tv Bloomberg Technology Bloomberg December 1, 2021 11:00pm-12:00am EST
>> 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. coming up in the next hour -- dr. fauci: we knew that it was just a matter of time before the first case of omicron would be detected in the united states.
emily: the covid variant now here in california. how did it get here and what do we do next? plus, there is a new kid on the block. square is officially changing its name to block, a move signaling its growth beyond commerce and a nod to the blockchain. from part-time job to full-time spacex rival, how the founder and ceo of rocket lab built a top competitor for delivering small satellites to orbit and has musk in his sights. we will get all that in a moment. first let's get a look at the markets following the news of the first omicron case here in san francisco. our ed ludlow here with more. how did investors take it today? ed: negatively. we started with this big rally in u.s. equities, but you can see the s&p 500 down 1% on wednesday. it was its biggest two day drop since october. the brunt of that in technology.
clearly those mega cap tech stocks filling the brunt of the concern from traders over omicron. the philadelphia some conductor index held onto gains for so much of wednesday and at last minute gave up. earnings seasons continues. a big focus on software in the cloud. snowflake up 13%. crowd strike been up a lot more. they upgraded their guidance for top and bottom line for the fiscal year after strong demand from customers. splunk missing estimates that came in below expectation. come to the bloomberg terminal. we got data key to the global supply chain. this is the global index, factory activity. it is made up a series of gauges. the gauge came in line with
expectations, but look at the downward trajectory of the white, yellow and blue lines. they all dropped in the prior month. it is a little sign that some of the supply chain congestion might be starting to unravel. emily: i want to get back to the big news about the omicron variant being found in california. i am joined by jodi schneider. also right here in san francisco, where they found this variant. how worried should we be? jodi: anthony fauci briefed the press this afternoon and president biden, says we should be concerned but should not be panicking. this is a case of this new variant. it came from a san francisco resident who traveled to south africa from one of the places it has been found. it is the first confirmed case here, although anthony fauci
said he wasn't that surprised, that it was just a matter of time before it happened. the question is how transmissible this is and whether it can evade the -- the 30 mutations in this variant can evade the vaccinations and boosters we are all being encouraged to receive if we haven't. emily: there is a lot we still don't know. we did expect this was circulating in the u.s. and the world for some time. how is the administration reacting and how is this impacting the travel ban? jodi: their first real move is to heighten some of these travel restrictions. they have been imposing for the past few days more bans and more restrictions on people coming from various countries, including south africa, that have been found to have the first cases we have seen of this
omicron variant. according to an administration official with knowledge of the matter, the president himself tomorrow will announce that travelers into the u.s. will need to have a test within 24 hours of traveling. right now it is 72 hours of traveling. they want to make it more likely that if you are getting on a plane, that you do not carry this new variant. they will step up the testing and continue to be vigilant about this travel ban. beyond that, it is more of a call for keep getting vaccinated. if you haven't, get your booster. emily: jodi schneider, bloomberg's political news director. meantime, square is rebranding,
now calling itself block. the company says this is to acknowledge its growth beyond payment. square crypto, a separate initiative focused on bitcoin, will change its name to spiral. joining this on this latest news, our own kurt wagner. you had a busy week covering twitter as well. this on the heels of jack dorsey resigning as ceo of twitter just two days ago. that can't be a coincidence. kurt: i can't imagine that it is. jack has always been interested in building a company of the -- of companies. with square, he can do that. at twitter, he just had twitter. there was a lot of speculation, especially when he first took the job at twitter, that he would leave square behind. it is interesting that he has gone the other direction.
the ability to build an empire of sorts is probably a big reason why. we saw that today with the name change. emily: they talk about how this name block means a lot of things, like neighborhood blocks and local communities, block parties. would it be a mistake to think this is really a nod to the blockchain and a signal that cryptocurrency will be a much bigger part of the business than dorsey knew when he founded the company? kurt: that is the first thing i thought of. you know that jack dorsey only tweets about bitcoin. he tweets about cryptocurrencies, decentralization. when i think of block, that was the first thing i thought of. they pointed to a number of things that block could be referencing. i don't think it is unfair to assume a huge motivation is this is a blockchain interested ceo. i think there has to be a connection there.
