Miss the deadline for 422 million in bonds. The first u. S. Cruise ship to cuba in nearly 40 years across the florida straits and pulled in to have an essay. Into havana today. Havana areuise is to expected to bring cuba millions and badly needed for an current thcy. The improbable has happened leicester city, 5000 to one underdogs, are the champions of the premier league. The Football League secured the first title of its 132 year history after it went 22 at chelsea. From bloomberg World Headquarters in new york, im mark crumpton. Emily i am emily chang, and this is bloomberg west. Coming up, our exclusive interview with troy carter, ceo of the factory. We get his thoughts on whether winter is coming to silicon valley. Plus, how the granddaddy of the gaming industry Nolan Bushnell who created atari and centipede. We will ask them how gaming could change education. Could an Australian Academic potentially be the mastermind behind bitcoin . What does this mean for the future of the Digital Currency . First, to the lead investors are continuing their caution towards tech, specifically private valuations, pointing to a few bearish signs of a bubble. Tech valuation still have 25 to 75 further to fall. Bill gurley recently wrote in a blog that dirty term sheets have allowed some companies to continue raising money at higher valuations, promising bigger payoffs to new investors at the expense of old investors, which he says could lead to shares held by employees and some founders. There are 200 private companies valued at more than 1 billion, with uber being the biggest elephant in the room. I sat down for an exquisite interview with troy carter, founder and ceo of adam factory, an early investor in some of techs biggest unicorns bite uber and spotify. I started by asking if winter really is coming. Troy i think fall is here. I dont know if winter is necessarily here yet. We have on our light jackets right now, looking at the winter coats. I do think winter is definitely on its way. Emily if winter is coming, how does that play out . What we have seen, some down rounds, some flat rounds, some companies not able to raise at all. Troy i think we are going to see much more of it. We are already starting to see market corrections in the late stage an early stage side, as well. I think we are starting to see a lot of the younger entrepreneurs getting a lot smarter in terms of their business approach. Before where it was about hyper, i think a lot of entrepreneurs are actually factoring in profitability and revenue and things like that. We are starting to see a correction in behavior. Emily youre an investor in uber, lift, slack, and dropbox. Lets start with uber. Is uber worth 62. 5 billion . Troy ultimately, i think wilbur is going to be worth a lot more than 62. 5 billion. When they do decide to go public, its going to be one of the largest ipos in history. I definitely think we are just seeing the beginning of uber. Emily what about dropbox, which is employed that has been plagued by writedowns from mutual funds . How significant are they . They seem to be adding to negative sentiment. Troy they have a very smart team in place. Drew is a fantastic founder, and i think they have an awesome product roadmap. I am bullish on the longterm with dropbox. Emily i want to talk about spotify. You were one of the first managers to embrace spotify, but the Company Still has challenges to overcome with many of the most prominent artists. How do those challenges play out for spotify . Do you think they can overcome that . Do you think they can succeed for the long haul . Troy i think they will get the biggest names. Just projecting ahead, i think spotify will definitely win the music streaming race without a question. I think the revenue pot is growing exponentially for artists. I wont even say necessarily for artists. I would say for content owners. I think the misconception is that spotify is not paying a lot of money. Spotify is paying a lot of money. That is one thing that the artists have to figure out with record labels sooner than later. I do see some changes in behavior there. Longterm, spotify is going to be in fantastic shape, and i dont think those artists will be able to reach broad audiences without spotify as you look at the next five years or so. If you are a big artist, and you are not on a platform but all of your fans are, i think you are going to be doing your fans a disservice by not being there. Emily beyonce just dropped an entire album with streaming rights exclusively on tidal. Is tidal stealing some of the thunder that spotify or apple music would have . Troy i dont think she dropped it exclusively on tidal. If i pull up youtube, i can listen to the entire beyonce album. The issue is, with audio, theres not such a thing as a real exclusive. Once you let the cat out of the bag, its going to be all over youtube. My argument is, what is youtube paying out to the artists for the songs that are up there illegally . Emily would you say that apple music has been a success . Troy they never made any grand proclamations about what they were trying to accomplish, but when you look at what they were able to do with drake and you look at what they were able to do with some of the other exclusive content and some of the talent they have been able to attract to the platform, jimmy ive been, dr. Dre, they are just a force to be reckoned with at apple. I think they have attracted a lot of talent that apple normally wouldnt have been able to attract. Judging from that level, i think they have been a great success. Also, i think they have been fantastic about educating consumers on streaming. The moment that apple putheir stake in the sand, we saw spotify grow, as well. I think