tv Bloomberg Technology Bloomberg March 13, 2018 5:00pm-6:00pm EDT
also set parts of california could use a while to break the flow of illegal immigration. secretary rex tillerson's delegate in his responsibilities deputy --workday to tillerson was fired earlier by president trump. , i ama proud american proud of the opportunity to serve my country. president trump is assigning mike pompeo to replace tillerson and deputy cia director will succeed pompeo. she will be the first woman to lead the agency. florida prosecutors 806 the death penalty for nikolas cruz for the mass shooting at stoneman high school. republican candidate rick saccone is in a tight race against democrat for the house
seat vacated by tim murphy. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am alisa parenti. this is bloomberg. "bloomberg technology" is next. ♪ emily: i am emily chang and this is number technology. the buckham bombshell went all the way -- the broadcom bombshell went all the way to the white house and why it failed. advocate forstrong diplomacy and what the surprise firing means for the intellectual property fight between beijing and washington. details on the company's new islet program that allows owners
to rent out cars. but first to our lead. was supposed to be the largest tech deal ever but now it is dead. but comes hostile takeover of rival qualcomm has been blocked by president trump over concerns of national security, saying there is credible evidence that leads me to believe that outcome acquiring qualcomm might take action that threatens national security of the united states. . what happens now? i welcome ian king who is following this deal day by day for months, and they also welcome brooke sutherland. how unusual is this? were talking yesterday about how this will drag on and a lot was based on the ceo of block him was at the pentagon yesterday afternoon trying to explain himself and find a way forward. a matter of hours later the white house comes up and says no
you don't, does the end of it. emily: unexpected? ian: certainly. emily: what implications will this have on m&a and the tech industry? clear signal to government is sending is u.s. tech is off limits to foreign buyers. this is not the first deal that has been blocked under president trump's administration because of national security concerns. capital was trying to buy a semi-conduct or that was locked by trump. the broader implication is that it is not necessarily china that is the problem. all caps nationality plays a minor role. their primary push back was what type of company.com is. -- are worried.com will use broadcom will use cost cuts.
that has much broader implications on m&a because that is what companies do when they do large m&a, they cut costs and tried to make these deals. table and ishe considered a national security risk and there is a ton of companies that were may be looking at deals that have to hit deposit button while advisors try to figure out what to do. emily: is there any way forward for broadcom? is it definitely dead? we believe meetings are underway to consider what to do. emily: with who? ian: between themselves, and the only way forward for them is to launch a legal challenge to this. but even then, according to what we are told, they wanted explanation as to why. emily: what is the explanation as to why? ian: that is a matter of conjecture. it just says secret concerts is the end of it, but broadly than
did say that we don't like the fact that we believe you don't invest in technology. that is a security concern. the definition of what is a concern has spread. ke, thisroo administration has raised red flags about non-foreign takeovers, talk about what this means for m&a and general. brooke: the signal being sent is this administration is what to take a tougher look at all types of m&a, which is not necessarily what we expected going in. trump pitches himself as a great dealmaker but he is pushing grassley against a deal -- pushing aggressively against a deal. the two companies don't have a lot of overlap and historically the u.s. has a look at that i as an antitrust statement, it is an attempt to shift and
look at vertical integration. we have expanding definition of what is national security concerns, and you're going to see that expand further. there's legislation in front of congress that would allow to look at joint ventures, real estate transactions, and to further define what a national security issue is to include technology and all sorts of other issues. emily: hong kong shares drop on broadcom, but come -- shares dropped on this news. qualcomm also down. they still have a lot to figure out. ian: this is by no means a victory parade -- that competitor was disqualified and not convince shareholders to vote. going to that shareholders
meeting that was canceled last minute, they were losing at it look like that board was going to be taken over i broadcom -- by broadcom. this is something that will have to address quickly. emily: what our next steps for qualcomm? they have to get that apple situation sorted out. they are in a massive legal dispute with one of their biggest customers -- that technology licensing revenue is of massive importance for them. high margins, and they need to get that back to get shareholders back on their side. emily: talk more of the broader markets and how they might react to this bigger idea that this administration is not going to be friendly to m&a. brooke: one big open question out there is qualcomm's acquisition waiting for regulatory signoff from china.
