tv Bloomberg Technology Bloomberg September 15, 2017 5:00pm-6:00pm EDT
at least 29 people were wounded when a homemade bomb exploded on a london underground train. islamic state reportedly claimed responsibility. the manhunt continues for the suspect behind today's attack which is being considered an act of terrorism. police are asking for photos and information to help solve the fifth terror incident in britain this year. president trump has called prime minister theresa may to offer condolences. the u.n. has condemned north korea's latest missile launch after the u.s. ambassador to the u.n. said washington is not planning for the retaliation. h.r. mcmaster added there is a military option for north korea, though it is not the preferred route. withdent trump will meet leaders of south korea and japan at the united nations general assembly in new york next week in the wake of that launch. that is according to an administration official. the united states continues to lean on china to use its oil deliveries as leverage to deter
pyongyang. global news 24 hours a day. parenti.a this is bloomberg. "bloomberg technology" is next. ♪ ♪ cory: i am cory johnson in for emily chang and this is "bloomberg technology." surge coming to a painful end amid growing warnings of eight market bubble. silicon valley's waning political capital. in scandal the latest setbacks.
accessrg's unprecedented into china's biggest online commerce company. our exclusive interview with alibaba founder, jack ma. summer ismagical coming to a crashing halt. the cryptocurrency has dropped more than 26% since hitting an all-time high of nearly $5,000 on september 1. the drop is due to the moves by china's policymakers restricting the trading of bitcoin and outlawing the initial coin offering. prices have been recovering somewhat. the market as a whole has taken a hit over the past couple of weeks knocking about $50 billion off the total of cryptocurrencies. jamie dimon shared his thoughts about the state of the cryptocurrency market. >> for bitcoin, my view is you can create a significant number of cryptocurrencies with the central bank behind it.
it is probably going to become ubiquitous. darling -- barred grilling house and sonny singh. china has backed up everything you have been telling me for the past three to four years. then we saw a big selloff. you might have expected a selloff at some point. it has been dramatic. bitcoin's know about influence in china? >> china is important to bitcoin. it is one of the four largest companies with bitcoin trading. it changes a lot. definitely very important. two of the top 10 largest exchanges are in china. ede government of china bann initial coin offerings.
frenzy inting to a china so the government shut it down versus regulating it. now the rumor is they have given the ordern exchanges they have to shut down as well. this is where you see the selling happened. this has happened before. they start regulating more, adding more restrictions and rules, and then they bring them back live again. ripple deals with bitcoin. what does it mean for countries, places like china? to use these cryptocurrencies as a way to move money and solve problems? >> that is at the core. when you see real-world use cases, you can use cryptocurrency to solve real-world problems and make payments more efficient. you can make security salmon --
settlement more efficient. there is real value investor can, in -- real value in those tokens, in bitcoin. i believe it is not just speculation. theink bitcoin has become store of value. gold historically has been a store of value. that is a $9 trillion asset. bitcoin is a store of value, the digital store of value. today, $65 billion asset. there are other digital assets. one of them is the one ripple uses, excerpt he -- xrp. utility youe more drive, the more demand you will drive. increasing demand will drive the price up. cory: they are being put to use more as speculative instruments.
people don't really understand what bitcoin is so they compare to some other currency. then this price rise in bitcoin over the last year, it looks like things we have seen before. we have created a chart that shows this where you can look at in thee, the bubble nasdaq in the early 2000's. we have seen that before. since i don't understand what it is, it is the dot-com bubble. we have seen a movie like this before. convince our viewers this is different. >> i think most people know about bitcoin because the price rises, they buy it and hold it, and their speculation. at bitpay, we will process over $1 billion this year in payments. businesses where it
is cheaper and quicker than a wire. in one day for a 1% fee. we are the largest processor of bitcoin in the world. them into fiator currency. large global brands have their suppliers and pay them in bitcoin. cory: last time we talked on , check us out on it some serious -- xm sirius radio. totalked about the necessity change it but they were not going to accept it, the bitcoin community has accepted it. >> the bitcoin community has accepted a fork today. there are rumors of another fork in the future.
bitcoin is not going to be the panacea to solve all transactions. payments is something we think about a lot at ripple. it bitcoin transaction takes on average four hours. that is a pretty long time. it is faster than a wire transfer. it is slower than using your visa. xrp can process transactions in three to four seconds. comparing the bubble, i think there are things we can point to, to say this market has been volatile, a lot of things can change. i think it is very different. we both have been following this a long time. newsweek had a cover story about half the internet was going to fail. jamie dimon saying that bitcoin is a fraud is like the "newsweek" cover. i don't think "newsweek" understood.
