>> from the heart of where innovation, money and power collide, from silicon valley and beyond, this is "bloomberg technology" with emily chang. emily: i am emily chang in san

-- seattle. met us result. its big bet on that in question. can the tech giant prove a are vr can be a meta-moneymaker? shares plummet. we will discuss. amd has a spike of strong earnings. i will speak with the ceo on how she is doing amid the continuing supply crunch. microstrategy takes a charge running down its bitcoin holdings. still, buying more bitcoin, we will ask why later. first, look at the markets. ed ludlow is here watching meta-, spotify. ed: the nasdaq 100 is up. fourth gain in a row. best run of a winning streak since november.

amd, real strength. if there was one area we do not carry on was in cryptocurrency. the crypto index is that basket that is tracked, weighted towards bitcoin. ethereum is down. it has been stressful bless our. qualcomm, stocks rising. its -- you know this story. trying to move the company away from automotive, really lofty expectations. the end of the first quarter,

180 3 million subscribers paid. that sounds good when you say it out loud, but it was less the streamer was looking for. meta-, the parent company of facebook. this is what you're saying, we are down 21%, 22%. the company is candid. headwinds from competitors. analyst cut price targets on meta-because of the competition of tiktok. clearly, something is not going right or something is going wrong. >> i cannot remember a time when facebook's core users do not grow. can you remember the last time that happened? >> for the first time that i can

recall, this is new information. facebook lost daily active users on a worldwide basis. the monthly user base gain is not that great. challenges with flatness and asia-pacific. that is historically where it is seeing some of its largest gains. these are things that we were not surprised by at insider intelligence. the fact that, here they are is what is causing all of this chaos right now. not to mention, the questions about the metaverse, which looks good for 2021, according to our estimates. the guidance for q1, lower than

expected. that is a lot to unpack. some unsettling things are going on right now for meta-. emily: seeing in the numbers is different. why do you think this is happening? teens and young adults thinking facebook is not cool anymore? >> a lot of things. there is going to be a natural ceiling for a platform like facebook to be relevant. not only in the united states where you are right, teens and young adults are not using the platform very often. outside of the u.s., they are a huge worldwide platform as well. asia-pacific, a source of growth

on an annual basis, those things are not happening anymore. we are not forecasting much gains at all. emily: with advertising, not just your people on facebook but also targeting down on advertising. especially because facebook is trying to make this big pivot to the metaverse which could take years to pay off, if it pays off. >> so much to think about. looking at the short-term, facebook's full-year ad revenue came in almost exactly where our forecasters are expecting it to be. kudos to our forecasters. that is ok. i don't think anyone would think twice about a performance like that.

they're acknowledging increased competition for a engagement on its eager's -- on its users. huge investments in the metaverse. we know they are not going to bring any revenue or any meaningful revenue in the company anytime in the next near-term, even in a few years. emily: are investors going to be willing to wait around for that? this is obviously a huge investment. nobody knows if that feature will actually come to fruitition -- fruition. >> no one knows if that metaverse will be a place were people spent a lot of time gaining or shopping, socializing. all of the above, none of the above.

there is a lot of questions surrounding other companies investing right now. not just facebook. -- meta-. it is taken me a while to get used to calling it meta-. meta-is making certain investments. the logical place for meta-to lean in when it thinks about revenue is advertising and commerce. we are expecting experiments along these lines. none of us will drive significant revenue towards the bottom line for meta-. we're interested in seeing, what is the next ad format going to be? when the company first launched, it revolutionized advertising. the question we have is can it revolutionized advertising again? emily: mark zuckerberg is saying the popularity of tiktok is driving the reason behind -- i

always appreciate you taking the time to join us. we will continue to watch out for headlines from that call. coming up, a different learning story. the chip industry may be in the crunch, but not for lisa sue. i will talk to the ceo of amd. coming up. that is next. this is bloomberg. ♪

emily: shares of chipmaker amd soaring. lisa is here with me now.

