>> from the heart of where innovation, money and power collided in silicon valley and john, this is "bloomberg technology," with emily chang. ♪ emily: i am emily chang in san francisco. this is "bloomberg technology," elon musk says spacex cap fund sidelights in ukraine indefinitely. how will it impact the war? new filings show elon musk is

under federal investigation over his potential deal with water. we talk about this and what it means for the company's future with footer founding member jason goldman. pure speculation. that is what meta is calling ftc antitrust concerns over a deal to buy the vr fitness company. what hurdles mark zuckerberg will face trying to dismiss the case. first, a brutal end of the week for the markets. emily, what a week. emily: stocks pretty much ending in the red to finish a volatile week. s&p 500 index falling all day, finishing down 2.4% after the one-year new michigan inflation survey rose for the first time in seven months. we saw traders ramping up expectations for how aggressive the fed going to be feared the u.s. two-year yield whopping

4.5% for the second day in a row. nasdaq 100 underperforming and coming under pressure in the technology space as the philadelphia semiconductors index is down 4.46 percent. all about a lack of demand and concerns about rising rates. individual movers in the s&p 500 in the stock market -- apple down 3.2% today. it was the biggest contributor to the s&p 500 declined today. twitter though, a rare standout, up .2% to finish the day after reversing course after it fell yesterday on news that twitter sought documents last week related to a federal investigation into that elon musk deal. speaking of elon musk, twitter stock falling 7.7% today. it closed today 50% below its november 2021 closing high.

the stock has been crushed in one year, down 25%. however, i looked at how it has performed since the end of 2019. it is still up 630%. it is easy to fekete -- to forget about the run tesla has had when we look at these short-term movements, but tesla getting crushed with the rest of the stock market. emily: thank you for that update, emily graffeo. meanwhile, starling satellites in ukraine provide crucial support for ukrainians in the war on russia and elon musk has threatened to cut off support for starling terminals in the region. he is pressuring other entities to stepien after costing spacex at least $80 million. the pentagon says it could turn to options other than starling. this follows an earlier dispute over elon musk's public comments

suggesting the government in kyiv cede territory in exchange for peace with russia. i want to bring in ed ludlow and the president of global advisors, which is advising investors on the risks of the russia-ukraine war. ed, what did elon musk say and why now? ed: in a tweet response, he said that he was following the advice of a ukrainian diplomat, a ukrainian envoy who used profane language and basically said elon musk should take a hike. musk said in his tweet, that we are just following his recommendation. that led to wide media coverage answer justin's elon musk might pull funding support or operational support for starling in the country. -- star lake -- starlink in the

country. the pentagon says they are engaged with start a space link -- with starlink, but elon musk says it is an issue of costs in that country. emily: how crucial is starlink to ukrainian defenses? dj: crucial. when you think about how they have integrated western military gear into their operations, communications is essential. one thing ukrainians have done much better than the russians is actually coordinate their defense and offense across a very, very long line of contact. so, this is essential for coordination. it is essential for targeting and using western technology

very well. if you think about a lot of this area. -- area, it is rural, spread out, great distances, traditional radios might not work at the russians have knocked out so much infrastructure. so, this is important and is a very important leveraging factor, leveraging all this assistant the west has been getting. emily: can you give us an idea of how much these centralized -- these satellites cost to manage and whether that resonates with what elon musk has said? d.j.: there is debate around the number and as we saw with the twitter deal, playing loose with numbers about israel in the twitterverse. we have to take these numbers with a grain of salt. generally, if you look at what has been deployed in the field already, it is 12,000 units. it has cost probably $80

million-$100 million. the number that he has put out is not too bad. when you get to the issues around his main issue of maintaining the network and cybersecurity, that is a cost of doing business as a big, billable firm. i am more skeptical of that. another thing we need to pay attention to if you are looking at cost is, the ukrainians have asked for much more in terms of these units on the ground, the transmitter units. did they get them all? that goes into the $400 million number spacex has put out. that is an ask. it is not necessarily going to be delivered. and i want to add we have talked about a commitment over a year and from my perspective come

alongyou global advisors' take is that this war is not going to last another year. russia has only months to fight. it is not clear at this point whether they will need all the satellite comms for a year. officials i have talked to in the u.s. government say it is not an unreasonable ask, not only for the u.s., but for all our allies. combined, a lot of countries would be willing to contribute. emily: ed, there is a report that elon musk spoke to russian president vladimir putin before he made those public comments, the public torture polo suggesting how ukraine -- public twitter poll suggesting how ukraine could achieve peace. elon musk is denying it. david: categorically, elon musk -- ed: categorically, elon musk has