emily: dorsey leaving twitter and saying it is time to move on from its founder seems to be a rebuke of mark zuckerberg digging in at meta. we see dorsey taking a page out of mark zuckerberg's playbook. what do you think the relevant comparisons are here? kurt: i think if you look at square, you can see the overlap between meta and square, block holding a bunch of different businesses inside. when you compare it to twitter, there is not much comparison anymore. we love to loop facebook and twitter together, but those companies are on different planets in terms of business. that is ultimately why jack dorsey is leaving. he was not able to bring twitter to the level of business success that i think people expected. in some ways, he's making a dig at mark zuckerberg, but he has not been able to turn twitter into the business it needs to be.
that is probably a big reason why he's not there anymore. emily: we will be watching to see what he does at now block. kurt wagner, thanks for that update. more board room changes, this time at disney. susan arnold has served on disney's board since 2007. arnold will succeed bob iger when he leaves the company at the end of the year. that is the end of an era, for sure. coming up, a call to congress. we will be joined by the ceo of global foundries on the push to bring chip manufacturing to the united states. that is next. this is bloomberg. ♪
>> this is a worldwide challenge. a natural byproduct of a world economy shut down by the pandemic as it comes back to life. prices are still out of sync as the world comes back. emily: president biden speaking earlier, where he said work has begun to ease supply chain disruptions. in a letter to congress, over 50 corporate leaders, including tim cook, have called on lawmakers to speed chip aid and bring manufacturing back to the u.s. the letter warns time is running out to take action. semi conductors are essential to virtually all sectors of the
economy. unfortunately, demand for these critical components has outstripped supply. the shortage exposed vulnerabilities in the semi conductor supply chain and highlighted the need for increased domestic capacity. i want to bring in one of the signatories of that letter, global foundries ceo tom caulfield. remind us why this is so important. tom: today semi conductors are so pervasive in everything that we do as humans in engagement. it's just this pervasiveness of semi conductors that touches everything. it is the center of the world global economy. you can understand how disruptions are impactful around the world. emily: what would be different if more chip manufacturing would be happening in the u.s. right now? tom: i think that is more about getting balance. this half a trillion dollar
initiative will double in the next eight to 10 years. 40% of that semi conductor industry is product that comes through u.s. headquartered companies, but only 12% is manufactured in the u.s.. it is not just to add more capacity that the world needs, but get security for the u.s., to get economic and national security, a more secure supply in the u.s. emily: when will supply meet demand? how far out is that? tom: we have a very broad-based business. we serve almost every market segment. we still don't have enough capacity, even though we are investing at a breakneck pace for 2022. if we start to get more balanced between supply and demand, it is probably in 2023. that is what i hear from customers every day with what
our demand looks like. emily: what does next year look like? talk to me about the ebbs and flows that you see. tom: i could argue the worst is behind us, because it was such a big gap. it doesn't make it where you won't hear about this ever again. hopefully we get more of this supply coming online. the semi conductor industry has an all-time high shipment in 2021. it is how long it takes to add capacity is what creates this big lag, and the billions of dollars it takes. emily: global foundries went public in the middle of all this. how has the current climate impacted the business decisions you are making? it is clear we need more chips. tom: we didn't go public for the sake of it, we had good uses for
the proceeds. we raised almost $2.9 billion of capital in that ipo. a better part of 50% of that is going into the capital deployment we will do to expand capacity. between 2021 and 2022 alone we will spend $6.5 billion. that will enable us by 2023 to ship more product to our customers compared to 2020. emily: if congress can't get this act done, what happens? tom: i haven't thought that far ahead, because i think they will get it done. the opportunity for this year is running short, given everything else congress needs to get through in funding the government. i think that will close by the end of the year. q1 is the real opportunity. this has broad bipartisan support. we need to clear the decks so that becomes the focus of the government. i really don't think there is an
option where this does not happen, quite honestly. emily: how would you say europe's progress compares to the united states? are they doing it better? tom: hard for me to judge. i think it is difficult for them there because there are many nations that have to come together. they have a record of being able to do this. in the past we enjoyed partnership investments with the european government in our dresden facility in germany. emily: something we will keep watching. appreciate you giving us the view. tom caulfield, global foundries ceo. coming up, job openings. hundreds of thousands of them. and no one to fill them, especially in tech. a new analysis by bloomberg found one reason could be the lack of h1b visas being filed. let's look at salesforce, among the biggest decliners on the s&p after the company gave a disappointing revenue forecast for the quarter.
