Transcripts For BLOOMBERG Bloomberg Technology 20171216 : vi

He also he also referred to messages from fbi officials criticizing him as disgraceful. Female members of the he also referred to messages from fbi officials criticizing him as disgraceful. Female members of the Congressional Black Caucus want gop leaders to allow doug jones to join the Senate Immediately emily im emily chang and this is Bloomberg Technology. Federal investigators confirm at least one criminal probe into uber. Well talk about what it means for the worlds most valuable startup. Plus, the Worlds Largest Futures Exchange will begin allowing bets on the worlds biggest cryptocurrency. Whether we can whether we ca plus, another firr spacex. Elon musks other Company Since a recycled rocket and recycled representing a former security analyst detailing some business operations. This may be a key piece of evidence. The letter was supposed to be unsealed at noon local time. It has not happened yet but it could happen at any moment. Joining us is j it could happen at any moment. O. Our guest host for the hour Bloomberg Contributor David Kirkpatrick. Thank you for joining us. What do we believe is in this letter and why is it important . Joel we know a lot about the letter because jacobs testified in court, and a lot of the letter was read into courtroom testimony. We know that it alleges that uber engaged it makes a wide array of allegations, some of which he walked back, so we should be careful with that. We know at the very least it alleges surveillance on competitors, on other riders, for example, and we know they engaged in some web scraping of competitors, peeling information from foreign competitors off the web. He has walked back very significantly the trade secrets claims. He alleges there was a group within uber designed and built to steal trade secrets. This comes from the lawsuit in waymo alleged uber to have stolen trade secrets. Pressed in court, jacobs walked that back and said he did not really know for sure on firsthand knowledge that trade secrets were stolen by this group. It is kind of ironic because that may prove actually useless, this letter, but it exposes all these kinds of problems, some of which are true. Emily how does this play into emily how does this play into the criminal investigation . There are a lot of investigations. Joel i think bloomberg has reported as many as five. This comes from a criminal investigation. Stolen trade secrets. Pressed in court, jacobs walked one of the criminal investigations we know of is of possible trade secrets, but we do not know that this letter is actually related to that particular investigation. We do not know that. Another important point to consider is there are about 1000 people working security at uber, so the idea that one person would have access to all these different projects and would know about them with firsthand knowledge is also coming into question, the idea that jacobs would know about Market Analytics but also surveillance efforts based on government is questionable, so theres a lot of backandforth on how much he knew, how much he would have had firsthand knowledge of as opposed to just overhearing things in the office and maybe taking them out of context. Emily uber 2. 0 new uber has said over and over they have new leadership, changing the way they do things and will be more transparent, but how much do these old skeletons in the closet hurt the uber of today . Clearly, the waymo lawsuit continues to hurt the uber of today, but if theres multiple lawsuits, probably more than we even know about. Theres a macro question, which is how much the old culture, even if it is now dispensed with, will hurt the future uber, and my guess is it will hurt the future uber considerably, despite the fact that current leadership seems to be far more responsible in the way they run the company. Emily how much will this letter hurt uber versus help waymo . Joel i think it hurts uber a lot more than it helps waymo for the reason david was talking about. You can see uber trying to clean house and clean up these lawsuits and the litigation, but its like every time this another skeleton in the closet that reveals on the problems. It is important to point out that the competitors that the letter alleges surveillance of are foreign competitors. Were not talking about lyft. We will see how much turns out to be true, but we are talking about trying to get into foreign about trying to get into foreign markets. Their problems in london, for example. Just as they are trying to make inroads and are desperate to do that, those countries are now learning about these practices of their Companies Based in those countries. Emily integrity again coming into question. I know you have been on the phone all day long. How do people feel about this within the company . How disruptive has this been . Olivia people close to uber feel devastated by this because they feel their job was to protect employees, to do everything they could to protect uber from other companies they say were spying on them and that that was their intention and that this is being taken out of context, but violating a law is violating a law, whether you did it for benevolent reasons or to protect your own employees, so i think they will have to do with a lot of questions. Therell be a lot of questions about what they have been doing behind the curtain in secrecy that may or may not have been illegal or ethical. Emily you have covered Silicon Valley technology for many years. Im curious how uber fits into the pantheon of Silicon Valley shakespearean dramas. Every day, there seems to be a new chapter that makes the whole tale more dramatic. Does it cap them all . David sadly, i would have to say that uber appears to be just david sadly, i would have to say that