Transcripts For BLOOMBERG Bloomberg Technology 20180116

Service body for palestinian refugees, less than half of its expected contribution. Global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. Analysts in over 120 countries. Im alisa parenti. This is bloomberg and Bloomberg Technology is next. Emily im emily chang and this is Bloomberg Technology. Bitcoin tumbles, its worst decline since 2015 . We catch up with arianna huffington, what she has to say about current ideal plans and the me to movement. And one of apples is getting slammed for harsh conditions. There hasnt been a a selloff like this in bitcoin in months. Less than a month ago bitcoin was trading at almost 19,000, rival cryptocurrencies are also doing the pain here it to discuss that and cover all of the news in cryptocurrency, we correspondent and also cory johnson. What is boeheim the pressure . Rampant speculation by a handful of traders, an interesting piece that we have been suggesting that a lot of the rise in bitcoin years ago was just two traders, or maybe even one. There was a limited amount of people speculating on this, what when those speculators leave the market, you see a decline in price. Its also about the functionality of these cryptocurrencies and thats what you mentioned ripple, i think its amazing that ripple in particular is down so much after doing so much in the last week. Emily take a look at this 5928. G btv you see the decline in price their and other cryptocurrencies down below. How would you pick this apart . Its exciting. Orry time theres good news bad news, the market tends to overreact and now we are seeing an overreaction on the downward side. There is talk about asian regulators, banning the currencies in korea, china has already been banning for a while. Legislatorsk the want to ban it, they just want to regulated more and make sure its good for the industry here at emily what you think of the impact in asia, theyre cracking down on Online Platforms and mobile apps . Ory to suggest a change in the law, its a toss. Gets a fever. The suggestion is something that is hardly being use, bitcoin can be used to move money or buy goods and services, but thats not what is happening with bitcoin. Its not in rampant use. Is not much effect on the efficacy of the currency itself, the notion it will be less effective and thats a minor concern, but it has a major concern on the trading of these coins. There a turned on in transactions . Inwe havent seen any dip our volume, actually. Emily are you concerned . The market cap has gone up 16 x, and next week it might be up again. This of the first drop we have seen in the last year when a lot of retail buyers come in, so it new people. But people there for five years, this happens often, actually. Levels ofre back to early december, four weeks ago. We were saying this is a fantastic rise, so we are kind of in the same place. Emily what about cryptocurrency hedge funds . Im curious about these traders who have turned it into a career. And thee the fundamental ones appeared they are buying and holding a basket of cryptocurrencies. Doesnt matter which one you pick, they all seem to go up and down together. If bitcoin catches a cold, the rest of the industry catches up fever. Emily what is the next bitcoin . Will some of this interest flow to the next one . Some of the ipos are ridiculous. Theres no natura efficacy and things dont exist yet, that theres going to be sales of these coins that dont even exist yet. Some of it is really silly, but there is real money speculating other value, bitcoin and currencies as well. Ould imagine this selloff emily where do you see the most interest in these alternative points . There are a lot of icos that shouldnt be raising money, but our. I personally invest in several, i invested in unicorn. Mark cuban invested as well. A have a real Business Model for customers thats really exciting, but i think bitcoin is the currency in the rest will all underneath that. Emily would you break down ripple and would you put those in priority order . Bitcoin is the number one by far, then you see ethereum and ripple, things like that. The rest of the ico coins are really trying to establish a use case for global adoption. Cory mark cuban announced the mavericks will accept payment in bitcoin. Think some of these individual things we talked to the ceo of kodak before the power went out at ces. But i have it on bloomberg. Com where i talked to him or you can see what they are doing for their kodak point in this isnt speculative for him. They are gone to have it up and running in 90 days. I keep saying this, the axle of fundamental usage of this Blockchain Technology for some companies, for some uses, is very exciting and make a lot of things possible that werent in the past. To talk aboutsy volatility, because it is sensational, but what is the story we should be watching . Is it regulation or alternative currencies . I think we will see things from the government saying we are not banning cryptocurrencies, were just trying to regulated more. And i inc. I think that will reach the markets, actually. The use thatut cory talks about in if you are a longterm holder, this is a downward trend in should be back up in a couple of weeks or a month. Emily thank you as always for joining us. Watching over, will be limiting the time that u. K. Drivers can spend on the road to 10 hours a day. This is among how concerns about deke and exhaustion. Exhaustion. Gue and workers will be prevented from logging into the app during rest of meadows. Rest periods. Coming up we talked to arianna huffington, what she has to say about ipo. This is bloomberg. Emily a story we were watching, all 49 senators democratic ators have signed on to the gutting of internet neutrality rules. The protections sparred broadband providers like comcast or verizon from locking or slowing web content to favor their own content her. The