First, to our lead. The continued fallout over the microchip security flaw affecting nearly all of the worlds devices. This week, microsoft said fixes for the vulnerabilities may significantly slow down servers and personal computers. In a blog post on tuesday, the company suggested they could be more substantial than intel previously indicated. Microsoft is also temporarily suspending some updates to windows operating systems that use chips that are freezing or not putting up from amd as a result of the fix. Monday night at ces, the intel ceo tried to reassure people that their data would be safe. The security is job number one for intel and the industry. So the primary focus of our decisions and discussions have been to keep our customers data safe. As of now, we have not received any information that these exploits have been used to obtain customer data. Emily we broke it down with ian king, who covers the chip industry. Ian to start off with, intel was very much, we are all in this together, everything will be fine, nothing to see here, move along. Now we just heard from brian krzanich, admitting that maybe things are a little worse than we kind of said there they were. And then microsoft coming out, saying, we are finding problems. So really, this industrywide effort to put a brave face on it and say there was no problem appears to be fragmenting. Emily so what exactly is microsoft saying here . Ian that in certain circumstances, particularly in servers, it appears as though the slowdowns as a result of these remedies are being put in place are worse than had been previously thought. Emily so talk about what exactly this means. Because if the fix doesnt work, then what . Ian its a choice, right . You fix it and your computer doesnt work like it should, or you dont fix it, and you are vulnerable, right . So, you buy more servers to make up for their performance, you struggle by with the corporate system that doesnt work . There are all these ugly alternatives. Emily we also have an update from arm. They are saying 5 of their chips are affected. Luckily it is not 100 . So, what does that mean . Ian this is important. Arm is in every smartphone. Right . You iphone, your android phone, whatever. Many more chips based on Arm Technology rather than intel technology. They are saying since 1991, 120 billion chips using our technology are out there, only about 5 are vulnerable to one of these potential exploits. They are really saying it isnt a huge deal. Emily so, we have headlines crossing the terminal about senators urging the sec and the department of justice to investigate brian krzanichs share sale. We talked about this last week. You mentioned it was a planned share sale, but he is down to the minimum of his holdings. Do you expect more to happen here . Ian as we discussed at the time, intels stance is this has been in place for a long time, this is why companies do this, however, this problem was known to intel before the plan was put in place. People are looking at this and saying, hold on, maybe this kind of a regular plan, the excuse executives always use to ensure themselves against this accusation, maybe that doesnt stand up in this case. That is what has led to senators putting pressure on the fcc to have a look at it. The sec to have a look at it. Emily we also have a headline crossing, saying, they dont expose any exploitable vulnerability related to intel, related to either issue. What does this mean . Ian they are just adding to a list of companies that said, look, no problem here. The most prominent among them is probably google. We have patched, everything is ok. There is no slow down. So we are really getting conflicting information here, and what we have to find out and what we are working on is finding out what really is the truth here, and the part is a lot of people dont actually know yet. Emily whats next . What are they waiting for . Ian we need to see these patches deployed, we need to see what Material Impact it will have. We will see intel report earnings later this month. We will see how it impacts it. Maybe people dont buy their chips, maybe people need more of their chips. Emily as a consumer, should you download the patch or not . Ian this has been one of the consistent messages. If you are an average pc user, if you have a fairly modern system, one you have bought in the last couple years, you dont have anything to worry about. Download the patch and you will be safe. Emily that was bloombergs ian king. One Company Feeling the heat from the chip flaw, arm holdings, which is at the heart of most major mobile phone components. 5 of chips made using this design are vulnerable to the potential hardware hack known as specter. We spoke with arm holdings ceo simon segars in las vegas, and asked how concerned consumers should be about these issues . Simon it is a very serious issue, but it is one the industry as a whole is taking seriously, one we are taking seriously. We are thinking about our future designs and how to mitigate against issues such as this. We are working closely with partners to make sure the Software Mitigations we have developed over a series of months are distributed, that people are using them, installing them correctly, that we can provide the maximum safety to any user of our electronic systems. Emily how long before remedies are fully in place . Simon well, i think it will depend on which system, which type of device you are talking about. For some, it is relatively straightforward to update devices, but in other cases, there is a vast number of Companies Involved in the supply chain to get products to market, so it may take some time. It is really going to be casebycase, and up to the individual oems of the products, who need to take on the software and getting pushed out. Get it pushed out to their customers. Exactly how long that will take, its hard to say, but everybody is on this with a huge sense of urgency. Emily android updates are pushed much more haphazardly than apple, which means some older phones might be left stranded. How much of a