announcer: from the heart of where innovation, money and power collide, in silicon valley and beyond, this is bloomberg technology with emily chang. ♪ emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, a breakout year for crypto. that is how the coinbase coo described 2021. but is a crypto winter ahead?

plus, she's been a key exec at google and show me. -- and xiaomi. now who go barrel once you to test for covid in your new home. we talk about his new pcr quality home test. misinformation has made its way to the metaverse. could virtual worlds be harder to police than social media? first, a big day for news from the fed. ed: final fed meeting of the year. the stage is set for 2022, the meeting signaling three quarter-point hikes in 2022. the fed will double the pace of its tapering to $30 billion a month. the gap between the end of tapering and left off seems much narrower than a few months ago. this is a hawkish fed. bring up the market on the board. you can see green on the screen. equity markets took a few

moments to find their feet following the fed meeting. broadly a relief rally across u.s. equities. a lot of that in technology stocks interesting to get our heads around, the outlook for higher rates. the nasdaq 100 up 2.4%. some of those mega camps doing well. -- caps doing well. the philadelphia semi conductor index more than 3.5%. there were some specific names. a lot of the messaging around the fed was, yes, we will fight inflation, but the economy is strong. that seemed to give equity investors confidence. nvidia, microsoft, meg cap tech stocks that were negative when the fed announced its rate policy jumping. we have breaking news after the market closed. apple's return to office policy is "yet to be determined." this has been the theme in silicon valley, when do we get

people back into offices? i want to think about that jump and bring up nvidia. this is the drama of wednesday afternoon. i love the federal reserve in the meetings. we were negative just after the decision hit, yet by the close of wednesday we are up 7.5%. this is a bullish market in response to a hawkish fed. emily: ed, thanks so much. apple had set the date to return to work for february 1. now they are saying it is yet to be determined. the world of crypto paying attention to today's fed meeting. a jump in bitcoin after news of a coming rate hike. i spoke earlier with the coinbase president and coo about the crypto roller coaster and whether we are riding into a crypto winter. >> we do not make any predictions about winters or summers. what i will tell you is anybody who disproportionately benefits

from crypto tens -- tends to r ide it out throughout the ups and downs. it is not for the faint of heart. the thing with the winters is the o.g.'s in the space love the winters. the reason why is the fakers get out of the space, the builders can focus without all the crazy hype. emily: the fakers, ouch. [laughter] emilie: in whatever the next winter is, there will be companies that talk a big game about crypto, but then pull out. that is great, because it means the mission oriented builders will stick with it and get disproportionate value as crypto grows. for coinbase, we took advantage of these downturns to buy the foundation for our prime brokerage. we bought the foundation for us to be the largest crypto custodian in the world. we tend to double down during

those times when everyone else is fearful. emily: talk to us about how crypto winters work. a lot of new investors are here, a flood of new investors. they get scared and go away. how would you describe the cycle? emilie: i would describe it as basically every cycle of crypto there has been a new high, then there is al ow. -- is a low. there is a higher trough. on a short-term basis, it looks like it is crazy, then if you look at the long-term, it smooths out and creates this higher peak every time. it's just one of those things where you have to truly believe in the idea of a long-term. if you stick through it, it is great. emily: last week your cfo said on capitol hill that coinbase

now stores about 12% of the world's crypto assets. that is huge. how much bigger can coinbase become? emilie: i think we can become bigger and bigger. i think we have opportunities on multiple fronts to become bigger. the 12% is representative of the trust we have. this goes to the sabo acquisition i was mentioning. we bought that because that was a unique asset. doubling down on the store of crypto that this custodian had accumulated over time. that helped us build coinbase custody. that 12% number builds on -- emily: it seems like there is not brought agreement how crypto should be regulated. what was your take away from the hearing? emilie: i was optimistic.

