>> 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, white house officials in early discussions about president biden taking a trip to europe, as russia's assault on ukraine only escalates. the u.s. calling on china to put

pressure on vladimir putin to end the war. this as instagram goes dark across russia. the russian government has cut off access to instagram, facebook, and twitter. we will examine how the digital iron curtain is impacting every-day russians. and china, dealing with the crisis of its own. hong kong facing the worst covid outbreak since the pandemic began. china wuhan in 2020. ,the worst since wuhan in 2020. why the technology behind the vaccine most widely used in china may be failing. that's in a moment. first, yet another volatile day in the markets, despite of morning rally. let's bring in sonali basak with the latest. another volatile day. reporter: another volatile day mostly on the downside. risks taken off the table in most major asset classes. if you take a look here, the s&p 500 saw a little bit of a

decline, less than 1%. the 10 year yield, yields up, prices down. the yields have risen above 2% again as the curve flattened. that is another big indicator that people are worried about the future. the bloomberg, literally index, people worried about supply chains, also down. i do want to show you the nasdaq golden dragon china index. everything from alibaba, jd.com to baidu, all following here. the whole index off 70%. you have first investors really worried about the crackdown in technology, then worries about daily sting, and now, investors worried about the relationship between beijing and russia. so as investors factor that in, we are seeing a steeper selloff almost 12% down today alone. , emily: thank you. i want to continue coverage on the latest in ukraine. let's bring in our senior foreign policy reporter.

i want to start with the latest on this trip, president biden may be taking to europe. what is the latest we are hearing about whether this will happen? nick: i think what you will see is that the president feels like it is time for him to essentially get out there and make those connections with foreign leaders and to put new pressure on vladimir putin. a huge element of president biden's approach has essentially been to project unity with european allies. you now have this means that china is drifting closer and closer to russia. so what president biden wants to show is that the u.s. along with u.k., with france, with germany, those countries as well as the baltic states that are feeling anxious that russia may not stop at ukraine, he wants to show that the u.s. has their backs and will do everything it can to support the nato alliance should things get worse beyond ukraine. emily: at this point, what is the status of getting china more

involved here, and president xi jinping's willingness to put more pressure on vladimir putin? nick: it all seems to be going in the wrong direction in a lot of ways -- in a lot of ways. we were told that essentially, china has agreed to offer some form of military and economic support to russia -- at least that is the assessment of u.s. officials and they are letting allies in europe know that this could be a problem, and trying to put more pressure on china. the administration had hoped china could be a counterbalance , could potentially open the door and put pressure on putin to negotiate. if china is doing that, it is doing it very much behind the scenes. right now publicly at least, china is firmly in russia's corner. emily: meantime, you have russia continuing to cut off access to social media across the country, instagram the latest to go dark. we are preparing to hear from ukrainian president zelenskyy, who will be speaking before

congress, as talks between russia and ukraine seem to sputter today. any sign of progress, when do we expect a new round of talks to begin? nick: i think what you will see is more talks. but whether or not they achieve anything, it will be the real conundrum. that's in part why volodymyr zelenskyy is going to congress. congress has been a great ally. they have put a ton of pressure on the biden administration to move more quickly on tougher sanctions. the big thing ukraine wants is more military aid. they've been pushing for the no-fly zone despite the fact that the administration says that doing that would put them essentially into direct confrontation with russia. he really wants to put more pressure on congress so that congress, in turn, including democrats -- this is a bipartisan thing -- will put more pressure on joe biden not only to ration up sanctions, that could potentially give ukraine more military and other aid. emily: bloomberg's nick wadhams

for us in washington. so much to follow, thank you for the updates. coming up, russia banning instagram. the digital iron curtain dropping further across the country. what it means for facebook, meta, and citizens across russia, next. speaking of meta, we will hear from a nintendo veteran and one of the most widely-followed gaming executives. he's not a fan of mark zuckerberg's vision for the metaverse, and goes so far to say facebook is not innovating. my conversation with him from the sxsw festival, after the break. this is bloomberg. ♪