concern is that . Do you feel android is more at risk . Simon well, one of the things about some of those older devices is they contain less sophisticated processors, which are much less susceptible to the Security Issues we are seeing here. There are a vast number of Android Devices using cpus from arm, which are not susceptible at all to the security issue. Its not an over characterization to say that every phone every issued is at risk here. That is not the case. Emily when it comes to the actual hardware, is there a fundamental way for you to redo your chip architecture to avoid this . Simon the hardware features can dictate how much risk there is. So Going Forward, for anything that is easy to work around, we are going to do anything that is easy to work around. Some of the more sophisticated features, it is about the combination of hardware and software that determines if there is a risk introduced or not. I think what you are going to see Going Forward is tighter guidelines on how to write software to use microprocessors in a safe way. I think what this episode has shown is that we are in a new world of security, and security risks are changing all the time, and the definition of what safe looks like has changed. We have had a fundamental rethink of it. Emily im curious how much of a wakeup call this has been for you . Has it raised any concern that the chip industry is too concentrated . Simon i mean, in terms of a wakeup call, security is something we take very, very seriously. We always have. We have been looking at the deployments of arm processors in safety critical systems, in security critical systems, for many, many years. So, we have always been looking at and thinking about how might a hacker get it into a system . Trying to stay two steps ahead of how bad actors will try and exploit the system, try to learn as much as we can from the research that goes on in a very broad way. On one level, this is another case of a security tool that has been uncovered. It is different because it is much more hardware fundamental than others in the past, and many Security Issues that you see talked about are down to software and the way that software is written. So it is a little bit different. I think one thing to take away from this whole incident is the way the industry has come together and collaborated in a really positive way. The issues around competition have been put aside as Industries Work together to try to mitigate these issues. That is a positive thing, because there are going to be new issues in the future, and the Industry Needs to react in the same way and work in a positive way together. Emily but do you think the way that the industry has consolidated so much over the last several years could actually be a negative, especially when considering just how widespread this flaw is . Simon i guess theres two ways of looking at it. You can say theres a lot of consolidation and a relatively small number of points of failure. On the other hand, with the relatively small number of parties involved, it is much easier to coordinate a response. One of the reasons we are seeing time taken to get all the software pushed out is because of the complexity is because of the diversity of the manufacturers involved. Emily that was arm holdings ceo simon segars. Well, apple is facing a french criminal probe on whether the company deliberately slowed battery performance on older iphones. This follows allegations from consumer groups. A preliminary investigation began against the company last for programmed obsolescence and deceit. And here in the u. S. , a member of congress is also speaking out. Republican senator john thume wrote a letter asking about how apple is handling customer complaints. Into a Bloomberg Television interview, john thume was disappointed with apples responsible far. Sen. Thume we dont think they have been sufficiently transparent with the american people. There are a lot of customers and consumers who have noticed the changes in some of these apple devices, and the fact that they would have those devices degraded in terms of their capabilities without them knowing why, i think is what we are trying to get at. Emily and more news for apple this week, an activist investor and the california state teachers retirement system are urging apple to create ways for parents to restrict childrens access to their mobile phone. The shareholders want the company to study the effects of heavy usage of mental health. They fear the mesmerizing qualities of the iphone could put fost could foster a Public Health crisis. Coming up, carlos ghosn joins us next to talk about the future of automotives, from ridesharing to electric cars. And if you like bloomberg news, check us out on the radio. You can listen to us on the Bloomberg Radio app, bloomberg. Com, and on sirius xm. This is bloomberg. Emily more news out of the Consumer Electronics show in las vegas this week. Amazons Alexa Service will be available in certain toyota and lexus cars sometime this year. The voiceactivated Virtual Assistant will let drivers and passengers get directions, control entertainment features, and perform other functions in the car via voice command. Also at ces, mitsubishi announced a new Venture Capital fund with plans to invest 1 billion over the next five years. The chairman and ceo joined us from the event in las vegas to talk about the fund. Take a listen. Carlos you know, we have so many things to do for the next six years, which is about the transformation of the car. And i dont think we can do it alone. I think we will need a lot of innovation and creativity coming from startups, or support coming from partners, and we think the way we are organized today is not sufficient. That is why we came with a new organization, which is a corporate Venture Capital who will invest up to 200 million a year, which adds up to more than 1 billion, in order to support our efforts, transforming the car into electric, autonomous, and connected product. Emily vc investing just hit the highest level since the dot com boom. 84 