The special ops are in brazil. Larger military units on stand by. Global news 24 hours a day powered by more than 2,600 journalists and analysts in more than 120 countries. Im mark crumpton. This is bloomberg, bloomberg west is next. Emily im emily chang, this is bloomberg west. Coming up the nasdaq and s p 500 end the week with an flourish, both ending at an alltime high. Well break down the numbers and the historic day. Last year shattered all of the records for deals in the tech sector. How does 2016 stack up . And tesla putting a dollar figure saying the cost may exceed expectations. Well tackle the unforeseen challenges ahead. To our lead. U. S. Stocks jumped the nasdaq and s p 500 both hitting alltime highs after the government reported better than expected jobs data for the second straight month. The private and Public Sector added 255,000 new jobs in july including coveted highpaying tech jobs, wages also showing solid gains and Unemployment Holding steady at 4. 9 near an eightyear low. The nasdaq rose 1. 2 led by tech giants apple, microsoft and alphabet. Joining us to break it all down, c. E. O. Of a recruing firm with a close eyes and cathy wood who has been investing in Silicon Valley for more than 30 years and focuses on disruption. We had a slew of positive earnings from the tech giants. Can tech equities keep up the momentum . Yes, we think they can and while a lot of people are worried and think about the past bubbles, tech an telecom and so forth, we think were at the threshold of a new bull market. Its about s curves. Amazon is less than 10 of retail going up in s curve and the fly wheel is amazon prile. Thats one example. Facebook and google, only 16 of advertising around the world is mobile. As you get toward that 20 mark, you hit a tipping point. So we think these are big s curves in motion. Emily so, john, when it comes to jobs, we saw Tech Companies actually hiring for more fulltime jobs. We got a chart of this on the bloomberg terminal. Hiring fewer contractors which has been a trend. Does that sort of echo what youre seeing . John i think it does. When people are more certain about the future, they look to bring on more fulltime employees. When theyre more uncertain, its about temporary and contract. We see people really bullish right now. The tech sector is roaring back off the lows of february. Venture Capitol Investment now alltime high, 23 billion into venture capitol funds just in the first half of the year. A nice time to be in tech. Emily cathy, does this renew talk in a bubble or end it . Were trying to educate people that, who are still very fearful, very conservatively positioned in the market that you dont move off an s curve when there is a real one in place. In the tech and telecom bubble, there was no s curve. We didnt have the right technology to make the cloud happen, to make mobile advertising happen and Online Retail happen the way it is now. So we think were just beginning. When were only 16 in mobile advertising, it has a long way to go. So were very excited about where we are. Emily john, hiring can also be symbolic of euphoric trends or lack thereof. Its interesting, i have heard from folks at google and facebook that hiring has actually slowed down because all of the good people are taken. There is this land grape for people, the good people between facebook and google and airbnb and uber. Have you heard anything to that effect . Joe there is a counterpoint. There has been a lot of tech m and a this year. You have linked in, you have neck suite. When there is m and a, that tends to shake things loose. I dont want to work for eye Bigger Company that is going to slow down. I want to work for a startup. The m and a thats actually red hot in the tech sector does mean there are a lot of people moving around. Emily were talking more about m and a in the next block. You focus on disruption. Where is more room for discorruption if you dont think were in a bubble. Where is the most room for growth . Cathie we see it all over the place. You have the whole ecosystem going to change the way health care works. You have the auto sector. Tesla is going to shake things up big time. I dont think people understand how theyre going to revolutionize manufacturing in the united states. Theyre going back to vertical integration away from the system that we have today. We see Autonomous Vehicles. Theyre going to be here before you know it. We think tesla will lead the charge there. They have really a billion miles worth of mapping data, more than any company in the world. So we think the auto sector is ripe for disruption and its going to happen a lot faster than people believe. Obotics as well and the last one really is Machine Learning. The whole Machine Learning, Artificial Intelligence, that is going to add a whole new did i mention to the cloud. The cloud is seeping into every sector. Economy. So many, many Big Companies out there who have been very successful over the last 30 years are going to be facing disruption, which is what we study all the time. Emily now, john, you make the point that the world is getting more tech centric, the economy is getting more tech centric. Does this mean more jobs absolutely in tech . On the other hand, a lot of these companies that are getting acquired werent necessarily growing. An acquisition can also be a wait out rather than a way up. Joe we believe the world is becoming more tech centric. You see demand in engineering as cathy mentioned. Security is becoming such a big concern, i. T. Security, Retail Companies that didnt think of themselves Aztec Companies and then got their servers hacked, theyre now thinking about themselves Aztec Companies. We dont see that change anytime soon in terms of more demand for tech. Some of the big