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

>> i am emily chang in san francisco and this is bloomberg technology. elon musk is asking for the twitter tried to be pushed back after a recent allegation about the company's security and he is changing his complaint. will that help or hurt his case? plus, we are learning more about the early years of youtube. for 12 years, the site was a refuge from sensors and corporate overlord. it was also a founding spot for terrorists. and the pandemic changed how we live, work and learn. more students are accessing online learning with fewer people going to college. we will launch our education tech series in the next hour. we will look at the --

>> it is starting to look like convection. they are closing in on a third straight day of losses. the s&p 500 is off by more than 1%. it was the chips that led losses and filled out the semiconductor index by 1.3% again. all of this as treasury yields rose. this means the fed will keep hiking. even the meme stocks fell victim to what we saw in the broader equity market. they are still up over 20% over the past three days. earnings season truly never ended. estimates are down by 4% or so

in the after hours. hewlett-packard enterprises narrowed their adjusted eps forecast. an crowd strike actually, estimates were pretty in line with what the company delivered, a little bit of boost -- of a booster shares after hours in what was pretty heavy selling at the index levels on tuesday. let's and on twitter. i get a little anxious if i go too long without talking about elon musk. i know you do as well. we will dig into the details of that complaint he amended other bit. let's look at the discount between what the actual offer price is and what twitter shares are actually trading at. they are now at about $15 or so. can't imagine elon musk is too thrilled when he thinks about that. >> thank you for that update. elon musk saying this is another

reason the deal should be canceled. also, looking at the associate dean here. she has expertise in corporate government and bloomberg's kurt wagner joining us as well. there is a lot of back-and-forth here. almost every day. what happened today? >> there were a few things that happened and both of them were things we have seen previously but they have since been amended or updated because of the whistleblower we talked about. the first is that elon musk sent another letter to twitter yesterday, saying that i am formally walking away from the deal and here are the reasons why. those reasons now include more information from the whistleblower that he did not have one he sent the first version of that letter back in july. the second thing he's doing is he is trying to amend his counterclaims. twitter sued him, he eventually sued the coming back with his own counterclaim. now he is trying to update those

counterclaims with more information he has from the whistleblower he did not have the first time around. he is putting the whistleblower at the center of his argument here. >> basically as i understand it, musk has changed his argument and is giving a completely different reason for wanting to terminate this deal. is that correct? does that help or hurt his chances? >> it is correct. a lot of the interesting things about the whistleblower is he agrees with twitter on the bond issue. the issue that has been dominating the proceedings until now. the whistleblower says yes, that is right about that tequila issue. but there are all these other problems with the company. data security, as you see compliant. i.t. issues. in terms of helping or hurting

him, the question is whether or not this will even allow him to bring all the stuff in now. musk is requesting to move the trial day back in november and the first question is whether or not the court will even allow that. that said, if she does, this helps them. >> if meet -- it elon musk signed a paper saying that i am going to buy twitter no strings attached, to all these other issues potentially raised by the whistleblower actually matter? >> they do but they matter in different ways. musk has had two separate argument.

one is contractual. i get to walk away for that reason. the second argument is twitter intentionally misled me as to the condition of the company. those are two separate arguments. on the contract one, musk can only succeed if he is able to show that all these allegations had a material adverse effect which means long-term impact on twitter's finances. the reason that is the standard is that is literally in the contract. that is what it says. if he can show that, he gets to walk away and it does not know -- it does not matter how much diligence he did. for fraud, if musk can show that twitter intentionally deceived them and he relied on that, then he gets to walk away for that reason. in that case, he is -- it is

harder to establish. >> elon musk is asking the judge to move the trial from october to november. how likely is that to happen? >> i actually don't know the answer to that. i'm not exactly sure how prevalent this type of request is. i can say just based on common sense it seems to make sense they would want a little bit more time. they just have so much more information today than a month ago when they decided on this trial date. i could see this happening but i don't know if that is a common thing, to push a trial back by that far. especially once both sides have worked to come to an agreement that work for both of them. >> are you thinking this trial

is getting moved? what else are you watching for? i don't know. does he get to bring in all of this new stuff? that is actually the standard. is it just to allow him to reopen discovery? the argument is i had no idea that any of this was going on. of course you should be allowed to. he had no idea because he chose not to do any due diligence. a lot of the papers right now, it is the same thing. it is really hard to tell just how much all of this has done. >> discovery has been ongoing. what could come to light in that process? could there be a smoking gun? >> sure. he has allegations of

