caroline: i am caroline had a

bloomberg's world headquarters in new york. ed: i am at the low in san francisco. this is bloomberg technology. coming, espionage act in the chip industry. the second such breach in less than a year. we discussed. ed: are we there yet? elon musk says he needs until later this year to fix twitter before handing it over to a new ceo. caroline: evaluating the ai opportunity. we sit down with a partner at sequoia's capital growth team. but first, we check in on the markets. as a mean inflation will be high? the market decides to drive higher. the bond markets we were worried

about the good data and they are up some six basis points. we got a bit of a sellout in chinese related names at the moment. a bit of a focus of what is happening in geopolitics. i was going to look at the micro stories. we have some significant rallies. roblox of 26%. -- up 26%. airbnb up 13%. it seems as though the strength of 2022 will continue into next year. ed: these are names i am watching. cisco forecasting sales in the april quarter will rise 11-13%, double what analysts were expecting. pouliot has gone through a

second round of layoffs. -- twilio has gone through a second round of layoffs. a big surprise, boosting best stock by almost 13%. roku up almost 12%. there has been a concern about how they are losing market share to everybody else and seems to be weathering the storm. the big story of the day and markets and geopolitically was asml, the dutch chipmaker. it is basically closing flat. the company disclosed that a former employee and china stole information. that is what was driving the narrative now. in the last 30 minutes, a break in bloomberg scoop which will give us more insight into that data. let's bring in tom giles. + we have gotten information

about the exactly what was stolen. this former employee took information from a data management system that is used internally to let employees collaborate on products. the products are very expensive machines that asml uses, that customers used to actually make chips. it is very expensive equipment. these could be the size of buses and cost upwards of $170 million apiece. so it is very valuable information and what this person took, we do not have the specifics, but we know where it came from. it came from this information sharing system called life center. >> team center, is that why it is called? >> team center. >> this is the second time we have seen such a breach from

china be a link to asml. it speaks to the attention around u.s. and china around technology. >> the u.s. is doing everything it can to deprive china of the information and the technology needs to become a force in chip making. e-labs far behind the u.s. in this critical technology. and he has asked players in japan and the number wins, which is some of the companies that make the most sophisticated equipment. if you do not have asml on your site it is really hard for you to come anywhere near the capabilities of the u.s. and the west. that is why asml is so critical. it is one of the few companies in the world that makes these systems that the information was stolen about. caroline: um, thank you so much

for helping to break down another great scoop. turning to another company we are watching. the man behind one of the key electric vehicle companies. elon musk says she may need to have the rest of this year to make things right at twitter. take a listen. >> i think i need to stabilize the organization and just make sure it is in a financially healthy place and that the product roadmap is completely laid out. i am guessing probably towards the end of this year would be good timing to find somebody else to run the company. i think it should be in a stable position at the end of the year. caroline: a man who has followed

his entire journey is kyle wegner. i feel like a lot of tesla shareholders were disappointed by that timing. >> i saw the poll that elon musk came out with saying should i find somebody? the expectation was that this would happen quicker than a full calendar year. as he pointed out, he has been dramatically trying to cut down on the costs at twitter. he is spending a lot more time physically at the building then i would have predicted. he does not feel twitter is in a place where he can hand it off. let's be real. when he finds a new ceo it is not as if he will suddenly disappear. this is somebody who likes to be hands-on with the companies he has. ed: we went to our audience and asked what elon musk should be doing right now. these are the results. they speak for themselves.

45% said get the new ceo as soon as possible. why has he actually changed their? >> we know he has gotten rid of a lot of people in terms of costs, they cut well over half of the staff. they are trying to renegotiate contracts with vendors. there are business things he is trying to drastically limit how much money twitter is spending. it does not feel like there has been a ton of change. we have seen some of the algorithm changes and tweaks to the types of things we see in our feed. it is not as if there is some major new product. ed: i guess twitter blue to a certain extent. i will ask you a difficult question. who could be the next ceo at

twitter? >> we have heard that there is a search going on. my take on this is it will be somebody elon musk is already close with. he will not just hand this company over to a search -- to somebody a search firm finds. you look at the people who have been helping out most at twitter, people like david sacks, steve davis, the president of the boring company. those are the types of names i would be leaning toward, but it sounds like we have a lot of time before he will make that decision. caroline: kyle wegner. we love having you want. let's stick with elon musk. thanks to tesla's rights this year, the billionaire is closing in on recapturing his title as the world's richest person. but it made take a little bit

longer for elon musk to overtake the richest person. he gave 11.6 million tesla shares to unnamed people. ed: coming up, the regulatory crackdown on cryptocurrency continues. the sec suggesting requirements that could further squeeze crypto platforms like coinbase. we will get more on that next. roblux, biggest intraday gain since may. a really strong end to 2022. the holiday quarter really driving expectations.

