Much is about where the consumer is physically, but how does that square with data concerns . We will ask the foursquare ceo. For many of the National Security teams that monitor threats on the u. S. , the apparent drone strike saturday was the realization of their worst fears. The attack raised concerns by u. S. Security officials and experts in terrorism about the rapid evolution and technologies that may have allowed these inexpensive devices to pierce saudi defenses, flying long distances to drop bombs. Im joined by alan. Alan we are still not 100 sure exactly what devices were used. The rebels in yemen, which took initial credit for the attack, said they used drones. Later, u. S. Officials said that they were Cruise Missiles and possibly drones as well. A Cruise Missile is a kind of a drone. At the very least, Cruise Missiles used to be kind of the weapons used by large military organizations, but as the technology has gotten cheaper and easier to use, we now see kind of it merging into rebel groups like this. Very definitely, this is kind of a boundary that has been crossed that is quite troubling. Taylor do National Security officials just assume that more of this technology will be used in warfare . Alan we have certainly heard that from the point of view of domestic terrorism. Homeland security has identified quote unquote drones, so that is a big category. But as a threat going forward, the federal Aviation Administration is looking for ways to track these devices better. Clearly, the same is true overseas, where groups can sort of work on these kind of things without being tracked by the fbi and u. S. Intelligence. It is definitely a concern. Taylor besides tracking some of these devices, how much future regulation do you see coming down to this . Alan there is a host of things. Quickly, and the next couple of months, the government is about to propose requirements that every drone in the usb tract trackede u. S. Be electronically. Beyond that, they are also looking at better registration, they are trying to create a lowlevel tracking system that will follow these kind of like radar does. I have to tell you, the technology is tricky. They did some tests at airports and it was difficult to spot intruder drones. Sometimes radars see them but sometimes not so well. It is a very tricky technology problem. It is also tricky how to take them out of the sky. You can override their radar signals. It is quite a tricky problem. Taylor tricky problem indeed. That was alan levin. Apple fights a tax case this weekend luxembourg. They will tell the European Union courts that they pay more taxes than anybody in the world. The judge has ruled that apples tax deals with ireland let the company pay far less than other businesses. Mark gurman, who has the upper hand this week, apple or the eu . Mark apple would not be sending a team of six people if they did not think the eu had the upper hand. I dont think apple is coming in with a position of strength. Having tax loopholes in ireland has been heavily criticized for years. The e. U. Has its position on this. Apple has its position as well. If recent history is any indication, apple has taken these things to court but settled quickly. I would not be surprised to see if there was a meeting of the minds between apple and the eu. Taylor if there is not a meeting of the minds and we get a 14. 4 billion tax bill, what does that mean for apples bottom line. Mark that is a lot of money. I would really like a check for that amount of money right now. They will find a way to sprinkle it across several quarters, do different adjustments, maybe take debt out. Of course, they have over 200 billion in cash offhand. If any company could take that bill, it is apple. Taylor what do the tensions mean for apples strategy in europe . Are they less likely to wanting to be working with europe . Mark basically every global corporation, so they have these issues across different countries. They are dealing with the tariff situation. In china, the balance between local laws and what they want to do for their consumer. The e. U. , they have this tax situation. What you are seeing here is another one of those things, one of the biggest and most Successful Companies in the history of the planet has to deal with. I think you will still see them working on striking deals to get the apple card there and some of the other products they want to work on. Taylor we await some other announcements on that this week. Coming up, wework entering the Public Market has been quite a ride. Why vision fund and some others are having second thoughts. That is next. This is bloomberg. Taylor the biggest backers of Softbanks Vision Fund is having second thoughts. They are reconsidering how much to commit to its next investment vehicle. Softbank invested in it at a 47 billion valuation. Now there is talk that the company could be worth less than one third of that in an ipo. For what we should expect from the roadshow, i am joined by sarah and ellen. How much of a scar do we think wework is a relative now for softbank . Ellen i think we are seeing they are more closely tied than expected. They have invested something around 10 billion in the coworking company. We are starting to see how the ipo gets a little shaky, there are effects on softbanks ability to make money going forward. Abu dhabi and saudi arabia, which have traditionally been backers of the enormous vision fund, they are starting to get nervous. They are saying, we are not sure that we want to invest the same amount we did in the first fund in the second. We are starting to see, we work is having ripple effects beyond just their own ipo. Taylor you have been writing some great articles about how they have been an enabler. Does that show that softbanks demand is not limitless at this point . I think that is correct. The tensions between softbank and some of its investors have been going on for some time and wework of course is at the center of some of those concerns. The big saudi arabia Government Fund had some questions about softbank pouring as much money as they wanted to into the company. Tensions inside of softbank between executives who wanted to invest money into it and others who were not quite so sure. Taylor we know that the roadshow sort of kicked off today. We are expecting to have it this week. There are still some last minute filings and final decisions that we are waiting for. I think if things go forward as planned, what we were hoping is that they would have this roadshow starting soon and they would be able to wrap it up before the jewish holiday, which is a time that their ceo may need to spend some time away from technology. There is pressure to get it done soon and they are hoping maybe investors will show some more interest in the stocks now that they have made some governance changes. Friday, they brought back some of the more dramatic Corporate Governance decisions that the company had made and we will have to wait and see if that will have any effect on the company . Taylor you talked a lot about how changing the Corporate Governance structures frankly has not changed what is really wrong with the company, which is its finances. Do you think the structural changes did not go far enough . It certainly helps. It addresses at least one of the question marks. This is a company that is burning cash like crazy so it needs a constant resupply of cash to survive. It owes something close to 50 billion in lease payments and, again, this company has a short history and pleads cash. And bleeds cash. It is still almost entirely in control of one person, ceo and cofounder adam newman. The company sort of made some questionable investment or business decisions. It is probably good that they addressed some of the governance concerns, some of the powers of adam newman, but it rolls back for a few of them. Taylor the big red flags, what are the biggest concerns . Shira this is a company that is growing very fast but look how it got there. We dont know how much money, how much profit the Company Makes on buildings it has subleased for a considerable period of time. It doesnt really go into any disclosures about the buildings it has owned or leased for a longer period of time. This is a company with an uncertain Financial Model and it is on the hook for 50 billion in lease payments. The mismatch around the question marks about its ability to profit ever or the cold hard cash that it owes in coming years, that is certainly a red flag for me. Taylor i think we were a little bit surprised that wework went through with the ipo or the roadshow despite pressure not to. Any idea how that relationship between wework and softbank may change . Part of the interest in following this story has been trying to track the disagreement internally between softbank, wework, between the companies, the banks, about how to proceed. Continuing forward with the ipo despite reservations and hesitations from other parties, because they really need this cash. It is not just the 3 billion or so they are hoping to raise, but it is the 6 billion of additional Credit Facility to get access to only if they have a successful ipo that raises at least 3 billion. Theres a lot at stake for wework to try to make something work, try to see if they can move forward with a plan as had been discussed. Changes are a possibility but that is not what they would hope to happen. Taylor a gauge on how well they think the ipo is doing. Thank you for joining me. Coming up, our exclusive interview with ibm ceo Ginni Rometty as she discusses red hat and the future of the company. This is bloomberg. Taylor Ginni Rometty started at ibm in 1981, became ceo in 2012, and has overseen a dramatic repositioning of the company. Chapter two of techs evolution is centered around reconfiguring data. Caroline hyde spoke exclusively with Ginni Rometty about the cloud and why they can be collaborators. Ginni this is something we always felt so true about, that the customer is first. You live in a world where sometimes your innovation will come from google, amazon, microsoft, ibm, and you want to take advantage of wherever innovation comes from. You want to build something once, run it anywhere. The second part, you want to get to innovation wherever it is. In almost every business, you have competition and cooperation. When we bought red hat, absolute commitment. It is open source. Absolute commitment to the integrity of that. That is really for our clients. Caroline would you still see microsoft, amazon as competition . Ginni we are the number one hybrid cloud player now. That is what i want my name synonymous with. Number one hybrid cloud, best partner to make you a cognitive enterprise. Data and ai infused in all the ways it does its work. If you do that, you have to have a hybrid cloud underneath it. I am really amount the Digital Transformation journey. You already have many clouds. Clients, i will say, how many clouds do you think you have . They will say, two. Come back, i have seven. The idea is connect all of that together and when you speak of just cloud alone, the idea of cloud, which is both private and public, you really are the best cloud for missioncritical work, because of the security and our ability to take missioncritical apps, that is our sweet spot. Caroline our clients getting it . Ginni take the example of delta and at t. At t will move all of their applications onto the ibm hybrid cloud. With red hat, it will be out into the network so your Network Services come faster. Delta airlines, a lot of work done with them as you front end deal with your customers. When you