hair-raising security divisions. he has a lot of reports about internal reports to the board and internal reports to people that are ignored or covered up. it is very difficult to tell from the outside, twitter is fraudulently covering up this business versus an employee who may very well feel strongly about how the company should be run. management ultimately gets to make those kinds of choices. >> thank you for talking to us about these evermore complicated issues. we appreciate it. we are also following news about the central layouts for some of the biggest social media platforms. they are planning to lay off around 20% of the 6500 police

following weeks of planning. layoffs will start on wednesday. business insider reporting that meta-is also planning to lay off hundreds of facebook contractors in the united states. this as the company looks to source more jobs outside the states. coming up, we will take a deep dive into youtube content moderation challenges over the years. they are not over. this is bloomberg. ♪

>> for years, everyone was welcome no matter how extreme their views but as the social giant became one of the most visited site on the internet,

the company has consistently struggled to adjust and some say they kept a double standard when it came to moderating stream is him on its platform. this is the subject of the upcoming book inside you -- youtube's chaotic ride of world domination in an excerpt here. mark is joining us now for more on this. mark, you have been working on this for a couple of years. excited for it to finally see the light. tell us about what you explore in this particular excerpt when it came to help mott -- youtube moderated its content in early days and how it changed those policies over time. >> the article begins with a theme in june of 2017. a seminal moment in youtube's history. five years ago, they were in the midst of this unprecedented advertiser boycott. advertisers were pulling their money over extremist videos.

there was an attack in london. one of the attackers was inspired by this cleric he watched on youtube. the company came down hard and said we are going to crackdown on anything that is inflammatory or supremacist content. trying to eradicate terrorists from youtube. they have a lot of government support for that particular type of radical extremism. it took several years for them to deal with white nationalism. a problem that we have all seen very violent outbreaks of and the past couple of years. buffalo on the internet and a very visceral one in a scary way. youtube has solved one part of

that problem. this growth from 2017 to now, they really have a different sort of problem right now. the issues are former regulatory. they are looking at tiktok in the rearview mirror. i -- not a lot of their problems are solved but the central problem they have dealt with is they built up this phenomenal platform with guard rails in place. >> we are looking to hear more revelations from your book. it is hitting stores next week. something else you reported on today, a top youtube executive that had a business that was actually the first hire from hollywood 12 years ago is leaving the company. tell us what that departure signals.

>> robert is one of the longest serving senior executives in youtube. they are busily entering this training was. they pivoted away from that entirely and drop that program earlier this year and officially moved into shorts which is there competing product with tiktok, e-commerce, youtube tv. a lot more horizontal illnesses that google is more accustomed to than taking on hollywood. i think it was really telling that tinsel is leaving next year. google announced the replacement of the ad executive which is currently best in northern california. not in hollywood and l.a.. >> another developing story,

trumps social app has been blocked by the google play store. what do we know about this and how has the trump team responded? >> google said that they only allow apps that have content moderation policies in place. true social responded and said they do and that they deserve to be out there. it seems like google is standing pretty strong on this. i imagine news will be covered and have potable ramifications for taking the stance. we first started the irony that google is imposing -- youtube really struggled with this problem. it is the benefit of that is what google can do when it is the gatekeeper. this is as well as youtube.

it shows the power of these companies in and credible way. it shows them how much they have evolved. >> a story we will continue to follow. thank you. please preorder mark's book, it is out september 6. coming up, i researched getting a boost. the founder of boston dynamics talking about the institute he will lead on the state of ai development. this is bloomberg. ♪

>> last year, hyundai bought the controlling stake in boston dynamics. now the car manufacturer is launching the boston dynamics ai institute. research first organization that

aims to work on event in artificial intelligence and robotics with a $400 million investment. let's talk about all of that in more with the institute's executive director, mark rayburn. great to have you with us. obviously, ai is one of the most powerful, promising and essentially terrifying technologies in human history. what are your goals with this institute question mark >> -- institute? >> robots have come a long way but they have along with you. compared to people, robots are still pretty stupid. it takes a lot of work to get you what they want them to do -- to get them what you want them to do. we need to make it easier to tell robots what you want them to do. can you imagine having a robot that can watch you perform a repair task or in a similar task

and have it understand what it is seeing and figure out how to do it themselves? that is science-fiction today but i think if we make a diligent effort and get the right people and have a sustained effort, we can make robots do that. correct it is interesting that you say that robots are still pretty stupid. we also recently interviewed a google engineer who claims that google has developed artificial intelligence that actually has feelings, that computers have feelings. they are scenting. what do you think? >> i think when people see the boston dynamics robots doing things like dancing or climbing or doing those physical things, they assume they also have the intellectual capabilities of an animal or a person and that is just not the case.