emily: for the first time in a decade, the number of immigrants in the united states h1b visa program dropped to its lowest level. workers applying for engineering and mathematics jobs fell 12.6% compared to a year ago. hb1 visas allow lawyers to hire high skilled foreign workers in specialty fields. the tech industry in particular relies on this program for talent. for more on why this is happening, i am joined by a partner at a company where they focus on many immigration issues.
why are we seeing this dramatic decline in the number of petitions filed for h1b visas? >> first of all, thank you for having me. it started with the trump administration, who became almost against legal immigration as we like to call it. then the pandemic happened, which resulted in office closures at the government, consulate closures, travel bans. all of that culminated in creating a decline in foreign talent, immigrants coming into the united states. it's not just one factor, it is a multitude of factors. emily: are we seeing any improvement given that things have started to open up, or do you see this trend continuing? >> the problem is the biden administration has eased up some of the restrictions implemented
by trump, but what he did is here to stay. so that's not going to change. second is it's almost impossible at this point in where we are in the pandemic to get back to pre-pandemic processing of applications, getting consulates reopened, reducing that backlog. that is not going to happen immediately. i want to say we are looking three to five years out before we get back to pre-pandemic processing. i don't see an immediate resolution to this matter. we have the new variant, another travel ban against south africa and other african countries. i don't know this will resolve itself any time soon. emily: tell us what kind of workers are on these h-1b visas and the program's role in solving pockets of labor shortages in the u.s.
nandini: mostly s.t.e.m. degree individuals, science, researchers, scientists, doctors. this program utilizes so many occupations. of course, doctors, think about it during covid. researchers, the individuals who develop these vaccines are immigrants. some of them are on various specialty visas like the h-1b. it is a visa that is for professionals. these are highly talented individuals utilizing this program. emily: what impact do you think this drop will have on the tech industry in particular? nandini: it is a significant issue in this industry and the united states as a whole.
we are all seeing labor shortages across industries. this inability from the u.s. government, their agencies to process and bring in the talent is having a significant impact. i have clients that are just scrambling to bring in individuals trying to fill the gaps that they have. i believe there are millions of job vacancies in the tech sector that cannot be filled by u.s. workers. we need to be able to better utilize our foreign talent for this. emily: next year in your view, will we see this number continue to decline? nandini: absolutely. it's not going to improve. the administration needs to make some different fixes to open up the consulate more, waive in person interviews. there are fixes the government
can immediately do. do they have the appetite for it? is it politically viable today? i don't know about that, but there are things they can do. emily: thank you for sharing your perspective with us. appreciate it. match group agreed to pay to settle all claims related to the 2017 evaluation of tinder. the settlement was announced the day before the parties were due to give closing remarks in a trial held in new york. the issue is if they cheated tender out of billions by lowballing the valuation. snowflake reported better than projected revenue and a bullish forecast fueled by a gain in new customers. product sales will be $345 to $350 million.
the company came to prominence in september of last year with the largest ever ipo for a software company. coming up, the rocket lab founder and ceo makes bloomberg's top 50. we talk how he got a start in aeronautics and how he turned his passion into a spacex rival. that is next. this is bloomberg. ♪
>> welcome back to "bloomberg technology." i am emily chang in san francisco. let's get back to the markets where space related stocks came crashing back to earth. ed: there was a lot of selling in space themed etfs. we saw a similar pattern where the three etf's on this port are up by the most in four weeks. this changed. fantastic tickers. they have not had a great time.
both of these etf's are at the lowest since january. this was launched in march. it is at the lowest point at any point. they have not done very well. we have seen particular selling in november. you and i have been all over the country, standing in deserts, and in florida, looking at all of these rockets go up into the atmosphere in space. this was supposed to be the year that space was put on the map but there is not a love for investors. rocket lab was down 4%. we are also seeing selling on wednesday but it has performed pretty well since back in august. that is a question going forward. when do investors start to take
this space seriously? >> thank you. up up and away. peter beck has landed on the bloomberg 50. bloomberg 50 defines global business in 2021. it goes on to look at leaders in entertainment, finance, politics and technology whose accomplishments deserve recognition. for more, i want to bring peter back in. thank you for joining us. the stock has been doing fairly well. rocket lab is rivaling elon musk and spacex in the business you're in. is there enough demand to really be a significant competitor to spacex? >> the space industry is growing.
