Paul pearl harbor. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti. This is bloomberg. Emily im emily chang. This is Bloomberg Technology. Coming up, qualcomms ceo opens up for the first time on the broadcom takeover. Billionisses a 105 bid as a potential lowball offer. Bitcoin roars past 16,000 for the first time. And americas aia addiction continues to hit home. Ur exclusive interview with first, our lede. Qualcomms ceo speaks for the first time publicly since broadcoms offer of 70 per share. He weighed in on broadcoms offer. There is not much more i can say than what was in the press release, which essentially is that we didnt think the offer was in the ballpark of value and there is a lot of uncertainty or at least unknown timing related to regulatory and justu look at our board, speaking as one person, its a pretty strong board. Emily just speaking as one for more, i wang in bloombergs ian king. This is the first time we are hearing from Steve Mollenkopf personally. Is this a negotiating tactic . Ian he is very careful to say, if we get enough value, but he has to say that on behalf of his company. Think , why do you what do you think is the significance of the fact that he has personally said not in the ballpark . Ian he went on in that presentation to talk at length about the way his company is running, how it will get through all these issues that it has that its stock price is at a low point at the moment. Emily you have been covering the chip industry for years. Whats your hunch on how this plays out . Ian it depends on a number of ian it depends on a number of variables. If they can get that done, then that puts them in a much stronger position. If they could get some sense that some of these legal battles, say with ian it depena number of apple, are coming to a conclusion in their favor, a much stronger position. Roadcom has emily whats the timeline for potentially closing the nxp deal . Ian he said, by the end of the year, we are kind of hopeful, but maybe early next year. , then if that happens that puts them in negotiationland with nxp shareholders. The pressure is on him to pay more. He said there would be discussions if he found himself in that situation. Emily what about the situation with apple . Thats only gotten more antagonistic. Ian it seems like just when they have uncovered every stone in the legal world to throw at each other, then they find Something Else and they sue each other for new patents they have found as recently as last week. It doesnt seem like its going anywhere. All of the analysts and investors say apple has no incentive at all to not drag this on. Emily what does broadcom say . No backing down, right . Ian we think that these people are in a better position to take this whole company forward. Its a bold statement. Pf saidon mollenko thats not really a friendly maneuver. Its not an approach we understand. Its not looking like a very conciliatory approach at this point. Emily the earnings yesterday were strong, but they do take a view of the future, but dont put a timeline on when that future arrives, when they will see increased margins and all of that. Explain. Ian the numbers were, as may have been over the last few quarters for broadcom, much better than expectations, and they said they will get better as well. But they dumbed down a little bit of the enthusiasm. We are only going to grow 5 longterm. Emily so, what does longterm mean . Ian exactly. This has been the this is their competing view of the semiconductor industry. We are a 20 growth industry over time. All these new opportunities, cars, 5g they are saying, no, dont get carried away. This is about consolidation. This is about getting the most profitability out of what we are good at. Emily i know you will keep us posted on all the latest. Ian king. Thank you. Another top story of the moment. We continue to track the price and the frenzy around bitcoin. Bitcoin had one of the wildest sessions ever, crossing the 16,000 mark, just three days before cboe debuts futures on the cryptocurrency. The rbs chair spoke to bloomberg surveillance about what is perceived as a bitcoin bubble. Im afraid that this is irrational exuberance. This is, as greenspans famous phrase he found the market cap to ongoing up after he said it should stop market kept on going up after he said it should stop. He found the market cap to we are not in a normal trading market. Even in the biggest rises, you have some people trading in and out. We are in very unusual territory here. Its a great chart, tom, but im not sure that normal, rational Market Analysis can really illuminate this well. Tom you are the most qualified person in the world to talk about derivatives in wall street. You made regulation work in the united kingdom. Should cme and the cboe should the americans derivative market make a formal market in this thing we are seeing in this chart right now . I think i would counsel them not to at this point, because im not quite sure that they know enough about what the underlying is, about the nature of the supply and demand of the underlying asset. So, i think it would be a very risky move in reputational terms for them to go in that direction now. We are understanding that, for example, the cftc are aoking at stress tests and lot of clearing before these contracts are given the green light. Could futures put an end to bitcoin if it doesnt go well . But iuppose it could, just dont know how you would price of future at this point. Maybe there is someone smart enough to do it, but the normal way in which you would price of future i think would be very difficult to adapt to this instrument. How do you see blackcha blockchain developing . The Underlying Technology could be used in other ways. Howard i think blockchain is much more interesting. Banks are a bit cautious about the security of it, but i do think that the idea of distributed ledger, which makes transactions and Payment Systems much cheaper and faster in real time, is a good one. Blockchain, i think has got life in it. Emily that was rbs chairman howard davies. Last month,time, is a autodesk d it is restructuring its business to focus on cloud and subscription services. We will hear from the ceo next. And Bloomberg Technology is Live Streaming on twitter. Check us out weekdays at 5 00 p. M. In new york, 2 00 p. M. In san francisco. This is bloomberg. Electricneral announced plans to slash about 18 of its power business workforce. The job cuts total nearly 20,000 this year. The new is part of ceos plan to eliminate 3. 