Transcripts For BLOOMBERG Bloomberg Technology 20161205

Global news 24 hours a day journalists and analysts in more than 120 countries. Bloomberg technology is next. This is bloomberg. Emily im emily chang and this is Bloomberg Technology at our time 5 p. M. In new york, 2 p. M. In san francisco. I message to big tech move faster to crack down on hate speech or we will do it for you. Les, the fifth annual breakthrough prize awards. We will hear from russian billionaire investor yuri milner, swap started. And our science and technology on the priority list for the new administration . Me ceo joins me on the latest. First, a warning for tech giants to act faster to combat hate speech. Remember youtube, facebook, and twitter signed a voluntary code of conduct. They said that they supported eu regulators in the challenge of making sure Online Platforms do not offer opportunities for illegal online hate speech to spread virally. They reviewed notifications for the removal of hate speech and less than 24 hours and remove or disable access to such content if necessary. Six months later, eu regulators say the companies are not living up to their promise and less than 46 of cases are addressed in less than 24 hours. Joining us, we have Michael Berdych in palo alto and in the studio all the way from berlin, bloombergs caroline hyde, who covers a lot of the European Technology for us. I want to start with you. Talk to us about what is going on with european regulators. Obviously, they are not getting this stuff offline in 24 hours, sometimes not even close. They want to see the legislation come in and force the hand of large u. S. Companies. , about 600 rts only 40 of them tackled and refer hours. Much more are being tackled 80 and 48 hours. They are saying, its not that you cant do it. Youre not putting in up resources behind it are your billion, trillion dollar companies. You should be able to put resources behind it. No wonder this is being viewed strongly by the eu at the moment. You have terror attacks, notably and france. Just in november, Angela Merkel said she was thinking of pitching in support to regulation to reduce hate speech because she feels that is behind this way for populism that drove the italian election referendum. Emily and the numbers are different there, . Caroline and thats notable. Slownly has the speed been aboutly, 4 of the alerts hate speech are tackled within 24 hours. Be 100 . Pposed to in austria, 11 . Over the weekend we saw this is a country that very closely had a notably far right president ial candidate winning. These are countries the eu is very worried about. They want to drive back populism that i glimmer coal and the leaders are so worried about. Emily michael, this is an issue you have taken on for a good part of your career. You have tackled these kinds of issues. The eu you make of how was handling it versus the United States . Michael its a good question. This topic is very difficult for american viewers and businesspeople to understand. We have a very expansive understanding of the first amendment. Thats not the case in europe. Its not the case in europe. Speech is not perfectly protected, including clinical speech, inciting speech, and hate speech. There is a long history of radical violence in europe that has been met with legislation and constitutional changes. It is a situation that is different on the american situation. That is the first thing to understand. Europe is very serious about it. Of problems. Axes they are not responding fast enough according to eu regulators, but secondly, secondly the eu once them to take a more expansive view of what constitutes inciting or constitutes hate speech. They do not think these companies are taking it seriously. Now in america, these topics are coming up more and more. We see the impact of the spread of fake news. We know that the russians were spreading fake news to affect the election. Maybe they did. We know that general flynn, one of Donald Trumps nominees spread very vitriolic news that was always live fake about the Lenten Campaign about pedophilia. The Clinton Campaign about pedophilia. Example, anr Amazing Company led by amazing an unusualin position. They have to say hate speech does not impact our viewers because our audience does not take that stuff seriously. At the same time, they have to say, hey, we are the world and our audience takes the stuff they see on our pages seriously and they will buy stuff when they see your advertisements if you are a large corporate advertiser on our platform. Its a very, very delicate situation. Another thing hang on. Chael, michael what do you think facebook should do . Should facebook be behaving more like a Media Company than a Technology Company . Takingfacebook be greater responsibility for moderating fake or inaccurate news . A great i think thats question. Maybe the answer is yes. Maybe technology can point the way. The law gives it the protection to copyright. If facebook or youtube or microsoft or twitter receives notice that the photograph being shared as under copyright of an owner and the owner does not want it distributed or shared in a way that violates copyright those companies