Skip to main content

tv   Bloomberg Technology  Bloomberg  September 26, 2019 5:00pm-6:00pm EDT

5:00 pm
♪ emily: i am taylor riggs in san francisco. this is "bloomberg technology." coming up, a bumpy ride. peloton opens below the ipo price. we hear from the ceo john foley, who cited disappointment. plus, micron reports, shares fall after hours after gross margin and profit outlook nest estimates. -- ms. estimates.
5:01 pm
departmentstice launches its own facebook probe as the social network is the focus of a federal trade commission investigation. story,st to our top peloton falling 9.5 percent after raising more than $1 billion in its u.s. ipo. it is the latest unprofitable startup to struggle in its trading debut, but the ceo john foley remains upbeat about peloton's future. he spoke with jason kelly at the nasdaq. >> we are playing the long game. millionsis as building and millions of subscribers around the globe in the coming years. now we have the money to do that. after fully funded today's primary, so we are feeling confident. >> when you think about the last couple of days and weeks, you mentioned the market. it is a tricky ipo market, to
5:02 pm
say the least. do you have a sense of where the miscalculation was? fundraiser --a eigth fundraiser. there are people who believe, and those who don't. those who have invested in peloton, they have been very, they will invest in us. >> you mention fully funded. what will you do with that money? we are building a $50 million streaming television studio in new york city, another in london, where we will hire foreign language instructors to stream toward german market, which we open in 50 days, so investing in new content, new verticals, the treadmill market,
5:03 pm
u.k., germany. investment mode. it is semantics, we are investing money and feel good about what we are doing. >> how do you feel about the consumer market? you sell a high-end product. there is some volatility we are expensing. what do you hear back from your customers and your potential customers about their willingness to write a big checker chart something pretty big on the credit card? >> one of the most important things we think about at peloton is affordability. it is insane value vis-à-vis anything else. but fitness has been a recession-prove category for the last 15 years. more dollars went into fitness has008 and 2009, so there
5:04 pm
been secular growth for the last 15 years and if we crate the best value in fitness -- on average, our bikes are written 12 to 14 times a month, divided by 39, a couple of dollars for a workout, it is better than the boutique fitness world, and we will show it is better value than going to the gym. >> you have described the company in the s1 in the roadshow as a media company that does a lot more. where will you be primarily spending money? is this a content push coming? >> i would say we cannot hire software engineers fast enough. we are a software company, tech company at our core. emmye have 13 award-winning producers. one will build a special media ,ivision, but to your question
5:05 pm
the investment will go into technology. we were open retail stores, logistics, more markets, but certainly, software engineering is at our core. the peloton ceo john foley. to the first day of trading, i'm joined by two other people. down 11% today, what was the biggest concern from investors, why didn't close a much lower? roadshow, it has been a binary story. you have a bunch of people that believe peloton will change the fitness landscape and how people work out and think about workout, or you have people who think it is a business model they cannot sustain, that that has been a story in the investors mind. you either believe it or you don't. that has made for interesting
5:06 pm
dynamics in the pricing, because you have a bipolar set of feedback from investors, so that is why the deal is struggling this morning and were seeing the price fluctuate at the open at the end of the day closing below below, but more of the criticism has been the profitability of the company. it is still unprofitable. toestors want to see an end that. taylor: was valuation a concern today? >> it was. it was double the last private funding round, and yet he wants to make it into a content company. share left it at more than $8 billion, which is more than netflix based on 2020 sales, so it was quite expensive. my valuation professor believes it should have been $23 a share.
