All of that ahead. First to the lead in washington tonight, the chinese president sits down for a private dinner with president obama. There will be more than food on the menu. The two men will attend a formal state dinner tomorrow, but observers say tonights get together will allow president obama to have a much more frank discussion about the issues confronting both nations. One of the talking points will be cyber security. President obama is expected to bring up cyber attacks. How do you expect the dinner to proceed tonight . Are these dinners constructive . Guest that is what the white house said. The president gets to talk with out many people in the room and discuss the issues that face both countries. Cyber security is an issue both countries are facing and president obama says he will be frank in his discussions over the concerns he has that china is backing and supporting the hacking of u. S. Companies. Emily what is going to happen when it comes to cyber . Are we going to see a deal and how effective would it be . Guest that is a tough one. The chinese president doesnt even agree to the fact that Mark Halperin china is supporting hacks on u. S. Companies. So that is the first step getting the chinese to admit they are evening doing it. We may see something that starts along the lines of an arms deal. We may see a framework for what both countries say they are not going to do, but in terms of a full arms agreement on the cyber, it is going to be difficult and the Administration Says it will be a while before we see something along those lines. Emily what really happens at these state enters . State dinners . Is it going to end up with them Smoking Cigars the back room or is this much more formal than that . Guest they have had a couple of these dinners in the past. In 2013, the two residents sat down in last year in china, they did. They do have a rapport and they do know one another, so this is an opportunity to have an informal discussion. But with the number of tough disagreements between them, you dont see things becoming too informal. President obama says he has a number of issues he wants to bring up and will have frank discussions. They will have an informal discussion, but everyone knows they will be talking about serious issues. Emily we will be watching to see what comes out of this dinner. Thank you very much for that report. Turning to Venture CapitalSequoia Capital is one of the most sought after investors in Silicon Valley and one of the most exclusive. I got a chance to speak to roelof botha, a member of the paypal mafia and early investor in youtube. I started asking him about all the new money from Foreign Investors to hedge funds chasing tech deals. Guest there have always been tourists. There are always people who come and go depending on the macro environment and interest rates. We dont pay too much attention to be honest. Emily lets talk about the macro environment. In 2008, sequoia said good times. Thats when uber and airbnb were conceived. Do you stand by that . Roelof i dont think anybody could have seen how aggressively governments reacted to monetary policy. If you think about the poly, because you were unlucky and running out of money at the wrong time. Many of the greatest companies have been born in tough times. Entrepreneurs are serious and are not doing it because it is fashionable. Emily if you said rip good times in 2008, what is it today . Roelof if you look at companies right now, its certainly not a marker when it comes to technology stocks. People point to anecdotal examples of private companies they think are overvalued. Im sure some of them will be proved overvalued, but im not sure you could point to something systemic that cuts across all the companies. I see how they get written up and people dont know the details. I remember being at paypal and reading the articles and one title was earth to palo alto. Nobody knew what we were building and today it is a 30 public company. Billion it is always good to raise money when you dont need it. Its probably a good time to think about raising money. You might have a lower valuation than you might have achieved later and any Macro Economic shifts. But i dont think there is a rush because of a fear of an imminent meltdown. Emily when companies are you most excited about and what will you stay away from mark what is overvalued and what is undervalued . Roelof hard to tell. We love the theme of the rise of the developers. We are investing in a company that helps with containerization and data centers. There is a lot of reinvention taking place in enterprise software. Software defines networking. We are excited about a company in the 3d printing space. These are some of the scenes we are excited about. Im going to meet some of the tomorrow who is coming up with an idea in an area i have never thought about. That is part of the fun, always keeping an open mind. Emily you were one of the earliest investors in instagram and they Just Announced they 4. 