aspectsthere are happening in digital assets and blockchain that will permeate our lives more broadly than people can embrace. level iscoin at some in competition with the business jamie dimon has, recording transactions, being a middleman. cryptocurrency takes a lot of that business away. if you are jamie dimon you might be concerned about cryptocurrencies being accepted in the markets. >> i think there is a lot of truth to that. for jamie dimon to talk about that, if i were a shareholder in j.p. morgan i would be glad he is doing that because it is in his best interest to protect the establishment. he sits on top of the oligopoly in terms of how payments work today. most banks do not want to see that happen. you see very innovative banks leaning and aggressively.
banks nota lot of putting their heads in the sand and i think they will be served well. blockbuster put their heads in the sand. they could have been netflix. they have the relationships with customers, the movie studios. but they put their heads in the sand about what the future of the internet would enable. they are gone and netflix is a valuable company. >> you see all of the banks wanting to partner up. even though jamie is saying those things, is internal team is trying to figure out how to leverage the technology. cory: it does seem like he knows on one level what he is talking about. so good to see you. always a pleasure. thank you very much. pitch toe making a convince amazon to build a second headquarters in their city. the city is highlighting the example of google with 5000 employees for the big apple.
amazon solicited proposals are a second location that could mean 50,000 jobs and could last 15 to 17 years. washington is in competition with other big cities including boston and chicago. its firstpening artificial intelligence research lab in canada. the social media giant investing more than $5.7 million for ai research. it chose montréal because of students and professors surrounding the area with the universities and strong startup culture and favorable government policies. it will start with 10 researchers and aim to grow to 30 in the coming year. coming up, the political backlash against silicon valley heating up. can tech giants turn the tide? we will discuss next. "bloomberg technology" is live streaming on twitter right now. check it out weekdays at 5:00 in
cory: the company has a new executive chairman as the interim c.e.o.. the move comes after the cofounder stepped down at the fintech startup amid allegations of sexual harassment. he has been said to engage in at least one inappropriate relationship. the suit is the latest in a string of high profile unethical behavior across silicon valley. news, theof fake issue of dodging taxes, companies drawing criticism from liberals and conservatives.
today, facebook said it will no longer allow advertisers to target based on how they describe their education or employer. at least for a while, after t advertisers were targeting users who expressed interest in finding anti-semites. joining me now, sarah frier. i will have you paraphrase that story. brilliant reporting again. >> they did a great job. peopleery easy to target by anyway you can imagine of describing themselves. facebook, youe on might say your employer is education or your prior life was in hedge funds or whatever it was. some people mix stuff up and say ingir education is jew-hat
and their employer is the nazi army or whatever. what people were able to do is target ads to those self-reported categories. when the ad was out, the facebook system approved it automatically, and they were off to the races. cory: one could target information to anti-semites, for example. >> they were able to see this duplicated on google and twitter. these categories are populated automatically by how people describe themselves on google based on the search terms people use. it is a system that facebook has not touched. cory: they said they were going to stop it, for now. >> until they solve the problem,
they are shutting down all targeting by interest and education. you cannot target ivy league grads who have jobs and consulting, which somebody might want to do. cory: will this hurt facebook revenue? >> it could. it is a popular way of targeting . in a college student community, you want to target students to come to your store. they have got to figure it out because this effort by per ropublica has exposed the problems with these self-service advertising systems. ofy: it comes on the heels the revolution facebook said some secret fake russian groups used us and pumped our consumers by giving them probably fake news. >> something people do not
understand about the russian effort is they could have done and goneh facebook through sophisticated sales channels, but probably not. probably, they used a self-service targeting platform just like propublica did in this story. it shows how easy it is to use facebook to target in very specific ways, in specific regions, specific interests. you would not have to have that much extra access to facebook to pull it off. societye injury to our is important. i readhe last election, a terrific piece in "the atlantic" talking about the role of racism in the election of the notion people could have been targeted to bring out the worst demons. to doely motivated something, and facebook helping
them to do that is a damming notion of what the technology of facebook can do. >> this is a moment of reckoning for these tech companies. previously, they might have said we are a reflection of what happens in the world. 2ere are all sorts of people, billion people plus who use facebook. and some of them are good people, some are bad people. bad things will happen. now we are getting to the point where we are questioning, what is the responsibility of these tech companies to try to think about the best cases for how their platforms may be used in ways that might hurt democracy, in ways that might manipulate plate -- people, in ways that may be untraceable in a campaign situation. if you are a tv station, you have to report to the government all of the election-related ads. if you are facebook, you do not. this is a trying time for these companies to try to explain themselves as neutral platforms
