tv Best of Bloomberg Technology Bloomberg July 13, 2019 11:00am-12:00pm EDT
♪ emily: i'm emily chang. this is "best of bloomberg technology," where we bring you all our top interviews from this week in tech. coming up, little love for libra on capitol hill. fed chair jay powell says he has serious concerns about facebook's proposed cryptocurrency. plus, ibm closes its $34 billion deal with red hat. our conversation with the ceos of both companies on the second-largest tech deal ever. plus, you will hear from the social network's global chief
diversity officer. she tells us how facebook plans to double the number of female employees globally over the next five years, and why the company is setting such an ambitious target in the middle of a media firestorm. first to our top story. facebook's plans to create its own cryptocurrency libra is not , getting love from lawmakers. and you can add fed chair jerome powell to the list. take a listen to what he told the house financial services committee. >> while the project sponsors public benefits including improved financial access for consumers, libra raises serious concerns regarding privacy, money laundering, consumer protection and financial stability. these are concerns that should be thoroughly and publicly addressed. facebook has a couple billion for thers so you have first time the possibility of a very broad adoption. if there were problems associated with money laundering, terrorist financing, any of the things we are all
focused on, including the company, they would rise to systemically important levels just because of the mere size of the network. it cannot go forward without there being broad satisfaction with the way the company has addressed money laundering, all of those things. the number of concerns i listed at the beginning -- data protection, consumer privacy, or all those things will need to be addressed very thoroughly and carefully in a deliberate process that will not be a sprint to implementation. emily: we discussed the future of the currency with joe weisenthal, the bloomberg cohost of ""what'd you miss?" >> skepticism gets to the general skepticism about crypto, which you heard jay powell's two cents on that, plus the fact that facebook has so much power. that is something we have been reckoning with over the last basically couple of years, where they have this huge user base,
they are able to push new projects, and you can imagine that if they try to rush people to this new cryptocurrency, that could create issues. emily: joe, powell is talking about libra posing a threat to the global financial system and at the scale of facebook size any problems would be magnified. is he right to be concerned? joel: listening to him, i was struck by -- this is something that is on his mind a lot. a lot of the lawmakers asking him about it. i think in the past, when it comes to cryptocurrencies or blockchain, or other endeavors like this, you get the impression that this was something they were watching. this is more than that. there are a lot of efforts to fed to really the understand what they are doing is the if it passes muster. i think it are reasons for them to be legitimately concerned. beyond the systemic nature of
this, it does raise questions of, if this will be a much more efficient way to transfer money from person a to person b anywhere in the world, how can you really do that, and also remain consistent with banking and payment regulations in all these countries? there are legitimate reasons to want to take a go slow approach to make sure this isn't some sort of regulatory arbitrage to get around existing rules of payment. emily: even though jay powell and the fed are taking their time in examining facebook's plan and cryptocurrency in general, it seems not all lawmakers understood exactly what they were asking about. this was an exchange between congressman david scott and the fed chair. take a listen. rep. scott: this libra business is really disturbing. i think we all know, libra is the london interbank offered rate. very critical.
isis apparent that libra going to leave us, or be removed. the potential ramifications of the end of libra, as the end nears. powell you said it well. :i think there are $300 trillion bor ineferencing li different currencies. emily: laughing at himself a little bit. can we trust lawmakers understand what they are supposed to be regulating here? joe: this came up during mark zuckerberg's testimony. you had supercuts and out of left field questions. i think facebook is going to try to use that and said, d.c. doesn't know what they are doing. the fact that people are confused by this and yet it -- and it does affect
potentially millions of people, suggests we should all be educating ourselves more closely. emily: your reaction? joe: it was a funny moment. the question about libor and the replacement is interesting. but you know, i have a lot of .ympathy for the politicians think about it, how many people have you and i interviewed who are in tech or maybe even describe themselves in crypto, or in in bitcoin that cannot articulate what makes the tech compelling? it should be worrisome. i do think it is a case for slowing down. again, is tech companies think they're going to reinvent the financial system while lawmakers are still struggling to wrap their heads around what is, it is, these kinds of exchanges say, you know, slow down. emily: speaking of regulating, who actually does have the authority to regulate cryptocurrency? to regulate what facebook is trying to do and launch this thing in the next year?
