tv Bloomberg Technology Bloomberg September 6, 2019 11:00pm-12:00am EDT
this is how we heal. cancer treatment centers of america. appointments available now. ♪ taylor: i'm taylor riggs in new york, in for emily chang. this is "bloomberg technology." coming up in the next hour, tech strong. u.s. tech jobs stand up in an otherwise disappointing august jobs report. we will explore where the jobs are and what skills are in demand. plus, warning. the cdc says this is have struck people who use devices that contain thc.
we will have the details. ticket pact. several car companies band together with california to reduce emissions, even after efforts to ease restrictions on carmakers. president trump calls the action illegal and now the justice department is investigating. but first over top story. i think trade war escalates, the job market decelerates, or so the u.s. jobs reports indicates. jobs came in at 130,000, below what was expected. despite those numbers, president trump's top economic advisor tells uber he believes in the strength of the u.s. tech sector. larry: we are the world leader in technology, innovation, application, and new business startups. we are the world leader. technology. technology is our family jewel, and we must protect america on that. that is the president's point of
view. taylor: joining me to discuss is mike sullivan. so, michael, you heard it there. tech is the crown jewel. do you agree? michael: i do. tech is a big sector that is going fast. i don't know if we are the exclusive world leader on that, but we are doing really well. taylor: aside from some of the jobs report which i want to get into, a lot of the conversation has been about trade. do you see it higher within the tech sector? michael: not directly, but what we are seeing is trade and the trade war influencing the overall economy, and we are heaving talk of hiring freezes, layoffs. we are starting to see that. what we are seeing in the tech sector is companies are trying
to hire much more quickly than they were before. i think for fear that summary will pump the brakes. we helped negotiate a job and they moved quickly and were willing to give us what we were looking for for that person. we are also starting to see on the file inside an increase in demand because the hiring is slowing. taylor: interesting because i heard a lot about business hesitation and summaries about hiring because they are not quite sure how the trade fight will work out. so you are seeing the opposite. you are seeing companies at speed up hiring to get ahead of it? michael: yes. they want to get people in these key roles before somebody at the top says hiring freeze. taylor: very interesting. ok. talk to me about today's jobs number. the main number not good. michael: we will see changes coming to the rest of the economy as a result of the tech sector.
we in the tech sector are creating so much efficiency and building such great products and technology and software. we are just at the beginning of seeing what is going to happen. as this downturn comes, and it will, we will see a lot of jobs that go away that are never going to come back. taylor: i want to come in my terminal here at gtv . from the markets perspective, software has outperformed hardware as we think software is less vulnerable to the trade war. michael: correct. taylor: are you seeing that play out in the job market? michael: not directly, but we are at the tip of that iceberg because as companies are having to rethink their manufacturing chains, they are having to rethink everything around technology. everything around hardware, software and where they are manufacturing it, and how much it costs. we are seeing a lot of companies
start to prepare consumers that you will be eating some of the cost from this trade war. taylor: it was very interesting within the jobs data. we noted more people are working more jobs. two or three jobs because frankly one job is not cut it anymore. how does that fit into the economy? michael: that was a really notable part of the report. the section of people who are dissatisfied were not able to make enough money and moving out of full-time jobs because they cannot get them into gig economy is growing. we will see that. that has been happening for years. it will keep happening for a while. i believe the public thought the gig economy was a choice. we represent at the highest levels of technology creators that it is a choice, but for many people doing two or three jobs, it is because they cannot get a job. that is where the jobs numbers that happen coming out are a little bit misleading. they are both misleading because they don't really factor in people that have fallen out of the unemployment numbers, but they are also misleading because they are not counting these people who end up in this category. taylor: a decade ago, san francisco was the only place to do tech.