sec said other agencies could behavior. We will speak about their decision to file suit on the show tomorrow. Atanna huffingtons luncheon launched a app to connect more deeply with yourself and others. We kicked it off with the thrive app and asked why we need a app to set boundaries her. Muchere has been so writing over the last few months about how Addictive Technology has become an how in fact deliberate that addiction is, how social Media Companies use out rhythms, Machine Learning to use likes and social feed back to keep us hooked. The app is like a guide to help us calibrate. It is bidirectional, if you are in drive mode, because youre having dinner with your family, and i get a text back saying emily is in drive mode. Mode, not to be distracted. It will help change the culture, the cultural expectations. Right now the expectation is we need to respond immediately and the second feature is a dashboard that gives you a mirror of your social media consumption. Emily you have a partnership with samsung now, when is it coming to the iphone . Na it will come in the next six months. We are developing and it will come to the note eight. We also launched together a dedicated section called humanity and technology, which is all about this Inflection Point in our time. Emily, it has become a big issue in Silicon Valley and beyond about what is technology doing to us. Emily how much responsibility you think the platforms like facebook bear and Companies Like apple bear for Technology Addiction . Arianna if you sell hardware you still have responsibility to have teachers that can protect especially children from abuse of the phone. If you are a social media company, as you know, in the economy, social Media Companies are deliberately mining more of our attention, because thats how they increase revenue and profits. Thats where its going to be very important or social Media Companies to put the Public Interest and ahead of revenue, which may see light seem like an impossible task, but we know unless they do that, the backlash is going to keep growing. Emily are there other changes that you think a company like facebook should be making . Arianna i think we are looking at what is the impact of conflict pushing notifications. I dont know about you, but i have shut off all medications from friends. I dont want to know when everybody likes of photo. I love instagram, all social media that apps, butocial media i also limit how much alerts allow to be disturbing my life, my ability to connect with my hands, my colleagues, my ability to do deep work are simply too rechard. Unplug and softbankw that the deal is done, well the company be ready for ipo next year . Arianna i think the company is in a really strong position. The softbank deal is really important. The ll have the ceo of that led the new funding and what is so important is that softbank is at the center of the ride hailing industry globally, so its so great for it uber to have softbank now as a major investor. And dollar a is doing an amazing progress inendous the last few months, he has hired a new coo, i knew general annsel, and there is interviewing process for a new chairman. I think everything is on track. Emily do you think an ipo could happen as early as next year . Arianna he has said that the ipo will be in 2019 and nothing can change that. Emily you mentioned a new general counsel, how is tony doing so far . Do you think uber will continue to be dogged why Justice Department investigations or how long will this cloud be hanging over the company . Arianna i dont think its a cloud hanging over the company, i think it is bringing everything to the surface to be dealt with. At the same time, the company is doing great things. Its not as if these issues of what had happened in the past are dominating everything. The company is growing, ringing in new major investment, bringing in great leadership talent. So, i think what is happening on not reallyront is necessary to deal with all of these problems, but its not in any way consuming dara. Emily i am dying to ask you this question, im sure you in following the aziz ansari story about anweekend encounter that a woman had with him that she describes as Sexual Assault. There has been a lot of backlash new yorkreporting, the times say he is guilty of not being a mindreader and the Washington Post saying this could be the end of the me too onement, whats your take whether this is going to far or whether it is a legitimate conversation . Arianna the me too movement is incredibly important. It is historic. We look not just that celebrities, but women in lowwage jobs that are often victimized more than anyone else. I think what is very important is to make distinctions between what is Sexual Assault and what is inappropriate behavior. And also to listen to both sides. Process, justice have to prevail, because this is a huge culture change and we want everyone to participate in it. Only way this is going to happen is by actually allowing due process, allowing people who are accused to tell their story. Thats at the heart of any process of justice. Think that, that story should of an published . Arianna its not a question of whether it should we published, the question is are both sides being heard. Silencingbout accusers, we should not go back to that, but its about allowing the accused to tell their side of the story. Emily that was arianna huffington. Ford is warning that profit will fall this year as they spend to catch up with rivals to bring electric cars to market. The automaker kicked off in important auto show this week investing 11 billion to bring 40 electric vehicles to market by 2022. Up, your destination for buying online groceries, next. And a few things i want to bring to your attention, your interactive tv function, bloomberg go, you can send our producers a message, play love with the charts we show you on air. As is for bloomberg