its one of those things where we are seeing everybody benefit from apples ability to educate consumers. Judging by that, i would say, so far, its been successful. Emily season two of your accelerator program. You are just opening up for applications. How would you compare adam factory in the crowded landscape of start up accelerators . Emily i dont know if it is too crowded. You have a lot of entrepreneurs starting companies. I think the accelerator programs are fantastic, just to be able to give them that support that they need. Whether its funding, mentor ship, access to networks, i do think theres a lot of value in these accelerator programs. Emily what kind of founders are you looking for that can disrupt entertainment and culture . Troy our program is open to all kinds of founders. What we have learned from our network is that we have strong relationships in entertainment and media and with a lot of cpg and fortune 500 companies. We look for companies that we can plug and play into adam factory. In the last cohort of companies, it was everything from a mobile streetwear marketplace to a sidestep effort to focus on merchandise. We transfer is doing large filesharing and serves as a media platform, as well. We look for companies we feel can fit right into our network, and we can help them from day one. Emily troy carter, ceo of atom factory. In what has become an epic stocks slide, mondays close in the red marks apples longest losing streak since july. Of 1998. It also means apple has wiped off 80 billion in market cap over the last eight sessions. Apple is the worst performer in 2016 on the dow and on pace for its biggest yearly loss since the financial crisis. All of this began with an underwhelming Earnings Report in which apple posted its First Sales Decline in over a decade and forecast another one in the current quarter. Coming up, bitcoins alleged creator steps forward. Is it really him, and what does this Development Mean for the currency . The man who saw potential in steve jobs and laid the groundwork for the modern videoGame Industry, atari founder Nolan Bushnell, later this hour. Emily the Whatsapp Messaging Service was blocked in brazil for the second time in less than six months. A judge said whatsapp fail to comply with an order to turn over data in a criminal investigation and ordered phone companies to block the service. According to a newspaper, the fine for not cutting the service would have been 143,000 a day. Local Telephone Companies have agreed to comply with the decision. Turning to bitcoin, Craig Stephen wright, an australian entrepreneur, has identified himself as the creator of the currency. This announcement comes five months after Media Outlets reported he was the mastermind. Questions remain over the validity of his claim, as its pretty difficult to verify. Does this have an impact on the Digital Currency . Does it matter who created it going . Joining me, bruce benton, founder of the bitcoin foundation. Do you think it is or isnt him . Bruce theres not enough information to tell right now. The information he has released so far is interesting, but its not conclusive. Emily what would it take to confirm this . Why are there so many questions . Bruce it wouldnt take too much. There are a couple of transactions that should be done that would put peoples confidence at a higher level. We can never be 100 , but there are a few things that can be done, different transactions that would put us at a high level of confidence. Emily why doesnt he do that . Bruce you would have to ask him. I understand there are problems with trust or tax issues. There are some very bright people on both sides who believe he is the founder. I am somewhere in between. I want to see more evidence before i make a decision. Emily it is believed that whoever created bitcoin does have a pile of it stashed away somewhere. How big is that pile, and when would this person potentially sell it . Bruce thats really key for the market, because it is such a large piece. It would be Something Like 980,000 bitcoins. Certainly, if he is the founder and decided to sell that, that would be huge news for the markets for sure. Emily does it matter . Does it matter who created bitcoin . Does having the identity of this person change the future of bitcoin in any way . Bruce the great news is no, it doesnt. It doesnt really matter at all. What bitcoin is at the end of the day is a ledger. Its a very good ledger, maybe the best ledger the world has ever seen, and all that ledger is is a statement of truth. Its a statement of who owns what. That statement is true whether the creator is craig wright or someone else. Regardless of that motivation, that ledger is very solid and wont change. Emily do you think that the true founder of bitcoin will ever be revealed with certainty . Bruce it will never be 100 certain because we have the potential somebody could be hacked or compromised in some other way or any number of other reasons. It will never be 100 . If craig wright were to do a couple key transactions, the confidence would be very high. He hasnt quite done that yet for most people in the industry. Emily give us a status update on the future of bitcoin in general . We know the valuation has fluctuated wildly. We talked about it a lot a year or so ago, and interest around bitcoin has really ebbed. What is the future of bitcoin . Bruce the interesting thing is because it is traded in a public way, that creates a lot of focus on the price. If the internet, if somehow you have been able to buy shares or coins off the internet of the internet or tcip or html, that would been very volatile, too. We see this volatility because of the nature of it being a new thing. Overall, what is