denied he spoke directly with vladimir putin. one source said he spoke to elon musk about two weeks ago i had not planned on revealing that conversation but decided to in his own newsletter after he saw elon musk's comments on twitter about ukraine and he said that muscat told bremmer he had spoken to putin about the issue of ukraine, which was controversial. musk denied its, then went further and said he hadn't spoken to putin for 18 months, which predates the current conflict in ukraine. emily: d.j., why do you imagine musk would present the starlink issue to the public, and whether he spoke to putin and the

controversy over his twitter poll in general? d.j.: i find it dumbfounding. musk got into a lot of trouble, politically as well as reputational he -- reputationally, for making this statement about russia. he got a lot of favorable press in russia, not a good thing. the timing is very bad. because it is on the heels of days of russian attacks on ukrainian infrastructure. it looks like he is trying to play up a situation where ukraine is in a bind. and that is not good, either. there is a deal to be had here. i think the allies are more than willing, given all that we have spent, 400 million dollars is not that much. so, there is a deal to be had here, but he should not be presenting himself as a global statesman. that is not his strength and he

is clearly screwing up on this. repeatedly. emily: not mincing words, dr. dj peterson come alongview global advisors president along with our own ed ludlow. more on the elon musk saga later this hour. instacart is slashing its valuation for the third time. the new valuation of $13 billion was announced internally this week according to sources. it was valued at most $39 billion in march 2021. instacart executives reiterated the company still intends to go public but is waiting for market conditions to improve. coming up, meta-response to the ftc sued over its latest vr acquisition and what it means for zuckerberg. this is bloomberg. ♪

♪ emily: meta-is pushing back against the ftc moved to block its acquisition of a new vr company. meta-hasn't said it would hurt potential competition in vr fitness. this week, mark zuckerberg advertised the metaverse as the first -- future of work, gaming and entertainment.

here to discuss is bloomberg's alex barinka. alex: this is under the move -- this move is under the ftc chair, lena con. the suit could block acquisition by meta-of this virtual reality company and seems to be a big swing she is taking. the latest drama, emily, last week, the ftc narrowed its argument to block this deal, only leaning into this idea that the acquisition would kill potential competition in a future market. they killed the argument that the acquisition would consolidate power under meta-. in response, meta-this week is saying, if this is the argument, you don't have enough to block this deal. they are asking the judge to dismiss it.

the judge can rule on this and have hearings or the hearings on the injunction could actually still go forward in the summer, and the judge make a decision after that. either way, emily, folks watch the ftc and its antitrust actions, and meta and the metaverse will be paying attention to this -- at least through the end of the year. emily: why is meta soaking by a virtual fitness company? alex: meta had their connect conference on tuesday and showed up all the things they are bringing to the metaverse. right now, the meta argument to get people living in this virtual reality world is dependent on what you can do there. they talked about video games, new partners, but this fitness idea, they spent a number of minutes talking about it on

tuesday. fitness is one of the things their users come in every month and the game supernatural is one of these fitness apps you have the controllers in your hand, the oculus on your face and you move your body. it is key to this argument for them on why people need to show up for the virtual world that they are spending $10 billion a year on. emily: meta reports earnings in a few weeks. the market cap has tanked over the last year. if 10% of the revenue is going to metaverse, what are you watching for? alex: i am watching what investors think. the stock is down more than 60% since january. they are paying to what is paying the bills for meta. meta used to be called facebook, who owns instagram at all the social media properties. it has been a tough year for

advertising budgets. advertisers haven't been spending as much, which is where media companies make their money. emily, that is probably the thing that is going to determine how much patients investors have with mark zuckerberg, the ceo, and his aspirations to spend 1/10 of every dollar that comes in on something that hasn't materialized, is metaverse virtual universe. emily: bloomberg's alex barinka, who covers social media, thank you. coming up, network effects made facebook, over, -- uber, bitcoin, a thing. we focus on an investor betting on network effects next. this is bloomberg. ♪

