransomware is going to continue. there is too much money to be made and too little risk. it is so easy to do it. i was asked about this recently. wise it's so easy? -- why is it so easy? it is an --it is very easy to do with a lot of money and revenue share.

supply chain attacks are cause for concern for many organizations and we see large supply chain attacks last year. those are things to keep on the radar and certainly, the landscape for threats, i wish it would go down but it continues to get worse every year unfortunately. emily: crowd strike ceo george kurtz. we will see what happens next year. coming up, we will look at the people putting their lives at risk to keep supply chains running. our special report from malaysia, coming up next. let's take a look at the vaccine makers. researchers in south africa say pfizer provides less immunity than the omicron variant than other major variants of covid-19. however, they say a booster could provide additional protection. this is bloomberg. ♪

♪ emily: the global chip crunch continues to pressure companies relying on semi conductors to build devices for consumers but we rarely hear about how it affects those who make the chips, not the chipmakers but the workers at these companies, especially those in poor countries. praying the story of how the pressure to aegis the sordid -- ease the shortage devastated a malaysian family. ♪ >> [indiscernible] ♪ correspondent: nancy knew

something was wrong when her husband woke with a warning. >> [speaking foreign language] correspondent: her husband was quarantined in the hospital. weeks later, he was gone. >> [indiscernible] ♪

♪ reporter: he was a technician at a facility in new orleans for microelectronics. it supplies to apple, tesla, and auto consumer companies. nancy believes her husband was infected. to house ministry confirmed the existence of a cluster link the facility july 9, four days before he tested positive for covid. politicians blame st micro for the deaths of a dozen workers in june and july. >> [speaking foreign language]

♪ reporter: the delta variant ravaged the country then. most of malaysia was locked down but authorities granted ex chipmakers to try to balance the health and economic risks. >> we are not out of the chip shortage. it is a demand storm. >> we have a shortage. >> we need more capacity. reporter: the world faced a shortage, disrupting production of everything from iphones and f-150 pickups to nike sneakers. st micro faced extra pressure from politicians over shortages shutting down factories. the malaysia semi conductor industry association argued it had to do with parts. st micro declined the request for an interview. a spokesman said the company supports the families who passed away two -- due to covid 19 with

a financial package including a number of things that are standard across the company globally and measures like taking into account the situation of our employees. support for the education of the children of those families affected notably. nancy says it is too little, too late. nancy: [indiscernible] reporter: nancy says there are others like her who kept quiet, but she is speaking out for her children. nancy: [indiscernible] ♪ emily: bloombergquint take with that report from malaysia.

that does it for this edition of "bloomberg technology". we have another great show lined up tomorrow with the founder and ceo of the realreal, and the chamber of progress, talking about a testimony ahead of instagram on capitol hill. i am emily chang in san francisco. this is bloomberg. ♪

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>> i am haidi stroud-watts in sydney, counting down to asia's major market opens. shery: asian stocks set for gains after tech leads wall street to its biggest rally in nine months. haid: omicron optimism is lifting sentimen