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

emily: i am emily chang in san francisco and this is "bloomberg technology." coming up, nvidia misses revenue, a sign that electronics might be drawing up after just drawing up after a pandemic boom -- might be drying up after the pandemic boom. why the iphone maker has slowed down its buying spree despite a 170 $9 billion war chest. his facebook really the underdog now? are we underestimating it? we will count the ways in which tiktok does not come close to meda. all of that in a moment but first i want to get a look at the markets.

and bloomberg's ed ludlow here with the latest. we started the week with a whimper. ed: a lot of red on the screen. the main gauge of equities down a 10th of 1%. we have been higher as much as 1%. information technology, the biggest dragger, nasdaq town for the second straight section. semi conductors, you're right, poor earnings from nvidia dragging down the philadelphia semiconductor index. stop down 1.6%. interesting though, there are always bright spots, pockets of opportunities and the biotech index is up. a lot of m&a, which has been helping. we lost momentum, three straight weeks of gains, than to back to back down sessions. almost 1% higher from our june 16 low and we are all looking for that cycle of breakthrough that this was the bottom. we are seeking confirmation. earnings so important and of course, later in the week, we

get inflation data in the u.s. for the month of july, which will inform our thinking about the direction of travel and strength for the federal reserve's action when it comes to raising rates to combat high inflation. interesting stories as well. different stocks moving indices in different directions. overnight, we got the senate climate bill that really boosted ev stock. tesla closing up eight times of 1%, but it had been higher by about five percentage point spirit others include sunrun, solar names that would benefit from the measures in the bill. meme stocks are back in. it's been a while. beth -- bed, bath & beyond of 40% or do not adjust or tv screens, that is correct. 40% and we have been talking about it all day long. nvidia missing physical second-quarter sales by $1 billion. wow. emily: that is a big one indeed, ed. i want to talk about that a little bit more. thank you. sticking with nvidia, the giant missing its quarterly revenue projections by more than a billion dollars per debt into

the demand of components drying up after a two-year pandemic. bloomberg's who covers all things is here now. what happened? >> it's not a surprise that it happen, given what intel had said, what other pc related components makers have said. but i think the extent to which they fell short on the rapidity with which demand has fallen away have caused concern. that is what analysts and investors have been talking about today. emily: why did they get their own projections so wrong? ian: they said it happen so quickly, it fell off so rapidly, that they did not see it coming. the concern or if you like, the underlying suspicion is that it is not just consumers, not just gaming related, but also crypto dependency that they said that they shared. chips are not good for crypto

mining anymore, you don't need to worry about that. but the music cryptocurrencies being through a rough time. no reason to be mining and a lot of situations now maybe those cards are coming back into the game. emily: they also preannounced. how unusual is this? ian: relatively unusual, but again, to be fair to nvidia, at least they did. one of the big themes of intel's big disaster last week is why didn't you preannounced when it was so bad? investors don't like surprises. the fact that they did is unusual, but at least they are being forthright and we can give them some credit by analysts for doing that. emily: are they clearing inventory and is this something that will be cleared say my next quarter? ian: that is a positive scenario. this is what the chip industry do, they overbilled, they do it wrong, they cannot match the supply with short-term demand movements. as soon as we clear out energy -- inventory, we are back in every thing is ok. that is the positive picture. the negative is like consumer demand. emily: meantime they have been

investing in the server market and that has helped cushion the blow, right? ian: that's absolutely right. that is why they are the world's most valuable chip company because they built this chip business emily: what does this say about the broader state of the chip industry? did anyone expect the pandemic boom to last indefinitely? ian: you are a member and it perfectly pure to how may times did we talk about this, how may times did the chip industry tell us things are different now, the pc market is a higher level and everything is ok did every household needs three or four pcs, everything is going to be ok. and here we are in the middle of 2022 saying that is absolutely not true. emily: ian king, thank you for the extra details. we will be watching. coming up, apple has been particularly quiet on the m and a front, despite its massive cast pile. -- massive cast pile. we will expand my next. this is bloomberg.

-- we will explain why. this is bloomberg.

