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tv   Bloomberg Technology  Bloomberg  May 24, 2022 5:00pm-6:00pm EDT

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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. this is bloomberg technology. coming up in the next hour, snaps selloff -- shares of plummeting as much as 40% on a disappointing forecast, catalyzing fresh turmoil in tech stocks. how much lower can they go? we will discuss. twitter's annual shareholder meeting is coming up wednesday with elon musk still pressing paws on a deal. he has not tweeted about it recently either. we will preview what to expect. and california's landmark law
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requiring -- ruled unconstitutional. we will speak in an exclusive interview about why we need more parity in the boardroom and the research that backs it up. we will get more of that in a moment but first, stocks pairing their losses. tech fears triggered by the profit warning from snap. kriti gupta is here for the latest. walk us through the day. kriti: you do have a down day for u.s. stocks but erasing a lot of the pain toward the end of the session, some of the consumer staples starting to perform higher on the day. the nasdaq bearing kind of the brunt of the selling where you have the heavyweights, the likes of apple and tesla weighing on the index. what triggered the negative sentiment was snap and we will get back to that. we see a lot of the safe haven
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bid come through. you saw those yield down some nine basis points. it did not help the tech sector out today but you see the correlation between bonds and stocks coming into play again but what does it say about fears of a recession when you see bonds getting outbid today and it was a day of indiscriminate selling. you did see the dollar lower and you did see oil lower but we did have a bright spot. you see bitcoin just flat now but it was higher as you see some of the tech stocks. but let's go to snap because that is what drove the sentiment as it cut its sentiment for ad revenues. this isn't exactly your biggest stock out there and isn't even in the s&p 500 but it did sponge some 40% and did trade below the ipo price. it is warning about fears of a
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slowdown and what it means for ad revenue spending. in a recession, what is first to get cut? that is the ad spending. that has bled due to some of your social media peers. i'm looking at twitter and pinterest down today with other social media stocks. the stocks are all going to have to compete for advertising revenues and what's going to be a very challenging macro environment and today, on the day, you did see social media stocks losing more than $160 million of market value. they are clearly nervous out there. emily: i want to stick with snap with shares plunging below their ipo price after cutting their forecast, taking other social media stocks with it. how bad doesn't get for snap and the rest of social media?
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jasmine: we will be hard pressed to find any social platform that isn't struggling in q2. headwinds we were worried about in q1 have turned into these gale force winds and along with meta-, snap is the price of -- in the eye of the storm brewing. snap is blaming macroeconomic conditions and while that is certainly part of it, the reality is there's no shortage of challenges for the social media platform, whether that is to do with ad targeting or online privacy, the war in ukraine making advertisers weary of spending on social media or whether it is the shift in social media usage leaving established players leaving everyone playing catch-up to tiktok. emily: would you say tiktok is the one platform winning or are these dollars just flowing away across the board? jasmine: going back to the storm
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analogy, there is one platform in the eye of the storm, i would say does his tiktok. we just released a new forecast that shows tiktok's address and will more than double this year and, in 2022, ad revenues will be more than snapchat and twitter combined. emily: would you say this extends not just to facebook and twitter but also youtube? we can see what happened with youtube's last quarter this quarter? jasmine: yes. these struggles extend across all of social media. youtube is a major competitor to tiktok as well. we are seeing time spent on youtube is not going toward tiktok, so there is some competition there as well. emily: i heard one of the skeptics saying why should i be worried about all of tech where the rest of the market just because snap missed its
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guidance. how would you respond to that? jasmine: it's a clear signal in the market that there are these real issues that these social media companies are struggling with. snap is not the only one that has to grapple with these problems. a lot of ad players including meta-are dealing with the same ones. if it is impacting a platform likes -- like snap that has performed relatively well over the past couple of quarters, it shows some warning signs for the rest of the social platforms as well. emily: speaking of the rest of the social platforms, we are looking ahead to twitter's annual shareholder meeting tomorrow. twitter between snap and elon musk in this broader market meltdown, what are you expecting to happen at this meeting? jasmine: i think it will be a pretty tense meeting. the two big topics are going to be musk as well as the macroeconomic conditions putting pressure on the social media platform. these two things are separate