or san jose, silicon valley. more and more, it is spreading out. d.c. and new york within top five places that tech jobs are being created. is tech spreading to the east coast as well and texas, for example? michael: everywhere. any company that things they are not a tech company is not going to be a round for a long time. this is how you have to be thinking. you have to create efficiencies. there is so much opportunity between automation and a.i. that if you are not thinking about this stuff, and the implication is massive and scary, but from the standpoint of being a business owner or running a company for shareholders, you have to be looking at this. mcdonald's bought 3,000 kiosks to replace cashiers. that is the beginning. we all heard about the driverless car revolution that is coming. we will see it across the many sectors. taylor: talking later this summer about goldman sachs trying to hide some coders as well, survey analysis. that was michael.
thank you for joining me. now in japan, pushing back a lot of a mobile phone service originally set for next month. that is as shares of the e-commerce company's giant down by the most since may. a limited trial will begin october 1 and the full-scale rollout will happen between a month after that and the end of the year. coming up, huawei tries to circumvent u.s. trade sanctions by exploring gmail alternatives. the p30 pro, more on that as well as expectations ahead for next month's u.s.-china trade talks. if you like bloomberg news, check us out on the radio. you can listen to us on the bloomberg app, bloomberg radio, and in the u.s. on sirius xm. this is bloomberg. ♪
♪ taylor: companies affected by u.s.-china trade sanctions, huawei plans to unveil an updated phone running google's latest software in some regions. it would be huawei's first major update to the p30 pro phone since the restrictions which forced the company to slash revenue projections by $10 billion. at the same time, huawei seems to be coming up with efforts to make up an encrypted email service on future mobile devices, getting away from google's gmail. with details, "bloomberg technology"'s alistair barr from san francisco. the key for me is this was an updated software, not a new one. is this how they avoid sanctions?
alistair: this is one way to do it. they already had the stone out and are going to be basically doing a major update to it. the rules the u.s. has imposed on suppliers to huawei, they revolve around new products, so if it is huawei putting out a new phone, google will have trouble providing huawei with the system and the google apps like gmail and google maps that go with that. that is the small loophole that huawei is jumping through right now. the problem will come when they actually want to do a brand-new phone, which may come a little later this year. that one is likely to be shipping without android, the official google android and google apps. taylor: that was one of my key questions, is you have customers that might be ok for now with an updated software. how long until they become frustrated enough that they don't have the new software, that they start to switch away from huawei?
alistair: i think that is a big risk for sure. we were looking at one note today from gene munster, who is a veteran apple watcher, and he was saying this actually might be good news for apple in europe. really, it will probably lead premium providers because huawei will struggle if they don't come with the official google android system when they ship. taylor: alistair, what is huawei's long-term game plan? you think when android comes out and apple comes out with the new phone, what does huawei do? what is there long-term solution? alistair: the long-term solution is to build an operating system of their own, which they are working on, so they don't need android. the problem comes when you are outside of china. people expect an android phone to have gmail, google maps, the google play store, which is the important one, where you can get all the other apps through the play store.
huawei is going to have to build an app store itself, build an operating system itself. and the news that came earlier today about this other email service, protonmail, that is one of the examples where huawei is going to have to go out and provide an alternative to gmail and google maps and all these other google services. taylor: quickly, alistair, is that protonmail enough to satisfy huawei and customers in the short-term? alistair: protonmail is a very specific service to people really concerned. it charges a monthly fee right now. that might be a bit of a stretch for a lot of people. taylor: thank you. that was "bloomberg technology"'s alistair. it may not be on the table in the next round of talks in october. that is according to a statement by president trump on wednesday in which he said huawei's "a national security concern." the comments came a day after huawei accused washington of work spreading a campaign to
intimidate its employees and not cyberattacks. let's get insight on the trade talks next month from craig allen in washington. he is president of the u.s. china business council. it seemed at least for this week trade tensions sort of simmered down. would you agree? craig: yes, i would agree, but it is on very little information. the only thing that we really know is that there will be a vice minister meeting sometime in september followed by f that is successful, the vice premier and secretary meeting or cabinet level meeting in october. but none of that is certain, so the information we are working on is indeed very sparse. taylor: any idea specific details that we want? is it ip theft? is it that huawei is a national security concern? is it soybeans? what is trade coming down to?