emily: russia's promised ban on instagram has kicked into full effect with the social media platform inaccessible for the vast majority of the country's population. i want to bring in bloomberg's kurt wagner for more on this. what does this exactly mean for every-day russians given that , facebook and twitter have already been cut off? kirk: i feel like we are moving towards a relatively dangerous spot here where basically facebook, instagram, twitter, these were services that connected the rest of the world, where people could get information and news that wasn't directly approved by russian state media. you look at what is happening now and you wonder, are we ever going to get back to this? is this the beginning of russia looking a little bit more like

china, with a closed version of the internet? i don't know what happens after this. but obviously it is a pretty significant deal. russia is a lot smaller than china from a population and ease of perspective but it is symbolic of what this might look like going forward. emily: absolutely. china blocking facebook and twitter around the beijing olympics in 2008 and never unblocking it. you wonder if that will happen here. i'm curious, in russia, how widespread are the use of vpns and other means to get around the firewall? is that common? kurt: it is the kind of thing that companies are trying to make accessible. we saw last week that twitter, for example created a version of , its website of the browser so that if anyone wanted to get around this ban, they might be able to, they might be able to use the "dark web" to access the services, but that is not necessarily accessible to the vast majority of people. that is for people who are tech

-savvy, people going above and beyond to try to figure out how they can still keep services in their lives. the vast majority of people, unless they can get it on their phone, they will not have access to it. to your point, are we seeing the beginnings of a major change here that might not be rolled back? i think the answer might be yes. emily: we are seeing major changes from the platforms themselves. facebook, for example, relaxing the rules to allow ukrainians to talk about violence in the context of russia's war in ukraine. that has seemed to trigger the government. instagram was a place a lot of people turned to to protest the war in russia. where will russian citizens go to next? what social media outlets are available to them? kurt: the one service that keeps continually getting brought up his instagram. i don't know that will be a

place where people will be able to organize in the same way, it is a private messaging app similar to whatsapp and telegram . there are ways to broadcast that way. but they have a different vibe. you talk about what the platforms are doing, the instagram thing in particular was announced by russian regulators after facebook said ukrainians are able to call for violence against russian soldiers, and they said, this is a company basically allowing people to attack our citizens. that's what the russian regulators are saying. again, i think it has just kind of snowballed here, the relationship between meta and the russian leaders, and i just don't know where we go from here. emily: what does this mean for meta and twitter, companies that their growth depends on new users and new ad revenue? kurt: meta said something interesting at the end of last week. not a lot of people saw it because it was at a private

banking conference. the cfo said that the ad revenue that they get either from russian businesses or targeted at russian users is 1.5 percent of their total advertising revenue. so while obviously that is not nothing, not insignificant, it is also not a massive business for meta. when you look into the future and you say, is this the kind of thing where meta will bend over backwards to try to get back into russia -- i don't know that they are going to be willing to do that for such a small portion of their business. they don't have the financial incentives from -- incentives to make concessions in the way that they would other parts of the world. to me, that's one of the many reasons why i find this digital iron curtain interesting because i don't know if there's enough people in russia for these companies to feel they can compromise on the other parts of their policy that they have so far stood firm in

support of. emily: meantime, mark zuckerberg making a surprise appearance at sxsw later this week. my guests, obviously all of these topics will be on the agenda. but of course, the metaverse and his vision for the future. what you make of zuckerberg who has not done a lot of press getting out front? kurt: i heard this was his first time at south by since something like 2010. it has certainly been a long time since he had appeared at this particular conference, and he is doing it with sort of a familiar interviewer, not someone who's necessarily in the news industry, who is going to sit there and grill him about all the stuff we were just talking about, so i do wonder how substantive the interview will be about news and policy, and the world happenings. but for him, it is a way to talk about the metaverse and get out in front of a crowd that has always been interested in new and upcoming technology and to pitch his vision.