5:07 pm
thatthat said, i say peloton, like smiledirectclub, is not a traditional tech company, so they have a harder time selling themselves as technology companies. taylor: crystal, the ceo touted the health of the balance sheet, citing cash, saying we are fully funded. after today, are there concerns about the health of the balance sheet? >> hi spoke to the cfo just now. she was saying this is a funding event for him. where does the stock-price end today, it doesn't matter. they have happily raised $1 billion. they will deploy the capital into content. seen that actually much of a selloff in the market of where theyrms
5:08 pm
deploy their content, they mentioned international expansion, content, tapping the existing base, potentially rolling out new hardware. taylor: you heard crystal mention hardware, which is more important, a $2000 bicycle, $4000 treadmill, or $40 subscription revenue? >> the subscription revenue is recurring. as much a percentage as it was the last couple of years, so they have not seen that grow super significantly. people will want to see more of that. not to mention the hardware. we have been talking about the cost, marketing, international expansion, but the hardware is also expensive. there are hundreds of mains of dollars poured into their, so the cost base has been rising from and that is not see him
5:09 pm
able to clamp on. for investors to bite on the story will be a challenge without that revenue. taylor: thank you both for joining me. spike ind their shares the most in three months on thursday, after elon musk told his staff that the carmaker has a chance to top the vehicle delivery record set in the second quarter. in an email, elon musk says tesla has a shot at achieving the first 100 thousand vehicle delivery quarter. tesla reported deliveries of more than 95,000 vehicles in the second quarter. coming up, the clock is ticking for wework to raise money. we look at the struggles, next. if you like bloomberg news to check us out on the radio, the number cap,, and in the u.s. on sirius xm. this is bloomberg. ♪
5:10 pm
5:11 pm
5:12 pm
taylor: it seems the hits keep coming for wework. the chief product officer is set to depart the company, coming after the cofounder said he would step down to salvage the ipo. the company has seen a rash of departures of other executives in recent weeks, then this comes amid a dash for cash. wework is in talks about a new $3 billion loan. mean returning to its biggest investor, softbank. joining us now are our two
5:13 pm
guests. ,alk me through this new loan $3 billion. who gives that money? from a will come likely consortium of banks, and is contingent on equity from a different funder, most likely softbank. the whole thing is this plan ,eing developed as we speak because there have been so many changes in the last four days. the ceo has stepped down. his wife left the company. she was cofounder and ceo of the education arm. there has been a lot of intrigue around executives employees at wework close to him. it seems like the new co-ceos cleaningested in house. taylor: who are they? him?do you know about if they are cleaning house, who would they turn to? both executives at
5:14 pm
wework who notably have experience with public companies outside wework. one is from amazon, the other was cfo at time warner cable. ,hey have some ties to wework but not many. there were a lot of people who had been there many years, especially close to the founders. there were a lot of people who were personal friends of adam from his childhood, or relatives. , the reported recently person leaving the company is adam's brother-in-law. there are lots of connections there. they are interested in trying to strike a sense that this is a different era. taylor: let me bring you in here. thank you for joining me. as you look at wework and the financials and they need more money soon, is that still the biggest concern, the financials
5:15 pm
of this company? >> you are right, taylor. they need the ipo to secure $6 billion in financing. they are burning $2.4 billion in terms of cash flow. they were hoping to get $3 billion in cash on the balance sheet with this deal. that is the driving force from or them come the ipo, so they don't have to rely on softbank to fuel their growth. that is the driving force going forward, to push this ipo and get it done more than anything else. taylor: you talk about raising cash, the revenue, the left side of the balance sheet. on the right side are the expenses. they have to be cutting back on some of the fat. we had the co-ceos right and email to employees that we anticipate fiscal decisions ahead. what would you like to see from this company, more layoffs?
5:16 pm
how did they cut excess expenses? >> you are right, taylor. biggest expense is the cost of the leases they have to take on. s1ed on the last data in the revenues.% 285% of what we would like to see in this quarter in the coming weeks, steps from the ceos showing we are cutting costs, because right now, as you know, it is 1.7. for every dollar they make, they lose money at a very fast pace. just trying to show some discipline in trying to show they are trying to get to the end of the tunnel in terms of driving to profitability would be huge. right now with the model, it is difficult. taylor: when we talk about wework, you can help but mention
5:17 pm
softbank. are they the enablers? andhat is a great question, one people will be examining for the next months, if not longer, this idea that money came so easily to wework. they had no shortage of funding available. inemember interviewing adam april. he talked about softbank is amazing to me. they have given me $10 billion. the way they thought about it is they had given him the cash to build this incredible company, and now we are seeing how many ventures wework outside the regular business of renting out office space, those of the things on the chopping block as we go forward, including the elementary school they run. they have two residential dorm buildings. they will have changes in these things, and i think -- as we reported, i think job cuts are part of that.