there was some speculation whether china was purposely writing its feet as a retribution for trump because of the steel and aluminum tariffs. now this feeds the fire and it is interesting to see what happens with that. there's also a question about the marvell deal. there is a company based out of bermuda, is that a national security risk? debtens the floodgates advisers never had to previously consider. emily: broadcom executives are meeting among themselves, what do they decide on should they not move forward? ian: brock, an american company according to them. broadcom is an american company according to them. they bought companies that are american and they acquired -- an american company. a malaysian born person
but he is a u.s. citizen for 20 years and has top security clearance. calling them a foreign entity is a stretch in their opinion. the concern here is that if their policy is to buy new companies and to grow that mechanism, are they allowed to do anything? emily: do you think they will appeal? ian: i have no sense one way or the other. it is the cult to predict both ways -- it is difficult to predict of ways. thank you.king, after years of focusing on large customers -- they're doubling on small business space and rolling out a new product package called essentials. small businesses make up a third of salesforce is customer base
$1 trillion? mark. in spite of a lackluster earnings report, apple shi pped your iphones than expected. a huge checkup today in the heart of the trump administration. rex tillerson is out and mike pompeo is on his way and secretary of state. president trump fired former ceo thet they did not agree on hireduclear deal, and he the first woman to head the cia. energy andus tremendous intellect. we are always on the same wavelength. the relationship has been very good and that is what i need as secretary of state. emily: from our reaction i want
to get the washington, with the founder of the former chief counsel and senior adviser to senate foreign license committees. you want to talk about what this means for business and what is your reaction here? >> the president and rex tillerson did not get along and see i tie on international relations, were partly the iran deal. u.s.have to represent the and show they have president's backing so it looks at mike pompeo has a great relation with the president. emily: earlier this month former cia director tweeted this about president trump. he said you show an amazing albeit unsurprising ignorance of how technology, automation, and the evolution of economics and society has transformed the world. your civil minded policies cancers the damage our future prosperity.
howously, we don't know ipod pao is going to lead. we don't know how mike pompeo is going to lead. a change this mean for in policy and impact on businesses? jamil: mike pompeo understands technology well. he is in the house committee where he was deleting voice supporting the virus sharing act that should permission from private and public sectors. understands technology. -- itand" is unfortunate is unfortunate politics has taken place with partisan back-and-forth between former cia directors and the president. this is what it is, but i don't think it is about technology. -- the nominated
secretary of state for ciber, there are a number of people who understand cyber and tom pao is one of them and gets it and he will do a good job. emily: this president trump understand it and does it matter? jamil: president trump is a ceo of a big company, and i don't know what the president's knowledge of cyber is. he has hired people who understand the issues. minor technology in aggressive way so you have that going for him. you think the relationship between silicon valley and washington will of all as a result of this? thatve been reporting relationship has been on's since president trump was in the administration. we see tech executives meeting with them in washington but not a lot of engagement otherwise. jamil: there's a real challenge about technology and the relationship with washington, d.c. it is important to rebuild that relationship. there on the verge of relation
and their people like elizabeth warren talking about regulating major companies like google and facebook. that is a real problem because the best part of our economy is modern technology and i get that washington knows what is best is wrong. the opportunity with the administration to work towards the cooperative relationship -- i think they should take advantage of that opportunity. emily: what about the broader signal the sense about foreign diplomacy to the world? how this affect the united states relationship with other countries? this change in power. jamil: one way that will be helpful as you have a secretary of state has the backing of the president. the president sees eye to eye with and are possessed united states. whatever you want to blame the oruation with rex tillerson the president, at the end of the
day, the president was the person elected and you want to secretary of state and president on the same page. i think you see more of that with mike pompeo and that is good for america's relations going forward. emily: we know a lot about the turnover in this administration and now we have more. are you optimistic the next year will be slower on that front now that the president has made this one dramatic change? jamil: one cap on the hope it less less shamanic -- traumatic. foreign policy, so hopefully does the last of big changes. you needd of the day stability and leadership and policy and hopefully we see that going forward. we see decent stability in the defense department and we hope see that in the state going forward. emily: great to have you on the show. continues blue apron
at all-time lows and there's concern in the market, yet here million, how $40 do you sell this to the the and wealth managers? >> fantastic, there is a funding round and we had a positive reception. is one billionnt meals eaten in the u k alone and 70% are home-cooked so this is an absolutely enormous opportunity. we have the best value proposition from bill choice the price point to delivery options and therefore we have an amazing customer loyalty and managed to oversubscribed around. >> you are looking clearly at the u.k., but you have hello fresh which has its footprints in the u.s. and germany, and you others who may not be on your scale but they have your desires. how do stand up the competition? timo: i have a vision for the
next 10 years and i believe there are huge seismic shifts in consumer behaviors. we are building ai and automation and technology capabilities to capitalize on those shifts in consumer preferences. are taking a long time horizon, whereas other smaller players are being opportunistic on building capabilities. caroline: is the market therefore going to be between you and tell a fresh -- hello fresh? what about amazon coming in? to make your life healthier, easier, and a little bit healthy. amazon is for everyone the lowest price point, setting the most items. it is a different league, they are a retailer. we sell 29 meals on a weekly basis and have automated capabilities and so on. it is usually different from a
proposition point and i feel quite good. caroline: tummy me about the loyalty with automation and ai in terms of artificial intelligence and developed by you right now to make it a better proposition. gusto offers the most choice in the market globally. this means not only it is fantastic for you as a customer but it means i see what you look at and what you choose, and what you buy. 30% of customer ratings does me a huge richness of information, more than any other company in this market has. itean make sure that i wr trans earlier than anyone else and give you exactly what you want. we use ai personalized offering. hiring,: when you are because you are doubling your headcount on the u.k. -- how many are going to be engineers?
