>> from the heart of where

innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." with emily chang. emily: i am emily chang in san francisco. coming up, over rises after third quarter sales jumped 72%. i will ask the ceo why he is saying the business is stronger than ever. plus, elon musk is now the twitter complaint hotline operator. giving us an idea of what the subscription model for the platform will look like. he founded one of uber's biggest competitors and wrote the book on it, the grubhub founder joins us to talk about his journey from then until now. all of that in a moment.

first, stocks are bouncing back i want to bring in ed ludlow. tech company earnings reports. ed: let's get to earnings. the stock is down as we are speaking. disappointing outlook. revenue of $1.8 billion. below street expectations, but the language miss projections, this is that time competitors are seeing contractions and this would represent growth, seeing topline growth of 45% for the server business year on year in the third quarter which offset weakness in the pc market. another case of good economic

data, bad news for the market. the nasdaq 100 is down 1%, tech underperforming. the strength in semiconductors. one bright spot was uber. having its best day since the first week of august. third quarter sales are jumping. the real strength here. some fighting talk from uber. the company is not worried about consumer demand. emily: ed ludlow, we will talk to him about that. thank you for more on uber. let's bring in the man himself.

the uber ceo, great to have you with us as always. guest: the big trend we are seeing is the consumer spending but you are seeing a shift from retail during the pandemic, restaurant hospitality is strong, people are going back to work. the mobility business is strong, up 33% your on year basis. adjusted.

coming in superstrong. moby indicated for next quarter. more strength that for us. emily: writers are not taking as many rides as they used to. when he said happen? guest: we will get back to those numbers and hopefully beyond. trips for monthly active, pre-pandemic, we are about 5.7 trips per monthly active. it's headed in the right direction. we have the power of the platform.

we are moving our writers, up selling them uber eats, up selling the eaters with the membership program just because of the breath of use of cases we have now. emily: let's talk about delivery, demand holding up. sticky profit is looking good. we are not seeing notable growth. is this an area where you are seeing the impact setting, some customers might be saying, maybe i order out one less time just to be more conservative? guest: we're seeing the impact of -- lester we were not fully opened up.

the growth on the delivery side accelerated, we think you for will be similar in terms of fx growth. basket sizes are higher, some of that is inflationary. we look at the frequency of ordering of users, that is stable. we are comping against pandemic,'s and being hurt by foreign-exchange. emily: i have been traveling a lot. my rides per mother going out. when our prices going to come

back down, will they ever? guest: inflation has affected everyone. to some extent, prices. we have seen pricing ease for example, q3 pricing versus q2 pricing, surge levels came down. when you get your car? that has improved. i think this is a new baseline. our consumers, they are willing to pay. trips are of 19%.

emily: driver supply is improving. what happening with incentives? will they go away completely? we've keep some around? guest: we are going to keep incentives around. driver supply is improving as we made real investments in the driver experience. we have improved our onboarding process so it's faster. a higher percentage of drivers who have shown an interest in driving for uber. where making the onboard flow faster, easier. customer service is available in case you're having any issues with documents, etc.. driver earnings levels are quite robust. drivers in the u.s. on average make $36 per hour engaged on the platform. with an activity it is flexible,

drive where you want, when you want. we're innovating for drivers. they can see the upfront price that was one of the most requested features. they can see the upfront destination, if a trip is not right for them, they can move on. churn rates are down a most 20% on a year on year basis,, if churn is down and engagement is up, earnings levels are good, but we are very focused on

improving. emily: i want to ask your thoughts on prop 30. gavin newsom wants it to fail. electric cars seems like uber has a vested interest in. why haven't you taken a strong stance, i saw you ran into governor newsom on twitter. guest: i have talked to him. it's our feeling the california is making substantial investments in terms of ev ownership, and is definitely showing up in our business.

we have a great partnership with hertz to get more teslas. california is leading the path in terms of miles or the percentage of miles that are easy miles. it's 9% of miles driven on the uber network in california, they are now ev's. we feel like we're making the right investments, more on a trip basis when they move over to ev's, and in partnership with both public which is why we have stayed out of prop 30 one way or another. emily: the economy may be heading in the wrong direction. data showing a recession is very likely.