♪ emily: shares of galaxy digital rising monday, despite reporting a $515 million loss. sonali basak and caroline hyde spoke with them about the state of the crypto winter. take a listen. >> we have had one credit blast in the history of our company and i disclosed the name today. it is a manageable loss relative to our balance sheet and our

credit business. our business was profitable on the quarter. i feel pretty good about that. but what we saw away from us was huge concentration in this, which created a lot of systemic risk that we saw in the cascading of over 18,000. i do not have a crystal ball. when i add up the total claims that people filed, it does not feel like there will be a lot that comes back in that case. you know, you've got celsius, you got voyager, lots of other places where both institutions and retail lost a lot of money. and they will be in business for that. sonali: i want to double down on retail because you brought it up. you mentioned earlier that you're skeptical of a soft landing. to the extent that you mean that there is a recession coming, it will be hard landing, how much money will be on the sidelines to put in the crypto, let alone any risk asset? >> listen, you know, the fed

increased supply at a rate that we've never seen before. mike: they are slowly withdrawing that. there is a ton of money in the system. excess savings in retail, that is getting worn down some. there is monster cash. people got really nervous and we had a pretty dramatic selloff in the first half of the year. and so, i do not think we are going to see what we saw last year, when money was flowing in and it was all booming. i don't the gets armageddon yet here either. and so, again, you know, will bitcoin get through 30,000 on this move up? we will see. i am doubtful. i think we might be in this range now. i quite frankly would be happy if we are in a, you know, 22,000 or 20,000, 30,000 range for a while. just add a bit more juice to the top of the range. it could go higher. it's got a real story.

i do not see the mania that we saw in 2021 or 2017 reigniting. listen, i hope i am wrong. emily: galaxy digital ceo mike. meantime, apple use to acquire a company every three to four weeks but it has dramatically slowed dealmaking in the last two years. apple spent one half billion dollars on payments tied to acquisition since fiscal year 2020, but just over $200 million in the last 10 months. mark here to discuss. so why is apple slowing down the pace? mark: that's a good question. when you look at this chart, when you think about it, the first two things -- reasons you might propose is covid. covid messed up everyone's business plan. to tear it all up and start over, right? the second is regulation good obviously you have the ftc going after nvidia, microsoft deals. the deal for nearly $70 billion. mehta, amazon, all of these players spending so much money

and regulators suing them and trying to get in their way. so maybe apple is fearful of that. inside of the regulatory filings may suggest. i think it is neither of those. 2020 was the height of the pandemic and that year, they spent more than they had since 2014. i also think that apple is not spending amounts of money that necessarily would lead to scrutiny from the ftc. and other governments globally. i think this is a matter of fact of their product development schedule. two, investing in other areas and three, maybe they are trying to go at it more alone without needing to acquire companies. at the same time, this is extremely odd. i would bet that most people do not know that siri, face id, touch id, apple music, apple news, the weather app, i could sit here for 10 minutes giving you a list of iphone features that we all use every day. those stems from acquisitions. so buying smaller companies,

startups and core technologies has been core to the apple development process ever before since steve jobs even returned to the company in the late 90's. emily: that's interesting because apple has never been one to make big acquisitions. certainly not to the scale that mark has, for example. how is them not making these smaller acquisitions over at least the last year going to impact the product development cycle? mark: i would look at it this way. i think that these acquisitions have helped apple get to where they want to get much more quickly. and at lower costs, per se. i will give you my favorite apple acquisition is probably authentec back in 2012. they bought that company and all that company did was make very secure, reliable fingerprint scanners. and that led to touch id in 2013. remember how cool that was? right? and so those little things even though they're not big deals,

lead to cool features that have helped themselves phones. to answer your question, i think they should be snapping up autonomous car companies. car companies in general, car manufacturing, to really bring the apple card closer to fruition. remember when elon musk said that apple buying tesla on the table for a market cap around 60 billion was on the table five years ago, before the model three came out? imagine if apple would have bought tesla back then, how different the car industry would look today for a $60 billion deal. and i say just, if you compare a $60 billion deal compared to apple's cash balance over the last decade or so, it is small potatoes. i think there acquisition strategy has paid off in a lot of ways, but we are seeing changes at least for the last two fiscal years. emily: i spoke to tim cook around apple earnings about your story,. they are slowing spending on hiring, slowing spending on growth across certain divisions and here is the way he put it to me. he said we believe in investing

