tv Bloomberg Technology Bloomberg December 14, 2016 12:00am-1:01am EST
>> it is 1:00 p.m. in hong kong. casinos are expected to move closer in japan today after a final debate. legislation is expected in the next year hours, opening the doors to potential billions of investments. legislation will still be needed and no casinos are likely before the 2020 tokyo election. including morgan stanley reported $9.5 billion in gaming companies. the proposal may spark a bidding ar for cap corp.
activists moving from the hong kong legislature for abuse plan to take their appeal to the city's court. they say they need to raise $200,000 for the hearing and fromdy have 56,000 raise crowdfunding. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. let signal to the markets. afternoon trading getting underway in hong kong and china. it is a mixed markets. a sideline move as we await the fed. this is bloomberg. ♪ emily: i am emily chang in this is "bloomberg technology."
another day of records high for u.s. stocks, but tomorrow investors turn their attention to the fed meeting. plus, googles self driving car unit hits the road and gets a new name. we will bring you the details. in a senate fight looms over president-elect trump pick for a prominent diplomat. we will dive into the impact. now to a story we continue to watch. alphabet is announcing it is separating itself driving car unit into a new unit within the alphabet family. the announcement was made on tuesday at an event in san francisco. google has been developing this technology for many years as part of the google x -- part of google x.
marx, you are at the event earlier today. how does this change things for the self driving car unit? ark: they will probably have commercial unit same. -- soon. i think some of the delay is that alphabet is still figuring out logistics and what it is like to build up these standalone companies. emily: a lot of folks of been talking about how google has been working on this for years. uber beate were -- them. why has it taken so long? has sort of a self driving car, but what google is aspiring to is fully driverless, there is no steering will or break pedals, it is 100% autonomy. they are the most advanced in moving toward that front. ,mily: we spoke to sebastian
who invented the self driving car and worked at google on this project a long time. take a listen to what he had to say about the competition in this arena. other companies have been vocal about the fact that the self driving car came and could be a threat to business. many customers, but if you can offer it for half the money, you would be in trouble. emily: google is working on this, and tesla, traditional automakers are investing heavier in -- heavily in this area. they said this morning that they are like a startup, they just happen to be backed by a powerful company. google has a profitable search
, this is aor uber nexus dental issue but google can afford to play the long game. krafcik has been running this for a while. sebastian thrun was running it before that. you wrote a piece in "business week" last week about this in general. happening, is what we are seeing today another sign of wanting to clean up the balance sheet and make it clear who gets the resources and how much? mark: i think the founders are still involved. a want these companies to work like startups. talked with people on the team, talked about some of their french stations -- frustrations.
i think they're trying to find out what is viable, and what a self driving tech company looks like. emily: you will be trying the way forward for waymo for us. turning to another story we are watching, stocks pushing higher ahead of the fed meeting tomorrow come out with the dow inching, closing at 20,000 points. tech stocks were stand out in two citrate. the best-performing index were big tech names like microsoft and apple. now. joins us why today? tech is the one thing that hasn't participated since the trump election. if you believe that the deficit will somehow disappear and there will be limited inflation, if all that works and everybody the terrorists
won't overrun technology companies. the notion that terrorists somehow won't impede tech sales, that this tech meeting at trump tower tomorrow will leave everyone living tech under the new administration, i think hasn't been to do with it. emily: we will talk about that. bezos, they're all going to be at the meeting. and cory johnson will be reporting from the outside. talk to us about what you saw today, and the feeling among investors. it is always interesting to be on the trading floor. there was a moment when they traded a massive block of stock in the hours before the open, nearly a billion dollars before a single trade, and it was great to see those guys running and
then try to get rid of the shares in less than 10 minutes. it was exciting. there is some exciting -- excitement about the notion that in a slow ipo year, starting with snapchat, we might see some of the uniform -- unicorns come out of the ipo's and give more stocks to trade. we talk to the head of investment banking and credit isse.ze, -- su >> there is anticipation about a lot of the avid technology companies coming in 2017. i think if you stick about the size of the companies and potential size of ipo's, investors are thinking about what to position themselves. that there is a notion ipo's will be leading the way. we will look at the role of .redit squeeze -- suisse at the meeting at trump
