Apple Slow Hiring and Spending

says it's late. A season of Stranger Things was even bigger than expected, But can Netflix deliver In its earnings report this week after a dismal start to the year, Stranger Things have happened, and bitcoin rally's jumping as much as seven percent to hit two dollars for the first time in weeks. What's driving the crypto rebound? To this hour, Apple plans just slow hiring and spending growth next year

in some divisions. This according to Bloomberg sources. Apple is still planning an aggressive product launch schedule in including potentially a new mixed reality headset. But this news about typically recession resistant Apple taking investors by surprise. Mark German broke the story and joins us now so Mark, what exactly have you learned about Apple's plans, Emily, thank you for having me. We learned that the company going into fiscale is taking a more cautious approach to its investing and

spending when it comes to hiring. So you're gonna see upon some departures over the next year or so, normal attrition. Maybe Apple won't fill some of those rules in order to save a little bit money money and be cautious there. You're probably gonna see them have headcount even in many teams instead of upgrading their headcount maybe between five and ten and fifteen percent. You're also going to see them spending a little bit less money in certain divisions as well.

This is all in preparation for this looming recession we've talked about many times, and this economic downturn that people are concerned about, coupled with inflation. So talk to us about why the market is so surprised by this, are concerned by this given that Apple, you know, whether the pandemic pretty well also kind of a bell weather for consumer sentiment. I think that's exactly right, because Apple is

a bell weather, right. I think that the market and analysts and people who invest trust Apple to make decisions ahead of time. If you remember when COVID nineteen started to happen in the beginning of Apple was one of the first to sort of take a stand and begin closing their stores and begin putting measures in and begin talking about that potential impact. Right. So Apple has shown that it has good insight and good research to understand when economic situations are going to happen. So I think

the market knows that and traded based on that. At the same time, I don't think it's hugely surprising, given that you've seen Meta and Tesla and Amazon and Microsoft all makes similar moves. The differences is that Apple is going to try to keep that internal instead of Tim cook sending out a memo to the entire company detailing their plans for when it comes to this economic downturn.

They are not going to announce that publicly, right. That's why we're reporting it based on sources, just like you've seen other companies do. Write. Apple doesn't seem to appear to believe that they're going to have a major impact on consumers because of this or employees. You're probably not going to see layoffs here. You're probably not going to see major changes to their product pipeline and their launch plans.

Like you mentioned, I am still expecting the announcement of the first major new product category in eight years, a mixed reality headset to happen sometime in There's also gonna be big iPhone updates next year, Big Apple Watch updates, a larger iPad, many new max So there's a lot in store for next year. The company still wants to get out to consumers. Meantime, Mark, there's another story you're following, Apple being sued over pay and anti trust violations. Explain

to us what's happening here. This one's along time coming. So basically, the way the iPhone works with Apple Pay is that Apple is the only company that can have tapped to pay so all from the phone. So you know how you want to go to Whole Foods or another place and you tap your phone on the reader

to make a payment, that's only through Apple Pay. So that means that Square, PayPal, Chase, Amax, any financial provider, you name it, they're not able to develop their own application UH in order to use the NFC chip near field communications chip that allows to have to pay on the iPhone. So now you see this consortium of payment companies through this class action lawsuit to benefit consumers. Right,

that is happening now. They're upset that Apple is keeping that feature exclusive to its own service and then charging what they say are higher than normal rates for consumers to use that and those rates obviously being passed on to the payment processing companies. Okay, Mark German will keep the scoops coming. Thanks so much always for joining us.

In the next couple of decades, today's Internet will undergo a multi trillion dollar transformation to an interconnected, three D virtual world currently known as the metaverse, or so some tech futurists say. Think virtual malls where we shop, play, work, and more, all under the same roof. In his new book, The Metaverse and How It Will Revolutionize Everything, a Billion Co managing partner Matthew Ball offers a glimpse into this

new reality. Matthew joins us now from l A. So, Matthew, the question is, when so much of the progress that has been made on the so called metaverse so far seems to be pretty basic. When are our lives going to be quote unquote revolutionized? Well, so, we should keep in mind that these technological transformations do take decades. I'm glad that you emphasize that the first wireless cell phone call in nineteen seventy three, the first data based wireless

