>> 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. intel revved up plans to speed up its self driving car business. they could generate billions for the lagging chipmaker. is there a catch? we will discuss. instagram response to the outcry

over team safety, offering new tools to limit screen time and nudge users to healthier topics, this day before the head of instagram is excited to be grilled by lawmakers on capitol hill. microsoft has seized multiple websites that it 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. staging the biggest rally since march with major averages surging nearly 2% on optimism that the omicron variant want -- will not derail global growth. ed ludlow is here with more. ed: tech is at the heart of that. the nasdaq 100 jumping up 3%. it was pretty broad-based, we saw semiconductors get in on the act. philadelphia semiconductor up almost 5%. 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 mixed fortunes. for an idea of just how broad-based risk appetite is, come with me into my bloomberg terminal. this is the goldman sachs basket. companies that are not making that much money. even the index jumped by the most since april, 2020 and what 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 have edged higher towards $51,000 per token on bitcoin and now the most bullish elements of the crypto space looking toward 55,000. hard to know where we go from that point. a 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, heading toward $3 trillion of market cap. that was after morgan stanley gave it an equal street value higher. they say the market is already pricing future products like augmented reality and even in apple card. it is going to spin off the self-driving unit but also retain a significant stake. interesting what that means for that company. emily: i 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 owner after the shares are listed. they bought back the unit, and since then it has consistently grown 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 that do not have revenue. rivian, over 100 billion. intel in its entirety is that 213 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 for the advanced automotive technologies. emily: how will this impact intel given that this has been such a strong performer? is there a catch? >> i think intel's plans move forward without any disruption. i actually asked that question of other equities and analysts. they asked similar questions. if you listen to their plans,

their 2.0 strategy, their next generation packaging, the fact that they were a main majority shareholder, i see this in line with them recently. just last week, honeywell spun off their quantum computing business, and they are looking to unlock and make quantum or -- more investable. all of these cases, the assets were not providing much value in terms of these multiples. i was looking forward at the 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 value to be unlocked. emily: how do you see mobileye

competing with other electric car companies out there? who will the main competition be? dan: the nice thing is the teslas, the rivians, those are complete automotive solutions. they have assets, it is not just the semiconductors. by 2030 could make 20% of the billable materials for a vehicle. they shipped 100 million of their iq chips. they are already in many of the well-known automotive technologies. they are doing robo taxi. there technologies can be adopted. competition from qualcomm, nvidia, tesla that are building their own, but 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 full 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 something investors, both institutional and retail, are very interested in. emily: 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. the tesla ceo told the wall street journal article that the build back better package should be defeated. it would add to the budget deficit, that is even if tesla would benefit from the bill. take a listen. >> the federal budget deficit is

insane. it is like $3 trillion. federal expenditures are $7 trillion. federal revenue is $4 trillion. that is a $3 trillion dollar loss. i don't know if we should be adding to that loss. that seems pretty crazy. emily: coming up, the future of smart electric cars. we will have an exclusive interview with the president of china's company. about its ev technology and its plans to grow globally, as well as the supply chain crunch. that is coming up. this is bloomberg. ♪ emily: 2021 has seen raging

competition in the ev industry. a new suv designed from the ground up. are they 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. g9 is our fourth product and will be our flagship product in the suv segment. it is a full-size suv. if you think about the size, it is close to x5 or q7.

it is packed with technology. it will have our leading architecture that supports expo -- x-pilot 4.0 which is an upgrade of our current version. that will also enable mpg driving. most scenarios you will be able to join the features. we also have a very powerful electric powertrain that allows fast charging using an 800 volt platform. we target to have this in a vehicle charge up to 200 kilometers in less than five minutes. it will be a fast charging capability. more importantly is that this product will be packed with user-friendly 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. we are very excited about the product. emily: if i am a buyer, why should i buy your suv over a tesla? brian: when we unveil the product, it will be positioned in the premium category. in that category in the china market we believe it will be the best product, and it will cater to chinese consumer demand as well as user features with this and charging capability. it will 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 didi's delisting in

the united states and other chinese listings. how is this impacting you, and could it lead to a delisting for xpeng as well? brian: we have been watching this process, 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 completed a dual primary listing in hong kong. that means that xpeng can be traded independently 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 is no 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: international strategy is the core strategic decision and 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, has been welcome in european markets. we are confident with our leading technology appeal as well as beautiful design that we can attract customers there. i think for the chinese government, i think they are supporting chinese companies to go abroad and go global. we are confident we will get the right 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? do you have plans to do that? 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 companies that have made the effort to go into the u.s., it took decades to make that happen. we do not want to do that very lightly. emily: all right, thank you, brian. coming up, amazon packages piling up after an aws shortage wreaks havoc on the e-commerce giant's 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 missed 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 it can to help our colleague one year after she was detained in china. bloomberg's editor-in-chief, 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 said that fan was detained on national security law violations and that her interests are fully guaranteed.

