Transcripts For BLOOMBERG Bloomberg Technology 20240714

Nondisclosure agreements to join the android option. Some are calling the move another example of strongarming the competition. First, what a difference a day makes. Major markets have closed in the green after mondays recordbreaking losses. Tech can be partly to thank for the turnaround with apple, tesla, cisco leading gains. The s p closed up 1. 2 while the nasdaq closed up 1. 4 . Should take investors be popping the champagne just yet . Joining us to discuss, bloomberg Senior Editor michael regan. Should they . Ke they can at least breathe a little bit of a sigh of relief. Tech was the leader yesterday mainly because people saw that fix the chinese currency sunday night, monday morning china time. It was a dramatic move, the weakest fix for the currency on basis since 2015 and it allowed the currency to drift above that seven level compared to the u. S. Dollar. People thought that was a line in the sand. Fix, the peoples bank of china fixed the currency below seven. That is psychologically important. It was clear they werent letting the currency drop in freefall. That was important part take investors because so many of these Companies Get so much of their revenue from china. 15 from that get china. It is a lot of brand name tech companies. A lot of the semiconductor stocks. Apple, tesla, a lot of very important tech stocks derive important revenue from china. Today,w them to rebound it is still down quite a bit from the highs in july. Semiconductors dropped 12 from their highs at the end of july. To see a rebound of about a percent and a half today is not necessarily sending the all clear signal just yet. Emily how much does this simply have to do with the level at which china fixed its currency . Mike today in particular has a tremendous amount to do with it. There was that concern in particular not only that the fix was so weak sunday night, monday morning, but that this was the start of things to come, that they would allow the market to push the value of the currency lower. China took some steps, sold some , sucked up the liquidity on the overseas currency of the offshore yuan. That really made people start to believe that they are not going to let the currency go into a freefall. Emily what are the safe havens in this moment in time . Mike outside of the stock market, we have seen a tremendous amount of money poured into the bond market. Falling to the lowest since 2016. Gold trading near a fiveyear high. Itself,he stock market theres a lot of debate about where safe havens are. Utilities have gotten a lot of money but they have really become crowded, trading at high valuations for the utility sector. Real estate, the same. People are really trying to figure out where a good safe haven is in the stock market. Emily thank you so much for that context. First met donald trump the chinese leader said they had 1000 reasons to make the chineseu. S. Relationship a good success and no reason to break it. Today, thais are at their lowest in decades and ties are at their lowest in decades. On monday, the u. S. Labeled china a currency manipulator, sending Global Markets into a tailspin, further escalating the trade war. Bydiscuss, we are joined edith young. You split your time between the United States and china. Give us your view of what is going on on the ground in china. Called china a currency manipulator. In china, a lot of them call them a tariff manipulator. Against the Technology Sectors particularly in china. What has been going on banicular with the huawei created a strange sense of National Pride and support. A lot of the chinese public felt bad for huawei. In the last quarter, the mobilephone sales increased about 4. 6 . So chinese consumers are sympathizing with huawei, buying huawei phones more often than they would have. Does that mean they are not buying iphones . Edith i love the iphone and i still think it does well in mainland china. Overall, just the stance of wanting to support a local brand and really feel bad and feel they are the victim of this tension. Emily how does this impact and will this impact. Obviously there is a lot of crossborder investment. Edith to start with, for andcon valley, in 2015 2016, certainly a lot of chinese in silicon shop valley. Having said that, even though they certainly see the u. S. Committee for the u. S. , a Ripple Effect and specific funds from china, very specific companies. Think about alibaba with money m,andma recently moneygra or recently with grindr. It sends a strong signal that chinese vcs arent welcome in Silicon Valley. Emily how about calling china a currency manipulator, which trump threatened to do for a long time but didnt do until this week . Edith the way i usually describe, many years ago, President Trump had this deal called art of the deal. Two the chinese people, he is playing the tactics just like he said in the book. For the Chinese Government, is playing the long game, sort of the art of war. I dont the get will be easy for the Chinese Government to compromise in easy way and in any way and they will continue to fight. Emily how does it impact where you are putting your money . Edith we invest in both china and the u. S. When im talking to my fellow vcs in china, if you think about it, the strongest ipo from s,ina in the last two year many of them do go ipo on nasdaq, and they are logistics