if you hear the tone, it was a lmost this acknowledgment that the u.s. is behind the times in terms of approving a bitcoin etf, in terms of the innovation starting to go offshore. i felt like it was this of knowledge meant that we need to make sure innovation happens in the united states. with any of these new technologies that are not fully understood, you will have dissident voices, you will have people who don't understand it. what made me really happy was these lawmakers wanted to learn more and embrace it. emily: what can and should regulations look like/ emilie: we just want one regulator. we don't want a new regulator, per se, but one regulator so we can have much more clarity about the whole cradle-to-grave activities that one uses with crypto. that is what we are asking for. right now, there is not clarity.

we have more than 50 regulators alone in the u.s.. we can navigate that, but for the crypto ecosystem to thrive, we need to have fair rules and transparency and clarity. emily: there were pricing glitches on coinbase yesterday that showed astronomical prices for a time. some users thought they hit the jackpot. emilie: we are dependent upon another provider for data. there was a glitch. it did not cause anything than the superficial thing you saw with the pricing. it is honestly one of the things that is indicative of an emerging industry. we are still building out infrastructure to make sure this scales in the right way. when we have providers that have those glitches, we will be impacted. emily: these coaches and outages happen frequently. what safeguards do you have to prevent them? what kind of infrastructure do

you imagine building over the long-term? emilie: crypto is always on. we have never seen the type of technology scaling we would need to do for this given the number of users and requests per second that we get. we have these new milestones every week. this was an audacious goal not long ago, just flew through that. we embrace the challenge. we are invested in making sure our infrastructure scales faster and creates more reliability. as we grow and are building out the infrastructure team, i think the big thing for us is making sure we communicate clearly with customers about what is happening so they are not surprised. emily: what do you say to customers who wonder, is my money safe in crypto? emilie: this is the bedrock of the company, security, safety,

ease of use. we never had a hack on the system. we doubled down on security every year. we are always on top of every emerging technology that exists in the security space. i feel confident about where we are on that. emily: how do you deliver crypto if there is no internet? half the world is still not connected. how do we get more people of color, more women into crypto? emilie: in a world where you have a mobile phone, you basically have the equivalent of a bank in your pocket now. we want to make things like crypto available to people who have been historically underserved. crypto sees no color, no gender. if you want to get into the crypto economy, you basically just have to hustle and get involved.

i think that is the coolest part. emily: you can catch more of my interview with coinbase's emilie choi, including her thoughts on the metaverse and much more on bloomberg.com. a pivotal day in the fraud trial of theranos founder elizabeth holmes. we are nearly 100 days since the trial began. closing arguments are set to begin thursday and will last until friday, when the jury takes the case. the 37-year-old holmes faces up to 20 years in prison if convicted on charges she deceived investors about theranos' patient testing capabilities. a new pcr quality covid test from the comfort of your home. we speak exclusively with the diagnostics company that wants to make home testing as acceptable as smartphones. this is bloomberg. ♪

emily: these are live pictures where a funeral bell is ringing 800 times in honor of the 800,000 americans who have died so far from covid-19. as the pandemic continues to grip the world and the omicron variant is spreading, more measures are needed to slow the spread. the consumer health care diagnostics company detect is reasoning a new at home covid test with pcr quality. once an executive at google, he joins me now. you launched this test today. talk to us about the first day of sales and the reaction so far

. hugo: we have been live on our e-commerce shop, selling the covid-19 test, which is the most affordable pcr quality test in the market today. we are selling it for $49. it gives you essentially the equivalent of a pcr lab test in one hour at home. we just started selling today. we do have quite a bit of inventory, so we don't expect to sell out or anything. it's coming at a time of urgent need. you just highlighted it in your opening remarks. we hit an incredibly sad mark of 800,000 deaths in the u.s. alone, heading into a essentially scary mark of one million deaths. sadly, i think we may be headed into a perfect storm in this

holiday season with the omicron variant approaching. dr. fauci said this week the likelihood of breakthrough infections is three times higher with omicron than with the delta variant. people will be traveling. we are concerned and trying to participate in providing solutions to people during the pandemic so folks can gather and travel with more peace of mind. emily: a lot of companies, schools, airports, they want a pcr result. you say this is pcr quality, but doesn't it have to be done in a lab? hugo: it is a molecular test. most places require a molecular test. canada, the u.k., most european

