tv Bloomberg Technology Bloomberg July 22, 2019 5:00pm-6:00pm EDT
lawmakers somewhat presumptuous. and, deep fakes. from trump to pelosi to obama to zuckerberg, no one seems to be safe from videos that are so good that you can't tell they are fake. we speak to one company who says they can. heads of companies back in washington on monday. trump's top economic advisor in secretary called a meeting to talk about the trade war with china. one topic stuck out, the fight with huawei and whether the ban should stand. representatives from microsoft, intel, qualcomm, and more. what is the latest we know about this meeting? who was there? what was discussed? >> the meeting was called basically to hear a view from a
business perspective. we do hear a lot about the huawei fight from the hawks and the administration and on capitol hill who obviously are in favor of a total decoupling of supply chains. this is a chance for them to make their case of wife huawei should -- of why huawei should continue selling. the invitation list was pretty broad in terms of companies that are affected by this. sent aompanies have letter to commerce secretary wilbur ross a couple of weeks ago, making their case in writing, in private meetings at the commerce department. this is basically their second run at it with a broader audience. the commerce secretary was in
the meeting but he has heard the case before. watching forl be any headlines. we want to get a lawmakers look now at the case against chinese tech and the alleged threat to u.s. national security. lego --man rubin get reben gallego is standing by. that thisur sense meeting is happening at all. rep. gallego: is not an independent act. an independentt actor. it is an arm of the chinese government. huawei was working with a shell
company, in north korea, supplying them to knology that was-- them technology that banned. we want to enforce a huawei zte sanctions regime that we think is effective. the president should not do one-off traits for farm goods for something that could affect security of our country. emily: many people, including high level tech ceos, would tell you privately that they see no evidence that huawei has spied on u.s.. rep. gallego: i hope they would look at the panda shell corporation set up in north korea that allowed huawei to essentially do business with north korea. it is well known that among chinese companies it is part of
their mandate that they make anything available to the chinese government. while i respect a lot of these companies, their goal is to have the highest margins for their shareholders. as a member of congress, my responsibility is our national security. this sends a very bad message to our allies overseas that we are trying not to get to incorporate huawei. it makes it difficult for us to share information with them. emily: you are referencing a report in the washington post that huawei has partnered with a chinese state company, panda, on projects in north korea such as improving their wireless infrastructure. when the president was asked about this, he didn't seem particularly alarmed. he said the u.s. will lead on 5g. we will see what north korea does.
how does this potential north koreabout change your objection here? rep. gallego: i object even harder. i think other corporations and members of congress should be worried about this. you --pe really tells this key national security issue. president is not understanding what could happen if huawei is able to have access to our technology market as well as our allies, and is trying to display one trade war against each other. we should not be trading access forhe 5g market for huawei us to go back to what we had pre trade war, for us to be able to
sell products to chinese markets. this will have longer-lasting effects to our national security than this temporary trade war. emily: the leaders of these u.s. companies will say that the blacklisting of huawei has significantly hurt their bottom line. some of these companies provide chips, forrovide consumer-products that they say don't have an effect on national security. rep. gallego: they are wrong. communityntelligence -- we have a right as congress, as a nation, to stop corporations to engage with other countries or entities that put our national security in danger. i don't see these companies
complaining about us having a sanctions regime against iran or other bad actors. they do not have the right to make a profit at the expense of u.s. national security. hopefully congress gets our way these ceose to stop from getting their way. emily: what would you like to see the trumpet ministration and congress do -- the trump administration and congress do? rep. gallego: i think the administration should continue the sanctions. if they don't do that, the house and senate, in a bipartisan manner, should pass a new sanctions regime or continue the sanctions regime that is on file to make sure we are enforcing some good order and discipline. emily: since i have you come i have to ask you about iran. the president defends withdrawing from the iran nuclear deal and at the same
time, iran has seized a british flag oil tanker. what do you think the u.s. should do? rep. gallego: i think we have to but in ao iran, measured manner. i think, at the same time, we do have to recognize that us without ae jcpoa major plan, more as a reaction to anti-obama policies. iran says they are going to comply with the jcpoa but there are other areas. the last thing we can afford or need is a war in the middle east. it is not in our national security interests to engage in this type of war. but we have a lot of tools in the toolbox to keep iran in
check and de-escalate the situation through diplomatic means. emily: at home, the president under fire for now multiple days for what some have called racist or racially charged language about four congresswomen, all women of color. do you think the president's remarks have been racist and that he is stoking racial tension especially given his response or lack thereof of his report -- of his supporters as rally chanting "send her back." rep. gallego: it is not the first time the president has enrage his base. he started his political career of notsing barack obama being born in america. he accused a judge who was born in indiana of having dual loyalties.