network smartphones. Two the early two thousands we get the first consumer media services on mobile devices blackberries. Thereafter the iPhone. Some way through the next decade, most of the world was running on mobile and cloud services. What's clear now is that the advent of real time three D as we talk about it in industrial applications, the advent of x are in live patient surgery, and the fact that hundreds of millions of people, typically under the ages, are

all living in three D worlds today. So not you or me yet no offense talk to us then about how this is going to change our daily lives. For example, you know you you're joining us now remotely, would it seem like you were here in the studio in this new world. That's certainly one element. We see this in particular emphasized by Meta where they talk about the idea

of co location and presence in virtual space. But in some instances we will just be using some of the devices we have right now, but we might be doing those in three D what we call volumetric displays or holography. You and I might be sitting thousands of miles apart looking at a screen, but the actual presentation would be in three D. And so he showed that that has remarkable improvements on retention, engagement, non verbal forms of communication.

Now you've had your metavers cy t F now going for several months, you've gotten you know, names like meta in there. Not surprising. Also Snap, which I found interesting because snaps view of the metaverse is so different from metas, where you know, Evan Spiegel has called Mark Zuckerberg's vision so hypothetical, and Snap is betting more on you know, more sort of augmented reality over real physical reality. And today Snap unveiled a new web version of Snap, which

almost seems like it's going backwards. How do we square these two visions? The way that we square it is by ignoring the term altogether. It's helpful to talk about a new generation of the Internet. But you'll find that because there's no concrete definition, some believe that it fundamentally requires crypto. Others have VR centric beliefs, others have augmented reality centric. Under the classical definition, where we're talking about real time three D. All of those are likely to

fit in one way, shape or form. Evan might talk about augmented reality lenses. Mark Zuckerberg might talk about a virtual world with all of your other vision cut off. That's still three D and they're still going to interconnect in some way, shape or form. Now, let's talk about how this changes the world of streaming. You know, you were a long time former Amazon Studio executive. How does this change the way we watch and what we watch and how so? This is a great example of the

fact that we're already sitting in parts of this world today. Disney, of course produced most of the Mandalorian using a game engine, a real time three D simulation engine. That meant that they could create the perfect sunset. They could hold that sunset in place, they can pull out the entirety of that virtual set, we shoot it in five years, or make it available to you and I on our peloton on a video game console in virtual or augmented reality. That's one of the ways in which we're gonna start

to see entertainment change. You've seen that the match CEO now comes from Zinga, and he in his new roles talking about the idea that you might be able to traps tattooing on a date rather than just play games from a smartphone. Now Netflix earnings are coming up, We've been talking a lot about the success of Stranger Things, which is not necessarily a surprise. Even though it's scarier and more gruesome than the last three seasons, I'm still watching it. Um, what would you bet is going to

happen here? Do you think they're going to buck the trend that we saw earlier this year? Are we're going to see a slow degradation in the number of subscribers for a while. It's clear by all streaming benchmarks that Stranger Things season four was as exceptional as the fans hoped in excess of what Netflix did, but also third party analytics show that a lot of the subscriber editions are weaker than we would have hoped for, and in particular,

churn looks worse. Antenna, a subscription analytics and data company, shows that Netflix now ranked second last in terms of subscriber retention after thirty days from sign up. They're also had a four year high for the overall services churn and retention, and so the numbers basically say that even if it was a pretty strong quarter for ads, the churn elevation is likely to offset them and more. Lord of the Rings the new series. Jeff Bezos tweeted out

the trailer last week. Do you think it's gonna be a mega hit like Stranger Things has been for Netflix? Stranger Things came out in sixteen and it's still breaking records seven years later. Defining by that degree is going to take some time. But do I think that it's going to premiere to outstanding viewership globally, that it's going to cover the press, that it's going to be one of the most magnificant things that Amazon overall does in

twenty two? Absolutely? So what's your take on the overall tech market dynamics. You know, we've got this negative news out from Apple that they're going to slow down spending growth, that they're going to slow down hiring. Apple you know, long considered a bell weather for consumer sentiment. Are you taking that as a signal a bad signal for the

rest of big tech for the foreseeable future. It's not encouraging, certainly when you take a look at how many other creators, founders, products and services rely on the iPhone and the incremental improvements from every device refresh. None of that's good. But we're seeing this industry wide. Separate from Apple, the video game industry was down nineteen year every year last month. Year to date, it's trending at eleven year every year.

