And with a Golden Ticket its a golden day welcome to squawk alley. John and kayla and myself at post nine as we watch yet another rally fade away on some more bearish than expect inventory numbers on oil. Well watch that today. Meantime, the former coo of twitter and a partner at y combin ator. Its great to have you back. Good morning. A lot to talk about. Thank you, carl. Well start with apple. Last week according to the intercept ceo tim cook criticized the white house for a lack of leadership on encryption. Of course, tech ceos are anything but yawn itd on this topic. Heres what blackberry john chen told john fort last week. I think theres just not an organized effort for it. I think this job, you are correct, you are not missing anything. Many of us have a different position and a different view of it. Some of us feel stronger than the others. I think theres really eventually it needs to come from an organized effort and maybe the government this is a private Public Sector conversation. Theres a conversation swirling around about apple. Fortune makes the case that apple should buy the company. The company has declined to comment. Lets start with encryption here, ali. We talked about how the valley has been split on this for a long time. Some people thought that maybe postparis and Postsan Bernardino that would change. Has it . You know, i havent sensed in the networks that i sort of keep up with. I think that most people that i know in the valley feel the way tim cook does that theres really no way to create a back door only for the good guys. If you create a back door, then the bad guys are going to get in there as well, and all of our privacy is going to be compromised. Not just by cyber criminals, but also by even state actors. Whether thats the chinese or whoever it might be. I actually hear a lot of handringing about government pressure in this area, and mostly in the valley i hear people firmly behind tim cooks view. Ali, what if i find so interesting about this issue is that back in 2011 tech went all in against sopa on the messaging. You know, privacy online and against censorship. On Net Neutrality last were and the year before there were a lot of united voices on that. Why do you think encryption is a bit different . Essential than sopa, but even from the Net Neutrality response. Well, i think its really a difficult issue. I mean, i think nobody likes to see the horrors that weve seen in paris and san bernardino, et cetera. I think the Tech Community is motivated to be able to try to help where it can in terms of stopping that kind of stuff from happening. The truth is there are always going to be encrypted channels of communication, and there will always be ways for bad guys to hack into systems that are left open, so i think among the people that i talk to, theres a really strong feeling that weakening the sort of data privacy protections on your phone, weakening encryption is a bad way to address this problem. I think its a lively debate because its such an important issue. In the meeting between white house officials and representatives in the Tech Community, just a couple of weeks ago, it was social media that came to the forefront. Encryption took a back seat. Given what we know about how potential criminals are using social media, do you think that should be a higher priority than encryption in and of itself . Well, i know that at twitter, you know, we had a lot of constant communications with Law Enforcement, and we were often trying to balance the rights of our users against the legitimate desire of the state to be able to get information that would help them prosecute crimes. It was in fact, we had a whole group of people whose job it was to deal with Law Enforcement and to help them do their jobs better. I think you would find the same thing at other social platforms. I think to imply that social platforms arent engaged with Law Enforcement and arent cooperative, i think, is misleading. I think theres actually a lot of dialogue going back and forth, and i imagine that is only increased in light of some of the terror attacks you guys mentioned. Now, ali, its interesting this idea that apple could buy time warner. It strikes me as a really bad idea because if owning content really helped you make deals, then sonys kinect would have ended up being a prominent download service. Apple has had a close relationship with disney. Certainly since disney bought pixar, where you used to work, and it seems like it could also kind of screw up that disney relationship. Maybe bob eiger would have to leave the board. Whats your take on that possibility . Yeah. Its not the first time these rumors have been out there. You alluded to disney and others about apple going and buying a big Hollywood Studio or buying content, and to be honest with you, i dont see it. I dont think thats apples dna. I think those businesses are very different, and i dont think as you point out, you need to own content to be able to create great User Experience which i think is really apples core. I dont see it happening. Not going to stop a lot of people from chasing the story, but that is a story for another day. Lets talk a bit about twitter. You mentioned the company. Shares have slipped to a new low. 18. 