A direct listing, and is there really investor demand . But first to our lead. Intel disclosed this week that most of the processes running the World Computers and smartphones have a feature that makes them vulnerable to attacks. As the largest chip maker in the world, the impact is farreaching. Intel says fixes are coming over the next few weeks and it sees no Material Impact to its business. Google, which discovered the flaw, says the issue also affects other Semi Conductor firms. Microsoft, apple, and google said they secured their systems. We found out what we need to know. Google researchers found out that this might be a problem going back to the middle of last year. The idea was hey, we all get together, we all find a fix for this, then we put that fix in place. Then we go and say, look, this is what happened. We sorted it out. Dont worry. Unfortunately, news intervened. People found out. So now they are in this kind of scramble mode, where intel was forced to come out. Not have all of these fixes in place, we do not know the impact they will have on computers. A lot of concerns. Emily are there any legal issues here . Yet, one has said anything but this is the kind of thing that class action lawsuits are designed for. There are regulars that might regulators that might look at this and say, hold on, you have one or two companies where everything depends upon. Why are we giving them so much power, so much influence and the potential to damage . Emily we are talking about almost every computer and smartphone and server out there. Ian that is correct. Emily what are the potential impacts . What does this flaw mean . Ian first, no reports that anyone has exploited this vulnerability yet. Toy have all been careful say that, but you have to say well, if people did not know about it they were not working on it. Now they know about it. That is the important thing here. If you have a computer at home, you have areas on your computers where passwords are stored, where, say Encryption Keys are , stored. In the normal course of events, the programs you are using dont have access to that data. This feature of chips allows , in theory, access to that data for highlevel programs and makes it more vulnerable as a result. Emily intel says they wont have a significant Financial Impact from this. How can that be . Ian in the past, they have had to recall chips or fix patches. This time, they are saying look, this is the future of chips. This makes chips faster. Our chips work as they should. Emily another thing that doesnt look good is that intel found out about this, as you said six months ago. , the ceo sold a chunk of stock later in the year. What happened . Ian this, again, has created a lot of attention. But if you look at the filings, this was a regularly announced plan. I mean, as you know, executives clearly usually set out a plan where they say, in advance, i am going to sell this amount of shares. Deflect counts of them trading on insider information. The timing of this, whether intel really knew this was going to be such a big deal, that is obviously all up in the air and we cant say with any concrete basis that he knew this was coming. Emily bloombergs ian king. And we continued our coverage from the fallout of intels news speaking with brian white. , take a listen. What we are talking about is a feature, speculative execution, that has been in processors for over 10 years, nobody has discovered it until now, and and it is used in intel and other designs. Arm licenses their designs to apple, qualcomm, mediatech, nvidia, everyone is impacted. What i find interesting as i was brought in a couple weeks ago by these companies to get a sense, because they knew what was a big deal. In 20 years as an industry analyst, i have never seen three Companies Come together in a briefing to talk about the issue and how they are addressing it as an industry. To me, that is a very important side of the story that hasnt been told that much. There are a lot of problems, to be absolutely clear, but there are interesting ways the issue is going to be be mitigated. I think we will see more discussions from apple and other people as well. Emily do think they should have told consumers . I think they were going to. I think it showed bob is right. The transparency of the industry is working, working together, it was responsible disclosure, which is important. They found a vulnerability, find informed the manufacturer, working on a patch, and were planning to announce it. We believe it was next week. But somebody leaked information, and now it is public. But one of the biggest takeaways here is that it shows the community is taking security more seriously. They are more responsible. But what is scaring us is this is ubiquitous. If there are issues at this level, where are they are not issues . Emily how serious is this issue in terms of actual impact . Ian mentioned we dont know that anyone is exploiting this flaw, but we dont know a lot of things about attacks happening. It is a fair point. It remains to be seen. There are some variants that are considered worse than others. There are three in particular that allows people to get access to private data, that is the one being talked about a lot. That is what most people are trying to address immediately. I think you are going to see some of these variations play out. But what is interesting is this has been out there forever, and we are seeing this being addressed now. In theory, there are bad things that can happen, but it took 10 years to discover it. That should give you a sense of how hard it is to exploit these. Emily who could exploit this vulnerability and what would they do with this information . I would suggest that those who have significant resources. For example, google has a significant Security Team that would spend the time necessary to find this vulnerability. Such astors, nationstates, may have the capability to know how to actually access and take advantage of this flaw. I