it is not a surprise that he accuses four american women of not loving this country. these women are of color. he disc -- he does not describe nancy pelosi or other women who are white of not loving the country. he is trying to gin up a base of his support that a racist. emily: thank you so much for stopping by. a prominents gained cloud computing customer from the field of artificial intelligence. the software maker has agreed to invest $1 billion in the partnership with research group open ai. elon musk and peter thiel gave at least $1 million went it was created. facebook's libra got a little love from lawmakers on capitol hill but will they welcome the new money?
emily: let's look at how some of the major cryptocurrencies fared monday. ethereum allcoin, down. facebook's cryptocurrency project libra continues. congress grilled david marcus over the proposed stable coin, one that some analysts say could users tothe platform's create a global currency. i want to bring in the ceo of ripple and protect's -- and bloomberg tech's kurt wegner,
who was in the hearing. >> i think they have taken a very bold, ambitious effort, which is part of what makes silicon valley great. i think there is a little bit may be more than ambitious, maybe arrogant. the white paper articulates it is a new currency. i think the u.s. dollar works pretty well. this is a moment where i agree with the president. we don't need a new fiat currency. there might be some smaller markets, the argentinian peso, that might make sense. , a way they rolled it out lot of headwinds, turbulence. we talked about the level of skepticism and ire. one lawmaker comparing it to 9/11 and the level of danger. what happens next?
>> that is to facebook to figure out. we have this group of 28 partners that will be part of the libra association that oversees the currency. there is no charter for that, no payments have been made. need toook's side, they get their team together to get this move right now, it is an idea but not something that is tangible. emily: do you think the regulators will let libra happen in the u.s.? brad: facebook had conversations with regulators before they announced the white paper. facebook had concerns. it is very important to both the u.s. government and governments around the world that financial regulationutters -- matters. these are important financial
pieces of our system. we have to make sure that future construct keep that in mind. the only danger happening right now is that legitimate projects taking advantage of crypto to solve real problems get caught in the crossfire. even the president came out and tweeted, i don't like cryptocurrencies. that's like saying i don't like an internet company in 1997. there's lots of shapes and sizes. emily: some have said that if libra succeeded, that would not be good for ripple. is there truth for that? brad: no. facebook is a consumer company. what ripple is doing is at the institutional level. we are connecting ask. -- connecting banks. we had one of the best weeks in our history. it is a call to action for banks.