5 million monthly users. What do instagram you see as instagrams trajectory going forward. How much of this is due to facebook and how much of this would have happened anyway . Roelof facebook has been a wonderful acquirer and has given the team the resources they need to scale. It has given them room to be able to continue to flourish, but they were already on a tear by the time they were acquired. I think they have a very Bright Future in front of them. Emily with square, are you convinced you have your Ceo Jack Dorsey for the longterm . Roelof no comment. Emily if he said i want to do both . What would you say . I think he is the founder of both companies. I dont think it is for me to judge and tell him he cant do it. Emily theres so much debate about what makes a good investor. And reason for what its says founders and ceos make the best investors. What do you think . Roelof im not sure there is a need for that. Its not the individual, it is the key. Having individuals with different types of backgrounds people who have been general , managers or maybe have engineering or leadership roles. It is that complement at a team level that helps make fabulous investing decisions. Emily coming up, ibm opens a brandnew headquarters for its think like a human software. The father of watson tells us how it could soon turn a profit. Plus, new gear out of the oculus s conference in hollywood. The ceo tells me about his latest product. Emily ibm is opening a new west coast hub for watson right here in san francisco, part of an expanded effort to get Developers Using the Artificial Intelligence system in their own apps. John kelly leads the watson team and stopped by to explain his plan for san francisco. John watson is no longer one machine. It has a platform in the cloud and we wanted to come where the developers were so we had an ecosystem on top of our platform. Developers will be working on the watson platform and the startups out here will be all over watson as they now have local access to it. Emily you talk about Watson Incorporated into apps in terms of vision and discovery. What can it do now that it couldnt before . John it can now speak. It could read before. It has ingested wikipedia and all the worlds medical records. But watson now has the ability to look at images and understand damages. In health care, we are in the process of acquiring one of the top holders of medical images. Watson will learn from those images and help doctors such as radiologists give a better diagnosis more quickly and precisely. So giving watson site. Next, we will give him other senses in the world of the internet of things. Emily you are trying to grow the number of Developers Using watson. How fast is that number growing . John we have hundreds of partners and thousands of developers on a platform. We have several dozen apis that developers can get on and that will grow to hundreds in the next year or so. Emily what are you doing to attract more developers to the platform . John first of all, we make it free. As they get to market, we share the value that has been created, but the on ramp is very easy. Emily are these new expansion isnt part of a new investment in the watson group or is it part of the 1 billion you committed to last year . John this is part of the 1 billion we have been saving for this area. Emily how much have you spent so far . John we spent a substantial amount of money since the beginning of this program and the system is progressing fabulously. The business is growing exponentially. Watson is part of the 17 billion Analytics Business and is the fastestgrowing portion of that business. Emily this is a big bet for you on watsons future and the future of ibm. When do you see it as a big driver for the business . John it is already incremental. It is growing it is in our very rapidly. Fastestgrowing segment. Emily what does incremental mean to you . John these are above our core existing businesses. All new. This is a whole new era of computing. We still have many programmable systems, but this is a whole new era. All incremental. Emily do you see it getting to 1 billion in sales and if so, when . John yes, and as soon as possible. Emily there are still questions about the financials behind watson. When do you see watson becoming profitable . John watson is a heavy, heavy investment for us right now. If you look at the performance of watson, it is surpassing anything we have seen before not only in our business but any other as a service business. The growth is exponential and with these new businesses, we think it will be a huge engine for ibm going forward. Emily so are you saying in the near term or is this five or 10 years out . John nearterm. Emily how does watson compare to Everything Else you have worked on at this company . John ive never seen anything like watson in my career. A system that can sit by us and reason with us and help us make better decisions. Watson will not be parked in a glass house computer room or confined to a mobile device. Its going to be everywhere in our lives going forward. Emily ibm Senior Vice President , john kelly. You can catch the full interview on bloomberg. Com. Now and update from oculus the company unveiled a new 99 headset powered by oculus technology. It works with samsung phones and you can buy it in time for the holidays. But it is