fortune 500 companies are coming to us all the time saying we need more engineers, designers, more data scientists. We dont see that slowing down at all. Emily theyre growing in absolute terms . Joe we talk with a lot of these companies on a daily basis about what the cutting edge is in terms of their recruiting needs. They tell us its tech, tech, tech. Emily where could there be weakness or challenge ahead . Cathie there is weakness in a lot of companies that really led the charge in the old days. We think the Auto Companies are going to struggle. We think the old Tech Companies, the ones that were not built into the cloud and havent been able to gravitate towards it are going to, are really going to theyll either be acquired or go out of business. We see robotics causing a lot of dislocation in the employment industry which should be good because we do not think that technology at the end of the day will be bad for employment. It will mean a lot of shifting around, but it will mean higher value add and higher paying jobs. We see a lot of dislocation, but we also see a lot of opportunity, huge productivity gains ahead. Emily john, what trends are you saying in the economy, for so long, there were more and more uber and lyft drives, were hearing talk of l. Y. F. T. Struggling, what is happening in that economy . Is it getting bigger or starting to plateau . Joe it seems to be still growing very strong. One of the big differences, the labor force is shifting. There are a lot of people that simply dont quality. If youre driving for uber, delivering meals for somebody, delivering groceries, you may not be counted in the jobs report. You might be able to make a great living. We see a more Flexible Workforce emerging. Its a big opportunity. Uber is still growing incredibly fast, lyft is growing fast. You see Companies Come into all different sectors and say we can tap into this more flexible labor force and have incredible success. Emily all trends well ontinue to follow, john, cathie, great to you both here on bloomberg west. Still to come, a slow year for tech deals, serious steams in the Second Quarter. Well focus on the m and a pipeline for the rest of the year next. Apple announcing a deal to acquire an Artificial Intelligence company. Well bring you the details next. This is bloomberg. Emily now to a story we are now following. Apple announcing a deal this friday acquiring turi for 200 million. Our Bloomberg News reporter mark reporting this stoirp, welcome, mark, your first time on the set here in san francisco. Its great to have you. Already making news, why is apple buying this company . Mark apple is investing a lot of resources into future products and services. One of the difficult areas theyre focusing on now is Machine Learning and Artificial Intelligence. And turi brings a lot of that to the company. Emily how does this different from past acquisitions . Mark the past acquisitions have focused on products they want to develop. They bought suri and integrated it into the iphone. This company turi has a very fast portfolio of Different Services and plat performs and algorithms that apple can use across the entire portfolio. Emily will it make suri better . Mark there are some recommendation engines, features that will allow systems to better apply products to different customers based on how they use the products. This really fits in photos, perhaps apples online store, the app store. Its very much relevant across the product line. Emily now, a lot of people, namely Mark Andreason has talked about how apple has lagged in a. I. He told us at the bloomberg tech conference that amazon has lapped everybody including apple in a. I. Is this an incremental step forward or a really big deal . Mark apples acquisition of turi today, we might indicate this by the high 200 million price point, this is one of apples biggest steps forward in a. I. And Machine Learning yet. Turi is very integrated into the a. I. Development community. They are very open about their progress. They write lots of Research Papers and followed by lots of students and universities in the field. We actually ran a story late last year indicating that some of apples issues in a. I. And Machine Learning are because of the companys Privacy Culture. This shows that apple is willing to move beyond that and invest 200 million into a company and lots of resources thats very well known for integrating with the community. Emily how is the Privacy Culture holding them back . Mark apple doesnt want to reveal what its working on next. And Machine Learning is a very hot topic right now in Silicon Valley and across the world. That has sort of held them back. They cant talk about what theyre working on. They would talk about it and bring other people in from the developer community, they wouldnt be able to keep it private. Now theyre showing they want to take a step forward to make it more open, hire more people and bring in more resources that can push the technology across the product line. Emily changing the culture of secrecy, not opening up everything. Mark, covering consumer tech, great to you here. Mark thank you so much. Emily on the topic of deals, we started with cutthroat rivals selling on a deal in china. Uber leaving the home turf in exchange for 1 billion and a 20 stake in its competitor and tesla looking to be a one stop for tropical depressions. The those are the confirmed deals waiting regulatory approval. The unconfirmed deals, h. P. E. For several billions of dollars and apollo looking to scoop up the i. T. Company for for several 3. 