southern new hampshire university has changed my life and it can change yours too. - [narrator] visit snhu.edu. announcer: from the heart of where innovation, money and power collide. from silicon valley and beyond. this is bloomberg technology with emily chang.

♪ emily: this is bloomberg technology. coming up, twitter is finally about to launch that edit button. to edit or not to edit has been one of the longest-running debates in twitter history. we discussed how the timing could affect its tussle with elon musk. millions of students across the country are using free edge tech tools. but all of that data is at risk. we will chat with the attorney general of mexico who is taking on google over student privacy. do you have crypto in your retirement account? we talk to the head of the federal retirement board that oversees $800 billion in assets. we will get all of that, but u.s. stocks ending higher just today before the u.s. jobs

report. emily? >> talk about a late day rally. s&p 500 managing to finish up about 0.3%. today if you zoom out to the one week look at the u.s. equity markets, we are deeply in the red. i am taking a look at what week s&p 500 down over 5%. also, tech stocks. the nasdaq 100 falling over 6% on the weekends of philadelphia semiconductor index falling. it fell further today after nvidia, one of the biggest chipmakers, warns that new u.s. rules on exports of chips to china are going to eat into nvidia's revenue. it has been a tough road for them. the bloomberg dollars -- index hit an all-time high. you can see here the risk off trade happening as investors are waiting for that jobs report. i also want to look at etf flows.

you talk about risk off and you's can see in cathie wood's dark innovation etf, it saw its biggest monthly outflow in almost a year in august this is an $8 billion etf, focuses mostly on highly speculative tech stocks. look at the chart behind me and you can see throughout most of the selloff, the etf was able to pull in positive inflows. now this outflow -- the fund is down 60% year to date. that investor loyalty is starting to fall off. maybe just a little bit. if you look at the post market, we are seeing action in starbucks. not too much, up almost .2%. they announced a new ceo. broadcom, another chipmaker come up 1.3%. unlike nvidia, they seem to be avoiding the slump. they did announce a positive revenue forecast for the fourth quarter. twitter not doing much in the

post market. it didn't do much today. in its intraday trading either. they did announce the edit button. we will be watching the stock for movement but so far, not a lot of movement. emily: all right. emily: fail. thank you for that update. twitter launching the edit button for the first time after years and years of debate. here to tell us more, kurt wagner. this is only a test right now for paying subscribers. >> you get a 30 minutes timer. once you post your tweet, you will have 30 minutes to go and make edits and change before it gets locked more permanently. other users will be able to see a label to shows the tweet has been edited. they will be able to click that to see prior versions. there's a little bit of a track record.

to your point, it is only available on twitter blue. you have to currently be a subscriber in order to get access when they roll it out. that could change in the future, but they want to start with a small group of people and it makes sense to start with the most diehard twitter users. emily: is this going to change the nature of twitter? the dynamic of twitter? >> i am waiting for when it first rolls out to have that moment, that first week when people are playing jokes and someone is inevitably going to send one version of a tweet, then change at 29 minutes later to something offensive and everyone is going to look silly. i wonder in the long term if that is going to die down. maybe we will have that for a week or two. that 30 minute timer really isn't that long. it is long enough to fix the typo, to change a link. in the case of breaking news, it could be a big deal.

but for most stuff on twitter, it is probably not going to have a dramatic effect. we are heading into an election. this is a weird time to want to try edited tweets. all we are doing is asking for someone to come forward and say something about election results were voting, that goes viral and suddenly we are going, why are we doing this? emily: does this make it harder to moderate misinformation and disinformation? what is twitter's plan heading in the midterms to be on top of this? >> we don't know about their plan for edited tweets. just announced today, rolling out soon. we don't have a good plan for how or if they are going to fact check. twitter across the board has been more hands off on fact checking than facebook, which has tons of outside partners. twitter has focused on specific topics that they fact-check like election results, and only from high-profile accounts.