focused, automotive. Their target market is actually not the u. S. At all. Now, instead of coming to the u. S. , a lot of the chinese vcs are thinking southeast asia, latin america, brazil, germany. Emily would you say we are in the middle of a tech cold war with china and, if so, how does it end . Edith it is unfortunate what is going on now. It pains me being someone who has spent time on both sides. In the Venture Capital community, i think the communities will mix as much. It is not saying that any Silicon Valley startup really needs chinese money anyway, nor does chinese startups need u. S. Money, but we would like to see more collaboration. Cold warhe socalled will segregate the communities. Emily what does it mean for innovation . Both countries are less innovative . Edith at the end of the day, technology is not a zerosum game. Siliconcontinue to see. Alley u. S. Who anyone in the wants to play games. Google and facebook have been for a long time in china anyway. Edith yeung, partner at proof of capital, thank you so much. Amazon looks to attract talent in arlington, virginia, home of its second headquarters. We will speak to the person in charge of hq2 developing plans and hiring. This is bloomberg. Emily welcome back to bloomberg technology. Talking about amazon now. A new program out to retrain workers, train workers from childhood to career. Amazon dedicating over 700 million to provide people across its corporate offices, tech hubs, and Fulfillment Centers with Training Programs that will allow them to move into more highly skilled jobs within or outside amazon. One of them is about is called amazon future engineer, a program to educate and train kids and young adults from underserved and low income communities. Earlier, we spoke to the amazon Vice President of Workforce Development about the program. Amazon future engineer is a conference of program and really an opportunity to meet kids where they are and help them build the skills they need in order to continue in Computer Science at hopefully to engage in a career that Integrates Technology into whatever they choose to pursue. Emily you are offering a scholarship and the winners get an internship at amazon. How many of those people the think will become fulltime employees, or what do you hope . All 100we hope that them to come fulltime employees. Them become fulltime employees. What is important to us is increasing the number of students who pursue Computer Science. Emily how are you benchmarking yourself . What will be a measure of success . Ardine theres the regular feedback on the program that we solicit from participants and teachers. At the high school level, we look at how many students actually take and pass the advanced placement test. For those who receive scholarships, we look at the scholarship renewal rate. For the interns, whether they choose to return to amazon or not at the end of that first year, we look at whether they get an invitation back because that tells us they are thinking strong progress in the field. Emily you have been instrumental in hq2 and focusing on the d. C. Area. When amazon set up in seattle, they did do programs like this and we saw the relationship between amazon and the community suffer. What are you doing to build a better relationship with the community in arlington from the start . Ardine i think the nice piece about arlington is we have a view to the flightpath. We know we will hire when he 5000 employees over the next 10 years. 25,000 employees over the next 10 years. What that tells us is there are kids in school today who want to get interested in Computer Science so they can join the ranks of those College Students who obtain tech degrees. We are excited to be here in arlington, engaging more with the community about the programs that exist now and where we can put our shoulder to the wheel. Emily you promise to that 25,000 employees in a decade. What is the pace of hiring so far and are you finding the skills you need . Ardine the first year is relatively modest, we will hire 400 folks. That is really so the construction can begin on the site. So far, we have had a fantastic response from the community and have had the opportunity to interview great talent. Talent is the number one reason that brought us to National Landing and we are excited to be here in the community. Emily in doing all this hiring, you have the opportunity to change the profile of the company. About three quarters of managers are men. You dont report the percentage of women who hold technical jobs but the rest of the Tech Industry is about 20 . How will this Program Change that . Ardine you are right, this is a great opportunity for us change the profile of folks who work in tech. Key to that is impacting the pipeline. We know that within science, technology, engineering, and math, fewer than 8 of that population pursue degrees in Computer Science. A fraction of that 8 are women and people of color. By creating programs like amazon future engineer, which expose students early in their education to Computer Science and make it something they can see and understand, provide the opportunity to make that pipeline richer, to invite more women and people of color into it, which ultimately helps representation in the workforce. Emily given that you are arlington, hq2 in also in nashville. You pulled out of new york city after pushback from local leaders. Some of the