how are you thinking about costs and spending? will you be opportunistic? despite everything going on. guest: this is one of the most uncertain environments i have been a part of. europe is going to be weaker and is likely heading into a recession, we are preparing for that. in the u.s. it's unclear. from our standpoint, we want to look for any eventuality. we don't have significant fixed costs. in a weaker labor environment, our supply position will tend to get better. we will be a place for more drivers to earn real money on. this last quarter, we think the

marketplace. we think it's a business model that can do well in strong economies and can perform weaker economies. we have been forward thinking, free cash flow generation. our outlook, even in an uncertain environment, is a superstrong outlook. emily: the ceo of uber. great to have you with us.

coming up. a strong earnings report from arista networks. we will talk to the ceo who is on the list of the richest self-made women, we will ask about the state of supply issues and cloud adoption. that is next. this is bloomberg. ♪

emily:emily: let's get to arista networks. third-quarter results beating expectations and prompted bank of america to upgrade the stock. shares were up 5.7% at the close. that's bring in the president

and ceo for more. so great to have you with us, i believe it has been a year since we last talked. your sales going 57%. on path to grow 45% for the year, which is even bigger than you projected at the start of this year. inventory issues. how are you bucking the trend? guest: it's great to have our own micro momentum in the larger set of issues. i would attribute it to great products and technology. a great set of customers headlined by microsoft and meta, or as i call them m&ms since i like candy. the confluence of these overseas cases that we are now part of, arista has been well known as a data center company, and today we are becoming a centers of data company we are bringing the

data to every location. emily: speaking of m&ms, fitting around halloween, microsoft and meta are leading customers. why do they rely on arista so much? more broadly, they seem to go with white box retailers for back and stuff. guest: it's a good question. we co-engineer with them, we partner with them. we work with them on different designs use cases. in some use cases, they look for diversity and build on their own or use other vendors. the key in both cases from the data center, to the when, regional, interconnect. to a new use case that is coming

up more and more for ai. the partnership is indeed not a classical vendor, but we take that partnership very strategically and not lightly. emily: the tight supply environment has dented the growth foremost tech bellwethers, unlike arista. give us an update on supply issues. when you think those normalized? guest: these are the times i wish i was just a software company. arista is a platform company. we build a lot of hardware. hundreds of manufacturers and vendors to work with. a couple of years ago, arista put a plan together. we had that approved by our board from the tune of four to

$5 billion. it's an order of magnitude greater than our revenue. this is unheard of. we took a multiyear view on this. as we got the approval, we started planning well ahead of our demand in 2021. the good news is, it has paid off some. the bad news is, we're not getting enough of it. we would like more components. despite our best efforts, leadtimes are prolonged. we're waiting for the golden screw. the last components are not available. it's hard to build a system without the components and be like a car without the tires. we're looking forward to overcoming that, but as we have crossed our first billion-dollar quarter and marching ahead, we need more and more of these components to get stronger this year and next year. emily: meta is raising its capex for 2023.

guest: i think we all know meta for the strength they have brought as a social networking company, adds etc.. every company has to redefine and reinvent itself and markets doing just that, looking forward at where to invest and where to put the money where his mouth is. one of the important areas for companies like nvidia and arista is this area of ai applications that will tremendously test the network itself. when you put in hundreds if not thousands of gpus, storage, etc., the pressure you put on the network and bandwidth, latency, dynamically load-balancing, flows, is huge. it's an order of magnitude more than anything then we have developed. the 7800 as an example will give

them that kind of delivery of hundreds of ports at very protectable latency, a buffer in architectural level where they do not drop packets anymore, a lot of the investment will go into ai. it will have a direct impact on the network. emily: you have the analyst day coming up. talk to us how we should be looking at growth in the next year. will these dreadful macroeconomic concerns being a headwind for arista, how will it all impact cloud adoption if we are heading into a recession? guest: that's a really good question. we just had one of our best quarters ever. the rest of the world around us

is not as beautiful. as we look at it, we're going to be thoughtful and vigilant, is there a macro recession, what is arista's part? in some degree, we are micro momentum. we think some key trends have not affected the data center and networking infrastructure, it remains strategic and relevant. should a recession come, obviously, we will not be immune to it. at the moment, we are feeling really good. we have good visibility for the next six to 12 months, and looking forward to a great analysts day. emily: good luck. great to have you back. we will be right back with more. this is bloomberg. ♪