a lot of positivity right now at least around this name in the gaming sector. more on that next. this is bloomberg. ♪ ♪♪ what will you do? will you make something better? create something new? our dell technologies advisors can provide you with the tools and expertise you need to bring out the innovator in you. ed: earlier today the sec

proposed expanded requirements to cover a range of assets, including digital assets. caught up with paul burrell about how these changes could impact his company. >> coinbase is a qualified

custodian today. it was a qualified custodian yesterday. it will remain a qualified custodian tomorrow. when weiss has operated exactly in accordance with these rules. we think that is good for consumers and investors. >> what do you make of these sec comments that investment advisors cannot necessarily rely on platforms such as coinbase as qualified custodian's? >> well, i think when it comes to coinbase, we see sec officials recognize that coinbase can and does offer and operate as a qualified custodian in a safe manner that investors and consumers can have confidence in. we think standards are a good thing. we think investors and consumers have a right to understand that their assets are safe, that the standards are being followed by

those charged with the responsibility. in a lot of ways, this is about bringing the rest of the industry up to the standard coinbase has set for itself. we think that is possible. >> what does that mean for something like international expansion? how does that translate? >> one of the things i think it has led to his its nature. the fact remains that each jurisdiction has its own rules and coinbase follows those rules to the strict letter of the law. the thing is though that for many in cryptocurrency, the options to upgrade our truly international. the united states need to understand its standards are in some ways competing against

those of the rest of the world. we always want to make sure investors and consumers are protected. you want to make sure the standards are clear. but it has -- it is important to strike the right balance. ed: that was coinbase's chief legal officer. i guess the starting point is what does it mean for coinbase is business? how does that complement things for them? >> you have been clearing the record and seeing them as a qualified custodian even under these proposed rules. it is still unclear on how long it will take to become real rules. even though we have coinbase applauding certain parts of this process here, coinbase has such a nuanced relationship with the sec. they applaud certain parts of this rulemaking process.

there are other things they dispute, such as staking. even when it comes to this qualified custodian issue, you have other members of the crypto market a little bit more concerned. some voicing concerns about how they can make things less safe. when we look at the other sec commissioners, there are number that have voiced concerns about the amount of qualified custodian's. what happens outside of calm voice in this industry -- outside of coinbase in this industry? you saw the shares completely ripping today. there are some things on the sidelines like the staking issue. caroline: let's go outside the world of coinbase. i am interested in your world outside.

what are the ripple effects? what is crypto at large reading into the sec crackdown? >> outside of coinbase, the reason it matters is because we reported this week that the sec and other regulators have largely been whispering to the rest of the financial industry saying your relationship to crypto matters to you and could open you up to more liability. it is interesting because, let's see how the next 12 months play out. what happens to something like bny mellon? you have just a couple of days ago brian armstrong talk about how institutional interest is growing in the space even despite some of the crypto winter issues. but what happened since the sec brings down a stronger arm on the industry, do the traditional

players get spooked? caroline: ticket back to why the sec is so vast about crypto is because of what happened with ftx. bring us up to speed with sam bankman-fried. >> what a day. we knew sam bankman-fried as well as his lawyers have been trying to get the name of the guarantors behind this record-setting bail package. but now we have the judge saying this does not apply to these particular instances because these guarantors decided to be involved in such a public case. these are two people that are very closely related to the parents of sam bankman-fried. this is barbara friede and joseph brinkman who are stanford law professors. larry kramer was a stanford law dean.

if you take a look at the statement, he makes it very personal and has nothing to say about the legal matter, but his family has faced the harrowing battle of cancer he says and the bankman-fried family has been the truest of friends. this has been a personal matter for them to show up for the family in their time of need. according to his statement, sam bankman-fried faces court in new york again tomorrow to discuss his bail conditions. there have been a lot of questions about how he has been communicating via signal and other means in the course of this house arrest where he is living with his family. caroline: i am sure you will be keeping us up to speed with what happens in court tomorrow. the ceos of apple, microsoft, amazon had been subpoenaed by

congress. the subpoenas required them to respond to the committee with documents and communications by march 23. we do not know if there will be an in-person hearing. ed: coming up, apple pushing back. its long-awaited debut of its mixed reality headset. we bring you the bloomberg scoop. that is next. roku shares continue to push higher. above expectations. they say 20 to a very tough year, but the outlook going forward a bit brighter. we will continue to track that stock. this is bloomberg. ♪

