Encryption back front and center. We will examine techs role in the responsibility eliminating terror from social media. Softbank announce the first round of Capital Commitments for a tech investment fund. With more than 93 billion in the coffers. The vision fund is asked to top 100 million in six months time and will focus on startups in the united states. Peter l strong joint us from tokyo with all the details. Peter it took a long time. Softbank originally announced this in october of last year. It came from the meeting with the deputy crown prince of saudi arabia. After many months of waiting that it would close, it did they did not get the full 100 billion dollars, but they got to 93 billion. A record for a tech fund. The core investors are softbank and the Saudi Arabian sovereign wealth fund. Abu dhabi has also put in moneys as well as qualcomm, apple, and some others. One name that did not show up in the press release was Larry Ellison of oracle. It is not clear whether he is going to come in at a later round or not participate. Emily talk about the vision for the fund as we know it now. Peter he has never been shy about his ambitions. He talks about a 300 year plan for the company and wants to last well beyond his own investments. He has already cut a very big deals. He put 5 billion in two the Ride Hailing Company in china. Venture roundest ever and now he has even more capital to be able to deploy it. He has talked about the opportunities he sees. He had some successes in the past, including alibaba and yahoo . He thinks now there are even better opportunities than in the past and it wants to be able to use this capital to go after them and Artificial Intelligence and the internet of things and other kind of cutting Edge Technologies as well as these kind of sharing Economy Investment he has made so far. Talk to us emily talk to us a little bit more about where we know this money will be invested next. Dede. W about what else . Peter he is going to be the key person on the investment committee. It will be an extension of softbank in some senses. They will focus on some of these areas. One of the big surprising that slashed year was the acquisition of arm the chip design company. , he sees that as a gateway into the internet of things where they will be able to collaborate in different areas of technology. Ride hailing has been a big focus. There are a number of these areas and he is one to pull surprises. There will certainly be one or two surprises on the horizon. Emily peter l from peter in tokyo. We brought in for more reaction to the softbank news at a larger perception on tech investment. He is one of the most prominent tech advisors in china and the founder and ceo. He has executive posted apple, that post at apple, microsoft, and google. We usually manage funds in the hundreds of millions of dollars. We began investing in ai and other related technologies cointreau years ago. We are also strong believers that the future of technology is great. The age of ai is coming so we are looking forward to safety softbank being a later stage investor in some of the companies that we and other venture capitalists have a buildup. Emily a lot of this is supposedly going towards ai. I am curious, could it be too much . Are there enough opportunities out there to warrant 100 billion . I think theyre certainly can be deals like that. They have already invested in. Idi, for example if you think about finding like that,companies they may be the money will be used up before you know it. Emily where the most competitive Ai Investments . They are still in the u. S. And canada. Jobs are strong because of the large market and the large base of ai knowledgeable people. 43 of top applications are written by chinese authors. Chinas large market will create a lot of data and ai is driven by data. China is coming on strong. I would currently say number two. But with a good shot at becoming one of the emily you gave a two superpowers in ai. Emily you gave a fascinating commencement address at club it. At columbia. You said in the next 10 years all Financial Companies will be turned upside down with ai replacing bankers and accounts. Accountants. Last year, my Ai Investment algorithm returned eight times more than my private banker. That reminds me, when i go home, i am going to fire my private banker. I hope he is not watching. Emily he is shaking in his boots. You go on to say you think simple jobs like factory workers and assistance will get complaints, but more complex jobs, doctors, teachers, reporters. Who still has a job in this brave new world . I think the creators will have a job. The creators in Technology Science and also arts and entertainment. Thats a significant portion. I think people who are in Service Industries who deal with social aspects of service. That will actually be a set of jobs we have to create. Unlike in the Industrial Revolution where a set of jobs is gone and another set came about through the assembly line, this time we have to deliberately create these jobs that relate to social aspects because ai is no good at dealing with people to people. Hordes ofyou see Unemployed People or do you think those people will get other jobs that have yet to be created. Dr. Lee i think first there has to be a way to redistribute the wealth created to ensure some kind of social welfare and minimum stipend for the people who are displaced and it will take time for some amount of retraining and i think if people are open and inclined to be retrained in the social aspect of the job, a bartender,asseuse, tour guide, concierge jobs like that, that will be on the rise for the people to people interaction. Lee, founderas dr. Ceo. A bloomberg