It is all about people losing jobs and sometimes thinking they lost jobs to people abroad. Makes a point that while economists are almost , there is free trade a reality that people lose their jobs through jobs going abroad. Lowwage jobs are moving to places like china where things can be produced more cheaply. Things are moving out of china to vietnam where they can be produced more cheaply still. They had these programs where workers are compensated when they lose their jobs to trade but they have not been that effective. To economists, the idea is when you loose your job to trade, if the markets are efficient, you will find another through some new business coming up. A really incredible feature in this issue, how to hack an election. Introduce us to the man at the center of that profile. He is in custody in columbia. A rare interview. This is the first time that he told his full story. Him in aiewed courtyard deep in columbia. He is talking now because he would like to say how he has turned good and he will help turn states evidence. He would like this sentence reduced. What does he say he has done . He says that he has interfered through various methods of hacking in many elections in latin america. That. Is evidence he is telling the truth. There are people who say he isnt. He has some evidence that he has hacked many elections in latin america. There are critics who say the story isnt true. What are they saying . He says that he works for a gentleman named mr. Rendon who has a home in miami. Him,n says i worked with but in a limited way. I was never involved in anything illegal. He has never been charged. He says he was not involved in a lot of these activities. Some of them involved fake calls inccounts, robo the middle of the night to suppose it reporters and those angry supporters were so they were being awoken at 3 00 in the morning that maybe they did not vote for the candidate. Intelligence gathering so they knew who they were voting for before the person across the hall new. Of candidatesy that had information and votes for candidates. Will becover story familiar to some of us who have used word processors. About how thes relatively new ceo at microsoft is betting big on Artificial Intelligence and what he is trying to do is bring to the four chat box that will supposedly help you in a variety of apps and business activities. Some of this was introduced at a conference they had earlier this week. It showed up before then were a bot did not act the way they thought. They had a bot they released early. She,if you can call her has the personality of a teenage girl. Since they learn what people see them, people fed the nasty stuff. Racist,out there being talking about things you would not want your bot to talk about. They took her down. Microsoft has been working at ai for a while in things like cloud and security. But they are now focused on what they think will be the next major platform shift in computing. Moving us away from a world of apps toward what they see as conversation as a platform. In particular, these things called chat bots. An aiprogramf program that will handle interactions for you. People have been playing with their new chat bot. I know you played with it as well. What was it like . It is basically modeled on a teenager. It is in reverent and profane and sometimes i did not understand what it was saying at all. Selfie of myself and it called me old because im outside the target demographic. I mentioned once that i was stressed and she responded, dont worry, it will be all right. Of course i didnt get anywhere near the results of some people last week which caused microsoft a pulldown today after some people manage to program it to respond with racist, inappropriate, sexist comments. Big controversy for microsoft. You mentioned that you said you think chat bots will replace apps. Microsoft is behind the curve on apps, why believe they are ahead of the curve on this . I spoke to the ceo who said it is a little selfserving to say we are moving on from apps because microsoft did so poorly. There are a fair amount of analysts and other Companies Looking at this idea of bots. Theyre not the only people who want to play here. Facebook has been working on bots, google is reported to be working on this. Some of the original work on. His is we chat some of the microsoft executives had looked at it and thought it was an interesting paradigm. Doesnticrosoft ceo even use it, does he . I asked and that any said that he doesnt because the teenager speak is so in copper hence that it may as well be french, but to him that is sort of the point. There will be in his view a lot of different bots that will be tailored to different personalities and needs. You have some which are aimed at a target demographic of 1824 and some that talk to you if you are not a millennial in a different way. There are Customer Service bots and a variety of implementations. He feels there should be a lot of different options. X i guess thats what microsoft is betting on. They want to be the platform that owns it all. They want the platform that others use to make their own. Was historically built when bill gates and paul allen started writing developer tools for the first home computer kit. Want iscase what they for people to take their software, and their tools, and use it to build their own bots. They also wanted to use them within their own products. Build theirople to tools. One of the interesting things that have developed is it will let you automatically deploy these bots to if a righty different platforms including those who are not made by microsoft. So she wrote the cover story but the man responsible for the art on the cover of that story is robert vargas, the creative director. How to come up with it . It came from an early conversation with alan pollack. We were talking about how to represent a new generation of ai bots that microsoft is creating. You think of what Artificial