craig: when you go back to the original source of the problem, there are probably six items that were very important. intellectual property rights, of course technology transfer, state owned enterprises, subsidies, market access, and cybersecurity or hacking. all of those are important issues. i think a lot of progress has been made on all of them. that does not mean that we can get to a solution to an agreement. but the fact that we are going into our 13th round of negotiations is a very good sign. will 13 be the lucky round? that remains to be seen. taylor: we spoke with larry kudlow this morning, the trump administration's chief economic advisor. i want you to hear about what he has to say about the next round of traits. larry: there are no conditions. they are coming to talk and we
welcome them with open arms. our team would like to go back and pick up where we left off in the may talks. whether that will be possible remains to be seen. i don't want to predict it. all i know is we got a new round of talks and i think that is a very hopeful development. taylor: craig, your reaction? craig: so, this is number 13. the fact that the two sides are meeting is a very good thing. at the same time, i would not want to exaggerate any shift on either side than indeed we have quite a few new sanctions in place. we have tariffs going up on october 1. we have a large round of tariffs going up on december 15. does that help negotiations were hurt negotiations? are we closer to a deal or further away from a deal? i think time will tell.
i appreciate larry kudlow's optimism. he knows a lot more than i do. i hope that he is right. we have to wish the negotiators well. taylor: talk to me about the next round of tariffs. on september 1, as you mentioned, within the technology sector, you have airpods, a lot of hardware devices that really get the consumer come into effect. december 15, as we know from a retail, holiday, shopping season. what are you looking for from the december 15 tariffs that can hurt the consumer? craig: on december 15, there will be $170 billion worth of imports which will be subject to 15% tariffs. now, that is a lot. it is a lot of imports and a lot of tariffs. it will absolutely have an effect at the till, at the cash register. this will be inflationary. now that is on top of, as you just said, september 1 tariffs.
and another round of tariffs coming on october 1. and so this will have an impact on cpi. it will have an impact particularly on lower income americans. a tariff is only a tax, and it happens to be a very regressive tax that affect low income americans more than others. we are about to begin to feel the impact of that, i regret to say. taylor: you talk about how the devil is in the details. i think both sides want a deal, but the problem is getting there and meeting in the middle. huawei, for example, i know you cannot speak specifically to it, frankly is a nonstarter from the chinese side, and from the u.s. side, it is deemed a national security concern. where do we stand generally as it relates to national security and trade, lumping them
together, and then you get huawei? craig: that is a very complicated question. huawei is a perfect example of the complicity that we face here. and the rest of -- the cfo in vancouver awaiting extradition to the united states again is a point of real tension. the president has said he is willing to consider this as part of the trade deal. he suggested otherwise as well. having said that, we have mixed national security and trade policy. not a good thing to do, but it has already been done. from a chinese perspective, i understand their negotiating position is that they want to settle this deal as well. that adds complexity, but it does not make it impossible. certainly a plea bargain, some sort of an arrangement can be made by which huawei admits to breaking u.s. law without necessarily admitting that they
broke chinese law. such a deal is possible. and i'm sure such a deal is being considered. taylor: like you said, very complicated lumping the two together. coming up, health concerns continue to stir around thc vaping, but what does that mean for the e-cigarette companies? we discuss, next. this is bloomberg. ♪
♪ >> taylor: marijuana vaping products have become increasingly popular in recent years as a discrete way to take a quick puff of pot. but suddenly, serious lung illnesses have struck people leads vaping devices to many cases of products that contain thc. many researchers have come out with new information on vaping in the last few days. health questions still remain when using e-cigarettes. to discuss, we are joined by craig. craig, you have been covering this.