♪ >> network effects impacts all of that. if you spend your life's energies building a startup, is going to take 100% of your effort. if you are trying to defend the business area you carved out, you might as bubble working on a business that has network effects, because then you will have a shot, making an impact on the world and creating true value. emily: part of the teaser for the venture firm and fx's master class on network effects, a new program by venture capital firm to help start ups build that scale. i want to bring in founding partner at nfx capital

management, james currier. james: i see nfx as probably the largest seed-stage firm in the world. our mission is to help 10 million founders. we can only invest in a few hundred, but we can help them with software and content and the content we most recently released is this master class on network effects. our firm is nfx, which stands for network effects and we have done posts, tweets, other ways of educating folks about what we see with network effects and how you use them to build the giant companies of the future. this master class is our next-level product where we encapsulate 20 years of learning about network effects and then bring that in three hours of video so that founders and teams can educate themselves about this powerful tool in building

giant, important tech companies. emily: we mentioned facebook, burke, even bitcoin has been a success because of network effects. what startups are being built now based on network effects that you think are going to be the next big thing? james: mammoth biosciences is building a plot more platform network a fact like an operating system, like microsoft. they are based in the bay area, recently raised over $1 billion and we think a nobel prize winner who is one of the founders, this company's going to be large. another company, incredible health, is run in rome and they built a market place between nurse labor forces and hospitals who hire them. they installed software in the hospital. and they bring the hiring to the hospital so that they can find

nurses. many businesses, both marketplaces and platforms as well as twitter and facebook, because they are 16 different network effects, we are finding a lot of different companies that are using these techniques to create multibillion-dollar companies. emily: we have had imhan and jennifer both on this show. we are in the middle of a massive downturn. there could be farther to fall. how concerned are you about that? how is it impacting your investment strategy? james: at nfx, we see across a bunch of different verticals like marketplaces, fintech, comp tech, ao three.

we are investing against a lot of different verticals for 7-10 years now. that way, we are insulated from current market conditions, and are still looking for founders with big ideas, particularly ones with network effects. because the next three or four years won't really matter what we invest this year, it will matter what market conditions are seven years from now. the market will decide. eight -- in the meantime, we are looking to build 100 million dollars of revenue in real businesses and we can invest now. we feel like now is the best time to start a company. we are leaning aggressively in. we leaned aggressively in during covid, we ran a program called fast where we offered one million to $2 million to 15% of companies within nine days. we touched 4000 companies at that time come at the beginning of road -- beginning of covid.

now, a similar thing is happening. emily: we talked about instacart slashing its valuation from 39 billion dollars to $13 billion. huge haircuts here. james: those companies that work ere seeding years ago, so we are still in a. -- still in a period of rapid growth. we are focused on that stage. emily: nfx founding partner james currier, thank you. coming up, we are talking about the elon musk winter deal and the october 20 deadline fast approaching. twitter, revealing musk was

investigated by federal authorities. we hear from twitter founding member and former white house chief digital officer jason goldman next. this is bloomberg. ♪

♪ emily: "bloomberg technology," welcome back to "bloomberg technology," i am -- welcome back to "bloomberg technology," i'm emily chang in san francisco. nurse -- news corp. confirms it will explore a combination with fox corporation. there had been reporting that rupert murdoch was considering reuniting his media empire that he split in 2013. news corp. now confirming it will explore combining once again with fox. meantime, elon musk's deal to

buy twitter has had many twists and turns, one might forget this started on january 31. that is when musk quietly began binding twitter shares. he has since gotten a lot louder in many ways. "bloomberg businessweek" broke down musk's tweets by the numbers. joining us for a look at what has been going viral all year is bloomberg's ed ludlow. crunching the numbers, what interesting insights that yield? ed: it is the frequency and volume of the tweets since january. in may, we were surprised how quickly elon musk put the deal on hold and raised his concern about the level of bots on the platform. -- level of bots. after the deal was put on hold,

there was a big spike in the number of tweets he was making. then, things go quiet. a few weeks later, everything changed because twitter sues to enforce the deal. emily: he tweets memes, emojis, polls, does he have a favorite kind of tweet? ed: the overwhelming tweets -- the overwhelming number of tweets musk sends our replies. elon musk is one of the most active and followed users on twitter. but it is not original tweets, it is mostly him replying to other users. he engages actively with other tesla users, people he is a fan of, people interested in spacex. and you can see from the chart quite clearly that is how he uses engagement. very few of the tweets he has sent since january 31 have been retweets. emily: what is he tweeting about

the most -- tesla, twitter,? spacex, repopulating the world? ed: you and i -- repopulating the world? ed: you and i have been obsessing night and day about twitter. but for elon musk, most of it is about tesla, spacex. he is really engaged when spacex has a successful mission. he tweets a lot about tesla. space is a topic that is high up there. the interesting number to me is crypto. he has not tweeted as much as one might think about crypto since january 31 of this year. emily: and when he has talked about twitter, where does he focus? certain tweets have gotten more attention than others. emily: -- ed: he tweets a lot about the bots on the platform.

