Content, and digital assistants. We have highlights from the annual ces event in las vegas. We hear from the heads of micron, qualcomm, Verizon Media, and quibi. And Tesla Ceo Elon musk cuts a rug after delivering the first customer cars from the shanghai factory. Shares touch record highs. Our top story this week brought increased tensions between the u. S. And iran. Last friday, a military strike in Baghdad International airport took out one of irans top generals. Tehran responded by launching missiles at u. S. Interests in iraq. It all roiled the markets and created new fears of cyber warfare. CyberSecurity Firms like cloudflare and fireeye were up this week as a result. I was joined by marcus fwoler, the director of strategic threat at ai Security Firm darktrace, and our cybersecurity reporter kartikay mehrotra. Kartikay i think there is a significant distinction between irans conventional battlefield capabilities and where they are on the cyber front. They are never going to go tototoe with the united states, at least in this realm, in a conventional battle. In the cyber realm, they have a greater chance of pushing back more dramatically and having a greater impact in the united states. So even though they have not gone that route in terms of immediate reprisal, it is not out of the question that, in the days, weeks, months to come, that we will see Something Else. Taylor marcus, your take on a potential cyberattack . Marcus yeah. Kartikay, you make great point. They are moving into the cyberspace. This is the time for them to do it even more than they have. They have historically and beyond. Certainly, i was not expecting to see it as the immediate retribution. We saw that last night. But the cyberattacks and vulnerabilities are significant and we think about those. It expands to not only the government, but the Threat Landscape associated with the private industry and commercial companies. Taylor and i wonder why a physical attack first and then a cyber attack . Why is cyber attack seen as a secondary choice . Marcus i would say secondary or augmenting. I feel i, in order to get revenge, adequate revenge, it needed to be something in the physical space iran could point to as on par with what occurred. However, cyber disabling Critical Infrastructure as their first move would have been very escalatory. Cyber moving forward beyond the physical allows them to do it behind the scenes and include something they could attribute. For them to say it was something that could be conducted and take action that their name could be put to it. Taylor in the introduction, we were talking about fireeye and crowd strike as a few examples of companies that could benefit from this. In your reporting, is it too early to tell some of the winners and losers . Kartikay it is hard to say because you have crowdstrike and fireeye as the two prominent, strictly cyber firms listed, but there are dozens of large and Small Companies that play in the space. Microsoft offers Cyber Security solutions and Onsite Services when there is a hack. Cisco does as well. There are local providers in states that are providing state governments and counties with cybersecurity protection. So i think you can distinctly state that crowd strike and fireeye will reap some of the benefits, but what share is hard to tell right now. Taylor marcus, i am curious to know, now that we have been talking about this for a few days, if that means we are any more prepared . Marcus i do not think the answer is yes. I think you are more on guard. I do not think you were prepared before or trying to repair now. And as you talk about the Cyber Security companies and what they are looking at and what they may be thinking about in terms of position, i think one area we are seeing a growth in this industry is the application of Artificial Intelligence to move faster into that security space more quickly. So you can move faster. We have a scarcity of cybersecurity skill sets. There are a number of individuals trying to figure out the right formula for bringing in new technologies, like Artificial Intelligence, while getting a more robust Security Team in place. Taylor marcus, some of your smart analysis has pointed to an increase in National Infrastructure and cyberphysical attacks. Walk me through both of those. Marcus theres a lot of vulnerability in the u. S. If they were going to strike inside the u. S. , i do not think it would be physical. It might be against Critical Infrastructure. I think, today, we move past that level of escalation, but it remains a vulnerability and something we have to be very mindful of. And i know that the u. S. Government is obviously very focused on it. But the systems, this Critical Infrastructure, now being more linked into the i. T. , and that makes that vulnerability increase. On the cyberphysical front, you are talking about moving away from going after data, grabbing data, and more at causing machines to destroy themselves through a cyberattack. That is significant as we move further into that space, and it becomes mainstream as a viable escalation point. Taylor kartikay, i feel like i come to you every few days and ask how good are the iranian coders and how good are we at defending ourselves . Do we know how far i am asking terms of preparation are they getting ahead of us . Kartikay it is hard to say on a daytoday basis how they are progressing. But since stuxnet hit 10 years ago, we have seen irans capabilities mature aggressively. In 2012, they showed an attack on saudi aramco, and no one thought they would use that tech again. Then, four years later, they were able to tweak it and able to attack a broader swath of saudi assets. Again, we have seen smaller attacks that are more incrementally sophisticated in their technology and the