also think what is important here is that there are no known attacks ongoing right now. We are still unsure if you can execute this remotely or you need to be on the user machine. So there is a lot we dont know. It i do think, you know, just reinforces two things to me. One, increasingly, the software we are operating is quite secure. The second is that we know that if a determined at the terry adversary wants to gain access to a machine, they are going to gain access. There is no way they are not going to find a way in, and this may be another way they can potentially exploit. Emily what can consumers do . Consumers right now need to update. There will be two types of updates that, out. Cpm,el be soft out. There will be software and hardware updates. It is easy to take down a software update. The hardware update may be difficult, depending on how they push that out. It is going to be straightforward, given the attention this is receiving. I think the manufacturers are all over this and we will be fairly protected. However, what i think is important is that this enforces you need to protect your data and you need to understand who is accessing that data. Just like you do with your own personal data at home do extra , precautionary measures. And make sure only certain people have access. Emily what do you think this foreshadows for the year ahead in cyber . Going tok it is focus a lot of attention. I have seen people write articles that say you know what, as bad as this is, it is going to lead to better things. What you do when you find these weaknesses is you redesign things. You rearchitect software, you rebuild the hardware in order to do that. To address a point you raised, it is very common in the security world for people to tell people about an issue and give them time to fix it. Actually, normally what projects zero does, i was told, is they give people three months. Because this was deep level, they needed more than three months. They were scheduled to do it january 9. Next tuesday was the scheduled date, which was six months past when they got it, because they knew they needed the extra time. So bottom line, we will see more awareness of how this process occurs and sensitivity to what is going on, people having to figure out how they do this. We will have to have better update policies, because it is going to be hard. The firmware stuff can be hard to update. Apple, for example, will probably do it as a combined os and firmware update, but on a pc, you have to do a bio update and os update, and it gets messy. Emily we know companies are cooperating more clearly. We know that the vulnerabilities being discovered are more specific, yet hackers are also Getting Better at their jobs as well. Is anything changing . Are we under any less or more of a threat . First, it is important to keep it in perspective. Understand the threat and understand you are adequately equip. And we need to remember to protect the data. That is were security needs to live. It is not about just protecting the software. It is understanding your data and understanding whoand we neeo protect the data. Interacts with the data. And keep in mind it is a layered approach. It is also basic training. It is all those elements together that are going to , over time, increase our cyber hygiene and make us better. Emily that was ryan white with fourth point and bob ladonna with tech analysis. Barclays analysis Mark Markowitz says apples offer to replace iphone batteries cheaply could mean a big drop in future sales. Moscow its writes that apple he writes that apple may sell up to 16 million fewer iphones this year. The analyst expects some customers to take advantage of the discarded batteries and skip potential upgrades to newer models in 2018. Coming up, tesla pushes back a key Production Target again, raising questions about whether the electric carmaker may need to raise more cash. Later, we hear from the blackberry Ceo John Chen, discussing the companies turnaround plans to tap into the upcoming autonomous driving industry. This is bloomberg. Emily chinabased and Financial Services group has abandoned its plans to merge with moneygram international. This comes after the company failed to win approval from the committee on Foreign Investment in the United States. The National Security panel has recently become more active in blocking chinese investments in american companies. Nt financial offered cash for the dallasbased money gram, valued at 1. 2 billion. Tesla pushed back a Production Target yet again after shipping fewer cars than expected last quarter, shedding more light on elon musks selfprofessed production hell. The Company Expects to hit producing 5000 cars a week, delaying the goal by another three months. Tesla delivered 1350 model threes in the final months of the year, trailing the average estimate of just over 2900 units. We broke down the numbers with chaftin. Why are these numbers so bad . Max they are bad because this is now another delay. Year hek, he said last hopes to hit this 5000 a week goal by the end of the year, then it was three months, now six months. And as bad as these numbers are, tesla has done a good job of managing expectations. If you look at what analysts were saying at the beginning of the week, a lot of people were expecting some disappointment. I mean basically elon musk has , conveyed to investors and the public that he wants to get this right. This is taking a long period of time. Ammunition to skeptics, who are questioning whether tesla will be able to meet these wildly ambitious production goals, whether they happen in the middle of next year or later than that. Emily we have a chart showing production on the bloomberg here. It shows the number of cars produced every quarter. So overall, they are holding about steady, but what do the numbers overall indicate about just how hellish production is . It is just way below what we were expecting. I wouldnt read too much into the production numbers of the model s