he doesn't so much talk about the characters involved. management, on occasion, but the focus is really on bots, one of the bigger portions of the pie charts on that screen. the other one is issues of censorship and bias. another big consideration for elon musk is policy. we want to know what policies will change in terms of content moderation and who will be out or allowed back on the platform. but that pie chart is the most telling. emily: ed ludlow, thanks for bringing us all the data. joining us to continue the conversation is jason goldman, founding member of twitter and former white house chief digital officer under president obama. always good perspective from you. jason, what are the latest developments that we haven't talked a lot about, revelations from twitter that elon musk was being investigated by federal authorities over his acquisition

conduct, if you will. what you make of this? jason: it is difficult to say because we don't know which federal agency was investigating him. it is premature to think there is much fire. it could be as simple as twitter lawyers trying to get their hands on information elon shared with the ftc. it might just have been something they put in the filing to get information about that. so, without actually finding out what kind of investigation was involved, it is premature to say there's something super nutty going on. that said, you can't discount super nutty in this story. emily: what is your hunch? does a deal happen by october 28 and are there more surprises between now and then? james: i would never rule out more supplies is. i believe a deal happens.

i just don't have a ton of conviction about it. i believe what is happening now is that lawyers from both sides are trying to figure out how to execute this deal between two parties that have absolutely no reason to trust one another. it is, how do we get all of the money in one place, you show us the money, with oakley take all of the money and you get the twitter, without involving a lot of contingencies? which twitter is not going to accept. emily: say elon musk gets the twitter in a couple of weeks. what happens to twitter under elon musk? what is the biggest risk? james: the risks are twofold. there's going to be a lot of brain drain peopl -- brain drain. people are going to leave of their own volition or get fired. and the other is, twitter is going to be subject to reactive decision-making that elon has shown publicly in his comments about the company and now,

privately, someone who doesn't respond well to criticism, likes to be praised, likes to be given accolades about how smart he is said what great ideas he can to bring forward. but despite all that, still does not have a serious plan for what to do with the platform. that puts the company in a dangerous place and its users in a dangerous place. emily: ok. here is a similar question -- what is one thing elon musk could do that would make twitter better, and do you think he will do it? james: the easiest thing is to immediately remove himself from decision-making. like if he somehow moved the company into some foundation and said this was going to be run in a nonprofit way. jack and i don't agree on a lot of things but jack has this notion of twitter returning to be a protocol and that it needs to be one client running on top

of a technical protocol. if elon were to divest them of authority and decision-making power around the platform, that would be positive. and then, leave it to subject matter experts to evolve the technology needed to do that. emily: i have been dying to know your thoughts on text exchanges between musk and jack. what was your take away? you had this hunch all along that they were somehow in cahoots. james: it was obvious from the proxy filing that jack had a conversation with elon that he expressed his opinion that it would be better in independent and spirit we find out that when elon agrees, jack is overcome with emotion that he would later say publicly the senior solution to -- the singular solution to put your problems has shown up. he couldn't believe this messiah arrived to save twitter from this board that jack put

together and simply couldn't stand anymore. the texts reveal jack as frustrated and pretty much done running the company, and willing to completely roll under the bus anyone at the company including the ceo, who got in the way of elon taking it over despite the fact elon at no point to jack in public or private expressed any real idea of what he wanted to do with it. certainly nothing in line of what jack thought needed to happen, this idea of making it a protocol. i think the texts reveal in general how willing people are to appease elon, and anyone who pushes back on him immediately gets pushed to the side. emily: we haven't heard from the other twitter founders. i know you are close with them. what do they think about this, to the extent you can share? james: i prefer to speak with

myself. i am close to the founders, but for all of us that were there in the early time of the company, we have always had self-inflicted wounds, we have always had turmoil with the company. despite differences in terms of, i did think jack should be ceo and that was a rift in the company, i never really doubted jack''s willingness to do what was necessary to make twitter a better product. nor did i doubt he had true conviction about output or should grow into the world. what we are seeing now though is someone who doesn't have that kind of expertise. we are seeing instead by everyone who has been blowing up his text messages that he is the second coming of thomas edison and a genius and despite a lack of expertise, he is going to fix these very difficult problems. and that is dangerous for the geopolitical reasons you talked about, you are talking about

someone who is incredibly susceptible to flattery and influence and belief to highly in his abilities. that is going to create the context for a large mistake, whether that is shutting off access in ukraine or inadvertently or purposely revealing user data to an authoritarian state that is trying to get information about dissidents coordinating on twitter put your has, so now, china has a strong lever over elon in order to jeopardize user safety and dissidents in hong kong or taiwan or anywhere else. that is a real problem. and it doesn't require a secret conversation between elon and pugin, it is obvious on its face that he's going to be susceptible to these pressures. emily: how concerned are you about this happening right before a mentor -- eight midterm

election? james: i am not concerned about the midterms, it is too close. but for future election cycles around the world, it is a concern. not for putting up thumb on the scale of a political party. i think it is more a problem that, around the world, that autocrats already use the platforms to spread lies about opponents and whip up violence and mayhem. that is a problem, because elon is going to be able to tip the scales for those kinds of forces around the world. emily: james currier, one of the founding members of twitter and former white house chief digital officer, thank you for stopping by. ♪ coming up, the crypto exchange that just raised $165 llion in

a downturn. the unit swap ceo mary catherine lader joins us. this is bloomberg. ♪