rebook an airline, not only can you rebook, but everything a passenger wants, done. Realtime when you are up in the air. Delta, real strong proponent of red hat as well. Missioncritical, hybrid, multicloud on open systems so you can get lots of innovation, and it is very secure. Caroline red hat, 34 billion, amazing acquisition. You are someone who knew about acquisitions. You helped integrate within ibm previously. How are you ensuring the integration can be as smooth with red hat . Ginni i dont think the word is integration. It is related to what you asked me a minute ago. Red hat is the worlds number one opensource company and together we are the number one hybrid cloud provider. When we acquired red hat which, by the way, it is a very fair price. They are a very good company and very Profitable Company highgrowth, high profit is not what you associate with a cloud company. An Outstanding Firm built over many years. Ibm has worked with red hat over 20 years. We were the original folks who really helped propel opensource onto the stage. We put a billion dollars into something called linux back then. Not everyone is familiar with all the tech pieces but it will be linux, containers on top, and something that moves containers around. This is the future architecture. I think that war is over, that is the architecture of the future. That is what red hat is. When we acquired them, we have two goals. Horizontal and vertical. We are leaving them as a separate and distinct unit. I have plenty of experience. I have done 60 acquisitions in my time. They will participate and continue to be the leader in opensource. It is a very Different Community out there. They must remain committed and neutral. The second, they have to be on all of our competitors platforms. I want to see firm neutrality on that. What ibm does think of them as completely nonbiased. Ibm will be opinionated. We take their products, we use the best missioncritical cloud. I have already built all my software to take advantage of theres. You can now take ibms entire key software portfolio, and it can run anywhere. That is a dream to be able to renovate. All the missioncritical apps in the world are built on ibm. The world is already more than half linux, which is what red hat is, and the destination is our architecture. Taylor tune in all week at 2 30 p. M. Eastern for more of our exclusive conversation with ibms Ginni Rometty. Tuesday, they talk about ibms push into quantum. Coming up, the rest of the gig economy with that new potential law ab5. This is bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Taylor New California legislation including Many Companies from claiming workers as independent contractors will take effect in 2023 named a. B. 5, the law passed the senate and Assembly Last week and governor gavin newsom indicated he will sign it. I will Companies Like uber and lyft make out . To discuss, i am joined by steve jang of kindred ventures. Hes also an uber shareholder so you are the perfect person to talk about this. How big of a hit is it . Steve some of the estimates, anywhere from 20 to 30 in terms of the california operations. Larger than just uber and lyft. It is any gig economy marketplace. That includes Service Marketplaces. A lot of these companies have come about in the last 10 years. They are involved in fixing appliances in your home, perhaps cleaning your office, driving you or your family or your coworkers to and from their employment. It is really a farreaching bill. There has been a lot of exceptions applied into it as part of the political legislative process. It has been an interesting thing to watch. Taylor do you think uber or lyft might be hit more . Steve definitely the Service Marketplaces will feel the hit. They will have to react to that. The truth is the process from here is still complex. Not only does the governor have to finally ratify that, but it is in negotiation right now with the governor. Its also the companies have created a consortium to propose a bill for next year that will be voted upon. Their idea is to provide a lot of the benefits that makes sense and keeps the business running with as many participants, in terms of parttime, discretionary workers who want to be independent contractors, but to provide minimum income and benefits to them. The end outcome here is there is going to be a compromise where a lot of these benefits and assurances should have been proactively proposed by a lot of these companies. The test is whether they can come to a good agreement and do something that is good for the people that are not only parttime and want that discretionary, independent contractor work, but also the people working fulltime and to provide something for both of them. Yet, keep the number of Jobs Available to these marketplaces and the consumer is happy. Taylor how do you value a company like uber . An analyst said he values it as a social Media Company because you are tracking how many monthly downloads you have of the app. How do you value a company like uber that is in so many businesses . Steve it is a Global Business as well. It has International Coverage but also multiple product lines. The core platform is called marketplace. What they have done so well is launched uber eats, uber freight, uber health, which is a very performance version of taking you to your Doctors Office on a scheduled and ondemand basis. A lot of these businesses are built on the same exact matching engine. This matching engine is not dissimilar from a stock market, like nasdaq. The idea that this marketplace has multiple products, it does make it a challenge to identify the overall size of the business when you have so any different product lines growing at different paces and different timelines, beginnings. Looking at it as a platform and evaluating each pro