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, shop ify is sinking. the stock has its biggest drop in almost two years despite a better-than-expected earnings report. the concern that retail sales

will fall post-pandemic. i will speak with the president of shopify about where the company goes from here. plus, after nvidia failed attempts to buy, how is another chipmaker is preparing for its own idea. we have a conversation with the new ceo later this hour. and from snazzy selfies to a souped-up shopping expanse, how snap is shaping the future of e-commerce with the power of ar. first, let's look at the market stocks rebounding. in response to fed minutes, s&p 500 index erasing losses. kriti gupta has more. take us through the day. kriti: a good day for the markets, started on and off tone especially in the tech sector. a lot of selling was concentrated. but you nailed it, the fomc minutes turned the message around, the idea the balance sheet reduction might come later in the year than expected although you saw members start to say actually we should start the balance sheet reduction right here right now.

that being said, good news from markets that were expecting bad news. the s&p 500 closing about flat on the day, recovering about 1% on the losses. nasdaq similar, only 1/10 of 1%. even the 10 year yield ending flat on the day, although you saw choppy volatility. the dollar is where you saw a lot of the action we saw selling, a little weakening. that just means it's easier for foreign investors to hop into tech. but it looks like today, they did not take that opportunity. there are some after-hours earnings stories i want to get to. nvidia, strong demand and strong revenue. stock was actually down after hours because of a tiny little tidbit in their earnings. they are still making giant prepayments to help secure way -- wafer capacity. last quarter, they paid $9 billion for inventory purchases and long-term supply. compare that to the prior quarter of $7 billion, and a year ago $2.5 billion. you can see that nvidia is trying to keep up and trying to continue to provide those chips.

they are doing so at a pretty high cost. you can still see high pressure in the shares despite strong revenue. cisco projecting strong sales as well, jumping as much as 7% after hours. it looks like it's paring some of those, but it comes after they announce a buyback authorization of $15 billion, boosting that is always good news for the stock market after hours. doordash, a similar story. revenue jumping on record orders you can see 31% gains after , hours for that stock. trip advisor is your last one, taking a bit of a year, a bigger -- hit here, wider than expected loss. but sticking with the idea of spending, whether it is on retail or travel, retail sales is another data point. a lot of it has to do with savings. one of the big questions, do you start to see retail sales fade as people have their savings rate drop? that is one of these charts behind me. this is the savings rate of the percentage of personal income

going back to the 1970's. now it's down to pre-covid levels. does that mean retail sales will start losing momentum? emily: we will talk about that now. thank you. i want to stick with shopify, bringing the president on. you beat on the quarter but it is the outlook that investors are concerned about. what is your reaction to this big drop in the stock? >> let's talk quickly about the quarter because i think it is important. revenue was over 130 -- $1.3 billion. if you look at the year though, revenue was $4.6 billion, which is 67% year over year 2020. so i think what you are seeing is the merchants, we have millions, have proven resilience and e-commerce is doing really well. the 2021 annual revenue was triple what it was before the pandemic. i think what -- certainly the q4 earnings and full-year results show modern retail and e-commerce are doing really

well, and people remember that the business model is virtuous cycles of entrepreneurship. we do well when merchants do well, then we can reimburse -- reinvest back in them. we are excited about the year ahead. emily: so clearly, shoppers are there, it is happening. the question is growth. you are talking about inflation impacting consumer habits. there's concern about people coming out of lockdowns and going back into stores physically. how much growth do you actually see ahead, especially after this covid bump? >> here's what makes me optimistic. if you look at business applications, a single metric, business applications have one

million more applications filed in the u.s. in 2021 versus 2020. in terms of even things like e-commerce growth, e-commerce is expected to hit about $4.9 trillion for 2021 and grow to $7 trillion by 2025. in terms of retail, retail spend in january was up about 3.8% after being down almost 2% in december. this is the highest since last march. more generally, i think 2021, q1 in particular, you have lockdowns, government stimulus. we are now getting back to a point of some normalization. but that is on a much larger base. and i look across merchant bases, consumers are shifting by and preferences away from big box retail. emily: what about inflation? how will that impact the consumer? that is something you don't have control over. >> we don't have control over inflation, but we do monitor it. whether it is pandemic or supply chain issues, merchants on shopify are resilient. when you are buying something on the internet and it is an amazing experience, it is likely powered by shopify.