And so we're looking at a broad situation where consumer electronics, entertainment, leisure, high end GPS from Nvidio are all getting rest. The drop in the crypto markets is exacerbating that on a demographic basis. All right, Matthew, always good to have you here and excited about your new book, The Metaverse and how it will revolutionize everything out tomorrow wherever you get your books, Matthew, ball of a billion, Thank you. Coming up? Could Elon Musk's bid for Twitter somehow be good for

Twitter's relationship with China. Our next guest thinks so. Strategy Risks founder and CEO Isaac Stonefish is back to talk to us about the future of China US tech relations and more. This is Bloomberg, the world's biggest maker of batteries for electric cars, is considering at least two locations in Mexico for a manufacturing plan. China's Contemporary and Paris Technology could be positioning itself to help Tesla and Forward

grow their eving market share in North America. The potential sites are near the Texas border, according to Bloomberg sources, and the company is planning to invest as much as five billion dollars in this project. Meantime, China is facing a slew of new challenges as its economy buckles amidst

stringent COVID zero policies. There are ongoing protests at housing projects, for example, in more than fifty cities, with residents refusing to pay their mortgage payments, and typically vibrant Hong Kong is struggling to recruit and retain new talent. So how will this all impact the tech sector? I want to bring in Isaac Stonefish, the founder and CEO of Strategy Risks that works with companies to assess their risk atxposure to China, and thank you's been It's been a while, Isaac.

Is so good to have you back here on the show. I mean, when you look at China right now, is it still a good place to put your money? I think it depends what better options you have, And certainly there's a lot of other places in the world, a lot of industries, a lot of other sectors that have

more minimal China exposure. I think for so long people have been miss pricing the risk of investments in China, and now that the risks are so much more clear, they're able to step back and say, oops, right, is the center of gravity in the texting moving? Is it moving from you know, Beijing to Hong Kong, or from Hong Kong to Singapore for example, where conditions are more predictable. I think a lot of people in the tex Sing like the idea of it being decentralized, especially the more

bitcoin e of the folks. I think the China certainly is the center of the tex sing in Asia, but it's really too early to say whether or not they can never have a global tech scene. I mean, Chinese entrepreneurs have long succeeded despite the Chinese Communist Party and despite the conditions of China as opposed to because of and as their space grows narrower and narrower, I think we are going to see more of an exodus of

talent to other parts of the world. Do you think the COVID policies will have a long term impact, like will this be an inflection point. I think it definitely could be there. There's a metaphor going around China of the guy stepping on someone else's neck and a lot of people going around thinking, Okay, how do we get this guy to breathe? What can we do? What can we do? And the solution is take your foot off the neck. So it's been a long period of strangulation

of China's economy. There's huge emotional damages of the cruel lockdown that they've had, and yeah, I think that will have really long term effects. Meantime, you've got companies like TikTok, for example, just continuing to thrive. And obviously you know parent company is Bite Dance. And do you think that US tech company US social media companies will ever be a to catch up. I think they will. I think

they certainly might. And I think the game that TikTok is playing is how can it seem as un Chinese as possible in the United States? And the more it gets tarred with its association with the Chinese Communist Party, the better it will be for Meta and Google and

Microsoft and frankly even Oracle. So you live some interesting analysis on this whole elon Musk Twitter debate, and that you think that Elon Musk's potential involvement in Twitter, or you know, the drama in general could be good for Twitter's relationship with China, which is interesting given that Twitter has been blocked in China since two thousand nine or

two thousand and ten when I was living there. Um, what do you mean, Musk, For someone who's such a free speech avatar, has this massive blind spot when it comes to China and refuses to criticize China the Chinese Communist Party in a way that's especially egregious for someone who's so open and no holds barred with so many other people, And it feels like employees of Twitter will read between the lines, or we'll listen to directives that say, Okay,

we don't need to be so aggressive and labeling Chinese accounts linked to state media. We don't need to push back against this kind of information, We don't need to see this as misinformation. And hey, Tesla's in China. Why can't Twitter be in China and make a lot of the ethical sacrifices that Musk has made Visa VI Tesla in China. Interesting, So you think if Elon Musk takes over Twitter and does the deal as he promised that it could be an entree for Twitter back into China.