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and a setback for the company. its next big initiative, they are to postponing the plan introduction of its first mixed reality headset. it will go to june instead of april. talk to us a little bit about what is having to put the brakes on here. >> thank you so much for having me as always. this is the latest incarnation of the status of apple's mixed reality headset. they wanted to get it out the door about this time last year, they pushed it back to the end of last year than to january of this year, then to april of this year. now it is being postponed yet again to early at the annual

worldwide developers conference. this makes a lot of sense. this is apples big showcase. the early summer, late spring where they introduce their nets platforms. so it makes sense to showcase this device there too. ed: i get the marketing decision but is that what drove it? did they say let's wait for the big splash? or was it not ready? why have you found out? >> i am sure it was a blend of both. apple is a very marketing driven companies so i matured that had a big role to play. but this was mostly an engineering based decision. there were quite a few of issues related to hardware and software with the device.

if they introduced it in april, they probably would have to push back the release by a couple of months. ed: pivoting to services, you had another story about apple's strategy when it comes to buy now pay later and it is changing how it makes decisions on basically lending to the consumer. >> apple will be doing lending for the first time. they will be given out loans up to $1000 for buy now, pay later. what apple will be doing is using the data and history they have an individual customers to make those decisions, maybe they look at your apple pay, how many cards you have on apple pay, how

many apps have you bought on the apple store. ed: bloomberg's mark gurman. thank you. coming up, more on the rise of ai and how it can impact the tech enterprise sector. we will be joined by sequoia capital. am very excited about this conversation. caroline: shopify down almost 7% after hours. the company still facing uneven recovery focus. from new york and san francisco, this is bloomberg. ♪

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>> it you think that artificial

intelligence is going to influence the enterprise in a big way, then i think this represents just a staggeringly large market opportunity. caroline: ed: you heard there the thoughts of c3 ai ceo. let's carry on this conversation because it just won't stop. euphoria, the buzz around ai won't go away. caroline: what's notable is we are all talking about that consumer use right now. what about the enterprise use? there will be some killer apps out there. ed: those are some of the names that are continuing to raise funds as well.

welcome. you sent out a thesis in september and in that, you said this is where generative ai takes us by 2030. a lot has changed since september. has anything accelerated what is possible and how soon it can happened in your mind? >> we think this is a watershed moment for technology. if you take about previous platform shifts from desktop to mobile, we think this is larger in magnitude as a platform shift . , to underscore the significance of what is happening right now in technology. consumer scientist have been dreaming about this since the 1950's and it has finally arrived. i think the impacts are going to be profound.

every industry is getting reinvented by ai. there is an explosion of applications right now because whenever there is a platform shift, it opens the door for founders to build new and daring companies. that's the gold rush we are seeing right now and the startup ecosystem. ed: you call it a gold rush, others have called it frenzy. is this overhyped or is the hype justified? >> there is hype and it there is substance and we try to separate the two. hype comes and goes. you can't control it. for the better of our part, we try to ignore what happens with hype and focus on substance. when it comes to substance, it's stunning to see that results in generative ai already. previously when people got excited about ai, it was had fake.

this time it's different. everyone is using this technology. if you look at the results that are being delivered, get have had results that codes are being auto completed by them. we try to ignore the hype and focus on the substance. will missy the substance of the results created right now, we get excited. caroline: you wrote in september, what's interesting is you called it a large model moore's law. where in the next decade does it take us? what will we beal to do? -- what will we be able to do? >> the pace of progress and r&d has been breathtaking and it's only accelerating. if you look at the results that have been made, there is an arms race happening right now when it

comes to training and investing in these large models both the computer and the data. that benefits the entire ecosystem because all these applications rely on great foundational models. as the models get larger and larger, their capabilities are blowing everyone away and that means a positive for the entire ecosystem. these applications are capable of doing things that were possible before. one company does legal contracting software. now that it's getting so good, it is finally becoming possible for us to automate away the creation and analysis of legal contracts. these are the sorts of capabilities that get unlocked at the application layer when the foundational layer starts to get really good. caroline: the previous answer you gave was about separating hype from reality. the way in which you talk, it does unfortunately take me back a year or so when hype was all

