One dozen now at valley wineries are damaged. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Isoomberg technology next. Emily im emily chang at the geekwire summit summit in seattle. Is is Bloomberg Technology coming up with google, facebook, and twitter are smelling to hold washington regulation and they as a result of the russian political ad scandal. For thethe game plan tech giants ahead of being called to Congress Next month . Also, we will cover how seattle has transformed into a tech hub and one of the centers of innovation. One of seattles biggest players is microsoft. We will sit down with the list was of interview with the companys president , brad smith. But first, to our lead. Tech giants are bracing themselves in the face of congressional regulation coming their way. Paid velation thatds the revelation that adds paid for by russia on their platforms to influence the 2016 president ial election has sent them into a crisis. They get ready for a public hearing on capitol hill. Joining me now is so many who has been covering this story from bloomberg, a longtime Computer Science professor. Thank you for joining us. You just wrote a story about the Great Lengths that these companies are taking to minimize the damage, if you will, including calling lawmakers personally. Talk to us about these efforts. These Companies Offering to figure out exactly how much this possibility they should take, exactly how much change they should promise. These are all very difficult issues that have grown to the scale they are at now by having these ad platforms that you can transact on automatically. It helps propel their massive growth. Cleared they have views ahead of the u. S. President ial election it is something lawmakers are trying to understand and try to think about how they should regulate them. It has really been something that no one has really cared about quite as much as they do now. The companies are coming to terms with try to figure out what the next steps are. Emily you are actually going to be in washington on november 1 covering these hearings the same day as the facebook earnings call. Mark zuckerberg not expected to testify . Sarah not restricted to testify. I think we will likely see somebody who has a little more technical knowledge. That is what senators have asked for. My money is on alex, the head of security for facebook, who has been handling this investigation, although i have not confirmed that. Ed, zuckerberg has apologized for minimizing the extent of fake news, the problem of fake news. Do you buy it . Not for a minute. Zuckerberg began by saying it was a crazy idea of misinformation influenced the election. Sarah got it right. You have to follow the money here. It is not a pr crisis. It is a technical crisis and almost a moral crisis. Emily what is the responsibility . Ed well, your first responsibility is to take your responsibility seriously, and that is what facebook failed to do for a long time. Lets talk about another company for a second. Lets talk about our friends at uber. Anything that built the business was ok. It is ok with the ceo, the employees, the board as long as it helps the business. Facebook is in the business of selling ads so we know that they had people embedded in at least the Trump Campaign helping the Trump Campaign buy and microtargeted ads microtargeted to individuals. With a story that set they took a trip from trick from u. S. Businesss playbook. Part of it was needed and edited turning a blind eye to what was going on. Emily lets talk about that point, sarah. The digital director of the Trump Campaign said they had facebook employees embedded in their campaign. What is the significance of this . Sarah this is one of the things i have heard internally. Facebook executives are very dismayed to hear how they think people had partisan hand in the election. They do not feel like they did. Their response to that embedding report is that, well, of course we helped them. We help everyone. We offered to help hillary clinton. We did not need to with the people in her office the way we did with trump because they were out of new york and we are in new york. Totally normal, something we would do with a major retailer or a moviek friday studio before the release of a major motion picture, so again, facebook is just trying to come to terms with the fact that people do not understand how his business works and not understanding so much how these things can be interpreted in this kind of now that people are looking at it through the lens of understanding how facebook is used ahead of elections. Emily ed, do you think we can trust these companies to self police . Do we need regulation . How do we compel change . Ed congress has got to get involved, but it is a difficult technological problem to deal with fake news at scale, right . On the other hand, there is a willful blind eye to what is going on, i believe. Emily what about when it comes to advertising and where the dollars are coming from . Ed i dont know what to say about that to be honest. Emily you are sticking with meemily , longtime Computer Science professor. Sarah covers facebook and is covering the story for us. Thank you so much for stopping by. Investment in ai software startup. Makesurghbased pentium software that can be used by a variety of industries, including data centers, health care, and more. The Company Technology is intended to supply the process for companies to use Machine Learning applications at scale. Sceneg up, seattles tech is on the rise, but how does it compare with Silicon Valley . We will talk with rebecca. That is next. Bloomberg is live on twitter. Caps on 5 00 p. M. In new york check us out 5 00 p. M. In new york. This is bloomberg. Seattle has seen a boom in Venture Capital investment in the last few years. In 2015, seattlebased 70s rocked up 2. 