also tomorrow, ibm's ceo be there. ibm has said they're working on investing $1 billion and grading more jobs. -- creating more jobs. is this part of winning over the new administration? : maybe, and maybe it will work, but when you look at that money be spent in acquisitions, the comet has spent three $6 billion over the last four years. the notion that $1 billion is a commitment when you just spent 26 -- that was 15 weeks of spending last year alone. $1 billion is a drop in the bucket for ibm expenditures. what they need is to make more profits. let me show you really quickly, if i look of the cash flow statement for ibm, this is their annual number. four years of capital expenditures, that is five
will stay with five years to keep it simple. that is capital expenditures alone and you can see the company is spending nearly $3.6 billion. to that the money they spent on acquisitions, you can see the company is spending billions and billions of dollars every 15 weeks or so. a commitment to $1 billion is very little commitment for ibm. emily: that is something we will continue to follow. we will be all over that meeting tomorrow. cory johnson, our editor at large. thank you so much. still to come, a star-studded list of silicon valley execs headed to trump tower tomorrow. ask an advisor how they should treat this meeting. this is bloomberg. ♪
his recruitedain as it worksns to -- to persuade the technology provider to adopt bitcoin technology. many see digital currency we talked with someone about how it is impacting human jobs. >> if you walk to the middle and back office of a large bank, you see lots of people working at computer terminals, and all of that can be automated away and there will be a lot of job loss. jobs are likely to talk the agenda at a meeting between resident electromed and tech
executives wednesday. -- resident elect trump and tech executives wednesday. it will be a who's who representing america's tech companies. a policy wish list was outlined for the new president, tackling things like trade and net neutrality. the internet association ceo is in new york advising tech leaders on the message they will convey at this meeting and joins us now. michael, we have a live shot inside the lobby of trump tower were all of the action, all of the meeting seven going down. bill gates was there earlier today. most of these tech leaders did not vote for donald and some were vocal about speaking out against him. what was the initial response when they got the him -- invitation? michael: i think the election is
over and the conversations from now on our how do we create jobs, continue innovation and make sure the economy grows. as about what you're been advising them on. what is the message they intend to convey? think one of the most important things about our --tor, it is one of the most fastest-growing sectors of the economy and is creating jobs in every sickle state. -- every state. of theompanies are part solution to make sure the economy growth. we outlined a number of important policy issues for president elect trump and we want to work with him on making sure this sector can remain innovative and trade value in the united states. emily: have you expect the meeting to proceed? there is some concern that donald trump could unleash the same sort of scolding that he gave to television media
executives after the election ended. are these folks going to listen? are they going to be scolded? be ael: i expect it will cordial meeting and they will be heard. all of branches have been going back and forth between our sector and the trunk transition team, and there are very important people in the room such as jared kushner and peter thiel has previous relationships with many of the ceos in the room. this is about the future, how can our companies hope growth -- help grow the economy. this is the beginning of a conversation and it is important that everybody is getting together. emily: a journalist wrote a --tty scathing calling column where she took the stand that these folks should not be going to trump tower at all, saying that the leaders of tech should be ashamed for lining up
the attacks after trump has made on what his pre-match the most important business sector. my only hope is that elon musk will also abrupt when he realizes the farce he's agreed to be part of. michael: i have a lot of respect for cara, but i disagree with that. the users -- 80% of the users are abroad, and we need have a clean slate. i think president obama put it best after the election, we need to have a clean slate and give the president elect of chance, because if he is successful we can all be successful. let's start fresh and let the election go behind us and if there are areas where he
disagree with the president going forward, we will make our voices heard and be loud about it. this is not a shy group of ceos. we're still in the early stages and we want to try to work together. and airbnb's ceos will not be there. they are traveling internationally and will not be there for whatever reason. should be freed -- should we be reading anything into this? michael: i would look at this as the first meeting. i would not read too much into who is there and who is not there. there are probably a lot of ceos who would like to be in the room. this will not be the last opportunity or the last conversation, and as an association we represent 41 companies and we will all work with the new administration make sure these businesses can grow.