everyone is excited about the outlook. what is driving this in terms of execution? lisa: great to see you. we are very proud and excited about the quarter that we had. 2021 ended up 68% growth on an annual basis. very good traction across all of our businesses, whether you're talking about our data center business, graphics, pc. all of our businesses are firing on all cylinders. going into 2022, we see a strong demand in environment as well as a great portfolio. we are excited to see what the new year brings. emily: seven years into your tenure as ceo. there is a question of how much further can amd go.

how would you answer that? lisa: the wonderful thing about technology is that there is so much to do. as proud as we are of the progress we have made, we have to keep pushing the envelope. there is more to do. the applications are requiring more high-performance computing. this is our sweet spot. this is where we specialize. i see tremendous opportunity for us going forward. you can see that in the strong demand environment and the fact that everyone wants more compute , whether you are basis, gamer, enterprise, cap -- cloud manufacturer. more compute is one of those trends that we believe a lot in and will continue to be a key factor over the next five plus years. emily: much of your earning is market share gain or the industry getting bigger? lisa: great question.

there is no question that the backdrop of the covid pandemic and all of this digital transformation has been good for semi conductors. the overall demand in is strong. we have a and d is an alpha factor. we have great products, under representative. we have been working for the last five years at willing trust with some of the largest customers in the world so they can trust us with what their technology needs are. within that backdrop we have been able to gain market share and the trust of some of the largest and most important brands in the world. emily: the industry has struggled to get enough supply. elon musk said that tesla will continue to be chip limited. i spoke to the ceo forward, he said there is no relief in sight. i'm curious as to how your executing and managing to get more orders and beating your

targets, even against is difficult backdrop. lisa: the last 12-15 months has been about strengthening the supply chain. we work very closely with all of our supply chain partners, whether you're talking about the wafer or front end or back and side, all of this testing equipment. what we have planned for his long-term growth. we had a very ambitious growth outlook for the last fears and we continue to have that. we are investing with our partners in building up that capacity. i think we have been very aggressive and i'm happy with the fact we have gotten more supply. i know people say there is no end in sight, i would not say that. i would say that a lot of progress is being made. we are thankful for all of the partnership across the supply will will continue to drive more

supply as we go through every quarter. emily: the biden administration is taking an active role in trying to alleviate the crisis. the president had this to say about his view. take a quick listen. pres. biden: everything from cars, dishwashers are delaying getting to showrooms just as demand for them is up because the economies are going. because supply is low, we find ourselves in a position that we are really behind the curve. prices are going up. emily: i know you have been with the biden administration on this, is there anything the government is not doing that they should be doing more of that you think would help? >> i think the overall government has been very supportive of the semiconductor industry. the most important thing is

declaring the industry essential. we saw that with the pandemic, we see that now to need for semi conductors in so many different applications. that is a tremendous statement. i think we are supportive of the legislation going through now. we view it as a public and private partnership. we all have a part to play ensuring there is a strong ecosystem in the united states. we're happy to play our part that is not just a manufacturing statement, that is also research and development. we really want the u.s. to continue with leadership on design and the new innovations that are necessary. we are all working on the case and we continue to be focus, not just in the short term which is very important, but really the health and prosperity of the industry over the longer term. i think there are a lot of good deceptions -- good discussions

by that place as well. emily: meda just reported a difficult quarter, there was no growth in facebook for the first time since i can remember in my 10 years covering the company. what has it been like working with them now that they are a customer? can you share any color? lisa: the way we interact with all of our large partners is really a long-term roadmap. we are talking about work with not just meda but all of the large tracks taylor's including google, microsoft, amazon. about what do they need over the next three plus years. that is technology, supply, bringing our two teams together. that work is going well. we view this as a strategic area. think about data centers and the cloud and secular growth over

the next five plus years. we need a lot more compute there. we're working closely with all of our partners to make sure that we have that and we help them meet their objectives. emily: a man in a christmas sweater we might recognize as one of your competitors recently had some words about amd. take a quick listen. >> all of a sudden, boom, we are back in the game. amd in the rearview mirror. never again will they be in the windshield. we are leaving the market. emily: i suspect you have a different view on the competitive position. curious to what your response is to that and how you see the competitive landscape right now. lisa: we have been working on this journey of building out amd as a high-performance leader for the last five years, we will do that for the next five. we are about playing our game. we feel very good about our

strategy and our customers. i think we will do well in this market. emily: we will be watching for that. lisa, great to have you here. thank you so much for joining us. coming up next, so much to talk about when it comes to web three. what is that, really? this is bloomberg. ♪

emily: the tech world has been buzzing about web three and its possibilities. a lot of people still do not understand what it really is. we are trying to understand it as well.

