tv Bloomberg Technology Bloomberg May 23, 2017 11:00pm-12:01am EDT
alisa: i'm alisa parenti from washington and you are watching "bloomberg technology." let's start with a check of your first word news. british prime minister theresa may has raised the nation's threat level saying another attack may be imminent after the suicide bombing last night in manchester. may spoke today in downing street. the terror level was raised from severe to critical. manchester residents held a vigil today for victims of the attack. authorities also identified a 22-year-old local resident as the suspect. 22 people died with more than 50 wounded. islamic state claimed responsibility, but the u.s. has not verify the claim. president trump is in rome and
will meet with pope francis tomorrow at the vatican. this is the first meeting between the leaders and the third stop on the president's first official trip overseas. the pontiff criticized trump has -- trump's campaign plan to build a wall. the president responded by calling the pope disgraceful. step closeris one to developing a nuclear armed rocket that directly threatens the u.s. north korea says the missile is ready for mass production. sir roger moore, the debonair star of the james bond movies in the 1970's and 1980's has died. he has been active with the united nations children's fund. he was 89. i'm alisa parenti. thank you for watching. this is bloomberg. ♪
emily: this is "bloomberg technology." coming up, the trump administration rolls out its budget proposal. we will analyze the potential impact on tech. plus, uber swerves into yet another bump in the road, this time costing the company millions. microsoft's more powerful fifth-generation surface pro hits markets next month. we will preview the device and its potential. first, to our lead. u.s. stocks pushed ahead with small gains for the fourth day in a row despite news of the terror attack out of manchester. abigail, give us the roundup today of what happened in trading. abigail: it was a quiet day for stocks in the u.s. the dow, s&p 500, and nasdaq finished fractionally higher and not really much of a reaction to that terror tragedy. this is pretty consistent with what we have seen over the last year or even more so.
perhaps investors weighing in saying that the tragedy is unlikely to affect the corporate outlook for u.s. companies. we also have the vix trading lower, so not a lot of fear there. another way to look at it, actually -- some of the high beta names and nasdaq traded higher. nvidia was lower. paul sweeney, intelligence analyst, says high beta names tend to trade down significantly. we are not really seeing a reaction, and the reaction from nvidia, we see stocks finishing down about .4%, so not a huge decline, but that was much more related to company-specific action as opposed to anything to do with that terror tragedy in manchester.
emily: what about chip stocks? they underperformed. what happened? abigail: wells fargo downgraded shares to market perform. and analyst citing lackluster growth opportunities. plus, morgan stanley plus analyst has been relatively bullish but conceded that analyst day yesterday was a bit disappointing, so those shares fell. we also have amd down. the stock has been week after its rocket ride over the last year, but more recently down, and the cause for the weakness today, citi saying it's unlikely the expected intel deal comes through for amd.
we saw a selloff for the stocks in april. it did weigh on the major averages. we see a beautiful one-year uptrend for the stocks, but on -- that uptrend has started to reverse, but the stocks below it, which tells us buyers are starting to fade. if sellers decide to aggressively move then, it could cause more volatile action. perhaps a decent declined to the downside. as you know right now, technology is the top sector this year, so it is important that the strength in chips holds up. there could be some volatility ahead, and very quickly after our post-market trading, we have shares of intuit popping sharply after the tax and accounting software maker boosted its full-year forecast. investors are clearly chairing this.
it was a bit of a slow tax season, but they say demand for their accounting software is strong. emily: our bloomberg news stocks reporter abigail doolittle there with the roundup. thanks so much. president trump released a full budget, detailing massive cuts totaling $3.6 trillion over a decade. the office of management and budget director mick mulvaney spoke at the white house and explained the motivations behind the plan. >> part of the foundation here is sustained 3% economic growth. everything we do in this administration, and free single time i am called into the oval office, if it is on immigration policy, health care policy, tax reform policy, trade policy, budgets and spending, the focus is sustained economic growth.
emily: first of all, talk to us a little bit about the impact that this budget specifically would have on sectors we care about like security, like infrastructure. >> this budget does have a large number of cuts, but the president wanted to focus a lot on security, when it comes from security on foreign threats, so there is a large increase on military spending. military contracts can be expected to increase under this budget, as well as cybersecurity. there is $1.4 billion for a new cybersecurity budget. there's also tax dollars for infrastructure spending as part of the president's trillion dollar infrastructure plan. the rest of the money is expected to come from the private sector, but the president is cutting a lot of social safety net programs. he says his idea is to focus
more on defense and less on domestic spending, and he believes he will be able to get the economy growing so people will not need as many of those social safety net programs. emily: meantime, solar tax credits were extended for seven years. what is not getting cut? toluse: the president is focused on certain programs both democrats and republicans can get behind, things like the paid family leave proposal the president put into his budget as a bipartisan program that would increase spending on paid family leave, things like solar tax credits which request support, before the most part, the environmental protection agency is likely to get a very large cut as well as several agencies that focus on climate change and climate science.