rex tillerson has officially been nominated for the position of u.s. secretary of state. the exxon mobil ceo has been criticized for his ties with vladimir putin, as possible russian interference in the u.s. election is under scrutiny. what can we expect from the new administration on cyber security? me, senior policy advisory terra mueller.
the cia has come out recently saying not only do they believe russia hacked the election but hacked it in order to help donald trump win. -- of thehink the choice of wrecks tillerson, if he ends up in this job as top diplomat, what does that mean for the future of u.s. and russia relations when it comes to cyber security? >> there are a few issues to think about. one is the relationship pressure. you have a number of hawks in the trunk team, but rex tillerson has been fairly roleliatory in his last with exxon mobil. there are a lot of things the obama administration have put into place that tillerson may not have worked on much in his previous role. i do know he was at the obama
security meeting with ceos last year, so he may be familiar with some things, but a lot remains to be seen. he's a nontraditional foreign policy picks. we've never had a secretary of state with this kind of background. i think it is interesting to think about what are his policy positions going to be on things like the global engagement center which was set up to fight extremists online. this,he will good at establishing relationships in terms of his experience, but he doesn't really have a track record or past experience in the area. emily: typically, there is some sort of retaliation in cyberspace when things like this happen. talk to me about what official retaliation might be an unofficial retaliation and how there might be a twist to this under a trump ministration. : donald trump has made some statements as far as cyber
weaponry, and traditionally the united states has not had a strongly stated cyber policy and terms of how we respond to cyber attack. you seen this with north korea and with russia. we don't come out publicly with what these things might be. an interest in offensive cyber weapons. there are dangers with this because you can see escalation, cyber attacks going back-and-forth, in terms of hacking or disrupting, or denial of service. if you want to go a step further, attacks the takedown physical infrastructure. is a very important security issues. james clapper has listed cyber security as one of the main threat areas that the united states faces. i think it will be interesting to see. i do think donald trump underestimates our cyber capabilities. the united states has one of the strongest cyber arsenals in the world. where we are a little weak is in terms of our defense and
vulnerabilities, and that is due to the nature of how we vulnerabilities there are. internetan access the from our nuclear facilities to our hospitals to our computers at the pentagon, they are all potentially targets. that is the nature of the threat. emily: would donald trump be inclined to retaliate if the russians intervened on his behalf, i guess is my question? it will be interesting to see how he weighs and assesses the credibility of what the diligence agency is offering dan. pinpoint attribution for a cyber attack, you have to be confident and where it is coming from and a lot of times states like russia and china youth third-party actors -- use third-party actors carried out. i think you could see donald trump perhaps taking retaliatory
action because he seems to have taken a strong posture and some remarks. having said that, he doesn't have a clear cyber policy on paper. emily: carly fiorina, former hp ceo, national intelligence director, what does this mean for issues of encryption and intelligence? think this will perhaps be key. she is been a strong and vocal supporter of backdoor entry, allowing law enforcement to get in, this is important on the counterterrorism front, something one enforcement has been pushing for. i think it will be interesting to see them and not just on encryption, but moving to counter cyber attacks online. these techthese tech companies n under pressure to crack down on content the filing to the terms of service, extreme propaganda. they cannot with a statement last week, -- came out with a statement last week. it will be interesting to see if this a ministration pressures
>> it is 1:30 p.m. in hong kong. i have an update of your top stories. confidence among japan's large manufacturers improved the first time since june of last year. the weaker yen improved prospects for earnings. rose.ents in the boj there was a 5.5% increase in business investments for the fiscal year. mitsubishi motions -- motors are closer to an alliance. they now have a machine capable of turning out 10 million cars per year. nissan bought control in october
after mitsubishi had a scandal that threatened their first loss in eight years. syrian forces have retaken the city of aleppo, wiping out rebel fighters in the government's biggest victory in a most six years of civil war. yuan secretary-general says he is perceiving alarming reports of atrocities against civilians. it has been 16 months since russia began bombing aleppo. korean use unemployment rose to a record in november as popular protest led to the impeachment of the president. the jobless rate for those aged 25-29 reached 8.2%, up from 7.2% one year ago. government business has been at a standstill with an undue influence scandal in the country. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries.