some of our correspondence take a look. >> what is web three? there is a lot of buzz, but what is it? it seems, kadant. not really. web three is not a platform or type of technology or something you will find in the metaverse. before we dive deeper, all of this is still vague. long story short, web three once to be decentralized internet. people want to take a step back were power is in the hands of a few ceos. it is a development of a blockchain, a technology with cryptocurrencies. how does blockchain decentralized internet?

bitcoin is a vast number of commuters are connected to the internet. now we know how it can exist, the question is why our venture capitalists pouring billions of dollars? into web? three -- into web three? is one of the reasons why you're seeing so much optimism. here is my colleague with more. >> thanks. servers with big companies like facebook, and ensures no one can shut them down. what is important is that users can have the full measure of their data tokens or virtual -- virtual assets for real. some of the most popular applications are in finance and

gaming. this app called pancake swap allows for no middleman. there is a hit game that is just like pokemon where you can sell your mood -- virtual pets for money. >> it also has skeptics. elon musk said it seem like a marketing buzzword. a photographer also discussed the issue of servers. as they start running the own servers, it is not really decentralized. accountability can also be a big issue. regulators are raising concerns with some issues like finance that let people lend, borrow and trade with each other. they do for -- so without verifying identities and background checks. at the end of the day we have to

ask, is web three worth the height or is it a lot of tech talk? let us know what you think. emily: i want to talk about spider-man coming to the a of sony. the japanese electronics corporation reported strong third-quarter ordering -- earnings and raised its forecast. credit goes to the new movie along with sales of image centers used by apple iphones. it was not all positive. they expect sales of playstation to be down because of ongoing chip shortage. big chains -- big changes at cnn. the president resigned after filling to disclose a romantic relist -- relationship. this came up after the investigation of andrew cuomo and chris cuomo.

cnn named three interim co-heads until the merger with discovery which is expected to close by spring. coming up, and exclusive interview with the new co-ceo of salesforce. bret taylor will be with us to talk about the new safety cloud. that is next. this is bloomberg. ♪

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emily: welcome back. i am emily chang in seattle. getting people back to work in person and sickly is the goal of salesforce's new safety cloud. it helps businesses manage testing and health protocols as everyone navigates the return to work and in person events. for more, i am joined by brett taylor, co-ceo of salesforce, in his first interview since getting that new job.

talk to us about this new safety cloud. i understand it was based on salesforce's own work experience. how does it work? >> it's really about scaling testing, which is the way back with all these new variants that none of us expected that are part of the new reality of this pandemic, which is becoming an debt make. the company kickoff in new york city with 5000 employees, it means that you can scale testing. you can do an at-home test or with one of our partners like cvs pharmacy, do a test, show up with a qr code, and you know everyone in your building at an event has been tested and you have the confidence to reconnect safely. that is top of mind for all our customers, how can we reconnect safely in this ever-changing pandemic? emily: what is salesforce's latest return to work plan and view on how workplaces in general are going to be changed

forever? >> since the beginning of this pandemic, we have been focused on how we can bring the power of the technology platform to help ourselves and more importantly help our customers thrive in the face of these unexpected changes. whether it was contact raisi raisi tracing raisi, where we partnered with rhode island, or vaccine management in my home state of california, now with safety cloud, we know our customers want to connect with their employees and customers digitally and safely. we are representing that as well. we have 84 out of 100 offices open, powered by this safety cloud. we are getting together 5000 employees next week. we are also day-to-day running our company on slack, our digital headquarters. i think that is the new normal. most of our interactions will be digital, but we need to use the power of technology so we can reconnect safely and reunite all of our cultures in this new normal. emily: you have been in this role of co-ceo for a few months