Intelligence is, it does not have a body. It is existence based. So it thought of what the first representation of an ai bot for microsoft was which wasnt quite ai but deftly a bot. Characterpping, this in the 90s it didnt do so well for them. He came in a tory us figure but really has somehow persisted to the years as kind of a symbol for this thing that microsoft tried out the did not work so well. Regardless, we took him as a character. He is clearly recognizable with a paperclip body and large bulging eyes. Toive this to an illustrator determine how this would work in the future. He give him a large brain to make them smarter. He has some kind of optical device. He is basically like a smarter clipping. Its cool they on skype so its a whole vision idea. How much do you think about how this would be interpreted are what some we might think of it . It varies a lot. Sometimes you have a basic idea and then we pair the idea with the right artist and tell them to go with it and see what we get back. And when we get back make sure there are no problems with it. If there arent we let them fly and dont think too hard about being literal with every component associate to that territory your back to being a microchip. You ever think about the ceo of microsoft and what he might think . Given all that has happened with my christophe recently, he is probably a guy with a sense of humor. So i think he would like it in a think it is a pretty flattering portrait. Next up, Johnson Johnson had to court again after allegations that baby powder causes cancer. Agreewhite funds cannot how much some unicorns are worth. Welcome back to Bloomberg Businessweek. In the market and finance section, with tech a look its one of top u. S. Mutual funds. Why they cant agree what private startups are worth. Unicorns these private are waiting for the right time to go public. They still need liquidity. So they have been raising capital in the private markets and one of the sources for that capital has been mutual funds ramping up in the last year or two. They need to turn around and provide a share price for the habit companies to their publicly held traders. How much is Dropbox Dropbox worth . You ask these mutual funds and you will get a different answer in a matter which one you talk to. Think of startups and immediately you think of venture startups Venture Capitalists. Is this a new thing and what are the particular challenges . It is not necessarily new but what is new is the rate at which these fundings funds are investing in private companies. If you compare it to a Venture Capital firm, their shares are not publicly traded. If you are not a Venture Capitalist you dont really care if their valuation drops because you are waiting for the longer game. These are publicly held, publicly traded mutual funds. You hope to have transparency. Yes, there is very little. They will speak very generally. They will similar can the indices and the other values. But their actual methodology is none of our business. Is there a push for more transparency because of that . A lot of people want to know is the valuation of dropbox what it is supposed to be . You have a lot of people on the private side and the Public Markets trying to figure out what they should say where the market is trying to figure out what these copies are actually worth and long time. The discrepancies we see across these mutual funds and how they value these companies is reflective of that. Next, California Wine country gets stiff stiff competition from unlikely places. And we will take you inside the grand prix of magic the gathering. Welcome back to Bloomberg Businessweek. Have you heard of magic the gathering . Game thattrading card has been around since 1993. Just had the grand prix and washington, d. C. A couple weeks ago. There are some incredible pictures of 4000 plus devoted fans. Thousands of dollars at stake. In high school there were classmates of mine who played it. Its like fantasy meets collectible. Some of them are worth a ton of money. It started in 1993 and became popular. Game. It ist the still popular, 20 20 years later. You can still buy them but now there are 5000 cards. Etc. Sectioneks you can read about new competition to the wine industry. Dan has written a book called american wino. The former nightlife columnist did what they do which is drink a lot. For whatever reason, wine never did it for him so in 2014 he set out to remedy that. He drove around america going to at least one winery in all 50 states. Wineryidea there was a in all 50 states but they are making wine in all 50. He went to one in every state. He went to four in miami. Basically what he was trying to wine look at the state of in america 40 years after the judgment in paris which is went up skewer American Wine bested these famous french vintages and his conclusion is that california is still king but 40 years from now we may drink wine from nebraska. Winery he visited, the grapes have to adjust to soil temperatures that ran from 10 degrees to 90 degrees. This obviously will take 40 years to figure out. Some of them are being made in extreme climates and really at this point many of them are functional and making money but a lot of them are still passion projects. Do you get a sense of why they are putting these wineries in places where they are not natural places for one gross . For wine gross . Groves . They are in vermont, and annex ibm executive. Some of them are second careers. Outside california, washington and oregon, this anyplace standout is the place you would be surprised to find decent or good one wine . Texas is huge, nebraska, wyoming. States you would not necessarily think of would be growing grapes are doing it. Next on Bloomberg Businessweek, Goldman Sachs sacks its top with the ui we will tell you why. Welcome to Bloomberg Businessweek. Coming up, highlights from this weeks issue. I am back with alan pollack, the editor of Bloomberg Businessweek. There are so many great must reads. Theres this about the 15 minimum wage. That number 15 has taken on significance here. It really has. A nation like moved to get lowwage workers and fast food restaurants up to 15 an hour. It has happened in seattle and los angeles where, by 2020 it will go up to 15 an hour and last week, jerry brown from california announced that eventually it would go to 15 an hour for the whole state. Theres been a big push by unions around the country. 