i don't know if we will be fulfilled as a news journalist for the interview, but it's a chance for him to reach people who care about the future of tech with his vision for the future of tech. emily: alright, hopefully we will get some probing questions there, it may be some reaction to what my next guest has to say. kurt wagner who covers meta and twitter for us, thank you. sticking with meta and its biggest bet on the future, metaverse, i spoke with the former nintendo america president and coo, reggie fils-aime, at the sxsw festival in austin over the weekend, and i asked him what he thought about mark zuckerberg's vision for the evolution of virtual reality. take a listen. reggie: i am not a buyer of that idea. i don't think that their current definition is going to be successful. emily: why not? reggie: why do i say that? i say that because, first, i don't know if anyone from facebook is here, but you have to admit that facebook itself is not an innovative company.

emily: wow. >> they are not. [applause] i mean, you look -- they have either acquired really interesting things like oculus, like instagram, or they have been a fast follower of other people's ideas. that's facebook. inherently, they are not an innovative company, other than the very original social platform that was created many years ago. emily: so what do you think mark zuckerberg is getting wrong here? reggie: i believe that in order to be innovative, you really need to be thinking about the consumer first, and i don't think they do. i think you need to be looking at -- emily: what do they think about first? reggie: i think they think about advertising first because that

is 98% of their revenue. [applause] that's a fact. you have to think about your consumer and customer. you need to think about bringing new and different ideas into the marketplace. you need to reward that within your culture. these are the things that derive drive innovation. you need to have a culture of innovation. anything you do within an innovative company, whether you are in accounting, whether you are in product development, whether you are in marketing, you need to be challenging yourself to be doing things differently versus doing the same old, same old, or copying someone else's idea. so that's why i look at the vision that has been to date articulated and i'm not of a believer. the other thing i would say about facebook is, they don't have a great history with physical products. portal, not a big idea.

emily: oculus. reggie: oculus, they bought oculus. they have worked on it for a number of years. the last number i saw was that in total, and not just oculus, in total, about 20 million vr devices have been sold. 20 million. when i was running nintendo, that was a good year, one year in terms of hardware. emily: i'm hoping we will hear mark zuckerberg respond to that conversation when he speaks at sxsw. my conversation with reggie fils-aime turns to gamestop. he joined the board in 2020 just months before the state of its -- before the start of its roller coaster. the meme stock saw the stock go from just a few dollars a share to over $500. reggie feels emma left the board after less than a year saying he was unhappy with the strategy of the chairman of the board, ryan cohen. take a listen. reggie: i asked to be part of the team to develop the strategy. i knew the business. i knew it as a consumer, as a vendor. i had pretty strong opinions on

how the business needed to be visited, but i was rebuffed. the perspective was, "reggie, we want to keep the team small, so it's going to be myself and the people that are brought on board, who, by the way, don't know the business, don't understand the players, etc.." i took that as code as thank you, but we really don't want any other ideas. and for me, that was not acceptable. emily: so what do you think of the strategy now? reggie: there has not been an articulated strategy. you can go on the gamestop website and try and find a strategy, but there is no articulated strategy. the leadership says you won't find it because we don't want anyone to steal the strategy. you know?

i come from the business perspective that you need to articulate your strategy to all of your key constituents. you need to communicate to your business partners, vendors, employees, shareholders. you need to communicate your strategy. emily: former nintendo america president and coo reggie fils-aime there at sxsw in austin. coming up, the disney ceo bob chapek, breaking his silence on the controversial florida school bill. how it is impacting employees across disney, pixar, and more and what it means for chapek, i had. this is bloomberg. ♪

emily: just two years into his role as disney ceo, bob chapek , under scrutiny following his response to a controversial florida school bill. for more, i want to bring in bloomberg's chris palmeri, who covers disney for us. so, set the stage. what is the bill, and why is it so controversial, what bob chapek didn't, and now does, have to say about it? chris: the bill, which was passed by both houses in florida, would prohibit schools from discussing sexual orientation or gender identity in kindergarten through third grade. this is designed for parents to be able to control the discussion of these issues with their younger kids. a lot of people in the gay community obviously don't like it. it has been called "don't say gay." they feel this is really stifling to kids who may be deciding where they are going in life.