this is bloomberg. marketst a check on the trading in asia-pacific. are on a fed watch. most markets tracking high today. you've seen us trillions up and closing higher by 7/10 of 1%. if seen a pickup in a number of stocks and also worth noting is that -- are up about 9%. that new offer by mccourty group is touring the other bit -- sporting the other bid. runners of 5%nt shanghai isinto -- coming off its lunch break but it was a choppy start to that trading session. late rate is up a 10th of 1% and still holding onto those 26 day
highs the we are seeing on the nikkei and the topics. are going to be live from london at the hour here on bloomberg television. this is bloomberg. ♪ back to our top story, stocks are pushing higher ahead of wednesday's fed meeting with the dow into closer to 20,000. tech lead the way with apple and intel leading gains in the blue-chip index in tuesday's trading, and it cap a seven day record losses. andose to an all-time high the nasdaq advancing to its first record since october. any major tech names making up lost ground since the u.s. election with tech stocks performing so well while other companies take the plunge. -- the plunge to go public next year. alex, i will start with you,
tech is finally catching up in this rally, what does it mean for ipo's? sign, heis a very good have her memory how these deals good -- get done. they look at where the comparables are trading. the company's on the closest year. if you have a bunch of cyber security companies trading up and doing very well, that means a potential ipo candidate in cyber security could get a better valuation than they could have before that rally. seeing tech stocks come back, basically after labor day and the election, is a great sign that could help push some of these pre-ipo companies that friendly have missed opportunities of this year to not get out the door, a could push them to look at listings for 2017. emily: we're expecting snap to go public, potentially dropbox, spotify. olivia, everyone is asking about airbnb. my sense is not any time
soon. i spoke with investors yesterday and they all assured me it is knock on happen anytime soon. i think a key indicator is that they have not picked a bank yet. i'm sure they are saying about what one may have their eye on, but they have not chosen one. emily: sure they are getting a lot of attention, as well. you have a story out that they have bought back $94 million of company stock from morgan stanley, which is unusual for a startup. incredibly unusual and can be deceiving. it can be -- it can appear that the coveney body's own stock as if something was wrong, but it was opposite. airbnb's value has gotten so high that morgan stanley can no longer keep it in its portfolio at the amount that it had it. so morgan stanley is only allowed to have 10% of its portfolio and private companies, and airbnb's value has tripled since morgan stanley purchase the company, so i had to sell
off a lot of stock. it did sell it for a lower value than it currently is now, but that is because airbnb got to set the price. emily: alex, as far as your reporting goes on other companies we've been talking about, dropbox, spotify, doing know anything more concrete about their plans, and if indeed they are honing in on next year? probably comewill for next year. if you look at their last capital rate, it was actually a convertible that round where the longer that that round is outstanding, the longer it takes them to exit and convert that the longer the holders of the security get paid back. it is a ticking time bomb there, their cost of capital for that money goes up over time. dropbox, we did report earlier this year they have brought in advisers to consider what toys 17 look like, and this becomes a valuation question for them. will they be able to fetch the
valuation that they have privately in public markets, given work comparables like box are trading? this is in addition to snapchat, which we should see in the first quarter of next year according to sources. those are the big guys. behind them, we know there are more than 170 unicorns valued at more than $1 billion paying around out there, and there is a lot of buzzing with a lot of names this year that we have not seen go out the door. various look at the companies, these are ones that we are waiting for, and it looks like they will be twice seven event -- twice 17 events. airbnb,potify, uber, they are the new guard. tomorrow, we are looking at older, established companies like facebook and apple. you confirmed that the ceo of