the president has focused on a few areas including solar, where he has not made those drastic cuts. emily: the proposal involves cutting the fcc budget and the renting the agency auction off more spectrum licenses. toluse: the cut in spending would reduce the size and probably lead to layoffs or at least a reduction in the staff size of the fcc, so you could see fewer fcc actions, and you could also see it auctioning off more spectrum. that is something mobile wireless companies might be interested in, but one caveat is this is a proposal from the president was will go to congress, and congress will likely take its own liberty with this proposal and decide what to keep and what to strike out. from what we hear, they are likely to focus on using their own priorities and writing their own budget bill before the budget ending runs out in september.
emily: how long do we expect that process to take? toluse: it could depend on how close negotiators from both parties are able to get over the next few months. we are hearing the president's budget is likely dead on arrival in congress, and that could help bring negotiators to the table because democrats have largely said this budget is not something they are even willing to negotiate over because there are so many cuts in it, but once republicans and democrats can agree on some topline numbers and agree to not cut as many programs as the president wants to cut over the next few months, you could likely expect them to come to some kind of agreement, either over the summer or into the fall. they have that hard deadline in september when the funding runs out, so that will put some
they were taking customer fares based on the pretax some instead of after taxes and fees. uber will pay drivers back $900 each, which will cost the company tens of millions of dollars. and israel is indicting uber for allegedly offering illegal rides. the company pick up passengers for a week that a government license. undercover agents have been posing as passengers for several months. the ridesharing service is illegal in israel where drivers are banned for charging for rise in private cars. instead, it has been offering service in tel aviv where passengers pay private car drivers a reimbursement for things like gas. the service launched in israel attempting to lure customers away from local rivals. a new startup is trying to make its name in the $30 billion self storage market.
it was founded by the former head of product at uber, who just left the company last year. he joins me in the studio. have to ask you about uber first. it has been in the news. you have been credited with coming up with the idea of surge pricing. what is your take on the fact that it does not seem like it has been settled yet? michael: surge pricing happens around us every day. on a late night in boston, bars close around 1:45 every weekend, and we could not satisfy all that demand, so in order to get drivers to come out, we had to try paying the more, and it turns out that we increase rates, demand goes down, supply goes up, and it is something that goes on around us every day with hotels, with storage.
it is a common practice. i did not invent the idea of supply and demand. it was something talk to me in econ 101 in college. emily: do you think uber has to answer to these drivers who feel like they have not been treated fairly time and again? michael: at the end of the day, marketplaces are all about supply. i wrote a blog post about a year ago that said supply is the foundation of a great marketplace. at the end of the day, uber does not have a product will supply. we started a company, trove, that partners with professional movers and storage companies. without them, we have no service. emily: talk about what you learned at uber that you are applying to trove. michael: with uber, the idea was black cars. they would come get you, drive
you 10 minutes, and they might wait an hour everywhere else. moving and storage is a category that has not changed dozens of years. typically, if you store today, you have to rent the unit, rent a truck, by the boxes, and then you have to call your friends. usually that is off-line, too. i don't know about you -- when i call my friends, they don't really pick up if it is for moving and storage help. in this case, it is bringing that to their business and connecting them with more customers. emily: what is your value proposition? what do you offer that no one else does? michael: they have taken as an approach a vertically integrated approach. clutter and makespace lease and own warehouses, trucks, and employed drivers. we are taking a page from other market forces such as uber to connect moving and storage companies with customers.
we can help them expand and grow their business and create more jobs. emily: what about when it comes to culture? what page will you be taking from uber when it comes to that? michael: culture is something set at the very early stages of your company. john, my cofounder and cto and i probably spend the first part talking about culture every day. in the storage category, a customer wants honesty, empathy. moving is one of the things that is the most stressful you can go through in your life. emily: how about stepping on toes? michael: at the end of the day, we do believe deeply in something like ownership. owners, for example, empowering storage companies. internally, we also believe in
taking the extra step to complete something and get it done. emily: there have been a lot of questions about the uber culture and if that led to the problems it is having today. did you see early warning signs that things could get off track? you were there for four years. that's why i'm asking. michael: all i can say about that is cultures are founded and set at the very early stages, and that trove, we are trying to set a culture that is customer centric, that is about empathy and honesty. emily: how easy is it to get money? how much is stored in the coffers?