emily: tiktok should be banned according to the fcc

commissioner. the common sense shares of meta rising as much as 4.1%, snap spiking as well. axios saying it is the strongest language used so far, and while the sec -- fcc has no authority, congress previously acted after he voiced concerns about chinese tech companies, telecom companies. bloomberg has learned tesla is sending workers from china to help with an expansion at a fremont, california factory. a move that could help the u.s. facility ramp up production. 200 people had to the fremont facility on -- at least three months. coming up, elon musk wants to quadruple the cost of twitter elusive surgeons, cut jobs and possibly bring back fine. all things twitter, next. this is bloomberg. ♪

and it's easier than ever to■ get your projects done right. emily: welcome back. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done.

elon musk is teasing a new subscription model for users, eight dollars per month. he is making major changes including limiting content enforcement work before midterms by freezing employee access to internal tools used for content moderation. all while advertiser been urged by advocacy groups to boycott the platform if he lowers safety standards for content. let's get into it all, so, give us the latest year. let's start with job cuts. we have been waiting for more. have a happened? >> at all levels, yes. we are hearing people have departed including the gm for revenue products. the head of engineering has

departed. bloomberg has reported. the vp has departed. this is all happening. a source told me they were asked to put together a list for layoff candidates that would reduce headcount by 50%. i'm told that when determining who should be laid off, they have been assessing an individual based on code contributions, contributions individuals made to the underlying source code, we know there is an all hands meeting called and that is pretty much it. i know a lot of insiders and staff are bracing for that. emily: let's talk about content moderation. let's happening? what is being moderated, what is not being moderated?

>> it seems like elon musk is self moderating. it seems like there has been, according to bloomberg sources, a slowdown in what is being moderated because they basically told the team to pause what they're working on. you will remember elon musk talked about a group of diverse perspectives which for me, reminding a lot of what they already have. this will be one of the areas elon musk will absolutely have to lay out what the plans will be, because is not just users and posters of content who care about this, it's importantly the advertisers where twitter makes most of their money. they won't want to be paying to have their brand show up alongside content they view as unsavory. that moderation peace is widely talked about in the few days since he has been the death ipo

owner, but we are yet to see exactly the roadmap he plans to take for twitter. emily: of course, there have been developments about this obstruction service. what is the latest? >> he is arguing because he sent it out in tweets that a, those compelled to pay for blue check mark verification will want to do so to separate themselves out from the rest of the crowd. he talked about responses, fewer ads on the timeline. the verified user base is about 450,000, if you go to the verified account, if you times that eight dollars by 450,000, it's not this meaningful shift in business model. it's not going to displace the necessity to have a revenue stream for advertising.

the idea is to elevate premium content, have it stand out from what we know must believes is a pervasive issue, pots on the platform. emily: what about this teasing of vine coming back? this short form video product that twitter bought and then quickly dissolved. is this potentially happening? >> it has been tweeted about and that seems to be where the latest is happening. i will point out, sources tell bloomberg vine can be revived, but there are some hurdles to doing that. it runs on the old source code, there has been updates behind the scenes. looking at the viability of that option, i will tell you, if you spent time on tiktok, people talk about vine energy. there is still the stage. it was the first short storm --

short form video out there got that type of content popularized , woven into the cultural fabric. it seems like yuan has joked about this, that he is taking recommendations about what can be coming back, sources tell us that is one of the possibilities on the table. emily: there is excitement out there about the possibility of vine becoming twitter's version of tiktok. are these changes going to impact the midterms? we are one week away. a lot of moderating is normally operating, how can this play out over the next seven days? >> it's important to be clear that the group of people who have access to the dashboard and tools that allow the policy actions to be taken against accounts that have british policy is going from a group of 150 people to 15 people.

