Placed on paid leave. Global news 24 hours a day powered by more than 2600 journalists and analysts, in more than 120 countries. I am alisa parenti. Bloomberg technology is next. Emily i am emily chang and this is Bloomberg Technology grade coming up the president and the gop roll out their framework to reread the tax code. We will fail what companies could be in the crosshairs. Trillionsbe targeting of dollars of offshore profits. We will discuss that. Plus amazon steps up their game with a suite of new products. We will review the new products and see if amazon has the upper hand with the holiday season. The iphone x may not be ready for prime time. We will dig into the production delay and the highly anticipated device. Up first to our lead. President trump and Republican Leaders have unveiled their longawaited overhaul to the american tax code. Speaking indianapolis. Corporations are part many trillions of dollars in our economy and many have done this to avoid our taxes the altogether. Some companies actually leave our country because they have so much money overseas, so much it is a incredible amount that they move the company to get their money. We will let them bring it home. Emily that is the president stressed in one of the major points of the tax overhaul. Ringing back the profits that are stashed overseas. It is estimated firms have 2. 6 trillion in profits offshore. Apple leads the way. Is the me now to discuss head of the texting out of our washington bureau. Thank you so much for joining us. Talk about the not simple here. We does this mean for companies that have these profits offshore . Tax day. Was a big everyone was waiting to see what the president and congressional leaders were going to reveal. One of the things that came out is that there would not be a rate for repatriation. That is what that companies have stashed offshore bid all that was not specified there would be two levels. One would apply to cash and a lower rate would apply to noncash. Emily is there any sense of what the repatriation rate maybe . Alexis that is one of the many questions that happens. The only kind of guidance that we have is back in 2014 the former chairman came out with a tax plan that called for a split repatriation rate. 3. 5 for noncash. We have heard tax writers are looking in arlington heavily from this point. It is possible that is what we could see. Emily what other International Tax changes could these companies see . Alexis it is complicated, one of the plans is to shift to a territorial system. The u. S. Is kind of unique and that it refers to a global system. It is referred to as a global system where companies have to pay taxes on their earnings regardless of where they are made. The shift to a territorial system would be they only have a tax on earnings made in the u. S. Emily lets say some Companies Like apple has 200 billion offshore. What would the potential rate mean for them . Xis i think that really depends on how much is in cash and not in cash. Obviously we know Companies Like apple and Tech Companies in particular have the highest amount of profits offshore. They are really going to be scouring to determine what the best way is to pay that rate. The companies can also pay the taxes over several years so it is something we will take into account. Emily however the Companies Responding . we are making calls and trying to figure out. The number one thing we know is they are sending their lobbyists to make sure the rate is as low as it can be. Emily thank you so much for joining us. Right, amazon seems to have found their hardware calling in the amazon echo. They unveiled a number of new hubucts including a alexa as well as a speaker. Amazon also announced that it will be coming to cars and here. The product rampup shows they will not back down to the likes of apple or google. Any me now from seattle is mark. Talk to us about what this means in context for seattle and amazon push into the home. This is amazon stepping up to becoming a Major Technology player. It be google and apple who will have this fleshy events. Amazon is and they are here now as well. They really stepped up their game introducing several new speakers as low as a new box for the home. Emily you reveal all of these products how does this stack up to what google has . As well as what apple is planning to announce . K google has their own speaker that is the center of their world. Speakers a single coming out. That is also going to become the central hub of the smartphone world. Apple also has the apple tv. They have the ipad and ipod. Google has the pixel phone and their chrome cast product. What amazon is saying we are going to make the smartphone our entire category. We are going to take over every part of the home. Not only do they have a smaller beaker they also have a high and beaker that will allow you to connect to your network. As well as a new fire tv stick. I think that really stole the show. A half circle device with a small screen that you can make video calls from. You can watch video and listen to you sick. You can learn about your day and your calendar. Is comingee as amazon out with these devices for all parts of your life. Basically amazon is trying to be wherever you are. Emily you see more of these partnerships in the future . Mark this is the third one. They announced a partnership with volkswagen and ford at the beginning of the year. I have nothing any models of those coming out. Today you the event can see behind me. They talked about some of their new vehicles. They will, out of in the middle of the year with amazon. Will someone by a new car because it has this and it, i do not think it will drive a theyll for the consumer are certainly a big win for amazon. Allowing