Is in georgia, and has become the most expensive house race in history. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im Alisa Parenti. This is bloomberg. Emily im emily chang and this is bloomberg technology. Played hisjack ma trump card. The alibaba founder delivers on a promise made to the president to create one million jobs in the usa, starting with Small Businesses in detroit. Plus, the inside track on the trump administrations plans to protect. Insight from the founder of code of america, who was in the room alongside techs biggest heavy weights for the first meeting of the technology council. Tipping point. Why they found it was time to finally reward passengers for service. First, alibaba is pulling out all the stops for u. S. Business entrepreneurs. They are kicking off a two day event in detroit, michigan right now, drawing in thousands of u. S. Business owners and aiming to learn how to succeed in china through alibaba. The companys founder and executive chairman, jack ma, is following through on a promise to President Trump to create one million jobs in the u. S. Earlier this year. Is also trying to lord 10 million Small Businesses to trade on his ecommerce site. Joining us from new york ceo of aounder and Consumer Intelligence Firm that works with clients in china to provide research on chinese consumers. We also have a partner at leadingedge capital. Brian, what do you make of the fact that alibaba is holding a conference in detroit, of all places . I think its great what they are doing. I think they are trying to get out to american businesses, Small Business owners, farmers, and agriculturalists, and trying to educate them on the opportunities in china, which are massive, and also get them to sign up on alibaba. They say, look, you have been selling in america for a long time, but there is so much opportunity in china and the economy is growing so much. You should bring business here and start exporting here. There are a lot of chinese consumers with the rise of the middle class looking for interesting products produced in america. Its a Great Potential marriage. Emily is the demand actually there . A good question. I would separate the demand from the supply. I think there is a demand in china for american goods. We have seen that repeatedly. The question is, where will that supply come from . I think the conference is great planking, it is strong above constituencies. As a matter of practicality, i dont know how many of these Small Businesses will be successively selling on alibaba. However, there is demand from chinese consumers for foreign goods. Emily what do you make of that as an alibaba investor . I think they have a position for the longterm. Six to 12in the next months, they dont have as many u. S. Based sellers on their platform, but this is a longtime play. When we think about the business, where we get excited is what can they do over the years . 5, 10 if you look at the present projections they made, they were that 1about doing trillion in gross merchandise value through their platform by the year 2020. Some help they could get from american suppliers would help them reach that goal. I have become very excited, and i would agree with my counterpart at most certainly it might take a little time, but over the long term, i think this is certainly an opportunity for the company. Emily your counterpart, the other brian, jack ma promised he would create one million jobs in the u. S. Can he deliver on that promise . If we are looking at a 100 year timeframe, i think he could. [laughter] i dont think in the next three to five years. The math doesnt work in his favor. That being said is a lot of trade that could obviously have been,. Let jack is doing here is hes trying to open up the u. S. Market to alibaba more prodigiously than it has. Hes trying to get this brand in front of Small Businesses and try to make it more acceptable in the eyes of the u. S. Chamber of commerce and other groups who have been battling with alibaba and the issues theyve had regarding, for instance, counterfeits. Emily amazon made big news by going to buy whole foods. Alibaba has been investing in grocery for several years now. Alibaba and amazon now clashing on a new battle line . To some extent may be but they are doing this in very different geographies. When you look at what alibaba is doing, it is primarily in china, obviously. I dont think amazon has any plans to get in there, but who knows . Foodss takeover of whole certainly will make for a lot of interesting dynamics, but i dont necessarily think they are competitive headtohead. I think they are learning from one anothers strategies. You see that across the board. They have gotten into payments, media, cloud, so certainly they are learning from each other, but they dont directly compete in the same geography. Buchwald, there has been concerns about alibaba and amazon clashing more broadly. Will that ever come to fruition, or no because of the geographic limitations . Amazon has had ambitions in china more aggressively. They looked at different paths as alibaba has looked out of china. Alibaba has found greater success looking at the rest of the asia and other nonus markets. If you look at what alibaba is doing, it is taking the walmart approach. They are looking at more mass brands and investments in companies. They have been much more about discount marketers and large scale supermarkets, not whole foods of the worlds. You could almost see amazon succeeding on alibaba with whole foods selling into china more so then the two of them really competing in china, at least in the nearterm term. I just dont think amazon is the competitor that tencent is for alibaba in china right now. Neider, as an investor in alibaba, do you feel a threat from amazon . Certainly not. There are a lot of other companies doing well in china. Certainly tencent and jd. Com are the