now. tell us more about your relationship with marc benioff virtually and in person and how you have been working together in this top job. >> marc and i have been friends for over a decade. he has been a mentor of mine particularly as i transition from consumer to enterprise software. when i sold my company to salesforce five and a half years ago, i didn't imagine i would be in this role now. this is a lifelong partnership, something that has been the most exciting part of my career. operating this important partnership with him is such a privilege. particularly right now. i think this has accelerated the digitization of the economy. you can see second and third order effects around the economy and salesforce is such an important trusted digital advisor to all the most important brands in the world. doing the partnership with marc is the privilege of a lifetime. emily: salesforce made a huge tech deal last year buying slack. i know you were critical to

that. i'm curious how you are thinking about m&a right now given that we just saw microsoft up the ante, buying activision for more than twice as much. what is your view on salesforce doing deals, how aggressive you should be, and where valuations are at? >> i will answer your question. let me just talk a little bit about how excited i am about slack. the expectations we have developed as employees in the pandemic has permanently shifted the way we work. we did a survey of employees that work in offices. the last survey, 76% said they want flexibility where they work and over 90% said they want flexibility when they work. in the competition for talent, that means that the digital headquarters we build for employees is just as important as the physical headquarters. we had salesforce tower in new york, but the idea of building digital headquarters is top of

mind for every executive team around the world. right now, we are focused on integrating slack. to answer your question, we are not seeing short-term m&a opportunities, but we are always opportunistic in finding innovation in the market. emily: the same week you were promoted to co-ceo of salesforce, you became the chair of twitter's board of directors. curious how much time you are spending given this is his first time being a ceo. >> i have been on the twitter board for over five years and it is such a privilege to work with a new, incoming ceo. i am excited about his leadership, where he takes the company, and really excited about the innovation coming out of the twitter consumer product as of late. emily: twitter just pivoted to an fts and profile pix. we are seeing facebook -- i should say meta--- making a pivot to the metaverse. we are seeing microsoft throw its hat into the ring with an enterprise metaverse play. what do you think of the move to the metaverse and will

salesforce have a role in it? >> i am really excited about the innovation in this space. when i think about nft's and the metaverse, i bring it back to seeing what our customers are doing to engage with their customers. it is about digital identities becoming more important. it's about building communities, digital goods, collectibles. i have seen so many interesting experiments with retailers around nft's, digital goods, and while it's that i think are really exciting. as you saw in the segment right before i came on, there is a lot of hype in the space. sometimes it's hard to untangle the interesting stuff from the hype. we are really excited and you will see some innovation from us. we want to make sure when our customers want to experiment with the space, our platform is there to help them do it. emily: what do you mean by innovation? can you give us a hint? >> i can't, but you will have to

wait and see. maybe i come back on the show and tell you about it. emily: i will hold you to it. brett taylor, co-ceo of salesforce, appreciate you taking the time. your first tv interview since taking that role. coming up, michael sailor of microstrategy, the company taking an impairment charge having to write down the value of its bitcoin. but still investing, still buying more. michael sailor with us next. this is bloomberg. >> there is a way of building for the internet, building for the world, that is trusted, that is open, that is inclusive of anyone who wants to participate. ♪

emily: microstrategy taking an impairment charge on its bitcoin holdings after the sec said companies need to follow new accounting rules. still, michael saylor's firm is buying more bitcoin. here to talk about it is sonali basak. >> it's interesting to see how microstrategy has written the ride of bitcoin. you see the ups and downs bitcoin has gone through and where microstrategy has bought in on the average price of $48,710 of last year. that has led to an impairment charge of $147 million. remember, these are accounting changes. you have investors that may or may not be comfortable with those swings.

some are more comfortable than others. microstrategy is an investor in bitcoin, did double down on the dip, bought bitcoin about $10,000 lower, around $37,865 per coin. that is much closer to where it's trading now. that would still be a slight loss today, but let's see where it goes later on. if you look at what btig says about microstrategy's holdings, they think microstrategy, which has declined about 50% on the year, could eventually be about $950 per share. so getting comfortable with what it looks like to have the biggest corporate holding of bitcoin and starting to get comfortable with investors and what those impairment charges look like as they flow through the income statement. emily: following bitcoin's downward trend. at least for the last few months. talk to us about the micro moves that we are seeing for microstrategy's investors?