that is why donald trump's account was constantly flagged. i do not know what this is going to do but it -- it poses an opportunity for those who may want to cause trouble. pay attention to that. but because it is just being tested with a small group of people for now, maybe we will avoid a big issue ahead of the election. maybe the rollout will happen after that. emily: elon musk stir the pot when he dug that whole -- asking users if he wanted an edit button. what do you make of the timing? does it impact the ongoing feud between twitter and elon musk? >> twitter has bent over backwards to try to make sure we all know this was in the works before elong showed up on the scene. twitter actually tweeted april 1, on april fools' day. everyone ignored it because they thought it was a joke.

since october that was the beginning of what they had planned for this long-running thing. they were going to tweet april 1. e -- elon showed up and messed it up, but they wanted people to know they started work on this the year before. that is important because they do not want to create a perception where elon is directing the product strategy. not only did they want to avoid that when they thought he was going to be the owner, now they really want to avoid that when the two sides are fighting a legal battle. i have to imagine elon may be pushed the timeline quicker for twitter but i do not think he is the reason they ultimately decided to build this thing. emily: kurt wagner. thank you for that. very anxious to see how this rolls out. coming up, venture capitalists have raised a record amount of dollars in time for a potential recession and a wave of valuation cuts. where does that dry powder go?

we discussed with mike -- this is bloomberg. ♪

emily: despite -- raising record capital, startup fundraising is slowing as fears of recession looms. let's bring in my -- for his take. good to have you. you have seen a lot of cycles, a lot of ups and downs. where are we in this one? >> great to be back.

we are probably somewhere midstream between the downturn and somewhat of a correction in valuation. hopefully sometime next year things will come back. we are right in the middle, i would say. emily: what is a hawkish fed meeting? >> it is tricky. most companies refund lose money for a long period of time, then make money somewhere toward the end of their life. when you have positive earnings at the end of your life and high interest rates, you discount that back today on the value drops a lot. that is really what is causing downturn in all of the larger tech companies and even the private ones i think a hawkish fed means we are going to be sitting in this stuff for a little while until we get inflation under control. emily: we have had guests on the show who have said we are going to have millions of layoffs. how does that square with what you are projecting? >> i am not convinced.

when you actually look at the u.s. economy in general, it is in a healthy state. there are something like two job openings for every unemployed person in the u.s. when we looked at b2b businesses, i would not say they are destroying their goals or records, but they are doing reasonably well. overall, the economy is not in that bad shape. banks are in good condition, good balance sheets and so forth. we got a little out of whack from where the market was in the consumer is being more careful with their wallet but overall we are in a decent spot. i think recovery is around the corner some way. emily: -- raised a record amount of money. there's a lot of money in those chests. has it been hard to find places to put the dry powder? >> it is a very slow summer. i got a lot of text messages from friends while vacationing

in italy. [laughter] emily: not calling anyone out, ok. >> it has been a slow summer. we are seeing some -- one of the things that happened over the last couple of years is a lot of companies have been seeded and they are coming up for serious investments. we are seeing growth companies get term sheets. maybe they are are not straight equity and they have some general structure, but we are seeing it come out and generally speaking, venture capital has had capital to deploy and they are not going to twiddle their thumbs for two years. you're going to see some movement. >> what happens for vc as the cycle progresses? will they not raise as much money? >> that is the case. the -- that have invested in our funds have been drained. because the ipo market is closed and there has not been

eliminated. they are going to be reticent to give us more funds and we are going to generally slow the pace down until we start to see the exit market open up again to pump money back into the lps. emily: we talked to the ceo of pilate, which -- has invested ceo services to startups and they have done some surveys and found it does not necessarily look as dire as it sounds. take a listen. >> two things are happening. the first is that there is definitely pain from the downturn, but it is more significantly felt by companies who really have nice offerings as opposed to need offerings. the second is the dynamics in late stage and public markets are very different than what you would see in the early or mid stage ecosystems for start up emily: what do you make of that? >> that is act red.

