Flown back to the u. S. Where he died. Global news 24 hour the day powered by more than 2700 journalists and analysts in more than 120 countries. I am Alisa Parenti. This is bloomberg. Bloomberg technology is next. Emily i am emily chang. This is bloomberg technology. Sean spicer steps down as White House Press secretary just after Anthony Scaramucci is named president Trumps Communications director. We have the latest on todays big white house shakeup. Plus, chinas master plan to lead the world in Artificial Intelligence. We dig into beijings new ambition and how it plans to invest 59 billion. It rolls the dice on its own self driving technology. Is it too far behind for the race . We will compare their strategy to uber ubes. A staffing shakeup at the white house. Sean spicer announced his resignation after President Trump hired Anthony Scaramucci as his medications director. Sarah Huckabee Sanders will become the White House Press secretary. Scaramucci is the founder of sky Bridge Capital and a Campaign Fundraiser for trump. He joins the team amid intensifying investigation for the Trump Campaign and its ties to russia. With Jared Kushner set to speak with Senate Investigators next of theresident trumps sun and Paul Manafort are both scheduled to appear before the same senate committee. Joining us from new york are Kevin Cirilli and my guest cohost for the hour, david kirkpatrick. Kevin, you have been on television all day talking about this. Said there isucci more palace intrigue, yet the whole press conference was about personalities and relationships. What is the back story from your perspective . I have spoken with several sources on everything that went down in the past 24 hours. What i am hearing is this is a political victory for what they are calling the originals, the original staffers who backed candidate donald trump when many in the political universe did not. He is someone who has aligned himself with the old guard, the original guard of the trump world. People like sean spicer who will stay on board through august are not going to disappear. Reince priebus is still involved in the white house. It comes at a time when they are trying to turn the page with so many questions surrounding next week in particular with the hearings set to continue with regards to russia. , givenwhy is scaramucci he does not have Traditional Communications experience, he is a businessman, but what else . This was a top fundraiser for the trump political campaign. He is a financier very familiar to wall street but not familiar to washington. I think that washington and how he meshes with the inside the beltway crowd remains to be seen. We should note today he faced few questions regarding political policy as well as the russia questions. We should also note sarah Huckabee Sanders has been promoted to press secretary. This is a big promotion for her. She is well respected by more traditional political circles inside the beltway and is a familiar and known entity. Emily they both deflected questions today about russia. David, im curious. The noise around the administration is getting louder. There is so much uncertainty about its future. Is it a big is this risk for businesses, for Silicon Valley . David for Silicon Valley and business generally, it is already a big business risk. We are at a precarious point in American History where it is extremely hard to see this will not get worse from here. If we have a president who will not allow the investigators to investigate him, he continues to send signals he thinks he is guilty, which leads ordinary that he has got to be trying to hide something. Even if it is not true, it is what we think is true. It has to make all Business Leaders very nervous about what that could mean for the economy, for foreign affairs, for the breakdown policy. I think it is a scary moment for the American People and american business. Silicon valley included. Emily kevin, looking ahead to next week, Jared Kushner is set to speak with Senate Investigators. What do we expect from that conversation . Jared kushner is set to meet behind closed doors with the Senate Intelligence committee. I spoke with a democratic member of the Committee Earlier today. They are pressing for more. Nformation about finances bloomberg breaking the exclusive this week. On wednesday, donald trump, jr. , and Paul Manafort have been invited to testify. Unclear whether they will accept the invitation. They were supposed to reply to the deadline by the end of the day. They have a couple more hours. In terms of policy, we can talk about that on tuesday. The Health Care Vote is likely not going to pass. The conversations regarding tax reform as well as deregulatory financial policies still ongoing as well. I expect a potential budget vote in the house next week setting the stage for tax reform. Lawmakers trying to turn the page and bracing for a failure on health care policy. Theres a big the fed has a big meeting on wednesday next week. Emily not much at all. What about the interview President Trump did with the New York Times where the idea of firing bob mueller came up . The special investigation has moved into covering his business interests. Scenarioe know about a in which that could be possible . Bombshell bloomberg report yesterday. Special Counsel Robert Mueller is reportedly expanding the scope into President Trumps business