when you look at the satellites and programs, space is going to become a one or $2 trillion industry depending on who you believe. what we are doing is keeping our head down and working hard and supplying all the things that need to be supplied with that market growth. >> you have won a lot of contracts from u.s. agencies. but what about private companies where spacex seems to dominate? >> there are all the government agencies. and the commercial companies like little startups and then read through to the large blue chips. we have drawn across both
commercial and government. >> the feeling that got you started was bringing down the cost of a rocket launch which you have done. rocket launchers are expensive endeavors. how much further do you see that cost being wrought down? -- being brought down? >> we created a more affordable launch vehicle. as we have continued to grow the business, never do a lot, we have missions to the moon, mars, nasa and the next big milestone for us is a neutron launch vehicle which is a significant -- significantly larger vehicle designed to help that environment in the medium launch sector. >> where do you see most of the growth taking place? >> these are constellations putting up really critical infrastructure that we are all going to use in the future and we all use now.
and within rocket lab itself, we like to have a diversified portfolio of 50% large, 50% satellites. diversification gives us the ability to have fingers in just about all the pause. >> talk about what comes next. there is a whole space economy growing. i wonder where you see the most vibrant part of the economy in the future. how big a piece of the pie is space tourism and what about everything else? >> the space industry is interesting. there is excitement and ambition but it is a little bit shy and -- shy on execution. if you look at the air industry, spacex was the first private company to send a rocket into orbit. from the launch perspective,
there is like 100 something launch companies. fundamentally, you make up every morning and see this is super hard. you see things that used to be government only and they are now turning into commercial programs. we can do that because the cost of launch has come down, the cost of running satellites has come down. >> let's say a decade from now depending on where we see the most changes, what does the space industry look like? >> i liken it to when we think of the first email.
that is where i feel like we are. i think there is a tremendous amount of growth and opportunity. we are positioning ourselves to catch that way. >> peter beck, rocket lab's and ceo. thank you for joining us. we'll have a look at those and entertainment finance politics aside. -- politics, science, and technology, now available. coming up, the importance of mental health during and after covid. we will be joined by arianna huffington to talk about the future of work and so much more. before that, let's listen to some airline executives who share their thoughts with bloomberg earlier on the latest covid headlines. this is bloomberg. >> i am pretty heartened about what i have been hearing in past
couple of days. airlines are the easy target for the change of signals to the public. >> it is a bit early to say. we had a strong thanksgiving in the u.s.. because there are reports just now that vaccines are working. that seems to be less fearless. -- les verlander. -- less virulent. assuming that is all true, i think things will continue to improve. >> at think the vaccines have been fundamental in people's confidence to fly. we have seen a very significant recovery. jetblue flew as much capacity in quarter three as we did in 2019. >> not to the same level of downside we have seen when there were restrictions introduced. >> what i am telling my team and my government in the u.k. is as quickly as you introduce those measures, if it turns out things are not as significant, it takes it back immediately as well.
>> this individual has not been hospitalized. the individuals that this person has come in contact with have not tested positive to our knowledge. >> gavin newsom talking about the first case of omicron. confirmed right here in san francisco as this new chapter of the pandemic continues to unfold. the pandemic has highlighted health care and mental health care as millions of people or their loved ones became sick, millions lost their jobs and so many others suffered in isolation. mental health became another public health crisis to cope
with. what does mental health care and wellness look like in the post-pandemic world and how do we move away from business as usual and make sure employees don't burn out? i'm going to dive in with the ceo of thrive global. >> you have huge businesses including pfizer and beyond that are using your products. how has the pandemic impacted the trajectory? >> it has been a huge accelerant. when we launched five years ago yesterday, we launched with the mission of ending the stress and burnout. not a lot of people are talking about burnout in 2016. now it is everywhere. companies have recognized the connection between now, mental
health problems, productivity. these issues are no longer warm and fuzzy benefits but strategic priorities. both for hr departments and as a whole. >> how long do you think this great resignation will drag on? and what do you think the ultimate result will be? >> what we are finding is whether it is pfizer, accenture or walmart, the great resignation is not just about burnout. it is about other things. it is about working mothers who are having a much harder time. especially during the pandemic of managing children at home, educating them and work. also, it is about the larger evaluation of what matters to people. we assume that it is just the career ladder and money, and now
people are saying maybe not in the presence of an essential threat like the pandemic and so many debts, people are choosing a lot of things. we have people that want to do things more meaningful to them. that is another component of the great resignation. companies do an entry interview. we talk a lot about exit interviews but we recommend in -- we recommend and entry interview. the first question is what is important to you outside of work? they feel that they can express themselves about what matters to them. emily: that makes a lot of sense. i sat down with the ceo of alphabet. google has committed to allow its employees to work in a hybrid mode for the long-term and i asked him if this was forever. listen to what he had to say. >> we are giving people the
