Transcripts For BLOOMBERG Bloombergs Studio 1.0 20171221 : v

BLOOMBERG Bloombergs Studio 1.0 December 21, 2017

You were 12 years old and moved to tennessee. Tell me about what must have been Culture Shock in that moment. Kaifu i did not speak a word of english, but people were extremely friendly come a southern hospitality. Friendly, southern hospitality. I made a lot of friends. I was reading my chinese books. Emily you caught up, went to columbia, phd at carnegie mellon. It were working on speech recognition, which is now the forefront of new technology. Kaifu also Artificial Intelligence, machine learning. It was an exciting age when there is so much unknown and naive optimism, but it is gratifying to see that coming to the real world. You join apple in 1990. How closely did you work with steve jobs . Kaifu i always say i was there between jobs. , and after ie left left, he came back. We did have some intersection. He did call me to see if i would go back to apple, but at that time it just looked too scary. Applesy was predicting doom and i got this job offer from microsoft. Emily you went on to work at microsoft in beijing, then google. Microsoft was not happy, and they sued you kaifu . Kaifu thats right they sued you. Kaifu thats right. Everybody was reporting it. I could not escape it. I had a flight and said i was going to get on the plane and read the magazine and take a break, and the magazine was handed to me. There i was on the cover, the lawsuit, but of course google and i had done nothing wrong and to munch two months later was allowed to go to work at google. Concerned youre would take intellectual property and things you had worked on, right . Claim, butt was the i was working on something totally different. Afraid of further exodus. They felt that would be the best way to stop the next 5000 people from going, but that did not work. Emily google faced its own challenges in china. When you were running google in china, you got shut down. Kaifu we made a decision we would comply by government law. That allowed us to grow our toiness from 9 market share 24 and search revenue from nothing to almost 1 billion, so i thought we were given space to do our business, but ultimately i think the legal restrictions and googles values didnt allow google to continue to operate. Down was theg shut beginning of a series of shutdowns. Facebook and twitter were blocked. Kaifu none of these companies would have succeeded in china because American Companies were just too far removed from the chinese users needs. Google agreed to create a chinese interface, but that was in the way of the Silicon Valley way of the world where one ,latform would serve the world and that egocentricity would have caused every American Company to fail in china. The new companies that rose up in china in a very tough competitive environment, i think wechat is a better product than thebook messenger and chinese Payment System fully connected, frictionless, micropayment come up here too. Is clearly better than paypal and credit cards. Many people compare it with gladiators in the colosseum and i am afraid the Silicon Valley companies are not gladiators. They would get killed in china. Emily he left google in 2009, then google left china. What happened. . Aifu i was surprised New York Times called me and asked me for a quote. They sit google just left china. I said i had no idea. I cant give you a quote. Then i read about it in the news. Didnt want to respond to the censorship demands of the Chinese Government. Was that the right call . Kaifu it is hard to say what is right or wrong. Google is a valuecentric company, so it will do things according to its values which we all respect, but on the other hand makes it impossible for the company to do business in china, and i would prefer to seek wouldment, and engagement give users more choices, and that would ultimately i think lead to the competitiveness and better products, but that requires following the law, and if you choose not to, then i guess you would have to exit. Emily do you think a google will return to china . Butfu it is hard to say, the Core Products cannot return and less they follow laws and regulations. Some secondary products, facebooks oculus is launching in china. I think some of googles new products that are maybe not as core could potentially be launched as an experiment. I think google is a Great Company and i would like to see them launch products everywhere. Emily facebook has been making overtures, shaking the right hands. Instagram and facebook are still blocked. Do you see a scenario where facebook can have a substantial presence there . I wouldif i were mark definitely launch oculus and work hard and getting more Chinese Companies to see facebook as a platform for ads so that Chinese Companies can project positive images worldwide. I would consider if i were google or facebook launching the open source ai projects in china. China wants to be a world leader in ai, so there is a case where the interests are aligned, so it is always better to start in an area where the interests are aligned rather than going to an area where there is conflict and values. In values. Emily when you think of the approach the Trump Administration taken to the Chinese Government . Emily president xi jinping and the government have been more rather than less strict when it comes to the internet, shutting down vpns for example. Is it a mistake . Kaifu i dont know what the causes are of this. Access the world