have to take very swift action to remove or otherwise segregate those copyrighted materials. As a result, what has been born is a series of Technology Solutions that allow them to limit the impact and distributions of this copyrighted materials once they are on notice. The same thing is never really helped will happened with hurtful speech, the video of a little kidlittle kid being beat. Theres no law that requires one of these pages to remove it if they are put on notice. So, theyve never had to develop technology. I think theres a Technology Solution here. Whether or not its a Media Company or a platform company, i think technology can solve these problems. I am confident they can if they want to. If they want to, they will. Clearly, something you are very passionate about, michael. Caroline, i wonder what youre hearing from investors, ceos, in europe about the election of donald trump. Caroline it was shot. They could not believe it. The same way that breaks it took everyone in europe by surprise, in the United States by surprise as well. Telecomearing big giants, big advertorial companies saying, actually by bringing u. S. Dollars home, repatch region, that might make the economy better. Is moreere consolidation, more business friendly. Its a little more cautious optimism. One area of concern, of course, whether the wall starts to be built, which side of the you play. A big presence in latin america, big presence in central america. They worry how that will affect global trade and mexico. Been the markets have doing well with the exception of text so far. We will keep watching. Caroline hyde, michael, thank you so much for stopping by. Coming up, Silicon Valley fifth annualthe breakthrough price. I caught up with yuri milner, the founder of tsg the st global. This is bloomberg. Emily top execs from hollywood and Silicon Valley gallery for the fifth annual breakthrough prize, that celebrates achievements in physics, life sciences, and mathematics. 12 million given to researchers. A special prize was awarded to a group of over 1000 people researching gravitational waves, ripples in space and time created when two black holes merge. The breakthrough prize was created by mark zuckerberg, jack ma, sergey brin, and russian billionaire yuri milner. I sat down with him and the handout which breakthrough prize he was most excited about. The most special prize with the collaboration of 1000 people for the discovery of navigational waves. These waves come to us from two 2ack holes that collided billion years ago and its incredible we have developed technology to detect this. It verifies the prediction made by Albert Einstein 100 years ago. Emily you are very fascinated by space. You also launched rate through listen, a breakthrough listen to discover exeter is extraterrestrial life. What you think we will find in our lifetime . Yuri i think we have a decent chance. The reason is there are 20 billion planets like ours in our galaxy, which is the milky way, and that 20 billion should be multiplied by the number of galaxies in the universe, so the chances that all of this opportunity is only created once are pretty minimal. So, i think eventually we will find out that somebody is out there. And maybe they are a billion years ahead of us and that will really be exciting. Travel around the world. 45 percent of your investments are in china, for example. That this kinded of innovation, funding for this kind of innovation might suffer under the new u. S. Administration . Its very early days. But i think what is happening is n amazing Global Market trend, which is really empowering all of us with technology and software. Valuewere 4 trillion of created around the world, tres 5 in the u. S. , 25 in china, and then the rest of the rest of the world, so my prediction is in the next 10, 20 years to move this trend will continue. And many more trillions of dollars are being created. So, im not good at shortterm predictions. What is going to happen next year but i will bet that in the next 10, 20 years, we will see a lot of value coming out of places like Silicon Valley, beijing, tel aviv, london, bangalore. Do you have concerns about the election of donald trump, given for example whether it is ripping up the playbook, flouting years of process, or potentially defending vladimir putin, given that you are from russia . Yuri again, i am not the best to opine on this. I have really been also saying seeing a lot of technology around the road and thats really what drives my travels. Are technology opportunities, you know, i am trying to spend a lot of time there. Longtimeebook, investor in facebook. Do you think facebook needs to take on greater responsibility when it comes to fake or inaccurate news . Should they consider themselves a Media Company or a Technology Company . Yuri i think they are very serious about this. Everything will Major Company like this, you recognize there is a very high concentration of value in Internet Companies. In know, 80 of value Internet Companies in each one of them, has responsibility. Doesnt onlyt apply to facebook. It applies to all of them around the world to think about things like that. Into 2017,ooking talk to me about how you are dividing your time and what technology you are most excited about . 