folks that were bound for new york city, what happened to them . Ardine we have a large presence in manhattan already, about 5000 corporate employees. There is still a presence. We have a Fulfillment Center in other island as well as sites across the state. Those businesses will continue to grow organically there. Emily we know you are focused on hiring but we have to ask, when a day like today when the trade war is escalating, how much are you, amazon executives following what is happening between the United States in china and what impact it could have on amazon . Ardine i expect our executives are following it closely, as they do any initiatives or amazon. Hat would impact we will always take the long view. Emily bloomberg broke a story about the president considering intervening in the pentagons plans to award a huge cloud contract which many believe amazon is best position for. Youve got a new defense secretary saying hes going to look into the process by which that contract was awarded. How confident are you that amazon will secure that deal . If it goes to microsoft, what does amazon do . Ardine i dont have insight into the contract. I think the new secretary has every right to take a look at the full portfolio of things that he manages and make the best decision for taxpayers. Emily that was amazon Vice President ardine williams. Coming up, disney shares fall after reported thirdquarter earnings that missed estimates. Seems like not even avengers could save the day. Details, next. This is bloomberg. A emily disney shares plummeting in late trading after reporting Quarterly Results that fell short of analyst estimates. Falling themepark attendance, spending on new service new streaming services, and a flop of a movie inherited from fox. Chris, i dont understand. Disney opened the most anticipated theme park attraction may be ever in star wars and attendance dropped . Ardine chris yes, we are calling it the star wars stumble. Theres nobody on main street, no wait for these rides. Bob iger today on the call gave a surprising mea culpa. Hard to we tried too limit attendance because we thought the crowds would be too big. They had a reservation system for the attractions. Everyone in anaheim raised hotel prices. They didnt have that other big attraction they were going to open. Some people just stayed away. Same at Walt Disney World in florida, people stayed away because they are waiting for that to open later this month. Emily lets talk about streaming. Obviously, streaming is way down on some of the expenses this quarter but disney firing a shot at netflix, announcing a price for not just one but three streaming services in one. Take a listen to this from the call. In the United States, consumers will be able to subscribe to a bundle of disney plus, espn plus, and add supported hulu for 12. 99 a month. The bundle will be available on our november 12 launch date. Emily disney plus, their new service, espn, and hulu for 13 . Yes, which is coincidentally the price of the entrylevel netflix package. Youre getting sports, kids entertainment, and the hulu broadcast shows, about a 30 discount to whether you 30 discount if you bought those three things together. Emily lets talk about the film lineup. This fox film that was a flop, dark phoenix, how can that outweigh hits like avengers and also them launching toy story, aladdin . Chris disney has three 1 billion movies in the quarter, including the highest grossing ever, avengers. They admitted that the fox acquisition is costing a little bit more than they anticipated and that is going to continue some time. They outlined even wider losses in the next quarter. A lot of it has to do with the new film library. About boosting the results for foxs liveaction film business and said that could take a couple of years. Emily we will see if this quarter, with lion king coming out, gives them a boost. I will let you get back to covering the disney headlines. Emily coming up, taking down a hacker with a tip line. Using the old school to fight the hightech. That is next. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Emily this is bloomberg technology. Im emily chang. When you hear the words tip line, you are thinking about a Police Hotline to report a crime. But, they are also used by companies to expose cyber vulnerabilities. According to a 2018 report, 93 of the Worlds Largest Public Companies do not have policy to handle cyber tips. For capital one, they did and that is what led to the arrest of the person who allegedly accessed Sensitive Data on more than 100 million people. To talk about this and more in the world of cybersecurity, roy, the chief product officer at cyber reason, a firm that got a 200 Million Investment from softbank. He is with us from las vegas where he is attending the Information Security conference. In new york, jenny who has been covering the hack. We are learning new details on how capital one responded to this tip for the hotline. Tell us what is the latest. Jenny capital one got this tip. It was in early july that an anonymous tipster emailed and said it looks like some of the data is available out on the internet and the company was able to respond pretty quickly. Two weeks later, they were able to disclose the breach and working towards remediation. That was the unusual aspect of how pete how this came to light. It Takes Companies a really long time to respond, but