information. Think one thing important to realize on the u. S. Side is dont assume every chinese to get onlly wants facebook and google. If you do a survey, the great majority dont know these sites exist, and those who do generally think they can do without them. I think people have to understand that the chinese substitutes are really, really strong. It is much easier for a chinese person to build a virtual Friendship Circle around wechat down for an american person on facebook. It is much easier for a chinese person to use the phone to Order Services and buy books and pay other people money, so the chinese internet has become an easier to use set of tools than the american internet. Emily what do you think of the approach the Trump Administration has taken towards the Chinese Government . Kaifu i would be concerned a and president trumps vis immigration policies. The core competitiveness of america eyes on the brilliance of the universitys and researchers and americas ability to draw the top talent to the universities here, and a certain percentage will stay, and i was a case in point. Visas became difficult, that will be a huge longterm negative differentiator for america. Emily is china leapfrogging the u. S. When it comes to Artificial Intelligence. Ahead ofoogle is well the rest of companies, and american diversitys are ahead of chinese universities and Companies Come but china has three big advantages that may give it a chance to leapfrog. Because ai isata about having a huge amount of data that you can train on and get better than it is about having brilliant minds. The second is a huge army of engineering grad students, engineering and math is the strongest point of chinese universities. In july 2017, the state council came out with an ai plan, and that is a set of policies that have teeth and are sent to all the provinces and cities with lots of funding for ai companies , so with these reasons together i think chinese leapfrog is possible. I would say it is 5050 right now whether ultimately the u. S. Or china will lead the world in ai. Emily the strategies of Chinese Companies differ from facebook amazon when it comes to the strategy itself and implementation. Kaifu microsoft, facebook, and tencent have chosen to build the powerful but ive retower kind of way, whereas alibabaamazon, baidu, are trying to take a productdriven approach. Both are interesting. I also think ill seven king up there suc worlds top talent, which is not good for entrepreneurship and an antitrust standpoint, and i think Chinese Companies probably the one part that sets them apart from the u. S. Companies is there is not as strong a concern or regard for antitrust consequences, so you see the Chinese Companies really building empires, whereas the American Companies having seen what microsoft went through with antitrust, what google and maybe facebook are going through, or more cautious of us thing with their core business. Baidu, tencent, and alibaba become substantial players and markets were google and facebook are dominant. Kaifu the Chinese Market is probably larger than the rest of the world combined. Not in people or dollars come up but if you think about the number of people who can be online and immediately be paying for something, 730 Million People fully connected can pay anything to anybody anytime without commission. In chinampanies acquiring and investing in Many Companies in Silicon Valley, it even more so in southeast asia, india, islamic world, so i think the chinesedriven outside china american challenging Top Companies is something that will happen, probably not on a one to one basis, probably not fought on u. S. Or china, because the incumbents will win, but the rest of the world it will be interesting to watch. Emily what do you make of . 10 investment in snap, buying a 12 stake . Is it part of bigger ambitions . Kaifu tencent is smart about making global investments. I think they teach a lot to the companies they invest in. And hespoken to evan really appreciates all that tencent has taught them based on chinese user behaviors, social, and things like that, but i also think evan has taught tencent through its experiences, so tencent is this for a powerful and amazing learning machine, so these investments are teaching what they know, just like tencent and facebook were , soected by yuri milner there is learning going both ways. I dont think tencent has global domination ambitions. I think they are primarily a Chinese Company, but want to continue to increase their presence and learn and teach at the same time. Emily what do you think of amazon selling part of its Cloud Business in china . Kaifu i know very few domestic Chinese Companies using amazon services. Amazon services are doing well in china for Chinese Companies that want to go overseas hummus that i think will restrict that want to go overseas, so i think that will restrict the use. In china, butds just for Chinese Companies to place ads outside of china, so if American Companies limit themselves to the outsidegoing part of china, that will be such a Small Business i dont think it is interesting. The only American Company doing ok in china is apple actually. Emily apple return to growth in china, but still face cheaper smartphone competitors come and yet now they have this 1000 iphone on the market. What is apples potential in china . Will we see it right to . Votto plateau . Kaifu i think overall apple is gearing up for some exciting , iducts, and i think those think those