is it the the fed? u.s. regulators? joe: there is a real morass in terms of crypto regulation in the u.s. the fed will definitely have a role in this because libra will interface with the banking system. unlike cryptocurrencies, there will be fiat money and government yielding bonds held in regulated financial institutions that back libra so the fed will have a role. to your point, if it is going to be a global currency, at some level, they will have to deal with regulators in every country in which they want to operate, which is why i think part of the appeal may be regulatory arbitrage. you have to wonder if the crypto approach is sort of a shortcut around that, and if so, it is a good reason for people to be concerned. emily: coming up, the president holds what he calls the social media summit, only it was missing the social media companies.
emily: a federal appeals court said tuesday that president trump cannot block his critics on twitter. it said he blocked the first amendment when he blocked users who were critical of his policies. this upholds an earlier ruling. trump wasn't the only politician affected by the ruling. congresswomanict, alexandria ocasio cortez was sued by people she blocked on two twitter. the trump administration hosted a closed door social media summit at the white house on thursday. billed as a gathering to bring together leaders to work on opportunities and challenges in
today's social environment, but here's the catch. google, facebook and twitter were not invited. it was a group of internet conservative and lawmakers, many of whom are called trump's complaints about social media sinuses conservative voices. we discussed the event with one of its attendees, senator marsha blackburn of tennessee. sen. blackburn: my biggest take away from the meeting is, you have a lot of people who utilize social media to get their message out and to communicate their stories. what they are tired of his seeing social media take and choose what they want to promote, what they want to prioritize. they feel like they should be unusual platform and they are looking forward to have congress do some more work on this. and they are also looking forward to the white house turned more attention to the issue of big tech in the fairness on these platforms. emily: facebook, twitter,
social media companies were not invited. how can you have a productive meeting without the companies? actually, they are going to be included later. what the president did today was to hear from people who utilize social media. emily, one of the things i think is so important right now is that individuals do not sit down every day and watch the news at 6:00 and 10:00. what they do is to build their own network of different sources and channels, sometimes they are streaming it, sometimes they are watching cable, sometimes they are getting notifications and alerts on their mobile device, and they have built their own network. what they want is fairness. they don't want one of the search engines going in and prioritizing everything in that feed. they want to have access to fair news. they don't want opinion journalism.
they want facts. when you have individuals who are creating that content, it is important to hear from them. now, i do understand, and as the president said today, he is going to invite these social media companies to come in and and that isng, something that is taking place in the next few weeks. white house will have the date out soon, i am sure. and they will have the opportunity to talk about what they are doing. one of the things that has been of concern to us is how some of these companies manipulate their algorithms. that pushes forward certain content, then diminishes others and is the exercise of a form of bias. emily: so, do you think that the "conservativesing of
views," which is what you and other lawmakers have been complaining about, do you think that is deliberate or inadvertent? sen. blackburn: when mark zuckerberg was before us, when i was in the house just about a year ago, i asked him the question, do you subjectively manipulate your algorithms? me containedts to the information -- well, people live in northern california that work with us and they bring their worldview to work. as we move toward a.i. and machine learning, the bias of these algorithms is something of not on they were talking about opinions, but also when you are looking at how machine learning will be self replicating. emily: some of the folks in that
room have been accused of posting racist remarks, anti-semitic remarks, spinning up conspiracy theories on social media. is that the kind of thing you think should be left up on social media? sen. blackburn: of course not. there is no place in civil society for that conduct. just as, there is no place in a civil society for some of the postings that take place that are offensive or suggestive or harmful to children. all of these components for social media, is speaking specifically to the reason why we need to put some guardrails in place for social media. emily: speaking of that, you have been calling on snap to take action to prevent, as you wrote in a letter to them, more children from being exposed to sexual predators and explicit adult content while using snapchat.
saying the fact that messages on snapchat does the year actually is a child predator's dream, is the way you put it. what your main concerns about snapchat in particular? sen. blackburn: number one is their ratings, being there for the auto delete feature on those videos. there are cases where child predators, pedophiles, have been arrested, convicted. they have used snap to coerce and ensnare children, threatening to put their video on social media unless they send more videos. this is something parents need to have the tool to turn this off. there need to be explicit instructions for parents how to handle this. emily: that was tennessee senator marsha blackburn.