5 co reuters. Shares went up 1 at one point in friday trading. Where do we stand compared to a record breaking 2015. Joining us with more, the head of u. S. Tech deals, it feels like a record year . Is it really . How does it stand up compared to last . Thanks for having me on the show. In terms of where were at so far this year, we are on pace with last years record. We have 125 billion in announced transactions through the Second Quarter and then just in the past week in terms 20, nts, announced, 30 billion announced. It was 135 billion fourthquarter in 2015. A big feat to match. Emily were looking at a chart of what is going on here. Microsoft and links in having an outsized impact on the numbers this quarter. There were a lot of other deals. Is microsoft inked inan outlier or more huge deals like that . We think that mega deals are the trend that are going to continue this year. Looking at the numbers this past year, 30 transactions over the 30 billion mark. That trend started last year with a lot of the semiconsolidation and certainly were expected to see continued mega deals as we go through the end. Year. Emily Bloomberg Intelligence had its own report how private equity firms are paying more attention to the Software Industry for deals. Tell me about trends youre seeing in software in particular . Software, its always been the bedrock of tech m and a. Its 50 of the volume. In particular this past year, you look in terms of software in terms of valuations. Public multiples are way down. They are in a much more affordable for companies to consider. Private equity are coming into that. Most of these companies in the software space, you generally have more predictable cash flows, especially if youre going into a cloud model. Were definitely seeing more interest there. If i look at the key areas within software, there is probably three that were particularly seeing. Number one is cloud, of course. You got a lot of companies transitioning into the cloud and cloud is supposed to double in terms of revenue size over the next five years. The second area is security. We have seen some big security transactions this year. If you look at that market, thats a highly fragmented market. You have 1,000 to 2,000 different Discreet Security companies. Thats an area that is ripe for some consolidation. The third area is anything related to i. O. T. , internet of things. In terms of software in particular, what were seeing is more of the platforms in the middle of the stack and moving up the stack a bit into apps and the analytics that you apply on to that data. Emily so,ed toson, what about i. P. O. s . Obviously we have seen a slight pickup in the tech i. P. O. Market. Is this trend toward staying private, is that turning now the other way . Well, i think its turning, but its turning slowly. In some respects, it was easy to beat the firstquarter mark of zero when it comes to i. P. O. S. We got six out this past period. I think from p. W. C. s point of view, we certainly see the i. P. O. Market coming back and that pendulum swinging back from staying private longer into coming into the public markets. We really think that trend will be more into 2017 and m and a is more of the driver for some of those private companies as we finish out 2016. Emily what are the big etech i. P. O. S well see this year . Yeah, i dont have any great speculation for you on that point. Ily will we see bigger tech i. P. O. S . The ones that have happened have been on the smaller side. I think the market creates a challenge for that. As you mentioned at the start of the segment, we got a lot of Economic Uncertainty both within the u. S. , especially on the political front, but then more importantly, abroad both in terms of china, brexit impacts, et cetera. That could hamper the ability of companies to come out in a big way until we get through some of this, get into the start of 2017. Emily what about some of the other private Tech Companies or valuations, private market valuations have dropped, drop box and box which is a puppet company, never sort of lived up to the valuation that some expected, will we see buyouts here, will we see drop box take the plunk and go public, what will happen . Our expectation is that well see many more of those types of companies being acquired as we go through the end of the year. One of the Key Statistics if you look at unicorns out there today, a lot of them are going out for funding over the next six months. As you have reported quite often, private funding is getting tighter and there is quite a significant expectation for down rounds and so if you combine those two pieces and the fact that there is not a guarantee for a large i. P. O. , i think were going to see a lot of those Companies Getting acquired and there is certainly a lot of buyers ready out there. I mean, if you look at the record of 2015, even though that was a record year, most of the serial tech choirs sat the year out and werent happy with the valuations on offer. As we start to see valuations come down this year, those companies are coming back into the market and not all of them have yet. We certainly expect them to be active as we get through the end of the year. Emily all right,ed toson paige, u. S. Tech deals leader, thank you so much for stopping by today. Still ahead, amazon c. E. O. Cashing in on his most valuable stock ever. Why he is selling amazon shares now. This is bloomberg. Emily on demand Food Delivery Services continue to rake in funding. The londonbase startup for ordering takeout has raised 275 million pushing its valuation to more than a billion, germanys delivery hero and uber. Venture capitalists poured 5. 5 billion into Food Delivery Companies globally. Jeff bezos is cashing in selling a Million Company shares for more than 755 million. It brings the sales for the years up to 1. 2 billion. Amazons shares are up 13 yeartodate, the sale appears to be routine. Bezos sells a large number of shares every year. An