someone said it is the end of western union. we have taken the opposite approach, let's work with the system. regulations work at that point. we can paint with one broadbrush especially at the federal level. emily: you work with a a lot of banks. what did they think of the libra association? brad: a lot of people signed up, the 28 members signed up, it was just an moi, no money changing hands, no hard commitment they wanted to have a seat at the table. the 28 whoee if signed up continue to participate. i thought it was very noteworthy that there weren't any banks or financial institutions within those 28. that: there been reports there has been skepticism among the partners that have signed
on. what are we hearing? kurt: they are not saying anything publicly. that is one of the concerns, that facebook is out here taking the beating for themselves. if i am facebook, i'm saying, are you guys in not? bloomberg has reported that facebook and others in the association are out talking to banks right now. i think it does add a level of legitimacy to this whole effort right now, -- this whole effort. right now, if you're facebook, you want someone to say something publicly. emily: on another topic, there have been reports that bank of america has taking a -- has taken out a patent that it would use ripple ledger. can you confirm or kill the
speculation? confirm norneither kill. we are working with a lot of banks around the world. some of the largest banks in the world are customers of ours today. we will continue to work with big banks around the world. surprised by that patent application because we have not announced anything. emily: thank you both. coming up, how china plans to keep up with the tech ipo's by opening a new nasdaq-style stock exchange. this is bloomberg. ♪
china's attempt to avoid losing the neck alibaba to new york -- the next alibaba to new york or hong kong. we talked with someone who is worked with many of china's top tech startups. >> i think it is expected given the expectations, limited supply. i'm not terribly surprised by the first-day performance. but i think that is the beauty of a new market. it's going to take some time to settle down. we see more supply of companies in the pipeline. i think the new market having enthusiasm is not bad. longer-term, the investor -- >> this isn't the first time china has tried to create an alternate venue with looser regulations. we had the boom and bust of
china-x.what is different this time ? >> it is all about disclosures in the end. that is the process for us, represent chinese tech companies. interesting change. >> there has been some concern about the quality of names is listed. with the company that -- with the country that has the most unicorns outside of the united states, not a lot of well-known names. >> in terms of the first batch of companies, a lot of them are there not necessarily because they are the best technology companies in china, but often times the ones that are ready for an ipo. we have gone through a lot of
the companies. i'm on the advisory committee for the exchange as well. i would say it is pretty good. >> how much do you see shifting the balance of listing from new york and hong kong to mainland china? the u.s. is still an attractive place given the ability to raise u.s. dollars. will allent markets have a different focus. the u.s., i think, if you are a large cap company, in the u.s., it is the most liquid, broadest capital markets in the world. hong kong obviously they have liquidity to the china market. consuming -- if you are a company with unique business models, hong kong is probably the pick it -- probably your pick.
other companies, china is probably the best choice. from our perspective, it is always good to have more options. i think eventually chinese tech willnies and entrepreneurs move toward different selections. bloomberg'swas selina wang with china renaissance group ceo bao fan. coming up, deepfakes continue popping up across the internet. how one company is attempting to stop the spread of misinformation. this is bloomberg. ♪ hey! i'm bill slowsky jr.,
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this is bloomberg technology. i'm emily chang. back to our top story -- the trump administration versus china. the u.s. and china continue their trade standoff, the white house is convene a meeting of tech minds to talk about the tension. from a tech perspective, huawei and the trump administration desire to ban u.s. government agencies from doing business with it chinese telecom giant. to discuss the latest, tom giles. we are still waiting from headlines from this meeting that is happening today at the white house. what is on the agenda of these tech ceos, we believe, were meeting with trump aides?
tom: that is right. it is very much in their interest to have these restrictions as loose as possible. their view is that we are leaders in chipmaking and other technology that we sell to huawei. we should maintain our leadership. we want to keep this market open. we want to continue to invest in u.s. leadership in this technology. view,u know -- in their this does not represent a threat to national security. this is a part of the global 5g buildout. this is not something we want to -- this is not an area where we think national security interests are at risk. emily: the argument has been made that some sales to huawei should resume for consumer devices, like smart phones, laptops. but, perhaps anything that would be put into 5g equipment might be put into a different category. tom: it is not clear to me how the u.s. is going to delineate
between what is a threat to national security and what isn't a threat. there is a view that if we slow the rollout of 5g globally and huawei is at the forefront of that, then everybody is hurt as a result. all the people who are investing in wireless technology that will benefit from the rollout of 5g will be at a disadvantage. that includes a lot of big u.s. companies. rollout inlow this order to accommodate the huawei ban. emily: there seems to be a bipartisan issue. you have republicans and democrats who are trying to push a bill through congress that would prevent huawei from being used as a bargaining chip in the trade war and keep this blacklist in effect. yet, when you talked to a lot of these tech ceos privately, they don't believe that huawei is using its equipment to spy on the u.s. perhaps this report from the washington post about huawei working with a chinese company to advance wireless
infrastructure north korea might change their minds, but the people at the very top of some of these u.s. tech companies have not seen any evidence that their products are being used in nefarious ways. tom: it is a big question. it is a conversation the u.s. is having with its allies. we have just seen recently in the u.k., they are holding off on a decision whether to impose a similar ban on sales to huawei there, for their business with huawei in the u.k. a lot of u.s. allies, close allies, are asking that same question. where is the evidence that huawei is creating back channels, backdoors for the chinese government to spy on our equipment? where is the fresh evidence that they are stealing intellectual property? we want to see that in order to make a decision because there is a lot of u.s. allies that are really dragging their heels on imposing these same restrictions on huawei that the u.s. has
imposed. emily: more reporting on the ftc that they have reached an agreement with youtube for a settlement. this as we are waiting for the final amount of a fine that the ftc will levy on facebook. tell us about this youtube situation. tom: the ftc has been looking into whether or not youtube has violated terms of -- this online protection for minors, for children. the u.s. has strict rules around advertising that can be shown to children and the types of data that companies are allowed to collect and keep on children. the allegations are, and what the ftc has been looking into, is whether youtube has been in violation, as it comes to minors and data collection around minors. the defense is youtube has transgressed those rules in some way and we know they have reached a settlement. we don't know the amount yet.
