In the biotech names and, again, guys, some real loops here well see if that continues as people dissect what is happening with this Senate Proposal for health care. Well send it right back down to the New York Stock Exchange and the true over at squawk alley. Good morning. Welcome to squawk alley much its 8 00 a. M. At oracle headquarters in Redwood Shores in california. 11 00 a. M. Here on wall street squawk alley is live good morning welcome to squawk alley. Carl has the morning off. Im on this side now. Youre on this side we like to switch it out a little bit joining us this morning, vanity fair special correspondent and General Motors vice chairman and cnbc cbsor bob lutz. Good morning to both of you. We want to Talk Health Care were just getting this draft legislation from the senate. Theyve been working on it in secret were starting to get the details trickling out as we make our way through 140 pages. Were seeing the markets react Health Care Stocks are surging on the back of this bill that includes the insurers. The hospital stocks as well. Don chu is monitoring that for us a bit of relief potentially on what this is going to mean in terms of the number of insured and what its going to mean for the industry overall you can see with the insurance side of things as weve shown you those right now, a number of these names have been rallying in maybe the week or two ahead of this release proposed legislation we talk about cigna and aetna and some of those guys all hovering near record high levels here if you take a look at that, you can maybe say that much of the Health Care Move has been kind of in anticipation at least of some of the proposed legislation here like you said, with 140some pages worth of that legislation to parse through this is the knee jerk reaction well see as the morning progresses whether that kind of gets tempered or accelerates i can admit and many others can admit i havent read through all of the legislation sure, insurers and the hospitals as well, some of the hospital stocks up probably the biggest among the health care names that we talk about. Tenant health care youre seeing there up 7 . Community health, 7. 5 hca holdings, 3 or 4 there the idea here is if there is some kind of optimism in play here, these are some of the initial battle grounds where yooer you youre going to see that stock move play out. We dont know if well see any movement tempering the optimistic surges. That remains to be seen. But still, these are the names that were going to focus on throughout the mid morning and mid afternoon trading to see whether or not wall street agrees with what people are saying about Health Care Legislation or the proposed ones i mean, sarah, i think wall street cheers the Senate Health bill is the only way you can interpret what were seeing right now. We talked about how, you know, throughout this whole process people wonder where is the insurance lobby . Where are the Health Insurers . Are they for or against it the response is lets work kind of lets wait and see that appears to have paid off. We mentioned some of the insurance names trading at all time highs big moves in the hospitals again, part of this this is what will there is concern that this does leave in place some portion of obamacare as currently structured but thats why youre seeing a positive response in the Health Care Sector broadly speaking the changes will be facing but over a longer period of time i guess we dont know whether this rally is based on whats in the bill or some calculation on the likely hihood of it actually getting through. So few people have had time to dig into this. It may be both now. The early reception again this is early hours. Because it does seem relatively positive, maybe you couple that with a less unfriendly bill than maybe the house version might have been. And a chance of maybe this thing actually passes and maybe its not the worst thing for this industry i would say what we have heard out of the insurers is pulling out of Obamacare Exchange markets that is something the white house points to. Republicans point to as well the other group of stocks i want to point out are some of the biotech stocks which have also sort of been on fire lately. Yesterday having the best day in some time again, softening of perhaps what might happen on the drug pricing front out of the administration. We should also watch the medical device makers as well. We know this draft bill would repeal medical device taxes effective after december 31st, 2017 that is the end of this year that is something they were lobbying hard for. Its been in the house and Senate Version of the plan justining to che continuing on the bill. Youre just not seeing as Much Movement today all right dominick, thank you for that upday. Moving on, President Trump meeting with tom tech ceos at the white house this hour. Drones on the table. Among those attending, former aol ceo and founder steve case, sprint founder and at t ceo randal steef randal stephenson. Were expecting comments from the president at any moment. Bob lutz and nick bilton are still us with. Bob, i want to ask you on the drone front. A number of changes have come out allowing regulation and how much of that is actually going to be enforced precision hawk and air map among the Drone Companies that tl. Wh there what do you think needs to happen laying the groundwork for this form of transportation . What can the Trump Administration do . I think theres got to be federal guidelines on what altitudes these vehicles operate at, whether theyre passenger carrying or freight carrying but the legislation has to be such that more efficient form of transportation