subscribers only, check it out at tv. This is bloomberg. Emily google is launching a new program that will sort of life evil in Information Technology support. This after the tech giant spent aliens on artificial intelligence. The program will help people without formal training or College Degrees find i. T. Jobs at large companies. Grocery delivery instacart may have bought itself into the canadian market. Instacart has agreed to acquire a company, unata. Be absorbed in the deal serves a dozen grocery chains and can that. A new Blockchain Company is being formed, they will use a ledger like it going to track cargo movements for shipping across international borders. It is set to become available in the second half of this year. Coming up, john chambers, Cisco Chamber americas with insight into his purpose driven investing strategy. If you like Bloomberg News, you can check us out on the radio, the radio app, and bloomberg. Com. This is bloomberg. Alisa you are watching Bloomberg Technology. It is a check of your first witness. A judge is holding a point i sent sentencing hearing for a sports doctor who is guilty to sexually assaulting female athletes, 100 of Larry Nassars victims are being expected to speak where have these red. Presence inking a of 40125 years. A group of florida lawmakers say strengthening the power grid and have more seniors are Top Priorities to better prepare for peter future hurricanes. This was formed after Hurricane Irma knocked out power to much of the state. Homeland security secretary Kirstjen Nielsen says the agency will be working with states on proper protocol before issuing emergency alert, they told a senate panel that dhs has been unaware that helene officials could not quickly retract the false alarm is sent over the weekend, warning of an an imminent missile attack. Rex tillerson says the november Eastern Continental misaligned from north korea was visible from a commercial flight bound for hong kong from san francisco, tillerson says north koreas requisites creates perpetual instability on the peninsula. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 100 20 countries, i am a alisa parenti, this is bloomberg. After 5 30 here in washington in the evening, 6 30 in the morning in hong kong. We are joined by selfie with a look at the markets. Good morning to you. Looks to passalue those declines on wall street, and asian commodities player and watching as they track the drop in oil and prices and in australia, miners will also be a focus with several reporting quarterly productions. Japan, we are checking on what is going on with the state of machinery orders that are affected to have fallen in november. You have futures pointing to a overhead of that. This is the finance minister warned of excessive moves of currency markets in the dollar under pressure as well. They can remains on the radar after slipping below 11,000 as china and south Korea Intensify scrutiny on cryptocurrencies that has been a drag for bitcoin as other a condensed currencies are under pressure. That is what we are checking on before the big major market open in asia, up next, more Bloomberg Technology. This is Bloomberg Technology, i am emily chang. John chambers has undoubted jack, jc two benches which aims to be a purchase purpose driven firm which has a portfolio companies. Bloomberg television at large, cory johnson joins us live with john chambers, cory . John jc to, liza call that . It is about nextgeneration and what Venture Capital will evolve into. Im doing with my son so it is jt squared. We are forming an organization that we believe will help to initially,n startups catching market transitions from everything from drones to social media to security, to cricket farming which we talked about in terms of the capability. How big is the fund . It will be 100 million, it would be financed by my family. Whenat will go a long way they dont have the capital that they used to. What is really intriguing to me is this notion of social impact. This is a substantial sum of money. What does that mean to you . Interesting, this was about cisco growing eight major places. We want every corporate social possibility award. When we are doing at this time is refocusing on startups were all job creation has to occur. They were not higher over the next decade or start funding issues. A number of companies are down dramatically, a 40 year low. There will be countries like france talking about their startup engine and it goes for x in nearly three years. I believe this is where innovation will be done within the startup. If our country is going to leave, it will be uniform across the state, it will also be the innovation engine for our future. I love growth, challenges, i get my pick of the litter in each market transition and im trying to do a good job not being a Venture Capitalist. It is about venturing mentoring young ceos. That ciscohe things did under you is so many acquisitions. It went very well. I wonder what that meant in terms of coaching and mentoring. How might that play out in this fund . It is a great question. The first acquisition i, crescendo paid 90 million. The stock went down, is a 30 million revenue stream. We paid a pretty high price for 109 in revenue. Dollar revenue. First you have to get the market transitions right, you have to get companies that fit into your culture and you do that by spending time with the ceo. Andow when i talk to acquisition candidate, where we going to do the deal. What do you see in those ceos . It is identical. You see very highly motivated, extremely high energy, really smart people who really want to be coached, you can feel the culture in terms of their attitude, their people. If they dont want to be coast, i move them aside. You want to companies that want tay with you because the ceo was less than 5 , that is unheard of. 20 or 30 in the companies. This am and what the startups, i called him