someone to be and the car and they say they will buy something from their car. It is a big win for amazon. It certainly has that cool factor. There are some things you can do. Alexa still gets confused at times. The voice of a nation still has a long way to go. Have a address any of that today . Mark we saw a lot of new functionality. There was a letter first party products. In terms of functionality there is a lot of thirdparty integration with other devices like lights and thermostats. New as to integrate with other parts of your life did there is a new button that lets you play a game by pushing a button. Go with this. To there is a lot of stuff they are working and there is a presentation going on. It is totally worth talking to you instead. We will see more from them on that. Emily thank you for taking time out of a very busy presentation to talk to us. Youll have to update us, thank you so much. Right, leading up to developing self driving cars ford and lyft have announced they will share data. Get themy they will onto the network. Stakes after gm bought a for 500 million. Those two companies are still considering other options to ask and ridesharing operations. Coming up, it is at week we will break down how twitter is changing the game. This is bloomberg. Emily facebook said they had success fighting fake news in the german election. The company says they watched a major effort to combat fake news. The rightwing alternative for germany made historic gains in the election they said in a blog post they did not eliminate misinformation entirely. They did make it harder to spread and less likely to appear in the news feeds. Scientist say the level of falls news was low. Taking a look President Trump is taking aim at the social network. He said they have always been antitrump. Collusion . The turnover of almost 300 political as that were bought with russian money after the campaign. Facebook is making a larger push to attract advertisers. Week out oft ad new york. Also with us is gerry smith who covered media for Bloomberg News. Telling us all about what is happening. What are they saying about facebook . I think exactly what you are just saying is that facebook is really making a aggressive push to try to take away advertiser dollars from tv networks. Publishers lot of that are producing content for that. You know that is really where there is this big push to 30 70 billion arctic that is an advertising. Facebook was a piece of that. Havev networks right now the line share of that. There is a shift going on with digital. Emily are they concerned about this russian issue . Gerry absolutely. Advertisers are completely conservative and they are worried about their brand and the content. You to have a real problem with that this year. Advertisers are very concerned about their content showing up alongside fake news as well. Emily what is your take . I am hopeful facebook is successful in shaking that money out of television. If that is the model we are building to create content for these platforms sort of in advance of the money showing up. Dollars will always leg consumers. Seeink you will start to money start to move from money to where people are spending most of their time. Emily facebook and google are really gobbling up the digital time. How much is left over for companies . At how judyu look has been traditionally bought. Advertisers are buying from the cable networks. The Digital Ecosystem is so that you are buying for platforms rather than the media brand. That is problematic because building on these platforms. I think the shift is happening now that will take a long time where ads on facebook and google and specifically on snapchat are looking at that 70 billion. Time to place more on that premium content. Advertisers are so important for that new content they have to share some of that pie. Facebook is now starting to pay content creators for content. They are doing more to share advertising. It is still early but also the competition between these two platforms is fierce. When youtube was the only show in town advertisers had no leverage. Now that mobile platforms are competing for premium content. It is a good time to be a content creator. I think think do think this will be a thing to watch. Emily it is doing very well as a here. Ben there are 24 shows to watch. Emily what kind of engagement are you seeing . Ben comeback is the number one show, we are seeing over 20 million views are episode. Viewed million minutes bid that is a enormous scale. Number one show on the platform but collectively and less than three weeks we have had with hundred million views. We have have a million followers to these shows. Versionthis is the tv of a subscriber to a program. We are building a fan base and we are building and growing great engagement. We are pleased that the early results. This is going to shake out over a extended amount of time. Traditionalu think there tv networks will adopt this method . Gerry i think it will take some time. To think that these Media Companies are colluding is the furthest thing. There is some frustration with facebook in terms of the companies printing content for the latest initiatives they are not getting the kind of financial terms that they hope for. It seems like facebook has really made a effort to reach out to the Journalist Community to really try and meet their needs. I think facebook is starting to come around with the idea that they are colluding is actually kind of funny considering there is real tension between the two sides. Smith, always good to have you here on the show. , a publisher is undergoing a Digital Transformation with their textbook. We would hear from the ceo next. Be sure to tune into our conversation with the