late stage startups over the past couple of years have raised a lot of money. most of the particular they could companies have a strong balance sheet. they don't need the capital, they are going to wait for the markets to come back. earlier stage companies, they just don't have as much money in the war chest and they will have to come back to markets. we are going to see opportunities in the earlier stages. overall, certain sectors in the industry, there has been heavy hype. a ton of capital has gone in and a ton of capital, whereas more of the well-known sectors will continue to perform as expected. emily: what you think of jason horowitz writing its biggest check ever to adam neumann? >> market men have been contrarian in the past. they are contrary in this time. i would say the average -- in the industry would indicate this was not the best idea ever. but, we will wait and see. the guys special in every sense of the word. it is something they wanted to

do. we will see. emily: you have -- on one hand, benchmarks on the other, where is index? where is your strategy in a downturn? >> what i found in the -- interesting about the industry is if you listen to what people were saying six or nine months ago, there was a sense that the industry was completely changing. you're going to go to hedge funds that apply capital at velocity, they are going to use -- like some kind of index market and all of these smaller, more niche firms will go away. that has turned out not to be the case. the founders and entrepreneurs that take our capital are very diverse. they look for different things from investors. some look for benchmark, some look for vendor reason. we think of it as curated growth. the last foundry raised in totality was a little over $3

billion. that's raised -- decently large, but not the largest. if they get enough capability to the firm to offer services our founders want, but not so small we have to be niche. somewhere in the middle-of-the-road. emily: if there is a bubble in private markets, where is it? crypto? "web three?" >> i do not think there is a bubble. things have generally well corrected. there was a bubble in crypto for sure, but it is long gone. -- reported entities were down 99% in three to four months. clearly, the air has come out of that. companies are trading at somewhere near realistic values right now on the public market. i would say a lot of the growth companies that are growth stage right now are still holding onto the valuations they got from the tail end of 2021. those are probably still inflated, but they are not going

to raise their next round until they can catch up with those numbers. you are not going to see the air come out of that balloon. emily: what is your advice to those companies that were planning to go public this year? >> you have the ones that don't need capital. in which case, stay hunker down and wait for the market to come back. and you have the ones that need capital. if they need capital, they are going to have to raise it. right now, the market is coming back with debt, structured equity, convertible notes and so forth. it is hard to come by a sheet that is clean equity. you've got to figure out with the best option is. if you need capital, you've got to raise it. it's not that it is impossible to raise money now. emily: good to have you back. thank you for stopping by in person. coming up, cybersecurity. is that recession proof? this is bloomberg. ♪

emily: in the world of cybersecurity, crowd strike reporting results that beat expectations. shares fell after -- conservative by some investors. let's talk about all of that and more with ceo george kurtz. in light of the numbers, what do you make of the reaction? >> you have to look at the macro environment and what is happening with interest rates and a lot of the uncertainties. those are factors that are out of our control. as i have said many times over the years, we can only focus on what we can control. we posted stellar numbers. we noted we were the second-fastest company ever to reach $2 billion of adr. when you look at growth rates,

our rule of 40 at 84% is astounding at the scale we are operating at. emily: is cybersecurity recession proof? could it be under threat? companies are deciding to pull back cyber? >> it is going to be difficult for companies to pull back cyber. they may delay, and there might be more scrutiny's, but at the end of the day, there's too many drivers at the board level down. cyber is the number one risk boards are talking about. you combined that with some of the regulatory pressures like the sec coming out with guidance around disclosing breaches and disclosing if you had to pay ransom. at the end of the day, it is something that is going to be very difficult to make it a nice to have, it is a must-have for most companies. we will see how it plays out

over time and i think we are in a great spot to consolidate a lot of spend an hour sector. emily: let's talk about your assessment of the threat landscape how concerned are you about china specifically upping the groundwork for launching more cyber attacks against the west given rising tensions with taiwan? >> you always have to be concerned about china, and other nationstates. china is prolific in its attacks. it has great capabilities and continues to be active in many areas. as we have seen before, as the geopolitical environment changes, the attacks change and they may focus on different groups and gathering information that may target chip manufacturers. these are all areas of concern for many executives in the marketplace right now. when the geopolitical waves change, you have to be prepared