airbnb was moved -- invited to the meeting with trump but declined. olivia: he had travel plans. emily: should we read anything into this? i know it was last-minute -- olivia: we don't know. he has to travel a lot, so it is possible he was just traveling. emily: we will be following that meeting tomorrow. olivia and alex, thank you. and the latest tech revolving door, changes at the top of facebook's virtual reality unit oculus. itd is stepping down as divides into two groups. desktop-based, the other will be mobile vr. read will focus on the desktop division, and he says he missed
google opened a technology center in havana earlier this year as part of a white house deal to expand internet access to the country. of thisedition of "out world," another delay for spacex. the company has officially postponed the first manned fright of its crude dragon vehicle. may 2018.n pushed to it is the capsule spacex is astronauts tond the international space station. there has been speculation that the flight would be delayed after the falcon rocket exploded on the lunch -- launchpad in september. alibaba south china post is sever new -- seven new leadership. alibaba,chairman of
bought the english publication last year. the move raise eyebrows and critics had concerns alibaba would influence reporting. since the acquisition, the newspaper is focusing on all things digital, including terry down the pay wall, and improving its -- tearing down the pay wall and improving its app. gary joins us now from new york. thank you for joining us. what attracted you to this position? i think the opportunity we have a paper is really quite unique. the first thing is that it is one of the federated news organizations of the world with 113 years of incredible heritage and history as a quality journalistic outlet. the second thing, the post occupies a critical and super unique position being the english line which newspaper of record for hong kong.
that means the paper gets to cover china with and mincey but also objectivity, which i think is going to be increasingly -- cover china intimately that also with objectivity, what you think will be increasingly important. as an asian american, i think there is a duality of abuse in how asia is covered. i like to bridge that gap. emily: i lived in beijing and we read the south china morning post and it was perhaps the only morning paper that did not seem to be a mouthpiece for the chinese government. now that alibaba paper, will that change? -- owns this paper, will that change? that has not changed and it will not change going for. the owners and executive team, myself included, continue to be committed to editorial independence and integrity. of post, with that 113 years
journalistic history, has over the course of that history really covered china and hong kong in the region with objectivity and that will not change. emily: how will you deal with censorship issues? being in hong kong is quite advantageous for us. because we are there, we have an intimacy to china and we understand the nuance of reporting inside and outside of china, but at the same time because of the two systems, press freedoms in hong kong continue to be protected by law and so we have the ability to continue to be fair and balanced, and we will not be censoring. emily: have you spoken with jack ma, and has he told you what he wants your leadership? isy: absolutely, he committed to the legacy of this paper and the news industry. what they're looking for to is our ability to translate that
heritage into the new platforms and scale the internet allows us to access. emily: we have had similar conversations when jeff bezos took over "washington post," but what about the potential for conflict of interest to arrive -- arise between alibaba and the reporting of "the south china post?" gary: i think they have been adamant that they cover al about that -- that we cover alibaba objectively. emily: what is your social media strategy, given what we've seen around the world, the sort of difference between the social networks that exist and are available to use in china versus
the rest of the world, what is your use in china versus the rest of the world, what is your strategy? gary: my focus is going to be on the rest of the world. our focus is on taking news and coverage from china and about the greater china region to the united states am of the united kingdom and other parts of asia. the reality is that the news product we have on the internet has evolved from just print publications. the bright itself today is no longer just the world's best nihilism. it is a combination of the world's best journalism, plus the right packaging for the distribution. uncle with social networks and other district vision channels is to understand where consumption behavior is moving and making sure our product is packaged correctly for those channels. obviously this is an english line which paper, so i believe that you are probably more outward facing, but what is your strategy for within china, and especially given that a number of social networks are not available there, though they