countries require a molecular test. we are a molecular test which is pcr-like in its quality. we look for the genetic material of the virus in that sample and we amplify that many times so we can detect its presence much earlier than you would with what is called an antigen test, the commonly known rapid tests on the market. with a pcr-quality test like ours, th we are at least 50% more sensitive -- we are at least 50% more sensitive than antigen tests. we can detect the virus much earlier. that is why these airports say we need a molecular test, of which pcr is one type. we are another type that offers

the same accuracy. emily: you had high-level jobs at facebook, google, almost exclusively focused on mobile phones. you say you want at home testing to be as accessible as smartphones. why use that comparison? hugo: it's what i truly believe in. i think the next major wave in consumer innovation is going to point us to health care. i would have probably said the same thing with a medium level of confidence two years ago. what happened in this pandemic was a dramatic acceleration toward everything we were going to do already. we have seen telehealth taking off tremendously. regulatory approval for telehealth consultations have now happened pretty much all over the world. we made from and progress in delivery of drugs.

what we have not done is that thing in the middle where you just need an answer, you need to understand what is happening in your body before your provider can make a decision on one treatment. that is the gap we are trying to focus on here. can we help dramatically accelerate what is known as diagnostics? we are starting with infectious disease detection, which is a critical area where there is such a tremendous information gap. the lack of information solutions, you want to know, do i have this virus or not? i am -- am i at risk of transmitting it to a loved one or not? this is what we think the diagnostics world needs to address. emily: speaking of information, you led oculus's vr division. i am sure you are following

facebook's pivot to the metaverse. my colleagues posted on vaccine misinformation making it to a virtual conference in lisbon. do you think misinformation will be harder to police in the metaverse than it is on social media? hugo: i read about this incident, but i did not watch, so i don't know specifics about it. i might have a bit of a different point of view as it relates to metaverse. i think the technology industry should take a big step back. first, in how we even talk about metaverse. we talk about it being this dark future in 10 or 20 years where somehow people will be stuck in their homes, perhaps with a vr headset on in some virtual world in a game like

environment. while this may happen, where a small segment of the population, essentially the gamer types, wha t most people will experience that they will call metaverse is completely different. it is the idea of overlaying virtual things onto your physical world. the fact that you will be able to walk around the world and see augmented enriched worlds and be able to socialize and have fun because you have virtual objects with the. you are wearing augmented reality glasses. that is a much more positive outlook for the future. that to me is a more promising vision for the metaverse. i would refrain it to begin with. when we do get there, there will be problems we have to solve. there will be new privacy

frameworks we will have to adopt. the important thing to understand is this is 10 or 20 years away. we have time. we have awareness, meaning we know this stuff could be a problem, so let's get to work on it. let's do it with a positive outlook for the future, not this darker vision that somehow we ended up painting over the last few months. emily: we have to leave it there, but conversations to continue in the future. ceo of detect, hugo barra. companies scrambling -- that is next. this is bloomberg. ♪

emily: while the computing world

is struggling to contain a major vulnerability, a very common piece of open source code, this leaves hundreds of millions of systems vulnerable to attack, with the head of the u.s. government cybersecurity agency calling it one of the biggest threats she has seen in her career. let's get more. why is this one so scary? >> the log4j vulnerability is like pandora's box. everything is insecure because so many things uses open source library and it is so easy to exploit if you are a hacker looking to take advantage of it. we are seeing exactly that. there are all sorts of hackers trying to use this simple vulnerability to get into all types of systems. we have not seen any major hacks yet, but the possibilities are endless. getting it fixed will take months, if not years. emily: but what are the biggest fears that there would be major hacks coming from nationstates

or particularly pernicious groups? william: one of the most and credible things about the tech is you don't have to be a skilled nationstate hacker to do this. this is as simple as it gets. that is why so many people are freaked out. the real question is, can people patch their systems and find all the instances in their environment where they use log4j and patch it before it is exploited? emily: will, thank you so much for that update. certainly a vulnerability we will follow. we will have much more coming up after this quick break. what 2022 holes for startups, vc's, and valuations. we speak with a benchmark partner about his outlook and the impact the fed might have on his investing decisions. that is next. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." let's get back to the markets with ed ludlow. ed: let's stay with the fed. three rate hikes in 2022, doubling the pace of tapering to $30 billion a month, finishing that program sooner than we expected. it was interesting to follow cryptocurrencies. we have been talking about what bitcoin is. is it an inflation hedge? is it an asset haven?