i am not saying there are some narrow areas where ai has made progress but if you were here and this is my homework. i can show you how to do a task. in 15 minutes you have no trouble observing what i showed you, maybe you would have done a little experiment and figured out how to do yourself. that is a long way from where we are now. you need very sophisticated programming to make robots to anything. >> google also bought boston dynamics back in 2013. it has been a long journey from there. softbank sold it to hyundai. what has been like working with hyundai at this stage of the journey? >> it has been great. , their chairman is very forward-looking. he has a team of execs that are really excited about making the future happen. you can see how great their cars

are doing in the market but i think one of their ideas is that they don't want to be an old-fashioned car company. you need computer science and ai and other new technologies if you're going to remain competitive. i think both the boston dynamics acquisition and the rest of these are a means of strengthening that element. it really has been a pleasure. >> in that interview i mentioned with the engineer at google, he criticizes and questions the power that google has. the technology that is developing. take a listen to what he had to say. >> we need to start figuring out why google doesn't care about ai ethics in any kind of meaningful way. why do we keep firing ai at this each time we bring up issues?

given your work with google, do you think google is asking the right questions for the technology it is developing? art although these companies asking the right questions? there are companies around the world like boston dynamics developing artificial intelligence. grexit is a company that size, big tech companies have lots of different people with lots of different opinions. i think that to some degree it was just one of many. i saw all of the details about that. i will say it was a pleasure working for google. the institute has been paying attention to some of the ethics of these problems. i think having an open discussion about what the pros and cons are of automation and

robotics is a good thing to do. i not embarrassed about these things. we are going to try to have an open discussion. >> all right. the head of the new boston dynamics ai institute. good to have you with us. we will be watching her work. >> coming up, how has tech changed the role of education in 2.5 years? our education tech series is next. this is bloomberg. his note

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>> welcome back to boebert technology. i am emily chang in san francisco. it is the third school season the pandemic has upended. we now rely on technology to learn more than ever before. this week we are taking a look

at the intersection of innovation. the number of students applying to u.s. colleges is in decline and enrollment in 2021 west 20% less than it was in 2015 according to the national student clearinghouse. relief is just one example of the government response to high tuition costs and drawing debts. companies are facing shortages, creating more demand for affordable and assessable education. that is helping companies that equip students with online credentials moving forward. within 5 million learners are registered on the platform. -- more than 5 million learners are registered on the, -- on the platform. a lot to unpack here. the world has been changing rapidly.

what we have seen is pre-pandemic, a lot of emphasis on learning digital skills. people realize there are new jobs with good compensation but you need to learn new skills to do it. a lot of emphasis on data signed skills, technology skills, business skills. during the pandemic, we saw a wholesale change in the way that people learn. mostly online and the way that people are now working which is more remotely. what we are seeing right now is an increased interest in working adults saying -- it is a pretty tight labor market these days. they are saying if i learn new skills, i can get a new job that pays better and has more >> ability, i can even work remotely. we are seeing interest in people learning skills to switch jobs. >> you're seeing employers dropping requirements for hiring. we have been asking questions for years. people keep saying that a

traditional four-year college degree is what is happening instead. >> it is not dead. i think they will become much more accessible. they will be more affordable. there will be more job element. we are talking about how universities change how they provide college degrees. there won't be as close of pathways to good paying jobs. there are great job opportunities in project and is meant, social media marketing that don't require a college degree. they do require skills but you don't need a college degree to land many of these jobs. i think you won't need to get a college degree to get your first good paying job but college degrees will help people continue to advance in their careers. that is our opinion. >> what are you doing to help colleges ensure students that it is worth it? cork the big thing that is interesting, during the pandemic, what we saw is a lot

of private equity and venture capital money going to fintech. there is a lot more alternatives now than getting a college degree. universities are trying to say i need to create more flex ability, more affordability, more career job relevance in my curriculum. what we are doing to help is we work with over 200 of the top universities like google and meta and ibm and we basically help universities offer industry like her credentials. when you get your college degree, you also get a certificate from google or ibm or microsoft or somebody else.