coming up, ibm closes its $34 billion deal with red hat. our conversation with the ceos of both companies on the second largest tech deal ever. and later in the show, facebook is attempting to drastically increase minority representation in its workforce. how the social media company is tackling its diversity problem. this is bloomberg.
emily: ibm has closed its purchase of red hat, finalizing $34 billion the world's second-largest tech deal ever. ibm was synonymous with mainframe computing, but it has been struggling to adapt. the company is playing catch up to amazon and microsoft in offering software and services over the internet. bloomberg's david westin spoke with the ceos of both ibm and red hat on >> it is important to tuesday. our clients. it is the destination for the
cloud. i think a lot of times people think everything will move to public cloud. one that is not what we see clients need, want and are even targeted to. it is this idea that, i have got an existing estate, i am going to modernize it, and i have private clouds already and if i 5-15 modernize an app, i will put it where i want and i have to manage and secure all that. that is the destination. for the next generation, we now give them a platform between red hat and ibm that runs on any public cloud, private, traditional, and they can write an app once, run it anywhere, secure it and manage it. that is a distinct and unique capability. the is what i mean by hybrid cloud, and it makes us a leader in that. others talk. they may have just a connection between public and private cloud. this now allows us to be multi-cloud everywhere.
david: jim, you have other competitors out there in the cloud that are pretty big, like amazon and google. how is this going to help you catch up to them? or is that even the goal? jim: i will start for the red hat component, our goal is to be a better partner with clouds. they are great partners. our software runs on those clouds, it runs on premise, ibm, those clouds. so they will continue to be great partners frost. as we are capable of moving many more workloads onto our software platform, that is more workloads that those clouds can actually go and address and run. my conversations with the major clouds have been very positive because of these the this is an opportunity to get more workloads out of datacenter running on cloud. ginni: that is an important reason to do this. our clients want us to be a wooded take our platform and run it anywhere. we cooperate with our partners and we are in competition on the
other side. david: you have ramped up ibm percentage of revenue from the cloud dramatically, 4% to 25% in a reasonably short period of time. what is the ultimate goal? ginni: there is not an ultimate goal. as you think about the clients moving their work 80% of work , will move to the hybrid cloud. when we look at our revenues, it transcends everything from our public cloud, and now these platforms will be on other clouds included in the services revenue. the goal is to move with the same journey our clients need it to move with. david: what about moving with the overall size of the cloud expanding? how much of this will just be riding with the cloud up and have much of it be taking market share from other providers? ginni: look. for ibm is -- 200 basis points of revenue growth over a five-year period. this is what -- jim just said a minute ago, the important out of it is to think of our own cloud,
should be the best for critical work. -- should be the very best for mission-critical work. we also want our platform running everywhere else. growth anywhere is going to be good for ibm. jim: this is all about helping clients provide more value to customers. when a client builds a new application, website, mobile application, opportunities for us to participate in building the application, helping them integrate that with data, helping them run it on our platform, run it on the ibm cloud, any of these components are areas of incremental value we can participate in as our customers create more value for their customers. emily: that was the ceo of red hat and the ceo of ibm. we continued our discussion of the mega deal with bloomberg's olivia cargill on >> think about tuesday. ibm. 108-year-old american icon that
has largely been known for the mainframe cycles. in the last couple years they have been trying to reinvent themselves. this acquisition is essentially ibm trying to reenter the cloud space as a totally different company. it is trying to transform what it has been providing so far. change the game. we have heard ginni call this a game changer for ibm. it is important to think about why this is going to be so significant not only for ibm but also for the wider cloud space and also for the other cloud providers like amazon, microsoft and google, who will now be seen as partners to ibm rather than rivals. emily: interesting. what are some of the risks to this new strategy, and what can go wrong? olivia: one of the biggest risks here is whether or not red hat will really be able to fold into ibm. this company is known to have a staunch and old-school corporate work culture.