we can't control inflation but we reduce resilience. cash we do see resilient. what we can do is make starting and scaling in the business way easier. whether it is shopify capital which is giving us $3 billion worth of cash advances and loans or the fulfillment network, by , reducing the barriers to success, we can make it easier to succeed despite inflation or supply chain and that is important. emily: a lot of investments russian investors are concerned about supply centers. there were reports you cut contracts with some partners. you preparing for lower capacity, or are you building out your own? >> so shopify's entire goal is to make the important things simple and everything else possible. fulfillment needs to work really well. so we are moving out of the prototype phase of the fulfillment network and moving

into what we call the build phase. we will be operating more warehouses ourselves. we will unify through a warehouse management system, which we designed. the goal is for us to achieve two day delivery coverage for more than 90% of the u.s. population. now that we have two years worth of data and insight, we think we know what we need to do together. whether it is fulfillment or capital, what we want to do is make it so merchants don't have to think about these things. we are changing the way we look at fulfillment generally, but it is not a massive change. it is simply optimizing based on the learnings over the last two years. emily: harley finkelstein, always great to have you on the show, thank you for giving us shopify's point of view. coming up, no deal with nvidia, now preparing to go. public how they are managing supply chain pain and ongoing trade tensions between the u.s. and china. it's new ceo joins us, next. and later, my interview with the airbnb ceo. i also asked where he sees the future of the internet with all the chatter about web3 and airbnb's role in it. this is bloomberg.

♪ >> i do think the blockchain technology is incredibly exciting, and there are a lot of opportunities we are looking at. i think if an entrepreneur is building on the blockchain, it's important to remember if you are a web3 business, you are part of the community. the stakes get higher. the other thing with an entrepreneur is being able to adapt and change is could go, but when you build things that are immutable and unchangeable, you have to be thoughtful about what things you will hardcode in. i do think at the end of the day, all that really matters is if you provide incredible service at a great value to other people, whether it is this world, web3, or any other dimension. these basic fundamentals will still exist. ♪

emily: arm is one of the most influential companies in the tech industry, providing key parts to chips, and licensing blueprint. after nvidia failed to acquire the company in a multiple billion-dollar dollar deal, the company's signed up for what could be the year's biggest ipo. now the new ceo is at the helm of arm's future. a trade war between the u.s. and china is feared along a path to the public markets. great to have you in the studio. thank you for joining us. so what makes you think you are the right person for the job against the backdrop of the last year? >> i've been with arm almost nine years and in the semiconductor industry longer than i'd like to admit.

we only had three ceos before me at arm and i'm honored to be the fourth. i have been running core arm since softbank bought us four or five years ago. i've been driving the strategy around growth, the new markets around hyper skills and automotive. i have big shoes to fill, but at the same time, i feel like the years i've been at arm and the industry makes me a good choice. emily: you've been in the industry a long time. do you have any regrets about not getting to work with jensen again? rene: personally disappointed, but also excited going forward. jensen is a fantastic leader appeared i was with nvidia for eight years prior to arm. learned so much, and i thought the combination would be fantastic for the two companies. at the same time, thrilled and excited about our future at arm. we've had a lot of growth in the last number of years, the key markets we are very excited , about the future. emily: what challenge does not getting the deal done pose for the company now?

rene: honestly we are just glad , to have the uncertainty over. it was a really long regulatory process. the deal was announced in september. here it is february. the parties got together and decided it was the best thing mutually to stop the process. for us, the uncertainty we were under, having that behind us is terrific. going forward we have a lot of reasons for optimism. emily: clearly some of your customers did not want you to be acquired. i spoke with the qualcomm ceo and he said arm is great as an independent company. what kind of work needs to be done to rebuild trust with all of these big other players, while the industry is in crisis? >> the industry is always moving. i've been in semiconductors my whole life. it's never been more tumultuous. we've had a lot of conversations with partners in the last 10 days or so since i took over. reassuring partners, talking to them about the future going forward, i think we are in great shape. some of the companies at the beginning, we worked with for almost the entire history of the company. we have long relationships.

the conversations have gone really well and people are excited about what independent arm can do. emily: we are seeing a lot of turnover across the employment generally, people are changing and moving jobs, and they are in tech as well. given the uncertainty you were dealing with internally, has turnover increased in that time and how do you plan to get that under control? >> we have had attrition like every company has. the uncertainty for our employees has not helped. we are so excited to be able to talk to employees. in fact, i had an all hands this morning. this is the first we've done in 18 to 20 months that we could talk about a future being independent, giving them some hope about certainty going forward. that is the single biggest thing, giving employees certainty. emily: that's the pitch to employees. what about public market investors? >> not really talking about that yet. masa came out last week saying we are looking at 2023 and i will stick to his comments. emily: nvidia earnings came out.