i'm relatively new. break it down for me. e-cigarettes, vaping, same or different? craig: basically the same. in common parlance, they are often talking about marijuana, but juul is a type of a vape as well. e-cigarettes are type of a vape as well, but they refer to tobacco products that people used to often quit smoking or cut back on smoking, but vaping and e-cigarettes is like kleenex and tissues. different ways of saying the same thing. taylor: to be clear, the cdc was talking about mostly thc related illnesses. craig: that's right. taylor: that is different from the black market sometimes. craig: in the news today, there have been hundreds of illnesses in the country. three deaths now. nobody knows what is going on. what the cdc is saying today is most of these people have been vaping thc products. these people are in states where marijuana is not legal, which
means they are acquiring black-market thc products. that is the concern is heightened now about they have suddenly become very popular in the u.s. over the last couple years. they are available in legal marijuana markets and widely available on the black market including new york and other places. that is the concern now, the people appear to be being affected. taylor: when we got the headline, what does this mean for companies for which they have stakes in? juul, for example. craig: juul has been under fire because of the concerns about a lot of teens juuling and how it has gone popular. they paid $12.8 billion in that state. the reason why altria comes up as they are worried about thc. phillip morris on the other hand have spent billions of dollars on "heat, not burn" technology. it looks like a cigarette, put it in a device, inhale it and
they argue it is less harmful than cigarettes. they have high hopes for it. they are going to go head-on at juul and other products sooner rather than later. taylor: come into my terminal here at g tv because what i'm taking a look at his segment revenue of smokeless products. grubbing agreement, no the highest it has been in multiple quarters. i wonder how this impacts the altria deal with phillip morris. can we assume a deal is on the table? craig: one of the rationales for putting the companies together has to do with the u.s. both juul and aikos. altria holds the license to market it in the u.s. phillip morris is saying now we are to go to market. maybe we don't want to share the
profits. we can reap all the benefits in the u.s. plus, by the way, altria has a stake in juul. long-term, juul will be a good option to get smokers off of cigarettes. we have to take care of this teenage problem but there is a future for juul so that as part of the rationale. taylor: complicated story and you broke it down for me pretty well. thank you so much. that was craig. coming up, facebook caught more antitrust fire, this time from the state. we will give you the details on the latest investigation, next. this is bloomberg. ♪
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♪ >> this is bloomberg technology. another day, another investigation. facebook now joins google in an antitrust probe, adding to the scrutiny of silicon valley giants. a bipartisan coalition of states probing whether facebook's iphone competition and put users at risk. joining me to discuss, ben. we have another headline from google, saying they are confirming basically what we knew, that the u.s. is
requesting information on previous antitrust probes and this week, the more recent news that facebook in the crosshairs as well. walk me through this. is this a monopoly or privacy data issue? >> it sounds like on the google side, this is particularly a monopoly issue. they did disclose to the department of justice has issued a demand for all previous documents provided to enforcers anywhere in the world. that is going to be a lot of paperwork for the doj to go through and a lot of opportunity for theories. when you look at facebook on the other side, that looks like it will be a little bit of a privacy and antitrust.