will this open-source linux providing company called red - hat, being known to be a renegade and revolutionary in the space, really be able to come into the ibm family? ibm andheard the ceo of the ceo of red hat talking about how within the acquisition red , hat will remain independent, a distinct unit, within ibm. it will have its own consulting services, its own sales, its own terms and conditions. the red hat leadership team including the ceo will remain within red hat and it will be able to talk to their own clients rather than through ibm. they are hoping that in order to maintain red hat's independence, that this integration will be a motoric seamlessly. romettye heard ginni use the words "cloud" before -- the words "hybrid
cloud" for, in fact talking about it for the last several years as they have tried to navigate the transition. how is this different from microsoft, amazon? olivia: they all provide different public cloud networks that have particular strengths. like amazon's strength for example is infrastructure services. streams as a cloud customer relations and management platform. you see companies that are buying into these services and using these clouds for different types of reasons. what ibm is attempting to do is to become the glue that will stick together or connect all those different clouds onto one platform. so you may be a company that needs to use salesforce for a particular reason and it needs to use amazon for a different reason. that means you may end up with up to 15 different cloud providers, all operating independently in different silos. you have no way to bring them together. ibm is hoping it will be able to become the connective tissue
that aligns all the different clouds under one platform. one of the really interesting things here is this idea, this kind of strategic move to become partners with some of these former competitors like amazon, microsoft, or google is what ibm actually did back in the 1990's regarding its global business services that form. it partnered up with software , weiders and add to them will allow you to run your applications smoothly on our hardware. we will partner with you rather than compete against you, and that is what saved the company. they are trying to do the same thing again. emily: bloombergs olivia carville in new york. coming up, facebook has ambitious plans to improve diversity. are they realistic? the global chief diversity officer tells us how they are planning to boost numbers, next.
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♪ emily: welcome back to "best of bloomberg technology," i'm emily chang. facebook has said big goals workforce diversity. in its annual diversity report, the social company announced lands to double the number of female employees globally over the next five years as well as a number of black and hispanic employees in the united states. the company wants half of the u.s. workforce to be from underrepresented groups by 2024. we sat down with their global chief diversity officer, maxine williams on wednesday, and asked why they are setting these goals now. maxine: there has been research done by very credible institutions to say that having goals is one of the ways in which to drive change.
the ford foundation has done a lot of work, a big study on why people believe technology and they found that having goals makes a difference. we want to do what is best practice. we have been building for the last six years, the machinery, the strategy, some things have worked in others have not. we feel like we are in a place that muscle tove release these goals on top of it and boost further. emily: you are looking to change numbers. 50-50. globally, when it comes to men and women. do you have secret innovative plans that we do not know about? maxine: i wish. i wish. then i would market that and never walk again! we do not have a secret plan. some sort ofis magic, this is hard work, consistent attention every day being deliberate. it doesn't come about through some organic weird thing. it was designed. we're hoping we can also design deliberate interventions.
and whatting better we now know after five worse its years of trials does work. hard, let meo be be clear. i am not saying that any stretch of the imagination that we are going to hit that. but everywhere in the business, we say 50-50 goals -- 50% we will head to come percent chance that we will not. we will push on this to get as far as we can. emily: facebook numbers are average compared to the tech industry. i get asked, even with sheryl sandberg's leadership, a leader on women's issues in the world, why can't even facebook to do better? why hasn't facebook done better? maxine: there are a couple of things. one is that there is a lot of stuff that we do on, and we have doubled down to adjust that. is there bias in the workplace? how do you evaluate people? is there fairness? how are you considering promotions? all of that, we are working on.