through downturns. we have always done that and found that made a stronger on the others. that is the frame of mind we go into. obviously, we are being deliberate in our decisions about where to invest. what do you wade into that word deliberate? mark: it's a word for yes, we're spending less because we and basically no one else knows except it was going to happen to the world and the economy over the next several months. so it makes sense that they're going to scale back spending a bit. i think a lot of that was attribute it more to our indian hiring more specifically. i think -- two are and d --r and d. if it came tomorrow or later this afternoon for a fair price, i don't think they will do anything to take the deal. i don't think that's going to influence m&a strategy as much. we are still trying to figure out why they are doing this, why they are being so careful. they have so much money, they

are clearly not worried about ftc scrutiny. the pandemic did not hold them back from spending one and a half billion .20, so clearly, there is other strategy or product related factors here at play. emily: mark gurman in l.a., thanks, mark, as always. coming up, digital rights in a post roe v. wade world. how to navigate what can and cannot be used against you when it comes to your web searches. that is next. this is bloomberg. ♪

>> the companies provide a very important service that allows people to access information about their health care. >> tech companies could choose to provide that information, provide free security services to websites disseminating that information so they are protected from vigilante

hackers. >> the other things that tech companies can do is become very prepared to go into court and actually push back against the requests that they get from law enforcement. >> they have enough data on all of us to serve their business model. they do not need a data about people's private health choices in order to make money. >> and if they are disregarding the rights and welfare of the people that they are serving through the technologies that they provide, those people are going to be less and less able to participate. emily: as abortion restrictions tighten in various states across the united states, questions remain about privacy. how will new laws be enforced in a digital age? privacy advocates worry that data could be used to track individuals who visit abortion clinics or travel across state lines. joining me down to dig deeper into this is alexandria, the president of the center of democracy and technology. thank you for joining us.

what is not being talked about when we think about the power that these companies have and the threat that our information could be used against us? alexandra: i think this is a wake-up moment for the tech companies to think about the sheer amount of information that they have and to know that their users want that information to be protected. so when a company is thinking about how much data they collect, how long they store it, where they are sharing it with and getting smart about how they respond to law-enforcement request as well emily: what kind of data are you most worried about? that these companies have? alexandra: so, right after the news of the overturning of roe v. wade came out, there was a huge conversation about period tracking apps. that matters but users should know there's more they should be focused on. your browser information, what websites you visited, your search history, your online purchases, if someone purchases medication that could be used in the case of an abortion.

and then also the subject matter of your text and emails and finally, your location information, which can be collected by your phone, apps on your phone, and also by your internet service provider as well. emily: how should tech companies prepare themselves to deal with this? alexandra: they need to think about a couple different things. one is data collection practices in the first place. we are about to enter a world where law enforcement is asking companies to hand over their customers most sensitive information for prosecutions that are wildly unpopular, when you look at the broader american public. companies need to think about what they are collecting, how long they are keeping it for, and how they are responding to law-enforcement request if they get them. they needed to be requiring a warrant. they need to be fighting to make sure that those warrants are narrowly tailored. they need to be pushing back from overbroad fishing expeditions and they need to be telling users about the requests that they are getting so they can have more transparency in this space. emily: you have also talked

about how worried you are about a chilling effect on free speech, when it comes to information around abortion. can you explain that? alexandra: there is a big conversation to be had around online content moderation. how companies can make sure that they're helping people get access to reliable, accurate information about abortion services, pushing away at and disinformation. and also pushing back state legislatures try to make it illegal to post online information about how to access reproductive care. so we need companies to be thinking about what they are curating. what are the signals they can put online to give access to good health care information. fairly similar to what they have had to do under covid really and also make sure that they are not falling for these statutes that try to access -- limit access to good information about reproductive care. emily: are there ways that big tech could help women wanting to

make this choice or who feel like they have no choice but to make this quote unquote choice? alexandra: it's all about knowing your options. it's about a woman being able to understand the circumstances that she is in and make an informed decision. and so, some of the things that we have seen companies do which i admire and like is for example, if a person searches for abortion services, what are the ads that can come up against that search down the bar on the side of your search engine? how do we make certain that those are from providers that are trusted. not from places that are trying to trap people that are seeking information about abortion care. we have reason to believe in this climate that crisis pregnancy centers, which come from the antiabortion movement, might well be trying to contact people who are running those searches. what are the indicators for trusted information that platforms can do and how can they quickly responded to fraudulent websites, websites that are trying to entrap people