we were watching the top line. the stock is unchanged after hours. what are the numbers telling you about what is happening in the broader industry and how they reflect what's happening in the brother industry, as you navigate supply chain issues? now >> we've always had ups and downs in the industry. this one felt a little different, because when you layer on top of it the pandemic, supply line shortages, and increased digitization that has gone on in our lives, it is the perfect storm for a number of things and demand. arm, we sit a little bit outside the supply chain. we don't build chips, we license companies that build them. we are not immediately impacted, but certainly we see the impacts of it. i think this problem will get solved. they always tend to end industry, but it will be bumpy for a while. emily: nvidia's results were underwhelming and i wonder how much not getting the deal done hurts them. do you see that? >> i can't comment on that. now that we are on two separate

vectors, i can't really comment on what impacted that. not much more i can say. emily: talk to us about arm's future. how do you switch back that mindset to getting back into these quarterly reports and knowing that that matters? >> that will be added interesting transition. as part of the nvidia acquisition, we had to do a lot of things about company readiness. we had been doing that already in terms of the internal plumbing. getting back into the rhythm in terms of quarterly reporting, that will be a new thing going forward. my partner in crime, our cfo, he has years of experience. so we are excited. emily: what do you think will happen with supply? when does the pain ease? and after it eases, is there oversupply? >> at think for the rest of this year, it will be bumpy. i would guess sometime in 2023, it gets better. it's always a bit of feast or famine in the semiconductor industry. what's a little different this

time is the leading edge, the people who can build 3d and below, there's not that many who can do that. it's a little different than it was before relative to partners who can invest. it is really hard to say in terms of where things are going and in terms of the future. we will be in a situation where there will be some boom and bust. at the same time, the advanced technology will be hard for people to get their hands on. emily: when you say you expect some easing in 2023, what parts of the industry will feel it first and what parts will take longer to recover? is it cars or smart refrigerators? >> it's hard to say. if you look at all these devices, a car alone has over 30 arm cpus, but there's a lot of other components like power amplifiers, diodes, batteries. there are so many things that can keep the balance. it just takes one component to be short for the whole supply chain and in the automobile for example, the impact itself. i don't think we know exactly we are in new ground, particularly automotive. that's an industry that has been all around needing to learn new habits in terms of the models

going forward. emily: how do you want arm to innovate? what is the roadmap? >> we are so excited. we are all about compute and performance and everywhere about the software ecosystem. one of the best things that people don't know is we are the world's most popular architecture, basically the link people program on. -- language people program on. 50 million apps, 10 million developers. a huge amount of people who develop. we will be in areas around the cloud, networking, automotive. there is not a place we can't touch. emily: arm ceo rene haas, thank you for coming into the studio. coming up, mark zuckerberg plans to take more of the backseat, promoting nick clegg to be meta's president of global affairs. what it means for the future and sheryl sandberg, next. this is bloomberg.

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emily: workers at an amazon facility in staten island, new york will vote next month whether to join a union. the fledgling amazon labor union faces long odds. the more established retail, wholesale and department store lost in alabama last year although there is going to be another election. meta's nick clegg just got promoted, now president of global affairs, marking even bigger territory for him in the company that move means mark zuckerberg and sheryl sandberg will likely have less involvement in future policy positions. kurt wagner joins us with more.

nick was already running policy. how is this different? >> as you pointed out, i think the significance here is actually related to ceo mark zuckerberg and coo sheryl sandberg's roles. as we saw in mark's post today, it sounds like they are taking a step back. you followed the company a long time as i have. mark and cheryl have always been the end of the road when it comes to policy stuff. we've seen that in the last few years with decisions about political advertising, elections, president's account. all of that ended with mark and cheryl. it sounds as though nick clegg will be the end of the road for those types of decisions. i think the significance is mainly that it is being taken off the plate of those other executives. emily: let's start with mark zuckerberg. why do you think he wants to do this given how involved he has been in all of these policy decisions to this point? reporter: i think he felt obligated to be involved.