>> some people think this is great. other people think this is not the way that they should handle this. what do you think? >> it reflects a huge and globally unique problem the u.s. has had. over a trillion dollars in student debt. how did we end up with a trillion dollars? students were able to borrow money, to buy a fairly expensive college experience that did not lend them a job. make degrees more affordable, make them more tailored to working adults who can't quit their jobs and move to a campus. also, make them more job relevant. we are creating collaboration between industry and universities.

>> one of the trends that you are seeing that you think we are not talking about enough? trends that we might find surprising? >> i think everybody knows that people are now starting to a lot more online learning. we had 47 million learners at the beginning of 2020. 30 million more came during 2020 during the pandemic and now we are at 107 million. there has been a big shift toward online learning. that is pretty well known. there is a lot of observation and some argument about remote work. will workers work remotely? what i think people are not necessarily appreciating is the power of putting these two things together. once anyone in the world has access to high-quality learning and even college degrees online and anyone in the world who learns these digital skills can

start getting these jobs and working in these jobs, even if the jobs are not in their cities or their states or even in their countries, suddenly you have much more equal opportunity to learn and also more equal opportunity for good paying jobs. i think maybe way more people in the world will become more educated and have a much better chance of landing a good job. >> we are going for a huge market contraction but shares are down since he went public as our many public companies in this economy. we long had this question, will investors see the benefits of ad tech question mark what is your message to investors? the growth is there. based on the numbers you're giving us, what is the message to investors? >> the growth is there. the message to investors, they already know this. everybody focuses on is how they

get the market opportunity the company is going after. higher education globally is a $2 trillion market. there is about $2 trillion per year in tuition being spent on college degrees. many people would say there is a lot of room for innovation in college degrees to make them more affordable, more job relevant, more valuable to the students no matter where you go to school. whether it is the u.s. and europe or the middle east and whatever. what we need to show, for investors to be excited is a big opportunity that generates high revenue growth with predict ability. and interoperating leverage to become more profitable as you get bigger. what we have mostly been focused on is growing and to your point, in q2, group 22%, some segments of our business are growing much faster than that. we have been around about 10 years. we see this as a multi-decade opportunity. we have been growing 59% year-over-year. 46% in 20 31.

we see a lot of growth ahead. it is really going to come down to reinventing the way people not only get educational opportunities but also how they get better access to career opportunities as well. >> jeff, thank fascinating to hear your thoughts on all of this. the potential of decentralized, autonomous organization. we will discuss, next, this is bloomberg. ♪

>> now for our crypto report. we are looking at decentralized

autonomous organizations. our crypto contributor is here to explain. take it away. >> doubt have a lot of purposes but i am joined by the founder of route 5 and the former general partner at college and capital. i'm curious about is dow's as it pertains to venture capital. there was some thinking a while back that dow's could really transform the sea landscape. -- vc landscape. this is when vcs have raised many billions of dollars for the crypto industry itself. how do you compete? >> we are very much in the early innings of just -- of understanding how they operate. making these functional entities. this really began with the first theory of native dow. it is now and if miss experiment. this led to the fork of the network. this is actually to start as a

traditional cryptocurrency venture fund. we make early-stage investments in companies and protocols but in the future, we will convert the fund entirely. what that means is the future adoration of dow will live and operate entirely by blockchain. >> what does that mean? the regulation be any different for a dow like you? or even doubts with other purposes? >> in terms of regulation, i think it is a constantly evolving landscape. one thing that gives me a lot of optimism is jurisdiction's like wyoming are taking a very positive stance and i think more will follow. that is one area we continue to involve -- evolve our best understanding of the practices but the core focus is on applying the capital responsibly , getting our best assets into the fund. >> i am really curious about how regulators outside of these operate but also how the dow's themselves operate and there has

been a lot of questions about the governance and the way it changes. to the extent that governance needs to change, what are the biggest changes that need to be made in the next year or so? >> great question. there is one case study taking place and a lot of debate on crypto around the dissolution here. i think this will ultimately form in a porton president and case study for our collective thinking on how corporate governance in these environments should work. for a little context, last december, decentralized stablecoin merged with roby capital and this was really the biggest dow on dow merger. we saw over $2 billion of combined here. this was a very happy marriage at the time but things started to get sticky in april of this year when certain lenders were hacked and about $80 million of lender capital were lost.

fast-forward to today, we are dealing with a very bearish environment. there is a loss of faith in this specific dow. quick there are other dow as well. some dow's work such that some voters just a bigger say. how then do you fight back against the dow? >> i think the underlying presumption and the core of crypto is this idea that code is law and if you create one where it is simple majority votes, if you decide to do a big round and have a bunch of vc's and concentrated token holdings here, you're ultimately going to be subject to their will when it comes to governance. i think these are things the crypto committee will have a better understanding of overtime and we are still very early. when you think about the history of corporate governance, public omni's have had many hundreds of years to get things right.

