Alisa global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Isloomberg technology next. I read stone in for emily chang, and this is Bloomberg Technology. Coming up, a bloomberg scoop. Another bombshell just after announcing a big move back to the u. S. On thursday. We will break down the plans to acquire qualcomm in a deal that can be the biggest takeover of a chipmaker ever. Plus, apple recess the Smartphone Market with the official launch of a 1000 smartphone. Frome covering this story all angles as lines form around the world for the iphone x. And the great bitcoin debate. Is the cryptocurrency a boon or bubble . We will continue the conversation as bitcoin crosses the 1 billion mark. First to our lead. A company is set to acquire qualcomm in a deal worth 100 billion. This be the largest deal ever for a chipmaker. Shares rose 19 , the biggest intraday move since 2008. Valuing the company at 111 billion. As a major supplier to apple, broadcom says it will return its headquarters to the u. S. From singapore. It already lists san jose, california, as a corporate code headquarters. Lets get straight into this with ian king. Also with me is brooke sutherland. Ian, first to you. This is an unsolicited bid by broadcom. What is the likel likelihood ths happens . Ian we are in the early stages, it has not been submitted as far as we are aware. So many things at play here. The basic thing as you have two Companies Already in the top 10 of semi conductors worldwide. The will be shooting up to number three. That is something regulators will be showing interest in. Got to be something that customers like apple and samsung will be looking at and deciding whether they really want this to happen. A number of steps definitely have to be taken before this becomes a reality. Brad you recently wrote a ceo wasaying that the in the oval office in the firm grip of President Trump and announced the moves from singapore to the u. S. , but that is about what were hearing about today. Tell us why you think yesterday and today are connected. Brooke i think it is a big part of it, and i think the initial thought when this was announced go backy were going to to the u. S. , is this an attempt to smooth Regulatory Approval for the Communications Deal which is still in front of 50th. I think this qualcomm deal would have been virtually impossible if broadcom was still based in singapore. Just looking at the push back and already got, on the deal attending to acquire a company, tighten of in history, i think you get pushed back but i is easier if broadcom is a u. S. Company. Brad how much of yesterday was theater . Ian depends on who you speak to, but a lot of of people were being somewhat cynical about what happened as the pending broke a situation. It already had headquarters here. The company that sort of took over broadcom and then changed its name to broadcom was a division of hewlettpackard back in the day. Very complicated situation. A lot of facilities already in the u. S. You know what, this does not mean anything. They are not moving anybody anywhere. It is a change of registration. There is certainly no shortage of cynicism about that new. Brooke iphone the other interesting thing is that even after i think the other interesting thing even after that is the tax rate will be raised. Still get a significant amount of their revenues from china, from asia. It is sort of a symbolic move to the u. S. , but we are now talking about multiples of billions of dollars coming in in extra tax revenue being invested in the u. S. Beyond what broadcom is already doing. Brad what does this mean for the smartphone owner, the iphone owne . Know, the supply chain is very important to what apple does, to what it is capable of bringing to the market. ,he same is true of samsung arguably to a lesser extent because a lot of what it uses it makes it self. Particularly from apples point of view, he components, the wifi, the cellular, really you have to rely on these companies. Is that a good thing, a bad thing . Apple is already raging war against qualcomm. Brad unit about this ongoing litigation to try to reduce qualcomms licensing stranglehold. Ian that is another one of the possible derivatives from this deal. Perhaps broadcom has a better relationship with apple, is more compliant as far as apple is concerned than qualcomm is. They come together, qualcomm goes away, apple gets the deal it wants, qualcomm shareholders andrid of the huge overhang potentially bring in chip orders as well. It is a complicated situation. Brad if you are intel, samsung, or other rivals, how do you see this potential deal between broadcom and qualcomm . Brooke obviously it is a massive deal, the biggest chipmaker combination ever. So i think that does sort of change the playing field, but i think you have to look at this as, are we facing a peak craziness in semi connector deals . There have been so many deals across the sector. When you think about the fact that qualcomm is still trying to close a 40 billion takeover at nxp, and broadcom is trying to close its deal, i mean, these are deals piling out of each other. This is going to be extremely difficult to integrate all of this. That may open up opportunities for intel and other people to take market share away while you have these two companies tied up on integrating multiple deals. Brad ok, brooks of the limb, ian king, thank you for joining us. Sut,g brooke ian king, thank you for joining us. Apple ceo says the Current Quarter will be bigger thanks to the current lineup, we will discuss if apple can keep up with the demand, next. Bloomberg technology is Live Streaming on twitter. Check us out at bloomberg tech tv weekdays at 5 00 p. M. In new york and 2 00 p. M. In san francisco. This is bloomberg. It is safe to say the demand for the iphone x is high, and expectations are even higher. Lines are forming around the world at of all Retail Stores as they unveiled the new smartphones of the public. High demand for the device also boosted