may take it a step xiaomif the competitive, and others in china, so i am bullish because i can see apple building these great leapforward from products, but be on the phone it is tough. Beyond the iphone it is tough. Emily how much is devoted to chips manufactured in china . Hardware isybodys manufactured in china. That is currently chinas competitiveness. Some companies are beginning to come back to manufacturing in less. S. In the humancentric labor. I am on the board of foxconn. Foxconn has built a number of factories here, so i think americas competitiveness will probably come from the automation part of manufacturing. The existing type that i think china has a lead. Emily who will win on self driving cars in china . Emily who is going to win on self driving cars in china, and why . We invested in three companies in Autonomous Vehicles. I think they all have a good shot. Nach of them has a executionoriented approach, so with Autonomous Vehicles it is important to launch, collect data, and use data to make your product better. Forave a lot of respect didi. They have a big incentive to make it work because they will lose more money if they dont replace the driver. Same with uber. I am actually a little bit contrarian in believing that sharedeconomy companies have a good shot, because they are the ones who most desperately need to get autonomous driving to work to fix their profit and loss problems. Aily you are an investor in bike sharing player. Other bike sharing players have disappeared. Do you see these businesses going under and investor cash disappearing . Shared bicycle is a winner take all market. Consolidation has happened. There is one player left. They can kill each other or merge. We think we have the right product, so we hopefully it will be merged. Emily are they considering a merger . Kaifu not that i am aware of, but on peoples minds. Emily it is something you would like to see . Wefu as investors come up would like to facilitate the fastest road to prosperity, and we can see a single platform for shared bicycle makes a lot more money because due to competition per houre paying cents for shared bicycle rides come shared bicycle is appealing to a fundamental need for people and they are probably willing to pay one dollar per hour, and that will rapidly push the company from loss to massive profitability, and that is something they will have to think about. Emily uber pulled out of china. Airbnb is trying to charge in. What are the prospects of airbnb succeeding were many other u. S. Companies have failed . I am not a fan of like weight internet American Companies succeeding in china. I am a huge fan of airbnb. But its thin the near approach to Building Products thin veneer approach to Building Products does not work in china. Build toyou have to block your competitors, otherwise they will eat your lunch. A Chinese Company building airbnb is leasing buildings, buying buildings, refurbishing the whole place systematically and costeffectively, replenishing the refrigerators at a costeffective basis him and the Chinese People traveling are still looking for a good return on investment, lower costs, so the airbnb approach is great for chinese travelers to go abroad and foreigners to go to china, but again that is such a small market compared to Chinese People consuming products and Services Within china. Emily so you think airbnb is toast in china . Kaifu not toast. They will have a decent business, like google and amazon, but it wont will be a small percentage. Emily talk to me about sinovation ventures, more than 1 billion under management. Where do you think are the hottest places to invest your money right now . Kaifu Artificial Intelligence is our big at. We are investing in a i applied ch ford tech finte banks, customer service, ais use in health and medicine, Autonomous Vehicles. We invest in robotics, primarily industrial robotics, because i think that is where people can see making money or saving money. We are invested in new types of sensors that will ring down the cost of Autonomous Vehicles and robots, so ai is probably half of our fund, but under a high there are 67 errors we invest in. Countrieshave seen like tencent continue to rise. Where do you see the valuations of Chinese Companies going . Forfu chinas market Internet Companies is larger than the rest of the world, so current day rations roughly are one to one, the u. S. Slightly higher. 50 ink china should be higher than the u. S. When it is all said and done, so both valuations will grow. I think chinese will grow more in the next five years because leveraging all this Online Access payment to and the speed of acceleration, i think probably a reasonable equilibrium is maybe 1. 5 china, 1. 0 u. S. , company to company. Emily really . Kaifu on the other hand i see a bubble as well, so i dont say everything will continue to go through the roof. Muchwill surely put too money and companies that are not ai companies and getting double, triple valuation, and that has become rationalized overtime. Emily thank you so much for joining us on the show. Kaifu thank you. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. Kong, new00 in hong in tokyo. Welcome to bloomberg markets. Noon in tokyo. Welcome to bloomberg market. Crisco control, the bank of japan keeps policy on hold, voting 81 to stay on course. The lone dissenter wants more stimulus. Targets leaders target three battles in 2018. Risk, povertyial and pollution at the top of the

© 2025 Vimarsana