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but they are also related. the more twitter takes a hit, the more fuel to his position. if he does that, he will take his plan on taking twitter less rely on advertising with him. that will leave twitter in the same position they've been in for a while which is underperformance. it will be competing with the other social platforms, any of which have larger ad illnesses and in an incredibly turbulent market. emily: what is your forecast for twitter? how do you think this story ends? jasmine: that's a great question. we just released a new forecast for twitter users and we are showing a slowdown in user growth in twitter. it's going to be a challenging platform for musk to revamp over the next year or so and even going forward, in order for twitter to start thriving again,
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it really does need to have some radical change. there is a chance a lot of these different programs and ideas musk has proposed for twitter would be able to actually change twitter as well but the reality is twitter is an established lot form. has been around for a while and convincing people twitter is a whole new platform is going to be a big challenge. emily: insider intelligence, jasmine, always appreciate having her thoughts on that show. another story we continue to watch -- elon musk other company, tesla, isolating thousands of workers in china to make sure they are covid-free. this is a large-scale plan to ramp up production at its plant in shanghai after weeks of lockdown. workers are being housed in unused factories and an old military camp. they will be allowed to join other workers inside the production bubble after a two or three day quarantine in
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accordance with government orders. coming up, shareholder showdown -- that twitter annual meeting coming in the midst of musk's deal. more on what you can expect, next. this is bloomberg. ♪
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emily: twitter's annual meeting kicks off wednesday and the company continues to find itself in quite the match. on one side of the ring is elon musk with his offer to buy the comfy on pause.
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on the other, a tech meltdown with snap cutting its forecast. to talk about what could come out of tomorrow's meeting is jason goldman, one of the founding members of twitter and i'm sure you have been through a few twitter annual meetings. this will surely be unlike any other. jason: this feels like the rag in iraq of twitter annual meetings where there's only one option shareholders are looking for which is to know deal is going to go through because now the deal price looks like this amazing deal and the rest of the world has melted down. i think the questions are going to be can i get my money now? emily: can twitter's board answer that question jason:? the best thing they can assert is the deal is not on hold. that there is no such thing at the deal being on hold, we have a deal for the price we agreed
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to and we are committed to executing this deal and will force compliance and execution of this deal if we have to. emily: is elon musk just bluffing? jason: i don't know. i think it's interesting he's been quiet on twitter. may be losing $70 billion of your own note worth by posting about twitter proved to be a little expensive for the world's richest man, or he figured he was making more work for his lawyers and the inevitable litigation that comes out of this. i think sometimes folks think there are these plans within plans and there's this five dimensional chess people are playing. i think elon realized a lot of his argument about why he was buying the company wasn't holding water and he was taking heat from so many sides that he realized it would be better to be a little quiet and hope for a better position later. emily: we learned more deals
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about how this came about, that it started with elon talking to jack directly and then this cautions about him joining the board. what do you find significant about the timeline? jason: this is all from twitter's proxy filing. this is not for many confidential sources. what happened was jack and elon initiated conversations on march 26 to pursue a strategy. if elon says i'm interested in buying shares and jack says ok, let's turn it over to the board and we can see about getting you on the board, he has put them in conversation with brent taylor, and they agree to a standstill provision that prevents elon from acquiring more shares in degree to put elon on the board. they execute this agreement on the fourth of april. the next day come on the fifth of april, they announce this deal. the very same day, jack reenters
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the picture and has a conversation which according to the filing, he shared his personal view twitter would better be able to focus on execution as a private company and the deal is completely off to put elon on the board and elon says he wants to take it to be a private company. that's a clear backstabbing of the board by the founder when they had a deal in hand to come to a standstill. emily: do you think there should be any consequences to that if you believe jack backstab the board? jason: what i'm saying is we need to look at the comments jack has made previously. he's been committed to this notion of twitter should exist as a protocol and not a platform or company and he said later the board is the greatest dysfunction in the history of the company and there should not be a ceo. but somehow, he convinced himself he's going to turn over this company to the world's richest man as a way of achieving this glorious decentralized transition to a protocol.
