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

emily: i'm emily chang in san francisco and this is bloomberg technology. coming up in the next hour, u.s. officials are discussing national security reviews for elon musk's various ventures. on twitter to tesla after his russia-ukraine tweets, especially given tesla's strong presence in china and ai development. the white house may put more restrictions on china technology from ai to quantum computing. and apple design chief that will replace johnny i've is leaving the company. how she impacted the product lineup and what it means for iphones, ipads, and the incoming mixed reality headset. first, let's get straight to the markets with bloomberg's ed ludlow. we made it. happy friday.

ed: it was a happy friday in the markets. in a week where there was a lot of anxiety. results from snap, a really precipitous plunge. tesla missing top line for the first time since the third quarter of last year. fed speak. fed speak. fed speak. lots of anxiety. yields pushing higher. and we really rallied hard on friday across the s&p 500 and tech in particular. the nasdaq 100 in-line with that performance. semiconductors really outperforming five straight days of gains. we are going to dig into that later in the show. let's dig into how the week looks. the s&p 500, the nasdaq 100, these were the best weeks since june. there was weakness. chinese tech stocks not performing well, we see that in the golden dragon index. all told, we are still bracing. next week is pivotal for big

tech. you're hearing a lot about the stronger dollar and weakness in the ad market. and now we are hearing a lot of jitters around elon musk. it twitter was the story of the week. it's always the story of the week at the moment. at one point the stock dropping precipitously and paring losses. it's important to say that the white house is not aware of any security reviews of elon musk or elon musk's is this is. -- businesses. but the spread continuing to creep. we are waiting for this to be done. october 28 at 5:00 p.m. is the deadline. the bankers on both sides, they are working diligently to get this done. this report about security reviews kind of came out of left field. this is something we were not prepared for. but it happened and you've got the details. emily: we will talk about that a little bit more right now.

biden administration officials are debating whether the u.s. should subject some of elon musk 's ventures to national security review according to bloomberg sources. this would include the twitter deal, tesla, the star link network. u.s. officials are uncomfortable with what they see as musk's increasingly russia friendly's dance. -- friendly stance. i want to bring in the stan and sarah. let's start with you. tell us what we know about this part central -- potential series of national security reviews. dan: in many respects, the views are centering on twitter. and on the consortium of investors that musk has lined up to help in his acquisition of the company if that is what ends up happening at the end of the day. those investors, some of which are based overseas, because of the makeup of that consortium,

there is a potential for the committee to get involved in looking at the interests. the question is twofold. one is whether the committee has jurisdiction which sort of has to do with not just the financial stakes that these investors are looking at but whether they will have any controlling interest in twitter. whether they will be on the board or have access to non-public information. so they have the ability to potentially ask musk or those involved in the deal for more information on that end. then it becomes a policy decision for the biden administration to make whether they would want to step in and stop that deal or potentially, more likely, have some revisions or mitigation effects on that. it seems unlikely that that is the course they will take but there is interest in trimming

his sales a little bit in terms of his rhetoric out there what he is saying publicly. and potential risks for foreign investment. emily: we are a week away from the day this deal is supposed to close. how big a wrench is this in that schedule? taylor: emily, we have -- sarah: emily, we have been on the show talking about how he wanted to buy twitter, then didn't, then he wanted to again. then there were stipulations twitter didn't want. finally, we are reporting that talks are cordial and we are on track to get this deal done by october 28. if the biden administration is the wrench that falls in its way, that would just be such a perfect climax to this story. it has really been a bumpy ride for the company and for elon

musk and for us reporters at bloomberg as well. but listen, it's hard to say. until they say they are going to do a review, whether this is going to delay anything. as far as the folks involved in the deal, they are on track to meet the judges deadline which is 5:00 p.m. eastern time next friday. if they don't meet that deadline, for whatever reason, it could end up going to court. i think that they are heads down on that. reviews could come still and they would have to respond to that whatever it would end up being. emily: in your reporting, you talk about the russia-ukraine tweets, the threat to cut off star link access to ukraine. how much are can fit -- how much are officials concerned about this potentially russia-friendly stance from elon musk?