ones that come to mind. Today, amazon has it really played there to the extent that alibaba wants to move into the u. S. And is bringing u. S. Based sellers into china. Becoming a them little overlap. But to this point, not really. Again, because of the geographical limit difference. They learn from one another more than think of you. Emily brian neider, and brian buchwald, cofounder and ceo of bomoda, thank you. Jack ma is expected to speak at this conference in detroit. We will bring you headlines as we have them. Adobe just released secondquarter earnings, beating analyst estimates for sale and profit, proving again that switching to a cloudbased subscription model for its Digital Media and Marketing Software is paying off. Adobe forecast revenue in the Current Quarter ahead of the average analyst estimate, suggesting it is fending off competition from salesforce and oracle. Adobe shares are gaining in late training trading. If it posted wednesday the current level will mark a record high on the stock. Big names in text got at the white house. We hear from code for americas executive director, who attended the meeting alongside apples tim cook and microsofts subtenant ella. This is bloomberg. Nadella. This is bloomberg. Emily u. S. Treasury secretary Steven Mnuchin says the Top Administration will not be set as id with 2 Economic Growth satisfied with 2 Economic Growth, as lawmakers continue negotiation on tax reform. He spoke earlier to bloomberg television. I think we have been pretty consistent in saying we are working every week very closely with the house and the senate to have a joint plan when we come out. The idea is to get us all on the same page so when we release the combined plan, it will get past. It will get passed by the house and the senate and the president will sign it. It is our focus to get it done this year. Its critical to the economy. We are working every day to get that done. Emily he also says the administration is committed to unlocking the economic capital to create jobs, better wages, and getting growth above 3 . Tech leaders say the u. S. Government needs to modernize, after President Trumps Senior Advisor and soninlaw Jared Kushner held a summit at the white house on monday. Ceo tim cook was one of the titans in attendance, and commended kushners steps in getting the government equipped with the latest technology. The u. S. Should have the most modern government in the world, and today it doesnt. And it is great to see the effort that jared is putting in in working on things that will pay back in 5, 10, 20 years. Emily for more insight on the tech summit, we are joined by code for america founder and executive director, who was in the room at this meeting and attended in washington, and served as deputy chief Technology Officer under president obama. Great to have you. How productive was it . To the credit of the people who organized the meeting and tech ceos, there were Breakout Sessions on substantive topics, things people dont usually put on the news late trip procurement reform, how to get the government into the cloud, and Digital Services for citizens. Most of the tech executives went to the sessions i was in and had dialogue it substantive dialogue about these issues. Emily you worked in the obama administration. Give us color from the room. What did it feel like . To the credit of the people there, it felt like the people who have come into the white house since obama left have what i and many other colleagues did to say this is how we are going to modernize government, and yes, lets continue and accelerate that. I think they are doing a good job of strengthening the u. S. Digital service and Technology Transformation service which are, two units that do great tech for the american people. Thats good. Im happy to see them doing that. They have a long way to go. On the other hand, they are doing this in the context of an administration whose other actions done is rarely represent dont necessarily represent what is best for the american public, if you talk about services. Emily lets take a look at what microsoft Ceo Satya Nadella had to a two President Trump. All the technology we had to say, because it started in government and recent institutions you funded, as well as enlightened immigration policy. Of course, im a beneficiary of that, and i hope we continue to really make sure the american competitiveness is what helps us set policy. Emily immigration has been a hot topic for President Trump. How did he respond to that remark . I dont recall what the president said to that remark. I also another was a lot more probably said behind closed doors. They had five Breakout Sessions per slot, and i was not in the one on immigration, although i was glad to see it on the agenda. Emily did President Trump seem receptive to what was discussed . Certainlynt trump responded to those tech ceos. Think, really look, i more towards what the tech ceos are saying to each other and how they will hold the president accountable, not just the things about modernizing technology, but modernizing in the service of what . They should be in the services for the american public, and a are going to have to stand up and ask those questions. Emily you posted ahead of the meeting and talked about why you were going. He said politics aside. Why did you think it was important to be there even if you dont agree with the politics, . Of course. Theres politics, and then theres governing. You have to get involved if you want ito work well to work well. As the tech industry, we have to get more involved if we want the business of government to work. Today. Nt work well try applying for food stands, for instance. If you want to do it online, its good that is online. Until recently, it is almost an hour online. 