apple stock them up briefly dipping into market cap about 900 billion, a first for the u. S. Company. Earlier today, the daybreak Americas Team sat down with longtime apple analyst gene munster and asked him about the company growth. The growth rate for next year is probably going to because of the 20 because we will have this big cycle so that really kicks in. That is the iphone x and why i think he will continue to see the stock moving higher throughout the day. People will feel better about what next year looks like. Brad joining me now, mark gurman, who managed to snag the new iphone earlier. Welcome, mark. What is that gleaming rectangle of metal and plastic and glass you are holding . Mark it is an iphone x. I still have the plastic on it. Brad i heard you and other just were having trouble activating that . Mark we posted a story on the terminal about this. Verizon and at t, trouble activating the thing. In order to use it, you need to activate it, one of the restrictions. Some reporting that the issues are clearing. Toi called verizon and had have it manually activated, which is not how it is supposed to work. I had to wait a few minutes on the phone. First world problems, not a big deal, but that is what it is. Brad you and a colleague monitored some of the lines outside stores today. Does that tell us about any demand of the iphone . Mark it tells us about the excitement of the iphone x. There is a lot of people lined up, and i have not see lines like this, and i have been following this since day one of the iphone. There have not been lines like this since the first one in 2007 or the iphone 4 in 2010. Brad they do cultivate questions around supply, right . They went out and told customers to arrive early for the new phones so there are questions about whether they would have enough. You think that orchestrates some of these lines because it is great theater . Mark they definitely wanted lines. They way they look at launches are the Opening Weekend for a new star wars or batman movie. They want the lines, people to show their friends the new devices. They like doing viral marketing, they call it buzz marketing inside apple. Is part of the plan. Brad there were already stoppers outside of the store in hong kong reselling the iphone x. You had a line in your story that the store in new york sent out chinese speakers to speak to people in lin. There are people in my not to own an iphone x but for war transactional reasons. How big of a conservation is this that you basically have scalpers waiting to get their hands on this . Mark every time apple comes with a wholly new redesigned product, you will see people from those asian markets coming to the u. S. In order to buy them and resell them. In hong kong, it is more difficult to get an iphone right now because some of them are only sold to the carriers and other places sell them in a symphony environment. Hong kong, you cannot buy that. There is room for the scalpers to make a little business out of that. Brad what do we know about the supply . There are questions about whether the supply chain can be the demand. Do the people who preordered get phones . Surprisinglyply is strong and resilient to demand. It started going down three or four weeks in italy and germany and the u. K. , but now it is three to four weeks everywhere, which is not bad. How long does this mean a fourweek shipping time last for . That is when we start to know the supply issues. Onrybody i talked to and saw twitter today did not leave the store emptyhanded. Brad it is amazing. There were questions when they were delaying it so far after the release of the 8. What was behind that . With a have enough would they have enough . This week, they announced blockbuster earnings. Is there any question right now about whether applicant execute in this quarter . Mark i think tim cook will get to keep his job, but they are doing great, honestly. The Revenue Growth and unit growth yearoveryear for all of their products as well as the different segments and markets, very impressive and very strong for this time of year for them. Brad last question. The one number that dont out and he was 24 quarter growth in the services business. Questionerennially the mark for apple, and they seem to be executing in that area as well. Mark they did not introduce any features in that segment over the last quarter. Usually when they introduce new products, that hikes up with the revenues are, but they do not kne do that. Brad iphone x owner and Bloomberg Technology reporter, mark gurman, thank you for joining us. Coming up, bitcoins never ending search, the largest cryptocurrency in the world, but even as its meteor rise continues, naysayers are not going away. That is next. This is bloomberg. Brad a story we are watching. Amazon is expanding up north. The Company Plans to open a new office in vancouver, creating about 1000 new jobs. Amazon plans to open the doors of the new office in 2020. All of this while the Company Currently searches for a second north american headquarters. Now to the story we have been following all year, bitcoins wild ride. The worlds leading cryptocurrency is currently over 7,000. That is nearly 650 jump since the year started, and it is dominating and cryptocurrency market cap. Right now, it is over 120 billion in total dolling, that is nearly 100 billion more than its top rival, but concerns remain about bitcoin from big banker doubters to talk of a bubble. To discuss the leader, i would like to bring in the chief commercial officer of the pay bitpay. Thank you for joining us. Tell us what this incredible appreciation for bitcoin over the past weeks and months has done for you guys. Great question. Bitpay is the Global Leader in payments across the world. Over 1 billion this year. However, we have only increased 10 to 50 month over month. 