important is the amount of new people entering this industry, the amount of venture capitalists investing in new startups, and that is very exciting. There are more and more bright people coming into this. I am here in new york. There are all kinds of serious banks and consulting firms who would have left this technology a year or two ago, and now they are very involved with huge teams looking into this. Emily if indeed the creator owns a 980,000 bitcoins, that would be on the order of 130 million based on todays price. Bruce fenton, thanks so much for joining us. Bruce thank you. Emily coming up, we hear from one of the Founding Fathers of computerized investing. David harding joins us on the model that beat the market. Luxury lifestyles, stepping into the tesla model s. We will take you behind the wheel later this hour. Emily a solar powered airplane is heading for arizona in the latest leg of its journey around the world using only energy from the sun. The swissmade Solar Impulse 2 took off from view, california for a 16hour flight to phoenix. The wings are equipped with 17,000 solar cells that power propellers and charge batteries. After phoenix, the plane will take two more stops in the u. S. Before crossing the atlantic. The Artificial Intelligence revolution seems to be upon us, but how can businesses and investors make use of it . Lets get to the Milken Institute global conference where Erik Schatzker is standing by with david harding, founder and ceo of winton. Erik thank you. David and i are talking about the rise of the machines. Artificial intelligence, Machine Learning coming to investing. Explain. What does it mean . Your firm is at the forefront of it. David Companies Based here have Machine Learning on the billboard. My company, a quantitative systematic company, we had been in and around Machine Learning techniques for more than 20 years. I thought, if its all going on here, we should be here, too. Erik ok, but we are at a point now i understand you have been making good use of Computing Technology for a long time. We do appear to be at a point or on the cusp of a point where Machine Learning and Artificial Intelligence are going to begin to build the long forecast . David computers continue to impress us more and more. Sometime around the 1980s, the u. S. Finally stepped up a little bit more. There was a whole Weapons Development program in 1985 and 1986. They started playing chess in the 1950s, computers. They have been doing clever things for a long time. Im not sure this is quite the discontinuity. Erik what does it mean, however, if the human is further and further away from the transaction . In other words, if machines are teaching themselves and reprogramming themselves, what does that mean for Financial Markets . Will they behave any differently . David i do think we are some way from that point. What Machine Learning is teaching us is that a lot of the things we thought were complicated and human are a lot easier than we thought they were. Human beings are not necessarily a lot of Human Behavior isnt necessarily intelligent. Erik particularly in investing. David in investing, computers outfitted with simple algorithms have been most investors over the last 30 years. Erik the absurd conclusion to all of this is that you get to a point where if its machines versus machines, is that ridiculous, or if that is in fact where we are going, do we get to a point where the market is effectively perfect and there are no opportunities at all . David i think that is completely wrong. [laughter] in order to use computers to find out techniques for investing, you need a lot of data, and that data needs to be clean. The data that is being created needs to be cleaned, which is a painstaking process, and then drawing inferences from that data is also a painstaking process. The chances of getting a computer algorithm and applying it is the chances of a champ chimp typing on a random keyboard. Erik if you are able to harness Artificial Intelligence or Machine Learning, does that mean better returns . David i think its just that the whole game is moving on. I think its a way in which things can be done by scientific discipline being applied to Financial Markets. It will be an improvement on how investing is done. It wont replace credit arbitrage or Something Like this. The opportunity to bring the scientific discipline to bear in Financial Markets, as in other areas of the economy, those opportunities are great. Erik david, great to have you here. David harding of winton. Emily, applying Artificial Intelligence to what he does as the systematic investor a systematic investor in Financial Markets. Emily Erik Schatzker from the conference in l. A. , thank you. Check out our podcast for extra episodes of our longform show studio 1. 0. It has commentary from brad stone. Its available on itunes and sound cloud, and this week, we are talking startup Success Stories with the ceo of dropbox, cofounder of airbnb, and Founding Partner jessica livingston. Up next, atari cofounder Nolan Bushnell is trying to revolutionize video games once again. We speak to one of techs most influential pioneers next. Iaaem the printed page of chinese manufacturing slipped in april after weakness in the economy weighed by overcapacity and toand factory pmi fell 49. 4, below that 50 mark. That is down from 49. 7. It highlights challenges for policymakers balancing the need for ongoing stimulus. The imf says rising debt levels have become a significant risk for major asian economies. It expects asian gdp growth at 5. 3 this year and next. Debt levels have increased markedly over the past decade, across most of the Major Economies in the region, including china and japan. An Interest Rate anno