bitcoin behaved very much like a risk asset. this was around the time of the fed decision, 2:00 p.m. eastern time. we are up beyond $48,000. earlier in the session we were down near $47,000. it is moving in correlation with those stocks. it is a big question, one that was asked to the fed chair about the risks from cryptocurrencies. take a listen. chair powell: the concerns are not so much current financial stability concerns. i of course would support the views expressed in the presidents'working group -- the president's working group reports on stable coins. they can be inefficient consumer serving part of the financial system if they are properly regulated. right now they aren't. ed: two separate things, the interaction of cryptocurrencies with monetary policy, but also the fed's other role. how does it view

cryptocurrencies? looking at the bloomberg galaxy crypto index, part of the discussion has been that central bank to me list popped up asset prices, including cryptocurrencies. this index is up almost 4% by the end of wednesday's session. crypto related stocks in on the action as well. coinbase up. all of those much higher. emily: pandemic related monetary policy is coming to an end, with the fed indicating it will be making aggressive moves in response to rising inflation. i want to talk about how this could impact the world of venture capital. great to have you back on the show. how closely are you following what is happening with the fed and what we expect to happen with inflation, given you are making early-stage bets, but have to be thinking also about the macro picture? eric: i follow it like anybody

does and have no particular expertise on it. on the stage we are investing, under 10 people at verily early stages, you have to have a decade-long view of what will happen. since macro is impossible to predict, it is impossible to predict in 10 years. the view is, is this going to be a good company over time? if that works out, the rest will take care of itself. emily: what is your outlook on the smaller-bigger picture when it comes to startups and valuations into next year? we heard things are getting expensive. would you agree, and are valuations going to come down? eric: there has been an interesting period that way, where if you look at all-time highs -- look at recent public market companies compared to their all-time highs, it has

come down, but if you look back six or nine months, they are up from those levels. the reality is we probably got a little ahead of ourselves in late summer and early fall and everything is coming back down. the public and private markets interact in a kind of unexplainable but weird laggy way, where sometimes it takes a few months for the public markets to correct for those valuations to trickle into private markets. these again, the nuances don't matter that much in the sense that at the stage we try to invest in, $100 million, $200 million, if it ends up being a $15 billion company, it doesn't really matter that much. if it does not work, it also doesn't really matter. some of it is just the flavor of

the day and not worth worrying about. emily: i spoke with gary yesterday and he had more of a warning for startups, saying they should get those term sheets signed pronto. take a quick listen. >> you have to keep your company alive and properly capitalized. the big benefit of doing that is if you can have a large warchest going into recession, that allows you to build your product, your startup 1000 times better. in those hard times are the moments where the next airbnb is born. emily: some of the commentary that he used, the r word, which is very scary. do you see that in the future? would you agree that startups should sign those term sheets now? eric: eventually we will have a recession. whether that happens next month or next year or three years from

now, i have no idea. i totally agree with his overall advice, which is for a company the number one thing you have to do is stay alive to have a shot to do anything else. if that requires capital, go get that. whether you sign the term sheet in the next two weeks or next four weeks probably does not matter much. i think the overall advice, that you need capital to build the business, is really critical. emily: we are looking at some of benchmark's portfolio companies. two of them were your very first investments at benchmark. they have both now gone public. they both had big debuts. i was looking at amplitude shares, which are lagging from their high. still think that is a good bet now that it is out of the

benchmark fold? eric: the great thing about the companies you put up is they are quality companies. i try not to worry about what the stock price does on a day to day basis. i think it is a great way to give yourself an ulcer and not something i can control. i think all of those companies that you showed are great companies that we have been partnering with for a long time. i think they can all grow very quickly for the next decade plus. they have tons of market in front of them, a great management team and leadership. that will build a lot of value over time, whether the stock market realizes it tomorrow or next week, i don't know, but that longer-term prospect of what those founders have done and what is ahead of them is amazing. emily: venture capital firms in general raised a ton of money this year.

