We have details. And the week that was, elon musk has a reason to dance, and apple hits more milestones, that plus highlights with team monster. But first, our top story, the Trump Administration is imposing new sanctions on iran, retaliation for tehrans attack on u. S. Military bases. Now, the sanctions target the steel industry, as well as eight senior officials. Now while adversaries didnt get into traditional military war, their continued cyber warfare remains. Cybersecurity film dragos published a report highlighting hostile hacking activity by an iranian linked group against u. S. Power suppliers. So for more, we have the president of gullah tech adventures. Prior to that, he was a hacker for the nsa. With me in the studio is the proof point executive vice president. Ryan, let me start with you. What increases have you seen coming from iran targeting the u. S. . Ryan well, weve seen the continuation of campaigns at that they were already running. Perhaps the most interesting thing that we saw was that we saw some of them move from diplomatic targets, Public Policy targets and government targets, the classic intelligence gathering activities, to targets of civilian organizations, particularly lifesciences. Taylor ron, given your background here, what do you see as the path of least resistance for iran to do the most damage on the u. S. . Ron iran can talk or target soft targets, people like you and me, Small Businesses and corporations. Anybody out there who is the gate about protecting themselves, they need to think about their connections to the cloud and what they can do to increase their cyber hygiene. Taylor ryan, you mentioned a lot about civilian targets. A little bit of a shift in strategy. What do you mean when you say civilian targets . Ryan what i mean is private corporations, instead of ngos or policy organizations, or Something Like government entities. When you put yourself in the shoes of the iranians, they are about the deal with much tighter sanctions. They have to provide things like essential medicines. So to me, it would make perfect sense to target life science groups. Taylor when you look at sort of the access to u. S. Utilities, is that sort of a very classic way in which they could do harm, create chaos via a blackout for example . Ryan the russians have used that playbook against ukraine. The iranians, weve seen targeting utilities over a fairly extended period of time, and theyve done destructive attacks. That hasnt translated necessarily into actually taking power grids offline. That would be a different level of expertise. But all those things are on the table when it comes to planning for defending. Taylor ron, you seem to take a different point of view that perhaps we wouldnt see a mass blackout type of scenario. Why do you think that . Ron so, iran has many options when it comes to taking action in cyberspace. If they did Something Like attack the city of baltimore, attack the city of atlanta and claim credit for it, they will invite a strong response from the u. S. And i dont think they will do that. Having said that, their goals are going to be gathering information and intelligence about u. S. Policy. So anybody whos a vendor for the u. S. Or working with the u. S. Government, theyre potentially a target and they should be getting a second look at their cyber defenses. Taylor that brings us back to ryan. As they look at going back to their cyber defenses, what do you recommend the corporations, even people perhaps, what can they do . Ryan i think you have to look at what the iranians are good at. Theyre good at social engineering, excellent at running phishing campaigns. Theyre very compelling, the sort of things people will click on, were they not aware of the threat that the attachments to emails may pose. Theyve also hammered on cloud services. And really, the iranian playbook is similar to the cyber criminal playbook, in general. Ron is spot on, everybody should be concerned, but the things you would do to defend against iranian attacks work in general. The other thing ill point out is the part of Homeland Security has fantastic advice on how to keep yourself safe, one thing was offline backups. Now, the same things weve heard about in the ransomware crisis, that has affected cities and organizations around the country, thats a fantastic way to prepare yourself for a potentially destructive malware attack. Taylor ron, what do you think of, should the u. S. Start hacking back . How do governments and corporations here whats the best preventative ways for them to brace for a potential iranian cyber warfare . Ron i dont think we really know what cyber warfare looks like. If we compare their abilities with the u. S. , President Trump, after the drone was shot down, we took offensive action as reported. Thats different from the capabilities of iran. They target businesses and corporations. Thats where us as u. S. Citizens can have an impact, by controlling what is on her own network. Taylor ron and ryan, thank you both for joining me. And coming up, the first phase is about to be done, we break down what to expect in next weeks trade deal and what is left for phase two. And if you like bloomberg news, check us out on the radio, you can listen on the bluebird app, bloomberg app, bloomberg. Com and on sirius xm. This is bloomberg. Taylor President Trump says the u. S. And china are set to sign an historic phase one trade deal and the president s Economic Advisor laid out what this means for the Tech Industry when speaking to bloomberg on friday. Weve got tremendous amount of progress on intellectual property and the avoidance of theft and counterfeiting, a tremendous amount. And with respect to the transfer of technology, some progress has been made there, too, more will spill over into phase two. Taylor to take a look into phase one and whats to come, in new york, we have a senior fellow from the asia society, isaac stone fish. And Sarah Mcgregor. Sarah, let me start with you. Were still waiting on phase one. What are the odds