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that to me doesn't make a lot of sense. there's nothing elon has said that shows he's committed to this protocol future. in fact, he published a fairly ridiculous business plan showing the type of product he wants to build on the other side of this acquisition. the question i would ask is what was really going on in those conversations between elon and jack and elon and the board. i think that affects shareholder value. emily: last time you joined us, he said twitter faced and not good outcome either way. given the price elon and twitter agreed on is much higher than the price it's trading at today. jason: it would be a great outcome for shareholders. jasmine did a great job setting the five in the valley in terms of what we are headed into an it is very much a 2000. feeling. graybeards like myself are counseling younger folks, talking about the last bust as
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though it was the dustbowl, when we didn't have crawdads, we ate sand and here is how you survive. all of this received wisdom from the last bust. there is a lot of feeling this would be a great outcome for shareholders. however, it's a great outcome for the product or for employees. because elon's plans for what he would do have proven to be so unserious that he's just shut up about them on twitter altogether. emily: how worried are you about the future of social media in general given what we just saw and about slowing user growth? jason: i think that's a real macroeconomic effect and there's some validity that the social media moment we've had for the last 15 years is reaching some sort of endpoint, particularly in terms of how it is valued by the stock market. maybe folks migrate instead comments of being in these
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arenas of public combat we have to contend with everyone all at once, maybe folks are looking for more private experiences or semi public experiences and maybe there's a new evolution of social media to come. as someone who's not a shareholder and not an employee, this is somewhat exciting to me because i think we've been in a frozen moment for social media and user experience and it would be great to see some new experiences come out of this. a lot of the best companies have been built during these downturns in the wake of these big corrections, so that is a potential upside to all of this. emily: we will be watching as it all goes down tomorrow at the meeting. one of the founding members of twitter and white house chief digital officer. great to have your colorful metaphors here on the show. meantime, walmart and its partner plan to expand their drone delivery hub to six states by the end of the year for the idea is you can have anything you order delivered for three
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dollars and $.99 as long as it is under 10 pounds. but there are big regulatory hurdles, faa rules to clear. coming up, zoom is showing signs it can turn its pandemic boom into post-pandemic slopes. we will talk to the companies cfo come in next. this is bloomberg. ♪
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emily: a rare bright spot in the market today -- zoom reported progress on customer growth. projecting revenue will increase 10% in the current timeframe. better than analyst estimates, but still the slowest quarterly sales growth top the zoom cfo
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joins us now. zoom shares up on the day, which i'm sure is welcome news give in almost every thing else is in the red. how is it zoom has been able to whether these macroeconomic forces that snap has not? kelly: we are successfully transitioning from being this killer meeting app that everyone needed to know and love during the pandemic to a indispensable platform for not only meeting come but zoom phone, which had an amazing quarter. we crossed over 3 million people as well as zoom contact center khmer new product that was just recently released. and zoom room, which is going to be an indispensable part of organization strategy and they are navigating what the future of hybrid work looks like and trying to make that as inclusive as possible. all of that together resulted in a strong quarter.
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emily: i wonder if it is time to get a little bolder? you have $6 billion in cash on your balance sheet. should we be expecting you to make more deals? kelly: we are really exciting -- excited. we are bringing conversational ai into our contact center. this is an important part of our strategy. we have a strong balance sheet and are looking toward m&a to continue to celebrate -- to accelerate our technology as well as talent acquisition. we are also in the middle of a purchase program -- our board approved a billion dollars we are executing against hunter institute. emily: you did say you are starting to see the impact of the war in ukraine on sales in europe. i wonder if you can give us any more details on that? kelly: we certainly saw some
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headwinds in our online segment of our business, largely related to the war in russia and ukraine as well as fx. combined, in our guidance, we indicated that is having a 1% impact on revenue. this is due to the sanctions we are seeing as well as the overall impact in europe do to uncertainty in that region and happening -- having a dampening effect. emily: meantime, microsoft teams seems to be gaining market share in videoconferencing. what's the plan to continue to fend them off? kelly: we have a natively built platform that brings together audio, video chat and all of that brings a lot of value to our customers. every single day, we are focused on bringing happiness to them by bringing them a lot of value in
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this natively built that form. we are continuing to innovate. we are hiring in r&d on a global basis and we continue to listen to our customers and build the product they need, especially in this ever evolving world of work today. emily: you also plan to incorporate more ai features but privacy advocates seem to have a problem with some of these new ideas. what has been your response to that? kelly: we are really focused on bringing ai into our products for things like life transcript, analysis after the meeting. this is helpful in terms of our new products, zoom iq for sale. this is helpful as they are trying to make their sales team more productive and make sure they are focusing on the right things in their meetings. we are very thoughtful when we think about bringing any new feature to the market and we