i think he felt it was his responsibility to be involved, but it wasn't necessarily something he enjoyed doing. warfield is the best use of his skill set. mark zuckerberg is a technologist. he wants to build products. he wants to work on facebook's future of technology. he wants to be seen as an innovator. every time he's having to make a decision about free speech on facebook, that kind of takes away from the other things he cares about. for him in particular, i don't think this was ever something he wanted to spend his time on, and he found somebody else who's better at it that he can pass it off to. emily: what does this mean for cheryl? does it change the reporting structure at all? reporter: i think this is one of the more interesting questions that we don't have the answer to today. we know nick clegg, who has been reporting to cheryl, will also report to mark zuckerberg. to me, that's a sign he is reporting to mark. it's hard to report to both if one of them is the ceo. i think he is reporting to mark.

but policy has been under sheryl sandberg for years. she's always been the one to kind of lead this group. that has declined somewhat in the last couple years. we haven't seen her publicly in the way she used to be, she is certainly not the only person talking about policy for facebook. so i wonder what this means for her. she obviously still runs the advertising business there, so that's a huge job. it's not as if she's not doing anything, but this was a big responsibility that used to fall directly onto her plate. emily: and what are the challenges that lie ahead? obviously, facebook is facing some big -- meta, i should say, is facing brand issues. what do we even call the company? they just changed corporate values. those are the questions nick clegg has to help answer. kurt wagner for us, thank you so much for that update. coming up, the future of

shopping with augmented reality. how snap is leveraging its mass millennial and gen z popularity for commerce. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." let's get an update on the markets with kriti gupta. tech earnings season coming to an end, airbnb, what has been the reaction? kriti: they reported pretty earnings on the opposite side of the spectrum. i want to show you how it played out interesting from a macro , perspective, airbnb rallying, up just shy of 4%. roblox getting punished after

bookings rose 20%. they did not meet analysts expectations, you see the stock took a hit. it's the divergence i want to show you. roblox, a pandemic favorite. airbnb, the travel recovery, seems to be that rotation is coming to fruition. i want to show you social media stocks. another pandemic proxy we like to look at, they surged throughout 2020, the idea people are at home, looking through social media. therefore, these companies were able to profit. take a look. this is 2020, this massive acceleration. the yellow circle is when alphabet said they might curtail some cookies that tracked ad spending, tracking. the blue circle is when apple said it did the same thing. you did not see any momentum after those announcements were made, and since then you have seen a pretty big drop when it came to social media stocks.

for today's session, alphabet came out and doubled down on that. they said it was bringing a privacy sandbox initiative to android phones, a change that could ban ad tracking across multiple applications. you can see the effect it had on social media stocks, a lot of revenue from ad tracking. something to see if they can recover from. emily: thanks so much. augmented reality may seem like something far into the future, but it's real-world use cases -- they are expanding beyond ar selfies with a bold bet on e-commerce. users can use snapchat as a digital storefront to virtually try on shoes, watches, sunglasses. what can be next? joining me now jeremi gorman, chief business officer at snap.

i want to take with taking stock at how much power snap has consolidated in ar. 200 million people are engaging with ar on snap every day, but snapchaters playing with ar an average of 6 billion times per day. those numbers are huge. what is driving this generational comfort with ar? jeremi: thank you so much for having me. i am so excited to be here. it is an interesting use case. the app opens the camera. it is a communication tool, there is a map, it opens the camera. entertainment consumption as well. all of these things that normal people do with their phones on a day-to-day basis, in one app, where gen z is spending an extraordinary amount of their day.

when you look at the statistics, 200 million people engaging every day. one of the things that is great, they are enjoying it as something that is fun and a great way to communicate with friends, but it takes a little of the i have to look perfect off of a picture to send to people when you can put puppy dog years on your head. that is moving into a utility, shopping in particular, where you can do things like try on, and the same exact camera, same exact tools to do the more fun things. it is a generation that talks with pictures. a picture says a thousand words. emily: they are shopping, huge, key initiative right now. how is this changing consumer habits. the vision is a lot bigger. jeremi: i think it is changing consumer habits in terms of try on, and when you couple that with the tailwinds e-commerce is experiencing in the overall macro, those together are where we want to place our bets.

everyone knows largely that the acceleration over the last 24 months is something that has changed the world dramatically, and is not going backwards. now that you can try things on, think of something like a lipstick. we partnered with ulta. things that used to walk into a store to do, try on a lipstick. kindest sound of strange now. -- sounds kind of strange now. it gives these companies an opportunity to use a real business case for augmented reality. ulta for instance, there are over 30 million try ons of their makeup products. emily: huge gen z and millennial audience. how do you get gen x and older millennials on board? is that a goal? jeremi: a couple of different things. as one myself, points people -- once people start talking with pictures, it is tried -- hard to go backwards.