scoop, softbank has a 4 billion stake, make it the fourth largest investor in the chipmaker. The stock tripled last year and is up nearly 30 this year, giving the company a market value of more than 80 billion. The worlds leading maker of is betting on a new unit so small it fits in the palm of your hand. This week, they unveiled the smallest drone yet. Bloomberg attended the event. You can take the new drone for a spin. Selina i am here in new york city at Grand Central terminal for the unveiling of the smallest and lightest drone yet. I have it right here in my hand. It actually weighs less than a can of soda and only 499. With this, they are really hoping to step into an entirely new ballgame and hoping to reach the masses with this very easy to use drone. It actually takes off and flies directly from your hand. I am here with Michael Perry and in my hand i am holding recently launched this fall and the newest one today. This tiny little thing has a ton of technology. Features as same even your larger drones. How did you get it so small . A lot of work a lot of work. Over time, our first product was about this big and just the flight controller. Able toe, we have been bring it smaller and smaller, making it more energyefficient and somewhat more intelligent adding new features like sensing obstacles and avoiding them in real time. We have done a lot of work to strengthen and stop shrink this down and still provide a powerful product anyone can use. Selina is this going to expand the total market . We think that when looking at the overall market for dgi, we see a few barriers. The first is price. We feel like at 499 we have a lot of technology. We also have ease of use . Finally, how often am i going to use this . We made this as easy as possible to get up in the air and tell great stories. Selina we are standing here at Grand Central terminal in new york for a reason. What does the u. S. Market mean for you . How important is it moving forward . The u. S. Remains our largest market in the world. What we see here is a lot of interest in Drone Technology specifically. Over 46 of the customers that we told were interested in buying a drone this year so we feel like this system overcomes a lot of those barriers and allow them to get into the market and start flying. Selina lets talk about competition. The Chinese Markets chinese have flooded the market with cheaper drones. Where do you think this guy is going to stand . We want this drone to be peoples First Experience with a drone. When you look at Online Reviews and try out the technology, consumers might be interested or they drop out because they feel like it is too hard to use. We put a lot of intelligence in the system so it can be simple and anybody can get up in the air and have a reliable flight experience. We have found that by having better technology, consumers have a lot more confidence and they are more willing to give it a shot. Selina can you show me how it works . Lets do it. Selena do i let go . Now its just hovering. Selina amazing. How do i bring it back . Raise your arm and go like this. Its coming back. Bring your hand to your chest. Now walk to it. Just like that. There you go. Selina dgi is operating in a competitive and niche space. Small. The drone market is still very small. It is expected to grow to 11 billion by 2020. Dgi is betting that with this tiny, lightweight drone, they think they can get the masses to want to take a personal drone time will tell if they are going wherever they go. Time will tell if they are going to be able to reach the masses in the way they hope it will. Emily that was selina wang. Short seller carson block is raising concerns about snapchats parent company. We will dig into his research, next. If you like bloomberg news, check us out of the radio. You can listen on the radio app , bloomberg. Com, or in the u. S. On sirius xm. This is bloomberg. Into carson take blocks research on snap. He has areas of concern, including Corporate Governance issues, ethics, and the strength of snaps Business Model. Erik schatzker asked him about his research. Carson weve done a decent amount of work on snap. As you said, we are not short snap at present. We might be short in the future. We really have three categories of concerns. Ik we should remind of your buddy this is the owner of snapchat. Carson we got Corporate Governance concerns and some of those are wellknown, but they are also real questions about the ethics of the company and that is something that is not well known. Weo, this is the area where are really trying to form the view questions about the Business Model and strategy coupled with the fact that it effectively has a lot of debt in the form of commitment to Amazon Web Services and google for cloud hosting. Erik lets take them one by one. You say some of the Corporate Governance concerns are wellknown. They might be known to many people, but not all people. Some people may own the stock may not know about the fact that there are no Voting Rights in shares. The First Company i have ever seen that has no Voting Rights in its shares. On the surface, that strikes me as a Corporate Governance concern. Carson thats not the chief concern. Thats definitely a concern. The ceo, evan spiegel, he strikes me as one of the founders who you dont necessarily want around to run a mature company. Erik why . Carson at this point this gets to the ethics concerns we have that is partly to more than replace the 300 almost 300 million sold on the ipo. That is really erik that is a red flag to you . Carson you dont really want to see that conflict of interest or that out right money grab. Beyond that, the actual ethics concerns, there is a whistleblower