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will continue to do so in the area of ai. emily: the cfo of zoom. thank you very much for joining us. i'm going to give you an update on some breaking news coming out of texas and that devastating shooting at an elementary school . we were just listening to a press conference by governor greg abbott who confirms 15 people were killed. most of them children, elementary school children. the shooter, an 18-year-old, was killed by responding police officers. a couple of those officers were shot but not hurt seriously. we are continuing to cover the headlines as we get them coming in. an absolutely horrific shooting. more coming up next on the show. this is bloomberg. ♪
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emily: welcome back to bloomberg technology. we are continuing to cover the breaking news out of texas where 15 people have been killed by an 18-year-old shooter. 14 of those 15 dead as we understand are elementary school children in addition to a teacher. we are continuing to wait for more details. the shooter was shot and killed by police. we are going to continue to follow this developing story and bringing more headlines. i want to get you back to the markets now. walk us through the movers on the day. >> we do have a down day for u.s. stocks but we did see some of them start to be erased for the end of the session. closing less than 1% lower. we saw some of those defensive sectors starting to perform higher but the nasdaq 100 was
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the underperformer, being weighed down by one of those heavyweights. tesla and apple. we did see the safe haven bid coming into the treasury space. as we start to see some normalcy coming back between that correlation but what is driving the sentiment surprisingly was snap. i say surprisingly because it's not the biggest company and it's not even in the s&p 500 but it did plunge 40% or more on the session today. i did warn about revenues going forward and it is that macro environment that it was warning about, profit margins and inflation and fear of a slowdown that could reduce the advertising spending. in times of recession, that is usually what companies are first to slash their budget on. you see that in the social media stocks.
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pinterest down 24%, twitter down as well. these companies come a social media stocks as a whole wiping off more than $160 billion worth of market value. but it is surprising -- and it surprising how surprise investors were. if i look at all the names kindly, they are down in the double digits on a year-to-date basis. social media stocks have not had the best start off to the year. i will show you a chart indicating that. social media group, that white line on the chart, it is trading back at some of the pre-pandemic levels that we saw. this is quite the change. it's now trailing the s&p 500 and nasdaq. at the height of the pandemic, social media was really soaring. it was one of the outperformer's but with the reopening come with the peers of a slow down what that could mean for advertising revenues, we see investor
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sentiment has started to sour. emily: thank you. meantime, a los angeles superior court judge invalidated a california law that required gender parity on corporate boards. senate bill 826 was signed into law in 2018 by then governor jerry brown, making california the first state to require publicly trading companies to include women on their boards. a law that the judge found to be unconstitutional. here with me to talk about that and more is california's for -- california's first partner, also the cofounder of the california partners project dedicated to promoting gender equality. thank you for joining us. what has been your reaction to the court in l.a. striking this down and the judge saying this law is unconstitutional?
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jennifer: it is great to be with you. thanks so much. the law has led to progress. we have around 1300 seats filled in the past few years with women in public companies in california. we nearly doubled the numbers, the percentage of women on public company boards from 15.5% in 2018 to 32% in 2021. we nearly tripled the number of board seats held by women because we increased the number of public companies in california as well. the law has been a success and i'm a firm believer that policy change leads to shifts in hearts and minds and attitudes and behaviors, so it has been working. emily: but here you have this law being overturned. does this set progress back and
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if so, how much? jennifer: first, we are appealing the overturned because it ignores the substantial discrimination against women to be on public company boards. we all know and research indicates that the board seats are typically held by men who have been conditioned or have biases toward selecting women candidates for the board, so everything from this perception of risk to insular networks and artificially narrow searches, all of this contributes to a bar raised in the process for women and lowered for men. so i am confident in this appeal that another court will see the benefit of this legislation and we only have 300 seats left to
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fill. i'm confident everyone already sees when you have more diversity, more women in public company board seats that there is greater profitability and ultimately, it's better for business all around. emily: i wonder if this is part of a disturbing trend where we see women backsliding? we saw them backslide in the pandemic. on the heels of the #metoo movement, now we are seeing companies going through layoffs, heading into a tent macro economic environment. are you concerned women could be backsliding even more as we speak? jennifer: we are living in really strange times and if we look at s&p ceos and broadly speaking, the board representation in public companies.