dealings. The guardian had an exclusive this week suggesting there has been communication between the investigators and Deutsche Bank with deep financial ties to the trump world and kushner world. The New York Times reporting about the debt obligations of Paul Manafort to russian and ukrainian influences. All of that suggesting this is faction and realm of the investigation into the financing and not just into the cyber sphere. I have spoken to several sources suggest they are very much looking at the data of both political entities interim world and democrats as well trump world and democrats as well. Emily if you are a c. E. O. , are you preparing for something . David i think it is hard to prepare for this regardless of what you do in the american system. I think we are all watching like deer in the headlights. We have never seen anything like this before. It is reassuring to Business Leaders markets and economy still seem to be doing great. Trump continues to point to that as a sign people should not be worried about anything because that proves he must be doing a great job. There is an element of reassurance in that. I think there is real risk. As i mentioned before, things could happen that could throw markets and the economy into a new position. We just dont know. There are so many things we dont know because we have never been in a place remotely like this before. Emily techonomy c. E. O. David kirkpatrick, you are sticking with me. Kevin cirilli, you will keep covering this for us. I hope you get some sleep. Sticking with news, the Washington Post is reporting google spent nearly 6 million on lobbying in the Second Quarter of this year citing disclosure forms. That is a 40 jump from a year ago. Some of the issues included responses to the travel ban, education, and privacy regulations. Coming up, we will explore the latest in the volatile world of cryptocurrencies. Is the height around initial ype around initial coin offerings about to blow up . This is bloomberg. Emily checking in on bitcoin, the cryptocurrency rallied this week as the Developer Community embraced a new mechanism. The group was previously split on how to make it more manageable. There is still a ton of interest in the crypto coin market with a flurry of initial offerings that can offer high risk for high reward. For more, lets bring in Caroline Hyde in london. Caroline thank you. Withnow joined by a man ethereum. He has now founded another cryptocurrency startup, iohk. Wonderful to have you passing through london. Today, the news is a coin rallied bitcoin rallied yesterday. It looks like the developers are backing the development. Is it good for the ecosystem for it to split . It is great. It shows the resilience of things. It looks like it is healthy and its future is bright. Caroline the future is bright for bitcoin. Talk about the landscape. Initial coin offerings going through the roof. 700 to 800 cryptocurrencies exist. Ipos are up six times in the last year. You say this is a ticking time bomb. Why . The fundamental problem with ipos is they are magical because they create liquidity and allow people who have never been able to raise capital before to do so. They have caused some people to forget the basic business principles of Due Diligence do not go away because we have technology. It reminds me of the dotcom boom and best. With new technology and paradigms, i see a lot of similarities in this respect and get worried people are raising too much, too quickly and have not thought about the convocation consequences. Caroline eventually regulators caps on . That is one. Too much money can be as bad as having too little money. You dont execute faster but have stronger expectations and a more Aggressive Group of investors. The other side is salaries go up. Negotiation leverage goes down. Everybody knows you have 200 million. As for regulators, it is a concern. Everyone of them have an opinion about what these things ought to be. At some point, it has to make that opinion public and force actions in some respect. Caroline the ipos we have seen come out, if regulation does come in, who does that affect . The base with a company that raised the money . From the Investor Base side, they lose liquidity on the tokens. They lose the value on trading. On the business side, they may lose their faith accounts. They may face some sort of criminal or civil issue. It depends on what representations were made, how much capital they raised. It is a snowflake situation. Caroline people they raised the capital from, who are the investors . With blockchain, you cannot tell. It generally goes who have won out with early bitcoin successes . We dont and with these people are or where the money is coming from. I would speculate a lot of the people are people that got lucky with the coin and ethereum so they put some money in. They wake up and are millionaires. They say let me see if i can do it again. It is fast money chasing even faster money in that respect. Caroline is it real money . How liquid is it if you own bitcoin or the other cryptocurrencies . It is tremendously easy compared to where it was a few years ago. You can sell billions of dollars. There is something where you can put bitcoin on it as a card and spend it. Liquidity has improved over the last few years. There was one where they liquidated the vast majority of money they raised as