5:18 pm
it will be likely outside the wework core business. taylor: talk to me about softbank's role. had they changed the vc landscape given the dominant force they are? have they changed the way the private investing market works? >> i think so. the fact they have so much money , and like i said, the willingness to lend it out, not only to wework, but all these unicorn deals. it is just the fact there was so much money being put into their toious funds that they have distribute out to all these deals come so now you get this point like, wait a minute? what is going on? we have these other companies, stocks turning below the ipo prices. some of these other ones, now people are starting to think, well, can this model continue for softbank? can they keep giving this money away? the result is everybody will be
5:19 pm
happy and everybody gets their money back. the market is saying no. taylor: the public market seemed to be in charge. thank you for joining me. dan, you will stick with me. microchip the global market is not yet in the clear. how global trade tensions are impacting micron's future. that is next. "bloomberg technology" is livestreaming on twitter. be sure to follow our global breaking news network tictoc on twitter. this is bloomberg. ♪ ♪
5:20 pm
5:21 pm
now that one is company is pulling its ipo. , which has a stake in another operator, lowered its price range from the previous range. size to 15offering million shares from 19.4
5:22 pm
million. shares of micron falling in after hours trading, after the company gave a disappointing profit forecast suggesting the memory chip industry slump is not over yet. course toles on decline 20% year on year for a fourth straight quarter. there with me to discuss the forecast and micron's fourth-quarter earnings in atlanta, dan morgan. you know better than me. i don't care about the current quarter. i care about the future forecast. that was a disappointment. do you agree that forecast was disappointing? >> taylor, everyone was looking to this quarter, there fourth-quarter 19 to be the low point in the valley, and that guidance going into their upcoming first quarter for 2020, which shows some improvement -- now they did revenue of a little more than $4.8 billion on the
5:23 pm
fourth quarter, five begin dollars, plus or -$200 million, putting you on a high range from that perspective, but the real thing to focus and with this micron report was gross margin came in at 28%, and they guided 24% to 27% gross margin going into the first quarter 2020, so it leads to the conclusion, like you were saying that everybody was looking for this to be the bottom of the valley, then start going back up the staircase starting the first quarter 2020, and unfortunately based on the guidance and a it looks like it's going to be somewhat flat or about the same, or even slightly down with regards to gross margins, so i think that disappointed people in terms of the headline news out of micron. taylor: i want to show a chart i'm showing to our bloomberg audience inside the terminal i .ave here at gtv we talked about memory chip prices, and this is why analysts
5:24 pm
were so bullish coming into the quarter, because they thought these prices were bottoming out. does micron's earnings suggest perhaps that quote was too early? >> you know, taylor, i think it might be, because, as you mentioned, we have seen dram prices in the last quarter were down, total dram revenue, and as you mentioned, ticking down from the last four or five quarters, and the expectation in terms of analysts was it would pick up again, and at least based on the remarks coming out from micron that they had with the results, it is not showing the type of improvement we were hoping for. you know what i mean? it is a continuation of the same , a lot of uncertainty around tariffs and huawei, so you could make the case analysts were a little ahead of themselves in terms of predicting that inflection point
5:25 pm
and things will start backing off again. taylor: what is the bottom-line impact from trade and tariffs? release,taylor, in the they talked about the relationship with huawei, concerns about getting an one department to continue to sell into that company. you have to realize micron's technology, of all the semiconductor stocks, drives 50% of revenues out of china, so they are very, very heavily entrenched in that debate, so because of that that is a huge headwind for him in regards to being able to recover, along with the fact we had a mature cycle in smartphones and pcs, and a little indigestion going on in the infrastructure of the cloud space, so you have all these things coming against him but china tariffs are big part of those headlines. we some pretty
5:26 pm
negative on the company, but when we look at the general industry, i'm shocked at the relative resilience. another chart showing on my bloomberg terminal shows the fact that dram prices have been bottoming out. the broader gauge has continued to climb. are you surprised at the relative resilience of the sector? >> what is amazing, taylor, and you have the numbers in front of you, i believe up 36%, year-to-date, correct? the technology sector is up 28% come in both those numbers are double the s&p 500 and the dow jones in terms of performance year-to-date, so you are right. there is a tremendous anticipation that things have bottomed and will start improving, so you have this huge run-up in the stocks, and believe it or not, it is higher than it was before we hit the peak, then we dropped down as of last summer when we had this pullback from china and everything else, so it is