I think it certainly can be. Now, I don't think that's necessarily going to be good for Twitter's bottom line, it will certainly change the way the social media platform works. I think we see Tesla on one side, which is heavily exposed to China. We have SpaceX on the other side, which is heavily hived off from China. You have Musk and other board members linking them, and I think Twitter will fit somewhere in between. But I think it's possible that they might fit closer to the Tesla model than

the SpaceX model. And how optimistic are you about the future of Tesla in China, especially given all of these broader economic concerns. I think it depends on how far Musk is willing to bend. And there's a lot of concerns in China about Tesla as a national security threat

because all the data that it collects. And I assume that Musk will be very happy to continue yielding to the Chinese Communist Party with sharing data, with doing things like opening a showroom in shin Jong the region of northwest China, where upwards of a million Muslims have been in concentration camps. I think will continue to see similar behavior.

I think that, frankly, the thing that would be most likely to change it if Musk decides to be more heavily involved with politics in the United States and thinks, well, this is just too much of a liability for me. But I don't see that as very likely. This along with concerns about TikTok and how TikTok handles data of its users and whether or not it's shared with the Chinese government, what's your take? No question that that it can be shared with the Chinese government, that there's no way,

I think what people need to understand. And this transitions to another even darker topic. But if the US and trying to go to war over Taiwan or highlands in the East or the South Sea, or Vietnam or any other country in the region, all of Chinese companies and US companies will be viewed by some his enemy combatants. And the threat with TikTok is less. That someone's using TikTok in New Jersey and the Chinese Commuist Party is

watching that in real time. But the way that that data, that information, that location tracking can be weaponized if Beijing so chooses dark. Indeed, thank you for taking us there, uh and for joining us here in the studio, Isaac Stone Fish of strateg g Risk always get to have

you here. Thanks for having me. Speaking of Twitter, some headlines just crossing now about Twitter's dispute with Elon Musk, Twitter dismissing Musk's complaints that he doesn't have enough information about spam and bought accounts, Twitter saying the complaints are a irrelevant quote sideshow urging a judge to hold a trial as soon as possible over his proposed cancelation of this deal. We're expecting that hearing the first hearing in

this legal saga Tuesday. Despite the major success of the latest season of Stranger Things, Netflix investors have been bracing for subscriber losses. Shares are down more than six this year as the streaming space gets more competitive and inflation is forced consumers to be more selective. But shares jump

to kick off the week ahead of earnings. Bloomberg's Local show covers all things streaming for us, So why are shares climbing ahead of what's expected to be a not so great report, optimism that things will be better than expected. You know, Netflix said forecast that they would lose two million subscribers in the quarter, which would be their worst quarter ever. It would also mean that for the year

they would have lost two point two million. I think there's some optimism, based on reporting and third party analysis and just the kind of obvious success of Stranger Things that maybe they'll lose five thousand or a million instead of two million. I also think that, you know, the last time around, Netflix recorded earnings and throw a lot of information at people, and they've done a better job over the last couple of months of trying to explain

what some of that means. You know, there's been some talk about, you know, changing the the binge watching strategy, releasing episodes weekly for example. Do you think there's a chance that could happen, I mean, I guess Stranger Things have happened, right un intended. Yeah, they're already starting it with with the release of Stranger Things and and what

Casa de Papel and Ozark. They've they've gone with this batch approach where they'll release a season in two installments, say, instead of all at once, and I think you'll see a lot more of that or maybe in in three I don't think you'll ever see Netflix or at least not anytime soon go with kind of the weekly model that's been popularized in a lot of pv But they are seeing a benefit in say, releasing four to six episodes at a time, uh and then spacing it out

because it reduces the number of people who are canceling. If they know that they have the show that they like, that they're gonna need to stick with Netflix for at least two or three months. Did you know they did that with Ozark too. Has it worked? I mean, as a viewer, I found it incredibly frustrating. Well, that frustration is why they haven't done it until now, because they've conditioned all these people to just get to watch it

all at once. I think what you see, based on some of the third party data at least and and on the data that Netflix puts out, is there is a secondary spike in viewership, and that seems like a good thing if your desire is to make sure that people are coming back to Netflix on a regular basis. You know, there's also some reporting about who growing more than even Disney Plus itself, and of course Disney is a big stakeholder in who what are these clues telling

us about what consumers want and what services? Are you know, going to trunk them all? Yeah? I mean the important thing to keep in mind on that Hulu report is that it's specific to the US UH and so, and it's from a third party data. So who may be doing better than Disney Plus right now in the In the U s Disney Plus is still larger than Hulu by a lot, especially worldwide. Hulu is only US only, and so the question looming over Disney is is are they going to end up buying comcasts out of it