and model x, the more expensive luxury cars, because a lot of Consumers Want this model three. The massmarket car, plus, tesla has already claimed a pretty big chunk of the luxury car market. The real question is, after you get into the mass market , 35,000, 40,000 current, tesla cange, whether do things the Car Companies have been able to do. Right now, elon musk has done a fantastic job of getting analysts, getting everybody to see this as a bet on the future. But the future gets closer each quarter, and each quarter that tesla isnt able to get this massmarket electric car we have been promised for a decade, the sales pitch is going to get harder, and it is going to continue to cause people to ask questions about the companys future. Emily why is wall street so focused on this when the numbers fourtill so small . Max tesla to justify for tesla to justify this enormous valuation, it needs to be a mainstream car company. It needs to produce these massmarket numbers. Not just a justify the valuation, but to meet the Ambitious Goals that elon musk has set for himself and humanity, as he would put it. If you want to get us off of fossil fuels, you need to get the cost of electric cars down. Goodo it is all well and to sell 100,000, 120,000 luxury suvs, but if you really want to make a dent in the universe, so to speak, then you need to sell these massmarket cars. Emily and still, analysts are saying tesla is way ahead of the competition. Put this into the broader context for us. Max any problem that elon musk and tesla are going through at the moment, his competitors are going to have to go through it. What tesla has said is one of the big problems happening is at the giga factory where they are making these battery packs. You have to assume that any other company that wants to make a massmarket electric car is also going to have to deal with battery production issues. So the bet would sort of be that toyota, gm, whatever will have to go through this as well. The other side of this is these are companies that are experienced in dealing with supply chains, manufacturing big hulkingng pieces pieces of machinery. Tesla has less experience. Maybe they will be will to deal with it faster. That said, tesla has done well as far as getting people to buy electric cars. The model s has outpaced expectations. At least of where they were even one couple years ago. A couple years ago. Emily coming up, blackberry takes to the road with baidu. We will hear from john chen, next. Jeter, we will speak with microsoft about the current role of technology in the administration. This is bloomberg. Emily uggla saved at least 3. 7 billion in taxes in 2017 with google saved at least 3. 7 billion in taxes in 2017 with its structure. It involves shifting revenue to a Dutch Company with no employees, and then on to a bermuda mailbox owned by in ireland registered company. Google is under pressure from regulators around the world for not paying enough in taxes. Blackberry has signed a deal with chinese internet giant baidu to Work Together on driverless car software. The ontariobased companys vehicle operating system and in car Entertainment Software will be bundled into baidus self driving car platform, apollo. Baidu has been signing up dozens of partners around the world in a bid to eventually become a dominant Automotive Software company. We spoke with blackberry Ceo John Chen about the deal. John we have been working with most everybody in the ecosystems, and this is one of the latest announcement of a number of partners we have signed up. You know, we have qualcomm, and others, all in the last four or five months, and this just happened to be the next major partners we signed on. Emily how does this help blackberry push into the self driving car industry . John we are providing, in all cases, we are providing the safety operating systems, safety and security operating systems for the Autonomous Vehicle and the platform. Tothat is how we are going you know, when we first talked about me taking this job, was to really create a new category for us to dominate in. I would not use the word dominate, but i think we are certainly doing extremely well right now in that category. Emily how will blackberry help baidu become a dominant player in the car industry, which is their goal . John baidu, as you pointed out, is quite ambitious in creating the autonomous platform, the Autonomous Vehicle platform. So they are putting together some code and a lot of partnership. They pulled us in as their operating system platform. As again, i pointed out, they picked us because of the safety and Security Certifications that that,e in qnx, and with they should be rather complete in going after the Auto Industry. And i assume the Auto Industry will go beyond just the auto that you and i know of today. They are going to provide maps and Digital Information also. So i think this is a pretty good partnership, and we are bringing some very good things together. Emily talk to us about the impact you see of this partnership on blackberrys business. Give us any hard numbers, if you can. John i cant give you any hard numbers. You know that. I know you have to ask that. It is going to be our growth platform. You should know today that my Growth Business is on the Enterprise Software, especially with security and cybersecurity. The next leg of our growth is with the auto. This is why the design is so important. We are going to go beyond auto into the embedded world. With the auto. We are going to gt world. It is a huge market, and it is growing. We are very fortunate. Emily are there any other partnerships with other automakers in the works, and how do you plan to pursue more partnerships . John you should expect us to continue to expand our ecosystems. Our attention the last two or three years has been winning new design, joining up with new partnerships, creating new platforms, like the one we just and hmi. With dondenso humanmachine interface. All really good, new stuff, some o