5:27 pm
interesting that enthusiasm for the sector. taylor: dan morgan, thank you. >> thank you, taylor. taylor: coming up, all things about peloton's bumpy first trading day. that is next. this is bloomberg. ♪
5:28 pm
5:29 pm
i'm all about my bed. this mattress is dangerously comfortable. when i get in, i literally say 'ah'. experience deeper rest with the award-winning leesa mattress. this bed hugs my body. i'm now a morning person. the leesa mattress is designed for every body. providing strong support, pressure relief and optimized airflow to keep you cool. hello bed of my dreams. order online, we'll build it, box it and ship it to your door - so you can try the leesa mattress at home. love it, or get a full refund. and rest assured, returns are free and easy. i love my leesa. today is gonna be great. find out why so many people love the leesa mattress, then try it in your
5:30 pm
own home. order now to get big savings - but only for a limited time. just go to today. you need this bed. taylor: this is "bloomberg technology." of the our top story day, it was a bumpy ride for fortine -- four peloton -- peloton. the opening was the third worst for a mega ipo since 2008. the process of picking an opening price took a little bit less than three hours. remember, peloton, of course, still unprofitable. the ceo said the concern peloton is losing money is "semantics."
5:31 pm
withscuss, i'm here 's" founder. what happened with peloton? >> i think what you are seeing is a restructuring change in the way the ipo markets, and peloton is as good an example is any of the ipo's we have seen over the last six months. what we are seeing is a story about demand and access and how that has changed recently as a result of an active late stage private security market, which peloton's case 13 months earlier when you saw two of the biggest hedge funds in the world, two of the biggest mutual funds in the world, they bought peloton for $14.50 a share. million 13sed $500
5:32 pm
months ago. as a result of that, 4 entities that were historically big buyers of ipo's -- not only have they already bought what they wanted to buy, they might even be sellers at this point. the ipo's, looking at peloton and walking back over the last six months, that's a new dynamic. taylor: what are your thoughts on valuation? >> the question of what is and is not a tech company gets more interesting by the day for me. i heard your interview with the ceo of peloton earlier, and he was saying software is their biggest investment. he basically wants us to think of them as a tech company, but in reality, you could increasingly say the same thing or so manyr disney companies -- walmart. just because a company uses a lot of software and has an app or screen, it does not mean that they are a tech company. this is basically a company that sells exercise equipment that is
5:33 pm
given -- being given an $8 billion lu asian. i think that is it logical. taylor: gene munster spoke with me earlier this week and said he was really reassured by the fact that the ipo and the filing, peloton was so transparent in their numbers, relative to a company like wework, which has been put on the back burner for now, which was not as forthcoming with numbers. are you relieved with the amount of financial transparency we got? >> sure. to take a step back, it's more like a $9.5 billion valuation at today's price when you take into account the 60 billion shares that are options. it is actually, i would say, a very nice valuation, and i do think the market is ascribing a certain level of value to the subscription nature of the business, which is a very high margin business. if we want to call it technology, then we can.
5:34 pm
we almost have to call anything today a technology component, but what does it mean with respect to the transparency? if you want to buy peloton, you want to make a bet that they are going to grow their user base, have very low churn, and generate a lot of cash flow, that is an assessment the investor has to make, but that is a very different question of are they or are they not a tech company? it is truly a matter of how much money they make in the future. taylor: as we talk about financial transparency, i have to bring up wework. what is the biggest concern -- the natural's or the valuation at this point? >> -- the financials or the valuation at this point? >> they are sort of makes tripoli connected. if the financials were better, we would not be worried about the lu asian. -- they are sort of inextricably connected. if the financials were better,
5:35 pm
we would not be so worried about the valuation. i think wework is a shaky proposition as a business. if i could go back to what joe was saying about peloton, if it's a tech company or not, and of course, revenue from subscriptions is all fine and good, but it also has an element hness. -- of faddis of course you make some investment in this equipment, but these things come and go as substitutes arise in the market place. again, a $9.5 billion valuation. i thought $8 billion was too much. it really makes me question the rationale for an investor to buy it at this price. let's see if they can actually make a real business out of it before we start throwing our money at these people. taylor: you mentioned you would be surprised if there was an ipo this year. we have heard that if they do not, they do need to start looking for cash.