where everything is populated by the community and policed by the community, to now saying we do have a responsibility here. we need to take some action above and beyond to stop this. cory: if they want to. >> whether or not they want to, this is a moment where they could be regulated. cory: sarah frier, thank you very much. coming up, the electric car industry getting a supercharge from china. that is next. this is bloomberg. ♪
it is up as much as 10% this week. maybe because china said it will set a deadline for automakers to end sales of fossil fuel vehicles. that would be most vehicles. joining us to talk about the industry, mark wakefield. the conversation tends to be all about tesla. wherebout competitively will be in 24 months. who will be out there making electric cars? >> the talk is often about tesla. the chinese news was big. it is not new news in one sense because china has been pushing all of their automakers to move heavily toward electric cars. what we have seen in our electrification index where we look at not just how many vehicles produced at how much range is being sold, a better weighting of electric cars, we saw a number of chinese vehicles
pushing hard and having about half of the amount of launches between here and 2020, half of the launches will be from chinese automakers. cory: what do you mean? how many launches are we talking about? give us a sense of the global automobile history and how it compares. >> right now, it is very small for the global industry. about 1% of the overall industry. still a small percentage. china is probably going to be the one that takes electrification faster, sooner. europe is what we believe to be next. north america next. you will have different penetration rates in each of those. 49 of thewe see platform launches that could have multiple vehicles on it. being 103 platforms electrified between now and 2020, 49 are from chinese oem's. cory: what about europe? what is happening in europe
without a, volkswagen, jaguar, b.m.w., mercedes? >> europe is number two. very big differences between one country and another. france has a lot of longer-range electrification. it is taking it quite seriously. you have small, fairly wealthy countries. norway is a prime example having almost 11% electric cars at the moment. you are seeing your take it quite seriously, particularly in city cars and small range cars outside of france. interesting. i don't have a sense of where the automakers are in terms of what their plans are to release vehicles. you're talking about the market underlying that. i wonder who the winners and losers might be. >> people are nervous about going too fast, too soon because it is costly at the moment. an electric vehicle does not cost the same as an internal combustion vehicle at the
moment. it depends on the use case. some delivery trucks, some small cars might get cost neutral in the next decade. some other cars in the later part of the next decade. it depends on the battery price for dominantly coming down. at the moment, they are much more expensive. automakers are a bit nervous about it. some are taking a longer term back and going heavily into it. some are taking more of a wait and see. cory: mark wakefield, thank you very much. coming up, exclusive access to talk executives, including jack ma, who is dancing like a crazy rich fool selling billions of dollars in stock. you would be dancing, too. see 100 great when you orders. then you realize i have 100 orders that i have to ship. ♪
birthplace of alibaba. the past 18 years have been transformative for alibaba, china, and the global internet economy as a whole. we were here for the 18th birthday bash. packed in with 40,000 employees into an outdoor stadium. withoke exclusively executive chairman jack ma. the cofounder. c.e.o. group >> everybody has a big chance to go digital. but people need to change. >> three liters driving alibaba, the global disruptor. it was a humble beginning for jack ma as he cofounded alibaba.
few chinese were even connected to the web. enthusiasm for dot-coms bubbled abroad and alibaba wanted in. when the bubble burst, many plans were put on hold. when an employee was suspected of contracting sars, the executives were quarantined. they then joseph if a out of china and led to the phenomenal success of the single-day shopping extravaganza and the launch of many new businesses, including have financial. no rise of alibaba has been small feat. moreext steps may be even demanding. >> i think the challenge is getting bigger, much bigger than the early days. the early days to me were like
[indiscernible] we competed with ebay. we saw sars. there are a lot of things we can learn from other companies. today, the things we are doing, there is nothing to learn from. everything, we are the pioneer, we are the leader of this industry. the thing that drives you is the mission. there is not a textbook you can read. i don't think anybody could have imagined the kind of scale we have reached today. i think we are very lucky to have participated in the confluence of china's economic growth and also the rise of technology. this is the best reflection of the landscape change, even the landscape change in china and the consumer lifestyle
change in china. 500 million customers in china. today, even more. more and more overseas customers joining the event. >> when i started with alibaba, the gdp per capita of china was $870. today, it is over $8,000. it is a tenant increase -- 10x increase. we have been very fortunate to be in this environment and road that wave. your smallto enable business, young people, and enable globalization. that is our direction. on the way there, we have more product. >> today if you look at the volume of the package on our platform, it is about 55 million a day. we strongly believe this will go to one billion some years later. a day. >> i'm telling my team it is
like the way you climb mountains. when you are only 1000 meters high, you enjoy it. it is fun. new goal across 4000 meters, you don't have enough a year. you don't have a lot of people working together with you. you don't have anyone to share your thoughts and worries. are probably like 5000 or 6000 meters high. we are getting lonely. without a strong mind and for it, it is difficult to continue to work. resistance in china for what you are doing. >> i recently interviewed him. we all know about his comments of the internet economy destroying manufacturing. do you think there is an old guard in china that does not understand the new economy?