microsoft ceo, with a indepth conversation about microsoft and the future of ai, we talk about it all. That is this thursday. This is bloomberg. How do you transition into a leader in digital learning. Witheed to install a ceo the new textbook. That is the route they are taking in the last three years since they were bought by a management firm. We spoke with them about the transition. A it has been quite transition. Make it work. What we have done with that is moneyspending a lot of trying to see how we can improve this education through using software. It was about becoming a Digital Company . It is about becoming a result company. Using a combination of psychology to help People Better their education. Tell us about the software . What are you providing . I know you are working with ai. How does it all happen. School we went to learned by reading a book. Now we have turned that aired im around. What do meaning what do we mean by that . We have the answer to a piece of ai. How confident you are and how confident you are not. How accurate you are and how can i think you are. They are helping guide you on a personal part of life. You and i would have different backgrounds with this subject. One of us may go further. Is very good at making sure you get there in the end. Is becoming a teaching assistant in a way . One of the things it does is it gets a lot of data. It goes back to the student. But it goes to the teacher or instructor and say wouldnt it. E useful to get that there is a lot of insight that comes with this. Is digitalportion now . With things like that. How much of this is from this new technology . Than two thirds. Under been a rapid change 20 . That was not really quite true, now it is two thirds that is softwarebased. Kfault is more complicated to do infrastructure with. Use years of becoming 100 . Need their is always a time when print is better. Then there on his first years of learning to me. There will be a much longer withstence of that undergraduate education more likely than not you are going to be doing this. The education ceo. Had a up, apple has production snag on the iphone x we will talk about why they are falling behind did a feature i want to talk about is our interactive tv function. You can watch us live. Send our producers a message and play along with the charts. That is for subscribers only. This is bloomberg. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. , lets Mark Crumptona get a check of first word news. President trump struggling to indianapolis for he unveiled a tax plan that would provide instant relief to the american people. Tax reform would protect middle american households. Wantcan call me all they and it will not help it i am giving you the right thing. It is not going to help me believe me. They would cut the Corporate Tax rate to 25 . For individuals tax bracket would be 12 20 and 35 . International chemical weapons cold war stockpiles. Many are looking at Vladimir Putin today with a estimated five million dollars. Earnings have arrived in puerto rico with a newly released video of supplies arriving on the island. Within two dozen ships will eventually arrive there to distribute a. Power is still out to much of the island with the humanitarian crisis worsening by the day. Where it has strengthened off the coast of carolina and is now a hurricane again. It is not expected to hit land. Expected on the east coast over the next couple of days. Global news 24 hours a day powered by more than 2600 journalists and analysts, in more than 120 countries. I am Mark Crumpton it is 5 30 p. M. Here in new york. My colleague paul allen has a look at the markets. Good morning, lets start over in new zealand where it is at one and threequarter percent. It changed on that news. It was in that first decision for the active government. The markets here in australia are high. Hortense up as the stoxx close. Keep a eye on the political scene in japan today. They will decide if this is going to be october. Some action in hong kong. Largest Insurance Market has raised 1 million that is backed by a investor. The first of investors. Expected to slip to 2 . I am paul allen, morgan Bloomberg Technology next. Emily this is Bloomberg Technology. I am emily chang. Apple facing production delays with the iphone x. Sensor, with the 3d reports a sin of the components used with visual recognition are struggling to head adequate production levels make you with all the details is alex who covers all of this for us. What do we know . That there are some problems with the 3d sensor and that is often the production process. They then dug into this a little bit more and with those infrared dots that have the 3d facial recognition system. We dont quite know the extent to which that would affect how many phones are on the shelf. That was my next question, how well do we know how these things are going to impact july . Going back when they unveiled these two phones for the first time and as far as i know they staggered the release, you can go out and i want right now. There is a six week window until the iphone x becomes available. Is apple says the delay taken into account. Know to what extent the 3d sensor delay were taken into account when they said the release it will be on november. If it was then investors do not have anything to worry about. If they did then it may be that they are in short supply on that day and they will not be able to meet demand. That may be a cause for concern. Emily could this print some answer to why the release was staggered with the iphone eight out last week and the iphone x until november. That could be one of the factors. There are only a handful of factories in the world making these displays that give this sharper wider display for