as simple as how are you, what are you doing, i was at the super bowl and it was awesome. the number of pictures i sent versus words told so much more of the story to my family. i think that behavior, as it becomes more normal, is something that helps age up the app. there is a misconception that our audience is really young. while we do reach 75% of 13 to 34-year-olds across markets, 80% of our audience is over 18. we also program in the discover section, the hand-curated news environment with things like sportscenter, partnerships with nbc, olympics content. things more appealing to a broad audience. emily: snap's vision for the future is grounded in ar. real life with augmented

reality. how is this different than what meta and mark zuckerberg are proposing, and do you think it is more realistic? jeremi: yeah, it is important to note the difference between augmented reality and virtual reality. one of the things i notice in talking to advertising partners, people put them together in the same bucket. virtual reality is this separate space. there is a headset, you go to different worlds, you are a different person, interacting in different ways. augmented reality is computing overlaid on the world around us. the reason that ar is our debt, as we believe that is where people will want to stay focused, on the world we live in, with this layered computing that makes it more beautiful or tangible, potentially more educational. an example would be, we have a feature called scan, where you

can press and hold the camera, when you are pointing at a plant, it will tell you what that plant is and give you information. a similar feature with nutritional content. that is augmented reality. i am living in the real world, this is in front of me, i have an extraordinary experience and ultimately it will be wearables. that is our bet. we have been making our bet for 10 years, being a camera company and thinking about the future. emily: the last earnings report was quite significant. we saw snap soar, meta plunge. they are feeling the impact of the apple ad tracking issue. why is that, and why do you think it is taking so long for investors to have this awakening? jeremi: one of the things that has been helpful for us is we have been aligned with what apple is trying to accomplish

since the beginning, we are private by design, the features that exist already in the platform in the context of -- bidirectional friendships, no likes or comments. all of those are private since the beginning. the pivot was different for us. we were able to work without the -- with apple to talk about scan, their solution for measurement, and now our purse -- first party solution. supplemented by estimated conversions, then there are third-party measurements. we are working to help advertisers triangulate those things. the reality is, it's going to be a journey for everybody, it's a huge change in the overall industry. we are working diligently with advertisers. emily: quick question. how do you see tiktok as a competitor? jeremi: it's interesting. we love to see innovation across the whole space. we have always operated in a

heavily competitive environment when it comes to mobile online video. the good news is there is so much advertising money and time spent moving towards mobile online video that there is plenty of space for all of us. the use case is quite different, one app is a lean back experience to be entertained, and snap being rooted in the camera as well as communications. while we do compete in one area, generally speaking, pretty different, and i think one of the great things we see is for each of the last five consecutive quarters, our audience has grown 20% year-over-year. showing that there is space for a lot of people in this generation. emily: jeremi gorman, snap chief business officer. fascinating to hear the view of the future. thank you. moving on to the future of travel. i spoke to the airbnb ceo on the heels of their earnings results. take a quick listen.

>> the reason we had our best year is two reasons. number one, our model is inherently adaptable. we have millions of types of homes in nearly every community at nearly every price point. that means that however travel changes, we are able to adapt. people are staying longer. because many people don't have to go back to the office, it means people are going to thousands of communities all over the world, staying for weeks or months at a time. at the same time, people are starting to return to cross-border travel. that has been a huge tailwind. it comes down to our dna. we are a design driven company. last year we did over 150 , upgrades. between our adaptable model that

explains why we have had our best year in our company's history. emily: it is happening. microsoft called people back to the office. when more people go back to work inevitably, what does that mean for long-term stay? brian: first a look, i do not think ceos will determine when people return to the office. long-term, it will be employees. we are all competing for the best talent. what most people have said is they don't want to return five days a week. even if people do, all you have to believe it is not going back five days a week. maybe some people are like me. they are living nomadic lee. i know that is not for everyone. if you have kids you can't do that. we think more and more people are going to work remotely over the summer. summer rental. we will also think we have three-day weekends a lot more frequently, where they might

work from an airbnb and go away, maybe with their family or on their own, i think we can adapt. all you have to believe the world has changed, believe travel has changed. we are never going backward, we are going forward. by the way, if the world were to go back the way it was, the majority of the pandemic was cross-border travel. emily: when is that international boom going to happen? when are we going to get back to that? u.s. to europe, asia, where things have been tougher to open up? brian: that question is probably best answered by health experts, they would give the best guidance for when people are going to be comfortable traveling. what we are seeing is that cross-border travel is growing. it is one third of our business. at our low point, it was 20% of our business. before the pandemic, it was 50%.