and folding it into Disney Plus. Do they want to keep it independent. That being said, whul has been on a really good streak of programming um and is one of the reasons why you've seen Netflix stumble a bit. Is these other services, namely Disney Plus, HBO Max and Apple TV Plus and to some extent, Hulu, have given consumers a lot of alternatives online. And I think it used to be that Netflix was the default for most people if they wanted to watch TV, at least if

they wanted to stream and that's just not the case anymore. Meantime, you've got Amazon coming out with Lord of the Rings, long anticipated. Who stands to gain the most from, you know, a potential decline in Netflix subscribers. Is it Disney plus, is it Amazon? It'll probably be spread across a number of players. You know, Disney has already benefited a bunch and hopes to continue to do so. HBO Max has been in a really good group with programming and has

grown at a study clip. You know, Paramount uh is actually one of the fastest growing services, at least in the US. You know, Amazon has been at it for as long as Netflix and has really been a second or third fiddle to them the whole time. They are trying to to kind of get their act together. Lord of the Rings is the biggest swing and they certainly

hope that that works. At the same time, you've got another tech giant in Apple that some would argue has done a better job of programming over the last couple of years. All right, Well, lots to keep watching with Netflix results out later this week are very on Lukashaw. Thank you Lucas as always for joining us. Well. Next

to streaming, one of the industries. Perhaps most profoundly changed by the pandemic has been healthcare, accelerating the progress of telemedicine and more able Partners is a women let investment fund supporting early stage brands that focus on making the daily lives of consumers happier and healthier. And they just ran a study on how gen Z in particular is navigating the new complexities of healthcare. Founding partner Amanda Alien

joins me. Now, Amanda, thank you so much for being here so talk to us about this report and what surprised you most about gen Z. Well, thanks for having me, Emily. I think the most surprising finding by far is the fact that this generation gen Z, they might not want to go back to the office full time, but they seem to want to see their healthcare providers in person.

When we asked them their preferred communication method for their healthcare providers, they chose in person communication well above any other form of communication. And looked at another way, we asked them their top criteria when choosing a healthcare provider, and they chose convenient location as their top criteria, and telehealth capabilities were actually last in the survey. So when you look at the amount of funding. Yeah, So does that mean we should you should be lesting investing less

in telehealth? Well, I think when we dig a little deeper into those findings, we find that the preference is really for a hybrid solution. So while they they want to meet their healthcare provider in person, when we ask them how they want to how often they want to hear back from their provider, the majority of respondents expect to hear back from providers within a few hours when

they have a question or a concern. So they're really looking for the convenience of digital channels while still having the opportunity to make an in person connection. So well, I think it's true that the telehealth revolution has been oversold for this generation, there is a role for it, and I think when you start looking at specific specialties, perhaps mental healthcare, there could be even a larger role. So healthcare is operating and not just a post COVID

but also now a post ROW world. Are the trends that stem from that. When we think about the impact of the job's decision, that obviously has the largest impact directly on providers of telehealth abortions, and they've seen increase in demand as well as increased risks and liabilities as a result of that decision. But when you think about the broader impact, it actually has the potential to make employment and investment more or less appealing in any number

of states. So if you're in Austin or Miami, I think you you have a recruiting disadvantage at this point. In our survey, we found that nearly half of gen Z women were somewhat or very unlikely to take a job in a state that had restricted abortion rights, and that number with for men. So when you're an employer and you're looking at potentially of your future workforce not wanting to work in your state, it doesn't matter where you stand on the political divide. That's just a business decision.

And so I think the secondary impact of that is we will see further move towards permanent work from home policies and companies that are able to optimize a distributor workforce, we'll continue to have advantages. Interesting, all right, thank you so much for joining us to tell us all about it. Able Partners founding partner Amanda Alien appreciate it. Coming up. Bitcoin and all coins rallying after the June crypto wipe out.