they are talking about data security, ads. as well as how they may have treated upstart companies and some other issues. sounds like it is kind of early here, but there is a lot of probing in the last 24 hours. >> a lot of probing, including that record fine from just a few months ago. is this different because the ftc is federal and these are state attorney probes? >> it is important to understand that the states mean there are more lawyers in the room, more courts, you know, who can take action on these things. more laws that they are dealing with and more people that can view more paperwork and more people that can say that is not good enough, you have to go farther. this is a lot of distraction for those companies. in a lot of ways, they are dealing with the same sets of laws. it is in general, a lot of lawyers in the room and that means the companies become more
cautious and less dynamic. it takes time to deal with these things. >> walked me through the case of monopoly. you and i have had the discussion that monopoly has to hurt a consumer. how is the consumer being hurt? >> it is something the companies are saying consumers love us and our products are free. i think just in the last year, democrats and republicans have been saying consumer harm does not just have to be about pricing. we want to take a look at some of these. these are old measures, particularly under republican administrations and now both sides say we want to bring these
back. we think these me the better measures of what is going on and it may be possible that the real price here should be negative. >> the keyword here he said is innovation. if you break up big tex, they cannot compete with china. >> that is what companies are coming here and telling enforcers. i think that is something you can tell congress. ultimately, they have to weigh different prescriptions. they can't say we are concerned with the breakup in the market and they have to see if there is a violation or not. >> thank you for joining me. sticking with facebook, facebook
plans to double its headcount in new york city and hire more than 3000 people over the next five years. the expansion could set facebook up with a clash with some of the biggest firms in finance including goldman sachs. join me to discuss, olivia. >> it is starting off with investments in digital technology and now on the flip side of this, the other technologies coming for wall street. >> facebook saying they want to double the count here in new york and during research for the story, i was looking at the
profiles. >> is it because they were at those big companies or new york is desperate for tech savvy people? >> i feel like a lot of engineers coming out of those institutions had traditionally have gone into the finance sector and facebook is looking to recruit engineers, they are also now trying to target those instituions and recruit directly out of them. we spoke to one recruitment firm that said new york's fight for talent is the fiercest she has ever seen and it is bound to get worse because even though we have facebook saying it is going to double its headcount over the next two years, we also know
comes an increase in salary. how much money to pay to compensate the coder for facebook? >> the companies are actually paying more than finance and traditionally you were not have thought that. typically, a subway engineer makes around $100,000 at the moment, so the talent is going to follow the money. >> there was a lot of backlash
when amazon pulled out their second quarters here of high-quality jobs. this arguably is a very good thing. is that as well what you learned? >> at think it is just going to boost new york's profile. we know it is second only to the bay area when it comes to raising capital and we have these big tech giants looking to hire more and more people. >> do you get the sense that things are becoming more like tech companies or tech companies are becoming like banks? >> i feel like banks are trying to become tech companies if anything and as you have seen earlier, goldman sachs is looking to hire 100 coders over the next three months. >> we all need to learn how to code. thank you for joining me. coming up, facebook and google are not the only companies under investigation. we will break down the u.s. justice department's latest probe of automakers, next. ♪
♪ >> the u.s. justice department has launched an antitrust investigation into four automakers who made a deal with california on tougher vehicle emissions standards. volkswagen, bmw, and agreed with california's premier regulator to boost the fuel efficiency of autos told in the u.s. from 2026. this is in defiance of a proposal by the trump administration to ease back
those national standards. joining me to discuss his bloombergs craig trudell. a very complicated story. to me, it looks like the trump administration -- there issue is more with california than the automakers. walk me through this. >> we have to take a step back where the automakers were brought along with that administration on tougher fuel economy rules, but they were going to slowly graduate there. carmakers got concerned that the rules were going to be too tough and they got that with the trump administration, but what the trump administration date is go overboard. they wanted to water things down. they've had an ability to set tougher rules and what the automakers didn't want is for the fed to set significantly
weaker standards. it would result in having to meet these wildly different roles depending on where you are selling in the u.s. >> select he said, it leaves the automakers in a period of uncertainty. what are the automakers saying? >> for the trump administration to take a look at the rules, but what they didn't want is the administration to go to war with california at they essentially have done and so what you have is go to california and say let's dial the standards down a little bit, but we will agree to hit the tougher standards as long as there is a deal.
