tv Bloomberg Technology Bloomberg January 3, 2018 11:00pm-12:00am EST
alisa: i'm alisa parenti in washington, and you are watching "bloomberg technology." let's start with a check of your "first word news." president trump struck back at steve bannon after steve bannon called donald trump, jr., treasonous. in a statement the president steve bannon has nothing to do with my presidency. when he was fired he not only , lost his job, he lost his mind." paul manafort is suing the whole department of justice. manafort claims mueller overstepped his authority by charging him with crimes unrelated to russia's meddling in the 2016 election. the former trump campaign chair
is charged with money laundering and other counts. authorities in ireland say an 18-year-old egyptian national is in custody after the stabbing death of a japanese man and two others. the attacks occurred just south of the border with northern ireland. police believe the suspect had been seeking asylum in the republic of ireland in recent days. the death toll from the freezing temperatures across most of the country has risen to at least 16. it is not letting up with the so-called "bomb cyclone" getting ready to hit the east coast with snow and high winds. more than 2000 flights have already been canceled. this is bloomberg. i'm alisa parenti. "bloomberg technology" is next. ♪ emily: i'm emily chang, and
this is "bloomberg technology." tesla struggles to manufacture for the masses, pushing back a crucial production target. plus, blackberry ceo john chen joins us to talk about the company's partnership with baidu and its push into self driving cars. a messaging app used in iran has been blocked as a wave of antigovernment protests sweeps through the country. how social media is shaping the sentiment. first to our lead, tesla has pushed back a production target for its all-important model 3 yet again, after shipping fewer cars than expected last quarter, shedding more light on elon musk's production hell. they expect to hit 5000 cars per week to the second quarter, delaying the goal by three months. tesla trailed analysts' estimates of just over 2900 units.
max, why are these numbers so bad? max: they are bad because this is now another delay from -- elon musk last year said he hoped to have 5000 per week by the end of the year, then it was three months, now it is six months. as bad as these numbers are, tesla has done a pretty good job managing expectations. if you looked at what analysts were saying at the beginning of the week, a lot of people were expecting some sort of disappointment. basically, musk has conveyed to investors and the public that they want to get this right, that this is taking a long period of time. that said, it gives plenty of ammunition to skeptics who are questioning whether tesla will be able to meet these -- what really are wildly ambitious
production goals, whether they happen in the middle of next year or even later than that. emily: we do have a chart showing production on the bloomberg here. it shows the number of cars produced every quarter. they are holding about steady. what do the numbers overall indicate about just how hellish production is? max: it's just way below what we were expecting. i wouldn't read too much into the production numbers of the model s and model x, which are the more expensive luxury cars. a lot of consumers want this model 3, the mass-market car. tesla has already claimed a pretty big chunk of the luxury car market. the real question is, once you get into the mass-market, $35,000, $40,000 car range, whether tesla can do the kinds of things that these big car companies, gm, toyota, have been able to do.
and right now, elon musk has done a fantastic job of sort of getting analysts, getting everybody to see that this is a bet on the future, but the future gets closer and closer each quarter and each quarter that tesla isn't able to get to this mass-market electric car that we have been promised for a decade, the sales pitch is going to get harder, and it's going to continue to cause people to ask questions about the company's future. emily: so, why is wall street so focused on this, when the absolute numbers we are talking about here are still so small? max: for tesla to justify this enormous valuation, it needs to be a mainstream car company. to be a mainstream car company, it needs to be able to produce these mass-market numbers, and not just to justify its valuation, but to meet the ambitious goals that elon musk has set for himself and for humanity, as he probably would put it. if you want to get us off of fossil fuels, you need to get the cost of electric cars down. it's all well and good to sell $100,000, $120,000 luxury suv's,
but if you really want to make a dent in the universe, so to speak, then you need to sell these mass-market cars. emily: and still, analysts are saying tesla is way ahead of the competition. put this in the broader context for us. max: that's the bull case here, which is that any problem in one tesla areon musk and going through at the moment, his competitors are going to have to go through it. what tesla has said is one of the company's big problems is where they are making the battery packs. any other company that wants to make a mass-market electric car will also have to deal with battery production issues. the bet would be that, you know, toyota, gm will have to go through this as well. these are companies that are really experienced that dealing with supply chains, dealing with manufacturing, big hulking pieces of machinery. tesla is less experienced there. maybe they will be able to deal with it faster.