how are they interpreting all of this? >> it is interesting, again if you are comfortable with it or not. when the sec announced this change would happen, microstrategy did say it would be noisy for investors to start to do this. again, this is a volatile asset class. microstrategy, the share of that decline is much more steep than you see from its peer group. perhaps the russell 5000, if you use that as a proxy, only 5% over the year. most of the analysts that follow microstrategy say that it's either buy or hold. that btig price target of $950 is the most aggressive that we see. emily: thank you so much for joining us. i want to bring in the man himself, microstrategy ceo and founder, michael saylor. great to have you with us. we're going to get to the investor question in a moment, but i want to start with software. it was the best year for your software business, 2020 one, in a decade.

i wonder what that says about 2022. what is the outlook ahead? michael: we got a nice boost in 2021. our cloud subscriptions business was up 39% year-over-year. our top line was up 6% year-over-year. we had a big boost in free cash flow. we were at about an 18% free cash flow market, so we generated a bit more than $90 million in free cash flow. we were able to invest that in acquiring more bitcoin and easily cover our debt service. so we are comfortable with the business. it's nice. emily: some of your margins did miss estimates due to wage inflation, investments in the cloud. do you think these pressures will keep up in the near term? michael: there are some challenges with wages in the tech business, as you know. we expect that will continue. we will have to continue to get more efficient. if you're doing business internationally, international currencies like the argentine

peso has lost 93% of its value over the last four years. the turkish lira is also struggling. the news last night was the lebanese pound lost 93% of its value. so international currencies will be a bit of a wait, but our domestic business and western european business looks good to us, and as we rotate to the cloud, that is a nice efficiency gain for us. emily: let's talk about investors. why should investors buy into microstrategy rather than buying bitcoin itself or some of the etf's that now exist? michael: if you had a spot bitcoin etf and you held a spot but you charged 0% fees, that would be better. microstrategy does not charge any fees. we are an operating company and that means not only do we not charge fees, we make money and we can generate additional yield and we can get fairly cheap

leverage, like the $2.2 billion in debt that has a 1.5% interest cost for us. so your choices as an investor would be to buy into a nonexistent spot etf that charge you 50 to 100 basis points with no leverage or no yield, and to buy into a futures etf and that is much more expensive than 2% or 3%, or invest in grayscale, which is a 2% cost per year. as an operating company, we are pretty compelling. also we are not a bitcoin miner. so we don't take any bitcoin mining risk. if you're looking for a leveraged bitcoin play with spot exposure that has positive yield, then micro strategy is the only game in town. emily: you bought about 660 additional bitcoin during the dip. $25 million worth or so. that is actually your smallest purchase since last may. what should we read into this?

do you have plans to buy more or are you hedging your bets? michael: we did that out of free cash flow. we didn't issue any debt and we didn't issue any equity to buy that. so that is a pure accretion to all of our common stock shareholders. as i said, we generated $90 million in free cash flow last year. as we generate that cash flow, we'll pay our debt service, then we will sweep the remainder into bitcoin and we will continue with that. if we're going to be more aggressive about buying bitcoin, then we will look at various financing options. probably the most compelling and interesting ones are to generate yield off of the 110,000 bitcoin that's currently unpledged or to borrow against that 110,000 bitcoin and then reinvest that in more bitcoin. we haven't made any decisions on that yet. we will have to make sure anything we do is accretive and meets our risk parameters. emily: you just held your big microstrategy world conference.

i believe 70,000 people tuned in. you interviewed jack dorsey. of course he rarely gives interviews. he had this to say about corporations considering getting into bitcoin. take a quick listen. >> even if you don't use or don't believe you could use bitcoin in your company, i think it's worth your study. because there is a number of lessons in it that will make your company better. how you operate your company, how you interact with the world , how you think, how you execute. i have just learned so much from it that has made everything about my company and what we do much better. if i were to start another company, those lessons would be so great. emily: i'm curious if there is anywhere where you and jack disagree on bitcoin? what do you think you have to learn from each other? michael: we agree pretty enthusiastically.