to make sure your systems are protected. emily: the former director of -- suggested attacks would come on the supply chain. you mention chip factories, how vulnerable do you think the supply chain is? >> supply chain attacks are a grave concern for many companies. it is a huge risk. we have seen several attacks over the past couple of years. whether that has been the software supply chain, or the software that goes into the code of the chips, that can obviously be problematic. it is one of those areas that is very difficult to identify. they do have a long tail. it is something that companies and governments need to be vigilant about. emily: preparing for a suite of new regulations coming from the ftc, the fda, the department of energy, what are you

specifically prepared for when it comes to regulation? >> you have to look at the regulation itself. there's a lot of regulation that has the best of intentions. but then you have to look at how they are implemented. we do a lot of responses where one of the top two breach response firms in the world. in the middle of a breach, it is difficult to be talking about disclosure. it is important understand the timeframe and not to be able to compromise an investigation. and then, what are the parameters around that? what is material? what should be disclosed? there's a lot of complexity around that. we are trying to work through that with many organizations. it is important that people have visibility because you can't just say you didn't know. you have to take measures to -- your systems to identify and prevent against potential breaches. emily: george kurtz, ceo of

crowd strike, always good to have you. coming up, the attorney general who took on google and has sounded the alarm on big tech's use of student data. new mexico's hector volterra joins us next. this is bloomberg. ♪

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emily: continuing our coverage of education technology, new mexico. new mexico school districts use google's free education tools but the state says the company improperly used student data. joining us is one of the most proactive attorneys general in the country. >> glad to be with you. >> the suit of google for the pandemic even hit, at that time you said your investigation revealed that google tracks children across the internet in their homes and without obtaining verifiable parental consent. what concerns you so much about what you saw that you believed

google was doing with student data? >> for me, the risk i was concerned with and the reason i brought the lawsuit first is that our nation, our congress, members of law enforcement have been primarily asleep at the wheel when it comes to data privacy. banks are not protected, our personal information as adults is not very well protected. i already knew the environment was very difficult. number two, these are children and minors. when we have an inadequate environment that exploits consumerism and privacy, i was very concerned that from a safety perspective, these technology companies were tracking, marketing, and monetizing on the backs of children. number three, it is a violation of federal law. there is already a prohibition built into the law that says technology companies cannot market and profiteer and gather

data of minors without the consent of parents. it was three tiers of risk and i thought it was very important to try to change this course because these miners are so innocent, small, and unaware that this practice is being imposed on them. they just want to play video games or go to school and use this technology in a positive way. emily: you settled with google in december 2021. some folks looked at this as a victory for google. would you have wanted more? >> absolutely, but i was strategic. i understand that this is a risk. most members of congress are struggling to use their iphones as we speak today. our nation is behind decades and generations behind in holding

technology companies accountable. i was more focused not necessarily on the monetary victory. i was trying to change the way google does business and the way google does business in schools and we were successful in that. the ultimate mission for this is to be a tool for other attorneys general and consumer advocates to make sure we keep an eye on our schools and safeguard technology and how we use those services in our school district. emily: because of the pandemic, you got more tech, computers, software, apps in the classroom. also being used outside the classroom. what are your biggest concerns now two years later? >> i think there has to be a shift at some point in our school districts. there has to be a greater emphasis on privacy and security. now we are starting to see scams

that are bringing pain and hardship to our school district even schools are having a hard time safeguarding their own data. i hope to see the conversation shift to more safety based. we also have to have a moral debate in the halls of congress and legislative bodies not only about protecting data and school children but who should own the data. i don't think it's fair that we are allowed to track adults and children utilizing these products then technology companies are the ones who profiteer and monetize this behavior. i think there's going to be a longer conversation about imposing more safeguards, but shouldn't i make a dollar off of the data that i generate using these technology services? that is a debate that has to go on in our school district and also in the halls of congress. emily: how much of a problem is it that a lot of this stuff is free for the schools, kids,