in the case of facebook and we and others have reported, it is going to be in the neighborhood of $5 million. that is separate allegations facebook has transgressed certain rules the ftc may enforce. emily: tom giles, our executive editor, thanks so much. apple is said to be in advanced talks to buy intel smartphone mobildem chip business. it will cover a portfolio patent and staff valley that more than $1 billion or more and could be reached in the next week. joining us to discuss, mark gurman who covers apple. what does this mean? mark: it means for apple, getting a jumpstart in developing their own modems. modems is key in order for apple to connect to the internet anywhere in the world. right now, they use a
combination of modems from qualcomm and intel. apple has been looking at ways across the entire portfolio, all the components inside the products to reduce reliance on third-party suppliers. building their own modem would do that. by buying intel's motive business for, $1 billion a few hundred engineers and patents. it seems like a win-win for apple and intel after looking to sell the business. emily: we will continue to fall that what -- follow that one. you have a new piece about apple's coo, jeff williams, who has tim cook's old job. a lot of current and former employees about his management style with johnny ives leaving. he has basically the entire design team reporting to him. tell us about jeff williams and what you have learned. mark: williams is a very respected manager, ceoo of apple. he does more than what his title
seems to indicate. he oversees all product development at apple. he is in all the meetings with a lower level engineers. he's also a pretty modest guy. his big beach house in coastal california, he calls his shack. he has a knack for being pretty modest. he used to drive a toyota camry even though he was at an executive level. he would cycle between office meetings with far more junior employees. he's pretty much on the ground with the engineers, visiting the factories very often. he is a big part of what keeps apple running. if something were to happen to tim cook in the near term, he would be able to step in and there likely would not be any hiccups. emily: wink-wink in your story about him possibly being the heir apparent. tim gurman thank you so much. coming up, improving document workflow for companies like lyft
emily: it is time for our work shifting series where we take a look at how businesses are leveraging technology to improve workflow. the productivity startup hellosign wants to supply everything from pdf's to onboarding paperwork. the company provides digital contracts and document solutions to over 80,000 customers, including lyft, target. in january, the company was acquired by jo dropbox.
joining us to discuss is the cofounder joseph walla. thank you for joining us. what is it like being part of the dropbox family? what opportunities that open up? joseph: they are an amusin amazg group of people. this all happened very organically back in the fall. we were working on a partnership together. the more time we spent together, we felt this huge alignment from a vision standpoint. we are both very compassionate about confined work. go too have freemium market strategies with inbound sales. from a team culture alignment, every person we met, it felt like we were part of the same company. we have this rare chance to accelerate our vision. the more time we spend together, the more it felt like a no-brainer. six month later, a lot of those things have been validated. emily: a match made in heaven. how is hellosign different from docusign? how do you believe you are faring against the competition?
joseph: the biggest thing is that we think our biggest competitor is actually pen and paper. a lot of folks, the vast majority are still print, sign scanning or physically moving documents between desks. we think everything is digital, but you go back to my home state of minnesota, other countries, other states, people are still using paper. i think the biggest thing is this is a $25 billion market with only 35% market penetration so far. we are still at the beginning of a very big, blue ocean. the other couple things we think about is our sweet spot is in the 250 to 1000 person company range. that is where our strength really is. you talked about lyft, aaa, instacart -- a lot of those folks pick us for the user experience. emily: how do you convert your users to paying customers? joseph: like a lot of freemi um models, we have a certain amount of functionality they could use for free.