and thats where i always say the third dimension is the untapped variable in modernizing the nations surface transportation system. Its got to be highly efficient. Its got to be affordable and at the same time they need to pass the regulations that ensure public safety. You cant leave that to the states thats gotting to federal just like all federal aviation regulations are. And, nick, i know that drones and 5g are on the agenda for the administration. They want to talk about the startup visa. There are rumors throughout that that framework could be pulled back that would have allowed immigrants to stay in the country for 2 1 2 years as long as their ventures are seen as adding jobs. How much do you expect that to emerge out of this narrative of what we hear after the meeting today . First of all, i cant wait to be able to fly to work on my personal private drone i think it will be very exciting i think the thing that is interesting when you bring up the immigration and vcs, the sprob a lot of vcs didnt go today. You know, if you look at perkins, all these different venture firms, they didnt send anyone partially because of optics and because they dont agree with the president and things like. That yet this is actual lit immigration topic is the most important things to the companies that they work with. It is Mark Zuckerberg has been pushing it heavily elan musk and all these people and so its going to be interesting to see what actually comes of this topic, of this conversation when the most important people in the room that care about it the most arent actually there. Top executives from all of the major wireless carriers are going to be there. How do you expect that to impact the conversation, nick thats also an interesting scenario with the carriers but as he said and as others have said, this is one area where i do completely agree with the white house is we are so far behind as far as cell phone speeds and pricing and all these Different Things when you look at other countries, specially asia, we pale in comparison i think that there is a hope that we can kind of move things along a little quicker now and thats one thing that theyre discussing to day. 5g should have been in our devices long ago all right moving on. More drama at uber long time board member bill gurley stepping down from that role after reportedly leading the charge to push travis to resign as ceo. Gurley posted this tweet there are many pages in the history books devoted to travis k. Few have had such Lasting Impact in the world bob lutz, ride sharing or if you want to call it gig economy, on demand rides have been a big part of what is rolling the Auto Industry what is the impact of this resignation of the drama on the board of uber . Look, nobody questions the fact that ride sharing is the future of the automobile business and the Car Companies are going to have to find a way to capture value down stream by owning part of the ride sharing experience because 20 years from now these fully autonomous modules with no controls will be standardized, normed and basically brands will disappear. Having said about the heat, it happens very frequently that founders of the companies once the company reaches a certain size are no longer capable of running it this is a typical case of Silicon Valley startup, hightech young people and they were treating running of the Corporation Like a frat party. You can do that as long as the company is small but once it gets big, you have to obey the rules and you cant be engaging in sexual harassment, jokes about race and ethnicity and all that stuff that has to go away. And at some point when the company gets big and youre in charge of all that shareholder money, you owe it to people to behave responsibly and in a mature fashion and he was obviously not capable of doing that. So i think the fact that hes going to be replaced by somebody is looking at it cosmically, i think its a good thing. Bob, i think a lot of people would agree with you nick, i wonder if that really is how Silicon Valley looks at founders and losing them as an asset or a liability look, i think the reality is this isnt just morals and ethics lets not give the v. C. S the credit they dont deserve. They want a return on investment they want the company to go public and travis, you know, had a tremendous amount of control of that company and decided which direction it was going to go. And the ipo for them was not necessarily on the table any time soon. So for the vcs that pushed him out, i dont believe that was all about ethic ands morals. I believe it is they wanted to get their money out. Thats the only way they can do it because its such an overvalued company nick, youre saying its about money, not changing the world . I know its hard to believe i know its hard to believe. You look and you think but this is the thing. This has been my problem in Silicon Valley for the last decade there is this complete nonsensical thing that were making the world a better place. I think thats the after thought. And for the Venture Capitalists, they say that too. I think its complete nonsense they are in it for the money this is a perfect example of that we have to leave it there nick bilton and bob lutz, thank you for joining us. Sure. Thank you straight ahead, oracle shares are on pace for the best day in three years up almost 9 next, a cnbc exclusive with mark hurd well keep an eye on the Health Care Stocks. [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. They are the natural borns enemy of the way things are. Yes, ideas are scary, and messy and fragile. But under the proper care, they become something beautiful. Shares of oracle surging