lawsuit recently filed by a few former employee. He was only with the company for three weeks before he was fired and in his lawsuit, he is alleging that at the time that snape was telling investors and advertisers that they hit 100 million daily active users, it was really about 80 and there are other issues at the time. At the time, they were apparently telling everybody they were growing double digit month on month in terms of daily active users. He said it was really quarterly low to mid single digits, which is what we see now with the First Quarter as a Public Company. Erik lets say he is right and you are right to give him some credibility. Who is to say that evan spiegel who his and his mid20s isnt going to grow out of this stuff and grow up if you will and start running snap like the other like a Public Company . Carson one thing i want to asize is that is a we had one of our investor investigators do a lot of Due Diligence and every thing that comes back into lynns indicates he is a very standup guy very serious, very honest. , erik he checks out. At this point, i would say it is probable that he thinks what he is saying is correct. In terms of the question of can a zebra change its stripes . Lets say speigel was problematic before, can he straighten out . Here is the real problem i have with that, he has just been massively rewarded for this unethical, problematic behavior. People who are positively rewarded positively sanctioned for that, i dont see them all of a sudden having this moment where they say that was great back then, but now is the. Ime to really tell the line that have toe like have something really bad happened to them before they correct their behavior. Erik a 26 stock price drop is on the day of earnings is something bad. Bad not sure if it is enough. Before we run out of time, lets get to the Business Model and strategy issues. It sounds they may be as though they may be even more important than the ethics problems and Corporate Governance issues. Carson for us, we dont do a lot of forwardlooking analysis. This was the piece for us we really wanted to work on more to come to a view. For people erik everything snapchat does, facebook seems to replicate. Carson right, but there are some important differences. The Younger Generation thinks of facebook as we thought of oldsmobile and we are not interested. They are not going to go to facebook, but the counterpoint to that which i actually think is a very salient counterpoint is that snape is great when you are a teenager in high school and you have your clicks and you are trying to hide things from your parents. As you get to college and start thinking about applying for jobs, that is when you want to embrace the wider world and snap which it with its focus on tighter networks as accused as of to the whole world like facebook is not well for that. The counterpoint to the thesis on snap is that todays teenagers will become tomorrows prime they will use facebook as the primary social Network Going forward. It is not that we see a real generational difference. Emily that was Erik Schatzker and carson block. Coming up, the u. K. Is on the highest level of alert in the wake of a terror attack in manchester this week and a potential conflict is brewing between tech giants and authorities who want access to encrypted data. We discussed. This is bloomberg. Emily this week the u. S. , government gave an update on on expanding its laptop ban on flights. Homeland security has decided not to widen the ban of laptops and other electronics used in airline cabins for flights leaving the agency hasnt made a decision about electronics on incoming flights from europe. Meantime u. S. Airline travelers , will face more scrutiny of electronics larger than mobile phones at about a dozen domestic airports. Passengers will be asked to send Large Electronics including tablets through xray screenings separately from their carryon bags. The agency says this steppedup screening may be extended nationwide. All the while there is continued fallout from the worst terror attack in the u. K. In more than a decade the Terror Threat level. Has been raised from severe to critical its highest level. , there is a demand for access to encrypted messages as part of the investigation, urging social Media Companies like facebook and twitter to go after terror posts on their sites. Caroline hyde spoke with jeremy khan about next steps. Jeremy they would like all of the social Media Companies to do a much better job of trying to police content on their sites, taking down posts from terrorists or terrorist sympathizers or those encouraging extremism. They really want social Media Companies to close down those accounts, delete the content, remove users repeatedly reposting jihadi content or content that would be praising these attacks. That is one thing. The other thing is the home secretary amber rudd come out and said that she would Like Companies to end to end encryption. These are Services Like whatsapp that are encrypted across the communication chain so the government cannot access them. What she has said is she would like these companies to be responsive in particular requests when they want access to this information the government given access. She is basically asking them to come up with a way where they can meet these requests. Caroline it feels like deja vu. Referring to the San Bernardino shooting and we saw apple taking on the u. S. Government. What argument are we likely to hear from those who have the end to end encryptions . When are we going to hear a response . Jeremy you will hear them say they dont have access to this information. In order to meet this request, they would have to bui