as their needs increase, maybe they need branding, additional transactions, more sophisticate team management, then we upgrade them to various plans. emily: you have integrations with some big tech of eddie's. salesforce, microsoft. what about the concern they will take your business, as they all try to improve their productivity offerings as well? joseph: in the end, the way i think about this is a lot of times companies will pick what are they really good at. when i think about these other companies, slack is phenomenal. digital communication. dropbox is phenomenal at content. a lot of these other companies are phenomenal. i don't know if it makes sense to do what we do. if they do, we got a pretty strong lead. emily: joseph walla, cofounder and ceo of hellosign. thanks for stopping by. as ai progresses, deepfakes are getting tougher and tougher to
suing an investor is netflix after the company reported a loss u.s. subscribers for the first leg in the years. the proposed class action suit claims the streaming giant left the bad news under wraps for two months and said pumping up the stock price with rosy projections. the production of 5 million new subscribers that they knew to be false. netflix reported a loss of nearly 130,000 subscribers last quarter following a price hike from $11 to $13 a month. netflix did not immediately respond to our request for comment. technology,e of ai fake videos and audio keep getting better and easier to
make, and also harder to spot. last month, deepfake videos featuring the likeness of mark zuckerberg and house speaker nancy pelosi triggered a new round of questions about policing this information. and, with the rate that technology is progressing, lawmakers are concerned doctored videos could add to the spread of fake news. bloomberg's quick take explains the rise of deepfakes and the dangers they pose. >> we are entering an era in which are enemies can make it look like anyone is saying anything at any point in time. >> jordan peele created this fake video of president obama to matured how easy it is to put words in some one else's mouth. >> we need to be more vigilant with what we trust from the internet. >> not everyone bought it, but the technology has rapidly improved, even as worried increase of the potential for harm. this is your bloombergquint take on deepfakes. lookings are realistic video and audio.
despite bans on major websites, they remain easy to make and find. they're name for the deep learning artificial intelligence algorithms that make them possible. input real audio or video of a specific person, the more the better, and the software tries to recognize patterns in speech and movement. introduce a new element like someone else's face and voice and a deepfake is made. fake app, the most popular, needs dozens of hours of human existence to create a video that looks like this rather than this. in august, researchers at carnegie mellon revealed software that showed a changing weather patterns and flowers in bloom. this advance is not yet available to the public, but with increasing capability comes increasing concern. in a world where fakes are easy to create, authenticity also becomes easier to deny. people caught doing generally objectionable things could claim evidence against them is bogus.
fake videos could be difficult to detect. researchers around the world and the u.s. department of defense have said they are working on ways to counter them. deepfakes do however have some positive uses. take a firm that creates digital voices or people who lose theirs from disease. >> the artificial production of human speech. >> there are applications that can be considered either good or bad, like the many, many deepfakes that exist solely to turn as many movies as possible into nicolas cage movies. emily: before we talk about deepfakes, a tweet from the president. the president says a deal has been reached on the suspension of the u.s. debt limit. in a tweet, president trump said "i'm pleased to announce a deal has been struck with mitch mcconnell, chuck schumer, speaker of the house nancy pelosi, and kevin mccarthy on a two-year budget and debt ceiling with no poison pills." no second tweet yet but we are waiting to see if the president
tweets again. of thespends the raising u.s. debt limit. there we go. the second part. " ar eal compromise in order to give another big victory to our great military!." back to deepfakes. one company tackling deepfakes is the photo and video verification platform trucp epic. its technology checks images for manipulations and watermarks, and then watermarks them with metadata verifying that at the source. it announced a product that compares photos to similar ones in search of irregularities. joining us to discuss is that ceo jeff mcgregor. how does the technology work? jeff: to start, think the video that just rolled is a great example. we are ending up in a distrust by default state online. the company started three years ago and we were originally