hitting all time highs this morning after a blowout Earnings Report lets send it to josh lipton on the west quoechcoast. Im here with oracle ceo mark hurd mark, thank you for joining us. Sure. Thank you for coming over. I want to dig right in, mark, into the traction youre seeing in that Cloud Business cloud ookings, 855 million, up more than 40 year over year you call this the best quarter oracle has had you compete in a lot of different cloud categories though can you walk me through just what is driving that growth . So to try to talk about what you said, we did 855 in q4 in Cloud Bookings that was against what previously last year was the best quarter ever so this was big growth on a big growth prior year where we did almost 600 million in clawoud bookings the beginning of the year, we predi predicted we would do two million in Cloud Booking so it wasnt just the 855 that we reported last night but that brought our whole year to about 2. 1 billion worth of Cloud Booking. It was a good quarter. And part of a really good year for us and it really was broad based across multiple geographies, multiple product lines we had very strong bookings in erp which is a very important if you will, the largest Software Applications category very strong bookings in hr, hcm which we virtually doubled in our revenue part of our Cloud Business so very strong across really all aspects of the things we measured you mentioned do you have the multiple cloud offerings in this market are you able to get customers to buy, you know, multiple cloud offerings at once . Can you package those . How much better are you at that now than you were six months snag. Its a huge part of our strategy, josh we believe that customers dont want to buy from multiple Cloud Companies if they k they want accommodative models they want to share information they want to move information from application to application and do that easily the fact can you have not just great applications but a suite of those great application thats Work Together is a big part of our strategy and that manifests itself. And when we book nerp sass complication, were now seeing more and more that it brings with it in other applications with it. H. R. Applications, sales applications, et cetera. I want to switch gears and talk about competition youre going to catch and pass sales force. Do you have to get now more competitive in crm specifically . I ask that because when you look at that, you know, Sales Force Management software, that market right now controls about 18 that thats about double the market share how do you think about that competition . Well, again, our strategy is exactly what we just described w we have a suite of applications. We have more application offerings than anybody else. Were competing in more categories frankly, were competing in the biggest categories starting with erp. Then hr as well as all of the suite of Customer Experience opportunities including Marketing Sales and service. We are gaining shares in sales automation but it is for us, it is real i didnt think Bigger Picture not just the competition in one segment of the applications business i was listening to the call, mark one topic i didnt hear addressed was ai, Artificial Intelligence when i listen to the rivals, theyre putting a lot of time and money, effort into that technology is oracle also investing in ai acquisitions is there were going on under the radar that investors should know about its not under the radar. Just to be clear were investing heavily in ai. We believe the application of ai, pattern matching, whatever word you want to use for the technology, some people call it machine to machine is really getting it integrated and embedded into the applications itself so the fact that you can now get the computer to do things and do it actually not just do the work but do it really fast in a way that gives meaningful answers to meaningful questions and outcomes that can then be used in real time to make better decisions. Getting that embedded into the application is different than extracting data. Historically in our industry, we used to extract data from an application, send it somewhere, let people do magic with it and then takes a long time and then send it back thats not the way the industry is going to head were going to see ai embedded directly its not going to become a solution as a feature intergrated directly into the application sets themselves. And thats what were delivering as we speak. I want to talk about another rival called amazon. Aws, last reported revenue of 3. 7 billion infrastructure is a risk for you, it is growing fast. How do you judge the competition, specifically there with amazon . Do you look at the top line or are there just different financial metrics that traders and investors should be watching let me go back strategically what weve done. The view is start in the application space which is what weve done i think you hardly get anybody anymore had a questions the scale and software as a service or sass or application just to encapsulize our entire applications business, when you just take sass, our license on premise business and our support on premise business, that whole set at ecosystem grew 10 , roughly 10 in the quarter so weve been very focused that was driven by the sas business growing over 70 in the quarter. Weve done the same thing now with our Platform Business and our next destination is infrastructure its been thoughtful so it starts for us in the context of having great products larry spent a lot of time personally architecting this next generation of infrastructure as a service. When you say the next destination is infrastr