choice to move anywhere in the world. 20% of our work can be remote over time. we are going to embrace that flexibility forever. >> there are companies that are going to have to make that decision about whether or not to extend this or not. that is a very important question, emily. as we see additional uncertainty with omicron, what we are experiencing is that employees can easily move into a constant mode of anxiety and uncertainty
can lead to what we call negative bias where you imagine the worst. that is why it is very important not to just offer mental health support. but to go upstream and address stress triggers and prevent them from becoming depression and anxiety. and uncertainty is a big factor here. we developed this program with stanford based on the latest brain research to identify the stress triggers and negative bias is one of the primary ones at this time. >> you just announced a new suite of products to help fight burnout. talk to us about that. >> the key to this are five new products we are launching. we have found out that we have to meet employees where they are. a lot of this used to be served
through expecting employees to download another app and there is a tremendous amount of app fatigue there. our goals through these products are to meet people where they are. we are going to give you reminders to do something for your well-being and mental resilience. like resets. that is another one of our products. 60 seconds to breathe, to remember what you're grateful for, get up and stretch between zooms, between webex or team meetings. all of that is really a way to prevent the unavoidable stress of life. especially during this time. the truth is that stress is never going to be eliminated but cumulative stress, which is what leads to depression, anxiety, hypertension can be eliminated.
emily: you are at the forefront of calling for people to disconnect from the devices. i'm curious what you think of the facebook files and the whistleblower who testified again before congress today and talked more about what companies like facebook could do to help mitigate the impacts of social media on their users. listen to what she had to say. >> facebook knows that people who are suffering from extreme loneliness, isolation are also the ones that form very intense habits involving music. -- involving usage. we are talking about thousands of pieces of content per day. you can imagine simple things that are like are you going down a rabbit hole? are you spending 10 hours a day on the system? people can acknowledge this habit. it would help the most vulnerable users on the platform. but it would decrease their profits.
emily: should facebook post restrictions on their product to give us a break? >> absolutely. this is to make the use of algorithms for all comers. but we are all addicted. the truth is that it is going to require measures taken by individuals, parents, children. i know that your children are still young but i think creating phone hygiene rules early on is going to be increasingly important and we are finding with many of the companies that we are working on that parents are very worried about what is happening to their children. the fact that they sleep with their phones, they spend the night snapping or tiktok in instead of sleeping.
this increases the depression and anxiety. emily, the truth is that a lot of mental health problems are exacerbated by addiction to social media and our phones, it's much harder for them to find something that's going to work. that is another thing that companies are beginning to recognize. we just launched a thriving kids program with pfizer because they identified this as another new problem and that is something very new, in the middle of all of the grief and loss of family, there is something very exciting happening. that is the most innovative of hr leaders are really responding to what is happening very quickly. literally within weeks of identifying a problem, a loneliness problem, a problem with employees, children, they provide the solution.
emily: such an important topic. we will continue this conversation. really fascinated about this. arianna huffington, thank you as always for stopping by. coming up, china continued its crackdown on technology. bloomberg is learning that beijing is planning on banning companies on going public through stock exchanges through variable interest entities. we will have more on why that matters, next. ♪
beijing wants to close the loophole to address concerns about data security. let's dive into this with stephen engle in hong kong. what do we know? stephen: these structures have been used for a couple of decades now, back to 2000. subsequent to big listings whether it was alibaba or even more recently didi global, they all use this structure. it essentially allowed these companies to bypass laws in china that prevent foreign ownership in sensitive industries like the internet. they incorporated themselves with these shell companies listed in the united states through the british virgin islands or the cayman islands. it allowed foreigners to participate. i've had chinese law experts tell me that essentially, while the internet was developing in china and developing these national champions, beijing turned a blind eye to this.
it was in a legal gray area because they wanted these big companies to tap institutional foreign investors in new york and elsewhere abroad. they kind of allowed it. we really focused on this, redlines, that special we did earlier this year identifying the common thread as the vega -- the crackdown with beyond just antitrust, data security, we kind of said what is the common thread? all of these companies have v i.e. structures and the company and government is very concerned about the sensitive information in the hands of foreign investors. this is going to be a big story. emily: a potentially very big deal. stephen engle in hong kong for us. thank you for breaking that down. that does it for this edition of bloomberg technology. join us tomorrow.
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