billion deployed into startups last year. How much competition is there to develop and deploy the kind of technology that you are trying to develop . Carlos oh, theres a lot of technology out there. I can see it. I am receiving a lot of people, and hearing a lot of ideas. We have to be very careful, because it means that there are a lot of interesting ideas, but how many of them are going to survive, be able to be really implemented, executed, at a reasonable price consumers are willing to pay . This is where the challenge is. Now, when we are talking about 1 billion over the midterm plan, lets not forget that the alliance will be investing 60 billion 50 billion. So 1 billion over 50 billion is about 2 of our export. Emily so will you really be reading people brains, and using that to help them drive their cars . Carlos well, this is, i think, an illustration about the fact that this is not only about autonomous driving, which means that the driver can drive whenever he wants, but also the car will have the driver be an effective driver. That is what we call enhanced driving. So what we want is on top of the autonomous driving and what we call enhanced driving experience, the car has the driver be a better driver, be much safer, and optimize the driving experience. That is what they are talking about. So when do you think we will have fully Autonomous Cars on the road, and when will people use them . Carlos i think it is going to be down the road, within the next four years. I am talking about massmarketing here. I am not talking about having prototypes ready to use because we are we have prototypes already have prototypes working very well. It may take three to four years before the regulations allow this to be massmarketed, before we make sure the system is totally robust in any condition. So, i would say 2021, 2022. Emily wow, that soon . So how do you see u. S. Tax reform impacting auto demand . Do you think there will be a shift toward the luxury segment . Carlos i think this should obviously support activity and spending and consumption, which means that i think this is going to be good for the Auto Industry in general. And the fact particularly that the support and incentives for zero emissions cars have been maintained, it is also very good news for electric cars. I am seeing it really positively as a business person. Emily what are you hearing out of nafta negotiations . Do you think there could be a deal that wont raise the price of cars significantly . Carlos you know, it is very difficult to predict. I think in this field, we have to be prudent, watch carefully whats going on, try as much as possible to give the different policy makers data and facts in order to make the best decision for their own company, from the United States and mexico. That is what carmakers can do, make sure the revision of the policy is in the best interest. Emily businessweek once wrote a story that if the president were a person, it would be carlos ghosn. It was announced that the president will be attending davos. What do you think of the president attending this global event, preaching America First . Carlos i think it is going to be extremely interesting. Davos is the place where many people meet to discuss important subjects that matter for countries and that matter for people. And the more people participate, particularly people with highpowered levels, the more interesting it is, and the more it gives meaning to davos. So i welcome this opportunity. Emily carlos ghosn. And still ahead, sony has had some big moment at the box big moments at the box office this year thanks to smashes like spiderman and jumanji. But the ceo says the company isnt stopping there. He joins us later this hour. This is bloomberg. Emily china has entered the top five in u. S. Patents for the first time ever. Chinese inventors received 11,241 u. S. Patents last year, a 28 increase over the same period in 2016, this according to a report by ifi claims patent service. China ranks behind the u. S. , japan, korea, and germany overall. And gopros challenges are coming to a head. The company missed its fourthquarter sales guidance, signaling that revamped cameras and price increases arent sparking revenue growth. Shares tumbled on the news, leading to its worst performance in a year. M a is the likely next up for step for the struggling camera maker, but the gopro Ceo Nick Woodman spoke to bloombergs selina wang and denied reports that they have hired jpmorgan for a potential sale. Take a listen. Nick jpmorgan is, in fact, our banker, but we have not engaged them to help us sell the company. And you know, with that said, if there were an opportunity for gopro to partner up with a Larger Organization that could help us scale, the companys brand,company, scale our scale our reach, that is something we would consider, but it is not something we are actively engaged in at the moment. Selina do you think you will want to actively engage in this . Is there some catalyst you see coming . Have any potential suitors reached out . Nick well, i will answer the question in so far as, would we engage in Something Like this . This is something we explore from time to time, as it is our job to grow the business in the most strategic way possible, and that is definitely one way to do it. So it is not a new topic at gopro, but i cannot share any more information than that. Selina nick, can you talk a little bit about organizations that you would love to work with, if theoretically something did work out in terms of a sale or a partnership . I can think of any number of Consumer ElectronicsCompany Companies that gopro could fit well into. How are you thinking about it . Nick well, i am not going to go into too much detail, but i would say that being a company that is enabling people to capture and share themselves in exciting ways, gopro is a really social company. And we have one of the strongest brands in the world that is very well regarded for our ability to help people capture and share their active lifestyles. And so, we are primarily focused on s