so bob cherry-pick is trying to more broadly sort of keep these knee out of these political topics. he is trying to work behind the scenes on this issue but not , take a public stance and said that's what he wanted to do going forward. the rank and file at disney revolted, essentially, openly on social media, employees saying they disagree with this policy with a letter from pixar , employees, animators, a union sent out statements. so bob chapek reversed the decision a couple days later last week, saying "we are openly opposed to this bill." then a couple days later, he reversed further and publicly apologized to employees. emily: a lot of employees were not happy, and you also had leadership within disney, for example, at pixar,

releasing their own treatments. you have bob iger, the former ceo also speaking out about this. what do you make of the pushback from other executives? chris: this is part of a broader issue that he found where he does not have the same support from the creative community that at the company that his predecessor bob iger did. so he is making the decisions that are very unpopular. for example, he is relocating a lot of employees to florida that work in themepark design from california. they are not happy about being told they have to move. so we have weird situations with the florida governor desantis slammed disney last week saying they don't care about human rights in china. and then the governor newsom in california saying, why are you moving people to california? as this happens, he is opening the company up to people attacking them from both sides.

emily: this, of course, as disney shares themselves have been struggling. chris palmeri covering that for us. meantime, electric carmaker rivian has hired a new coo from one of the world's biggest automotive suppliers. he will take the role on june 1, rivian announced monday. the new chief operating office oled magna's-making unit, before that at the mercedes' parent company at daimler. rivian stock has been crushed in recent days after the forecast of building just 25,000 ev's this year, about half of what its factory in illinois is capable of, due to shortage of parts and production. the rivian coo resigned in the at the end of last year. coming up, the pandemic far from over, china facing its worst outbreak since early days as lockdowns are being put in place to stop the spread. how that will impact the supply chain, coming.

also, discovery shareholders approving a merger with warner media. the network prepares to launch its new streaming service, cnn+. we will have my conversation with cnn executive vice president andrew morse from south by southwest later this hour. this is bloomberg. ♪

emily: welcome back to "bloomberg technology." i'm emily chang in san francisco. the chinese city of shenzhen, home to 17.5 million people, is locked down, as covid cases have doubled to roughly 3400. this, as china faces its biggest covid outbreak since wuhan in early 2020. foxconn, apple's biggest supplier, is now halting operations in shenzhen and this could have massive global implications. our mark gurman gives us a

status update on what's happening at foxconn and what the impact of this more broadly will be. mark: so, as of now, the main headquarters for foxconn in shenzhen, as well as their iphone factory within shenzhen, those are both closed right now. foxconn is not saying when they will be reopening, it's not definite for now, but the order for closures for factories and other places is in effect in that area until march 20, so it it's possible it will open around then. we know the fluidity of covid and how things will go on. that is the real fear. as of now, a week of one iphone factory being shut down will not have much of an impact. this is a slow season for apple. right? they did just released new products. but they really need the factories running at full steam in the fall and late summer, new ipads in the fall, augmented reality headsets next year. that's when it would be danger territory. but right now i think they will

be ok, given their main iphone plant, called iphone city, is in another region of china, many many miles away from here. , emily: the pandemic in china is hitting a new peak in covid cases, it's not just happening in shenzhen. what is apple doing, or what can apple do to mitigate this given that there are already global supply chain issues that have been reverberating for two years? mark: it's very much whack-a-mole. foxconn has many factories where across china where they produce the iphone and other apple products, so as limitations go up in some factories, they will have to reallocate that to other factories. and as other factories reopen, they have to move production back. i'm sure that's what they are on the scene in china figuring out right now. i think they want to see how bad this becomes. obviously, we are and a -- we are in a very different place today than we were two years ago now with vaccines and