80 focused on investing, 20 in nonprofits like we talked about. Areof our investments concentrated in the u. S. , 40 in china, 20 in the rest of the world thats premuch on trying to allocate my time. Newy when it comes to technology, what do you like that is out there . Yuri well emily where do you think the growth is going to be . What are you most fascinated by . Yuri there are some unstoppable trends. From autonomous driving to translation and things like that. Another big trend is robotics. And i think when those trends are converging, you will see a lot of change in our society. You see happening with valuations given the Political Climate and what is happening in the Global Economy . Years,he last 10 billions of dollars of value created in our prediction is every five years there will be another trillion dollars. Even then, the question is, how is that going to be allocated between Different Countries . How it is going to be allocated between Different Companies versus new startups . But this prediction is the one i can make. Every five years for the next 25 years, there will be a trillion dollars worth of value created in technology around the world. Emily yuri milner there, creator of the breakthrough prize and founder of dst global. Stay right there. We will head back to the awards. What Anne Wojcicki things about the trumpet administration, next. And all episodes of Bloomberg Technology streaming live on twitter. Check us out, 5 p. M. In new york, 2 p. M. In san francisco. This is bloomberg. Emily the fifth annual breakthrough prize was held on sunday. I sat down with Anne Wojcicki, the founder of 23andme. Covered everything from her companys growth to the future of science and technology and her President Trump. Take a listen. Goal of this the was make scientists celebrities the way other people are celebrities. The way that zuckerberg and a company andate have huge financial awards and Michael Jordan and celebrities that are wellknown. My goal is, how you make scientists part of pop culture . Emily do you have concerns a Trump Administration will not prioritize this kind of research, innovation . For sure. Theres definitely a concern. But i hope that with things like the breakthrough prize and education of youth, it does not matter what the government is saying as much because you will , you will inspire individuals to get involved. Government policy about basketball, but we are all clearly into basketball. My goal is to get people to look around the world. What are your broader concerns about the election given the industry you work in, given that we were this close to seeing a woman in the white house . Anne to be honest, i am wait and see. Once things happen and i am eagerly awaiting to see who is going to be the next commissioner and the director of about thexcited potential of more freedoms, but obviously we want to complete scienceng the fact that is incredibly important. And without a scientific fast scientific fact based world, have concerns. Emily what about the Affordable Care act and not hiking drug prices . Anne i am waiting. Benefit of the Affordable Care act is there are millions of americans who are saying, wow, its great to have health care. Doubt, itk without a would be hard people want to have this benefit. People want to feel empowered to take charge of their health. I am completely openminded to alternative ways of looking at it. I have always been a huge fan of pfizer. I would love for pfizer to take over everything. But i want to be openminded. Emily give us an update on 23andme. Never sell genetic data. We have always done research projects. That is one thing i am without a doubt the most exciting thing for me, i love that consumers are stepping forward and saying they want their genetic information, but more than that, i absolutely love how well we can make discoveries in this research database, and i get people who have had sarcoma or migraines and they are saying, just help us understand why this is happening, and the fact that we are able to so effectively leverage all of our customers who come together, is her questions, and make really meaningful discoveries gives me huge optimism about what we will be able to do in the future and how quickly we will make meaningful discoveries. Emily what about the research you have been doing . Can you give us an update . Any diseases youre honing in on . Scienceke being in a event, you should not be that excited, but it almost keeps me up at night because im so excited. In so proud of my science team at how well the system works and we are making discoveries i am so proud of my science team. Who runs herler Therapeutics Unit who came from genentech, we have a number of compounds. I am enthused, incredibly inspired the database of information will potentially yield novel therapeutics, and im hoping to prove out the fact that we can do it faster and more efficient than other pharmaceutical companies because we are starting with the human genetic database. Emily that was Anne Wojcicki, thedme ceo from breakthrough awards in san francisco. Onestop we watching