this tip line was really instrumental in capital one having a quick response. Emily roy, this is not typically the way hacks are discovered. How impact will or helpful can hackers be in the future . White hackers be in the future . Roy when you look at capital one or any other organization, they are dealing with any threat going from traditional viruses in the past to more creative type of attacks is the one we saw here. In this specific attack, internal information was leveraged and used it to get access to this information. What we are seeing is more and more of the attacks are becoming driven by creative types of hackers or malicious players, what we call advanced persistent threat. The only way to find them is to have an intelligence way to look at the organization and actually understand the behavior and stop it. In this specific situation, the information was just posted on the internet so it was was so it was just visible. When it is not, you have to look at the way the behavior changes and stop it there. Emily what if some of these whitehat hackers, supposedly good actors, come across Sensitive Information in their work to stop the bad guys . Jenny it is a great question and it is a reason why you dont see a lot of banks adopting these policies and inviting hackers to find vulnerabilities because they are worried if that information gets into the wrong hands, it can be a huge liability. Companies kind of deal with it in different ways. Goldman sachs has a pretty explicit description of their Vulnerability Disclosure Program on the internet. They say if you come across the information, stop and immediately let us know. It is kind of a chess game, assuming these guys that are really coming in to help your company are not going to turn around and hurt it. Emily now, roi, your Company Actually Installs Software that aims to stop threats before they start. You us what kind of hacks have been able to discover with your approach. Roi ok, so, if you look at the type of terminology, we actually took the type of white hat approach for being an intelligent system that looks of what can be a vulnerability and developed an Artificial Intelligence capability that gathers huge amounts of data, and understands that data in realtime, almost like 8 million white hats asking questions every second. Trying to understand if there is anything weird that is happening that we need to stop. When you look back, we uncovered operations, which was the biggest Cyber Espionage that was ever discovered by a nationstate attacking a commercial telco organization across the globe, in order to run an Espionage Campaign around specific individuals through this telco organization. The type of attack they had was actually a very slow and quiet attack into the organization. The only way to figure this out was to constantly collect this immense amount of information and understand behavior is changing and stop it right there and then. Emily you are at the black hat cyber conference right now. I have been there. I imagine there are so many different topics under discussion especially with tensions ratcheting up between the u. S. And china. You have this new funding from softbank. How do you plan to deploy it given the trends in cyberspace right now . Roi this is a Pivotal Moment for cybereason. We are extremely excited for this 200 Million Investment. We have three stages. The first one is to expand our existing market globally. We are deployed on all five continents and multiple countries. We want to strengthen our relationship with our partners and dramatically grow our market motion. From a portfolio perspective, we are doing two things. The first is we are strengthening our position with what is called the Protection Platform market and solidifying the portfolio we already have there. The second is we are building the next generation of a taunus Autonomous Security to allow machines to protect these organizations instead of throwing bodies of the problem. Emily roi carmel, we will let you get back to the conference. Jenny continuing to cover capital one for us. Thank you. Namingis close to j. P. Morgan the lead underwriter of its ipo, with the offering expected to be the second largest this year. A relationship many years in the making. Jp morgan bought a stake many years ago and it propelled the startups growth. The bank will help the Company Lineup its most ambitious fundraising yet, a 6 million package that depends on the ipos success. Isning us to discuss what the latest we know . Guest jp morgans relationship spans much further than wework itself. When adam newman goes to the other banks, he pitches his own relationship with jamie dimon. The reason this matters is jp morgan has 40 million out in mortgages for adam newmans own homes. They have provided the financing for the money he took out against his own private stake and we work. They have a very strong relationship. The reason wework is a prime climate for the banks is not just this financing or the ipo, it is the fact they are so capitalintensive. They will keep meeting mone needing money. Emily what is next . The clock is ticking. Sonali they said around september, any day now we could see the ipo. They have the filing for. Analysts last week and people got a glimpse. The 47 billion in the last valuation, a lot of people are skeptical they could hit that in the next one. It means a lot for all of the