For. And 2020s crystal ball. Well talk predictions for Tech Companies in the new year as well as what tech trends well see in the next decade. The battle for tech privacy in 2020. Wednesday marks the official start for the California Consumer privacy act. This law is meant to give users transparency around what Data Companies select on them as well as the right to Block Companies from selling that information. For a look at what to expect this year in the battle to protect Consumers Digital lives, i talked to reese purse a partner where he coheads cybersecurity practice. Also with him is Eric Newcomer who covers the intersection of tech and government. This is probably the most important privacy legislation in the United States today. I mean, its economic powerhouse. We dont have federal privacy legislation. This is important for California Companies and users in california but also just all over the United States. And it means that companies are going to have to disclose what data they collect to users and then let users delete data they dont want the company to keep. There also has to be much more mindful with the data they retain and disclosing the data theyre going to keep for users. Taylor reese, what is it about ccpa that makes it in your opinion the largest data privacy laws weve seen . Reese weve never seen a law this comprehensive regulating privacy in the u. S. And because california is such a huge market, its going to have a large impact on National Companies and the data they collect even outside of california. Privacy regulation in the u. S. Has been a patchwork affair so far but is a comprehensive rigorous approach that creates a host of privacy rights for consumers they havent had before. Taylor eric, when you take a look in your reporting you look at ccpa coming into effect but there could be differing valid initiatives that post changes to the law. What could potential changes could we be facing . Eric there might be a referendum in california on the ballot in 2020 which would sort of lock in a lot of ccpa and expand the provisions and make it harder for california legislators to chip away at the bill. Thats one thing. Then you have illinois, new york, Washington State looking at bills and then theres still this stream of, you know, federal legislation, the idea that the Senate Commerce committee could come up with a piece of compromised legislation that could solve this problem nationally. But theres a lot of moving pieces if youre a company trying to figure out, is it just about complying with the current state of california privacy law and am i watching other states and what changes if theres a redged up. What initiatives on ballot oposeed could be different from what we have [reece the ccp was created from a Ballot Initiative and continues to evolve and its possible this new initiative could be on the ballot in november and it will if anything strengthen the ccpa and make a number of significant changes like changing the Enforcement Agency and take jurisdiction away from the California Attorney general and give it to a new agency regulating privacy in california. Taylor reece, do you see california as the beginning of a federal privacy law . Reece california has always been a trendsetter in privacy regulation and i think thats definitely proving to be the case already because as eric mentioned there are laws in new york, illinois, washington and other states that seem to take their cues from the rrpa. And i think right now the chances of federal privacy legislation appear to be stalled but if you have states around the country adopting new laws that either are similar to the ccpa or take the ccpa a step or two further, you could have an enormously complex regulatory landscape for businesses in very short order and i think if you reach that pain threshold where businesses are finding it difficult to reconcile these conflicting requirements that could finally be the impetus for federal legislation. Taylor eric, in your opinion what do you see as the big driver for federal legislation, is it frankly the fact businesses will be so confused by multiple different state laws that they really do need a federal law to lead the way . Eric right. I think there are these two different pension plans. On one side the private right of action or general push on consumer advocates and more the democrats to give strong enforcement on any privacy legislation that passes. Thats a key piece of debate in the federal raw. Federal law. How much are the states bundling the enforcement and thats part of the california referendum like we talked about earlier. Then the other side is whether were going to have the federal law consumer everything . Basically federal preemmings. And that takes over and kills the state bills and makes the federal bill the law of the land. Thats what the republicans are fighting for. You see the debate, do we have federal redemption or private right of reaction, we have neither. Thats where the debate remains. The small part of the bill people tenled to agree but its the big ideas, how we enforce it and whether the federal law is the ultimate law in privacy thats still up for debate and why congress is stuck. Taylor reece, what are you hearing from business us in a high level in terms of being compliant with ccpa and is that a big deal because they already compete with a loder level of prove answer. Reecu umpr is a privacy law that went into effect the year before last and the ccpa does draw upon a lot of the concepts in gdpr but thats a law that applies to data of european residents. So it hasnt even for Big Companies that implemented gdpr compliance they havent done it get for their u. S. Operations. And also the ccpa has its own set of requirements