5:36 pm
where do they turn next for cash? >> there was a fascinating article in "the wall street journal" about jamie dimon's relationship with adam neumann. clearly, they got a lot of support over there. i really don't know. maybe they will get it directly the saudi it seems like at the moment, the poor,tion of wework is so it will be a rare capital holding institution that is willing to give them very much. taylor: your reaction? >> i would just say that i think despite the salacious headlines about wework, they do have some assets, and i think the same article referred to what some of them could be. it strikes me that there are some parts of this business that people would be interested in. i cannot say much more than that, just that i think that while we can focus on salacious headlines, there's actually some aspect of the business that are
5:37 pm
doing quite well. taylor: i learned a lot from this roundtable from both sides. thank you for joining me. david kirkpatrick, you will be sticking with me. dimon should quit his job. he pitched disney chief bob iger story about a female ceo who builds an all-female board to help her choose a husband. >> it was a marriage counseling thing. it was about a woman who could not pick men very well, so she would have a board of directors of women who would be testing been for her and picking her husband. [laughter] some otherght be movie executives in the room that would be glad to consider this. >> i said bet midler should be part of the cast. jokingly called the
5:38 pm
pitch gutsy and gave the pitch a c. on capitol hill again. this time they are sending coo sheryl sandberg. what she is likely to face questions about next. this is bloomberg. ♪
5:39 pm
5:40 pm
taylor: facebook is negotiating congressional committee for chief operating officer sheryl sandberg to testify next month. this comes as room or stir about its plans for digital currency called libra. sandberg's appearance would follow july meetings with facebook executives. the discussions take place as the social media giant faces questions, as we have said, about its market power, and i really want to talk about libra.
5:41 pm
to discuss, i'm joined by kurt wegner, who covers the company y founder david kirkpatrick. >> maxine waters has been one of the staunchest opponents of libra. she has basically said, facebook, stop doing this, has a lot of questions. it will not be exclusively about that, but that will definitely be part of it, from what we are hearing. i imagine sheryl sandberg will have to brush up. the libra stuff does not actually roll up to her at facebook, so it will be interesting to know how much she is able to answer. taylor: your thoughts on libra. cryptocurrency is a new venture for facebook. >> libra is an interesting idea. i think it is one of the few major initiatives facebook has proposed in the last couple of years that really makes sense from a standpoint of an actual market need, and interestingly, it seems like the central
5:42 pm
bankers of the world have sort of recognized that we actually do need some kind of transnational transactional methodology that we don't have, and libra has put that on the table now in a way that is quite healthy, but is libra itself likely to succeed in any near frame timeframe? -- any near-term timeframe? absolutely not. they have said they will not launch without regulatory approval. they are not going to get it in any geography that i have heard about. the european union has made it quite clear they are not interested any time soon. i do not think there is any interest in the u.s.. the fed is very anxious about the idea. facebook's market power and scale combined with its privacy errors that have been so legion and other errors just make it a nonstarter, even though it is ironically a good idea. taylor: you heard david talking about the regulatory pressure that the company is facing. this comes as we have headlines they are now looking -- the doj
5:43 pm
looks like they are launching another investigation. how is it different from the ftc, which has a parallel investigation? >> in the state attorneys general have an investigation. there are i believe 4 separate distinct antitrust investigations into facebook, including the one bloomberg reported on yesterday. it was a bit surprising because a few months ago, there was a lot of discussion that the ftc and doj had divvied up the tech industry, each of them taking two of the big tech giants so that they were not duplicating efforts, and the ftc got facebook. the doj, it sounds like, kind of felt like they were being may be left out of the fun a little bit, and now they are getting in on this, so it will be interesting to see what they each kind of look into and if they will be looking into different parts of facebook's business or if they will be stepping on each other's toes.