dan: there are a couple things they are looking at there. there is the rhetoric that musk and others have engaged in on this issue. the satellite communications issue, and i think there is concern from defense officials and those in the administration that giving one individual so much control over that kind of communication and the methods of communication in these sensitive areas is potentially a risk on the redundancy standpoint and the communication network. and also in terms of giving one individual so much influence over u.s. foreign policy to a certain extent.

there is some concern about that. and there is generally concern on the part of the administration on chinese investments. this is separate from the ukraine russia issue. so i think that there is broadly a desire to more carefully scrutinize foreign investment in the u.s. whether musk runs afoul of that is a separate issue. that is something the administration is looking to be more active on in general. emily: in the meantime, there is reporting that musk is planning to cut 75% of the workforce. that's a lot of people. what is the reaction inside twitter about this news?

looks like we lost sarah for a moment. while we get sarah back, can you tell us the response from the white house so far on your reporting? dan: treasury secretary janet yellen was asked about this today and she basically said she cannot comment on actions, which is a common response and she is broadly supportive of what musk has done on the communications front. the white house says they have no knowledge of these discussions. our reporting is solid in the sense that there are these discussions happening within the white house. there is this a broader overall question of what do you do with a problem like elon musk? this is the richest person in the world exerting an outsized influence on foreign policy. and i think there is a desire to rein him in a little bit. there are some ways to do that that are both political and nonpolitical. whether city is -- whether they

get involved is more of a policy question and my reporting is that it would be an outside chance to get involved at this point. though not totally outside the realm of possibility given the foreign investment in the deal structure. this is something we will have to keep a close eye on as things move forward. emily: ed, why don't you address the news that broken the show yesterday that elon musk is considering laying off 25% of twitters workforce which would be thousands of people. what are employees saying? ed: sarah had some technical issues but no worries. sarah edited the story and it has been wellness month on twitter. the company has been sharing messages about worklife balance. the messages coming out of twitter are frantic. they are worried the strictest stock unit will either not happen the same day they thought

or it won't happen at all. they are looking at sources if they are laid off. do they get the right kind of severance? this communication that elon musk is considering laying off 70% -- 25% of the workforce is not upsetting twitter staff. what is upsetting is the chief legal counsel saying that they had discussed layoffs but ended at that definitive merger agreement. that is a different message than what was told to staff previously. across san francisco, new york, and london, it is understandably pretty low. emily: ed ludlow with sarah frier and dan flatley, we will follow all of your reporting to the weekend.

coming up, snap sends a warning to social media shareholders. we will discuss that next. this is bloomberg. ♪

emily: anxious investors are selling out of social media stocks with $35 billion in market value wiped out just at the open. this following snap reporting the slowest quarterly sales growth on record. i want to bring in craftsmen founder and ceo alex. what does this mean to you?

alex: there is a different macro environment should talk about where we are shifting from brand advertising spend to performance spend. it is more geared toward brand advertisers but the lack of first party data that apple has recently changed with the att framework really relying on first party to drive that value. snapchat doesn't have first party data. and opposite of tiktok, which is a very sticky platform driving a lot of engagement, it doesn't have the stickiness factor and it took a big hit today in the markets. emily: how much do you think these are short-term issues or are they long-term issues? alex: i think we will see more long-term issues in the social space. what the trend is right now is going back to first party data, there are these smaller platforms. i think of marriott, lowe's, home depot. amazon and walmart has paved the

way for that. the advertising and we see the spend across the social platforms leveraging smaller audiences. emily: what does this mean for alphabet or twitter that has a unique storyline as well? alex: google has a lot of first party data, so they will be fine. i'm not worried about google. twitter is one of the platforms like twitter, pinterest, and snapchat are the three i'm worried about and concerned about their ability to drive performance for advertisers. meda has a lot of first party data. i think they are going to be a player in the space and have meaningful value. emily: even if mark zuckerberg isn't as focused on's ace bookend instagram as he is trying to pivot into the metaverse?

