Steve ballmer. And we will hear from the ceo of starbucks to hear how the company adapts in the age of technology. This week we took Bloomberg Technology to seattle for the geek wire summit. We spent time with the biggest names in the region including amazon, microsoft, and starbucks. Lets kick it off now with my exclusive interview with amazon Vice President of alexa devices. She told us that they would not rule out partnerships with major rivals like apple and google if it means improving their voice activated technology. I am focused on trying to reduce friction for customers and drive towards what we call our Customer Experience north star. Really the idea there is that alexa is more humanlike. So, it is conversational. So we can shorten the path from where the customer is starting and where they want to be with less and less work on their part. Emily is alexa going be responding with the uhhuhs like in the snl skit . May be. I joke that that is Something Like a human would do. Emily when it comes to understanding human language, whether it is an adult talking or a child talking, or are we there when it comes to how much improvement can be made . We are definitely not there. It is day one, super early stages. We like to say we are on the Tipping Point of machine learning, Artificial Intelligence. I think we will see a lot of improvement over the next few years. Emily how so . I think the technology is there. Having, ourselves included, but developers being able to build features in the cloud which will allow for a lot of computer power, and i think you will see a ton of innovation out of that. Emily what is missing from alexa . What is missing . I think part of it is that north star human conversational behavior. Alexa and the skills we have today are great at reducing friction and making the Customer Experience very delightful, but we still have a long ways to go to make it an even more robust experience. Emily you recently partnered with one of your biggest rivals, microsoft and cortana. What do you see Customers Using cortana that they are not getting out of alexa . Is it office and email . It is definitely in the space of productivity. I am really excited to see this launch. For us, we see this world where there will be multiple ais. You will have ais that are expert in different domains. It is kind of like the internet in a way. Customers will be able to search out an expert in a space, and then you will have a group of ais who could handle your question. Emily will we you see more partnering with other rivals like google in the future . Why not. Emily how do you make those calculations . For us, it is very customer focused. We are super passionate about the Customer First approach. We work backwards from that. If we believe it will benefit customers and improve the experience, we will work towards it. Emily is alexa at the center of is the vision for alexa at the center of a network of home devices, or is it the device in the home . We see alexa being an ambient experience in the home. You know, customers can invoke this experience wherever they are. We also see that going outside the home. We have announced partnerships with automobile manufacturers, so alexa will be embedded in some of the cars. Bmw is one of those. We also have partnerships for when you are traveling on business and you are checking into a hotel you can experience alexa there. So we see this going beyond the home as well. Emily do you see Home Security potentially as an area of interest . Potentially. Emily what do you mean by going beyond the home . More like the auto space or hotel rooms. Emily amazon got a jump on the market, but now other competitors are there. What are you doing to stay ahead . Is there anything that you see your rivals doing that is impressive . I am impressed with a lot of the innovation happening in this space. We are super focused on building new features and experiences for our customers. We stay very focused on that. We think that, in the end, the customers will win. Emily that was the Vice President of alexa and echo devices. Still with amazon, we spoke with the head of the companys web division says the ships of the cloud is beginning. Sales of the aws units surged. I spoke exclusively with Amazon Web Services ceo and asked about amazons explosion in the cloud. Did it surpass his wildest expectations . It has certainly grown very fast, and i do not think any of us had the audacity to predict it would grow as fast as it has. Amazon, which is a very strong we always believed that a chance because inside of amazon, a Strong Technology company, we had a lot of Technology Company, in turn Development Teams that want help moving fast from our costeffective applications on top of an Infrastructure Technology platform. The fact that amazon wanted this made us think third parties would want it. Of course, i dont think we would have predicted that it would be a 15 billion dollars revenue business growing a little over 40 year over year. I do not think we would have predicted that we would have as that several times the business as the next several providers combined or that we would get a six to seven year head start. Emily of course, your competitors want this, too. How do you make sure that amazon stays in the lead position . There is a few things. It is not a surprise to us that every Large Technology company in the world is interested. It is such a great Value Proposition for customers, and that is why it is being adopted so fast. Others will want to participate. I think there are some real differences between the platforms today. The first thing is aws has a lot more functionality than anyone else. We are also iterating at a faster clip. That gap in capability