that they will have to adapt? this course, we have had kind of resistance in the past 18 years almost every day. we see people like him a lot. theyou know, this is evolution, revolution of technology. people like the older tycoons of the old economy, in the early days, they destroyed a lot of lower level companies. we are helping manufacturing. we sold more than $500 billion u.s. products last year. we are helping to sell the manufacturing. we don't produce. without us, these 70% of the $500 billion manufacturing products would never be able to reach the consumers. >> will you facilitate reform at state-owned enterprises from outside? vested interests want to keep the status quo. >> we are pushing that.
this is why a lot of banks do not like us and china. we are not interested in buying the banks to change it. react veryanks quickly in the past three to five years. these banks changed their services so fast. they put so much resources and technology on serving people better. you don't have to buy a bank to change one bank. may tiger is following you, you can run much faster. >> you are asia's richest man. are you still in your mind and entrepreneur? >> i never think i am the richest man. i don't spend money. i don't have time to spend money. you can spend money better than the other guys. how much money can you spend in
convenient stores. it begs the question, is alibaba moving away from its long standing model? big,en you are strong, think about it. you need having things. for today's alibaba sites, you should not leave the other model to the others. you have to do it because the infrastructure is building up. you have to invest. we want to change the consumer experience. you now have this growing middle class in china whose expectations and demands are being elevated. >> online and off-line, we cannot separate. they need to do the digital transformation. formatschinese retail will be upgraded or redefined.
i think of it as our baby. we want to incubate a successful model. we try to empower our off-line partners to upgrade their business. the most important thing is to embrace change. >> what we can do is serve an in-store purchase. you can also walk in and eat right there. if you do not feel like going in to the streets or the store, you can stay at home and order everything on your mobile phone and he gets to liver to you in 30 minutes. iteverything that is done, in-store purchase, eating, or online purchase the served from the same store location. >> heavily investing in southeast asia and india. can this new model be implemented? will you implement that as you expand in southeast asia? >> i would say yes. new retail is not only applicable to china.
it is applicable to all markets globally. >> i think southeast asia over the next five or 10 years will be a game of penetration with e-commerce taking more share of overall retail. today, i think as a whole market, southeast asia is probably less than 3% e-commerce penetration. specifically to indonesia, this year, they will have less than $15 billion of gmp for the whole country so there are a lot of growth opportunities. >> always think about the future. on the alibaba site today, you have to think about what you can do in 10 years. there is competition. alipay has been lonely running around for 10 years, no competitor. it is good for alipay but not good for the mission we want to do. when tencent came in, at the
beginning, alipay we have a competitor. when you are asking people today , they know there's somebody who we can work together with an influence more people and make the market bigger. this is the fun part. i think tencent pay is learning a lot from us. we are learning a lot from them. if we can work together getting thewhole society cashless, whole society will trust him credit. that will make the market much better -- bigger. >> what will be the criteria for you for your rush into southeast asia? that is the new horizon. you have bought stakes in one that has stakes in singapore. you are an investor in indonesia. you have gone into india. i hear that you are looking at the basket. there seems to be a land grab in southeast asia.