seeking information for care? and de-escalating the spread of viral disinformation about abortion services as well. emily: what are your biggest fears about how technology could potentially be used against us? alexandra: i think they are starting to come true already, which is the fear that they are going to be used in prosecutions. and also, when you look at some of the state statutes, it is not just law-enforcement prosecutions against people who are seeking or providing reproductive care. there are some statues out there that authorize individual citizens to go out as private bounty hunters and file their own lawsuits against people that they suspect of aiding and abetting abortions. that is really dangerous, because it creates this incentive system for the wild west for lone rangers to go out there and track down information about their neighbors, bringing these lawsuits with the promise of the state paying them a $10,000 bounty if they do so. that is a really worrying environment for people's privacy

and ability to access good information online. so that is the type of landscape that tech companies just should not want to get themselves in the middle of. that is why we need tech companies really limiting collection of sensitive health information that could be used to create an inference that somebody has accessed abortion services or any other type of reproductive care that could expose them to litigation or prosecution. emily: it is potentially very terrifying. have you seen any particular examples where this has happened or where this is happening already? alexandra: there have been cases. even before the overturning of roe v. wade there were women being prosecuted for pregnancy outcomes. being accused of self-induced miscarriages late in their term. what was used in those prosecutions were peoples browsing histories, online purchase history, evidence that they had purchased medications online and even in one case, the subject and the contents of a

woman's text messages with a friend as she was trying to get advice on what to do. we have seen already in these cases that digital evidence can be used against you. so that's a reason why users need to be careful and why companies need to be watching as well. emily: chilling indeed. alexandra givens, thank you for shedding light on this issue. really appreciate it. president of the center for democracy and technology. thank you for stopping by. coming up, mark zuckerberg is trying to pitch meta as a -- should we buy it? we will explore how the competitions against platforms are stacking up to tiktok. plus later, duo lingo boosts guidance as it works on its own tiktok strategy. a conversation with the ceo, later this hour. this is bloomberg. ♪

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emily: welcome back to bloomberg technology. i'm emily chang in san francisco. softbank says it will sell some or all of its shares in sophia. 9% state, softbank reporting and the curd -- a record net loss as it continues to hammer its vision fund portfolio. shares of ev makers including energy companies jumping after the u.s. senate passed a landmark bill on climate. ed ludlow back with the movers. ed: it moved as you would expect them to. $274 billion of energy and climate spending. you look at names like tesla around 5%, closing up 8/10 of 5%. legacy names like gm and ford. it ends the manufacturing on the

tax credit, which is something we expected. it had been negotiated and that scene is the tailwind for demand. there are price limits. anything over $55,000 for an easy car or sedan is not eligible and anything over $80,000 for a pickup or suv is not eligible. this is what we have been waiting for, the government to give this industry a bit of a push getting going. not done much for stocks so far. you look at the performance of tesla versus legacy names like gm and ordered your today. they are still under pressure and we are still seeing stiff declines. on this side of the screen, you see ford in particular closing the share gap on tesla in terms of year-to-date performance because they are ramping up activity and again, with governments, there is hope that they will see more. it was not just edie's. there are measures within the bill for support for renewable energy, not just for solar but for hydrogen as well. you see names across solar moving significantly on the back of that bill being negotiated.

not all the way there. it goes to the house next, but the expectation even though this is trimmed down from where we started a year ago, is that this is a really big play. ultimately, to reduce admission by 40% from where we were in 2005, interesting development. emily: thank you. mark zuckerberg's new narrative or meta-has consistently of all, pitching his books platforms as the underdog, especially when it comes to regulation and competition. facebook may be in a better condition to take off tiktok when -- dan zuckerberg is leading the public to believe. given a different regulatory environment, zuckerberg would buy tiktok. that is not possible at the moment. thus, his strategy is evolving. max joins me now. does anyone really believe mark zuckerberg when he says that it is in underdog? max: we have seen a bunch of stories all about the existential challenges facing facebook. end, investors have sent the