inside, there is concern that effectively, twitter will be shortstaffed in its ability to deal with content moderation over the course of the midterms. that said, we reported over the weekend there was some content moderation with the resilient election, despite the suspension of those tools. if you go to the twitter timeline, you will start to see alerts from twitter about the upcoming midterm elections, explaining some of the work they have already done. we would imagine they have got policies in place. the question is whether elon musk agrees with the plan and policies that were set to deal with the midterms. emily: we just got some breaking news that the twitter cmo is leaving twitter.

this has been happening with the number of top executives. she will not be the last one if our reporting is correct. thank you both. turning out to the world of gaming. activision blizzard said call of duty modern warfare two raked in $800 million in the first three days of launch, the best in franchise history. hear from you next list of interview is the senior vice president at activision blizzard. thank you so much for joining us. obviously, a huge weekend. what do you think is driving this, given the broader macro concerns and pressures on consumers, why are we seeing this show up? >> it's amazing. this is a testament to the community worldwide. so much passion built into the

franchise. to be hitting these numbers out of the gates the way we have launched year has been tremendous. it reflects how powerful the community of players we have is, but also the magic poured in by development teams around the world. we're in a celebratory moment. these types of numbers. it proves we have a blockbuster on our hands. we cannot be prouder. emily: is topping some of the big movie theater blockbusters. talk on and dr. strange in the multi-verse of mendez combined. what does that tell you about the popularity of games versus other kinds of entertainment as audiences evolve? >> it feels like it's the modern medium for entertainment. it is how people are gathering. they are creating friendships, lifelong connections through call of duty. again, this is that moment where

we could not be more proud to see so many different regions of the globe connecting this way. the numbers are staggering. it proves the power of gaming. we have friel -- fierce competition ourselves. we're all fighting for consumer's time and how they make choices, so many players rally together and pour in feedback and connections. just three days out of lunch, it's been amazing. we're excited for what is to come. emily: bloomberg has reported activision is adding and replacing next year's call of duty entry with added content for this year's game. tell us where the franchises going next. fans want to know. >> all of our eyes are in a couple of weeks from now. we have a new war zone experience. for those who don't know, it's another new way to play call of duty. war zone took the world by storm

three years ago. this is the 2.0 version of the -- experience. it's free to play, everyone can drop in and have an extremely awesome experience playing battle royale. we are really excited about that. there is so much going on in the modern warfare universe. we're excited. again, it's been a tremendous launch. there is so much more in store and even weeks away with 2.0. more to come. emily: i will let you get away without one. despite fans wanted to know. it's no secret activision has been working through some cultural issues, i would love to hear your perspective on how that is evolving. what it's like being a senior woman in gaming at activision. >> we have had our challenges. a lot of companies have their own challenges as well. when you think about how big the workforces. it's not something we take lightly. this is a priority for us.

continue to improve and replace culture, i have always felt so welcome here. i've been here for about four years. i have been so blown away by the caliber of the talent, the collaboration, and we have made this a top priority. we have no tolerance at all for bed behavior. we have said that in many statements. we continue to make investments to make sure this is the place people want to continue to work. it comes down to talent. i come back to that. we need the best and brightest. this is why modern warfare two has done what it has done. we have amazing talent all over the world. we want to continue to get better, attract the best, we can. emily: meantime, you're navigating a potential huge acquisition by microsoft. regulators are scrutinizing the deal. what can you tell us about any

signal you have gotten from regulators about when the skills going to happen? >> all of my eyes have been on call of duty. statements are out there as you know. microsoft has commented on this quite a bit. the possibility is very exciting. we all understand the scope of that. we are here focused to do what we came here to do, deliver the best possible player experiences we can. the call of duty milestones have been tremendous. a testament to how much work has poured in. more to come. all eyes are on this moment. again, i feel very honored and humbled to be a part of it. emily: more to come. thank you for sharing those numbers. we will stay tuned. the senior vice president, thank you. coming up. galaxy digital is mulling a big restructuring.

we will discuss next, this is bloomberg. ♪ arto run a business on artyour own. make it easier on yourself. with shopify, you can have everything you need to streamline your shipping, returns, and product storage, so you can focus on growing your business. because when we