we are starting to recover. i am not going to speculate on the health crisis, but what i will say, the longer that people can travel, travel is one of those things that the longer you don't do it, the longer you want it. people can only stay home, only play so many video games, only watch so many shows. i think there is a yearning to travel all over the world. with more flexibility, you will see more international trips than before the pandemic. emily: you can find that full conversation on bloomberg.com. coming up investors are reconnecting with an appetite for risk. crypto at the moment, but will it last? more on that coming up next. this is bloomberg. ♪

emily: as investors take on more risk, they're willing to take on more crypto. will that last? how long can we expect bitcoin to stay correlated to stocks, inflation and other traditional market gauges? reporter: it's interesting. a ton of crypto hedge funds are doing that quantitative work, try to figure out the correlations. let's take a look at the copycat issue we are seeing when it comes to bitcoin and the nasdaq. you are seeing a significant correlation between 2020 and 2021, i correlation rising. the correlation has not always

existed. sometimes it has been in the red. but there is also another correlation that is much more popular, something that is now up for question in a lot of ways. that is the idea of bitcoin and inflation. you are seeing a ways to go here in terms of possible bitcoin returns, but interestingly, that most recent decline on the white line, you seem bitcoin decline into this year even though we have seen the hottest inflation in 40 years. is it more related to stocks and technology, or less related to inflation, or are these moves priced in and the correlation is breaking down? emily: this is interesting, there was a letter sent to investors today saying crypto is often correlated to macro issues but only for about a couple of months. pantera saying we think over the next couple of weeks, crypto is

going to decouple from traditional markets and begin to trade on its own. reporter: super interesting, that is what i was trying to get at with the some of these correlations breaking down. dan moorehead, one of the biggest macro traders who pivoted to crypto, saying there is more of a way to go in bitcoin and some correlations breaking down, and will break down even more. emily: thanks for that. coming up, one year later. how pat gelsinger would great his first year as ceo, and what areas he thinks the company needs to improve. that is next. this is bloomberg. ♪

emily: i sat down with pat gelsinger for our upcoming conversation on bloomberg studio 1.0 on the one year anniversary of him coming back to the company as ceo. we talked about his vision to bring chip leadership back to the united states, his views on crypto and so much more. i asked him what it was like to come back and get that call. pat: three weeks of chaos. the idea of coming home, being a successful ceo, coming back now to the company i was born and raised in. i went through puberty here. now, the opportunity to lead, help the resurgence and reestablishment of this iconic company is the honor of a lifetime. emily: what was it like to return to a company with so much history? pat: the first staff meeting, february 15, i start of the first one at 7:00 a.m..

the first bullet of the first slide, we will have a torrid pace. it's a new word in the intel vocabulary. the industry is moving rapidly, massive shortages, competitors are performing well. what we have been doing ain't working, we have to set a new course for the future, and that have gotten underway very rapidly. change, you don't fix, you don't reestablish after a decade of bad decisions and poor execution. emily: you took the job in the middle of the pandemic, the middle of a supply crisis. two themes that are still with us. if you can give yourself an honest one year report card, what would it say? pat: let me give you two grades. the board gives me in a, i give

myself an a minus. in some regards we are ahead of where we thought we would be, in some areas not as far. it is more a statement of the massive challenge in front of us. we still have analysts here, some paste -- me off, the bears and permanent bears. when is a going to start materializing in the marketplace? good progress, it's a good year behind us, and people are really going to be excited about the new, bold intel. emily: investors are excited about the ambition, the torrid pace. but, they are not excited -- they want to know about margins. i know you said five years, that is when the historically high margins will return. pat: that's right, a couple of years of investments. i am proud of those investments.

we are not being managed on a quarterly wall street view, we are investing for a long-term return, and i am proud of that. emily: you have budgeted up to $28 billion, but your arrival -- -- your rival is planning to spend more than that. >> $28 billion for this year, it could go up. this is big business, big capital investment. this is big manufacturing expansion. we are proud of the position, and having doubled the capital investments year on year, we are not being bashful about big steps forward. with the announcements we have laid out, we believe we will be back by 2025. emily: pat gelsinger. you can catch more of my interview on bloomberg studio 1.0. that does it for this edition of "bloomberg technology."

join us tomorrow, talking to jared isaacman. redfin ceo glenn colman. he always has some great controversial things you won't want to miss. this is bloomberg. ♪

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