not the highly anticipated rift headset oculus is making itself. I spoke to Brendan Iribe today and asked why hes pushing ahead with both products. Brendan we think its going to be very big. You will have mobile vr at a lower price point, accessible for a different audience and its going to be super compelling and we will play them both. Emily while we dont have an exact sales date, he confirmed it is on track to be ready to be shipped in the First Quarter of 2016. You can catch my full interview with the ceo of oculus at bloomberg. Com. Coming up, pebble unveils a new smart watch. Its lighter, thinner and round. Eric migicovsky is with me in the studio, next. Emily it is time now for the daily byte one number that tells a whole life. Todays numbers 25 million. Thats how much money at t has spent preparing for pope francis visit. Thats big considering they spend 16 million on the super bowl. Thats to cover all of the hope related selfies and tweet. Most will be used to boost coverage so those can be uploaded without a disruption in coverage. Verizon has spent about 24 million. Now to pebble, introducing its first round face smart watch. It is lighter, thinner and only cost 249 versus 349 for the cheapest apple watch. While pebble has already sold 95,000 watches, it has fallen to third place in sales. Can pebble catch up . Joining me now is the ceo of pebble, eric migicovsky. You are wearing the new watch. We have mallory come our floor director wearing the watch. Give me the specs. Eric it is the thinnest smart watch in the world and just 38 millimeters in diameter. It feels like a real, classic watch and thats something our designers and engineers worked hard to make sure it had that feel. Emily can you explain the rose gold . What is it about rose gold . Eric we were looking at the trends and we started thinking about what would make a smart watch look like a classic watch on your wrist . We make rectangular watches that has been our go to for the last three years and weve seen a lot of people make rectangular watches, but one of the best ways to camouflage the tech and get it on your wrist is to make it look like a classic watch. Emily who are you targeting . Eric we are targeting people who were not interested pebble before. There are a ton of people who have put pebble on the wrist and there are over a million pebble users around. But for this, we are explicitly saying who else could be interested in pebble . Emily arguably, you are trying to get more women to buy pebble. This is the smallest and lightest smart watch on the market. It just so happens that some women have smaller risk than men and this is important for us because it is the design, the look, but also the feel. Emily you are first to market with a smart watch. I came down and saw you when you were in a garage and apple watch didnt exist. Now you are in third place and have to catch up. How do you see yourself reclaiming market share . Eric apple, when they move into a market i dont think anybody could have sat in the chair and said that apple would not have been able to sell millions of watches. But i think thats not really the point. Weve have weve been working on this for seven years and we are looking at the next seven years of smart watches. Apple has made it extremely clear what they are doing. They are building a watch that looks like the rolex of smart watches with prices starting at 400 or 350. That is not what we have been building. We have been Building Products that are fun, colorful, affordable, entry level crossplatform products. , i think we are positioned to be like the swatch of smart watches. Emily the swatch of smart watches. Ok. Lets talk about battery life. Two day battery life. The big question around the smart watches is how often am i going to have to charge them. Im not wearing my apple watch because i forgot to charge it. Often times i go for it and i just cant wear that day. How do you improve and the battery life . Eric we have announced a range of products. We have products that go up to 10 days and i think that is the , big message with this watch. We know millions of people are using pebble but we really wanted to build our option. For us getting double on to more and more wrists meant looking at the size and shape and how it fits on other peoples wrists. We have products that start at 99 that do tracking. That ranges up to 250. Emily in the beginning, you could not keep up with demand. How are you doing on supply versus demand . Eric we sold almost 100,000 watches. It took a while to catch up it was a fair amount of demand. Im not personally manufacturing the watches anymore. We have a talented team. We are now in best buy, target and it is spreading. Great to have you back here on the show. I like it. It looks good. That does it for this addition of bloomberg west. Up next we , have a special report on janet yellen speaking at umass amherst. Thats next. From our studios in new york city, this is charlie c rose. The pope arrived. He met president obama. The pope appealed for action. Trip istalk about the allen. The cbs news rome correspondent traveling with the pope on his plane. Anthony is the director of