5 billion of expenses across the company by the end of the year. Software firm autodesk recently announced an aggressive Restructuring Plan to prioritize its subscription services. It also cut more than 1000 jobs. While the company says this should streamline its business, the stock tumbled dramatically on the news. Cory johnson is standing by with the ceo of autodesk. Cory Andrew Anagnost joins us now from all the way across the street. Is such anodesk interesting company, both what the products do, the way you sell it, and the way you are changing the business. Can you describe the markets that are most important to autodesk right now . Andrew there are several markets that are core to us. We are also a big player in the Product Design and manufacturing space. Whats becoming a super important emerging market is construction. We have always been big in the a and e in aec. We are becoming big in the c. The whole industry is digitizing. If you work in procurement and design into the process, you will work a lot faster and have cheaper products. Andrew its even more than that. Construction is industrializing. Construction processes are beginning to look a lot more like manufacturing processes. Cory you guys are in the midst of this big change in the business model, particularly the move from maintenance to subscription. How thats maybe a little bumpier than you would have thought. The stock took a big hit last week. In context, youre still up about 72 for a twoyear stretch, which is a pretty good run. Andrew we announced rate results. We hit our goals. We exceeded a few. Cory 5 sales growth year over year. Andrew we returned to Revenue Growth. We were going through the dip. Now we have returned to Revenue Growth. We did exactly what we said we were going to do. I just think people expect us to do a little more. Cory why would a customer strip switch from maintenance to a subscriptionbased fee for your service . Andrew most of our customers are seeing Companies Like salesforce, workday, office 260 360. The way they buy software is subscriptionbased. Yeah,ustomers are saying, this is the way the Software Industry is going, so there is not a lot of resistance. Maybe from the smallest customers, but not the big ones. Cory i talked to a lot of people, getting ready for today. One of the questions i kept hearing was about the timing of the restructuring. Why do it now, and what does it have to do with your longterm 2020 Free Cash Flow goals . Andrew there are a lot of conspiracy theories out there. One of the things there is that famous john f. Kennedy quote, the best time to fix your roof is when the sun is shining. We knew we needed to invest more strategically in digitizing the company and in particular, in construction, the money wasnt where we needed it. We are going to invest every penny back into the company in the next six to 12 months. This is a reshuffling of where we are spending the money. Cory what does that mean for headcount . Andrew we will be as big a company a year from now as we were before the restructuring. Cory where do those resources have to be . Andrew we had a bunch of initiatives that werent core to what we were trying to do, driving the subscription transition, digitizing the company, reimagining construction and manufacturing. We essentially took out entire projects, and we are shifting the money over to those things that are important. Cory there is concern over the subtraction number. Projects, and we are shifting the money over to those things just how many customers the subscription number. Just how many customers are joining the subtraction service. Talk to me about the late about what the story is there. Andrew we delivered a solid result on the core, which is really what matters. You cant deliver the renew the recurring Revenue Growth without thejust how many custome subscription number. Strength. Cory you get down to a unit number, revenue per subscriber, maintenance per subscriber. When those neighbors come down those numbers come down, that starts to matter a lot more. Andrew heres the exciting thing, the revenue per subscriber on the subscriptions that matter is up 20 yearoveryear. What they got spooked by, and its natural, because it is a complex transition we just said we are going to do fewer clouds subscriptions and those cloud subtractions arent important to our twoyour goal because twoyear goal. They are small relative to our core, small revenue per customer. But they are going to be bigger 3, 4, 5 years out. They are small relative to the twoyear goals. Development, innovation, the kind of things you want to innovate around . In terms of your investment . Andrew we will be investing a lot in reimagining how people do construction and manufacturing processes. You probably know this. Construction is the lowest invested in i. T. Right next agriculture in the u. S. In europe, its below agriculture, i think. This Industry Needs to be transformed, and its investing crazy in Digital Technologies now. So, when you look forward, we are going to be helping our construction customers become manufacturers of buildings. Thats an exciting opportunity. Cory everyone watching this right now can look out at the majors these major cities, cranes allywhere, over downtown san francisco. 