uber appears to be just about the most unethical Large Company we have seen in Silicon Valley in its former incarnation. It is clearly reforming, and i admire that, but the uber that existed under Travis Kalanick was apparently a lawbreaking organization or certainly an unethical organization that took the risk of breaking the law very readily and did not abide by normal standards that we would consider what any company ought to abide by. I think because of that there are a lot of skeletons, as i said before, likely to continue coming out of this closet, which is tragic because its a Great Company in terms of the service it provides. Emily right. Well, i know you all will keep us posted. Joel, you will be watching for that letter coming out any minute. Thank you so much. David kirkpatrick, my guest host for the hour, you are sticking with us. Tencent has agreed to buy a 5 stake in a chinese superstore costing about 39 million following alibabas 2. 5 million purchase of a stake in a Chinese Grocery retailer. Its chinese fourth hypermarket operator and already has a tech example. Just as they are trying to make industry investor. Coming up, bitcoin closes at a new record right before futures start trading. We will talk about the continued crypto craze next. And bloomberg tech is Live Streaming on twitter. Check us out at 5 00 p. M. In new york and 2 00 p. M. San francisco on weekdays. This is bloomberg. Industry investor. Emily bitcoin continues to be in the spotlight, closing out the week at 17,630. And the Worlds Largest Futures Exchange is launching its own competing bitcoin product on sunday. Competing bitcoin product on sunday. What should we expect . Joining us in the studio is adam white, formerly the Vice President of Business Development at coin base. Us is mywith u is mand still wh guest host David Kirkpatrick. How do you see the week that was . Adam it has been an exciting week. Our headquarters is in san francisco. We have had teams working 2 47. We think this is a really momentous kind of weak indication for this space and we are focused on keeping our exchange of and stable. Emily what are you expecting with the cme . Adam more and more institutional interest. What is exciting watching the maturation of the space is its really driving in a whole new level of customers for us. We are moving beyond retail traders, the smaller crypto hedge funds and we are seeing mainstream wall street firms like hedge funds, Market Makers entering the space and entering very quickly. Emily has the institutional interest, the institutional action on bitcoin over the last couple of weeks increased your belief in the legitimacy of bitcoin and cryptocurrency in general and the future of it . David i would say certainly it makes me more confident there is some kind of future. I never questioned the legitimacy of any of it, but why this particular asset should have this particular value strikes me as hard to answer. I would actually love to ask adam if i could, given that it seems to be sort of perceived bitcoin, that is as a store value and speculative investment and a new kind of commodity, is it in your opinion likely that could remain the case even as bitcoin still has relatively little utility outside of the tradable asset world . Adam i think its a great question. I would push back and say i think we are seeing everyday greater and greater utility in this asset class. Thek we are seeing everydaybitf dozens, if not hundreds of assets out there. Right now, most people are using it as a store of value, in this a lot of speculative value based inside of that as people look at it as a way to send value to anyone anywhere in the world just like sending an email. That, to me, is incredible and powerful, but you are right we are in the early days. We are seeing a lot of developer interest. We are seeing more and more use cases. We are not quite there yet, but we are heading in the right direction. This interestf does affect coin base. At one point, you guys with the Biggest Cryptocurrency Exchange out there. How does this hurt you versus help . Adam i think we have a longterm macro view on the space. Market share numbers are going to change. What is important to us is we are offering a safe and trusted platform to really attract the professional trader. Earlier this week, we were the Largest Exchange in the world and we did 4 billion in trading in one span, which is a huge compliment. We want to be trading in the tens of billions before we can start to say we made it. Emily give us numbers on the growth you are seeing on your platform. Adam we talked about Trading Volume and seen that grow by orders of magnitude. We have also seen our user count increase by tens of thousands of customers, but we are also watching the activity, right . The Bitcoin Network itself, which is not a part of coin base, but the larger ecosystem, continues to see more daily throughput, more transactions, so not only is our Company Growing with the industry, but so is the technology itself. Emily the head of facebook messenger, formerly head of paypal, has joined your board. What does he bring . Adam he brings a lot of expertise and strategic vision. Just coming out of a meeting today of which he was a part, hes a fantastic resource for us to call on. He has been through hyper growth and scaling. He is really helping us make sure we know what we are doing and heading in the right direction. Emily what do you make of the market position . Is it cap into acceptance by facebook . Absolutely, yes would be my answer to the latter question. Not only is he someone who has experienced hypergrowth and did a great job creating and Building Companies in the past, but he is explicitly a Digital Transactions and Digital Currency kind of expert and his original startup that took him into