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94% of ceos are male and we are living in these times of crises with incredible economic equality. the climate crisis, the mental health crisis, etc., coming out of the pandemic, there is so much women have not had seats at the table and all signs point to you put more women with their perspective and experiences, at the decision-making table, it is just better for business and better for our society, better for the environment, better for everyone. all studies indicate women invest not just in profit but they will focus on people and the planet at higher rates than men will. the outcomes of having women sit on public company boards are substantially greater. i'm happy to talk about those in detail but i think this all points to the past hasn't been
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working was so we need to keep supporting and encouraging more women in leadership and giving them seat at the table where they need to be. women are primed to solve some of these complex issues across our economy and society today. emily: we are seeing companies increasingly facing pressure to take a stand, whether it is disney on the don't say gay legislation or companies in general on the potential for roe v. wade to be overturned. what do you think companies should do in these situations, knowing these are very polarizing issues? jennifer: you are talking to someone who has always believed in the triple bottom line model that a successful company invests in its employees and provides a family friendly
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policy and pays its employees equitably. a successful company makes sure it's not harming the environment and its leaving the environment in a better place and it pounded . and that it is profitable. companies need to be bold and lean into their values, like we are leaning into our values in california. part of that is, as we all know, the greater the diversity you have around the table, the greater your chance to be in a better bottom line. all these companies need to be bold. they have to lean in and lean and what their values. emily: governor newsom, your husband, is taking steps to make california a safe haven for abortion, recently allocating money in the budget toward reproductive health. what more would you like to see california do? jennifer: specifically with
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regards to reproductive health? i want california to be the state where working moms want to raise their families. i think we are taking great strides in that direction. i'm proud of the work we are doing with regard to pay equity and women on public company boards. we are leading the nation and a world leader when it comes to public company boards, the strongest pay laws in the nation and we have incredible laws related to sexual harassment and assault. i think we are creating an environment where women can thrive and we are so invested. part of my work is around children's mental health and ensuring kids get the best nutrition and spend time doors, and i'm turning to physical fitness and mental health
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counseling, i'm excited for california to be a leader in terms of centering women's perspective and experiences and making sure their family really thrives. emily: speaking of children, i have to ask you about this absolutely horrific shooting in you volte, texas where an 18-year-old shooter gunned down 15 people, 14 of them, we believe to be elementary school students in addition to their teacher. what is your reaction to this? jennifer: i want to cry. it is horrifying. i am a mother of four. guns are a major, major problem in our country. toxic masculinity is a major problem, misinformation is a major problem in our country. mental health is a major problem
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, but guns and ammunition kill people and they don't belong in the hands of people that have extreme beliefs, a lot of hate, are bigots, are racists, our sexes, are violent offenders, they don't belong in the hands -- semi automatic weapons do not belong in hands of people. california has been leading the nation's and conservative judges have been challenging us and i'm proud of what the governor has done in response to gun legislation and my heart goes out to every child and family member who has been impacted. it is horrible. emily: indeed. it is absolutely horrifying. cofounder of the california partners project, thank you for sharing your thoughts with us. i want to lay out what we know
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about this shooting in texas -- 15 people killed so far, 14 of them children in addition to their teacher. according to the governor of texas, the shooter was an 18-year-old person who was shot and killed by police. a couple of police were also injured. but they were not killed. we are continuing to follow everything that is happening at the side of this shooting and we will continue to bring you more details as we have them. this is bloomberg. ♪
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emily: we are continuing to cover breaking headlines out of the shooting scene in texas where fort teen elementary schoolchildren have been killed in addition to their teacher. the shooting suspect is an 18-year-old man, also killed by police. we will bring you more details as we have them. i do want to move on some of the other stories of that day and our crypto report. crypto keeping a low profile amidst the broader market slowdown. bitcoin falling below $29,500. showcasing a fairly strong correlation between cryptocurrencies and other equities. even more so than between the coin and tech stocks which is -- has institutional investors still spooked. kristen from the blockchain association joined my colleague earlier to talk about what it all means. >> there are two primary issues