the iphone x. We know that there have been some problems with the 3d sensors working. We do not know the extent of the issue. We have been doing our own reporting and see what the cases. The problem seems to be in the module. They piece together this to make the 3d sensors. It is there the Sticking Point seems to be. They are doing ok. The module assemblers and of that is as far as we know. Down in south korea, sharp which is in japan have these issues. Emily it is interesting that tim cook has this supply chain genius. He probably knows more about the supply chain than anyone at apple that at this point they have been working on this phone for months. Why wouldnt they be able to stockpile these components . I think it speaks to the fact that people have been worrying for a while about the extent to which they are really able to produce these phones. Apple has really been trying to push the envelope and get the Technology Available to the only difference is that the iphone is the bestselling smartphone in the world. Are a bunch of different models. They are trying to use this cutting edge technology. Many of these companies are not at this time where they can do deliver all of these components as necessary. Had a big capital expenditure. They tried to ramp up production. Clearly that has not been a success. Is interesting see all of this coming that the iphone eight is out. There are people who have been complaining about things not working. What you make about that . We always see a little bit about that. There are always some problems. It is usually solve with a software patch. With the connectivity issues. I literally just got my iphone. We will have to see if that is the case. Apple has said with this problem they will be able to remedy a with software fix. I would not worry about that too much. It is the supply issue which is cause for concern. Emily we will be waiting for that review. Thank you so much. Now to a stock we are watching. Andr reporting earnings another strong quarter. Couldmory storage chips be in short supply. They are curbing spending on new plans and production. Prices are also be bolstered with cars and other capabilities. Coming up, President Trump and Republican Leaders have begun their push to overhaul the tax code. For the changes had been texas, and. If you like Bloomberg News check us out on the radio been you can listen to us on the mobile app and on sirius xm. This is bloomberg. Emily this has just confirmed President Trumps take to have the Justice Department antitrust division. This comes after a series of pickups. He was confirmed with two blockbuster mergers away his review. Earlier in the hour we broke down what the proposed tax reform means for big Tech Companies what about for investments in deal making, joining us is the cofounder and managing director of aspects. Thank you so much for joining us. It is great to have you back here on the show. Lets talk about this tax reform plan, what does it mean from your perspective . We are verythink short and details. We have to look a lot at what the intent is. What we are seeing is that he sees this is the opportunity to drive growth at the Small Business level and also the saturation of dollars to drive reinvestment act into the economy. What we are thinking about and looking at is what does it need to be able to have a wide year adoptable spending and what does that look like as the rules around software and hardware and how will that play out for some of our startups. Emily for startups in particular does it seem like it will be beneficial . I think it has the potential to be very beneficial for Small Businesses perfectly immunityioned in investment dollars. With a lot of our companies. If you think about cybersecurity which is a large part of our portfolio. We think that a lot of the technology around cybersecurity is fairly archaic and not up to a level that many large need to secure their own data. If the rules allow for that kind right off with socials cybersecurity. That means a new investment with those kind of products. Emily we have been talking about this massive pack for the last couple of weeks. The sec, what technology is it that these companies do not have that they need . Does it actually exists . Jennifer i think that is a great question. Old infrastructure is trying to build a wall around the network and hoping there is not a rate. And trying to identify constrained those breaches. We are seeing a shift in the fundamental model and a lot of the technology is under the assumption that we are trying to shut down those credentials in order to prevent any data from being stolen. Emily cybersecurity has been a area that is right for this. Do you think we will see more of that as a result of this . If so where. Jennifer i think that is something we are seeing with an and eight. Woefully still with these fortune 500 companies that are eight major issue. So how that plays out in terms of how quickly these companies if it stilld remains to be seen, we expect that to be a big part of 2018. Emily do you think these tax heard mna . Seful it is hard to tell a kind of dollars will be available. Think about the trillion dollars that are offshore that he hopes to bring back to the unit is take it if you bring back a significant, of the capital, could that be driving growth and some of these categories that is the question. Emily i have to ask you. M a went on to cofounder what has been your thoughts on these sexualharassment claims at these Tech Companies. There seems to be no end to these stories. I think what is interesting is that people are talking about it. The real shift is not necessary that there is significant change in some of the behavior but there is a opportunity to talk about it