chunk, we are doubling our tech team the next six to eight months, and once we employ machine learning phd's and math grads, i deeply believe their designs will power every single part of our business. it is deeply integrated into all functions and giving them access to data, it is not just a few specialists. caroline: you raised more than 50 million pounds overall, is that enough? this is a hungry part of a deep-pocketed industry. timo: yes, i could be profitable today, however, if you look at this opportunity. a tenure shift of the market and 1% of the billions of meals eaten means you build a 5 billion revenue business just in the u.k.. i am feeling quite good of the
amount raised and will allow us to get off the boat and beyond and build an outstanding customer proposition and widen the castle to a shade further. caroline: we will see that castle as a grows. thank you so much for spending time with us in london. emily: thank you caroline hyde in london. coming up, it was month ago that broadcom ceo and president trump were chummy at the white house. but things have changed. what is next. this is bloomberg. ♪
sather corker says he is spoken to cia director mike pompeo, the president's nominee to replace tillerson. >> pompeo called and i think he is excited of his new role. we would look through the confirmation process as quickly as we could. mark: european commission president is demanding more clarity on brexit from the reason may cash theresa may. earlier this month may outlined her vision for life after the u.k. leaves the eu. the russian foreign ministry says attended the russian ambassador a note of protest as the fallout continues over the poisoning of a former russian spy who still remains hospitalized in google condition after being exposed to a
military grade nerve agent of the u.k. says was manufactured in moscow. afghanistans in where he met with their president and commanders. believess he de victory in afghanistan is still possible. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. mark: i am mark of been and this is bloomberg, it is after 5:30 a.m.in new york and 8:30 in new zealand, and here's a look at the markets. >> they are pointing down at a 10th of 1% after all major indexes in the u.s. declined after news that rex tillerson is no longer of the secretary of state commands is one week after the economic advisor gary cohn quit. region, thek at the
nikkei futures trading out of chicago showing strength but futures trading out of singapore looking weaker. in the u.s. dollar continuing to weaken against the japanese yen. a quick check on commodities, and weakness appears to be the story of the day here as well. gold showing a little strength and crude oil off a tenths of 1% , and futures not greatly changed. with we telln data sales at of and china expected to show slight contraction. i am paul allen in sydney. more from work technology is next. ♪ this is bloomberg technology and i am emily chang. back to our top story, a hostile takeover of qualcomm was
stopped, and the president's message was simple, this u.s. tech is not for sale to a foreign bidder. theonal security aside, timing raised eyebrows because it was being reviewed by the powerful committee on foreign investment in united states, which under the trump administration has killed at least nine take over else of u.s. companies by foreign firms. here to get us through the legal is matt with me here larson who covers tech litigation for bloomberg intelligence. tony, i want to start with you. ian king noted earlier this is a company based in united states -- are doing it is a foreign company. maybe a little bit murky, we know this is an unusual announcement for the president. what you make of it? tony: i think it is extraordinary because normally when you have issues come up,
the party acquiring control is domicile or located in the country that is at issue from a national security perspective. ande's concerns of china the proposed buyer of qualcomm. talk about the extent of qualcomm's business in china. 49% of business comes from china. emily: so does apple. race it feeds to this 5g and was going to be the first to develop the technology and where it is going to reside in terms of ownership. this is almost as much of a u.s. protectionist decision on behalf of the trump administration as it is with secure to concerns.