a hedging strategy. To be fair to them, it was more like a value transfer. They have a fiduciary responsibly to be conservative and not be currency speculators. Caroline the time bomb. What happens to this ecosystem up to 2020 . Do we see selloffs, implosions, rising from the ashes . Some people go away, some stay. It is hard times for a little while. The regulatory landscape changes. The bad actors tend to face some records and we move on. Completelyot stop a new way of looking at reputation and value and trust and the ability to move money anywhere in the world simultaneously, which is something we have not had ever in the entire history of the human race. Caroline what is the end goal . How do you see this affecting real people . How will it affect me in my real life . If it works in the western world, it should not impact you explicitly. Voip. Kind of like it was the future. Then skype came around and organically creaked up and now it is in everything. From the western world, it will be settlement and clearing gets faster. Transaction costs go down. When you buy something abroad and spend dollars, they get euros. The cost of the transaction goes down tremendously. You will see improvement which will lower cost. In the developing world, it is a completely new Financial System that runs parallel to the banking system. For the first time over, opens up microcredit and a litany of other things that are tremendously beneficial that allow them to build real wealth. Caroline fascinating picture you have painted so eloquently for us. Iohk c. E. O. , wonderful to have him joining us. Emily thanks so much, caroline. China is taking aim at the ai industry. Why Artificial Intelligence has become the new focus of international competition, next. This is bloomberg. Louis vuitton has started selling online in china. It will cover 12 cities. The Parent Company is trying to capitalize on the luxury rebound in china following a downturn in recent years. Vmh has been revamping its broader digital strategy. China is making a push in Artificial Intelligence, aiming to make the ai industry an important driver of economic expansion by 2020. The Development Plan was issued by the state cancel. Stocks rose on the announcement by as much as 9. 2 . York, selinaom new wang. Still with us, my guest host, david kirkpatrick, c. E. O. Techonomy. What is your take on the Chinese Government publicly ramping up its efforts in ai . Clear directive coming from the top ranks of the Chinese Government saying we want to be the Global Leader in this area. We no longer want to be a follower of western technology. We saw western companies become the dominant players in software and chips. They are saying ai is emerging technology and we have room and time to beat out the competition. But the experts say china is only a step behind many of its western competitors. The Chinese Government clearly thinks with the partnership plans and the Investment Capital , they still have a chance. These are very bold ambitions. They are saying by 2030, china will become the worlds premier Artificial Intelligence center in the world. Emily they specifically say this is to give china a competitive advantage, in part because of National Security concerns. Does this raise alarm bells for the u. S. Government . There are reports the u. S. Government is watching closely Chinese Investment in u. S. Humvees developing Artificial Intelligence. They have seemed to tighten controls as well as delay some approvals of the deals. The u. S. Government is going to be watching how they plan to use ai for military technology. Not to mention the fact that as china is bolstering its investment in ai with a bold claim, at the same time the u. S. Has been cutting back funding to science research. Emily david, ai seems to be the next big thing from almost everyones perspective. To some extent, it is not surprising the Chinese Government would want to focus on it. Perhaps they are doing so publicly, what is your take . It is a start contrast with our own government which is not doing much at all to push the progress forward of this technology except perhaps to the degree they are doing so secretly in the military. Im sure theres a lot of work behind closed doors. When we think about the fact that our government invented the internet and that kind of project has been our history, we have a president i dont believe who has ever uttered the phrase Artificial Intelligence. If he has, i doubt he would be able to explain what it is. Not that it is easy to explain, by the way. Here we have it the highest levels of Chinese Government, a major commitment. It is a stark contrast that is scary. Luckily, we are still ahead. Google, facebook, amazon, ibm. A number of our big Countries Companies are putting resources into it. The same is true in china with alibaba and tencent. They have the ways and people to advance it. I have sure they will be working closely with the Chinese Government. It is worrisome. We are still ahead. We cannot assume that will remain the case. Emily what does it mean for those Chinese Companies that david mentioned already working on ai . Baidu, alibaba, and tencent a rapidly trying to catch up to google, facebook, and amazon. With the help of the government, it will accelerate the closing of the gap. Baidu has done significant work in voicerecognition technology, and driverless