parents to use, and when it is free, you have more under resourced district usual -- utilizing it? >> i'm a big proponent in technology. technology is a great equalizer in terms of education outcomes. we are not regulating these companies and safety and the safeguards within these technology products. i think that when they say these things are free, we need to question why is it that that's the nature of the deal? nothing is free. we are finding that this technology primarily benefits students, but the technology is not telling our teachers and administrators that they are tracking behavioral data of the students and they are using it to sell this valuable data to

other companies. i think that's immoral question that needs to happen. i'm an old man, when i used to play atari and video games, my expectation was not that they were tracking me than selling my data to other companies. that's a question that lawmakers have failed to grapple with. emily: it's easy to say there needs to be regulation, but the bigger question is how. i wonder what you're thinking about the act that is waiting for a vote in the senate. a lot of lawmakers are still trying to figure out how to use their iphones. do you agree with how lawmakers are looking at regulating big tech right now? is there agreement in between congress and prosecutors across the country? >> there is not. there are consequential debates always going on between prosecutors and members of congress about who should own the data, who regulates and who should profit.

i ultimately think that these complex questions need to be shifted to a much simpler question. we are a nation where we all own property. i own my automobile, my home, i pay my taxes. the real question technology companies and prosecutors need to come to the table with is should i make a profit or be monetizing my own data? why is it that i'm using these technology services but i don't benefit in any way financially? we have a great capitalist system, i think a lot will be worked out once we figure out who should own the data. right now, we don't own any of the data that these companies are securing and ultimately, that capitalist model will be one that will set the tone for regulation and policy in the future. emily: back to education

post-pandemic, a big concern about learning laws and the gap over the last couple of years, a new report shows that there was the largest ever drop and reading scores since 1990 the first ever drop in math. new mexico in particular according to one report is in last place for education quality. why do you think that is? what can be done about it and what can tech do to help? >> traditionally, there has been a disconnect -- educators have not been in this conversation with technology. we have been consumers, fans, we utilize these products, but we need to redesign education where technology is a tool but ultimately, it is used as a great equalizer. i have great hope that technology can improve scores. there has been a disconnect.

technology companies are driven by profits and innovation. they have not been at the forefront in terms of the design of educational services and curriculum. i think bringing these parties together we can make a more efficient streamlined and affordable education system but frankly, we have been operating in silos. emily: thank you for joining us and sharing our perspective. we will be right back with more of "bloomberg technology." this is bloomberg. ♪

>> we may be just two years away from the next explosion in bitcoin prices. the bitcoin supply model is nothing if not ingenious. the mysterious creator of the original cryptocurrency if you got anything right, it is his model of ultimately fixed supply delivered at's lowering rate. let me explain. one thing that makes bitcoin different from the average ponzi scheme is that supply is fixed at the outset. they will only ever be 21 million bitcoin. that much is specified in the original white paper and coded in the algorithm. without broad consent, it can be

changed. not only that, the rate at which bitcoin approaches this cap is slashed in half every four years. more accurately, the reward paid to minors is cut. given that the rate at which blocks our mind is advanced. it is clear to see that freshly mind piquant into circulation at a diminishing rate. -- every supply cycle has been met with parabolic rallies. at the recent, prices rallied.

-- emily: cryptocurrencies and blockchain technology have been pitched as an inevitable part of our future. are these tokens a safe bet for your retirement account? should we be putting bitcoin in our 401(k)? >> i think we should be watching seriously. i think of blockchain as an infrastructure technology almost like our freeway system and

cryptocurrency as individual cars. as our population grows and our data needs become more complex, we're going to need a more robust infrastructure. that's where blockchain comes in . investing in underlying technology can be very compelling. there are about 10,000 different cryptocurrencies. i don't want to lump them all together. at this time when life expectancy is increasing and we are seeing high inflation and poor returns in the market, we need to look perhaps to other places. i'm not saying this is an ideal place for a pension because there is a lot of volatility in the cryptocurrency space. i do think we need to look seriously at blockchain. >> want to talk more about the tokens themselves. as long as i have here, there have been a lot of asset managers courting pension funds to get the into the space but we have not seen that movement yet.