around crypto. i know you have nothing to do with ftx yourself personally but sequoia has been embroiled in that in some way and i'm curious when you pick about the due diligence you do in ai and the value of these companies because it must be really hard to understand when you think of such explosive growth, how do you decide what checks you're going to write and where this company's future can go? >> i can't speak to crypto, what i can tell you is when it comes to ai, we are leaning into the approach we always take each is to find each of us finds one or two companies that we really want to partner with every year. it's a small number of companies, we're trying to find future category leaders and we are running down due diligence in order to understand where the evidence lines up with the story. it right now the story is incredible promising when you think about the things they are able to do. they are able to automate away the film the -- film creation

and game development process. the onus is on us to go to customers, look at dollar retention rates that we are not just dreaming and hoping they will see that value. ed: what's been so interesting about open ai is its closed profit model. a question that has kept coming out of that is how do these companies monetize? will they ever monetize to a level where they change the game economically speaking? >> open ai deserves a ton of credit for taking what happened with transformers and large language models taking it out of the research labs turning it into a real arms race and they have the results to throat. these results are stunning.

on business model, i think it is fairly straightforward. it is intelligence as an api. we are in an api economy. a lot of the companies we are working with need to rely on these foundational models in order to run their goons -- goods and services. the same way you pay for an api called stripe, you pay for open api. caroline: also now as the team up with microsoft, they are trying to slowly get it into consumers hands. people improving with it. it unsurprisingly, humanity falls as chatbots sometimes. some of the inaccuracies or comments, how do you feel about some of the regulation or focus on ethics we are getting to in the point of artificial intelligence? >> all of these questions are

very real. some of them are getting solved as we speak. the concept you were just talking about hallucinations that they have the tendency to make up things on the fly, these are getting solved by these companies. i wouldn't be surprised if within the next 12 months, we have models that are capable of truthfulness. we have questions over ethics, copyright. it is there to -- stability has been a great ecosystem player in wringing collaborative artist to the table. these are all solvable. i think long-term about the economic impact. what happens when these jobs get automated away? it has the potential to create a lot of disruption in terms of our labor force, the fabric of our society and the economy.

in that sense, it's incredibly important that we are all investing in reskilling so we can all be able to make use of these new technologies and nobody is left behind. this is a rising tide. ed: it's interesting to see the names from china follow suit free quickly. how interesting is the opportunity there? there is an initiative in congress to block investing into chinese companies right now. it is that an area you will look to come at the talent and innovation coming out of china and ai? >> i focus on investments in u.s. and europe. we are set up as three separate teams. i primarily focus on the u.s. and europe where we are seeing a lot of investment and effort from the likes of microsoft, google. i think this will likely play out to cloud computing -- similar to cloud computing.

china has its equivalent clouds. i think a similar thing will play out in this world. caroline: i can't believe they are called hallucinations, that's brilliant. thank you so much for spending time with us. wonderful to deep dive. coming up, shares falling after a software company reported pressure from the cloud computing cost. ed: joe biden has sent a surprising tweet. in building our ev charging network, we have to ensure that as many chargers work for as many drivers as possible. president biden naming tesla and elon musk, that does not happen often. this is a story we continue to track.

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caroline: let's check in on the shares of akamai technologies. perhaps the cloud computing costs -- let's talk about why that investment is being made. our guest is the ceo. talk to us about it seems as though analysts are concerned about your forecast. talk to us about the shift to compute. will it pay off eventually? >> the compute market is

enormous. well north of $100 billion per year. we want to tap into that market with our launch of akamai computing cloud. now we are integrating and growing it so we will have a core cloud computing functionality and a distributed compute functionality. so they can get closer to end users around the world. we will be able to offer major enterprises better performance for a lot of compute function at a lower price point. cost is a big issue today with the cloud. that is a place where akamai can help. caroline: when analyst says you are going all in on compute, we would wait for evidence it could pay off before getting back involved in your stock. when can they get back involved?

when will a payoff? >> i fit now is a great time to get involved. akamai has had a great value now and as we do the build out this year and add the functionality, we will be signing up more customers. i've had the chance to meet with senior executives at the world's leading media companies, commerce companies and they are very excited about being able to use akamai connective cloud. they care about performance, getting their apps close to end-users. they care about cost. i think you was the increasing numbers of enterprise users starting to adopt akamai connective cloud and that will translate to substantial revenue growth for us down the road. ed: you mentioned cost. one specific complaint from the street i point out is they are worried about you taking on the likes of aws andazure on price. it's a tough value proposition.