innovation playbooks. I love discussing it with you with theame thing startup ceos, are they able to visualize a market transition. Are they really brilliant engineers who passed the technology or really brilliant Business People in marketing who understand the applications of it. Manyook at the culture and young ceos dont talk about culture, they get the strategy, they get the evolution, they get around corners and communications but you never have a great start up without a very strong culture and some teaching culture is a huge part of what i do. There is nothing more exciting than when you see the lights go off and you see how culture will make a difference in the future. This is 250 growth. That is not what you see. You have some ideas that are very decent now. We started at cisco, we were 70 billion in sales. Was 747ime i left, it billion. We used acquisitions to do that and also internal development. Once you understood the acquisitions and the culture, it is the same thing about market transitions for the startups. I get the choice in the industry, i got to the expectations and the money is the third thing on their mind, they want to coach or mentor, they would 70 to do this before. I will go with anybody who doesnt want some tough love and the balance. Today i talked to three startups. Ihave a personnel problem, really need to struggle with how i get my culture message across. Used to be that you acquire a company where that coach would fit in with cisco. You dont have a cisco to match anymore, does that cultural mash work anymore . John even more. Sprinkle that we talked about before, literally social media management, change in a customer expectations, this basically freezes it and there where does the commercialization of drones and insurance and construction, transparent government. You have unit for that would really do a virtual assistants, speak assistance in the enterprise, youd be able to think about crickets that we drop, orout, a pin provera that make sure phone really secure. But all eight of the ceos, even though they are from all over the world, theyre all americans if you will, they have the same view in terms of what is right and wrong, the same view of one to build a great company, in terms of how you treat people. I like to companies that i become a part of the culture with. Always a pleasure, john his new, jc to visit venture fund, it already sold a lot of great investments. Emily our editor at large there , cory johnson with the Legendary John chambers. A story we are watching. Public defense against the 105 billion hostile takeover event. In a letter to shareholders, qualcomm asked them to trust the current strategy. Fired back at accused the chipmaker of overpromising and under delivering. Coming up, the appetite for venture funds is growing. We look at numbers that hearken back to the. Com era. This is bloomberg. Venture Capital Funding in the u. S. Kidding highs not seen since the. Com bone. Firms spent 84 billion in more accordingen companies to research from pittsburgh. For more on these numbers, lets bring in jeff,. Also julie who has been covering this story for bloomberg. This is 84 billion in 2017. This is the largest ever raised since the. Com bone. A lot of this is going to companies that are at a later stage. Over was a big run and their commanding a lot of funding for these things. There is a separate report from insights and pitch book on Global Investment and that has 33 rounds of 100 million or more. You can see a lot of these big rounds. That really brings the data up to the higher end. Alisa how do you expect this number to be different in terms of the kinds of companies that investors arent interested in us and mark we see the Tech Automotive industries. Pickup transportation, agriculture, food tech, many Investment Opportunities but that will continue throughout time and i think that provides a great investment over time and we are seeing that and we expect to see that in the coming year. Alisa when it comes to biotech, health tech, is that something you are seeing getting a lot of pick up . We are seeing that we are checking to see a big boom in the First Quarter two around from an ipo perspective which will provide the desk in liquidity. Good liquidity. Emily are there enough places to put that money . It doesnt seem that way because Venture Capitalists still have a lot of money on the sideline. They are scanning a higher percentage of the funding but it is hard to find places to put that in, health care is seeing a if they say private for longer, they will command were private equity. Emily that enough of money just changes the landscape . Anytime you have that kind of money move in and some of the rows that we have talked about, the interesting thing is you can take a step back and look at this as a result of a zero Interest Rate environment because investors are have to seek more yield. That we are seeing that come to it has never been less expensive to start a company and yet it has never been more costly to break away from the pack so we are seeing in the research that we did, we found that the number of startups in the United States tripled in one venture generation so from 2003 it went from 6000 and now we have over 18,000 venture backed companies. Emily do you think ipos will be an alternative way for startups to rate . They had 5 billion last year, venture raise eight. I dont think it replaces venture funding, it may provide a place but i think in the nearterm nearterm you will see increased regulation to provide investor protection. Caphat ultimately places a on how much you could raise . In two or three years, could the balance of power be different . Form, most ofent these icos, the analogy i use, it is like your by frequent flyer miles for an airline that hasnt it has no routes, no airplanes dont get because youre talking about buying coins to use on a service that will be