stock down something like 15% since february. there are definitely people out there with concerns. and i think what is happening is zuckerberg is leaning into that. so you do have economic challenges. facebook really benefited from covid at stay-at-home orders and the sort of explosion of e-commerce shopping. that is gone away. and then you have this cultural challenge, where tiktok is getting a lot of share. it seems like younger people of course are into tiktok, they are not into facebook. zuckerberg is saying we are in trouble. we're good to have this intense time, he is rattling the saber in terms of telling employees they should not take vacations. they need to weed out the bad performers. and i think this is, as i say, strategic. it is an effort to try to get more productivity out of staff and also kind of a positioning thing, because facebook faces serious antitrust scrutiny on a

couple of different fronts and in playing up challenges from competition is of course one way to kind of diffuse the situation. emily: how would you assess facebook's position of power, with respect to tiktok? what does facebook have on tiktok and what is tiktok's actual advantage? max: facebook -- it is easy to forget this, but facebook is way, way, way bigger than tiktok. we do not know exactly how much money tiktok is making, but independent estimates put it at $4 billion in revenue in 2021. and facebook, you know, is something like over $100 billion. they are making eight times tiktok's revenue and profit for the year. now tiktok could -- and there is a lot of chatter about this, tiktok could turn on the cash machine and make money, but they have not done that yet. and there's no reason to think that they will be any better at

monetizing than mark zuckerberg it is because what facebook has built is this kind of incredible cash machine for turning online intention into revenue. and he has, it's been well-documented, basically a monopoly on social media advertising. in tiktok is certainly eating into that, but really, it's a long way away from eating mark zuckerberg's launch. emily: that said, tiktok doesn't seem to be way, way, way winning the attention more -- war was facebook or is that also a misperception? max: i think that's absolutely true but it's easy to forget that lots of other companies won the attention more. facebook, there's been a lot of people pointing out that facebook is lost his cool but with that overlooks as it lost its goal for the last 10 years, right? facebook lost its cool to instagram, twitter was a hot thing for a while, and over

time, mark zuckerberg has found ways to maneuver the company. there is one important difference. whereas in the past he would have bought tiktok, that is not possible because of ftc scrutiny. he could try but it seems almost certain that the government will try to block it, given that they're trying to block this smaller acquisition. that is something that's not available, but what is available to him is copying. and we're seeing facebook do that with its reels product and with efforts to have more ai driven discovery basically tiktok interfaces. that's the complaint that led to complaints from instagram influencers and kardashian adjacent types. and we know this is working in part because facebook has said one reason that revenue is lower is because they are driving users into these tiktok platforms which do not monetize as well. so they are making a choice. they are choosing copying tiktok versus driving revenue. on one hand you can say that

both well. it suggests that they are not monetizing well. looks like they -- i don't see any reason why it won't work. it's worked many times before in the history of the company. emily: great place by you on bloomberg businessweek. as always, great to have you. coming up, bitcoin and coinbase both rally. it is winter getting warmer. ftx u.s. president brett harrison joins us to weigh in on that question next. this is bloomberg.

emily: coinbase shares rallied for a fifth straight day as investors continue to pile into the largest u.s. crypto exchange following news of its partnership with blackrock to help institutional investors manage and trade bitcoin. this has bitcoin also rallies, breaking above the 24,000 dollar mark. welcome news for the crypto platform ahead of its second-quarter results after the lows of market leader this week. here to discuss what is happening this winter, i want to bring in ftx u.s. president brett harrison for his read on this and much more. so what do make of this coinbase blackrock news, brett? brett: it does seem to be that winter is starting to fog here. prices are rising and what we see here, a lot of these are liquidations in the market. there's turning to come to an end. no more bad news about different exchanges or lending platforms going under. voyager is returning phones.