we could see a potential for phase two . Sarah so, the expectation is on wednesday of next week, on january 15, a chinese delegation, led by the top trade negotiator, will be in d. C. And assigned the phase one deal. Weve heard from the Trump Administration that finally we should receive an actual text of whats in the deal. We have comments from people, likely just played at larry kudlow, saying there are things on ip theft and detect transfers and other things, but we have nt seen the nuts and bolts. So, i think thats the first thing that we need to check off the list. After that, we see potentially the phase two part of the deal starting. That being said, trump said himself this week it may not come until after the election. So, i think there is skepticism about if he is reelected, will that ever come . Will the political motivation be there for him . Taylor isaac, your thoughts on what we have in phase one, and if it leads us closer to face two. Isaac i think it has to lead us closer because its a step in the direction. But i think weve got very little in phase one. Its sort of an agreement to have an agreement to have an agreement. And it seems pretty short on details. I also, with trump saying, maybe we have to wait until after the election, it really does seem to be a trust me, im working hard for you. Heres a little bit of a deal, vote for me and youll get more of a deal. Taylor sarah, we heard about larry kudlow talking about getting big concessions from china with relationship to technology, like the ip theft, like the forced Technology Transfers. What specific details, as we know the devil is in the details when it comes to trade deals, what are you really looking for as it relates to those topics in phase one . Sarah so, a big issue in may was china had come back to the u. S. With a draft text and really scaled back on some of its commitments to codify into law changes that would help protect intellectual property of foreign companies, like those u. S. Companies that are working in china, and other commitments. It sort of shrunk back from those. And theres a complex system there on how they codify the laws with many different layers. The u. S. Was not happy with what they were offering. So i think a key question, when people look at the text and know the details of chinese law, it will be whether they actually made a hard and fast commitment. And if they dont live up to those commitments on ip theft or tech, what will be the repercussions . What is the enforcement mechanism in place so the u. S. Can say youre rolling back on these commitments you made . Taylor why has it been so difficult to get all of us on the same page when it comes to ip theft and the forced tech transfers . Isaac you have two countries with different interests on this. I think like it was with the u. S. And the u. K. 150 years ago, a lot of the best technologies are in the hands of American Companies and the Chinese Companies want to get their hands on that technology. And some of them use illegal means to do so. And i think, on the one hand, there are many people inside the communist party who want the country to be ruled more by laws as opposed to the party, but there are many at the top of the party that feels like what the party says is what should matter. So if a certain company, if they re forcing a Technology Transfer or actual ip theft, if its in the interest of the party they think they should do it regardless of laws. Taylor when we came out of the phase one news, it was clear apple was the clear winner of tariffs on the iphone, for example. So, what other companies do you see really benefiting on the signing of phase one . Isaac i see tesla really benefiting from this because theyre doubling down on their plant in shanghai. There are a lot of companies that have a lot at stake in this relationship and its less about the numbers, but more is on whether or not the party and also chinese consumers a feel goodwill towards the company. We saw this with apple and the chinese tech giant huawei, when the canadians arrested the cfo, there were people who wanted to boycott apple. And so theres a lot of issues about the goodwill that the chinese feel toward American Companies, and at the party feels toward American Companies, that could play out in interesting ways. Taylor sarah, as you Cover Economic policy, does any of the u. S. Goodwill from American Companies help . We talked about tim cook having a good relationship. You talk about elon musk over at tesla going to shanghai and trying to build a factory. Does any of that make a difference . Sarah i think it makes a difference on the Trump Administration we know that steve jobs, for instance, spent time at the white house and has met with donald trump. And for that reason, apple has been able to escape the tariffs, get exclusions for instance, and thats an indication of the leverage some of these companies have. They, of course, want to keep access opening to the chinese market. This trade war started on the premise of the Trump Administration saying it was going to bat for businesses, trying to level the Playing Field to make it easier for them, when really i think what were hearing from the companies now is theres been harm caused to them and they want the dust to settle more than it has been for the past couple years. So the push for a deal is part of the corporate lobby that the Trump Administration has of companies that want to keep their foot in china and expand it. Taylor Sarah Mcgregor and isaac stonefish, thank you for joining. Coming up, more employees is stepping down from google. Well find out what happened next. Bloomberg technology is on twitter. Check us out technology, follow our breaking news network on twitter quicktake. This is bloomberg. Taylor another shakeup at google. David drummond is retiring at the end of january. He steps down following questions about his conduct at the tech giant. This comes after a recent departure of their founder, larry page, and sergei brain. He was the first lawyer for google before