75. This was once a 74 stock. Well below the iporice of 26. Some more concern this morning on the sell side about maus. Weve heard about 10,000 characters. Periscope has been integrated. Are you beginning to believe that everyone who has twitter already has it. I dont think its that i dont think its quite that dire. I think the fact is, as you guys all know, the level of innovation in the core product has been fairly meager, and with jack as the inventor of the products coming back to the company, i expect a lot more innovation to happen. I expect a lot of core assumptions about the product to be challenged, and i expect the product to get better and better. Now, they are now unlike five years ago, a whole host of social and messaging products where users are spending their time. We know that people tend not to use one platform exclusively. Theyll use a myriad of platforms for different needs. The environment has gotten much more competitive, but i do expect the Twitter Product to become easier to use and better over time, and time will tell whether or not it can continue to grow and attract more users, but i dont think the story here is game over. Twitter is not going to grow any more. When you say core assumptions being challenged, what do you mean . Do you see the product changing in a wholesale way . Well, you know, you alluded to one of them. You know, the 140 character conversation has gotten a lot of attention the past couple of weeks. Another has been the notion of how tweets are organized in your timeline. Are they strictly reversed chronological, or can there be more intelligence applied to how tweets are shown. These are two core assumptions much the product for the entire life of the product. That tweets are shown reverse chronologically and only that tweets are 140 characters only, and i think jack has been looking at both of those assumptions and do they make sense Going Forward . That is just the core of the product. You mentioned live video through periscoping being incorporated in tweets, and new experiences like moments, et cetera. I expect both the core assumptions of the product to change and experimentation along that axis, and i also expect new experiences and new ways to consume twitter and consume tweets as well. Its exciting to see, you know, jack dorsey back there, because i think he has the confidence of the inventor of the product, and he is not scared to do things that might seem crazy at first blush. Yes. Can speak with the founders really quickly, we have a news alert on fundraising over at uber. Kayla has some of that. Kayla. We have more details on that retail offering thats underway for uber. Remember, on monday our david faber reported shares being offered to Morgan StanleysHigh Net Worth client, but i have learned that there are people who have seen this organize offering as well, that its being sold to clients at Merrill Lynchs brokerage as well. The terms of the deal are roughly the same. 62. 5 billion valuation around 49 a share. The difference is that they have to reach a higher threshold in order to participate in that deal. It compares to Morgan Stanleys requirement of 250,000 investment with a much lower minimum for investable assets too. Now, this difference has miffed some Merrill Lynch clients who say they could qualify for the deal at morgan stanley, but not at merrill because they dont have enough money. Of course, there is intense competition. There long has been between these brokerage units, not just for afl we want clients, but because the banks want those eventually book running spots on all of those ipos. We saw it with facebook too. The current fundraising is around 2. 1 billion. It did raise 1 billion for Institutional Investors in december. Im told the remainder could come from this retail portion. We should note, uber and merrill declined to comment, but carl, its certainly interesting to see not only Companies Staying Private longer, but also tapping the retail base before they even go public to get some of that money. We had talked to Jessica Lessin about this very company yesterday. Fascinating reporting. Ali, the color that weve gotten from the valley is that as the markets come in, the mindsets has gone from growth at any cost to profitable growth, but uber appears to be Strong Enough to just plow ahead. What is your take on that . Well, i think youre right. Markets have contracted. The private market has contracted. I think in q4. Driven by a set of factors. The ipo market being one of them. So i think that, you know, rounds that are being done now, private rounds, are tending to be priced differently. Theyre tending to take longer to close. Et cetera. Uber is special. You know, i am not privy to sort of private company data, but we all know how they have grown. We all know how sticky their usage is. We all know theres a very exciting future of autonomous vehicles, which i think is truly groundbreaking technology, truly lifechanging technology. Where uber is a player in a world i dont think too far away where transportation is a service that we can all order a car thats driven autonomously and for a fraction of todays cost get to where we need to go. I think uber is both its growth and its potential make it special in this environment. What do you make of the fact that as these Companies Stay private longer, much of the Wealth Creation goes to the venture capitalist, goes to some of the Institutional Investors and now even though it is starting to go to some of the retail investors, they have to have 100 million in some cases in order to get in on that deal. Is that shielding risk for investors not sophisticated, or is that withholding wealth for people that would otherwise want to get in . I think the trend of great companies, Great Technology companies, staying private longer is here to stay. I think facebook is the first to be the pioneer there, and i think youre seeing it all over the valley. As long as capital is available for companies, i think the default will be to try to stay private because theres overhead in complexity. The founders typically dont want to deal with when they go public. Theres a lot of typical Public Market investors, via mutual funds its one of the factors with ballooning for private companies. I expect some shakeout here. You can reserve a lot of the up side for Public Market investors. I just think that for the most part thats a thing of the past. Not that companies cant grow as public companies, but i think the hypergrowth will likely be concentrated in private companies as opposed to public companies. Certainly is the view from the floor of the New York Stock Exchange you might argue. Ali, we covered a lot of ground. We hope youll come back soon. Thank you. Thank you so much. Ali, joining us from out west. Meanwhile, as we look at the markets, were keeping a close eye on the price of oil. It was up as much as 3 earlier on that surprise inventory build. It went negative. Now its eeking back into positive territory by 1. 