1 billion in funding, but that is still dwarfed by Silicon Valley. This is according to data from facebook, the Research Company ook, the Research Company. Joining us is rebecca lynn. Great to have you back. You met with a few companies this morning in seattle. What trends are you seeing . How is it different from Silicon Valley . Rebecca two of the richest men in the world here with bezos and bill gates. The startup scene continues to evolve here. It has always been strong, but when you go around seattle, you see the amazing number of new companies that have come up. I met with three companies this morning. Three days of Companies Back to back. Emily across a range of sectors. Where is your take on bitcoin and cryptocurrencies . Rebecca i think it is early. Bitcoin as a currency is more in the gambling category. Emily one about a fraud, because that is what jamie dimon said . Rebecca i think there are the bad cases as bitcoin in terms of this was out and out fraud. Ipos, when you get into the ipo market, there are some cases that it makes sense. You look at ipos, probably the thing that has made the most sense to me, which is not what we are seeing it used for too much is debt financing. A companyle, in south africa was doing solar panels and the anybody on the income from the individual solar cell was the currency, in other words, right . Instead of having to have a big upright, you can see it for companies of that nature so it is exciting actually. Emily when it comes to areas of investing, what interests you and what is not . Rebecca i think semtech is always hot. There is a billion dollars in tech company in every single cycle. It continues to reinvent the entire banking system. We are moving more into real estate. I think since tech will continue to be hot in different sectors. What is cool is the lending space. Emily you did investemily in lending club early on. They went public in 2014. They have had issues. They had a new have a new ceo. What do you think of the risks and the scandal . Rebecca it was a ceo transition. Scott stepped up. He is an amazing cmo for that really and has done a great job leading the company through that executive transition. I think in that case, it was a case of management transition, not a fundamental case of the Business Model itself. Emily there has been a rash of Sexual Harassment stories in tech, women at Tech Companies, among Venture Capitalists. What is it going to take to change . Rebecca i get asked this and i can tell you personally i have not been sexually harassed. It is kind of funny in a way because i get asked this alltime, but it is having the right example. More from the men than the women. It just has to not be tolerated. We are seeing that. What we are seeing these days and people standing up and saying that is not ok. That is what it will take. Emily what about his termination . About discrimination . Rebecca i have been lucky. I have been in a maledominated field. I feel like for me, it is more often than not working in my favor, but it is not that i have not seen it. I think for that, again, people saying something about it. When you see it, Say Something about it and dont let it go that is are you can change it. That is how you can change it. Emily one person says he things that are biological reasons. There is a high awareness right the which is positive, but same tone, there is a fear that many men feel that they have a gun to their head. Is not what is going to take . Rebecca you know, i hope not. I would say a huge majority of men i have worked with in my career, when they heard about these things coming out, they themselves were horrified that this is happening, so why worry about are people going to extremes where they are afraid dinnerting women out to for a business meeting. All very normal things for guys to do together, right . I worry about that because i feel like that will set us back even further. I think there is an awareness and a level of not expecting it to happen. Emily ok so they should be taking these meetings, doing these dinners. How do you make sure these things do not happen . How do you make sure nothing crosses the line . How do you make sure women are included . Rebecca i think you be inclusive. You ask yourself, what everyone feel comfortable on the team if we are having this dinner, going to this event . I often do that myself in terms of my entire team. Would everyone want to go and do this event . Sometimes you have to make sacrifices that are better for the overall group. I think a lot of it is just a judgment call. The guys that you see that are accused of doing these things, it is not a oneoff kind of thing. It is a repeat occurrence. Is notendemic it endemic. There are bad actors that have been called out before. Emily rebecca lynn, thank you so much for joining us on the show. Coming up, much more from seattle. Ed helped transform the region as a leader in Computer Science education. He will join us next. This is bloomberg. Watching bloomberg says you can try yours says u. K. Drivers with a broad changes, showing it is considering a change to its model. Uber has become more like a private Hire Car Service that exert more control over when and where drivers work. The statement is a rare instance in which the company says it may adjust if the government will miss new labor laws. Cl has turned into a hub protect innovation to