and to try to drive that change it it is not the majority of behavior. It is bad acting on the margins. That bad acting can also create an the culture and create a toxic culture for the startups andwhat is really powerful impactful is being able to change the culture very early on for many of these companies. Particularly the ones that are going to have a dialogue about how to do that. Those stories cannot has been very impactful. Our focus has been more about driving diversity. We think that is a competitive advantage for some of these companies. To get that early on is for the ones that do well. Emily there is also discrimination which may be a even take her issue when it comes to female founders not getting funding because that is not the same as what a female that a male make it. What do you see behindthescenes that could change this . Do think there is a real recognition happening right now is to mark or will they selected the way they were . Think there is a fundamental shift in that there is a challenge to seeing the microsoft ceo make comments about recognizing that we have a real issue and a long way to go that just around equal pay for creating this opportunity. When you have large corporations like microsoft and others. Melinda gates has made a huge initiative and supporting women as well. When you have a large impact with investors like that recognizing that challenge there will be a fundamental shift in the dialogue and how that permeates the culture and how it will play out in the Startup Community as well. I think we have a real opportunity. Certainly and the aspects portfolio we are seeing have of our portfolio has a Women Entrepreneur with diversity to really make better decisionmaking with a better return. I am glad you mentioned the microsoft ceo because we will be interviewed have tomorrow when we talk about this. He will talk about their bonus is his bonus and they are tied to a diversity of initiative. I was to have you here on the show. Spotifyreaming service will go public at the end of the year. That is according to a report. And sharese trades are valuing the company at about 16 billion. Spotify declined to comment for this story. Coming up, china issues a new warning. They could see the service go away completely, this is next. This is bloomberg. Restaurantlargest company in china is building a war chest backed by alibaba. They are close to finalizing a deal. The company is targeting at least 3 billion at their valuation which would make it the worlds fifth most viable startup. According to people familiar with the matter they are hammering out the final details with investors in days. Staying in china a new warning from the government to facebook. The cyberspace and ministration tos the service should act stop the spread of illegal information and take provocative measures intercept this. This comes after the Service Coming across china. The north Asian Correspondent joins us from hong kong with more. We talked about this earlier in the week, what does this message mean to you . En it is interesting we got a message because when you are reading the different rules and regulations it is all about speculation. Is it just slow or what is happening . Is it in the crossers by a regulator. Now we actually have a statement from the Cyber Security administration in response to questions posed by Bloomberg News. They came back and said whatsapp needs to stop the spread of illegal information looked. They must take proactive measures. Basically to do what they are already requiring other services to use. Whatsapp is obviously run by facebook. It is a remain service that is every available in china. We have been having intermittent outages if you will. In july users reported that they could not upload photos or videos. Now on sunday and monday outright and outage including the text message part of the service. All of a sudden on tuesday the service came back on. This is a clear warning from the authorities that they are watching and perhaps found a way to get around the encryption that it has employed. Signedchina recently . 10, could find the on the way . You have a question of what the efficacy would be big they could obviously find them. They had been cracking down on tencent. Have layn beijing they down heavy fines for these the electedncluding spread of propaganda and terrorism material. They are really cracking down which does 33 weeks from now. The big question is are these before thesesures big political power was or is this a lasting enforcement that will go on for years. Other other messaging services that are benefiting from this disruption . There is the big one that has nearly one elliott users. That has adopted a ecosystem if you will. Alibaba has a few of these various messaging applications. Has a dating application. That came from the russians which incidentally a lot of the bitcoin groups went over to telegram when groups are being crackdown on. That way they could talk about strategy and giving their money. There are a few other niche players. Stephen mooret disruptions to a current with this big meeting . My oneword answer would be yes. Emily short and sweet, thank you so much. That does it for this edition of Bloomberg Technology. Tune in for our conversation for ahe ceo of microsoft indepth conversation about his tenure at microsoft, the cloud and the broader tech industry. All that and more. We are watching on twitter, check us out. That is all for now. This is bloomberg. This is charlie rose. With out theegin great Republican Leaders have announced they will not vote on cap graham repeal bill. A adjustments as trouble time in the from administration. The president has come under criticism for attacking nfl players. Sizeresident as long as