player in china has a lot of tech and leadership in 5g development, as this qualcomm. i think the interest is keeping those ownership holdings u.s. based and free from any foreign influence or investment. emily: what if broadcom waited until the full u.s. relocation was settled? tony: i think that would be a little bit of a different scenario, but i still think that race the concerns over the to win five g technology that there could have been a potential review there as well. we have seen sify is continue to creep and expand its a hasiction and things the ability to review and i suspect this will end up firmly in their crosshairs even in that scenario. emily: i asked matt earlier, he doesn't know if not come is
going to appeal. what is the legal case here? the: you can appeal executive order, but the question is, are those dollars will spent on lawyers? even if successfully appealed come was going to go on with the reviews and there's too much legal overhang, and how much bang for your buck are you going to get? the question for broadcom is going to be whether that is wise and whether they have great shareholder meeting or to this meeting until the review came up. and i at the executive order and the recession is going to do anything it can to thwart broadcom's attempt so that there may not be as much appetite for a hostile takeover. there is no point in appealing so it is a strategic decision that is looking. bleak emily: what happens to the review? tony: it continues as it has as to other potential foreign acquirers of u.s. businesses in
the u.s. assets. with broadcom specifically, there has only been one suit in the history of the process and that also involved a chinese controlled enterprise that purchased some windfarms that were too close to u.s. restricted airspace, adjacent to military airspace. will be interesting to see if broadcom explores the courts because in that case -- they settled. there's not a lot of definitive court rulings of what happens if you appeal. in terms of the cvs process in terms of other buyers going forward, i think we certainly see reticence from chinese clients during the trump administration to engage in the process. builds on fears that the tech sector -- there's going to be significant headwinds for chinese investors looking to acquire assets or access to technology in the u.s.. that, talk to us about
what are the additional implications for business from china? tony: i think it is going to be a challenge. it is interesting because if you look at historically, notwithstanding the headline grabbing wattages are posted transactions -- chinese 80 to 90% have success rate going through the process, but it has to be in sectors outside of tech and semi conductors. i think you will continue to see chinese acquirers looking to do business and continue to grow their u.s. footprint, but i think they will have to pick their spots and figure out what makes the most sense and think long and hard before pushing the high-tech sector. emily: when it comes to qualcomm, we know there are engaged in lawsuits around the world, apple specifically. how is the case looking? matt: the shareholder
perspective with what is going out, a license excitement that was previously a third of their revenue and two thirds of their profitability. can they get the dispute with apple back on track? death 34 lawsuits globally and we start to see decisions and key trial dates coming up, likely china and germany will be the first to weigh in and in the second half of this year there is in international trade commission in the united states that will begin trial in june. a decision is expected in september so will start to see this dispute with apple take shape. gettingg that feud and tricky out by contract -- will have a sense of where everything is going in the second half of this year. we do have a good case that is going to take a wild. emily: matt larson, thank you so much. thank you both for joining us.
repairingld be damages for the 2013 hacked that exposed 3 billion of its users. a u.s. district judge ruled that victims of the data breach can seek damages because yahoo! executives to not do enough to protect consumers given what they knew about the breach. earlier this month that reached $80 million settlement over investors from concealing the hack to artificially inflate the price of yahoo! shares. coming up, from ransomware to cryptocurrency hijacking, cybersecurity threats are net enormous concern i will hear from chief technology officer at mcafee and what trance the company sees across the threat landscape. and if you like the news, listen to us on bloomberg.com and on sirius xm. this is bloomberg. ♪
chinese tech giant alibaba is leading the financing according to the company, does the largest funding round based by a bike sharing company to date and though at the competition which was loosely backed by tencent, and the make up roughly 90% of the bike sharing market in china. a new report, mcafee highlights rising cyber threats from mobile to cryptocurrency threats and ransomware. what are the trends in cybersecurity and what should
users be looking for in 2018? homework is chief technology officer from mcafee come joining us from plano, texas. talk about cryptocurrency hacking, this coincided with the popularity around bitcoin the price and rise of cryptocurrencies. what exactly is happening here? recognize that cyber criminals are looking to optimize their profits. as cryptocurrencies explode in price, cyber criminals are going to look to focus on how they could either still cryptocurrencies -- steel cryptocurrencies or take individuals resources to my new currencies, essentially be able to create cryptocurrency out of thin air as part of optimizing their business model. emily: what is being done to address this? steve: a lot of what we are focused on is looking for what is the underlying technology