say the least. Outside of amazon and microsoft, it is home to a going number of startups that can lead to a new wave of ai and Cloud Computing. Here to discuss all that and from we are joined by ed the university of washington, one of the top science for amazon and microsoft are essentially a duopoly in seattle. Where the advantages of that and what are the risks . Emily you jused you just saw n announcement recently. They need to geographically diversify. Emily is that a blow for the city . Ed in many ways, yes. Phenomenologist like microsoft, but we cannot be a one horse town and amazon cannot be a one town horse. To me, the important thing for us in seattle is to make sure what car jeff bezos can drive here and how can he grow and how do we keep that going . The fact that they need to geographically diversify is pretty obvious. Emily yes. Ed at the same time, we want them to get going in seattle. It was announced they would lease another 700,000 square feet downtown. It has been an amazing contributor to our economy. Emily i do you have been looking at tops policies any impact trumps policies and the impact. Ed in the longterm, we know the statistics on the entrepreneurs in this country. A stunning proportion of them were born elsewhere and moved here. People from everywhere over the world come to the u. S. To get education. They historically have stayed here and build the companies and driven our economies. We had now telling him we dont want them anymore. This is crazy. It has to change. Seattle has been at the leading edge of this. Amazon was one of the First Companies to join the challenge on the travel ban. Microsoft and amazon have been committing to provide defense for its employees. This is critical. The Tech Industry is critical to universities as well. Emily setting of students, ai and Cloud Computing and Machine Learning, these are areas that are exploding. Do we have the resources to train students to be ready for these jobs . Or is there a coming skills gap . Ed there is a huge skills gap in this country in Computer Science. Right . There is a workforce gap in the state. The gap between degrees granted and jobs filled is four times greater than all other areas of engineering. Emily in washington . Ed in washington. 73 of all of the newly created jobs in the next decade in all of stem will be in computing. 55 of all available jobs, whether newly created or of a available, due to retirement. We have to educate them better and faster and grow our great companies. Emily i know you are incredibly passionate about diversity and Computer Science. Women in Computer Science, what is the progress you are seeing . Lets start there. Question. S a great it is being taken far more seriously by more universities and companies. University of washington has a long way to go, but we graduated twice as high a percentage of women in Computer Science last year than the national average. Not nearly enough, but we are working hard at it. Melinda gates has taken a challenge a year ago it was the keynote at the celebration last week of women in computing. Why went to the first conference in 1994, there were 500 attendees. 15 or some of us were men. This year, 18,000 people. Emily what are the challenges that remain . What is not going right for women . Ed let me tell you what i think the great hope is first of all. Code. Org, which is a seattle organization. In the first hour of code that i ran several years ago, more women and underrepresented minorities spent one hour programming than the entire fiftyyear history of the field. A groundswellte from Elementary School of students who demand Computer Science and it will change education. Interesting young women in this is important. Computer science spent 50 years making things smaller and faster and less expensive. It has been a great run, but that does not speak to making society a better place. The next 50 years of Computer Science will be how we Impact Healthcare education, energy efficiency, the developing world. That is what Computer Science is about these days. That is going to attract a far more Diverse Group of people for the field because they care about societal challenges, not about faster, smaller cheaper. Emily what is the responsibility of the industry . On impacting the pipeline. Ed lets see. I think one Thing Companies can do is ensure they are great places for everyone to work, and google and microsoft have done it. You to pick up the newspaper to see how the newer Smaller Companies are doing. It is a complicated thing. Entrepreneurism brings people who push the envelope, and they may push the envelope in terms of their corporate as well. These are great jobs that everybody is welcome. The most important thing to me is that we need a Diverse Group for Computer Science because we are in a creative process. We are crafting, engineering complex systems in a creative process, and if there are reports of you that are not represented or underrepresented come you get a worse outcome. There will be problems you dont consider so even if you dont care about social equity or anything like that, if you are just a capitalist who wants to sell more stuff, you want the workforce. Emily you are sticking with us for the next block. We will be back with more from the geekwire summit. We will be talking to microsoft president brad smith about these issues and more, coming up. This is bloomberg. Who knew that phones would start doing everything . Entertaining us, getting us back on track, and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Mark i am Mark Crumpton in new york. You are watching Bloomberg Te