5:44 pm
how shoulduld and facebook be broken up, given these 4, 5, 6 investigations? >> i'm not so sure breaking up the company is the answer. finding a good answer is hard. i do not necessarily think they should be allowed to knit it together even more tightly, which is what they are currently .oing when it comes to regulation, i think the company has erred in its strategy for signaling that the only way it will be responsive to the public needs is if it is pressured by regulators. an example of that just occurred the other day when just as the massachusetts state lawsuit against the company was about to unseal a bunch of documents about a whole bunch of applications that facebook had barred because of their misuse of private data, facebook preemptively released an announcement about that, like, right before hand. they are constantly being pushed
5:45 pm
to do what they should have done already only by regulation, so it is easy to understand why all the regulators want to get at them, but i really do not understand, frankly, why the ftc and doj both should be investigating them, except that now the president is seemingly upset with them, too. as he mentioned at the human -- at the united nations. maybe they are just being responsive to him. taylor: interesting facebook is just brushing it off, going ahead and launching another new product with oculus. walk me through how this makes into their strategy. you and i talked about how hardware is not what you think of when you think of a spoke. >> no, it is not. this is not what they are known for. they had an oculus event yesterday where they announced a virtual world they want to build where you might literally hang out with strangers as an avatar. when the doj announcement came out -- not announcement, but this story broke, i started thinking about all the areas facebook has pushed into in the last 18 months. they launched a dating service.
5:46 pm
they bought this neuroscience company and they are getting into home as well with portal stuff. taylor: business as usual. thank you both for joining me. toll ahead, amazon looking write the law when it comes to regulating facial recognition. why this proposal is not sitting well with the company's critics. that's next. this is bloomberg. ♪
5:47 pm
5:48 pm
taylor: bitcoin extended its five-day decline, dropping below $8,000 for the first time since june. bloomberg sat down earlier with the cofounder and president of coinless in new york. >> it just points to the fact these are larger sellers going in and dumping to the market, smaller sellers. there's a lot of data points that are interesting. the december futures went from a
5:49 pm
3% premium to the spot market down to 2% backwardation, so a 2% discount to the spot market. these are people selling futures instruments, so the run is being caused by these larger institutional or at least large holder selloffs rather than the market. too, is interesting, because i think when bitcoin peaked in december 2017, it basically, like, peaked to the day the first true futures launch. it is kind of notable that we get these sort of intense turning points right at the times when supposedly a new vehicle will end up for money to come into the market. >> exactly. the back launch certainly contributes to the narrative. i'm not sure how much it contributes to the actual practicality of the situation. volumes increased over the week,
5:50 pm
but it is still fairly small compared to what has traded on the other exchanges. it certainly affects the narrative, though. what that signals to me is the increase in comforting institutions entering the space. we will start to see that kind of octopus of the financial industry reach its tentacles and more into the space, and i think back to the big indicator of that. the secave we not seen get more comfortable with it? it seems like we have been waiting for quite some time for them to sort of embrace this. >> i'm glad you use the word waiting. there's a lot of fear about the bad stuff the u.s. government has done. that's not really true. it is really just a waiting game and a lot of gray areas. i was talking in d.c. to regulators and legislators, and i found that it is just this game of patients. they want to make sure they really understand the space before doing anything and there is so much of acuity at this point that it is challenging. on top of that, the markets are
5:51 pm
not quarterly. it is hard to tell who the good players are so it's tough to regulate a market like that. joe: bitcoin fell a lot this week, but a lot of the other coins -- there's a euphemism i cannot say on air for them -- were getting much worse. is there still too much garbage in this space for it to be taken seriously? just stuff that is still too frothy, too many projects that need to go so people can focus on what actually matters? >> there's a lot of garbage in the space, but i do not think the garbage will disappear by his health. what needs to happen is other good assets in the space need to develop their own narrative and usage and have the signal outperform the noise. i do not think the noise will disappear by itself. you need to have more use cases, more adoption, and that is what will drive attention toward good products. joe: it is really rare to see anything not just rising and falling with the market. this still is not a market where good coins go up and bad coins go down. it's basically everything tends to move in the same direction.