that said, you have to admit that tesla has done pretty well as far as getting people to buy electric cars. the model s has outpaced expectations of where they were a couple years ago. emily: all right, max chaffin of bloomberg. thank you so much for that update. barclays analyst mark moscow it's -- a barclays analyst says apple's offer to replace batteries cheaply may mean a hit to sales. analysts expect some customers to take advantage of the discounted batteries and skip potential upgrades to newer models in 2018. coming up, blackberry takes to the road with chinese internet giant baidu. we will speak with blackberry ceo john chen. "bloomberg tech" is live streaming on twitter. this is bloomberg. ♪
emily: intel has confirmed the report, saying that its chips contain a feature that makes them vulnerable to hacking. it said other companies' semiconductors are also successful -- susceptible. intel is working with chipmakers and operating system makers to develop an industrywide approach to resolving this issue.
microsoft says it has already resolved the issue with a security fix for this chip. news coming out of blackberry, the ontario-based company has signed a deal with chinese internet giant baidu to work together on driverless car software. blackberry's vehicle operating system and in car entertainment software will be bundled into baidu's self driving car platform. baidu has been signing up dozens of partners around the world, in a bid to eventually become the world's dominant driverless software technology. joining us now is john chen here at great to have you back on the show. how did this deal, about? john: how did this deal come about? emily: yes. john: we have been working with most everybody in the ecosystem. this is the latest announcement of a number of partners we have signed up. we have qualcomm and others all
in the last, i'd say, fou ror -- four or five months. this just happened to be the next major partners we signed up. emily: how does this help blackberry's push into the self driving car industry? john: we are providing safety operating systems -- safety and security in the operating system for the autonomous vehicle and the platform. that's how -- one of our strategies. as you know very well, when we first talked about me picking up this job, it was to create a new category for us to dominate in. i wouldn't use the word "dominate," but we certainly are doing extremely well in that category. emily: so, how will blackberry help baido become a dominant
player in the car industry, which is their goal? john: baidu is quite ambitious in creating the autonomous platform, the autonomous vehicle platform. and so, they're putting together some code and they pull us in as their operating system platform. i pointed out the fact that they picked us because of the safety and security certification that we have at qnx. with that, they should be rather complete. i assume the auto industry will go beyond the auto that you and i know of today. they are going to provide maps and digital information also. so, i think this is a pretty good partnership. we are bringing some very good things together. emily: so, talk to us about the impact that you see of this partnership on blackberry's business. give us any hard numbers, if you can.
john: i can't give you any hard numbers. you know that. i know you have to ask that. it's going to be our growth platform. as you know today my growth , business is on the enterprise software, especially with security and cybersecurity. the next leg of our growth is with auto. this is why design is so important. we will go beyond the auto and go into the eot or iot world. it's a huge market and its growing -- it is growing. we are fortunate we can play well with it. emily: are there any other partnerships with other automakers in the works, and how do you plan to pursue more partnerships? john: oh, yeah. you should expect us to continue to expand our ecosystems. i think our attention the last couple years has been joining up with new partnership, creating
new platform, like the one we just announced, human-machine interface. all really good, new stuff. some of those are a little sci-fi-ish, but it's going to happen. you should expect blackberry to continue to grow the partnership and ecosystem, and we are working on some of them. emily: so, how does all of this fit into the context of blackberry's broader turnaround strategy? tell us what else is working and what's not working and how this business evolves, as it has evolved considerably since you have taken it over. john: that's a great question. i would not call us in a turnaround mode anymore. we make money. we generate growth in the right area. we have a very good footprint in the cybersecurity enterprise for regulated industry in
particular, like the banks and governments and health care. those are growing. last quarter, we announced our billings on the enterprise software grew 20%. and in the qnx organization, focusing on design wins, we are announcing big design wins. i'm hoping to see more, and you should expect to see more. when we marry the two together in the future, we are going to have a platform of security for iot management. and so, as i said, i'm very excited about the future of the company. we are executing to it. we are showing the results. so, it's not just a strategy on a piece of paper, like the first time you and i spoke. now we are really delivering. i am very pleased we are doing that. emily: in the vein of the questions i have to ask, john, you've been on the board of disney for more than a decade