masking and people used to these protocols. so my hope for apple and china , but globally, is this gets resolved quickly, and foxconn will be able to work through it faster pace than two years ago. if you remember even at the height of the pandemic, apple and foxconn were able to figure it out. in the middle of everything, apple was still able to shift -- ship the iphone in november 2020. that was a two-month delay further flagship product in the middle of covid, pre-vaccines, at the height of things. so they were able to figure it out then with only two-month delay, i am pretty optimistic they will be able to figure it out with more vaccines and masking regulations at a slower period for the company. emily: mark gurman, we will continue to watch your reporting on this. thank you. i want to stay on the topic and the resurgence in china and hong kong, and bring in a senior genomics analyst with arc

k invest. we are seeing the spike in china as the world health organization has been considering declaring an end to the pandemic. does this signal to you that this could get worse, or maybe a lot worse before it gets better? guest: thanks, emily, for having me. nice to see you again. i think obviously we have had these spikes before and seen multiple mutations arising from covid-19 and this continues to be an ongoing issue we are monitoring. here at ark. one of the things we are thinking about is disruptive technologies in our portfolio that could potentially help the crisis. one such technology is crispr, which is essentially working to look at different cases and potentially being a diagnostic tool but also used as a therapeutic tool as well. emily: now, china has a zero-covid policy, shutting down versus vaccinating on a broad scale.

they have been using the sinovac vaccine, but that does not use mrna technology and appears to be not as effective. are we seeing the fat vaccine and that technology are breaking down? ali: it's possible. at ark, we have been pretty focused on mrna technology. we have seen pretty great results from it in the u.s. and also in israel, where we have a substantial amount of data. this mrna technology is novel and has not been used prior to the covid-19 pandemic. we are following very closely what the companies are doing and how they are utilizing that technology, including moderna, but also several other companies that really are focusing -- we could talk about pfizer and the partnerships they have started there, but also the amount of sheer data we will get from mrna and be able to compare that to the adenovirus vaccines as well.

emily: how has the pace of innovation in mrna technology accelerated during the pandemic, given the role we have seen it play in vaccinations, along with crispr as you mentioned? ali: so the pace of innovations is really interesting because we are seeing that because i think crispr is an excellent example. we are seeing these excellent examples. prior to crispr, there's another gene editing form. other companies were in existence, and those took a really long time to move from discovery to the first human those. that happened in the first eight years. where's crispr took less than half that time. it was three years. they also can target many more diseases. so we are seeing a proliferation in terms of the pace of innovation. an example for that would be the crispr therapeutics, working on creating potentially functional

cures for diseases like sickle cell and beta cell anemia. they have treated 70 patients along with their partner, both companies within our genomic strategy. we are seeing the data and it looks like it could potentially really be a functional cure. so the pace of innovation but also what's happening with innovation, is really exciting right now. emily: meantime, there's a controversy evolving in the gene editing world, which i know that you are following closely, where nobel prize winner, jennifer doudna who's made important discoveries in mrna technology and been recognized for her work on crispr, has lost a patent dispute surrounding the discovery of her and her team around a specific part of crispr technology. what does this mean, and how significant is this? ali: that's right. first of all, i think it's great we're talking about this, because it demonstrates a commitment from scientists across the board.

and it's also a complicated topic. i think it's great to delve in. first of all, what is crispr? maybe we can back up a little bit on that. crispr is a precise tool used for gene editing. we believe in it and we have been investing in it for years . we think it is an incredibly innovative tool, and it is revolutionizing the way we think about treatment, but also potentially cures. a little background here, it is essentially from a family of dna sequences that was found to affect the genomes of bacteria and is now in trials used for correcting genes in humans. so, about the patent dispute, as you mentioned, really quick background, in jennifer doudna 2012, and emmanuelle charpentier, someone at wrote a paper. on eukaryotic cells.