does that mean they are in a good position to matter what? where do you want to be placing your bets for 2022? eric: you had it on a prior segment, the fed has printed a ton of money. that money is looking for returns. so venture capitalists have raised tons of funds and are deploying that capital, in a lot of cases really quickly. i think it is here to stay. i think the larger macro backdrop is the shift that we are seeing an enterprise from on premise stuff to the cloud. the reality is we are still quite early in that. you are starting to see the beginnings of a new set of consumer companies. next-door just went public. discord is another one doing great. you are seeing these next-generation consumer companies emerge as well. you mentioned amplitude. you have the next court -- the

nextdoor and discords of the worlds. i am sure there will be a new generation behind that. hopefully we will find some. emily: benchmark capital partner eric vishria. great to have you back on the show. coming up on our next edition of bloomberg studio 1.0, i sit down with the alphabet vice president and cfo. we talk about google's hybrid work plans for the future. find out how she manages work, family, and building a successful career. i asked her about alphabet's m&a strategy. ruth: the main thing we have done throughout the life of google is invest in innovation as organic growth. we are continuing to do that at a rapid clip. we have then layered onto it acquisitions and larger

acquisitions. we are continuing to be active more in the smaller ones, to be fair, but we think there is a lot of opportunity ahead of us. we are continuing to invest in partnerships and in some acquisitions and think there is upside in a lot of areas. emily: would you say this revelatory scrutiny is not -- this regulatory scrutiny is not slowing you down? rith: it is important to be constructively engaging and working with regulators on what is it they are trying to solve and how we can constructively engage with them. at the same time, our engineers should focus on innovation and continuing to up the bar on what we are doing, address what is motel for for our users. emily: google is facing more serious threats in the u.s. than other big tech companies. how are those conversations with regulators going? ruth: there are certain elements

that are frustrating. i listen to the outline of some of the proposed legislation. i think it is inconsistent with priorities for public policy. as an example, there is a focus on self-preference. during the pandemic, one in threeusses said they would have failed without digital scales. what they were able to do was connect with their users in different ways. when you search for a small business, you can get directed to the small business. that is a good thing. we have 6000 small businesses we wrote in. same with a number of things on racial equity. a real surge in searches about where is a black owned business near me. i think what is important, let's make sure we understand what

they are trying to solve and work with them on what is it we are trying to address through products so that they are helpful in the ways they want. emily: facebook has taken a serious reputational hit. has that created collateral damage for google? ruth: whenever there is a backdrop that is challenging, it has ripple effects. what we are underscoring is all the investments we are making to protect the ecosystem, our commitment to our users. we know how sacrosanct that trust is. it is all about privacy and steps to make privacy protected for users, protecting content and content moderation. emily: google reaches now more than half the people on the planet. why shouldn't we view google as a monopoly? ruth: i go back to the earliest

days, when i first learned about google in 1998. in those earliest days, when i heard about this search engine, the question was why do you actually need it? back at morgan stanley, our research analyst had our team put up white pages around the conference room and was doing this comparison. what provides the most responsive results most rapidly? you can see this google thing, maybe we do need something new. that has been the ethos at google since its inception, continue to innovate. if we can deliver on that, which is what drives people here, it is opening the world for so many people. that is the intent. emily: the alphabet senior vice president and cfo. you can catch more of that conversation on bloomberg studio 1.0 tonight 6:30 p.m. on the

west coast. it is such a great interview. coming up, we continue to redefine the post-pandemic workplace. i am joined next by the cfo of service now. that is next. this is bloomberg. ♪