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. reporter who covers apple for us. how significant is this? >> this is significant. it is a multiyear, multibillion dollar deal that apple did not disclose. typically when you see a deal of this magnitude, apple likes to disclose it and have pr for it. 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. -- very aggressive. you could upgrade from an iphone 12 to an iphone 13 at no charge. those rebate deals have faded away. they still exist but come in at lesser amounts and less savings. 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 deceleration in production and a

lower-than-expected unit count through the course of 2021. part of that is demanded part of that is supply. emily: there are multiple apple stories going on today. i want to get your thoughts on this other one that the doj is focused on. apple's treatment of roadblocks. epic claimed apple gave roblox special treatment, and roblox 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 company has positioned those experiences, instead of games, 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 ruled 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 -- whether apple has to put those changes in or if they have a short-term stay on this. emily: thank you as always for giving us those updates, mark. an 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 time to recover but this is definitely a big impact on amazon. basically, a lot of drivers that were already dispatched by this time, it happened in the late morning east coast time.

some drivers were already on their routes. they were able to continue and put their phones into airplane mode and not log 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. that is like uber where people make amazon deliveries in their own vehicles. they simply could not log in and get assignments. there will be a lot of packages backing up. if they get it resolved, they can dig out tomorrow, but 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 their aws help dashboard. the most meaningful thing they have said is that they don't have any kind of eta 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. that is a great question. we usually get a postmortem from amazon a few days later. generally, these things are learning opportunities. amazon should be transparent to help 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 from its appearance before a u.s. senate subcommittee looking into instagram's impact on children.

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 they can to protect people and particularly children. ♪

emily: welcome back to "bloomberg technology." i am emily chang. let's get back to the markets. it seems everything that is old is new again. ed: apple heading for a 3 trillion market cap. we are off the back of two successive weeks of decline in the nasdaq. even though the market is feeling good about the omicron variant, 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 31st 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. we had a great day. on the nasdaq. 100. you do see selling pressure. 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 flight to quality in this change of sentiment in the market because apple trades 22 times future earnings, pretty reasonable. that is a reasonably priced stock, so the point is you could see shifting in the market because the federal reserve does have a say, and there is an important meeting next week. emily: thank you. instagram encourages users to take a break if they spend a lot of time looking at a particular topic. this is 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. what are the actual changes that 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, say 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 a robust set of features but they are up in. -- they are opt 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. david, do you applaud this move? is it too little too late or not enough? david: anyone who uses instagram knows you can stare at your phone and suddenly lose 45 minutes or longer. they are considering 20 minutes a long 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 are lawmakers going

to press them on 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. facebook said they were pausing it 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

self confidence, particularly for vulnerable teenagers. those are a lot of pressure points facing adam as he heads into his first congressional hearing. emily: david, 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 would pass the bar? david: i think to nudge people regardless of age toward more variety and what they are consuming is probably 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 do not think -- i think he is going to be

resistant to that sort of thing. he will sound better typically than zuckerberg sounds. he 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, while 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 and their self image naomi mentioned. emily: there is a question of whether instagram should be the sole focus. executives from other companies have testified, snap, 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 is fair following the facebook revelations and they have been concealing a lot of what they knew. there is a little elemental -- there is a little element of unfairness here and that the study that got so much attention about facebook studying teenagers who self-reported they felt worse about themselves, the more they used the service. 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 the testimony tomorrow and naomi, your reporting on it. naomi makes, david kirkpatrick, thank you both. 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 -- a sales slow down after the pandemic eases but many of its existing customers see if boxing helps. 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 two russian nationals for an organized crime scheme. a criminal enterprise has infiltrated one million computers and devices around the world. google says it has created a botnet to steal 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 -- used by a chinese government backed hacking group to target organizations in 29 countries including the u.s. i want to take a deeper 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 folks can come together to 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 cybersecurity landscape. what are the major trends, the major threats, and what is happening for us in 2022? george: a big part of it was asking i.t. decision-makers about their current technologies and whether legacy technologies will protect them. they are losing trust in their current security vendors like microsoft and others. we have seen 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% increase, fe million up to 1.8 million. to top it off, even one 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. microsoft called your research self-serving. what is your response to that? george: i think we are just presenting the facts. we did not 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 vulnerabilities which 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 have is causing issues and their technologies are not able to keep up with defending those attacks. 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 servers as an example. if you take an example on their authentication mechanisms, credential theft is often used to get into companies and move laterally, and these are all part of the microsoft ecosystem.

they're trying to address that but 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 against the 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. why is it so easy? the adversaries have evolved. ransomware is a service model. they are making a lot of money. they have a revenue share and it is easy to do. 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. and, 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 that rely on semiconductors 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. bloomberg quicktake brings us the story on how the pressure to ease the semiconductor shortage devastated malaysian family. one>> i'm alone here. [indiscernible] ♪ >> nancy knew

something was wrong when her husband woke up with a fever one july morning. >> [speaking foreign language] her husband was quarantined in the hospital. a couple of weeks later, he was gone. >> [indiscernible] ♪

>> [speaking foreign language] ♪ >> he was a chief technician. the french supplier supplies to apple, tesla, and auto consumer companies. nancy believes her husband was infected. the health 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]

>> the delta variant was ravaging the country then. most of malaysia was locked down but authorities granted exemptions to chipmakers to try to balanh and economic risks. >> where are we in the chip shortage now? >> we are not out of it. >> we have a shortage. >> we need more capacity. >> 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 semiconductor industry association argued it had to do with parts. st micro declined the request for an interview. a spokesman said the company it is supporting the families of our colleagues who passed away due to covid 19 with a comprehensive financial

package which includes 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] >> nancy says there are others like her who kept quiet, but she is speaking out for her children. >> [speaking foreign language] emily: bloomberg quicktake with

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

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