someone else at harvard was the first to do this. so there are essentially two sides. jennifer doudna and emmanuelle charpentier on one side, other have this data ip from the university of vienna and university of berkeley. the other side is from harvard. so in 2020 as you mentioned, the two actually won the nobel prize in chemistry for their discovery of crispr cas9. but, as you mentioned, the u.s. patent office did not follow suit. what does this mean? this doesn't stop any ongoing trials. so all ongoing trials will continue. it doesn't affect ip outside the u.s. the most likely outcome that ark sees is some form of crosslicensing across companies. and in terms of specifics for companies, some of them will get their ip through harvard and then crispr through cbc.

emily: interesting. they controversy we will continue to follow. jennifer doudna has been a guest on this show several times. ali urman, thank you very much. next, the long legal battle over alleged illegal sales of its that syrupy token. what that means for the broader crypto industry next. this is bloomberg. ♪

emily: time now for our crypto report of the day.

i want to focus on ripple, after the sec alleged the cryptocurrency platform engaged in the unlawful offer and sale of securities. its xrp token. rep. roe: countered saying they , have not had reasonable fair notice from the sec about whether sales of x rp were indeed illegal. let's get into this with our crypto contributor, sonali basak. talk to us about how the markets reacted to this news, a volatile market. sonali: even though we have seen ripple down a little bit, it did rise after this news and over the seven day period actually, if you take a look, we do see it rising to the point that it is almost twice as much as you see in bitcoin in that period, and almost three times as much as ethereum. very good news in terms of ripple and its sec defense, but there are questions remaining for the market not just for ripple but the crypto industry at large. and that question is a factual one. will it cause more issuers to

register with the sec, and what type of regulatory overhang does it need for the market, even after the biden executive order that created some clarity for the markets? emily: stick with us. we will get into this conversation with the ripple ceo, brad garlinghouse. you called this a victory. what does it mean for you and also the broader crypto industry? brad: start there, i think it is a victory not just for the ripple company, but the whole industry. the sec has consistently tried to expand their reach and control over the industry. not just with ripple, but with other cases. and to have the executive order, really said to all agencies, hey, we need to be coordinated. if we want the u.s. to be competitive in this key technology platform, we need to not have group behaving one way and another group behaving another way.

so we are pleased not just by the court's decision, but the executive order that came out last week. emily: what do you make of the prominent role crypto is playing in the war on ukraine and concerns about how cryptocurrency could be used for example, as a tool to combat sanctions on russians? brad: i think this is a bit of a red herring. meaning that there is a lot of tension around what does this mean. but the practicality of using it to circumvent sanctions i think is really difficult. the reality is that just take the basic math, before the invasion of ukraine, there's about $50 billion a day russian ruble cross-border fx trades. there's just not enough liquidity in the crypto markets to really put much of a dent in that. moreover, the point at which sanctions are applied is at the endpoint. so, through exchanges like , binance.

i think you have seen globally that the major exchanges around the world have said, we will acknowledge and respect those sanctions, so the idea that crypto has been used at any scale to circumvent sanctions, it doesn't really understand how some of this stuff works. sonali: on one hand, you do have plenty of exchanges that seem to be working with the biden administration to figure out what's going on under the surface in the market. but on the other hand, when it comes to the sec, it seems like they have been at the crosshairs of a number of different firms. do you think the sec is taking a tougher stance than the administration at-large and do you think that will hinder some of the progress that some firms are making? brad: i think there is no question that the united states security and exchange commission has reduced the competitiveness of this critical industry in the united states. i think they have been out of step with this and other major economies in the world. the only country in the world

that considers xrp and thinks it could be a security, is the united states. we worked successfully in the u.k. switzerland, japan, uae, singapore, all of these countries have acknowledged xrp as a currency, because that is how it is used. if we want the u.s. to be a leader in this new, growing, critical innovative industry like the internet 20 years ago, we need that regulatory clarity. and the sec is just coming out and saying we will file lawsuits, not giving clear rules so people know how to operate, just like other countries have done. emily: brad garlinghouse, ceo of ripple. always good to have you with us, and sonali basak, thanks. coming up, the path to profitability for cnn plus. we will hear from the head of the new media venture, andrew morris, next. this is bloomberg. ♪