large venture capitalist already to be deployed again and news coming out with coinbase and blackrock showing that institutional demand to be able to trade crypto through some of the more traditional huge players in the market is not slowing down. in fact, as the saying goes, this is the time to build. people are obviously building as we start to come out of winter, people are trading them. the tools and capital will be in place to do so. all of this against the backdrop of more progress in congress. coming out with their big crypto bill. a lot of positive signs around that. bringing in positive sentiment to crypto markets and every market related to crypto. emily: still, you got coinbase and robinhood slashing their headcount. what mistakes do you think these companies made when they were scaling? brett: looking across the growth tech sector, there are so many company is talking about either layoffs or hiring this. everything from robinhood but

also google, microsoft, tesla. i think there is a real lesson learned here which is that growth companies which typically operate under the model that headcount grow as a sign of company growth, are realizing that headcount growth can get in the way of company growth. if you do not have a staff or you can prioritize the most important build outs, get things done, move with a market that moves extremely quickly like crypto, it is going to be difficult to keep pace. when there is a winter and things are slowing down, retail volume is drying up and you have to focus on the most important things. that means you have to pull back on employees, which can be devastating. to build up a giant workforce and have to lay those people off who have worked so hard. i mean, that is why i think companies like ftx, of course, were not the only company to do this, showing that you can operate with a leaner model and a smaller team and be able to focus on the highest priority items at all time, get things done, is super important to be able to weather even the downturns in the market. emily: ftx has been really

inquisitive through this winter and i wonder if winter is starting to thaw, how does that impact your strategy around deals? do you expect valuations to stay low or start to creep up and could that mean less opportunities? brett: yeah, absolutely. i mean, as you said, during this let's say couple of months, there have been a lot of opportunities presented to us, as far as potential deals with, you know, either companies that are looking for capital injections, help getting back in business, possible merger opportunities, lower private equity valuations. and yes, as investor confidence starts to come back into this sector, those opportunities will start to dry up as these companies start to get their volumes back, they will start to get revenue again. they will go on to be able to increase their existing pipeline on projects, capital in the same way before. but there is still plenty of opportunity in the market and certainly ones that we are looking at. emily: ftx is expanding its no stop trading fee to all of its

u.s. users, including non-crypto investors. what is the end game here, is robinhood a competitor or still a potential target for some kind of steak? brett: it is certainly the case that they are a competitor. they have been a competitor for a while. they started out in the stock trading is this and then they added crypto. they added the ability to trade bitcoin on their platform. they have since been adding more and more assets. just today they added avalanche. so, they have realized that their customer demand for retail and crypto trading is incredible. and so, they have been competitive with us for quite some time. what we realized is that we can do it, providing a stock trading pie form two our users as well without relying on order flow. we can give people more advanced analytics and tools to make smarter decisions. we want to make our platform one that is involved with educating users in how to make -- how to do trades in a responsible way, as opposed to being more of a game. in that sense, we think we have

a good shot of completing with them on this platform. -- competing with them on the platform. the are excited about all of the initial user growth that we have seen at ftx u.s.. emily: you have also in a number of different sports partnerships, your name is on arenas now. partnership with major league baseball. how much are these sport partnership, sponsorships actually paying off? brett: yeah, it is hard to put a clarification on that number of exactly how much it has paid off. we think from a qualitative perspective it has been a tremendous important for our brand. think about that one year ago, almost no one in the u.s. had heard of ftx u.s.. we were going up against coinbase and cracking and gemini and different companies that are been around for a decade. and in an industry that requires trusting your brand, that cryptocurrency does, with all the noise out there with exchanges going down with tax, with scams, you have to establish that brand presence, especially in the united states. for us, doing things like

partnering with major league baseball or putting our name in the ftx arena catapulted us into the public consciousness in a way that going more traditional advertising routes such as google or facebook ads would not have been able to achieve in such a short time. emily: what is it that ftx has done right or so much more right than some of these other exchanges and crypto companies that are struggling? brett: you know, i think -- i would not say it is more right, i would say we found our niche, which is that there was a really growing need for a great platform for institutions. you know, there's a lot of platforms that built up around making it very easy for the average consumer to buy. $17 a bitcoin from their phone. but for those very large traders, the large individual retail people, or hedge funds, the market makers, they needed to be an excellent platform where they can be sure it was going to be up 24/7, but the risk systems were intact and

working well for them. that the user perspective led -- lent itself to that training. that's how we got onto the scene is by going institutional route. that is why it far fewer customers globally than someone like coinbase, we have a greater volume. the average volume per customer is that much greater. and of course, now, we deathly interested in moving into the consumer sector as well with our app and mobile stock trading, but that is how we found our niche and have been able to grow our business. emily: all right, brett harrison, president of ftx u.s.. always great to have you. thank you for stopping by. coming up, it is that time of year again, back to school. were going to talk about the latest trends intact with the ceo of duolingo next. this is bloomberg. ♪