emily: so you are saying that there is bias? there is unfairness? maxine: everywhere. humility is important for every company, every group of people. to recognize that we are not special. there is no fairy dust we sprinkle on people when they walk in the door in facebook. they are those same people when they woke up in the morning in their communities. there is bias. you address that. on the other hand, having a leader that does model it helps tremendously. there is this expression, you can't be what you don't see. seeing a woman who represents what we hope for -- leadership, influence, success -- has been useful, and that is why we have seen our women in leadership numbers has been most improved of all. emily: you report the number of women and minorities in technical roles because those are important prime decision-making roles, decisions about the product that is used by 2 billion people around the world who come from all backgrounds. if you look at those numbers, women hold only 23% of those prime technical roles blacks and
, hispanics, 5%. could another goal be getting to 50-50 in those roles? maxine: remember when i said that there is stuff we control and stuff we don't control, right? we are 100% focused on our environment, opportunities. we have expanded internships by many factors in order to get more in. but when you are pushing again a situation where only 18% of the people graduating with computer science degrees in the united states are women, how do you get to 50? emily: that sounds like a highflying problem which many people like to say is a myth. maxine: there isn't. that is why i like to say, this is stuff we own. we need to make sure we deal with the stuff we own. are we giving fair promotions, creating opportunities, reading bias -- but when you say, can you get to 50%? we have increased from 15% five years ago to 23% women in technical roles. we have surpassed an obvious
market unavailability number with an 18% graduate rate. how much more can you do? could you get to 50%? to get to 50%, we need to have a lot of comprehensive work and we do some of the work investing in the long term as well to get market from underrepresented backgrounds doing technical subjects, studying computer science and computer engineering, data structures, rhythms. -- algorithms. we work with universities, we build tools that people can put in, like tech prep. you put in your zip code and see where you can get training in your neighborhood. emily: i have made the argument that digital privacy is a women's issue. it is not a women's only issue but it is an issue, like health care, that women have a view on. if you look at the studies, women are more likely to keep profiles private, perceive more risk online then men. it is pretty obvious that most of the product decisions that facebook for many, many years
were made by mostly men. do you think facebook would have issues around privacy if there had been more women at the table from the beginning? maxine: i think you don't know what you don't know. always our key thing is have more diverse perspectives, having more cognitive diversity on every team is going to produce better results. we have seen examples already now that we are increasing diversity of workforce, of how decisions are changing and how products are improving because we have different people. i will say, baseline, yes, everything will be better if we have more diversity. emily: we interviewed a former facebook employee last year who said that facebook has a black people problem. and it doesn't just affect black employees, it affects black users. the the last year called for a boycott of facebook when it was discovered that russians used facebook to target african-americans specifically in the 2016 elections. what is your response to that? maxine: my response is, there
will be a distribution of experiences and all the responses to everything. also that in people issues there will always be a complexity . what is required of you as a company is to constantly be trying to improve and take responsibility for the things you can change. there are many people who would stand up and say, i have an amazing experience that facebook. that doesn't mean that the person who didn't is wrong. it means that there is a range. what we are responsible for is getting to consistent execution to have the best we can get. i think that is what we need to deliver. emily: will you admit this impacts the product and the decisions that are made? maxine: absolutely. that is why we are doing this. we are not doing this because of are doingtition, we it because it absolutely impacts every decision. when you are trying to solve complex decisions, the more diversity you have, the better solutions you will develop. everything we do is complex.
if you think of the scale we operate at, and the meaning it has for other people's lives, we want that experience to be the best it can be. emily: this goal is exciting. it does put another target on face look's back. just today, the fed chair criticizing libra, lawmakers during your cryptocurrency plans. you have fake news misinformation issues, hate speech, you're dealing with pending fines, pending antitrust -- why put another target on facebook back when, 50-50, you succeed in 50-50 you don't? maxine: because i want to succeed. i don't know you achieve much if you risk nothing. if there is criticism to come, i will be proud to take that, if it was in the interest of us getting to excellence. emily: that was maxine williams. coming up, shooting for the stars. our conversation with richard
emily: houston, we have a listing. billionaire richard branson's virgin galactic will become the first space tourism venture to hit public markets after receiving an $800 million investment from a publicly traded shell company initially set up to some day merge with a private company in order to take it public, an alternative to a traditional listing. branson and social capital founder chamath joined bloomberg tuesday. >> when we could not go ahead with the saudis i decided i would found galactic to profitability myself through the virgin group, and then i got a
call from chamath, who said he was keen to have a look. he went to see our space people, spent some months looking into it. why do you carry on from there? chamath: i sort of admire the business from afar. we had a bunch of mutual friends who were early customers. so i was always wondering, what was really under the hood. i was floored by what they had built, and the quality of the business it would become. it took us nine months, but we got here. >> sir richard, did you talk with other funds, look for other in asia for example, or the middle east? richard: no. we had the deal from the saudi's that that was not possible.