>> one lawyer in the story asked if this was not an anti-competitive case and a procompetitive case. >> i think what he was trying to make is that the idea of the situation where the doj is stepping in to say if you cross the white house, you're going to hear from us. i think with the automakers, they want to compete on fuel economy because they know they will have to in other parts of the world. while they sell it a lot of f series pickups, they understand and appreciate they have to get with the times. >> what about the case that other carmakers don't get as much special treatment than
those that did the deal of california? >> you have a situation where the automakers that did not get on the deal are really nervous. you have a report that maybe the city spends was going to get in on the report. we just had mary barra been visiting. they want the uncertainty of planning for five years out for a new model and it is difficult when you don't know the rules of the road. >> very interesting, thank you. a quarterbacks huddle, signals are not the only one fans will
>> on thursday, we work is significantly de-evaluating its ipo. the cofounder is feeling the heat, but one of the company's most powerful investors could be hit even harder. its affiliates own about 29% which means it is tied up in a big way. to discuss, i'm joined by sarah mcbride. i have to ask, how does softbank respond to valuation that is half of what it was? >> there is a lot of
consternation about this, particularly which was not nearly as enthusiastic about investing and we work as other parts of softbank and there is a lot of tension within the company over investment. >> within that tension was a meeting between softbank and we work? >> earlier this year, we were told that the valuation would be at least $47 billion and the evaluation is going to be closer to around $20 billion. that is the same valuation where
it is invested two years ago, but after that initial investment which was over $4 billion, softbank, other parts came back and invested over $6 billion more. those investments are going to be very underwater. >> we know that softbank is an investor in uber, that ipl less than stellar. any indication there is hesitation given the ipo market right now? >> i should say that softbank was a large investor in uber. it was uber's largest investor, but even then it was only 16%. now we are talking about 29%. that is a huge stake. i would say almost unheard of,
so softbank is already dealing with uber's ipo not going well. it is trying to go raise more money for its second vision fund. we work is a large investment in the original vision, so softbank was hoping to be able to point to a big gain here. it looks like that is not going to happen in via black mark on softbank overall. >> you talk about fundraising for the second fun. there was a boards that softbank was lending by percent to employees. any sign that it is a lack of demand? >> didn't catch that. >> a lack of demand for second round on raising for division ii?
>> i think this is really hurting as it goes out to try to tout previous success. they made money on slack, but those are much smaller investments compared to its investments in we work. >> great breakdown. thank you for joining. the nfl season kicked off thursday night with the green bay packers defeating the chicago bears, but not every i was glued to the action. thanks to the deal, they will provide wi-fi and analytics solutions for the next three football seasons and to super bowls. i spoke about what data the nfl is downloading thanks to the deal. >> the nfl is all about fan experience so we provide infrastructure to the applications in the cloud and it
is all about the fan experience, quality and the dated now is being used for new services, new solutions that stadiums are trying to roll out, so if you look at in-seat concessions, interactive fan engagement on the large screen or if you look at gambling from an application level, the nfl is interested. there's a lot of different ways that the nfl can monetize the data to enhance the fan experience. >> one thing you said was perhaps on the future legalized sports betting. how big of that is that with the partnership of the wi-fi? >> it is important because they want to see what is going on at the stadium.
fans at the game want to understand what they are doing, so it helps them in their discussions with the different gambling providers. >> talk to me about data privacy. when i think about wi-fi, it is when you go on wi-fi you know there is a potential to get hacked. how are you protecting privacy? >> we do that with software and you are spot on because security is a huge issue. in our industry, it is about hard work, but today it is about software. so, stadiums and all of our customers and different enterprises, what they have to have his security at the edge of their network to protect users as well is to protect network and systems they are running on
the network. >> how much of a threat is 5g? when it rolls out, it will be very fast, faster than wi-fi. are you worried? >> no, 5g for us is complement reform wi-fi, so when we look at 5g deployment, what that means is there will be a lot more than with applications that are consuming more bandwidth and when they get to the local level enterprise, they will roam over to our wi-fi network, so for us, we see it as an opportunity because the more bandwidth running, it means you will need more capacity in the wi-fi network as well. >> we started off talking about the fan experience within the stadium and a lot of that comes down to virtual reality. how much of that is part of this deal? >> for us, we are providing that connectivity and different applications over the network. gaming has been one of the
fastest-growing areas in sports. the game of flirtation of different games or different simulations, these are things that are probably going to be part of the future of the fan experience. >> that does it for this edition of bloomberg technology. be sure to follow our global breaking news network at tictoc on twitter. this is bloomberg. ♪ ♪
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