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emily: as families ease into the

back-to-school season throughout the country, let's take a look at trends in the world of education technology. duolingo beat analyst estimates during its second quarter. earnings reports boosted its revenue guidance for the year. i want to talk about this and more with eo and cofounder luis. going into a school year has the pandemic boom been keeping up or is it starting to wane? luis: the pandemic was interesting. for us, it was not a crazy boom. we did benefit from the pandemic that we have been growing steadily and a lot of people up asked us if after worse -- afterwards things went down but we did not see that. we are used in every country in the world and the whole part of the socioeconomic spectrum. for us, it has been business as usual. emily: one of the most interesting themes going into this particular year, now that schools generally have been

basically open for about a year, since covid? luis: i think one of the things that is interesting is with schools in general, they have adopted educational technology a lot more and we are going to continue to see that. so we are expecting a big back-to-school month. we usually get it around this. it is used by about half of all schools in the united states for teaching foreign linkages. and so, we are excited about that. i think generally, educational technology is here to stay. i think that has been proven. emily: you have been leaning into tiktok when it comes to data spend. talk to us a little bit about that and why. luis: it is not ad spend. we have been leading into tiktok, but it is organic. the spend that we have on tiktok is the salary of our employees who run the accounts. we are blessed that we have a very lovable mascot, duo the

owl, and we make these videos that go viral. some of them are our mascot dancing etc. so that has been good for us. it is a proximally 10% of users in the u.s., new users in the u.s. come from tiktok. and it has been very efficient. again, the main spend there is the salary of the couple of people who run it. emily: interesting because we were talking about tiktok versus facebook and instagram earlier and i'm curious how you would assess the impact and power of both? do you see tiktok as more powerful or potentially a lot more powerful than the other two platforms? luis: for us, tiktok has been significantly more powerful. i mean, i think some of that has to do with the fact that it is on -- these days it is kind of the cool thing. buit is also the algorithm really rewards contents that is enjoyable. i think we managed to create enjoyable, viral content that has worked out very well for us.

emily: duolingo is back in china's app store after a one-year hiatus. talk to us about the impact of the crackdown and how much did that set you back? luis: yeah well, china is a very interesting market generally for everything, but for language learning, it is the largest language market in the world. for us, it has always been small. 1% of our revenue and daily users. about nine months ago or so, we got taken down from the app stores, which what it meant was all the users that already had duolingo could continue using us but new users could not get in there. and you know, about a month or so, we were reinstated. and we started growing again. and at this point, we are back to the traffic levels that we had before we got taken down, but for us, even though it is a very interesting market, we also know that western companies usually do not do super well in china. so it is an interesting market,

but it's only about 1% of our revenues. emily: now, you know, no question we are facing a difficult acro environment, inflation, the r word. but hearing it over and over again crude sometimes it is more impending than not. how are you expecting that to impact your business and the tech market in general? is this a discretionary market, where, you know, if companies or customers are going to have to choose, they will spend less here? luis: well, we have not seen any kind of weakness in our numbers. you know, we increase our guidance for the quarter. and i think some of it has to do with the fact that we are still pretty early in our journey. language learning is a large market, about $60 billion a year. most of it is still off-line, so if you think about language in the language learning market, most of it is kind of people learning english in night school in brazil or something like that. and it is shifting online. the way it dating shifted online

for the last 20 years, language learning is still kind of shifting online. so we are still in the early parts of our growth, in terms of user growth and also revenue growth. so we just have not seen any weakness in our numbers. and you know, the other thing is we have a free model, where people can learn as much as they want entirely for free. and then they can actually turn off the ads, if they pay, so far, this just has not affected us at all. emily: interesting. luis, cofounder of duolingo, thank you for joining us and giving us a snapshot of what is going on in your industry. that does it for this edition of bloomberg technology. later this week on tuesday, we got lemonade ceo daniel schreiber to talk about the results and how inflation is weighing on consumers. do not forget to check out our podcast wherever you getas i am emily chang in san francisco. ♪

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heidi: good