alex: facebook is a machine in that company has a lot of great talent behind it. a lot of folks have built that up. even if he is focused on metaverse, i think that platform is where advertisers are spending money and that is not going away anytime soon. emily: what are the big themes and the big takeaways advertising more broadly is changing? alex: there is a different framework. apple just announced their update about how to handle privacy. and what the big changes are, we need more data. you have that first party data but you also have attribution windows, which is the time that you can take credit for an impression or a click. they are opening up the attribution windows to feed more data to these algorithms that are these ad platforms which is ultimately going to boost the whole space. there will be an overall boost in ad dollars flowing to these

platforms. emily: do you see a hierarchical shift in where the biggest ad dollars are going, or the recipients of the big ad dollars? how does this look different in five years? alex: google is going to do well and apple will merge to a meaningful way. tiktok has stickiness and will drive those high flyer advertisers that are looking for the mega win. they still have the dream. that business has not been driven. what we are seeing in the space is connected tv. you will see a shift from these digital platforms that are just on your phone, shifting over to larger screens, disney getting into this space.

and with all this extra inventory, advertising is about supply and demand. there is the inventory publisher and supply. these platforms opening up their businesses, this is from the macro environment that the business is hurting and we need to make money. what's an easy way to make money? turn on ads. the more inventory you have in this space, lower demand, more inventory. we will see global costs of impressions decreasing over the next five years. emily: interesting. ceo and founder of craftsmen plus, thank you for bringing your perspective to us this friday. another top apple executive stepping down. how this departure opens a major hole in apple's design team. this is bloomberg. ♪

emily: apple's head of hardware design is leaving the iphone maker three years after taking the role, creating a significant vacancy at the top of the company known of course for its iconic designs. this according to people familiar with the matter and mark reporting. what do we know about her departure and why she is leaving now? mark: this is a significant partner, the vice president of industrial design reporting to the coo. she essentially replaced johnny ive in 2019 upon his departure. she's in charge of the look and feel of the iphone, apple watch,

ipad, the mac. the departure was announced internally within apple this week and she will be departing in about six months. the notable news is there is no replacement for her. apple hasn't been able to come up with who would replace her at this point. emily: filling johnny's shoes was always going to be a difficult job for whoever was going to try to do that. do we know why she's leaving after three years? mark: it is unclear to say for certain why she is leaving. she's certainly not at the point of retirement. she's been at apple for about two decades. she was basically the manager of the industrial design team under johnny. she ran the team as a manager and it was too much a natural succession for her to take over for johnny.

there were some other senior designers that still remain, but many of them, many of the close collaborators and senior designers over the last two decades responsible for the designs of the products have either left to start their own firms, left to other companies and others have joined johnny's company. but there is richard, he temporarily had the role between 2015 and 2017. he's not someone who wants to manage a team so i think it's unlikely he takes that role again, but certainly a major development for anyone that is a fan of the look and feel of apple devices. emily: how will this impact the product lineup? mark: they could be working on things in their labs that we won't see for two years to seven years. take a look at the current apple lineup, the series eight has the

same design as the apple watch from four or five years ago. the ipad pro is the same design as four years ago. some of the other products have legacy designs. so we are in for a big change to apple's designs over the next year were to just because those designs have lasted so long and we will only see the fingerprints of evans in the next year or two and then maybe for five years in the future we will see how the design evolves. emily: mark gurman, thank you. instacart is reportedly holding off on plans to go public and to live least next year. the food delivery giant had been planning to put the s-1 filing out this week but is said to have reconsidered given the turbulent market. they cut the valuation to $13 billion and decided not to go public until market conditions improve.