We're going to talk about why next. This is Bloomberg time now for our crypto reported Bitcoin rallying to start the week at one point, trading above for the first time since early June and testing the upper bound of the tight range where it's been stuck for the last month, and smaller tokens are All coins also having a good day,

even outperforming Bitcoin. You can see here Ether extending a rally that began last week after developers of the Ethereum blockchain gave a target for their software update projected to lower the network's energy usage, the long awaited merge, and other coins like Avalanche, Polygone, Cardono all in the green. I want to talk about all this and more with Bloomberg's Hannah Miller. So Hannah, first of all, why are

we seeing Bitcoin and other coins rallying right now? Yeah, Well, there's been some space in between, uh you know, this rally here and the freezing of withdrawals at Celsius, which we saw a huge downturn in price um for cryptocurrencies in mid June, and Bitcoin is you know, sparking trader's interests. There is hope that maybe they Bitcoin will break out of this nineteen thousand dollars to twenty two thousand dollar range,

and for ether in particular among all coins. News of the merge that can happen as soon as September has really sparked interests in etherorium again. And yet we had a guest last week that called etherium a giant Panzi scheme. What do you make of that? Yeah, there's always going

to be skepticism in this industry. There are people who are concerned about the safety and the risks that you know defive poses two investors um so with especially in light of like the what's happening with Celsius and what's happening with therrs capital and the freezing of withdrawals at various crypto lenders. This has put a lot of people

on edge within the industry. Let's talk about that. There are some new developments when it comes to three arrows this you know, big Crypto Hedge Fund, as well as the Celsius bankruptcy, and you know, all of this amidst calls for more regulation. Yes, we have a fuller picture of what's happening here with the collapse of three Hours Capital. Um we got a more detailed list today of creditors,

and it's a pretty interesting list. There are some really big names in the industry on their like Digital Currency Group, and also one of the co founders, through ours Capital's wife actually has a has a claim in So it's pretty interesting to see how interconnected this industry is. And we're still getting details emerging about Celsius, about there's Capital and it we're still entangling sort of this web here of what's happening all right, Bloomberg's Hannah Miller, Hannah, thank

you so much for all of those updates. Speaking of distress to crypto firms, the rise and fall of companies like Celsius and others has sparked calls for more legislation and regulation in the crypto space overall. Here's what Marty Chavez, vice chair and partner at six Street and recently appointed as a member of the Alphabet Board, had to say

about that earlier on Bloomberg Television. Regrettably, we usually wait until some calamity before there is regulation, and the questions always was this calamity big enough for does their need to be another way down before we have the appropriate regulation. My next guest who joins us now, Sheila Warren, is the CEO of the Crypto Council for Innovation, and she founded the World Economic Forums, Blockchain and Digital Assets teams. So Sheila, Look, there's been a lot of big red

flags Celsius three arrows. You heard what Marti Chavez, They're said, they're about regulation. Are we behind? Are we waiting for a calamity? You know that we're waiting for a calamity. I find that a bit dramatic. I mean, I think we've seen a number of cycles and waves in this industry. You know, I've been in this space for seven years now, and this is not the first time we've seen a

big crash followed by a pretty quick rally. And I think you're kinda mentioned earlier that we are starting to see a little bit of that rally start to happen in market sing were confidence in these alternative assets. So so I don't know that anyone's waiting for a calamity. I think there's been enough attention placeless industry, I would say unduly placed in some cases in this industry, and skepticism around it that I think there's been a lot

of attention already paid. What do you think is driving this rally? And does it last. I mean, it just seems to be bad news everywhere else when it comes to the economy. Well, I think that's right. I think we're part of a there's a broader market melt on happening. And I actually think it's pretty profound that you're seeing these individual coins that are starting to kind of turn

around and uh and pick up a little bit. So, you know, Etherory and I think Canada and nails that I think it really is about the merge is the idea that this has been waiting a long time coming. You know, people have been talking about the merge since Etherory it was first launched, and the idea that there could be this transition from what's called proof of steak to proof a from a work rather to proof of steak. I should note that it's a N nine reduction and

the use of energy. It's not just a ten percent or two percent reduction. It's a massive reduction and energy. Energy has been a big talking point for some folks in this space. So I do think people are excited to see not even so much about the energy usage, with the fact that this major technology change can be achieved. It's complicated, it's really hard to do the details, and

that the building these systems are are so complex. But here we are, for the first time really seeing this massive change in the way that infrastructure is going to run. But I think it's kind of proof that, you know, you give it time, these things are gonna thrive. I have to ask you that about these comments that we got last week from the founder of Tesso's, who you know, basically called Ethereum a giant Ponzi scheme. I mean, you've got major skeptics, not just outside the industry but inside

the industry who don't believe in it. So I think one thing that's important to note about cryptos it tends to be pretty tribal. So you do have folks that have kind of picked their token, they picked their team, and they're going to talk about their team as being the best team. And look, I mean or to stage of innovation. Like with any industry, there are a bunch of options. They have some similarities, they have some differences, in some cases pretty significant differences. And you know, I'm