emily: cnn is preparing to launch its most ambitious effort yet, a new streaming service cnn plus. why will consumers buy in when there is a sea of other streaming options? here is what andrew morse, the cnn executive vice president leading the effort, had to say. andrew: i think in our heart, we have always been about the news. i think every news organization in the united states tends to do a bit of re-think every political cycle, that is natural, because politics becomes an important coverage area for everybody. i don't think that's unusual for any news organization to think, ok, what's next? especially now, at a time when the entire industry is moving quickly, being disruptive. i think it's logical. emily: there's been a lot of controversy surrounding jeff zucker's departure not long after chris cuomo's exit, tied in part to chris interviewing his brother, the governor of new york, on air.

you've seen the criticism. what is your view on what happened? andrew: that's a good question, emily. [laughter] what is my view? look, when i heard about jeff's resignation, i was shocked. jeff resigned and he said he was resigning because he did not disclose a relationship he had with a colleague. and we have all been doing our best to lead through a pretty difficult. with jeff's departure. emily: some of cnn's own stars have pushed back on the way this was handled. dana bash said at an internal

meeting, that the punishment did not fit the crime. did you think the punishment fit the crime? andrew: i think the rules apply to everybody. and the fact is, the three red and white letters of cnn matter a lot, and they are bigger than any of us. emily: meantime, shareholders have given discovery's merger with cnn parent warner media the green light. the discovery ceo naming the chris late the president of cnn at sxsw. i spoke with andrew morse more in-depth about the future of cnn plus, the new streaming channel service, and its most ambitious effort since the network launched. take a listen. andrew: the beauty of a subscription service, it is if you create something of value, people pay. you walk into a supermarket, a mall, a shop, you go online, if there is something of value, you will pay. when you think about it what cnn does, when you think about it coverage in the ukraine, the

depth of knowledge that sanjay gupta has, the role he has made in this country on informing people about covid in the last year, we are so confident that we're building something of such value that people will be willing to give up on one cup of coffee a month to pay for the service. emily: just in time for your appearance today, shareholders approved the merger of discovery and warner media. cnn has a new president. chris licht has been named -- he helped conceive of "morning joe," produced "the colbert show." have you met and what has he told you he wants to see from cnn plus? andrew: we have not been able to talk to him yet, and even though the discovery shareholders have voted, we are in a quiet period so we have not been able to formally meet. but i have gotten to know chris over the years. what i do know of him is he's an incredibly creative producer and

a great journalist. somebody who really knows what an organization like cnn needs to be successful. emily: what the budget for cnn plus? how much have you spent so far? andrew: it is orders of magnitude larger than anything cnn has taken on since the network started. it is a serious undertaking and requires serious investment. the reason for the significant investment is it is tied to that aggressive business plan. we feel very, very confident that we will be able to grow a very substantial subscriber base quickly. we've been able to put together a business plan and an investment case to where we think we can get a healthy business. emily: given the research you've done, when, then do you expect this to pay off? andrew: we think it could become profitable within a few years. again, it is the beauty of the subscription business. i come back to that every time. that's what makes it different from cable television.

it is what makes it different from advertising. if you build something of value and you deliver value to the customers and footless customers before anything else, you have to back it up, you have to have a great product, you have to have great talent. you can't be afraid to compete and to take chances. but we feel good about what we are building. emily: andrew morse, executive vice president of cnn, speaking at the sxsw festival in austin, texas. cnn plus launches march 29. that does it for this edition of "bloomberg technology." tomorrow, we are joined by the founder of "girls code." she's got a brand-new book. also, we will talk all things crypto with the ceo of consensys, and the cofounder of ethereum, tomorrow on "bloomberg technology." i'm emily chang and this is bloomberg. ♪

manus: this is "bloomberg daybreak: middle east." your top stories this morning. stocks slide in hong kong once again. miss concerns over ties with russia and ongoing regulatory worries. washington and beijing described their first high-level in person talks since the invasion of ukraine as a substantial and constructive. that is president zelensky --