michael: that is also a great question that i'm not in the best position to answer. we are lucky to have a great partner in greylock partners. we have known them for years now, and they are fortunate enough to be partners with us. i cannot comment on the fundraising landscape in that we are currently heads down building our product and service. emily: excited to see it. thanks so much for joining us. michael: thanks for having me. take care. emily: bitcoin continues its record run. the crypto currency jumped to a new record high. its value more than doubling since march. speaking at an industry event, the ceo recently said the recent rally is being driven partially by moving out of riskier assets and moving into more established crypto currency. coming up, an exclusive interview. which jobs in banking will be replaced by robots in the next five to 10 years? we will get his take. and check us out on the radio.
bloomberg's editor at large erik schatzker caught up with tim sloan, asking which jobs will be replaced by computers five or 10 years from now. tim: any function that is repetitive can be done as well by a machine as by a human. i think any function that requires judgment, that requires listening, that requires empathy can be done only by a human, so i think you are going to see our business continue to evolve. that is why we are so excited about the innovation we are bringing to our customers, but there will always be a place in our industry for human contact. erik: if you look at the jobs today, how many are repetitive? tim: i do not know off the top of my head, but to the extent that we have a role that is repetitive that could be replaced by a machine over time, that is not to say we will not
create new roles. our payments, virtualization, and innovation group did not exist nine months ago. we have 31,000 people in that group right now. erik: why is it so important for wells fargo to be the first mover in technology? you are spending a lot of money on improving consumer experience. why is that important? every bank will have that technology eventually. tim: i hope that is the case, by the way, because it will provide better service and experience to our customers, but that's why we want to do it. our customers love using the branch network. they like using our network capabilities. we were voted number one by keynote this year. they like using our online capabilities. we brought online banking to the
industry in the mid-90's, so we have been innovating for a long time. the reason we want to do it is because that is what our customers want. emily: coming up, major testimonies at the capital are bringing more heat to ties between trump and russia. we will dive into what the former cia director has to say on russian cyber meddling. and i want you to check out our interactive tv function. you can watch us live. if you miss an interview, you can go back and check it out. you can send producers a message, send me a question, play along with the charts we show on the air. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪
the brca of sanctions against iran. the company was fined more than $1 billion for passing restricted american technology to tehran. southern ireland under military rule after terrorists went to islamic state clashed with troops in the city of malawi. the measure will remain a place for 60 days, and the president's cutting short his visit to russia to handle the situation. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. juliette: checking the markets in asia, midsession, as paul mentioned. what we heard from moody's is the aussie dollar drop, winship the mood down.
also weakness coming through in chinese stocks. down by about .3%. shanghai stocks or the shanghai composite trading at october lows. it has been as low as september 2016 levels. elsewhere, though, and a lot of brazilians coming through. japan's nikkei index up by .5%. some of the emerging markets looking good as well, although it is worth noting indonesia and jakarta composite index has come off those record highs. , we have seen weakness in the iron ore contract and also reports that the ceo says he believes the iron ore client has to drop even further. toshiba corp. up by 6.5% after reports it may seek buyers for its westinghouse unit as early as this all according to the ceo of that unit, and then elsewhere
, china everbright also doing well after we saw morgan stanley rate china ever grand at overweight. emily: this is "bloomberg technology." i'm emily chang. former cia director john brennan testified before the house intelligence committee tuesday. for the first time, he publicly said he was concerned about possible ties between russia and the trump campaign, saying that russia "brazenly interfered" in u.s. elections, including actively contacting members of the campaign. he stopped shy of calling it "collusion." he also says he's concerned over reports that president trump shared classified information with the russians on may 10 in the oval office. >> i don't know what was shared or said in the oval office, but if the reports in the press are true that mr. trump decided to
spontaneously share intelligence with the russians, i think he would have violated two protocols. emily: our global news reporter joins us from the -- washington. what where the biggest revelations from the testimony today? reporter: good afternoon. i think the big takeaway that a lot of people had was the early on concerned that brennan expressed, this idea that he was confronting russian officials as far back as august about these concerns. the expression he used was "pull at the threads," that he knew way back then that they had to see what was going on. i think that was a wake-up call, or a new revelation for people.
emily: the timeline, as you mentioned, seems to be worthy. it we get any more information about how intelligence officials handled these revelations at the time? he often said he would have preferred to talk about some of these things in closed session. i wondering what happens behind closed doors. reporter: they came out of the closed door meeting and mike conley and adam schiff, the top ranking members of the committee, declined to speak. there were several times were brennan said he would rather discuss in closed session because of classified information. they kept pretty well to that script because they came out with a sort of brush off, no comment right now. emily: the white house did release this comment, saying this morning's hearing back up what we have said all along that there is no evidence of any russia-trump campaign collusion.