if we were to actually take this public ourselves, it would take a long time. the approach seemed to work well. chamath, my understanding is that the fun would have had to return investment money in september. nine months in gestation, you are cutting it fine? chamath: i don't think so. we met more than 200 companies over many, many countries in the last three years. it did take us nine months to do the diligence required to really get under the hood and understand what they built and to feel comfortable across all aspects of the business. could we have done another one? sure. could we have invested in something else? yes. but i think that we found the absolute best companies. think it will thrive in the public markets, and frankly, something that will capture a lot of consumer interest, given the average person a chance to thinkbit of space, and i
there is nothing more exciting than that. guy: wimbledon first flight be? let's try to narrow that down. richard: now that we are public, i will have to be very circumspect in what i say. what is happening at the moment is we are moving the operation to new mexico. that is where the space force is. we are moving our rockets there, we are moving our motherships there. then we will do a few final test flights from new mexico and the new situation and i will go up and the public will go up. i will not give a specific date. i am told i am not allowed. but we have had to death very successful -- two very successful flight into space recently. we have made five astronauts made in america since 2009. so we are up to 14 years of hard
work getting this far and we feel that we are on the verge of something very special. vonnie: that is very exciting because you specialize in suborbital flights, slightly different from jeff bezos and also elon musk, looking at other segments of space. 56 miles above the earth and three times the speed of sound, which you have now hit. you did say that he will go up in 2019. will you? richard: if pilots are ready to say to me they have not tested the craft through and through, i will go up when they tell me to go up. vonnie: how many customers have paid? what is it a quarter of a million dollars now? richard: we closed out looking people five years ago because we had 600 customers. got $80 million on
deposit. since the test flight, we have had 2000 more people saying they want to come in. our research indicates there is a large number of people. chamath: this is an incredibly capacity constrained market, the customers we have will take 2.5 years, once you convert the 2500 people, the first three years of operation is already mostly spoken for. emily: richard branson and capital cofounder and ceo. we continued our look at the interstellar plans with "bloomberg businessweek"'s max chafkin. max: social capital raised money from investors to basically acquire a private company and in doing so take it public. the pitch we heard from chamath was not basically, this would be a much more efficient way to go public. when he started talking about this a couple of years ago, he was saying that the ipo process
is broken, it takes too long, there is too much regulatory oversight so this is something he could offer. it makes sense. virgin galactic, you are talking extremely high potential, this could revolutionize air travel, it could be the new disney world. you know, we go all own a piece of space. on the other hand, it is super speculative, the kind of thing that is really hard to value, which is why it makes sense to go public. emily: on the other hand, they could never happen or happen in 100 years. how big of the milestone is this that a space company which has never taken a person into space will very soon be a publicly traded company? and hisn branson partner center talking about this 15 years ago and they had their first test flight, i think in 2004, the idea that private space was going to be a big industry was a joke. elon musk was just at the beginning of spacex. it was going on but it was very niche. having a privately held space
company go public, it is a big deal. we should also say, virgin galactic has had test pilots in space. it is not like they have had no humans there, which is different from the jeff bezos and elon musk companies. the kind of travel we are talking about is not like going to the moon. it is like going to space for a few minutes. you are going just to the edge of space, experiencing weightlessness and coming down. it is sort of in between a trip z currently the main option for private space travel, and the idea that you take a 747 and they sort of dive bomb for 60 minutes. emily: does this give them advantage over space explorer blue? does it give them more flexibility, more visibility? max: i don't think especially. valuation, ituge
is a private valuation, so that is different, somewhere around $30 billion. they have billions and billions of dollars in government contracts. the company is well positioned. blue origin has the world's richest man. so those companies have nothing to worry about. , obviously,ranson is a wonderful marketer. being public and having that additional outlet for his, sort of doing his thing, will probably help the company. emily: "bloomberg businessweek"'s max chafkin. still ahead sky full of , a satellites. companies already filling or orbitz with plans to launch thousands more satellites to bring internet to everyone. but how will they clean up after them? that is next. this is bloomberg.