50 screens, hundreds of questions, doesnt work on a mobile phone. We have shown you can do that in seven minutes on a mobile phone, including uploading documents. It is not just that its a burden on the user, its a bad outcome. Food stamps is one of the programs most highly correlated with Better Health and education outcomes for kids. When we have half of our population in the state not on the program and have that could be on the program, we are missing out on the benefits, and will cost us a lot more later when we have to intervene. Cto, as the former deputy what are the challenges you will run into modernizing government . The biggest challenge is getting the talent they need. There are amazing Public Servants already working in government , most of whom came under the previous administration. Shout out to those who have come since and really set, as one twitter,plied to me on im going in because if our government is a house on fire, im going to run towards it, not away from it. Some will continue to go. There are also wonderful people who have been working in government to do this for so long, but we really need to keep that telling going. It is harder to do it when people dont agree with the policies of the ministration. Emily you started an Organization Called code for america. Tim cook stuck about it. What is at the top of your priority list . We are trying to prove Government Services can work for all people equally with dignity, that government can work the way it should in the 21st century. We are trying to reframe the conversation from modernizing to making it work for people. I think we can do that not just by speaking about meetings but by following up and showing it can work, and asking everyone who works in tech to pay attention, get involved, support government when its doing the right thing, and hold it accountable when its not. Emily jennifer pahlka, founder of code for america, thank you for sharing the inside scoop with us. Coming up, apples ongoing legal battle with qualcomm heats up. Elitist claims filed by apple next the latest claims filed by apple, next. This is bloomberg. Emily amazon wants to address prime numbers. They are making prime wardrobe, a company that allows customers to test wardrobes. They are using a twist on the subscription box phenomenon as part of a broader effort to compete. They had their own stable of fashion labels to sell items like suits, dresses, lingerie. According to a poll by bloomberg, amazon could overtake macys as the largest clothing seller in the u. S. This year. The legal dispute between apple and qualcomm is wrapping up ramping up, and apple fires the leader shot. And in filing, apple claims theres mounting evidence that qualcomms operating an illegal Business Model designed to extract high paying royalties on every wireless device sold. To be clear, apple is adding these allegations to a complete already filed in january that it cruises, come accuses qualcomm of monopolizing the chip market. Qualcomm fired back saying it is apple that it has been unfair. Litigationis our analyst matt larson in san francisco. New allegations. How does what apple is saying change the case . Reporter apple is building up the rhetoric in this case. They are trying to set the stage for a much larger dispute, a much more expensive dispute, potentially for qualcomm. Apple has long alleged qualcomm is double dipping by selling chips and charging royalty rates on the same technology on other peoples chips. Essentially what this case does is it builds out apples lawsuit and tries to sneak markings in. Again, this is setting the stage for a much longer slog. Emily these are two companies that had a symbiotic relationship. What is at stake for qualcomm . Reporter its huge. Its a large portion of their licensing revenue. Licensing makes up about a third of their Business Model and the royalties are about, a half billion dollars per quarter. This is significant for qualcomm. It also potentially impact Licensing Agreements qualcomm has with other companies. These are patents on industrystandard rates. Andcompany trickles down has what other companies can get down the road. Emily what is at stake for appleemily . Reporter its all about device margins. Apple is looking to reduce royalty rates and licensing fees it pays to third parties. Out the door and the more profit they get to keep on ipads, iphones, and other devices. This is a margins story and protecting the selling price. Emily what are the next steps . Reporter these are the initial stages. Qualcomm will respond in july. Qualcomm also has another lawsuit pending against the contract manufacturers that make the. Qualcomm is seeking to recover royalty rates from those companies, and a hearing on that is scheduled in august. Emily apple is working on its own kids now as a result of some of these disagreements. How does that change the overall landscape . Reporter it puts more question reporter pressure on qualcomm. I think the dispute will resolve into some kind of deal. Hopefully it involves potentially a joint Cooperation Agreement or licensing component, and a balancing of business interests. Like you said, they worked together very well for a long period of time. A couple different components and allens out apples aspirations. Qualcomm, rather than putting all their eggs in one basket, how are they diversifying . Reporter for qualcomm, this sets the stage for licensing. Tion qualcomm is participating in different standardsetting organizations. They continue to develop a portfolio of chips. They are looking at other opportunities to license patents outside of mobile. They are looking at potential opportunities at 5g and the internet of things. This is about securing a good rate and key part of their business, and opening up doors for other opportunities. Larson of bloomberg intelligence, great to have you on. You are in san francisco. Coming up, we will take a look at the Software Company tableau, and find out how it is faring after sh