15 wonder where that number came from. Its kind of been a push from the union and its president Mary Kay Henry who has really gone all in on this and poured millions of dollars into it. Its kind of a controversial move because these people she once to help are not actually Union Members so the question is will it help her union . People who believe she is correct say you have to think differently about unions. Maybe these people become members of the union even though they are not working for union shops. Meanwhile, Union Membership is way down. So can she save the union by helping people who are not members . It is a complicated topic. Give us a sense of what you could get this guy to do for you. What would you have to pay to get him to do what he can do . There were different packages. It was how to order cable tv. For 12,000 a month, you could get emails sent, rudimentary hacking. If you wanted to pay 20,000 a month, you got all that plus the encryption and more advanced hacking. You can pick your package. About thell talking u. S. President ial election. Does he think this election is being hacked . He is sure the u. S. Election is being hacked. After you read the story, he really started wondering. Story, he doeshe say he was contacted by someone in the trunk campaign. The Trump Campaign of course says we have never heard of this guy but he is certain this conductivity goes on. The last question i want to ask you is about johnson and johnson. Widely known for its baby powder. She reports on a string of lawsuits against johnson and johnson alleging that powder is carcinogenic. Its a sad story. A woman namedout Jacqueline Fox who has died of Ovarian Cancer. The question is whether use of the powder for hygienic reasons way is associated in some with Ovarian Cancer. It is not as though they are saying it causes it. Ist these limits are arguing that johnson and johnson kind of covered up at the risk. It is all about risk and whether they should have been more open about these risks. We have to be careful here. These there has been nothing conclusive here. The Company Still saying there is not a Strong Enough link. Absolutely. One abouts family 72 million. Its one of the early cases in this big pool of 1000 cases. After the verdict, many women contacted her attorney. This is the beginning of a string of at least 1000 women who are alleging this. Again, there is no established link what these women are arguing. They are arguing there was a risk that johnson and johnson was an upfront about and of course they think its safe and they are arguing furiously in court. I spoke to susan about the article. There is more than 1000 cases pending against johnson and johnson and the women and their families are arguing that johnson and johnson knew of Scientific Research of that kind of association. Not a cause but an association between using talcum powder genitally and a variant cancer. For many decades, they did not warn women about this possible risk. What has johnson and johnson said . What do they say about the sun . Science is the inconclusive, the association is weak, the data is underlying unreliable. They dont see there is any way that Ovarian Cancer could because by talcum powder. They didnt see any need ever to warn women about it. Again thiscourt month. What has happened in the past with these suits . There have been two trials. The first one found johnson and johnson liable of negligence, didnt award any damages to the women diagnosed with a varying cancer in remission at the time of the trial in south dakota. With Ovarian Cancer in remission at the time of the trial in south dakota. In the second one, the woman had died. The family was carrying on the case. In st. Louis, they awarded the family 72 million. That was more even than the lawyers were asking for. How important is this a brand, this well known company, powdermportant is baby for them . It is the foundation for their entire Baby Products line. Think more important, johnson and johnson in a lot of peoples mind is the baby company vanilla and represents a very small portion of their overall sales. Mostly, they sell medical devices and drugs. Baby powder has a certain scent, people know it. I think for the company, its very symbolically important. I think is a conflict here between branding and science may be internally within the company. There have been other cases where johnson and johnson decided they will set aside the science because they recognize consumers are concerned. They took out a lot of chemicals from a lot of their Baby Products. There was a big uproar a couple years ago. Formaldehyde was found to be in their baby shampoo. Then they said very clearly, we think its safe in the amounts we were using it but we understand you are a little concerned and we want our customers to have peace of mind. What about the history here . In some of the suits, plaintiffs alleged certain groups were targeted by Johnson Johnson, that they were encouraged to buy baby powder for the use you described. That i is something think is very troubling from a Public Relations point of view in particular right now. There are documents introduced into the trial from the 1990s where johnson and johnson said we recognize there is some concerns in the Health Community talcumhe link between matter and of varying cancer. At the same time, we see opportunities to sell more baby powder to blacks and hispanics and that is because they were already pretty good customers of the product. A