banks that are really trying to place themselves well in the ipo race. If they dont keep on making these ipos work well for them, then it bodes poorly for the next set of ipos ahead. Emily how well does this set up jp morgan specifically in jp in Silicon Valley given that Morgan Stanley has typically been the leaders . Sonali very well. Lyft did not do too well earlier this year, but neither did uber and Morgan Stanley was leading that one. It helps them get on more highprofile deals. The other thing that is interesting about wework, people debate if it is a Real Estate Company or Technology Company. A lot of companies are in this situation. Automobile company or Technology Company . For jp morgan to show themselves as a broader firm, a high growth firm which the market has had a lot of demand for, that is going to help them get pretty far. Basak, thank you so much for stopping by. Coming up, android everywhere. How googles mobile os beat out microsoft and apple to be the Smartphone King and making waves now. That is next. This is bloomberg. Emily amazon defended its use of sales data from thirdparty sellers in response to questions from a hospital conducting a broad antitrust inquiry. In a letter to the house judiciary committee, amazon said aggregating sales data to bolster its private label strategy is a practice in the retail industry. David, amazons general counsel, its important to note that private label products are eight a common practice. Google and facebook responded with her own letters. The director addressing the antitrust concerns. Joining us to discuss is mark bergen in seattle. You guys have had a chance to digest this response. What is their argument . Shira the argument is a little different depending on the company, but what i think is true across all of the three, google, facebook and amazon, is the message that they are not that big, they are not that bad. They have lots of competitors. Did we mention china . Wave american flags. The end. Emily what about amazons argument . Shira a couple different things. Amazon is trying to say you are looking at market share wrong. If you look only at how much people are spending on amazon as a share of online shopping, that is too narrow. Because if somebody is buying a microwave, the example they gave in their letter, you probably are not only shopping on amazon. You may also go look at that microwave at walmart and things like that. The other argument they make a amazon is basically the sellers, the merchants that sell more than half the goods on amazon, they have the same access to information that amazon does. That amazon is not using that data to determine when amazon makes its own version of a desk chair or office lamp. Emily is that a fair argument . Shira not really, to be honest. An individual seller does have information that amazon provides them, but amazon knows what every amazon has visibility into everything that is happening on its site and an individual seller only knows what is happening to their merchandise. Emily what about googles argument . Mark the questions looked at googles evolution from where they used to send out viewers and searches to different websites to a world where a lot of the property now lands on googles own sites. They have their knowledge box. You can get an answer right there. Their answer was we do still send people out, clicks to other websites. Also, websites can pull themselves from that knowledge box. Their answer was that was kind of revealing. They are effectively saying we are still driving a lot of traffic but if people do not want to participate, they have a choice to back out. Emily speaking up android, there is another story out today that google is requiring its competitors to sign ndas as part of an android auction that will list alternative Search Engines as an alternative on android. Tell us exactly what is happening here because googles competitors are not happy about it. Mark they are not happy about it for a couple of reasons. One, a great report this morning that they are being forced to sign nondisclosure agreements. That is suggesting they cannot , thetalk about the eu concerns that they are hamstrung. The idea that this is set up like an auction. They have to pay in order to get in front of consumers, opening up a samsung phone. The biggest reason why they are frustrated here is because google has had years and years with android, cutting these special deals with makers. When you buy a phone out of the box, you will have google as the default search engine. Google apps. It is clearly something where a lot of consumers, their default is thinking about search, maps, browsers, they automatically think about google. Emily shira, you have a great piece out about the history of android. You remind us that even at the very moment android hit the market, steve jobs was pissed. Willquote from him i spend the last dying breath if i need to and i will spend every penny of apples 40 billion to right this wrong. I will destroy android because it is a stolen project. Im willing to go Thermo Nuclear war. How does the argument that steve jobs is making inform what is happening right now . Shira interesting question. The argument jobs was making was twofold. One is android is a stolen project. That is how he felt. It was an open ripoff of the iphone and apples strategy back that was to sue these android proxies like samsung and to