way they are using it to indicate that their program is getting stronger. The trouble is that understanding exactly what they are capable of only occurs when they successfully infiltrate an adversary. And so i guess we will really know what they are capable of when we see what theyre capable of. Taylor that was Marcus Fowler of darktrace and bloombergs kartikay mehrotra. Coming up, ces kicked off in las vegas, and we talked to the biggest leaders in tech and media. Next, we hear from the ceo of micron as chipmakers have enjoyed a recent rally. If you like bloomberg news, check us out on the radio. Listen to us on bloomberg app, bloomberg. Com, and, in the u. S. , on siriusxm. This is bloomberg. Taylor chiprelated stocks have enjoyed a recent rally against the Broader Market amid growing optimism for the sector as 2020 takes hold. That optimism was apparent at ces in los angeles. I caught up with micron ceo Sanjay Mehrotra tuesday. Sanjay with respect to the chips, we have said that 2020 should be a good year for the industry. First quarter of calendar 2020 is typically a slower quarter in terms of demand. But in our industry, because of the capex reductions, the supply growth has been slower than the demand growth. In Market Applications such as 5g, ai, all of these are driving explosion in data. An microns products are used to store that data and process that data. So applications are growing. Micron is expanding its portfolio solutions. We are wellpositioned for 2020. We are excitedly looking forward to 2020. 2019, there was some excess supply in the industry. Yet micron produced excellent results. We are looking forward to 2020. With Strong Demand drivers as well as strong inclusion on the part of micron with technology with respect to Product Portfolio and technology. Taylor analysts on the street, namely some from cowen, upgrading the stock, saying that nand should become profitable as new smartphone launches help tighten the supply up. Does not coincide with your thinking as you look to supply in 2020 . Sanjay yes. As we said, i think the supply growth is less than demand growth. And the demand continues to exceed, given the and Market Applications such as cloud, smartphones. Increasingly, autonomous features in driverless systems as well. All of these are driving growth and demand. Just look at 5g smartphones. They are actually driving higher than average capacity than 4g. There have been phones announced with dram content as high as 12 gigabytes. Even 300 5g phones have six gigabytes of dram gigabytes in them, where before they averaged four. In 2020, a couple hundred million of 5g smartphones are expected to be sold. 5g is going to be a strong driver of dram content growth as well as flash content growth. Given the speed and connectivity it provides, an explosion of data and ai driven features as well as immersive experiences. That 5g will be able to give to you. They drive greater demand for data, which bodes well for microns business. In fact, we have exciting products that we have, over the years, in 2019, that we have announced that student very well for the smartphone applications. But let me tell you it is not just about smartphones. When you look at clouds and servers, they are requiring ai driven applications that are requiring more and more memory storage and Cloud Storage as well. Taylor that was micron ceo Sanjay Mehrotra. As for qualcomm, it unveiled the first chips and software for fully Autonomous Vehicles at ces on monday. Qualcomms president , cristiano amon, spoke with bloomberg about what he calls the companys natural extension into this space. Cristiano we are very excited to expand our automated offering. We believe that the cars are going to have to process so much data. It requires so much processing capabilities. You much, it is going to require a completely different equation about power. And coming from the cell phone industry, we actually have the ability to do chips. They are very efficient, from a power standpoint. You cannot run a data center out of the trunk of your car, and i think that is where the real opportunity is for qualcomm. We unveiled, today, our solutions from all the way from level one to level four , which is autonomy. More importantly, we believe the real commercial opportunity will be to add autonomy to every car as a convenient feature with a driver behind the wheel, like cruise control. I think that is the real opportunity qualcomm has to scale this. And we are also pleased to announce the expansion of our relationship with General Motors to include autonomy as well. Very happy about that. A significant milestone for the qualcomm automotive business here at ces. Romaine so when we talk about the prospects and competition in this space a couple months ago in november, intel talked about its acquisition of mobileye and how it was scaling up at a pace that it said is faster than competitors. Is the race here is it going to be about what you do at qualcomm internally, or do you look at m a and buying smaller players out there . Cristiano that is a great question. We have been building in our automotive business organically. And i think we got naturally to connectivity to become number one in telematics. Also connecting the cars to the other cars. Then we went to the digital cockpit transformation. And we became number one with 19 oems engaged. Autonomy is a natural extension of our computing capabilities becoming more powerful for Battery Powered devices, that is what you see in phones. We got into batteries for the car as well. We could see further acquisitions down the road but probably smaller. We feel pretty good about what we have done so far to be able to build our platform with organic efforts. Scarlet obviously, there are going to be a lot of flashy things