read it says it has more nft wallets than the popular trading read site open c. they have more than 3 million wallets. the largest nft market place has about 2.3 million active wallets. reddit is repairing for its own public debut in the next year. coming up, the u.s. weighing more restrictions on tech business and china which could have a wide-ranging impact across the industry. we will discuss, next. this is bloomberg. ♪

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emily: welcome back to bloomberg technology. let's get back to the markets and the chip sector with

bloomberg's ed ludlow. it was a good week for chips? ed: it was a good week for chips. the semiconductor index had its best week since may. but look at the momentum over the course of five days and it was the first straight run of five day gains since we had since november of last year. there is momentum and outperformance in the short term among chip stocks. let's get a reality check of where we are. a completely downtrodden sector. the blue line is the semiconductor index and vastly underperformed the s&p 500. the narrative around chips has really changed. we felt we would have never-ending quarters of double-digit expansion. that we would move away from the traditional boom and bust that you associate with semiconductors. that has changed very quickly. and there is a lot of concern here not just about the drop-off in demand for the end product

like consumer electronics and pcs, but other problems with regards to china. the moves the u.s. is making in terms of tech and export. also because a lot of the main players that make the equipment to make semiconductors are also u.s. companies. that is a big portion of the index. emily: we will talk a bit more about those moves. sources tell bloomberg that the u.s. is looking into new rules that would limit china's access to powerful emerging commuting technologies -- computing technologies, focusing on quantum computing and artificial intelligence software. for more on the tensions between u.s. and china, let's bring in isaac stone. tensions have been ramping up for a while. where is this leading? isaac: if we step back and look at how negative things have been between the u.s. and china and

the very real possibility that china invades taiwan as soon as this year -- not likely, but possible. possibly, the u.s. and china are leading to war. emily: wow. that's a profound statement. why go that far? isaac: we are not in a world that's past geopolitics. and i think we had this nice global mental break of big power wars from the fall of the soviet union and from after the korean war and the vietnam war, the proxy war. now we are waking up to the fact that great powers do fight wars with each other. they have throughout history and are likely to again. china has been very explicit about its willingness to retake taiwan even with force. the u.s. has been explicit about the willingness to defend taiwan with force.

if china calls the united states bluff, that could lead to an active hot war between the world's two most powerful countries. emily: how hot does this war get in your opinion? isaac: it depends on how lucky the world is. it could go anywhere from limited regional war to something similar to the korean war to world war iii. and it is stunning to me as we talk to people in the investment community that the u.s. government and certainly the chinese government are awake to this possibility. but the investment community seems to want to keep pretending that things will go back to where they were in the obama era of friendship with a sprinkle of competition in those days are over. -- and those days are over. emily: what would this mean for the tech industry? isaac: it would be

transformative. catastrophic to many and positive for some that plan ahead. apple, tesla, other companies are recognizing the difficulty of sourcing from china and trying to explore the supply chain alternatives. i think the absolute cratering of the chinese market would be cratering for a lot of business's bottom lines. a lot of companies haven't been thinking about this from an ethical perspective. i am a major u.s. company and i have thousands of staff. if china invades taiwan, will beijing use my staff as enemy combatants? how do i deal with that now? there is action with afghanistan and ukraine and companies taking care of the countries when they descended to war and chaos. what plans do tech companies have to take care of their own in china if china is to invade taiwan? emily: if that does happen, how

does that play out especially given the way we have seen the u.s. come to ukraine's aid to a certain extent. taiwan being a unique situation. isaac: it's impossible to predict the future but i'm heartened by the u.s. restraint towards ukraine because the message that sends to beijing is not we are going to treat taiwan like ukraine but we are preparing for the possibility of you to invade taiwan. we are not fighting a two-front war. we will not fight china and russia at the same time. if you invade taiwan, we will be ready for you. and we are supporting what the ukrainians are doing, but we are keeping a lot of the powder dry, so to speak. emily: interesting. so you think the u.s. would be much more hands-on if china were to invade taiwan? isaac: i don't think congress