what would it take to make pensions comfortable for ethereum or bitcoin? >> there would need to be clarity with accounting regulations. right now, it is unclear how to account for cryptocurrency and that create a lot of complications. there would also need to be transparent sing in the reporting out to shareholders, investors. bitcoin has proven quite secure to date. other cryptocurrencies not so much. we would also need clarity of the federal government on how it's going to be regulated. right now, there is a bill in the california assembly and it is on the governor's desk for signature. >> it's interesting because you see more and congress getting

comfortable with cryptocurrency. do you think the next election cycle is when we are going to see more movement in terms of that comfort that people need to get more comfortable with all of the things you are saying that longer-term savings type money into crypto? >> i don't know about that. i think the crypto right now has been uncorrelated from the election cycle although it is more correlated with overall capital markets now. crypto tends to follow geopolitical events. much more global in nature rather than domestic u.s. or local 21 state. -- local toone state. if there happens to be some type of disaster, we will see crypto being used there.

it is not yet the standard and i don't think our elections are going to affect that. >> how is crypto crash affected pension funds? >> not as much as one would think. pension funds are regulated on how they invest and part of that is the prudent person rule. the fiduciaries of pension funds and defined contribution funds have to invest like a prudent person which means i have to consider the permanence of the fund, amount paid to beneficiaries and the duration of those payments. as well as mitigation. there needs to be an optimization of return at a time when the markets aren't performing. there have been some who have invested in crypto, but they invested in very small percentage. i haven't seen a paint -- a pension that has invested in

excess of 1% and typically when they invest, it's with publicly traded companies that mine or hold crypto. there has been an additional layer of reporting that they can review. >> i'm curious about on one hand it's not like a pension can load up on a lot of venture-capital wagers but on the other hand, you see a lot of big companies taking blockchain and looking at ways to significantly change the existing markets as we know it. the bond market, stock market, mortgage markets all places that pensions invest very heavily in. what side of that equation do you think that movement is going to be? >> i think it will be on their systems. insurance companies started to invest in blockchain technology in 2016. i remember some doing paper and pencil claims processing. there are private permission

blockchain's and several insurers started to adjust those so they could start to see it on the chain and get the payment process more quickly with few if no errors. when it comes to pensions, they might have millions of members, many different changes to address, payments, and if there was a robust blockchain technology underlying that process, i think it would be more efficient and less costly. emily: fascinating stuff. thank you both. coming up, mark gurman gives us a sneak peek at what to expect from apple's iphone launch next week. this is bloomberg. ♪

>> apple is set to announce the iphone 14 and a new apple watches at its event ushering upgrades to its smartphone and smartwatch lines ahead of an important holiday shopping season. the iphone 14 will continue to be foremost. two regular and two pro. it will both come in two sizes and differentiate in terms of performance, materials, and cameras. they will look similar to the iphone 13 including aluminum sides and stainless steel sides available. only changes will come to the pro models. they will have smaller cutouts for the face id and camera system. it will also feature a new camera on the back in addition

to a faster processor. in contrast, the regular phones won't see as significant camera changes and will continue to use the chip from last year's iphone 13. the 14 pro line will also get a new always on display. for the apple watch, apple is planning a new version with a faster processor, one that looks like the siri seven but will add a new body temperature sensor as well as the new apple watch pro. the high-end watch will have figure display, better battery life, and a new design complete with a rugged aluminum case. emily: you can subscribe to his weekly newsletter bloomberg.com. we will be live next wednesday for that iphone launch and ring you all the news you need to

note throughout the day. that does it for this edition of "bloomberg technology." friday, we have the former ceo of tiktok joining us to talk about the latest in streaming, social media, and his investment firm. don't forget to check out our podcast. i'm emily chang this is bloomberg. ♪

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