built. Really, the value that has been there, it will be going up. We are finding that is not the case. What are some of the biggest concerns you are hearing . They wills on be worried about softbank or other sovereign wealth funds coming in there. They may worry about the icos and the company decided to do that in terms of getting it depends on which type of companies you are looking for. You think that we was others to copy the softbank model . What would be the impact of Something Like that . Jeff it jams of the ecosystem and that would potentially allow companies to stay private longer and we talked about 18,000 because if you look at the overall system, they would have to recycle capital and we need to have that recycled to continue to do that. Does that get us closer . I define a bubble it is such a cliche. I have to ask. That is when the asset class is overvalued. Historically i have looked at it that way because most of the conversation is round around unicorns. What is interesting is when you look at it from the overhead it overhead perspective which is you look at these companies, customers,eople, any they need places to put them, they compete for all these resources which are finite and that makes it more challenging to realize and create value for the shareholders. That you so much for joining us as well. Coming up, a new report by Advocacy Group describes has is working conditions at an apple parts supplier in china, we will dig into the latest, this is bloomberg. Site backedy video by tencent is trying to raise money out of a 17 billion valuation. They are targeting a billion dollars in financing as it expands the Video Streaming Service to southeast asia. This is a video platform in the same vein as instagram and periscope. Theyre careful to note that no final agreement have been reached, however, in the because of the detail they could change. Thee is getting slammed for workers conditions they have to endure. Are underir factories scrutiny. Peter elstrom joins us from tokyo with the latest. What are the actual allegations here, what you make of the criticism . Peter it is important to note that there is a report out from china labor watch. That, we sent a Bloomberg News reporters to interview workers ahead of this report coming out and they thatibed harsh conditions theyre working under. They talk about standing up for 10 hours. Sometimes up to 10 hours straight in hot factory conditions as they work on these iphone casings with loud noises and sometimes they say they dont have the plot proper equipment including masks and gloves and earplugs. They talk about the difficulties there, they also talk about if you are claustrophobic, they say there are hundreds of workers working in this factory and the door only opens about 12 inches which makes it difficult to get in and out quickly and the reporter was able to visit their dorms to see the living conditions, they are very cramped. Many workers jammed into small rooms, no showers or hot water at all. So it is a quite difficult situation for these workers and they talked about how they have asked for some of these protections and havent been able to get them and when it comes to safety training, they said they are supposed be getting 24 hours of training before they begin working at the factory and in some cases they are forced to sign off on the paperwork before they finish all of that training and in some cases getting only an hour of training. The door only opens 12 inches, how do these kinds of descriptions compared to what we have heard about apple suppliers in the past which is not always the most glowing reviews of the conditions, workers have to endure. That is right, apple has these hard at addressing kinds of labor issues in a supply chain, back in 2010, there was a rash of suicides, the primary partner for making the iphone and apple took actions to try to address that, they set upd, Counseling Services for some of these workers, they provided 24 hour hotlines to be able to call in any kind of issues and they set up nets around the factories to stop some of these suicides so they have worked hard at this, apple has been putting out these annual supply reports, talking about their responsibilities, they said last year they did more audits than ever before when they went out to the factories and did onsite audits, they did over 700 of those, they are addressing this, it is important to note that to be of to save money and make higher profits for your shareholders, it is part of a Business Model. Apple gets a lot of attention but how do we know how these can patient conditions compared to supplies for other Electronics Companies . Peter it is an ongoing issue in china and as mentioned, apple and it supply chain have been working hard at trying to address these issues and make the conditions better for their workers, their ongoing challenges throughout china, they take on this hightech manufacturing reserve, this is some of the best in the country, the way just made us on the much, the workers were making more than 600 per month which works out to a little bit more than two dollars per hour. It doesnt; much but in china that is a reasonably healthy wage. It may sound the compared to a thousand dollar iphone but it is relatively healthy. Emily thank you peter, thank you for that morning update. That does it for this edition of Bloomberg Technology, we are Live Streaming on twitter, check us out, that is all for now, this is bloomberg. 7 00 a. M. In hong kong. The bloombergom asia headquarters. I am yvonne man. Top stories, the asian stocks look set to pull back from record highs following losses on wall street and oil and metals. Well,n on the slide as they have lost as much as 25 . This is over for cryptocurrencies. No free lunch. From bloombergs headquarters, i am betty lou on this tuesday. President trump cause xi jinping to complain about the growing u. S. China trade deficit