agnostic about this. I don't know the market is going to decide which of these things winds up being really sticky and taking off. And which doesn't. I think it's natural to have contraction, natural to have some of these things are going to fail, right, some are gonna grow. So it's normal to me to see somebody who might be favoring a different opportunity talking about other opportunities with a negative frame. And I think you'll see that this happens quite a bit in the industry as people talk

about projects that aren't theirs, tribalism. Indeed, where are you on the big debate about whether crypto is is a security or a commodity, because obviously that has major implications for how all of this is regulated and invested in. Yeah, this say is I think the debate of the age

right now. And you're seeing a lot of activity on the hill also with Mika and the European Parliament Europe about this about this topic as well, kind of defining like what is the classification of this asset, which is determined not only who regulates it, but some of the rules of engagement, What are you allowed to do? How ownerous sort of disclosures when today happen, you know, all that kind of thing and will shape the way that's

really continted to develop. So so my view is that most things do start off, I think, to some degree in a somewhat centralized fashion, and simply because you do have a group of people who are engaging in that build. But I do think we've seen several that over time have really evolved to be pretty decentralized. Now, the how we test, which is what determines whether or not something is a security, does have a prong that talks about

the engagement of others. Right, how much does the activity of one or a group of people really affect the effort there are efforts? How does that affect the nature of the build, of the project, of the of the price of all those kinds of things. And in decentralized systems, there's an argument to be made that's really strong that there's not such engagement from any individual or even group that's going to affect the way that the thing tends to tends to land, tends to grow, tends to be shaped.

And so I do think we probably pretty pretty strong idea of bitcoin and ether commodities other things being developed and and happening right now. But we're going to get to a place, I think, or more and more decentralization is the is the norm. All right, Well, we will be watching every twist in turn to see how that debate plays out. Crypto Council for Innovation CEO Sheila Warre

and she looked great to have you back here. It is a big week for the courts and the integrity of m and A. Twitter has responded to Elon Musk, I had of Tuesday's big hearing Bloomberg, Jeff Peely joins us now from Wilmington, Delaware where this hearing will go down, and Jeff who joins us now on the phone. Elon Musk responded to Twitter suits saying he needed more time to to prove his argument in court that Twitter was

trying to rush and off to skate things. Twitter has now responded to what Elon Musk had to stay, Where do things stand right now? Well, you know, it's just a battle of two sides. Twitter today basically said that Mr Musk's arguments that they hadn't turned over enough information on the spam and robot bots within their customer base was quote basically irrelevant and irrelevant. Side show close quote that he knew all along how many bots there were

and this is a pretext to walk away. Um basically we're at the stage now where the judges to have to decide whether to fast track it and you know, go for a trial in September or trial in February or somewhere in between. Now, in another twist, the judge who's going to run this hearing actually has COVID. So the hearing is I understand it was supposed to be in person, is still going to happen, but it's gonna

be on zoom. Is that right? Yeah, that's right. But we've had a little boom let down here of the new variant. So judge Judge sent a letter out today saying she had been tested positive. We were pretty pretty uh familiar with this. We did. We did zoom hearings for the better part of two years down here, so it'll be fine. So what exactly is going to happen

at this hearing? What will the judge decide? So Twitter has asked to basically what's called fast track it's lawsuit and uh, you know that doesn't give you any specifics in terms of how fast, but it means months rather than years. And Twitter says that every day that passes with the cloud over its shares is harming the company's value, so that's why they're pushing for a UH sped up

trial for September nine. Mr Musk, on the other hand, says that the case is way too complicated to try to compress UH discovery pre trial information exchanges to that kind of UH period and it really needs, you know, to be spread out to The trial should be held in February of next year. My suspicion is the judge will come down somewhere between those two gates. Jeff Felia, Bloomberg News in Delaware, who will be covering this hearing for us, Thanks so much, Jess. As always, will stay

tuned to your reporting. And that does it for this edition of Bloomberg Technology. Tomorrow we're gonna hear from Gerber Kawasaki CEO, Ross Gerber, big investor in Netflix, and tessel Hilla help us breakdown Netflix results. And as always, don't forget to check out our podcast wherever you get your podcasts. I'm Emily ch in San Francisco. This is Bloomberg