>> so much. back to you in san francisco. >> thank you. we will dig deeper into the future of ed tech where we stand now. this is bloomberg. ♪

>> let's continue our coverage of education technology and explore the perspective from the road of venture capital. funding to education tech exploded with $14.8 billion invested globally. that momentum is continuing in

2021. where is it now? let's bring in a former teacher to talk about this. everyone jumped on the bandwagon during the pandemic. where is that momentum now? >> i think the momentum is really strong still. education is undergoing a lot of change now. the pandemic exhilarating a lot of shifts that happened years ago and that has woken people up to the advent of ed tech. >> how would you say the pandemic has been an inflection point for this industry? we know that education technology was becoming more prominent but was happening only. then it kind of accelerated very rapidly. where are we now?

>> in k12, we saw an acceleration of one-to-one device penetration in our school is. that means the computing device was used by almost every child now in our k-12 education. almost all teachers are using computers for their core instruction. this ushered in a whole set of new software companies and digital curriculums and possibilities with remote tutoring that has really exploded the space and then the global opportunity has also gotten much larger since the pandemic. cracked that said, the teacher shortage has gotten worse. how bad is it? why isn't it getting better? >> it is really bad depending on where you live. the teaching shortage was in place a decade ago. people were sounding the alarm because enrollment in school was

significantly down. about 39%. we knew that fewer people were going into teaching as a career. fast-forward to the pandemic and we had a great migration, the great resignation and it has only exacerbated the teaching shortage. it is really bad in states like florida, california, arizona, utah and so schools are really turning to extreme measures to build their classrooms. >> what are those? >> they are listening requirements on teacher credentials. in florida for example, they are ringing on veterans that don't necessarily have to have bachelor's degrees to come into the classroom and teach. they are upping the pay which is long overdue. they are increasing signing buses -- bonuses, they are

recruiting teachers on social media and in some states, they are going to four days a week of schooling to attract teachers. for example, in missouri, about 25% of the school districts are now going to a four-day workweek. >> what concerns me most -- obviously, teachers should be paid more but what concerns you about these other -- these other measures schools are taking? >> i think that right now, the focus is just on filling the classrooms with teachers. i think that every child deserves a quality teacher in the classroom. without quantity, we don't have quality. it is concerning that fewer people are going into teaching. i was a teacher for seven years. i found it to be overly rewarding career but also very hard. i think that we need to really rethink about how we pay

teachers, what the working conditions are like, what the expectations are for them, how do we respect them as a society and to the elevate the profession so that we have a lot more people going into the field. >> how would you describe the state of the ed tech investing industry and where you are facing your bets given the evolving trends? >> we have been investing in the space for about 10 years. our team has been together for more than 15. when we first started investing in the space, there wasn't a lot of vcs that were interested. there were very few tech funds. now, there are a lot more generalist vc's interested in tech because they see the large market size. it is exciting to see that more investors are interested in the space. i saw that jason horowitz is

investing in core american infrastructure like health care and education. these signals are very important to the space. it is good to see more capital go into it. >> you're watching higher education and corporate learning. what is happening that we are not necessarily talking about enough? >> in corporate learning, i think although we are in a downturned market, the job market is still very tight so businesses, corporations are looking to upscale their own workers. we are investing in companies that are supporting businesses to provide career progression for their employees. that is a really exciting space. in higher end, there is a lot of legacy software that is running the backend of colleges today. we are investing in innovation in that space. >> there is a huge debate happening now about whether

president biden responded to the student loan, student debt crisis the right way. what do you think? how will the administration respond? >> i think that the student debt forgiveness program that biden has, i was very excited about it. it will provide a lot of really for those most at risk for default and those that are most financially insecure. it also targets the one third of borrowers who have debt but no college degree. there is an equity piece here that is really important that has not been talked about that much and that is that black graduates oh on average $25,000 more than white college graduates and black families are twice as likely more likely to be pell grant recipients than their white counterparts. debt forgiveness is going to provide a lot of much needed relief for many people. that said, the rising cost of

higher education is untenable for most americans and if they continue to rise, something needs to be done about lowering the cost of higher education. there is over a trillion dollars of student debt out there. >> jennifer, great to have you back with us. thank you. i am emily chang in san francisco. this is bloomberg. ♪

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