now. and i'm curious what you think of the acquisition of the fox assets, a massive acquisition, and how you see that setting disney up for the future. john: well, you have to ask that. you know i never answer questions, right? any questions about disney, you have to ask the disney management. but thank you for asking the question. emily: all right. john chen, ceo of blackberry. always great to have you on the show. thank you so much for stopping by. john: thank you. emily: we have some news coming in from intel now. talking a little bit more about this security flaw in their chips, saying the exploit allows access to privileged information. it does not allow malicious code to infiltrate the computer or stop the computer, but they say that fixes to this attack will take some time to deploy and
the move is a signal that the industry may become dominated by global companies instead of local monopolies. you sick streaming giant -- music streaming giant spotify has confidentially filed for its ipo, according to a person familiar with the matter. spotify will go ahead with the plan to skip a traditional stock sale and list its stock directly. it avoids underwriting fees and restrictions of stock sale by current owners. joining us, alex barinka and lucas shaw. lucas, i will start with you. what do you make of the timing? why now? i know we were expecting this, but now we know. lucas: the timing is -- spotify has planned to go public either late in 2017 or early 2018. it really came down to when they could get their books in order. they felt they could close their books from an accounting perspective in just a couple weeks. they are clearly comfortable
with that. financially, they have really never needed to go public just to raise money, which is why they are taking this unconventional path of a direct listing as opposed to a more traditional ipo. they were under pressure to do so as quickly as possible to get out from underneath the terms of this convertible debt that they raised from ppg and dragon near. so, it was really just a matter of the fastest they could do it that they were comfortable with, they were going to, so now they are clearly comfortable. emily: alex, how is a direct listing different from a typical listing? alex: in a classic ipo, you hire bankers. they help you go out on a roadshow, craft a story, figure out what sort of valuation investors are willing to swallow. this cuts out a lot of that. emily: that costs money. alex: they pay the underwriters anywhere from 2% to 2.5%, which is what snap did. with this, it's different. they basically come out and say, look, our stock is trading now. we don't know how the mechanics are going to work.
but in the past direct listings i've looked at, small companies that have listed, they basically just open the shares on day one, like a normal open auction, and that can inject some questions. is there enough supply and demand? where does the price stand? these are things they will have to suss through that could inject a lot of volatility to the shares. you might cut out other writing -- underwriting fees, but it seemed like if they are moving ahead with this, they say they don't need to go out and scream their story from the rooftop like a classic ipo and they don't need 14 banks coming in, telling them how to sell their story. emily: lucas, what does this mean for the economics of the early investors? does this mean more money for everyone in the end, who is already an insider? lucas: those early investors who choose to sell when they have the opportunity are going to make a killing, if you are to believe recent reports about what the company is now valued at, which is $15 billion, as much as $20 billion. the last time they raised money in the spring of 2016, they were valued at $8.5 billion.
while i'm sure there will be some complications as to who gets to pull out money when, or what the terms were, most of the early investors should they choose to sell, are in line to make a killing. i do think that avoiding the underwriting fees might be somewhat of a motivation, but i think that the choice to go the direct listing reflects the company led -- a company led by a guy who really enjoys doing things differently from how the system tells him he needs to do it, and that's a big motivation here. emily: so, the question is, is it the right strategy? and is there any precedent for this? how has that played out? alex: the direct listing precedent isn't there for a big company, but this does make me think of google. google went out with a dutch auction, a different kind of ipo. they raised 1.6 7 billion they had to cut the price down. they had to cut the number of shares down. then they came out a year later and sold $4 billion worth of stock, and there were some questions about dilution. there is a precedent for doing things differently.