thrown out at ces that will make you think that all of this will be available tomorrow. When it comes to Autonomous Vehicles, though, we are not there yet. When is qualcomm betting we will actually get Autonomous Vehicles . Is this a 2020, 2022, 2030 event . Cristiano that is where the difference is. While we have a platform we can do full autonomy, we are focused on level two and three, which allow you to get scale and make this a commercial good proposition for us and our makers. In the platform we unveiled today, we expect to see cars on the road by 2023 with what we call level two or level three, which will have the full autonomous capabilities with the driver behind the wheel, much like a feature. That is where we think the scale will be and we think will become a commercial reality. Taylor that was qualcomm president cristiano amon. Coming up, the food Delivery Business is getting crowded, and taylor its no news that microsoft competes with amazon in the Cloud Business, but a new target seems to be in retail customers. For details, i caught up with bloombergs dina bass and mizuho analyst gregg moskowitz. Dina we are talking about this, first of all, because microsoft Ceo Satya Nadella is keynoting a big retail show. Retail is one of their most important sectors. Generally speaking, Web Services Amazon dominate the market, but none of the retailers want to work with amazon, which is one of their biggest competitors. You do not want to line amazons pockets with cloud revenue. Microsoft is working with a lot of these customers, like kroger and walgreens and now ikea, on a bunch of Different Things like store of the future concept. Ways to help these companies ecommerce sites better, monetize, sell more advertising. Things that will help these retailers do a better job of competing with amazons consumer business. And, at the same token, these relationships help microsofts Cloud Business compete better with amazons Cloud Business. Taylor as you take a look at microsoft in your coverage, where do you see them able to expand some of their cloud offerings to really go more toetotoe with amazon . Gregg sure. I would say, first, to take a step back, amazon is going to get a lot larger over time. However, we have fairly consistently seen microsoft narrowed the gap in terms of size visa vis aws. We expect that will continue. They are doing a better job getting more enterprise business. They recently won a 10 billion project with the dod over a ten year period. They have the retail aspect. I would say it was last year in 2019 when we first began to hear about microsoft pitching to customers that they are the more logical presence, or cloud provider, as it relates to those retail companies, where, again, they are not in the crosshairs, so to speak, as that might be the case with aws. So those would be areas where we are seeing microsoft gain momentum. Taylor that was bloombergs dina bass and mizuhos gregg moskowitz. The Food Delivery Service is a crowded one, and there were reports grubhub may be looking for a sale or acquisition. Analyst Gordon Haskett says the company is more likely to be an m a target. For more about what to expect in terms of consolidation, i spoke to d. A. Davidsons tom white and jefferies analyst brent thill. Brent you have seen the consolidation space with doordash buying caviar. You are seeing other small, regional players get rolled up by others in the industry. It could go either way. Really, there has been a lot of pressure on the revenue. The margin has put a lot of focus on the market. Our shortterm thesis is that grubhub has been dislocated. They had great margins, but longterm, the economics can be restored. I think the ceo of grubhub has said that consumers should not get used to the prices that they are seeing right now because they are not sustainable. Like in any market, you see too many vendors chase the market. You are seeing that now. There is just way too much competition. That will consolidate and, potentially, economics will restore. There is a standalone case for grub, where they could actually do very well among three big players, which we think they would be the third biggest. There is another case where you could see, would amazon want to acquire this . Could uber or doordash look at a way to consolidate some of the assets together . Could another large food or Beverage Company look at this . I think there are a lot of options where shareholders could win at this level. We dont have a buy on the stock but do believe you could see a higher price. Taylor you mentioned uber eats. So let me come and pose this question to you. You have been covering uber and uber eats. Do you see potential for uber eats to come in here and take up grub . Tom yeah, i think i do. Echoing the comments of my colleague here, i think this is a space that is ripe for consolidation. You have a lot of businesses that have very similar, if not identical, business models. They are burning cash, chasing growth. On paper, consolidation seems to make a lot of sense. For uber, it makes a ton of sense to explore this. I think there are reasonable questions as to whether or not they could get a deal done. I think uber has a target on their back, if you will, in the eyes of regulators broadly. That is an open question. With these sorts of deals, when antitrust folks look at it, it kind of depends on how they define the market. Are they going to define it narrowly as just Online Food Delivery or are they going to look more broadly at food delivery in general, including offline and sort of restaurant volume overall . So there are some questions there. But also, to brents point, one thing that could also go against the deal in general is it could likely result in prices for consumers going up. That is not something regu