have very healthy chinese social networks? china post ish currently not post within china. the editorial team and the company is focused outward toward the world. thank you so much for joining us. coming up, one of europe's biggest former bankers is joining bitcoin started watching. recruited-- have antony jenkins. next. this is bloomberg. ♪
startups. barclays seo antony jenkins announced he is joining the board of the bitcoin tech startup block chain. they explained the need for new finance system. is a consumer application for consumers who want to transect internationally at an efficient way. i am joined by two bloomberg reporters who know the u.k. tech scene well. and carolyn. carolyn, clearly there is a need for more seamless international banking system, and it is interesting that europe seems to me had -- be ahead on financial technology. carolyn: it does seem to be a perfect storm. you have the banking system and then you have tech city. you have startups able to work
39ngside or get into level or a really strong incubator and there are some great companies coming out of london. you are able to go any atm and take out your own money without paying any costs. you've also got some other interesting companies maneuvering things. things that i need right here and right now. i moved copies twice this year. has been slow. you need a passport to get a bank account. here, can i get money out of my account without a fee? no. emily: as an american it was very easy to set up a bank
account, and obviously the regulatory issues are less deep in the u.k.. i assume that is because people travel a lot across borders. how would you describe it? the government has done a lot to encourage these companies. the regulatory hurdles are less and the u.k. than in other areas of europe -- and in other areas of europe than you would see in the u.s. at what point is it too lenient? crowd funding is encouraged. now they are trying to rain that isk in because the regulator seeing some of the companies are not delivering like they said they would and the u.s. has a more strict approach and crowd fighting has not taken off the same kind of way, but they've not had the same kind of problems as the u.k. it not gol it or will up? what things get more difficult? i think it depends on
how pragmatic the governments are on either side of the eu. has beenyou startups looking to go into the united kingdom quickly. the only -- very mobile heavy in the u.k. some had delayed their opportunism to go jumping across the border and starting to set up in the u.k. so quickly before they get a clear steer on the wave regulation will work. i think at the moment for the eu , in berlin fin tech and paris and amsterdam, they're looking with an -- within their own eu at the moment. the ecb is the regulator for the whole of the eu. they're able to get one banking license and move with all the countries within it. it is how we are trying to regulate with the u.k. regulator and not really knowing how easy
it's going to be to do business across the border. emily: adam, this is the first time we've seen you in person since you moved to london. a lot of people do not expect brexit. after silicon valley, how does the european tech scene compare? adam: it is much smaller. of thing is, there is a lot buzz and attention happening in california, and a great deal of attention is in asia. i feel like europe, it is sort of watching the planes go by and waiting. a lot of interesting things happening there, especially around some of the universities in cambridge and a lot happening with artificial intelligence. it is flying under the radar because you don't have these big tentpole companies. emily: carolyn, you will have a chance to see to make that
comparison since you will be filling in for me caroline:. whether wait to see silicon valley lives up to the hype. i also want to bring to the audience attention what is actually happening in europe. maybe -- i think you are starting with these exits, they're not vast quantities when it comes to the startup community, but the money is going back into the ecosystem, which i think is lagging. you need money and engineers to go back in, refuel it, start a startup even more. dollars,ore billion billion euro companies. caroline hyde from berlin come here for a while. adam, you're going back to london it is great to see you. thank you both. that does it all for "bloomberg technology."
anna: waiting for yemen. fed chair janet yellen is poised to deliver the first rate hike of the year. risks and regulation, an exclusive interview, hsbc's chairman tells bloomberg he doesn't see u.s. president-elect donald trump rolling back regulations. >> our biggest risk is our industry. where perceived as a part of the world where people are able to -- were all exposed to each other,