30 percentaverage, or 40 of what you see on that site is wasted. Cory i appreciate your time. Glad to have you talking with us, ceo of autodesk. Back to you. Emily thank you, cory johnson. Coming up, at t and the department of justice step inside the courtroom. What a federal judge had to say about the impending antitrust case. And a feature i want to bring to your attention. Our interactive tv function. Find it at tv on the bloomberg. You can send our producers a message, play along with the charts we show you on air. This is for bloomberg subscribers only. This is bloomberg. Emily disney is tapping into the tech world. Luminaand the head of will join the board on february 1. The expansion of the board coincides with talks disney is holding to buy the entertainment assets of 21st century fox. Ceo bob iger is scheduled to require retire in july, 2019, suggesting that successors will have to be vetted next year. At t and the department of justice squaring off in court. A federal judge says the antitrust lawsuit will go to court next year. The doj is trying to block at ts takeover of time warner. Intelligences Senior Analyst for litigation joins us now. What happened in the courtroom today . I wasnt actually in the courtroom today, but i did get a pretty good run down as to what went on rundown as to what went on. The judge said, im setting march 19 as the trial date. This is between what the company had requested and the department of justice had requested. It is quite a bit closer to the company prostate companys date. What happens between now and the trial start date . Normally what would happen next is the companies would file an answer to the department of justices complaint, but they jumped in and did that right away, so thats finished. Most of whats going to go on between now and then is additional discovery, the collection of data, this documents, and statements. Most of whats going to go on between now and then is additionalits remarkable deparf justice might need to continue to do more discovery here when theyve already been investigating for a year, but they have said there is more they think they need in order to go to trial on this case. Of course, the companies themselves havent really engaged in that kind of investigation at all and will be seeking documents from the department of justice, as well as possibly other third parties. Emily how many days is the trial likely to last . Jennifer the judge estimated about three weeks. I took a look at the last three trials in which the department of justice was challenging a deal. The last one being about a year ago. It was the merger of two radioactive Waste Disposal companies. In that case, the trial lasted just a couple weeks. Ive seen them last about four weeks, two weeks to four weeks. This judge estimated about three weeks, right down the middle. Emily is there a possibility this case could settle before it goes to trial . Jennifer settlement talks can be ongoing at any time in any litigation. They can occur in the middle of trial, the eve of trial, or right at the end of trial. I imagine the department of justice and the Companies May talk a little bit, but it seems like they are at an impasse, and im not sure how that can be bridged. If the department of justice is looking for structural remedy, as in selling off assets like theer or directv, and companies are only willing to engage in behavioral remedies, which would regulate their conduct after they have merged, i dont see what the middle ground is there, and it doesnt look like a settlement can be reached. Emily jennifer, i understand you have closely looked at arguments on both sides. Who has the better case . Jennifer my feeling still here is that the companies have the better case. I think the department of justice is sort of going against their own guidelines, going against i wouldnt call it precedent, because it is not technically president but going against the practice of both the department of justice and the federal trade commission for about the last 40 years in their treatment of article mergers and in their treatment of the procompetitive effects of those mergers, as well as the kind of remedies they enter. Where vertical deals like this one, which is not combining competitors, have raised antitrust harms in the past, its usually been remedied with behavioral conditions, like the companies have offered in this case. Emily so, does that lead you to believe this is politically motivated . Jennifer you know, i think that is really just a difficult call to make. I just cant say. Because there is validity and feasibility in the department of justices arguments. A vertical deal can raise the kinds of harms that the department of justice is alleging here, and it really comes down to what the Economic Analysis looks like. We would really have to get into the weeds to understand that, and we dont know what theyre it cant miss have done and what what their economists have done and what those studies look like. Will it be profitable in the long term for the company staying gauge in a strategy where they withhold their content from other distributors, even if they take a shortterm hit by doing that . Its going to come down to that Economic Analysis and what the companies documents say. Emily i know you will keep us updated, jennifer rie. Thank you so much for breaking it all down. Coming up, the Holiday Shopping season is underway as the fight for your living room heats up. We will talk to the brain behind amazons alexa on its new key features. Check us out on the radio. Listen on the Bloomberg Radio app and in the u. S. On sirius xm. This is bloomberg. Alisa im Alisa Parenti in washington, and you are watching Bloomberg Technology. Lets start with a check of your first word news. The house has passed a stopgap spending bill. The measure passed mostly along party lines. It will keep the government running through december 22. The senate is expected to vote on the bill in the next few moments. The house vote came after President Trump and congressional leaders in both parties met to discuss a range of unfinished, bipartisan business on capitol hill. Officialpalestinian says representatives will not meet with Vice President mik