5:52 pm
>> i think that is right. the biggest example is that bitcoin is increasingly uncorrelated with the rest of the market, but the other assets tend to move pretty much in tandem with each other. still sort ofit serve a purpose as a, i guess, haven asset? we saw it behave that way earlier in the year. did not necessarily behave that way over the recent bout of market volatility. >> i think that is fair. i do think bitcoin is developing as a safe haven asset, and every event happening making people scared about existing assets is a boon to it, if you talk about china trade wars, impeachment talks, recent news of iran, that is all affecting bitcoin. people are buying into the narrative and over time, the safe haven argument will become stronger and stronger. taylor: another story we are following, amazon facing plenty of scrutiny over the use of its facial recognition software and
5:53 pm
its potential to be of use. ceo jeff bezos says the e-commerce giant is working with u.s. policymakers to draft regulation on the software. surprise reported that amazon's hardware unveiling wednesday, saying it is a perfect example of something that has really positive uses. at the same time, there's lots of potential for abuses with that kind of technology, so you do want regulation. joining me from seattle, chip joining me from seattle to discuss, matt day. i want to discuss the scrutiny that brought amazon to this point where they now have to work on regulation. matt: this has been a bit of a firestorm over the last two years. technology that matches an image or video of a face up to any sort of set of images in a collection. it has gotten to the point where it is pretty good and commercially available for the first time, so a man -- amazon is not the only one with a product on the market, but they are one of the more high-profile
5:54 pm
cases. have gone after them contending that just the existence of these products is interviews to civil liberties. taylor: generally, what do we know about the draft legislation that is in the works? matt: we don't know a whole lot. bezos was not specific. s. was rushed away by aide we do know amazon came out with a set of principles it was going to recommend in case of potential regulation, things like government should be transparent if they are using facial recognition technologies in spaces where that technology is active. people should know that it is happening. amazon, of course, stopped short onendorsing any sort of ban sale of certain recognition tools. they want to keep the market going on its own. taylor: do you agree jeff bezos -- do you agree this is in jeff
5:55 pm
bezos' interest? >> i think that is why companies like amazon have decided to speak up about this a little more, just the pressure something is going to be done, they might as well have a seat at the table. i think that is why you have seen from amazon in the last year a position of know, we don't really want to talk about this because the technology is fine and i'm not really interested in further conversations to a blog post outlining where they would stand and these potential discussions about potential regulation and being a party to those talks. taylor: why are critics and aclu -- what are critics and aclu, in particular, saying in response? matt: a lot of critics want a broader pause and reevaluation of this. they say we should slow down. the stuff should not be available in such wide circulation when we are not pinking through the impact. they bring up the case of surveillance being used to hurt marginalized groups, and i think they push more for a total pause on this in the way that
5:56 pm
purveyors of this tech would not support. been a but there has not total pause yet. how is amazon working with current law enforcement and still using this technology? matt: we are not sure how many adopters it has. this came to light because amazon talked about a couple of use cases, experiments out in the wild. there was a sheriff's office in the state of oregon, and it was the city of orlando piloting the tech. there has been sort of widespread speculation, particularly on the part of critics, that this product on the market from amazon is likely to be used by the u.s. government, particularly by ice. taylor: my thank you to bloomberg's matt day in seattle. that does it for this edition of "bloomberg technology," which is livestreaming on twitter. be sure to follow our global
5:57 pm
breaking news network at tictoc on twitter. this is bloomberg. ♪ devices are like doorways
5:58 pm
5:59 pm
that could allow hackers into your home. and like all doors, they're safer when locked. that's why you need xfinity xfi. with the xfi gateway, devices connected to your homes wifi are protected. which helps keep people outside from accessing your passwords, credit cards and cameras. and people inside from accidentally visiting sites that aren't secure. and if someone trys we'll let you know. xfi advanced security. if it's connected, it's protected. call, click, or visit a store today.
6:00 pm
paul: welcome to "daybreak australia." i'm paul allen in sydney. shery: i'm shery ahn and bloomberg world headquarters in new york. sophie: and i'm sophie kamaruddin in hong kong. we are counting down to asia's major market opens. ♪ paul: here are the top stories we are covering in the next hour says his callrump was wonderful, but the white house is already trying to lock down the record. trying to hit back


info Stream Only

Uploaded by TV Archive on