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employees but the number could soon change. sonali basak is here to explain. what is happening? >> enormous gout. galaxy may be laying off 15 to 20% of the workforce. that can amount to 75 people. i want to point out, pretty recently, galaxy have been hiring. this is definitely a new plan we

are seeing, the stock is off more than 70%. remember earlier this year, they have the plan to buy a company that fell off. that would have added more staff. reversal in trajectory. 75 physicians could go. galaxy reports next week, so hearing what mike no regrets has to say will be interesting. galaxy is one of the earliest investment banks in the space. they have become a large operation with venture capital investing, a huge research arm. where exactly they will trim some of that will be of interest. also of interest is what they will say in terms of liquidity positions. 1.5 billion dollars as of june 30. one billion of that wasn't cast. job cuts are spreading across the entire industry. the question is, on the younger side as well, where do jobs go

next? we are seeing large scale firms pullback. emily: thank you for helping us dig in there. we will see how it evolves. appreciate it. coming up, the grubhub founder talks about his new book. angry. he is next. this is bloomberg. ♪

emily: the founder of grubhub is out with a new book about his food business. hangry details the step-by-step

grind of building an innovative business with each chapter including lessons for entrepreneurs and startups. mike evans joins me now to discuss more. after everything you have been through, what inspired you to put it in a book? guest: that's the story of starting it in my apartment through the ipo. it is an intense experience. all of the things. i wanted to share that experience, and if i could change a few people's minds about the importance of thinking about what they are trying to accomplish, that is my goal. that is why i wrote it all down. emily: we have heard elon musk say things like starting a company is staring into the abyss of death, shards of shattered glass. i want your metaphor. what do you got?

guest: it is no piece of cake. it was challenging. that's one of the things i have had to remember. i started a new business. the start to success is not a straight path. it's important to be able to quit. it takes an iterative and experimental approach to make the business something customers love. emily: that is something i've certainly felt. logical attack? guest: i started the business because i wanted a pizza and i was hungry. it started as a hobby. i did not love working for another person in the early part

of my work experience. that is really where the idea came from. i was trying to solve a problem, and i made the point in the book that entrepreneurs tend not to be happy people, because you look around and see something is wrong and you are more annoyed by it than some of your friends and family. the difference between that person being a miserable grump and an entrepreneur is getting off the couch and doing something about it. a lot of the motivation came from being sick of having to call on the phone, having orders get messed up that all of those things. i can't cook. i cannot stand cooking. i had to solve the problem. i started the food delivery online ordering business. ultimately, it did solve the problem. it goes through the experience of what it is like emotionally to do these 80, 90 hour weeks. over the course of the decade.

emily: startups are hard, food delivery startups are hard. we just have you were ceo on. uber eats, still doing well. good profit but not a huge amount of growth. i'm curious. if you look at the food delivery wars today between grubhub and uber eats, do they survive? do they coexist? or is there a consolidation? guest: i do not think they can coexist. ultimately, the winner will be the one that creates the best product for customers. that is the one that creates the best product for restaurants and drivers. ultimately, that's where innovation and differentiation comes from. the company that does that the best will ultimately win the loyalty and frequency of the diners that use the platforms. i'm looking forward to seeing

how that shakes out. i think there is room for differentiation among those three right now. emily: you are not unbiased. who wins? who doesn't survive? grubhub is a partnership with amazon. is that a differentiator? guest: i'm not biased. i think grubhub has an edge because it has more relationships with independent restaurants. ultimately, the neighborhood gems, independent restaurants and those businesses that make up the heart of downtown, big or small cities, those are the things customers love the most. i think grubhub has an advantage. that is my hope. obviously, i am biased. ultimately, it comes down to which company invest in those things the most. emily: last quick question. you talk about stepping down, why was when you stepped down the right time, as you say,

stepping down is not quitting. guest: i talk about this in the book. my goal was to pay off my school debt. i overshot by a little bit. i ran the company from my apartment all the way up to the ipo, myself and my co-founder. as i got towards the end of the journey as i approached the ipo, the reason i decided to go to the next thing was i wanted to work on a business for the impact of what i was doing from a social perspective and profit was the same thing in whatever business model. that is really challenging to do. i'm not sure it's even possible a lot of the time. i wanted to start a new company where we can make that the dna of the company from scratch. that is why i went to start my new company. emily: we will have to leave it there. thank you so much. we will see tomorrow. this is bloomberg. ♪