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wap has gotten what it says is the largest funding round for a quick firm even as the market is still struggling and investors

are losing confidence in defi. uniswap coo mary-catherine lader joins us. what is it that you think about uniswap that got investors to pay up given very difficult market conditions? mary-catherine: what we have learned in the last six months is the importance of decentralized systems at the core of this new technology. and also the importance of safety and security. and uniswap has been committed to safety and security since day one and never takes custody of user protocols. we are a decentralized trading protocol. you are not managing actual assets or user assets. you are giving them open-source technology and allow locations to access that technology could what is different about uniswap is, it is a fundamentally different technology stack from

a central exchange whereas crypto firms we saw suffer over the past six months are those that are using traditional, traditional centralized exchange models. they ultimately had risk management failures. our investigate -- our investors and the markets saw that decentralized exchanges have advantages and uniswap is committed to bringing more users into the space because the entire ecosystem needs to grow and be more accessible and safer for that to happen. emily: what do you think this says about the popularity of decentralized projects in crypto over the longer term? mary-catherine: my hope is that the benefits of decentralized protocol will be recognized and we will have mortar products that -- more products that are

easier to use. today, it is to cumbersome. what are the benefits of different custody models? the transparency, lower-cost. it is a lot to explain, so we are focused on for the next several years with this funding is to make it easier and more accessible for retail users, but also traditional investors to recognize the technology has real-life benefits. it is an endorsement of fundamental innovation in technology and finance. teams understand the importance of security and useful experiences. emily: if there is still a concern about security, why have there been so many hacks in defi, and now can we prevent them? james: --

mary-catherine: we have multiple third-party audits of all of our code. it is a key part of deploying smart contracts. that is a best practice in the open garden where people can just lunch technology. not all projects necessarily billed through same controls prevents a key part of the technical risk. there is also the element of having a security mindset and anticipating all of the things that can go wrong, in a transaction and in deploying a smart contract. when you deploy a smart contract to a blockchain, it is effectively immutable. the battle testing in advance of that is huge. and not all projects treat deployment as final commitments. it means that sometimes, people are launching projects and users may access them and not risk the

desk and not realize the risk -- may access them and not realize the risk they are taking. so, investors, earning their trust in business is going to be all the more important because many people have been burned. but that is in the context of defi, where many of the risks have been technical. reason fillies have been failures of management, not managing user funds accurately. it is really important that people at a stand, those companies, celsius and the like, were not using the technology we used, for example. it is important we aggregate those risks. the financial risk management that is critical for companies that do touch user funds and also technical risks. emily: mary-catherine lader, coo

of uniswap, thank you for telling us about that funding. coming, a verdict in the jury trial against nikola's founder.

♪ emily chang guilt -- emily: guilty. that is the jury verdict in the fraud trial of nikola founder trevor milton. jealous more. ed cop -- tell us more. ed: trevor milton was found

guilty of defrauding investors. it was not found guilty for wire fraud. it was an astonishing case. the government proved that trevor milton lied, made misleading statements and exaggeration about company technology, progress and order book. but crucially, that those statements pushed investors, retail in particular, to buy the stock. and the jury returned a quick verdict friday. emily: why do you think the jury returned so quickly? ed: it is impossible to say. it has been a one-month trial. there was a pause for around 10 days because some of the defense counsel got covid. but one juror bloomberg spoke to leaving court said simply, the evidence was clear that the government presented many nikola

employees, documentary evidence, appearances from trevor and text messages and the argument from the defense was that trevor believed what he was saying was true, he never set out to defraud anyone and that anyone -- and that everyone around the company was saying the same thing and that if investigators looked at regulatory filing documents, they would have found the information that should have informed their decision. five hours is a quick verdict. emily: you make the point that the defense argued he didn't lie, he may be just over promised and said what he believed to be true. which is kind of common in silicon valley. it will be interesting to see how this impacts the tech industry. ed ludlow, thank you. that does it for this edition of "bloomberg technology." next week, next view venture partners' melody koh to talk

about women-lead and minority-let's start ups. have a great weekend. i am emily chang. this is bloomberg. ♪

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