paypal was a mobile money platform, a mobile payments platform. Running paypal gives him a lot of relevant background. The board of coin base is super impressive with the addition of marcus to fred wilson and chris dickson, i have to say, and others. That is a great, great board. Can i just ask who are buying bitcoin . I still dont get it. Im sorry. I do want to let you go without knowing who are these people that are paying these prices . Are they just hoping it will go up, or are they really rational, thinking, knowledgeable investors . Adam i really think they are the latter. We see growth from both sides of the table. We see institutions beginning to look at this as an asset class. The example of crypto derivatives, the legitimacy that brings and the need to trade on the stock market is driving a lot of this growth, but we are seeing the average retail individual say this looks like an incredible new technology. What is the easiest way to get started, by buying or selling maybe just 50 of Digital Currency . They are coming to us and doing that and we are tying to make it easy and safe for them to do so. Emily thanks so much for stopping by. Its a long couple of blocks it takes you to get here. I really appreciate it. David kirkpatrick, youre sticking with us. Coming up, blasting off into outer space thanks to jeff bezos and elon musk. We look at what the billionaires are sending into the great beyond next. This is bloomberg. Bloomberg. A launchpad. It will be reused for a future flight. Not to be outdone, elon musks 17th spacex rocket launch had its own milestone. Spacex sent a previously used rocket and recycled cargo capsule on a mission into the great beyond for the first time. The mission took place at Cape Canaveral air force station in florida. The payload 5000 pounds of research, supplies and hardware for the crew at the International Space station. Max from Bloomberg Businessweek joins us now. Along with David Kirkpatrick. Why was this launch in particular so significant . Max for spacex, any launch that goes well is significant, but this one is sort of a big deal because it proves the idea that elon musk has been working on for the last decade and a half, which is that rockets and spacecraft can be reused successfully. Not only were they able to land this thing, but this was a used rocket and a used spaceship, which is now making its way into the International Space station. It is the first time for that. That suggests that not only can they land these things, but they can use them again and again, so it is a big milestone in terms of trying to get the cost of launch down, which is a big part of spacexs business, a key part of their profitability or hopeful profitability we do not have much information about their finances. And as far as elon musk is concerned, proof we can get to mars or have manned space travel in the future. Emily exactly, thats my next question. This is a very ambitious plan here in this is just one step. What is the next thing that spacex needs to prove . Max they need to show they can do this over and over again. That is a big part of aerospace in general. The next big launch is this new rocket, the falcon heavy, which is a rocket big enough to theoretically take people to the moon, and we also have additional tests of the current rocket we saw with people in them. There was a report earlier this year that they were going to try to have a couple of space tours go into the end of next year. Again, with rockets and stuff, deadlines are a little bit fungible because it is somewhat dependent on conditions and stuff like that and also, elon musk has a tendency to set ambitious timelines. We will see when those things actually happen, but that is what is coming down the pike. Emily i know youre very impressed by these launches and this one in particular. Why you go . David not only was it used rocket and used capsule, but it then landed back on earth successfully so it could be used again. Clearly, this is going to radically reduce the price of spaceflight which enables things we previously were unable to do because it just was not affordable. To me, this is another feather in the manyfeathered cap of elon musk. To change the metaphor, the halo around this guy continues to grow and iand his Companies Continue to do the impossible again and again, and i continue to be amazed. Emily we do not know much about spacexs financials. The name was floated as an upcoming ipo candidate, when we would learn more if such a thing happened. What is the likelihood of that . Max there were rumors earlier in the year that spacex quickly beat back. I have said is nothing in the cards immediately, but that said, the general consensus is the economics from this company are pretty good. When you look at the market share of the launch businesses from the kind of launches they are doing, its pretty good. Unlike tesla, which is really just getting its economic engine into production now, spacex has had a pretty good business, and every time they have one of into production now, spacex has these launches that work, it is further evidence that they are making progress. I think really the one barrier to them going public is probably elon musk not wanting to run a Public Company wanting to put that off as long as possible. Emily for good reason. Thank you, as always, for stopping by. David kirkpatrick, our contributing editor, you are sticking with me. We are going to talk about the future of tech in 2018 coming up. This is bloomberg. Alisa you are watching Bloomberg Technology. Lets start with a check of your first word news. The ap reports a federal judge has ordered the Trump Administration not to enforce rules that can limit female access to free birth control. The house in Human Services policy would allow businesses to opt out of