and nuances. O the fact youve done ggdpr doesnt mean youre there by any means with ccpa. Taylor that was reece hirsch, partner at morgan lewis and eric new 2k7 comer. Get ready for a new slew of cyberattacks in 20206789 and tell you what crowd strike is doing to address those threats next. If you like bloomberg news, check us out on the radio and listen on the Bloomberg App and bloomberg. Com ando in the u. S. On sirius xm. This is bloomberg. Taylor new year, new threats. Cybersecurity trends in 2020 will include new mobile risks. In addition, hackers are expected to employ Machine Learning in attacks, and the cloud will prove Fertile Ground for compromise. Cybersecurity tech firm crowdstrike provides Threat Intelligence and cyberattack Response Service is meant to deal with such risks. The company is also the top security pick for analyst Alex Henderson. Basically, there is two points i would make. First one is, we believe security is an area that absolutely has to see more spending. It is a primary focus not just in terms of i. T. , but at the board level. To that extent, we think of that there is clearly going to be a very significant increase in spending, particularly as we get closer and closer to the election. It will become more of an issue. We particularly Like Companies that are in the cloud or direct segment of the marketplace that have a cloud native solution. I had heard your last guest talk about security in the cloud. What we want to highlight here is that these are companies that are in the cloud natively, that are used to protect Companies Directly from the cloud, as opposed to connections between aws, microsoft azure, or Something Like that, where it is a cloud connection, but not necessarily secure. Quite different from what he was referring to. But ultimately, the reason we like crowdstrike is we think the companys growth will continue to be well in axis of 50 over the course of the next year. The street has it slowing down to about 30 growth by the end of the year. I think that is too steep of a the celebration from the 100 growth they posted last quarter. Additionally, any upside you get in revenue demonstrates significant margin leverage. So we think there is good upside to both their revenue and the margin side of the equation. We believe crowdstrike is one of the Key Solutions to Security Problems that enterprises are facing. Taylor so you paint a positive picture in terms of enterprises and corporations increasing their spend on cybersecurity. But what is crowdstrike doing specifically that perhaps other companies are not to take advantage of that positive backdrop . Alex sure. Let me delineate between the winners and the losers here in the security space. We very strongly believe that the world of perimeter defense, where you basically put an i. T. Stack at the edge of your data center, is no longer a valid security solution. While you still need to do that, the world is shifting to what i would call a cloud direct solution. Companies like okta, zscaler, crowdstrike, Companies Like mine cast and proof point are in the cloud and delivering cloud security. The companies that are in the perimeter side of it, like palo alto, checkpoint, these companies are trying to do a perimeter defense model where you are essentially trying to keep the bad guy out. You are just never going to win at that. There was a recent Security Survey where 76 of chief of Security Officers at enterprise expected that they would be hacked in the next 12 months. 60 of those said that they did not think they would know it when it happened. That is a function of the failure of perimeter defense to work. All a bad guy has to do is get there once. You have to keep them out 100 of the time. It is pretty obvious that is not working. We are moving to a world of zero trust or cloud direct security. These companies that are in the cloud that are delivering that i think, ultimately, are the winners and will be the next generation of Security Companies and will gain share in perimeter in the ndustry. Taylor thanks to Alex Henderson of needham. As for those new Cyber Threats on the horizon, we got insight from one of the most Renowned Experts in the field, Tom Kellerman of vmware. He served on the commission on cybersecurity under president barack obama. Tom it has become a functionality of conducting business in todays world. You have to appreciate that all the major organized crime syndicates in the world have created Business Models around hacking. You have a rogue nationstates with dedicated cyberattack divisions. Geopolitical tension continues to manifest in cyberspace. With things like the trade war and other Current Events around the global stage. Taylor you know, tom, i wonder who is most at risk. I talked to cybersecurity experts and they say it is the employees. That we are exposing the companies. Financial institutions are always a big threat. Who, in your opinion, really poses the biggest risk in 2020 . Tom i think there is a shift in how hackers are hacking. They have moved away from burglary to home invasion. It is a lot more dangerous in that they will take over and commandeer your Digital Transformation efforts and use your infrastructure, your website, your mobile app and a network to attack your customers. Your brand will be used against your constituency, and thats the awakening that must be had in corporate america. Taylor i want to forward in the election. As you look at 2020, are we more prepared than 2016 . Tom i would say we are more prepared, because we are aware of the antics that certain nationstates will implement to leverage democracy. There is very few states that have taken up the free assistance provided by the department of Homeland Security to better secure