25 . It has been the driver of all of the equity moves. Absolutely. When we come back, according to walt mossberg, apple and google should win the coming battle over the car dashboard. Walt will join us live. Google going after facebook with a big move into the Virtual Reality space. A top goldman analyst will tell us why this has the potential to become an 80 billion a year industry and powerball is all anyone is talking about today. That record 1. 5 billion jackpot. How big of a chance someone even if its probably not you stands to win this time around. We weather we continue in a moment. Sure, tv has evolved over the years. Its gotten squarer. Brighter. Bigger. Its gotten thinner. Even curvier. But whats next . For all binge watchers. Movie geeks. Sports freaks. X1 from xfinity will change the way you experience tv. Choose, choose, choose. But at bedtime . Why settle for this . Enter sleep number, and the lowest prices of the season. Sleepiq technology tells you how well you slept and what adjustments you can make. You like the bed soft. Hes more hardcore. So your sleep goes from good to great to wow only at a sleep number store. Find the lowest prices of the season, going on now. Save 600 on the 1 rated i8 bed. Know better sleep with sleep number. Big headline this morning is about ges reported move to boston. Dade faber is back at post nine with that. David. Thanks very much, carl. Thats right. This morning from the boston globe ge is prepared to announce that its moving its Corporate Headquarters from fairfield, connecticut, to the city of boston in massachusetts. This according to a source familiar with the situation, quoted by the boston globe saying an announcement could come as soon as tomorrow. It was last september that we sat right here on this set with jeff immelt, the chairman and ceo of ge, and i asked him what the company would be looking for if it were to move to a new headquarters in a new city. Listen, i think were a hightech exporter. We want to be looking forward in a place thats going to be supportive of where the company is going. We want to be someplace where people support job creation, where its attractive to talent, good cost of living, and then its very supportive in terms of what a hightech exporter has to be all about. It was last june that ge first raised the possibility of moving its headquarters. That after an increase in business taxes by the state of connecticut. Since then connecticut has made efforts to actually reverse that or specific to ge e give them certain tax breaks that would offset those increases. It doesnt seem to have stopped the company from making a decision to move elsewhere. Nonetheless, certainly a psychological, if not significant story on many fronts involving ges decision to uproot itself from its longtime headquarters in connecticut and again take up residents in the city of boston. To chicago and now this. A couple of Big Companies changing locations. Thanks, david. Coming up, dont miss harry wilson, a member of the obama administrations Auto Industry task force. That is coming up at 12 00 p. M. Eastern. Squawk alley will be right back. The lottery is now at 1. 5 billion, but what are the odds you could actually win in Walter Hickey is lead live style writer for 538, and he joins us here. Walt, we heard all about how you need to pick high numbers, you need to not pick the xaurt generated numbers. What is the truth about this . Theres not a lot that you can do to move the needle on the individual probability of the powerball ticket. Going the random way is totally fine. Picking your birthday is totally fine. You cant really move the neeldz. No matter what, youll number the ballpark of one and 292 million no matter what. Why do we even talk about the odds . I used so buy and think youre more likely to get hit by a car than you are to but the question is whats the down side of playing, right . Im not going to win a billion dollars by eating a snickers bar either, and theres more of a health down side. It costs about the same as a lottery, so why not buy one, right . Some of us have to win. Youre spending 2 for a really good conversation piece, talking about how good you are at being rich. Dont miss out on your office and everyone else winning the lottery. Thats it, right . Not really an investment. The odds could really not be more relevant. P do you believe that it is truly regressive, harmful, repells a Government Strategy of building up drama and ticket sales. If i had to map out an ideal society, it would not fund absolutely at the lower values you are going to have a lot of folks. Its a regressive tax. Absolutely. At the higher values, once weve hit this level, its so many folks playing that. Yeah, somebody is going to win it, but its not going to be the folks playing since the very beginning. There was a stat referenced in the atlantic that americans spend 70 billion last year on the lottery. More than movies, more than video games, more than books. What will the Record Powerball do for sales . Will that number go up even higher . What were looking at already so far so in november it started out at 40 million, and then it hiked up until now were at this 1. 5 billion lottery. On saturdays drawing, 950 million drawing, they had already accumulated 1. 9 billion over the course of that process getting it up to that number. So far we spent 2 million on powerball. I have never played the lottery in my life. Its like my star wars, but i might do it this time. You can go ou