today's day and age, everyone would be online. but that is not the case. according to the u.n., 4 billion people worldwide lack access. -- lack reliable internet access. amazon and spacex are trying to remedy that by launching low orbiting satellites to try to get everyone on line. but as astronomers see it, it is not all clear skies. starlight, star bright. wait, is that even a star i see tonight? in late may, objects in a train-like formation trail the night sky. not stars, not planes, but satellites. you can expect more scenes like this one, which had sky watchers had scratching, as the race heats up with more launch is on the horizon. elon musk's star link program plans to propel 12,000 into orbit. jeff bezos's company has asked the fcc's to approve 3200.
and another company oneweb wants , to launch a month by the goal september. is to bring broadband access to the roughly 4 billion people on earth who don't yet have it. >> going forward, access to broadband is going to be close to being a fundamental human need. goal may seemhat noble, these satellites are designed to fly lower, it living to number is concerned it will interfere with the observation of distant galaxies. then there is the cost. the first string of satellites cost $1 million each to produce, they cost as much as $16.5 million just for space x to launch 60 satellites into orbit. still, investors are rocketing forward. $1.7 billion was invested in space companies in this year 's first quarter alone, according to the vc firm, space angels, and that is double the amount invested a quarter earlier. with satellites, the space economy, so to speak, appears ready for takeoff.
we continue our look with one of satellites can bring more people online, with one of the companies you just heard about. my next guest is the ceo of oneweb, and has raised $3.5 billion to date, backed by softbank, airbus and the virgin group. he spoke to us on >> we are wednesday. launching satellites starting in december, 30 a month. 34 per month, sometimes 36. we will have our first phase of our system giving global coverage by the third quarter of 2021, getting service in some places in 2020. our service goal is low latency service and global coverage, one of the things that happens with satellites now is that people get clunky service because of high latency. it is physics. geo satellites are 36,000 kilometers away. urs are 1200 kilometers.
everyone in the world deserves the best internet service whether you are in the middle of africa, asia, latin america or the heartland of the u.s. emily: what about the cost? it's been difficult to go click the cost of the space x satellite launches. for example, how much will it cost now to launch a satellite, and how much will that cost come down in the future? adrian: one of the things that has been exciting recently is launch cost has come way down. we locked in our 22 launches a couple years ago and we know that from then to now, launch costs have come down 30%. rockets are getting bigger. that means they can carry more satellites and they are more secure. we are looking for that trend to continue enabling more satellites to be launched. also, you are seeing cubesats are going up. cubesats, ours are
the size of refrigerators. spacex is 220 size. people focus on a satellite. it is not a unit of measure. it can be bigger or smaller with more or less capabilities. in your segment, you talked about us bringing down the satellite cost to $1 million for satellite -- you have to remember, it used to be that satellites would cost $150 million to $200 million. what we've done is taking advantage of all the advances in electronics, from smartphones them and applied an industrial approach. which is to say that we are doing this on an assembly line. we have factories opening in cape canaveral, july 22. so that is coming down to $1 million per satellite, is a really big deal. emily: elon musk has said, people see the satellite 0% of the time approximately.
that said, what about the concerns from astronomers about space pollution? adrian: the most important thing beinglisions and responsible in space. one aspect is visibility. our satellites are at a higher altitude, 1200 kilometers versus their satellites are at 550. so ours are not visible. the other thing you have to pay attention to when working with governments, we are very much thought leaders on this, is making sure that the satellites disintegrate when they come back into the atmosphere so you don't harm anybody. and, if you and i get into a collision on the street with our car, we walk away from that. if you get two satellites collide up there, they will fragment and the loot the area. so it is really very important -- tose as well up there be responsible up there in space. emily: that does it for this edition of "best of bloomberg
♪ >> coming up on bloomberg best, the stories that shaped the week in business around the world. deutsche bank swings the ax. the ceos new plants reshapes the business and slashes workers. >> we have taken the decision to retrench and step back. >> the big issue is capital. it continues to be capital. this whilearound all balancing cuts is something that continues to be a question mark. [inaudible] streetys here with wall are leaving we are going to get a rate cut. >> the big surprise would be i
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