the electoral system. Frankly, many states are hamstrung, with limited budgets and capabilities to do an effective job in thwarting nationstates. Christopher wray says he sees activities by at least three nationstates that are targeting our electoral system. Taylor what are the ways in which you see hackers getting to us in 2020 . Is it as simple as the voting machine or something much more enhanced . When it comes to the individual or the corporation, e need to be wary of our information supply chains, Cloud Service providers, outside general councils, outside marketing firms that we utilize. Even as individuals in the same regard, because of those entities will be attacked, and their infrastructures will essentially be jacked in order to target us and our constituencies as a whole. More importantly, what carbon black or vmware Carbon Black Research has shown is there is a genetic uptick of destructive attacks where hackers are manipulating the integrity of data, and changing either the way a corporation operates or an individual thinks specific to their devices and digital environments. Taylor i love that you brought up the cloud, because we have grown up thinking the cloud is secure and safe. Is the cloud more at risk than e think it is . Tom not all clouds are created equal. Honestly, the whole purpose behind what we are focused on here at vmware is to build in intrinsic security into the environment across the entire stack. You cant try to retrofit security on cloud environments. You have to build it in from the beginning. You have to understand that an adversary will use that environment to attack your constituency, so you have to have greater visibility in how you suppress that adversary in realtime. It really depends on the strategy and the amount of dedication of the organization to securing their cloud. That varies by industry and corporation. Taylor tom, you were saying that some of the biggest threats are coming from russia, iran, china. How are they differing in their approaches . Tom well, frankly, you know, you have a 50 year plan espoused by china for information dominance. I do see that as the trade war is cooling, you will see lesser and lesser attacks by chinese hackers against american corporations, hopefully. But you see north korea and iran now having teams with cyberattack capabilities and they are willing to destroy data, they are willing to attack infrastructure and leverage attacks against your constituencies. The cold war is alive and well. Russian techniques are very much focused on undermining the institutions of the west and the validity and integrity we place upon all sorts of things, from democracy, to our own ata. Taylor that was Tom Kellerman of vmware. Oming up, drumroll for tesla. The company delivered its first chinamade model 3 to customers in china before the end of 2019. Was it enough to help meet its delivery goal for the year . And, conversation with the cofounders of grab. From ridesharing to food delivery, we look ahead to the future of the singaporebased tech company. This is bloomberg. a taylor this week marked a major milestone for tesla in the Worlds Largest market. The first 15 units of model 3 sedans assembled at teslas new multibilliondollar shanghai plant were delivered on monday. I discussed the significance of the occasion with bloomberg auto reporter craig trudell. Craig the red bars in that chart signify just how much people are expecting china to sort of carry the water for the general ev market. That is really the case for tesla as well, and the reason why people have been so optimistic about this company. When you look at the rally that abigail just talked about, it is a significant portion of the reason why investors are growing so bullish with this company. Obviously, people were willing to give elon musk a little more benefit of the doubt after the Third QuarterEarnings Release when they reported a surprise profit. But really, the optimism that you have seen more recently that this is a company that will be able to unlock significantly more potential in the china market is a sort of a bet that is being made here. To answer your question, though, it is a little unclear at this point just how much this will have a significant effect on tesla, because we are not seeing the price of the model 3 drop significantly yet. What we may find is that the company will be able to bring the price down for the model 3 once it is able to localize more of the content of that car and the sedans that it is building in the shanghai giga factory are more sort of, you know, localized in that market. Taylor are those production targets for that shanghai factory realistic this time around . Craig you know, its funny. We talk about how much of a heated debate there is over the stock. Part of that is because there is this shakiness of execution versus the promises musk tends to make. This is a ceo that has talked about, early on, being able to make 1000 of these cars a week, at some point getting to 3000. Hes talked about the idea that the longterm demand picture for tesla in china could be around 5000 per week. But the analyst at cowen, who we have talked about earlier, ho is a little more on the bearish side, is skeptical that the company will be able to hit those levels, especially with the Chinese Government pulling back on subsidies. We have seen the ev market in china really struggle as a result of that pullback. Taylor are those production targets for that shanghai factory realistic this time around . Craig you know, its funny. We talk about how much of a heated debate there is over the stock. Part of that is because there is this shakiness of execution versus the promises musk tends to make. This is a ceo that has talked about, early