stop them. The other point jobs also made was android was kind of this horrible mess. It was bad for consumers because it was insecure. There was a billion different versions which often meant people buying android phones did not have the latest operating system with all the features and security. I think those are similar arguments being made now about android. They are all true, for what its worth. Those are arguments google has made to justify if it is making its own android hardware. All of this matters and what the European Union has done, it does not matter because android wanted smartphones and people at thinking about what is next and i think the status quo is not going to change. Emily google taking another beating from the president today in a new series of tweets. It seems president was watching fox news when an exgoogle engineer appeared claiming there was anticonservative bias and that is why he was fired. We have that series of tweets from the president , mentioning this engineer, specifically saying at the very end, very illegal. We are watching google closely. Google came out with a statement that the political leanings do not affect the product, and if they did that would make the product worse. Pace do these threats when the president actually have given the looming antitrust investigations and the continuing scrutiny from lawmakers in general . Mark it did not seem to affect their stock price today. I do think that they are much more concerned about the direction of the department of justice and certainly from congress than the president at this moment. Politically, it seems like the president is using google and in general Silicon Valley, liberal leanings as an election issue. Google is continually getting beat up on this. It will be interesting to see if they come out ahead and try to respond to this more publicly. Emily mark gurman and shira ovide, we will have to let you go. Thank you. Could israel be home to the next Silicon Valley . Why the nation is being dubbed startup nation, next. This is bloomberg. Valley isicon notorious for tech giants like facebook, google and apple. With a population of just 8 million, israel might not be far behind. According to the 2018 Global Startup ecosystem report, tel aviv has the highest number of startups per capita in the world. And Israeli Tech Companies raised 6. 5 billion in Venture Capital last year, up 17 from 2017. Joining us to discuss is wix is cloudbased Development Platform in tel aviv and a huge company. Tell us som about some of the tech trends in israel that might surprise us. Guest i think the most interesting trend, israel has been dubbed a startup nation for a long time now. What is interesting today is the maturity of some of those companies. Some of the companies are moving beyond just being startups and becoming fullblown Companies Like wix and a bunch of others. I think generally, you can see theres a new generation of entrepreneurs that are less prone to trying to exit early and Seller Companies and want to build something bigger. Something that can last for many years. As an israeli, my hope is someday we can see one of the tech giants coming from israel and having our own tech giant. Emily theres a lot of talk about trade. A lot of things having geopolitically. What is the impact of the u. S. China trade tensions, for example, in israel . Nir i dont think we have seen any real impact directly on israel. I think there is some impact hasnd currency when israel a stronger currency, we pay salaries and chuckles and make most of her income in u. S. Dollars that can put. That can put some stress on the local economy. So far, as much as we are feeling that, i dont think it has a big impact. Emily obviously, there are cities and countries around the world trying to recreate Silicon Valley. Even cities in the United States trying to recreate Silicon Valley. Do you believe that is possible buildael to continue to the tech hub there that could rival the United States or china . Nir rival, it is hard to say. At the end of the day, there is the question of population. It is a much smaller population than either the United States and definitely china. I do think in terms of per capita, if you look at the ability to innovate in tech companies, absolutely yes. What we are still missing, what i mentioned before, the Bigger Companies coming directly out of israel. Hopefully, wix will be the first one. Emily wix. Com president and coo, thank you so much. A swedish payments and banking firm backed by snoop dogg is now the most valuable european fin tech startup. Andvalued at 5. 5 billion it is challenging Companies Like paypal and square. Speaking of the Silicon Valley beyond. That does it for this edition of bloomberg technology. We are livestreaming. You can find us there. Follow our global breaking news network, tictoc, on twitter as well. This is bloomberg. Hey im bill slowsky jr. , i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Paul welcome to daybreak australia. Im paul allen. Shery im shery ahn in new york. Sophie im Sophie Kamaruddin in hong kong. We are counting down to asias major market open. Paul here are the top stories we are covering in the next hour. President trump keeps up the pressure on china with a new set of tariffs. The final list of duties may be published in days. Wall street clause back after china stabilizes the yuans, maybe cooler headsil