focused on simple photoshop manipulation. now we have synthetic media generated entirely by artificial intelligence and our view it will become impossible to tell if images are created by life or computer. we set out to build a highly specialized camera that verifies photos and videos. imagine light coming into a camera lens and us getting to that pixel data as soon as it is created. and using all of the geospatial data on the device and verifying it as soon as it is created. not looking to verify photos or videos afterwards, but at the point of capture. emily: who was verifying them essentially? jeff: it is the technology behind truepic. emily: this happens when the photographer is in the war zone shooting a scene? jeff: great question. anyone can download truepic. we have a free application today. we are moving towards the direct integration of truepic onto
devices. we view a world with anyone with a smartphone can swipe over to verify mode and take a high integrity image on their device. it could be document a war crime, documenting an insurance claim but you have the opportunity to have the high trust image. emily: we mentioned the deepfake of house speaker nancy pelosi. here's what she had to say about that at the time. speaker pelosi: something like facebook said i know this is but webut it is a lot, are showing it anyway. to me, it says two things. one, that i was giving them the benefit of the doubt on russia, but clearly i thought it was unwitting, but clearly they wittingly were accomplices and enabled false information to go across facebook. emily: her responding to facebook leaving the video up
despite other companies, youtube took it down. they flagged it. in response, you had a public outcry, as well as an advertising company doing a deepfake of mark zuckerberg, which we also have a clip of just a revisit. take a listen. >> imagine this for a second. one man with total control of billions of people's stolen data, all their secrets, their lives, their futures -- i owe it all to specter. specter should be whoever controlled the data controls the future. emily: even as somebody who has covered mark zuckerberg day in and day out for 10 years, that is scary. jeff: absolutely. what is really scary is the nancy pelosi video was just a slowed down video. that was not even synthetically generated. we have not reached the sophistication in the technology community to be able to detect a
slowed down video. we're grossly underprepared to detect deepfakes. emily: what is your take on whose response ability it is to police video? should facebook be held responsible knowing that video is fake and taking that down? jeff: i think they have a response ability to do everything in their power what they can do. one thing that is troubling to me about facebook is they have recently publicly said they are moving to more one to one encrypted messaging. now, when we talk about the deepfake doomsday scenario, we think about politicians with words an inserted into their mouths and being used for political discourse. we don't talk about how these can be used in a one-to-one way in a weaponize fashion. one example a couple of weeks ago, there was an application where the input was a photo of any woman and the output was a photo of that woman undressed, using the same technology. imagine how that can be weaponized at high school or a
workplace. if facebook moves the more one to one encrypted messaging, it will be impossible to detect manipulated content. emily: i understand the value of your technology, but isn't it a matter of time before bad actors start counterfeiting your technology? jeff: we are working hard to integrate at the hardware level of the device. for the verification software to run directly on chips and be thee to access geospatial data so that no one ever passes bad data. we want to bring that technology to as many people as possible. emily: what are the biggest use cases you see for deepfakes, especially as we go into a u.s. presidential election? jeff: i think that is where it becomes nerve-racking, right? we saw this four years ago in 2016, and i believe we will see again. it will be well-timed deepfakes. there has been some pushback, maybe we are overflowing this problem, but the reality is
people who want to manipulate public opinion are going to use a well-timed, well-placed deepfake that is distributed very quickly at a point where we are just about to make a decision as a country and democracy. that is what we are most scared about. emily: jeff mcgregor, ceo of trupic. fascinating stuff you are working on and trying to prevent. thank you for joining us. that does it for this edition of bloomberg technology. wednesday, we will speak to the ebay ceo live from las vegas at ebay open, the commerce platform's annual sellers conference.do not miss that interview 10:30 a.m. eastern time. . follow our breaking news network, tictoc, on twitter. this is bloomberg. ♪
paul: welcome to daybreak australia. i'm paul allen. shery: i'm shery ahn in new york. sophie: i'm sophie kamaruddin in hong kong. we are counting down to asia's major market open. ♪ paul: here are the top stories we are covering. doing a deal, president trump says there is an agreement on the debt limit. it may push the u.s. deficit over $1 trillion. the bank of japan governor addresses the imf in washington. he says he is watching global developments closely.
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