brennan today was repeatedly pressed for names, but he wouldn't give any of them up. what was your take on that? reporter: particularly trey gowdy, a congressman who made a name for himself during the benghazi hearings, he repeatedly pressed for specific names. that was when brennan was really parrying-- harrying -- that one back. he said that was sort of a classified -- something to be done in a classified setting. i don't think the republicans on the committee were quite satisfied with that answer. emily: brennan said also repeatedly that russia's middling in cyberspace is obvious and has been out in the open. did we get any more color on how it can be handled or prevented?
reporter: voter information between brennan and the committee members. what is interesting is brennan said today this is a pattern going back many decades, that was the exact phrase he used. so i think another turn of phrase he used occasionally was insidious. he said sometimes people were being cultivated as an intelligence asset don't even realize it, and may unwittingly be an intelligence asset. emily: last question, any line of site online former fbi director james comey will be testifying? reporter: there really is no line of sight. i know in the senate they said they were trying to get something together after memorial day. in the house right now, some scheduled testimony was put off. we will check back in on that. emily: thank you so much, terrence.
staying in washington, post mate ceo testifying before congress earlier, making the case for integrating robotics into his business model of on-demand delivery. in january, they teamed up with starship technologies to test deliveries via self-driving robots, but it sparked regulatory concerns around safety and fears around the displacement of human workers. i asked lehman about the fear and how he imagines robots integrating into the postmates delivery network. >> if i paint a picture 10 years from now, i think we will have what we believe is a site walk class robot doing short range deliveries, highly dense metropolitan areas is where we can deploy our sibor class robots in the most efficient way.
these are deliveries that are probably not suited for human labor. they are relatively short. i think the return of monetary value is not as great. this is where we think we can have the biggest impact. emily: what do you have to say to the elon musk's or the stephen hawking's of the world who are concerned that robots will supersede humans, or perhaps even become us? >> i think it's a question of time. i think elon is right in his remarks that we have to be careful, specifically when it comes to ai. i think what he is trying to fund like open ai, they are great ways to get broader base to people and not have isolated, intelligent ai operating summer. when it comes to robots, they already augment our life. automation happened a while ago. while there are some areas where
we still have to explore the impact, there are others where automation can't come fast enough. there are jobs that are simply not say for secure enough for humans to perform, and i think that is something positive that we should focus on. emily: bill gates has proposed that governments should task robot workers just like they tax human workers. what do you think of that? >> i think there's definitely an interesting discussion to be had. i think there's a time and place for this discussion. right now we are still in the phase of experimentation. we spoke to congress about not putting too many roadblocks into the cities, into communities so that we can at least explore the impact. it allows us to have some data and have deep analysis. then once we understand the impact and how we can augment and use robots in our cities, we can have a discussion if we need to find a way to tax them or do anything else to protect the
workforce we have today. i think we should agree that we need to appreciate and bear hug the future. emily: there's a question about whether the postmates model can scale. can you get a concrete number that shows progress? >> i think it is scaled well. these are external questions. these are obviously not questions we ask ourselves. we are doing over 2 million deliveries per month. this year, we will move $1 billion in commerce on the postmates platform. we paid out $300 million in income to postmates on the platform. we are in 44 markets across the u.s. we are attacking international territory. i think the platform scales, and i think it is something customers love and appreciate. emily: what about plans for international expansion?
you talked about launching in london. that hasn't happened yet. is it going to happen, and if so, when? >> you will definitely see us lunch internationally. i think we have been more concentrated on penetrating the u.s. market. ultimately, that is the decision we did earlier this year. we will launch outside the u.s. i'm not sure if europe is the first market, but you can think of it is definitely a market of interest for us. emily: my conversation with the postmates ceo. it was this day and had 15 years ago that netflix made its public debut. back then, it was simply a dvd rental service. since then, they have had a strong run, but not without stumbles. they lost nearly 80% of value between july and november 2011 after it raised fees and attempted to split up dvd and streaming services. still, the company is a massive growth story. a rise 40% each year in stock on
emily: microsoft is refreshing its surface pro. at an event in shanghai, they unveiled the new laptop hybrid. microsoft also announced a special version of windows 10 that lets the chinese government use its own encryption on its computers. bloomberg's seattle bureau chief joins us from seattle with more. longtime microsoft reporter, congratulations on the bureau chief gig.