would let the united states not go to war with china if china launched a full-scale invasion of taiwan. emily: this is all terrifying, isaac. i mean, really terrifying. especially given the 38 years of relationship building. you and i spent many years in china. it's a very different relationship that has evolved into a very different relationship over the last several years. what about a new administration? we have a presidential election in a couple of years. or is this something you see carrying on no matter who is in office? isaac: the u.s. navy chief talked about the possibility of a war with taiwan this year, next year. i'm much less worried about how things will play out in the medium term and i'm far more worried about 2022 or 2023. i would say less than a 50%

chance of it going to happen. and i think it's possible that a future trump administration, if that happens again, trump is more likely to sell out taiwan for other concerns. i think another republican or another democrat would be far less likely to do so. i think it's possible that beijing, right after the 2024 election before the new president takes power is the ideal time to strike. hopefully they don't and they don't decide to try to seize taiwan by force. but we haven't been having this debate or talking about what the u.s. should do to prepare for war with china and also how do we make sure we act ethically as well? i'm worried about our atrocious history with japanese americans in world war ii and german-americans in world war two. -- world war i.

so much of the conversation about war is how do we prevent the war as opposed to regardless of what we do, the u.s. might go to war with china and how do we conduct that war in a way that is most ethical and adheres to our values? emily: certainly an interesting perspective. i want to get your thoughts on the latest bloomberg news reporting on tiktok. we did some analysis of the deal that the u.s. government has struck with tiktok and its parent bytedance to store u.s. users data on oracle servers. but bloomberg news has concluded that this would still leave u.s. data vulnerable. what is your take on this? isaac: tiktok in a time of good relations with the u.s. and china is barely a threat compared to other big social media platforms. you can put it roughly in the same category as facebook. tiktok in an era of tensions

between the u.s. and china or an era of war can easily function as a national sleeper agent for chinese intrusion into u.s. homes, u.s. hearts and minds. and as such is very dangerous. any sort of deal that gets struck between the u.s. and oracle and tiktok won't allay those concerns. if tensions reduce between the u.s. and china, i'm not worried about tiktok. if you have a chinese app on tens of millions of phones and the u.s. and china are going to war, that is a huge national security concern. and one that i don't think investors or the administration has fully unplugged. emily: that is a bleak assessment, indeed. strategy risk factor and ceo isaac stone fish, thank you for joining us.

a major topic we will continue to follow. on a lighter note, google chips, not the ones in their chrome books or smartphones, we shed light on the latest marketing push. >> google is getting into chips. the crunchy kind that you can eat. you can tell from the package they are only available in japan. and here they are part of a marketing push for the latest pixel 7 phones from the internet giant designed to remind us that google also makes the other kind of chips. the ones that are made out of silica and -- silicon. with cameras and a litany of internet services from google maps to photos, youtube and chrome. it is hard to think of apple resorted to the potato chip ploy. that's because people already know and love the iphone and

google is running ads saying -- >> did you know that google makes a phone? >> it says something about the ongoing attempt to sell in big numbers and the opportunity in japan. in the u.s., apple and samsung account for 74% of the market and in japan, samsung scrapes 7%. it's a missed opportunity for google. wanting to take chunks out of a silicon valley rival by stealing business in a way that samsung has so far failed to do. if it takes spicy, savory, cheesy gimmicks to bring attention to the cause, so be it. how do they taste? not bad. but there's a far tastier meal on offer. emily: crunchy. coming up, the great resignation

bleeding into the crypto industry. this time shaking up the c-suite. this is bloomberg. ♪

emily: turning now to today's crypto report and the bloomberg big take. the $2 trillion wiped out has cut a path through the c-suite. two dozen high-ranking executives have vacated their posts. two names in the shakeup -- hannah miller joins us with more. who else? hannah: it has been a deeply unsettling flu announcement of ceos stepping down. alex at celsius, brett harrison at ftx us, and sam at alameda.