pandora. Shot up 60 on friday after a report that sirius xm reportedly approached pandora with interest in taking over the company. One analyst suggested a takeover by amazon might make more sense for pandora because of the integration possibilities with Smart Speaker elect so Smart Speakeralexa. This is bloomberg. You are watching Bloomberg Technology. Renzi to put his resignation on hold pending budget approval. He announced he was quitting after voters overwhelmingly rejected the referendum to push constitutional reform. In france, the Prime Minister will run for president in next years election. He faces off with the other contenders in the socialist primary next month. He will retire to focus on the bid. Chancellor Angela Merkels union will toughen its stance on immigration, setting the stage campaign. Thterem populists gained ground in europe. The language will be debated tomorrow. Ash carters final trip across asia as pentagon chief has Unfinished Business will be inherited by his successor. Militaryng more for protection and the north korean grand vision. Trump has picked retired general james mattis. If he is approved, he will have to navigate floundering relationships with the claims over the south china sea. Day, thiss 24 hours a is bloomberg. It just after 5 30 p. M. In new york and 9 30 a. M. In sydney. Allen, good morning. Paul looking quite good right 1 . Up one third of shrugging off monday surprise resignation of the Prime Minister. Fourth montlion in hs. We are seeing some positivity on the nikkei futures in australia. Up asx is expected to open 1 . Grain corps. N harvestseat potentially putting downward pressure on prices. Worksd bell may be in the to bid for the online broker. Dollar will be in focus as the ruby the final meeting for 2016. 27 economists expect no change. Im paul allen in sydney. More from Bloomberg Technology, next. Emily this is Bloomberg Technology. Secretary Ashton Carter is preparing to pass the baton to his successor. The cherish initiative is an effort to link the Defense Department with innovative business hubs. Some are questioning if the initiative will survive after he he leaves. General james mattis is his likely successor who donald trump plans to nominate. Mattis has military experience but what does the choice mean around the globe . Cybers dave, partner in a securities space. Mattis is an interesting choice given that he is not a civilian candidate. Hes a decorated veteran. What does that mean for his views on cyber security, technological warfare on the ground . Dave so, general mattis has a terrific reputation as an intellectual, he is strategic. He has advocated force only when necessary. I think he stands out as a confident pick among the cabinet. The question is really not about the particular but why it is donald trump would say he is looking to the Defense Department and joint chiefs of staff in this plan to protect the vital infrastructure against cyber attacks. Looking to the Defense Department to get on mattis, or the joint chiefs of staff to protect our industrial secure systems, dams, nuclear reactors. That is not the right solution. Calling in marines to stop malware is like trying to stop a termite infestation with a shotgun. Emily what does it mean for the nsa . They expect the nsa to focus more on threats from russia or within the u. S. . Dave it has always been to monitor threats from external enemies. What is scary is president elect trump does not see russia as an enemy as much as those on the homeland. Jihadists, conspiring journalists. Emily or anybody on snl. Dave the concern is is he going to redirect those Cyber Capabilities against the American Population . Given who his advisers are, Rudy Giuliani who proposed to stop and frisk on the streets of america, why not cyberspace . ,eter thiel, the billionaire whose main position was in the company he founded makes the software to monitor large populations. What is going to stop the nsa, which is part of the Defense Department, turning its sights on americans . The concern i have is whether general mattis will hopefully stop that kind of use of the nsa, but there are other spy agencies. Emily general mattis is interesting. Hes on the board of the very controversial Blood Testing Company theranos. He is still on the board today. You would have to step down if he becomes secretary of defense. He also tried to get the military to use theranos technology unsuccessfully. What do you make of this . Dave im sure yet no idea the tests didnt work. It is a good thing that we have the fda to set the rules and to apply scrutiny as to what it is the companies are going to sell to the public. When we talk about cyber security, this is an area where we need those rules. We need these regulatory agencies like the ftc and fcc for health the cms care and the regulatory commissions. These agencies are trying to identify, promote and enforce cyber standards among companies and Government Agencies in order to make cyberspace safer for everybody. Im hoping general mattis will be will pay more attention to the value that these agencies bring than theranos. Emily what about privacy, security . What about those issues under