this will be the first real test case. when i talked to my sources on the street who are in the ipo world, nobody has really come out and said, hey, i want to do this next, but everyone is going to watch this very carefully, especially the biggest companies who don't need the capital that would be raised from an ipo. it's a big if right now. we have to see how this gets executed. emily: we know the valuation is high. what do we know about spotify's financial situation and engagement situation, as compared to, let's say, apple music? lucas: spotify's revenue has been growing rapidly, along with its user base. the arrival of apple and other competitors, if anything, helped spotify. it made more people aware of the fact that there were these services where you could stream millions of songs on-demand. spotify now has more than 60 million paying customers, more than 140 million users. and its margins have improved. it negotiated new deals with all
of the major rights holders, the record labels and publishers, that gave it slightly better terms. most of the people who have poured over the different filings they have issued say the picture looks better and better. they have real cash flow, which a lot of startups don't at this point. emily: quickly, lucas, talk to us about the implications of this lawsuit we have just learned about. lucas: there are a lot of songwriters who are upset with spotify because they feel like they never had their work licensed or they are not getting paid enough. spotify thought it had settled this case last year, but some other songwriters have filed suit recently, asking for more. they have asked for more than they are likely to get, but this is a headache spotify would like to do away with before it goes public. emily: thank you both. coming up, the iranian government is cracking down on social media as waves of protest
markets: middle east. checking in on headlines around the world. china is showing signs of strength, optimism on the floor. services sector came in well above expectations at 53.9 compared to the forecast of 51.9. rising at the fastest pace since august 2014. president trump has denounced his former top strategist in a with the mank considered the architect of his campaign. stephen bannon released a book criticizing the president and
his family. trump says he lost his job and his mind. brutal winter storm is barreling up the u.s. eastern inboard ring the most snow almost three decades. forecasters say it could strengthen into what is called a cyclone. hundreds of flights have been canceled with several states declaring emergency conditions. in singapore, checking markets midsession. have a look at tokyo essentially showing us up by 2.6%, the nikkei having its biggest jump since the january 1992 highs. the japanese market playing catch-up to what we have seen in global equity markets so far
over 18. elsewhere you see hang seng thex up .5% up for it eighth consecutive session, the a-shares up for a fifth consecutive session in oil players. and positivity coming through in the china market as well. j.p. morgan upgraded its target for china for 2018 now expecting growth of 6.7%. let's have a look at some of the stock movers. a big rally in chip players, but market moves really leading the gain in hong kong. thatndo jumping on reports pokemon go could be launched in china, the largest gaming market. co, a look at hydroponics medicinal marijuana and the government has allowed exports
there from what we heard in california. that sack up by 24 percent. industrial's leading the game up almost 2%. health care looking good, every sector is higher as the redux -- as the index continues. emily: welcome back. i am emily chang. washington is gearing up for a new set of challenges, but according to m.i.t. president, one threat is being ignored in that is china. in an exclusive he warns that interview he warns that china is , king of the hill and the u.s. is at risk of losing its edge in technology and innovation. >> china has done amazing things and will continue to do so. china's population is close to 1.5 billion. we are a little over 300 million. they are five times the american
population, so, from that standpoint, the competition is going to be very strong with people who are extremely smart. we know, because we have them here. my concern is, we need to recognize we have a very worthy competitor. that's the expression i've used before. >> and you don't think we recognize that. rafael: it doesn't sound to me like we do. perhaps now people are beginning to pay attention to it. i think the corporations, people that are fighting every day for market share -- they know that. it's not clear to me that enough people in washington know that or recognize that. that is the issue that i -- the only way you compete for the economy, to maintain the position we have right now, is with talent and with research funding. that is the foundation of our future. the innovation comes from investments.
today's innovation came from investments made 20 years ago. so, if we don't pay attention to that -- i think it's also not so much the funding for research in isolation. it's the funding for research vis a vis what china is doing. while the funding for research of science in america is more or less wavering to stable and going down, the funding of research in china is just going up. in a couple of years, they will spend more money than we do as a nation. >> how close are we to losing our edge, our primacy, if you will, to china? rafael: in some areas, we've lost it. >> in what areas are we talking about? rafael: china is investing heavily in artificial intelligence, supercomputers, in rapid manufacturing. they are probably the king of the hill. i think in some areas, we already lost it.
emily: that was m.i.t. president rafael reif. antigovernment protests have swept across iran. once again, technology is playing a crucial role. messaging app telegram, used by roughly half the population of iran, and instagram appear to be blocked in the country. tara maller is joining us now from washington. tara, tell us what you know now about what the technology is available to these protesters and how the government has responded. tara: this is not really surprising. iran has had a number of social media sites and applications blocked prior to this. facebook and twitter had already been blocked in various forms. they have restricted access in the past. what we are hearing now, in addition to what was previously blocked, there has been an additional block put on the ceo
of telegram said that the app had been blocked. there are potential internet shutdowns in parts of the country as well. the iranian government taking on a higher form of censorship now as they are trying to crush any form of dissent across the country. emily: i am recalling the use of twitter back in the day, years ago, which precipitated the blocking of twitter in iran. talk to us about how protesters are using technology in iran today and how it has evolved from those years. tara: technology has been critical, obviously now compared to 2009, you have had a rise in not just the number of individuals using iphones and all sorts of mobile devices, but you've also had growth in terms of individuals all over the globe around and including social media and different applications used to communicate. in some cases, encrypted applications. it helps them organize,
coordinate times and locations, spread ideas in opposition to the iranian government, which we've seen ideas that have been protesting both the economy there and protesting the ideology, in some cases as well. so, i think you see technology being critical. it is worth noting that, even though the government in iran is taking steps to quell protesters by blocking their access, the iranians have gotten savvy about workarounds in some of these cases. a lot of them have ways to access these social media platforms even though the car -- government has prohibited them. emily: we should also note that the use of technology also has a dark side, including telegram. telegram has also been reportedly used by terrorists to communicate. is that correct still? tara: yes, absolutely. one of the areas the applications have been used for is not for peaceful protest, but also by terrorist organizations.