jack is a man on a mission and his view of bitcoin and lightning as they are open, fair, global permission-less digital monitoring networks and you can use them to provide financial inclusion to billions of people and do business at the speed of light, friction free. as a technologist -- he is a technologist, i we both agree on the idea of moving money at the speed of light to 8 billion people for free. as a humanitarian, we both agree there are billions of people who are unbanked and not included in the current system. again, if your currency is collapsing and you just lost 93% of your wealth overnight and the bank seized all of your assets, which is what just happened in lebanon this week, what choice do you have? there are billions of people who don't have a better alternative and jack wants to deliver a better alternative to them and i agree wholeheartedly. emily: dorsey threw some shade at facebook and mark zuckerberg

for the way they handled their big crypto bet dm, which has not worked out. we are tracking meta results today. not looking good. facebook, meta, trying to make this big pivot to the metaverse and nobody knows if it will pay off or not. you have seen so many shifts in technology in your many decades in the industry and i'm curious on your view on what's happening over there. michael: meta will figure it out. mark zuckerberg is brilliant and i have the greatest respect for him. what i will say with regard to cryptocurrency is the world doesn't want a digital monetary network controlled by one company. it doesn't want currency from one company. it doesn't matter whether you are the greatest company on earth. the beauty of bitcoin is it's open, it's common property. nobody controls it. nobody 100 years from now will control it, and that makes it ethically sound. i think jack's frustration is he knows that facebook and now meta could deliver utilitarian

economic empowerment to billions of people in an ethical, technically sound, politically sound, economically sound fashion. he is frustrated to see that we all use our power as a force of good. emily: microstrategy founder and ceo, michael saylor, always good to have you on the show. coming up, it's the name president biden won't mention. more on his -- let's call it a standoff with tesla and elon musk. that is next. this is bloomberg. ♪

>> we want to have a portfolio of ev so everybody can truly

make the transition. we're just getting started. pres. biden: eisai climate change means jobs. >> we are so happy to support your agenda on climate change and getting to an all ev future. emily: president biden last week talking ev's with representatives from gm and ford at the white house. even tweeting about building the vehicles here in the united states. but the president failed to mention the biggest ev maker in the world, tesla. it certainly got the attention of elon musk. ed ludlow here with more. do you think the president is deliberately leaving tesla out of the conversation? ed: this is a tricky one. it's actually quite clear this is politics and we are not a politics show, but bloomberg has done some fantastic reporting around this. according to white house sources, joe biden has made no secret about his support from the unions. he needs the union support. michigan is the state where the

democratic party can win. gm and ford are legacy automakers with a long and rich history of union assembly workers, and tesla is not. it pays its workers really well through equity compensation. joe biden is looking at this saying, i need the support of the traditional base that work at these companies. that's what we are hearing from the white house sources we are speaking to. emily: he is served baked -- he is certainly poking the bear a little bit. what do we know about the conversations between elon musk and president biden? president biden has invited ceos , continues to invite ceos silicon valley to the white house. i have never seen elon musk there. ed: it is a cold shoulder. you have to take the biggest picture. tesla is the world's biggest ev maker. it has created thousands of jobs in the u.s. tesla has moved to texas, which is traditionally a republican state.

it is interesting the white house doesn't acknowledge it. i was in l.a. last year listening to elon speak at the code conference. he essentially accused joe biden of being a communist and he called this the russian ev revolution, which are pretty strong words. it clearly grates him and we get that from his most recent tweet as well. emily: something we are going to continue to follow. thank you so much for taking the time to break that all down. ed ludlow there in san francisco. we will be watching the tweets. coming up tomorrow on bloomberg technology, we have the cofounder of reddit. founder of the 776 venture investment fund. we will talk about his latest crypto plays. also the california congressman ro khanna will be joining us to talk about his new book, dignity in a digital age. and hope cochrane, managing director of madrona venture group, will be joining us. big show. you don't want to miss it. i'm emily chang in seattle. this is bloomberg.

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