shifting to alphabet in 2015. For more im joined by mark bergen. What do we know about the departure . Mark this was sort of a long time coming. David drummond had been there for a long time. He was formidable in its early rise. Hes been associated with the old school google, but more recently with their problems around men, in particular, and allegations of sexual harassment. So, he was the top lawyer when the andy rubin dispute, the former head of android, who spurred the google walkout. Hes had issues with allegations with extramarital affairs, with former google employee. Employees. There are many women at google who are asking, why is he still around . What sign is it showing . Now, a month later, david is stepping down. Taylor on that point, what does this tell us about google shifting strategy, perhaps taking a closer look at relationships conducted in the workplace . Is this a shift on a broader level . Mark i think theres a shift external and internal pressure from their own employees and from the general public after the metoo movement, a general consensus that this sort of baggage that the executives had was much more of a hindrance. David, like the founders, has taken a step back, he has retreated from daytoday operations. He was running, he was managing Google Ventures and capital g, their investment arms, as well as jigsaw, but it wasnt clear, he certainly wasnt involved as much as he was a decade ago when he led their development and legal strategy. Taylor i think it brings up the bigger change given the shakeup and top management that weve seen. We sat here last year when sergey and larry step down, no offense, we said nobody cared because it was so clear of his strategy following in the steps of google. Is there that same sort of confidence in the next generation of the legal team we had when the founders step down and we had so much confidence in the new ceo . Mark yeah, he was a deputy under David Drummond for a long time. Before that, i think google has had the largest legal team of any company. The question that this poses is more around or the other parts of alphabet. So, david german was everything not google. Its not named a replacement, its not clear if there will be one. It will be interesting to see if they appoint somebody to run what he was effectively doing, which was the legal and Corporative Development for everything from waymo to other divisions, if they think they need that executive level seat. Taylor mark will stay with us, because i want to talk about another google story. In the wake of amazons stumble, google quietly expands in new york city. The tech giant has added thousands of jobs in the chelsea neighborhood in 2006, without provoking much ire. Joining us to talk about this story is Bloomberg Natalie Wong in new york to really talk about how google has navigated the landscape so far in the city. Natalie, what did they learn from amazon in deciding to take a different approach . Natalie i guess the lesson that you can see in contrasting their approach to building an empire versus amazon is it takes time, you have to be incremental and you must work with the local community. Google set up shop in the chelsea neighborhood in 2006, while it was gentrifying, but they leased the space first then started to buy up the real estate, expanding further, while working with the community in chelsea. Whereas amazon came in in a public way and did not really engage with the local community on the grounds of long island city, and that clearly was a hindrance to them when they had that critique against them when they announced they would set up shop there. Taylor and mark, were showing visual pictures here of googles presence in new york, and there was a strategy that struck out to me. Theyre not building these big tall glass modern buildings. Theyre also taking a different monetary approach, not asking for subsidies. What do you make of those two strategies . Mark the first one is different from their headquarters in mountain view. They had these big ambitious plans a couple years ago and they hired an architect. They were going to do modular offices. It was sort of like a google moonshot. This one is much more muted and looking at the reaction to amazon, a lot of the critical backlash, google clearly wants to be as far away from that as possible. The other interesting thing about their strategy, when they initially got that large building in 2010 in new york, that was above these fiberoptic cables beneath the surface. And a lot of what google does is they think about how are we going to actually work this with their data center, piping in internet as fast as possible. So, their strategy depends on their datacenter use and the speed of their services. Taylor natalie, its notable that theyre not asking for subsidies, because thats where amazon was criticized. Has that also been part of their take . We wont ask about subsidies either. Well go in, develop the neighborhood, and work with local regulators . Natalie thats played a role in their success in manhattan. With amazon, subsidies did not work out well. And they Just Announced a big lese in hudson yards, around the same neighborhood as chelsea, where google is located and they signed a lease that will house 1500 workers without subsidies. Taylor natalie, whats your take on relationships with the politicians . We remember aoc, very strong critic who was outwardly bashing amazon. Has google done a better job with working with some of those regulators on the ground and getting them on your side . Natalie its really important to cultivate local relationships, and we found out that google has worked closely with the community activists, the politicians and local organizers to make sure they get ahead of any issues or complaints before they come out to the public and there is a big outcry, as we saw with amazon. So, for the most part, theyve avoided that public outcry with what theyve done in chelsea, which in a way there has been gentrification since google came in. Its not perfect. Musl