this is something technology companies have been grappling with consistently. isis and other terrorist organizations using telegram both on public channels, but also more private channels to communicate, spread their ideology, spread their propaganda, something that my organization has been pressuring tech companies on, in terms of cracking down on content which violates their terms of service in the case of terrorism. in the case of iran, much of the protests going on there are peaceful protests and demonstrations, things that the united states government is in full support of them being able to do. i believe the state department has also been using these channels to try to communicate with peaceful protesters there as well. emily: what has telegram, in particular, done to combat the use of its platform for terrorists? tara: well, i think you're seeing the tech companies start to be a bit more responsive.
you saw youtube, which is part of google, take down anwar al-awlaki videos recently. in some cases, there are encrypted communications. we think that telegram should be enforcing its terms of service. any violent jihadist content or content that violates the terms of service ought to be taken down ought not to be permitted. , and users this material should have their accounts suspended. this is something we have seen tech companies being a little more responsive on, after coming under increased pressure, not just from the european union, but from capitol hill, democrats and republicans alike, particularly in light of the recent hearings on russia propaganda. there are concerns about an -- about nefarious actors using these platforms in ways that are in violation of their terms of service. emily: what do you expect from companies like facebook and twitter when it comes to
combating these issues more head-on? what do you hope to see from them? continue toe will see a continued buildup of pressure from capitol hill. i think you're going to see a push for more regulation in this area if you don't see the tech companies start to take concrete and specific measures to show demonstrable progress in terms of getting these actors off their platforms. we have a list of individuals on sanctions lists. you can't do business with them and if you do you are in violation of policy. in a similar way, our opinion has been, they should not have free reign, terrorist organizations or individuals promoting terrorist content, to operate in virtual safe havens. i think you're going to start seeing more public pressure.
i'm optimistic you will see tech companies being more responsive. i hope it doesn't take a series of more terrorist attacks and more deaths before they do so, because we do see that online radicalization has become a problem in most of the homegrown cases and most of the cases in europe that we have seen. emily: i know you will keep us posted, tara maller. always great to have you here on the show. coming up, the race among bike sharing giants. we hear from one chinese company who looks to hit the pavement in the u.s., next. this is bloomberg. ♪
emily: this day in tech history. it was nine years ago that cryptocurrency took off. on january 3, 2009, the blockchain network had its very first block mined. since then, the bitcoin blockchain has mined over well over half a million blocks. the cryptocurrency boasts more than 1000 different currencies. a total market cap just under $700 billion. ofo, the alibaba-backed, chinese bike sharing company, is expanding to companies across north america. it is in 20 cities across the u.s. and operates in 250 cities worldwide. last year it completed funding rounds that showed its value at chris taylor is joining us. $3 billion. talk to us about what you see for ofo's expansion in the u.s.
this year. what is the road ahead? chris: much larger expansion. it started to speed up in q4. at the start of q4, we were in only three or four cities in the u.s. we are now in 20 cities at the end of the year and looking to expand close to 100 cities by the end of 2018, a massive expansion into the u.s., after a fairly large expansion in china and throughout the rest of the world. emily: how do you manage the supply of bikes? there are images of these bikes lying in piles, a different strategy. chris: from our perspective, it's an operational exercise. we are one of the best at that. we have over 10 million bikes globally. we do about 35 million trips per day around the world. we have done 6 billion to date. for us, it's an operational exercise, making sure we have the right teams on the ground.