continues to extend. I think there are also different ecosystems around these platforms. It is not just that thousands of System Integrators that have built practices around aws, but most isps will adapt their infrastructure around one particular infrastructure platform. Some will do two, and only a few will do three. And they all start with aws. We have a significant maturity position. We have an expression we use internally that says there is no compression algorithm when it comes to experience. You just cannot learn certain lessons until it comes to the scale. With several times besides business of the next 14 providers combined, they havent learned the lessons yet, so you see that in a variety of infestations. Emily you just added ge as a customer while at the same time losing spotify in bank of spotify to google and bank of america to microsoft. Tell us about the lengths you are going to to keep and maintain your customers. We have millions of active customers. The way to think about a customer is a nonamazon entity which uses our platform over the in the last 30 days. They really span the gamut. Most of the successful startups have built their businesses completely from scratch on top of aws. These are Companies Like pinterest, airbnb, slack. Over the last three years, the enterprise and adoption has really increased with the cloud and aws. You see every meaningful vertical business segment using aws. If youre talking about oil and gas, shell, bp, and Financial Services capital one, in manufacturing you have ge. They have been working with aws for a long time. They are moving 9000 applications to aws. Technology, netflix runs everything on top of aws even though we compete with them in our video business. In the public sector, we have nearly 3000 Government Agencies worldwide using aws. We just have a lot more customers in every imaginable segment than you will find elsewhere. Emily that was the ceo of amazons web services. Coming up, we have more from our coverage of the geek wire summit. This is bloomberg. Emily qualcomm was accused of fined a record seven and 717 million this week. Qualcomm was accused of violating antitrust rules in taiwan and collecting licensing fees from local companies at that time. Qualcomm disagrees with the decision and intends to appeal. We have more from our geek wire summit in washington state. I sat down with brad smith to talk about microsofts impact in seattle and started by asking about microsofts reaction to President Trumps stance on issues like immigration. Also with me, a longtime Computer Science professor at the university of washington. Daca is an issue we believe is important for the country and to our business. In our industry, we critically depend on having the best and brightest. Many of the best and brightest are among these 800,000 people registered under daca. What we said was, if the government seeks to deport any of our employees, any of the 44 microsoft employees who are daca registered, we are not going to sit on our hands and watch. We are going to help them get legal counsel. We will be by their side. We want our employees to know that we have their back. Emily microsoft has a history of challenging the administration where you believe it is warranted. What are your main concerns with the Trump Administration . We have a history of working with and challenging every administration. We sued the executive branch for four times when president obama was heading it. In part we are continuing some of the debates that started in the last administration around National Security and privacy and protection of customers. Certainly immigration is a new and more challenging issue this year. We stepped forward in the wake of the travel ban, and we step forward again in the context of daca. We believe we need an immigration system which is in which is enforced. It needs to be balanced, but we also benefit in this country when some of the best and brightest in the world, and work by our side. Emily are you worried up about any sort of retaliation or blowback the federal government . Have they come to you and said what he you doing . The good news, in our perspective, if we are principled and explain things clearly we never make things personal. We stood up strongly for daca. I went to a Virginia School with with ivanka trump to stand up for computer slants. Computer science. Our view is simple. We will stand up where we can instead of our there we should. Emily what do you have to add . I have nothing to add. Rod said it perfectly. Brad said it perfectly. This is an important issue, and microsoft is always very principled in their actions. Emily we were talking about fake news early in the show. Facebook, google, twitter, all were called before congress to answer for these russian political ads. Have you been looking at microsoft at whether russia had he did the same thing on any of microsofts platforms . We are looking, but we have not found anything yet. I think we need to think about two things. One is, what can we learn from 2016 . It doesnt matter whether you are twitter, facebook, anyone else. The more you learn, the better you will be. The question we should focus on is not what happened in 2016, but how do we prepare for 2018 . How do we prepare around the world . There will be a new Prime Minister elected or reelected in 2019 in canada. There will be a president ial race in the United States in 2020. Lets assume that people are going to get more sophisticated in trying to abuse these social media platforms. They are going to get more sophisticated on these cyberattacks on political candidates. How do we get better as a tech sector and to get government to Work Together to use their voices to say that this is