how is it doing? reporter: they had a decline in revenue. the surface pro is the workhorse of their line. the version that was out in the market had been getting pretty old. people were buying other windows lines, or buying the ipad. they needed a refresh. that's what we got out of the shanghai event. emily: how important is hardware still to microsoft? reporter: it was a $4 billion business for the last fiscal year. it has been quite a focus in addition to revenue, just in terms of coming up with new categories where they can show what windows can do. this category, this two in one laptop tablet hybrid, they pioneered it, but apple stepped up.
this new version of the battery life by about 15%, has a new intel chip, and has interesting and compelling features, like the luxury material on the keyboard that they had in the laptop. just for volume, it is important for them to get a new version of this in the market. this is also the first launch they have done of a product outside the u.s. there was a desire to show the importance of the chinese market. emily: they are giving china a special version of windows 10. they announced this in china. why is that? reporter: the chinese government has not been willing to use either windows eight or windows 10, which obviously, we are talking the entire chinese government -- state, local, and state owned enterprises.
this closes a huge market off to windows. the chinese cited security concerns. so they had two years to come up with a version they can use. they allow the government to provide their own encryption. it means the chinese government doesn't have to send data outside of the country and doesn't have to have microsoft in their machines updating. they can also delete apps they don't want to use. it gives them a greater degree of control. at the same time, the government is fraught with concerns about civil liberties and blocking. that is an issue for them. emily: dina bass, our seattle bureau chief, with an update. thank you. coming up, how the u.k. compares to silicon valley. and the sad diversity problem that plagues.
emily: we've been taking a look at the long-standing diversity problem in the technology industry. this is a problem not limited to silicon valley. i want to get the caroline hyde in london, taking a close look at diversity and venture capital in the u.k. caroline: it seems as though when it comes to boosting the number of women in tech, people focus on how many females are in engineering or leadership, but there's another key area in tech where women are underrepresented -- venture capital. diversity vpns to bring more women and minorities into venture capital firms, and it just published first of its kind data that 160 venture capital firms in the u.k., only 20% have women at the top. >> it is a consenting statistic.
we compare that, to the labor force in the u.k. in general it is 47% women working across all industries. we are behind. only 27% in the hole investment industry, so investment in particular, it is quite shocking. we just don't have those decision-makers making calls on investing in companies that will be the biggest companies of the future in the u.k. economy. caroline: going forward, do you feel this underrepresentation is changing the investment mode of certain funds? how would having a greater balance help the investment decision?
> i think it's a big problem. one thing i first found when i came into vc, the fact that it is a very male environment, you are looking around the room and people are giving their views. it is all white, straight males. you are not getting that breadth of opinion. when i make a decision of a company, we invest in early stage, we need different views on the table and different segments of society represented. it is just a white male type, and then we are not going to get those views. they will make poor decisions. caroline: it is too homogenous. come here it geographically for us. how does it stack up, the u.k. versus the u.s.? >> in the united states, the most recent statistics, there are 11% female partner level employees in u.s. vc. we are slightly ahead of them. however, if you take out the two
biggest funds in our study that we looked at, you can around the same number. the difference is imperceptible. i think they are similar. i think looking at the broader vc investment picture in the u.s., you have 45% women in the u.s. industry, versus 27% in the u.k. we fall behind the u.s. on that front as well. caroline: and therefore, when you are looking at what can be done to raise decision-makers to be more balanced, whether on a female basis, and ethnic basis, hetero or homosexual as well, how will you make diversity something that is prioritizing -- prioritized? >> there was no data a year ago on what the ratio was in the u.k. industry. the first call was to do the study and understand what gender looks like in the u.k.
that has given us a more clear picture and a clear target as well. we have a 20% target of senior women in investment rules by 2020. that is really a call to arms for the industry. at diversity vc, we have four different areas we are investing in. it is about attracting more women into the industry, about retaining and promoting women already in the industry so they can get up to senior roles, it is about accessing a broader system to promote diverse entrepreneurship, and continuing to collect data like this. going on beyond the u.k. into europe, and beyond gender, like race, ethnicity, and industry background. caroline: as a female at downing ventures, how do you think people can be accessed, such as yourself?
are there practices that can be used? >> one of the things that's going out and talking about what venture capitalism is as a career. a lot of young people really know it exists. they barely know how to meet people in industry and develop the first connections to set up that interview. but we do is we go to talk at universities and schools, putting people on stage, talking about how they got into the industry. that includes people like me and my background before the venture, it was not traditional. talking about the steps which i made, which were unconventional, gives a sense of a template to follow, and hopefully inspires more young people to get into it. caroline: much more balanced needed. back to you. emily: thank you, caroline. that does it for this edition of "bloomberg technology." all episodes are live streaming on twitter.