President Trump and mattis at the pentagon . Europeook, we are behind in setting standards for Information Privacy to protect citizens. Emily we were just talking about that. Dave what large extent, businesses have had this thing for these business Information Privacy rules. I think as we look at the prospect of not having them, if we look at what happens that jamieson has espoused decimating the fcc, if we eliminate headcount within the ftc if we actually roll back the effort to bring protections to the we will citizens, then europe. Lly behind i think i would welcome those kind of privacy laws just like we have seen americans perhaps looking to switzerland for a safe haven for their money and canada for their families. I think we will see a flight of data as we look at europe as a safe haven for the data. We had that with the snowden revelations. I think americans will join them. Germany looks like a safer place for my data. Emily what does it mean for now hacked the election . Does this mean russia gets free rein if the pentagon is not watching out . Dave the big concern is trumps affinity for putin and russia. Cyberspace is one area we have to be vigilant in holding back russia which has been most aggressive in actually disrupting other peoples infrastructure or recently even elections. General mattis, hes much more concerned about russia as a threat than donald trump and i hope his appointment will mean we will be vigilant in to protect ourselves from cyber attacks. Emily trump says mattis recent combat experience is a positive andfrom cyber attacks. Emily trump has a pro in the ds seat. Dave i think normally there are very good arguments as you would want a civilian as a defense secretary. It is certainly dangerous for the working of the military to promote recent generals into the space of National Security advisor or defense secretary. Given how uncomfortable many of us are about having donald trump as commanderinchief, having a fighternd trusted war in the chain of command right beneath him actually gives me comfort. Emily dave cowan, thank you so much. Very smart analysis. Coming up, in the race for the best ai talent among big tech, uber is the most recent to announce the acquisition of a startup. We will break down the new research arm, uber ai labs. This is bloomberg. Emily a story we are following. Nissan is going a step closer with driverless tow trucks. They are testing out self driving machines in japan that would carry cars to the nearby wharf to loading. They hope to spread the technology throughout the plant by 2019 and have overseas plans in the future. Uber is betting big on artificial intelligence. They are buying a new yorkbased startup called geometric intelligence and eight createthey created ai lab. They will help self driving ubers navigate the roads. Eric is here. Lets talk about how this will change the uber experience for me. Eric uber has a lot of data problems, especially as it gets into carpooling where you are picking up multiple passengers. Asre trying to figure out the driver is moving to they should be picking up and how to cram the most number of people in. The more uber can do that, the more they can break down prices. It is a lot of normal problems like that and there is the self driving car question. How do we build a self driving car that is ready for the unexpected . emily what about mapping . It still seems to be an issue in any uber ride. The driver fiddling with the app. Is this something that would improve that technology . Eric it is possible. Uber is spending a lot of money trying to slowly move away from dependence on google. They have a lot of requests to google to solve some of these problems but they are building out the room technologies. They have thrown mapping software. They are relying on others for its drivers, but we have seen drivers still going to waves wantsoogle maps and uber to solve that where you need the driver to do everything in the app. Emily there has been a land grab for Companies Like google, apple, facebook. Do you see uber ascending to the ranks of a Big Tech Company . Eric i think uber is a hot place to the. A lot of these engineers are drawn internally to work on the self driving car problem. There is a question on how strong the problems are there. As long as uber pushes the agenda and says we will play around with flying cars next and support that i think as long as the questions remain interesting and there are challenges, they will bring in better and better engineers. I think they certainly are a big enough company. Emily you said it. Flying cars. Prediction from eric newcomer. Turning now to the gaming world, sony has an under the radar hit on its hands with more than 7 million downloads, beating poke mon go. It is called state grant order. The game allowing gamers to back in time and team up with historical figures like your narda da Vinci Leonardo da vinic. It has been at the top of the rankings on year. For more, eugene joins us live from tokyo. The big draw of pokemon go was this augmented reality. This is something that fate grand order does not have. What is causing this engagement . Eugene you are right. There is no ar. The real