at the end of the day there are , so many positives to bike sharing, cutting down on congestion, cutting down on emissions, giving people a healthier lifestyle. there can be negatives in terms of an eyesore. from an operational perspective, we need to make sure you don't see that as a consumer. people are going to vandalize bikes, knocks them down. that's a fact of life. we can't take that out of human nature, but we can make sure people don't see that. our goal from an operational perspective is to make sure society gets all the positives with as few of the negatives as possible. emily: i'm curious about some of the trends you see in bike sharing and how they compare to trends you saw in early ride-sharing. chris: near identical, which is part of the reason i'm here at ofo. people ask how do you get people in the united states to change to riding bikes? i don't think that's the case. i think we are walking on a path that was forged a decade ago by zipcar and then by uber and lyft, where people are more multimodal. we're not telling you to get rid
of your car and ride a bike. we are saying you have probably gotten rid of your second car, first car. you uber into work. you need to get to a meeting a few blocks away, hop on a bike. it's a less expensive way to get around and it's just another form of transportation in the city that is, from an infrastructure perspective, really changing the way the people moved in the last decade. emily: you had just wrapped up a trial in seattle. there are other players in the market. do we need so many? obviously, you look at uber and lyft. it is a stiff competition between just the two of them, and some would say only one is winning. chris: it's interesting. there were more conversations five years ago with ridesharing, where people said there are only x amount of taxis in new york. why do we need so many ridesharing cars? the more cars or bikes you have, the pie expands. users are just starting to use bikes. what you see is that with more
adoptions comes the need for more bikes. we have yet to understand what the true total market size for bike sharing can be, but it's going to be a lot larger than where we are right now. we have about 20,000 bikes in the u.s. we think that's going to be a lot larger in 2018 and beyond. emily: i just interviewed kaifu lee, a chinese investor who has invested in bike sharing. take a listen to what he had to say about the future of the market. >> i think shared bicycle is definitely a winner take all market. consolidation has happened. there are two players left. either one can kill the other or they will merge. emily: he is talking about another player that is china-focused. do you think this is a winner take all market? chris: i don't know if it needs to be. i think it is too early to tell. people have said that about ridesharing, and you are seeing two players in the united states and multiple players around the world. i think it's too early to tell if this is a two-player or one-player market, but time will tell.
emily: how big can the market be? chris: i think it can be massive. for perspective, about 16 months ago, we were doing a couple hundred thousand trips per day in china. now we are doing 35 million. the adoption has been intense in the last 30 months, and the -- in the last 15 months and the business has grown exponentially. we have seen more trends in singapore. we are starting to see those in the united states. i don't think we know the market and lyftand left -- even five or seven years later, but we think it will be a very large market, otherwise we wouldn't be here. emily: chris taylor, thank you so much for stopping by. coming up, alibaba has scrapped plans to buy moneygram. as the deal dissolves we will , take a closer look at jack ma's american ambitions going forward. this is bloomberg. ♪
emily: it was a $1.2 billion deal that could have reshaped the global fintech market, but and financial has scrapped plans to buy moneygram after failing to win regulators approval. what are alibaba's next steps in america? lulu, what are they? lulu: as of right now, we now -- know ant financial and moneygram said that they just saw no way that regulators could approve this deal. ant financial has agreed to pay $30 million to terminate the deal. they said they still want to collaborate together in working on partnerships, and that will take on something like what they have already done in southeast asia, where they have invested in thailand, indonesia, and
also india. emily: a year ago when jack ma met with then president-elect trump, he promised more business in america. how does that take shape? lulu: right. so, not having the moneygram deal go through probably because originally they were working towards that deal, it gave them extra initiative to really make those one million jobs happen. but even with this deal falling apart, it doesn't change things, because jack ma has said, until 2025, they hope that more than 50% of their revenue does come from outside china. when we spoke to them last year, they said they were on track with that target, hoping within five years they will still create one million jobs within the u.s. predominantly, those jobs will be focused on creating a transaction -- creating transactions, cross-border trades where u.s. sellers will be selling to chinese buyers. it is essential for alibaba to
keep going on with those initiatives. emily: as you look at the relationship between the major chinese tech giants, whether it's alibaba or baidu or tencent in 2018, what is the one major theme you think we should be watching? lulu: right. i think for the u.s., the deal -- this initiative to acquire and invest more in silicon valley and in the u.s. is a continuing theme. with this deal happening, a few signals the companies that foreign acquisitions will not be that easy anymore. they have some minority stakes of spotify, tesla. that is probably the approach they will be taking. emily: bloomberg's lulu chen, thank you so much for that update. that does it for this edition of "bloomberg technology." a reminder, we are livestreaming on twitter. check us out, @technology.
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