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that get the most attention for regulars. the first is having a way to regulate the spot markets. today, having transmitter relationships which is not directly related to what they do most. instead, we need to see a single regulator. the other is stablecoin regulation there are many types and having disclosure around water in those reserves, having audits of those and making that information available to consumers would go a long way to preventing something like the usp collapse. emily: to an extent do you think -- >> to an extent do think cryptocurrency and blockchain has a problem -- how much is a real understanding about how these work and how great the level of understanding is among lawmakers? >> we have made a terminus
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amount of progress. if you compare where we were a year ago to where we are today, the overall basic level of execution policy makers have about this asset classes risen quite a bit. problem is it such a fast-moving industry that is constantly evolving and changing, it takes a lot of work for policymakers to keep up. what policymakers on capitol hill realizes they have constituents in their district investing in these assets, building on top of these blockchain's, and they are passionate when it comes to public policy in this space. so as an industry and ecosystem, we've caught the attention of congress and with the exception of a few outliers, most of them are, if not crypto champions, they are crypto curious and want to learn about it. it's incumbent upon us in the industry and crypto ecosystem to make sure they continue to grow and understand and that is a lot
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of what we do at the blockchain association. emily: we will have much more on bloomberg technology, next. this is bloomberg. ♪
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>> first, i want to tell you that what happened is a terrific tragedy that cannot be tolerated in the state of texas. there is swift action being taken by local law enforcement as well as the text part of public safety. they obviously now know who the shooter was and the shooter is no longer alive. emily: texas governor greg abbott, giving us the latest on the absolutely horrific shooting . 14 children killed along with their teacher. we will be continuing to cover that story as it continues to unfold. i do want to move on to amazon
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web services. there is an aid to be u.s. summit underway right now, taking a deep dive into how public sector can use the cloud to innovate and enhance their digital information. here to talk about that and more is the vice president of it -- a debbie u.s. vice president. give us a report card on how companies are managing this digital transformation as we come out of the pandemic. >> that's a great question. we've had over 17,000 people registered to attend the public sector summit in washington, d.c. to understand exactly that question. a couple of significant ways people are transforming public sector business is in terms of speed. what me give you a quick example. at the university of british clump you, they are working to solve the covid pandemic problems we have all had.
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they turned to eight of u.s. for advanced computing power. they were able to take 6 million public records about health information, put it into a debbie u.s., where they were able to take these records and take what would have been a lengthy process and compress it into 11 days and identify seven new coronavirus areas. that is the power a ws gives researchers to understand and solve big problems. emily: you are announcing a new health care accelerator
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care startups. what are the goals for a debbie u.s. when it comes to the health care sector specifically? >> the health care accelerator is designed to help small businesses who have really innovated on a debbie u.s.. we give them technical symptoms and connect them with others in the health-care industry to create new solutions and startup accelerators are the things that really generate tremendous opportunities and solve really big problems and very innovative ways. we are excited to announce it here. this summit is focused on health equity in particular and is open for applications from now until july 1. emily: i'm curious for your thoughts on the labor market, especially how companies are competing for talent and companies in the cloud specifically. one of the interesting trends you are seeing? max: i would start off by saying there's a noticed shortage in tech skills, which is why amazon took notice to upscale any 5 million people with cloud skills by 2020 five. as a result of the pandemic, there is a temporary increase in the difficulty of maintaining and retaining folks. as we have come out of the
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pandemic, we have seen these return to more normal circumstances. but the key is to focus on continued skilling, whether it is early age which targets 13-14-year-olds, largely targets women to get them into tech skills, whether it's at the university level like a debbie u.s. academy. emily: max peterson, thank you for your views across all of that. i want to give you very latest that we know out of texas -- 14 children killed in addition to their teacher in a horrific shooting. president biden is now scheduled to make some comments about this shooting at 8:15 p.m. from the roosevelt room. we will be carrying those here on bloomberg television and you can stay tuned here for the very latest. this is bloomberg. ♪
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