an attack on democracy and it needs to stop . Emily do you think we can trust microsoft to self police, to take on these issues . As a lawyer, i think we are going to need some congressional action here. I would agree with that. We need to accept once again that, as an industry, we have a high responsibility. We might even have the first responsibility, but it would be a great mistake to think that these fundamental, frankly illegal acts under International Law are something that the tech sector can defeat by themselves. It is like seeing people looting a store and telling the store owner to just put better locks on their stores. We need the governments of the world to rally. This is an attack on our democracy, the democratic infrastructure of our country. The government needs to come together, and the governments of the world need to come together. Emily i suggested earlier that these Tech Companies were willfully ignorant in this regard. Do you think so . I do not think so. I actually dont. The truth is that these platforms are large. There are so many different people using them, and there are so many different types of ads being purchased that i dont think that it occurred to anyone in the tech sector, the government, or the media to ask are there people from a Foreign Government buying ads . If it did not occur to anybody at bloomberg, i bet it did not occur to us either. Emily they do say that they started looking into it in june which was several months before the election, but they didnt understand at that point this scale. At least that is what they say. It is kind of like looking for a needle in a haystack. If you look at all the ads purchased on a social media sites, it is quite a big haystack. Of course, you will get better at finding needles once you learn what they look like, were to look for them, and i think as an industry we are starting to discern that. I will continue to be the voice to say we need to do more, we need to look better, and we need to look ahead, because those attacks are going to get more sophisticated. Lets not assume the government should do nothing here. Emily europe is looking at greater regulation. It could be coming in the United States. Are you concerned about more regulation coming for Tech Companies . Are you bracing yourself . I worry less about more regulation and worry more about less thoughtful regulation. I think there is a place in the world for good regulation. The whole industry is focused on may 25, 2018, which is the date next year in europe when the socalled general Data Protection regulations take effect. We will have much stronger privacy protection. I think that is good for people around the world. Anytime it is good for people around the world, that is not bad for tech. It gives us more legal clarity. If we can get good regulations, we figure out how to manage them. Emily i know you have a question. When i moved here, microsoft was 12 people in albuquerque. There was not a lot of technology here. Times have changed. Baidu become the 100 Technology Company to open an Engineering Center in the seattle area. You have obviously played a role in encouraging people to be here. Talk about coop petition. I think seattle is the Cloud Capital of the world. It is definitely cloudy in the weather, but it really between amazon, microsoft, and all these other companies. You will find an extremely fervent environment for creativity and engineering. I think we all benefit of this Community Growth in the right ways. As you mentioned, i was happy to encourage the people of baidu, we have some great relationships with them at microsoft in part it is personal, and i think as the world comes to seattle, we will have new opportunities to play a leadership role in the world. Emily amazon is your biggest rival, so to speak, and especially in the cloud. Yes. And that is great. We are in an incredibly competitive industry. The truth is that we have some of the best competitors in the world. If you want to look at competitors doing great work, all you have got to do is look at amazon and google and facebook and apple. We also work with each other apropos your point of coopetition. We do need to collaborate on problems like cybersecurity attacks. At the end of the day, if more people have confidence in the cloud, if we can move the frontier of Artificial Intelligence forward this is a big world, and there is room for all of us to be successful. Emily you may disagree with the administration on a number of social issues, but on tax reform, you might be more in line. What are your thoughts on progressive tax reform . I think we need tax reform. We have needed tax reform for a couple of decades now. It is overdue. Perhaps as much as anything as an international company, we want to see a territorial system which is like what the rest of the world has. Lets get rid of the system we have today that creates incentives for us to keep profits offshore. Lets figure out how to get money back into the United States and put it to work in the United States, and lets bring our tax system into the 21st century. Emily that was brad smith, microsoft president and a university of washington professor. Coming up, a discussion on President Trumps stance on trade. That is next. This is bloomberg. Emily chinese web search giant baidu is expanding its presence in the u. S. By creating a new base in seattle to develop ai technology. We spoke with mr. Zhang about President Trump and his stance on china. China is becoming more open than ever before. The Technology Industry is growing phenomenally. Emily is that the case . When i was in china, facebook and twitter and google were allowed, but then they all got shut down. One thing is obviously there is a lot of