will you get the penetration and growth through the tema or istructure and alipay it to get the e-commerce platforms because penetration is so low in southeast asia? it is not a globalized alibaba. we have globalized infrastructure. in goingt interested to markets and getting some market share there to be the largest e-commerce company. we are not interested in that. they need a payment system. they need a logistics system. they need the platform system so they can sell things globally. we are interested in trading and e-commerce. i don't think tencent can do that. we have been doing that for 15 years. it would probably be good on the for we, especially good
chat that chinese people is a lot. does not have any experience at globalization, not like us. >> all of the data you are collecting by creating this ecosystem, and because you like partnerships, you have partnerships the you are all collecting data. do you run the risk of down the road having a dispute over the ownership of that data? a data company. that is your biggest asset, right? >> there are two issues with data, security and privacy. these two issues are always a problem. careful to be very about the security of the data in the privacy of the data. based on that, you have to go
forward. worried, -- you have to go where you have a problem and solve the problem. >> how valuable is that data? it must be extremely valuable. >> the data is so new to everybody. it takes time to educate. ,f the data does not flow meaningless. goodnk today, it is everybody, every government starts to worry about data and pay attention to data. data in the the proper way to improve society, improve people's lives, that is something in the next five or 10 years that will be critical. in the beginning, nobody cared about data. just like the last century, at , nobody cared
♪ >> alibaba was founded at the turn-of-the-century amid the global rush into.com. alibaba even opened an office in california ready to ride the wave. jack ma saw the business models of others and correctly predicted the.com collapse in 2000. are we facing a similar kind of tech bubble right now with the billion-dollar unicorns and inflated tech scene? are there any similarities? >> no.
>> none? >> not that much. i think the challenge at that time, a lot of people did not understand how powerful internet is. how to do internet. people just jumping in and starting to do it. for a lot of people, they have crazy ideas but did not know how to operate. today, everybody knows the internet is powerful and will change human history. >> i look at it from the very long-term perspective. if you take a step back and look at alibaba who went public in 2014, our stock price at the ipo was $68 a share. today, it is at the current level about 2.5 times increase. but look at our revenues. during the same three years, our revenues have tripled. so our stock price has not even
caught up with our revenue growth yet. same thing, facebook. when they went public, they had about one billion users. now they have 2 billion users. if you look at the long-term perspective, these large-scale internet companies continue to grow and there is no reason why they would stop growing. >> i think the infrastructure of the internet, the infrastructure of technology is much better than 10 or 15 years ago. greedy, ifnot that you are not that stupid and greedy, it is easy to survive today than yesterday. about the concerned heightened capital controls in place and the crackdown on irrational purchases in entertainment, sports, non-core businesses? is this going to be a deterrent for outbound investment? >> not really.
i think it depends on how you do it. for alibaba, it is our strategy. we never think we should du mp money in the outside world. in the older days, when you go to a country the most important thing is the money site. we think we should share technology. we are lucky we are a global company. >> there is a little bit of sentiment. it is understandable when you see a large trade deficit. but to us, we look at it. it does not really affect us because the trade flow that we are talking about is selling american products into china. steadfast focused on that strategy. in the other direction, i think some retailers, traditional and online in the united states, will suffer first if there is a
trade war based on trade tariffs. >> we never changed our u.s. strategy. we want to help u.s. companies sell to china and asia. this is what we think. we don't want to go to usa and be the local company. there is amazon, ebay, nice companies already all over usa. >> you don't to take on amazon doing what they are doing? >> no. >> how about entertainment, in hollywood? you had a partnership with a limp -- amblin and steven spielberg. you have been patient. with oneour strategy of the best names in hollywood? >> first important is our entertainment is focused on our strategy. in the next 10 years, we know we will he very profitable. we will be very good at doing
e-commerce, logistics, financing, data. but 10 years later, what is the new business alibaba should be focused on to stay happy and healthy. double h is our direction. you want to be happier and healthier the matter how rich. entertainment should be part of the business. >> we don't view it as a separate business. we view it as an investment to acquire paying customers on our ecosystem. >> it is ok to continue to incur losses as long as it builds the customer base and ecosystem? >> yes. i think a lot of things china entertainment can learn from hollywood and partner with them. should not think this is good, let's buy it. this is a strategy of 10 years for ali entertainment. . don't worry about it.
a lot of people criticized us. we have been criticized for 18 years and never stopped. you know where you are going. >> where do you see alibaba and what kind of company do you see alibaba will be in the next 18 years, 18 years from now? >> i would say alibaba is not a simple company. alibaba is an economy. empower ecosystem to businesses to do the digital transformation. of course, we want to be bigger. but i think the most important thing is quality. >> i think the business mix will change. it will always change because we will follow what our customers want. but the important thing is , 5, 10, 20 years from now will be the same company when it comes to our russian -- mission, to make it easier to do business anywhere. globalizationove
♪ from our studios in new york city, this is "charlie rose." charlie: maria sharapova is here. she is a five-time grand slam tennis champion. she is one of the world's most recognizable athletes. she has been ranked number one on five different occasions in her career. in2016, she was suspended competition for two years after testing positive for a banned substance. person its was shortened to 15 months after the court round she bore no significant fault and did not intend to cheat. she writes about that ordeal and her personal journey to the top of the tennis world in a book