drawl of the game is its story. E islar to pokemon go, fat is n japan. Ime series in it has evolved. Sony has a lot of tentacles everywhere. Thisnime studio created game, then three years ago, sony decided it will actually make a game based on the anime again. It will be for smartphones. Its a long trip to get to the smartphones, but fans love it here. Players travel through time. They get to meet a lot of very colorful characters. Youcaesar, cleopatra go back to the egyptian days. People like billy the kid. A lot of colorful characters and i think that is really the draw of the game. Players want to see what happens next. They want to meet more characters. That is basically what the game is about. Meeting colorful characters. Emily are we expecting a release outside of japan . The company has only released in china so far. I asked about a u. S. , european release. Im not too hopeful. The game is very, very niche. The hardcore fans love it here. They play a people, lot of smartphone games in japan. Whether it will appear to the mast appeal to the mass market in the u. S. , i am not sure. Pokemon go makes a lot of money, but the game, i think a lot of fans may not be comfortable having their kids play the game. There is a lot of halfnaked characters out there in japanese anime. That is true for this game as well. Again, yeah, whether or not emily i get it. Yuji, live from tokyo. Important for the company that has been under pressure lately. Rep sits downf to talk about potential media mergers and the future of tv. This is bloomberg. Emily cbs kicked off december by announcing a major screaming deal. The mostwatched network says it will have nfl games on its streaming service. We spoke with leslie moonves. We began by asking about his distribution strategy. Leslie our job is the do great content for cbs, showtime, the cw, latenight, sports, etc. If we do that, all the distributors will meet us and pay us for what we are offering. We dont necessarily need to be in the distribution. Decided they needed time warner so they bought the thing. At some point, you have mr. Peters knocking on your door saying we need your, cbs. We want to buy you. Leslie im sure there are businesses that like to do that right away. We are a controlled company, so that is more difficult. But, i can imagine there are plenty of people, especially when you see at t paying a lot of money for time warner. At a company like ours it would be very positive. I have had discussions with everybody and they say nice things. Do you have any concerns about the at t and time warner deal . A big distributor, particularly in wireless, they could favor time warner content over cbs. It. Ie we are looking at it was announced a few weeks ago. We are taking a good look at it to see if this is advantageous to us or not. We have not weighed in yet. Are you open to the regulators having some rules and regulations . It. You decided to sit it out. Why . Leslie number one, we have always said we will join any service as long as we get paid fairly and conditions are met appropriately. We are having active discussions right now with directv. We have different needs than some of our competitors. Our centerpiece iswe are takingt to see if this is advantageous to us or not. A broadcast network. There are issues like digital issues. I expect as to make a deal with them. I expect us to be a part of it but we want to be paid fairly for the content. You figured out a way to include the broadcast stations in that. As we move into the overthetop world, cannot broadcast stations participate . Leslie i think the great thing about ott his resetting the tables. We entered the retransmission or negotiations, they were paying a lot of money to a lot of Cable Networks and we were coming after the party started. We have the mostwatched network. The broadcast network should be paid more than the cable stations should be because more eyeballs should mean more pay. We and tend to be on every overthetop service, but we dont think anybody can exist successfully without cbs, without getting nfl, or big bang, or stephen colbert. That we are a necessary part of any package. For is your readers, they distributors, they wanted new content. How often does that come up . Are you willing to give exclusivity . Leslie stacking rights means the ability to have certain shows in a certain season. We only have all access. It is not to say somebody made us a very high offer for that, but exclusivity is really tough for us. Emily leslie moonves, cbs chief. I have a bit of news. Im pregnant. My husband and i are excited to welcome baby number three to our family. I want to thank everybody on the floor for helping to hide my bump. I will be here for two more weeks and i will miss you guys. Announcer from our studios in new york city, this is charlie rose. Mark good evening, charlie is a way tonight. Im mark halperin. Cardinal Peter Turkson is one of hope franciss closest advisers and amanda were likely to hear more about. You will be charged with issues facing margarets, the poor and all of those in need. What thate expert of the encyclical of capitalism. He spoke friday morning in rome. Here is the conversation. Charlie