that the cyber criminals are using. we are focused on looking at how did the applications that could take over a computer to perform the crypto mining actually work? detect that and prevent them from running, essentially giving our customers along with the rest of the industry focused on how to stop the cyber criminals from going after the sector of attack. emily: what about ransomware? we have heard about increasing ransomware attacks and you a 59% increase, including acceleration towards the end of last year. now that we know more about combat it? how do we steve: the first thing to recognize is from a cyber criminal perspective, ransomware is a great crime and part of the reason is they are paid directly by the victim. unlike data theft were a cyber criminal will need to steal the
stolen data to monetize it, ransomware is a clean crime. a lot of what we are doing to defend against ransomware is to understand all of the different types of attacks, either holding data for ransom or incorporate and health care environments. holding systems for ransom until a ransom of a large amount is paid. emily: are companies hating paying these -- hackers off? steve: it is a great question, and the advice we give is if you can recover from a ransomware attack without paying, it is a far that are process. backing up your data so that database ransomware attack and you can recover and not pay the criminal -- or if some other system is held for ransom, "to
restore service, it is a much better outcome, but we recognize that companies are often put in very difficult situations where sometimes they do look at paying a ransom as one of the means to get back in business. every organization needs to make that decision on a case-by-case basis. breachesnew target for -- what trends are you seeing? diversification of breaches were cyber criminals are now using all sorts of techniques and they are going after a much wider variety of targets. for example, in the health care industry it report talked about more than doubling of the tax against health care providers. part of the reason for this is they are often running older systems and not using best practices. the impact be severe.
we did one aspect of the study where we found things like medical images for patients were sometimes directly exposed on the internet. in some cases, those images were using formats that included things like patient personal information. we are also seeing the weaponization of data. the report talks about what we call face click where information warfare is attempting to abuse social media by making fictitious stories, get lots of likes in order to grow their credibility. emily: what are you saying when it comes to the rise in malware? are we talking exponential, will we see that plateau at some point? steve: part of the challenge is the barrier to create new strains of malware has come way down. we are seeing a much more rapid pace in bad actors building new
forms of malware. in a report we call out to that every eight pieces of malware are created every second, which is essentially a doubling of what we saw in our last report just a few months ago. emily: why is that? why have the barriers come down and awareness has increased? is just as of it defense technologies continues to evolve, the technologies that bad actors used to build malware has also evolved. take for example the ability to use technology like artificial intelligence. we are using artificial intelligence in the cybersecurity defense industry in order to detect attacks, but that actors are using the exact same technology to make their attacks more severe or to identify victims and automate things that used to
emily: gm is taking a page of the home shine playbook and plans to start a pilot program this summer depomed able car owners to read rent that vehicles when they are not using them. cars on gm'st platform and share revenue with automakers. joining us now for more details is david welch. how exactly will this work? cars -- itill take
could be a person who bought a car brand-new, and offer them the chance and wherever cities they launch this pilot program to put them on mavens network. they will rent cars out likes of cars for people who write them out for a few hours or longer contracts for people who drive for uber or lift or other delivery services. to connect people who need a car with gm's on network that are owned by maven. the owner of the car can put them on maven's visiting if they are nearby, and someone who needs a car cap stapp and goes and fix it up and uses it for as long as it is available or lasagna as they need. g.m. and the owner will spit the revenue. gm has been doing a lot of experimenting and made a big investment in left and also have some sort of relationship with over to the maven program.
what does it signal about their strategy moving forward toward partnership versus g.m. owning that relationship? david: gm is doing all of the above right now. and own a piece of lyft relationships with over, that is nonfinancial and work basically renting cars to uber drivers in certain cities and they bought kroos automation, are self driving car unit in san francisco, developing autonomous vehicles. gm wants to be involved in everything you can imagine in terms of mobility. by working with uber and lyft they're working with right sharing by starting this app, and it will be in this peer-to-peer car sharing. they will have robotech's to kos automation -- so they are dabbling in everything to see how people get around for the next decade and beyond. emily: what are the insurance
risks that come with this? david: jim hasn't given g.m.fics, we got ahead -- has given specifics. car sharing-to-peer companies, there is get around, thatrturo ensures vehicles, even though there are owned by somebody out there, they are insured i partners so that the owner of the car and the driver of the car and every thing is covered. well. is a competitor to avis or , they do have insurance in the same way those carriers what. emily: you expect other carmakers to follow this trend? david: elon musk talked about it 2016. -- theygm's competitors