>> when you look back 20 years, this will be one of the major developments in detroit's history. >> i think what is important is -- i have told a few people about it in tech corporations. my good friend, the ceo of service now, made a commitment

to come to detroit. emily: that was the mayor of detroit along with the founder and chair of related companies, talking about a new investment call to a detroit center in downtown detroit in hopes of revitalizing the city. getting in on the action is service now. joining me now the ceo. great to have you with us. talk to us about why this investment in detroit -- you are talking about adding more employees there, which is interesting given many are focusing on creating a more mobile workforce. >> thank you for having me. i really appreciate it. at service now, we are focused in totality on esg. the world needs action now. service now has an ambitions plan with our esg efforts. one of the pillars is the social

community pillar. as we think about broadening diversity, those plans to expand our workforce in detroit are just part of it. we are collaborating with local universities to focus on strengthening the talent development and access to opportunity in detroit and those those kind of communities. from a post-pandemic world, we are leaning into a hybrid working model. while we absolutely expect people to be working at home sometimes, in the office sometimes, coming together for moments that matter in times of innovation, but there will be times that the office is important, especially for the younger as they are coming in growing into their careers. we are excited about the opportunity to partner with related, and the announcement with detroit is part of that. emily: how will the shift to a remote and hybrid workforce change your role as cfo?

gina: the role of cfo has been evolving for some time now. the impact of covid has just accelerated that. cfo's are playing a pivotal role in ensuring we are guiding our organizations that the crisis and making sure we are making the strategic investments to ensure we are coming out of the pandemic stronger than ever. we not only have a seat at the table, but we are really focused on asking the right questions. our voices are asking the questions and insulin -- and influencing the decisions that will drive a stronger business as we come out of the pandemic. if you think about what is going on here, it's about digital transformation and investing in how we work better. emily: the cfo of servicenow, appreciate you taking the time

to join us. thank you for stopping by. coming up, a work in progress. that is how the wonder media studios ceo is talking about the return to the big screen. by warner has no plans to change its theatrical 2022 strategy, next. this is bloomberg. ♪

emily: day two of the bloomberg technology summit. we were joined by ann sarnoff. she spoke about the challenges in the content streaming business and the future of entertainment. he started by asking what state of recovery the movie business is in. ann: it is a work in progress. everyone was hoping we would be on the others of the pandemic by now, but unfortunately with delta and omicron, we are kind of having to live with it for a

while longer. thankfully, people are going back to theaters. not everybody, but certain demographics are showing more of a willingness. for us to get back in full swing, we need the broader spectrum of ages and tastes to go back to the theater. >> who are those who are more willing and who seem to be resistant? ann: you would probably guess the answer to that, but it tends to be younger people. i will say below 35, young-ish. and the opposite, over 35, we are not seeing as much of an inclination to run back to theaters. certain movies, we think they will come back. i think it will be a gradual thing that people have gotten used to because of trends that were happening before the pandemic with amazing content being delivered in the home.

high-quality content and bigger screens. the pandemic accelerated needing to sit on your couch and not go anywhere. people are pretty used to that. i think that is the part of the theatrical business, sitting in one's living room. we the theaters have to compel people to come out, buy the tickets, enjoy the popcorn, head out with the family and watch movies again on the big screen. it is no surprise that the movies that tend to get people out of their homes are the big action-adventure movies, superhero movies. certainly horror movies, people tend to like to be scared together. not me personally, but that is a thing. those genres are doing better than others. i hope it goes beyond that.

we want to be telling stories on the big screen that are beyond those genres. >> is it possible -- you talked about the mix of people that will and won't go -- can you release one of those movies in theaters and expect to make money from it? ann: that is a great question. we are about to start doing that in 2022. we stated we would go back to an exclusive theatrical window , 45 days, with our 2022 slate. we are certainly hoping to. emily: the warner media ceo ann sarnoff. that does it for this edition of "bloomberg technology." tune in tomorrow. we will be joined by jon ossoff, the senator. and the founder and ceo of an ar game developer. before that, don't forget bloomberg studio 1.0 on deck

with the alphabet cfo. i'm emily chang in san francisco and this is bloomberg. ♪

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

♪ haidi: a very good morning. we are counting down to asia's major market opens. shery: welcome to "daybreak asia." the fed's most hawkish pivot in years. >> we are phasing out purchases more rapidly because with elevated inflation pressures and

a rapidly