a lot of big names making big changes and stepping back from their companies. emily: why is this happening now? there is a ton of volatility in the market. is that it? hannah: yeah, there are a number of factors contributing to changes in major crypto companies. yes, the huge downturn that is affecting the market and causing crypto winter is a major reason why ceos might be stepping back. some are companies that have had serious issues. and others are just looking to kind of save their sanity and take time off to see friends and family and spare their mental health. we have also seen growing regulatory scrutiny as well. emily: how are crypto venture capitalists approaching this?

or are they behind a number of these departures? hannah: crypto vc's are some of the industry's biggest cheerleaders. we have seen a drop in funding for launching start. a 37% decline during the third quarter. i think they are trying to see the bright side of this. in some cases, they are saying more experienced ceos that might be coming from traditional finance or have helped companies go public might be feeling -- filling these roles. it is a new level of maturity for the crypto industry and kind of an optimistic take on what is happening here. emily: how much more pain are we expecting? we were speaking from kriti gupta -- two kriti gupta this week. she things it will be falling more than it has already and if that happens, i can assume that there will be a lot more attrition. hannah: yeah, i have talked to

people that said we should expect more layoffs down the line. that is a huge issue for the industry. we are seeing the startups buckle down for the next 18 to 24 months, making sure they have enough cash on hand to outlast crypto winter. i don't think this will resolve anytime soon. people are still invested in the blockchain. emily: bloomberg's hannah miller. coming up, expect big swings next week with big tech results. we will give you a preview, next. this is bloomberg. ♪

emily: another week over, but brace yourselves. next week is a big one with 15.3 trillion market cap reporting results. lots of that big tech. to break it all down is ed ludlow. we are watching big names next week. walk us through it. ed: i feel like we have been dipping our toe with tesla and snap. next week are the big ones, the mega caps that have an important role to play in markets because of their weight on the indices. it is such a big lens on the

world. at microsoft, alphabet, the parent company of google on october 25. twitter we can expect a press release and we don't know what is going to happen with the elon musk will but they will not do a normal earnings. he hoped for commentary around the macro advertising environment. meta as well. after snap, we turn to meta. and the things that hurt snap were not just a pullback advertising but the ios tracking changes really hurt them. you and now -- you imagined that is analogous for meta. -- you imagine that is analogous for meta. then our favorites on friday. emily: let's talk about the slow down as it pertains to google and meta. our guest seems to be pretty confident in google and meta's results. less so in pinterest and snap. ed: he talked about this in

terms of search, we learned earlier in the year that they kind of came out of the pandemic even in a changing economy, google still attracts eyeballs because consumers change their spending habits. they start searching for experiences, travel plays a big part. they are not immune to what we are seeing. the stronger dollar is also really interesting. if you think about the names we are talking about, these are global technology companies. when you consider the s&p 500, it is the technology sector and the communication sector most exposed. they are bringing in international revenues that will get hit by that strong dollar. emily: ed, you are an eternal optimist. give us some hope, what are the signs of light or silver linings? ed: there are people that think

the end of the world is inevitable. not naming any names. but there is the view in the market that the tech sector could hold up better. you think about these names, global players with entrenched market positions and strong balance sheets. they can weather the storm. apple and amazon are able to be noble because of their size. whether they pull that off or not, it is citigroup. they are optimistic over the long run and some parts of tech can handle the storm. we will see if that happens. emily: ed ludlow, i know you will be across it all next week. that does it for this edition of bloomberg technology. on monday, we talk about meta's new advertising strategy with brad erickson and we will dive into the broader trends we're seeing in social media and turmoil as well given what we are talking about when it comes

to snap, twitter, google, and more. and don't forget to check out our podcast wherever you get your podcasts. i'm emily chang in san francisco. have a wonderful weekend, everyone. this is bloomberg. ♪

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david:: the rescue week with the president trying to rescue buyers at the gas pump. the british government just plain eating -- needing a rescue period. this is wall street week.