is that your strategy to take on the big boys when it comes to price? >> we have been competing with the cloud giants for over 10 years. we still have the market-leading delivery solutions and market-leading security solutions despite competing with the hyper scalars. they are some of our largest customers. they use the services from akamai even though we are competing with them. now we are going to compete on compute to. it will be a compelling value proposition for major enterprises. also it's good to realize we are not a threat to the hyper scalars. we are going after 1% or 2% market share over the next few years which for us is huge, that's billions of dollars. but they have businesses growing 15% per year so if we managed to take 1% or 2%, that's not going to hurt them. ed: you talked on the call about

new segmentation customers. i wonder if you could talk us through some of the areas you feel you are winning? what kind of customers are they? what sectors are spending money with you right now? >> for segmentation, that's the companies that have key functions like infrastructure, banks, companies that cannot afford to get hit with ransomware. over time pretty much every major enterprise is going to need that solution but today starting with mission critical infrastructure. ed: thank you for your time on a busy earnings day. bloomberg caught up earlier with the ceo of airbnb post earnings talking about robust travel demand. here's what he had to say about

where the company is seeing any signs of that strength. >> we are expecting pretty steady growth. we are expecting a little bit more accelerated growth in short-term stage but that's more of a recovery. we are seeing more short-term stays, more people goat cities and more people cross borders. it's more a matter of a recovery of the old ways of traveling and a sustainability of the new ways including people staying longer and traveling more places. >> that was the airbnb ceo. the ceo talking about having significant growth in fiscal

2024. they see backlogs continuing above historical observers, all of this kind of fighting talk. and the order cancellation rates are low, kind of bucking the trend from what we've seen in the macro commentary this earnings season. we'll keep track of that stock. this is bloomberg. finding local pros takes forever. thumbtack fixed that. it's the app that finds people faster. we this is bloomberg. ♪

ed: let's talk about ufos and how they can help the u.s. and off russia and china. >> in the past few years, the u.s. has been much more willing to talk about ufos. something airborne that they can't identify. they prefer to call them unidentified aerial phenomena.

the u.s. breaks them into five categories. airborne clutter such as birds, plastic bags, civilian drones. natural atmospheric phenomena such as ice crystals. u.s. government or industrial development programs, for adversary systems such as technologies allegedly deployed by russia or china. and other. that's the one that tends to excite people because it includes flying saucers and little green men. it is the category of adversarial systems the government cares about. navy or air force personnel might have felt embarrassed about reporting potential citing for fear of ridicule but some of those might have been spy balloon's or drones from a geopolitical competitors such as china. if the ufo isn't reported, the governor -- a government might never know that spy balloon is

in the atmosphere. if pilots report what they think are alien sightings more often, it might help the u.s. better identify actual threats from terrestrial rivals. caroline: that was alex webb from bloomberg quicktake. our next guest is with a company that focuses on remote sensing stratospheric surveillance. stratosphere is a new economy. explain that. >> i think what we have seen over the last few weeks is that stratosphere is a contested domain. what that means is there's going to be nations all around the world that are using this kind of technology to deliver remote-sensing or surveillance types of capabilities. that's why we call it the stratospheric economy. ed: can you give us the size and

scope of how your business has been buffered by what is happening in the headlines? are you winning any new business? >> we are getting a lot more interest. the timing of us taking a company public helps investors understand that this is an area where it's a great place to invest. there's certainly a lot more work to be done in the stratosphere and it's not just government work, it is commercial work. you can do things like monitoring power lines or other critical infrastructure. it's really exciting. it is concerning as well to see those kinds of technologies flying over our own country, but it is quite exciting. caroline: your technology versus what we have seen out of china, how much more ahead of the game are they are not? >> one of the key differences is the ability to navigate.

we are going to fly over a country where we shouldn't be flying. our technology enables us to maneuver quite freely. to stay over an area for a long. of time. ed: president and ceo of worldview, we will continue to track your company i'm sure. that does it for this edition of bloomberg technology. caroline: i'm going to be off for the next couple of days. i know that you will do an amazing job. don't forget to listen to our podcast. you can find it on the terminal, apple, spotify, i heart, and our twitter space. from new york and san francisco, this is bloomberg. ♪

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