15 month over month. Us, but weople know also allow a lot of b2b transactions around the world. To 200 companies will use us have their suppliers in latin america or asia pay their invoices to europe or america where it is cheaper and quicker than a bank wire. It is solving a real pain point around the world. , you are saying there is a little more friction in your market. Sonny our market is different because we are dealing with suppliers and merchants that way, but it is great because everyone that buys bitcoin eventually needs to pay for purchase goods and that will eventually flow to our system so we are processing 1 billion right now. Billionmark is 120 right now so we want that to go through bit pay merchants eventually. Brad institutions getting into cryptocurrencies and bitcoin. Bill miller bringing bitcoin into his value find, showing amazing results as a result. What kind of impact are the institutions having on the price . Sonny i think the institutions are the ones driving it up. They happen on the sidelines for a while. When we get on a 50 billion market cap, they start to really notice, and 70 billion 100 billion, they started joining it because it is a big enough market where they can play in it. I met with a global billion dollars hedge fund the other day and they started treating bitcoin 4 months ago and now have a position over 100 million right now and you are starting to see what Family Offices and hedge funds around the world are starting to locate a small amount of portfolio to bitcoin. Again, since it is global and all of these hedge funds are involved, that 1 they allocated to it starts adding up. Brad legitimate asset or bubble waiting to explode . Sonny i think it depends on the use case around the world. We have a Development Team in argentina and they get 100 of their salaries in bitcoin because they prefer bitcoin over the local currency. On the b2b use case, solving a pain point quicker than a bank wire. America is not much of a pain point but people use it more for an Asset Allocation method. You are seeing that people are using bitcoin so i dont know about the price of it as much, but the uses definitely there. Brad there is a pervasive criticism that transaction times not much that there is you can do with it other than sort of hold it. Jamie dimon, obviously a big and persistent critic of bitcoin. What do you make of the criticism . Sonny we help some of the largest law firms in america except bitcoin from the international clients. We work with one of the largest real estate appellate shops in new york. They are tech savvy people. A bitcoin transaction may take one hour but that is cheaper and quicker from a bank wire from singapore or hong kong. It shows that bitcoin is starting to take notice and getting big enough where banks are starting to wonder. Brad these are people who buy the currency, he called them stupid. Sonny not my developers in argentina. They are having a great time. It depends again where you are located in the world and what your reason for buying it is. Brad this week, i noticed amazon registered three domains related to cryptocurrency. Does amazon start accepting bitcoin soon . Sonny no, because it does not solve a paying point for them. Based on other Payment Methods that are worth more than 100 billion, i can see amazon maybe excepting bitcoin for billing payment in brazil or argentina, where someone may not have a credit card that would be accepted. Brad by do not hope to understand this but i will ask anyways. Here is an upcoming fork very quickly, what does it mean . To be a problem for bitcoin and people who hold it . Sonny you are seeing a lot of people actually leaving other currencies and buying into bitcoin for the upcoming fork, hoping they might get another currency. Will happen with bitcoin cash a couple months ago. Hopefully it goes well and transactions i will be quicker and cheaper. That is what we hope for. Brad sonny, thank you for joining us. Sonny thanks. Brad coming up, as the self driving competition heats up, we will take a deeper dive into the Handsfree Technology driving Autonomous Vehicles. This is bloomberg. I am mark crumpton. This is the Bloomberg Technology. Says he isrump disappointed the Justice Department is not doing enough to investigate Hillary Clinton and the dnc. The president denied any connection between his campaign and russia. There was no collusion. There was no nothing. It is a disgrace frankly that they continue. You want to look at Hillary Clinton had the new book and just put out by donna brazil where she reports she stole the election from bernie. That is what you should take a look at. That book by donna brazil alleges Clinton Campaign controlled the ins east red a g and finances before she secured the president ial nomination. Former california congresswoman mary bono tells the ap she can do it suggestive comments from a fellow lawmaker who still searching congress. She and others say the incidence occurred years or decades ago. Spanish judge on friday issued International Search and arrest warrants for the Catalan Leader and his aides. He is in belgium after he and his cabinet were removed from office last week for even eagerly declaring catalonias independence from spain. Eight former cattle and officials were jailed on thursday. Former greek finance minister discuss the future of europe during an interview with bloomberg television. He has written a new book called adults in the room, my battle with the european and american deeper establishment, says in the wake of the election chancellor Angela Merkel is in trouble. Angela merkel is an extremely weakened leader at the moment because she has to form a government with a Political Party whose number one and maybe only promise to its electorate is that they will stop emmanuel taking the proposition that leads us towards a common budget. That he believes what ails the European Union can be fixed by a common budget. Chancellor Angela Merkel continues her push to form a Coalition Government after initial talks produce little progress. She says she remains optimistic about her conservative union block by theing Common Ground with democrats and the leftmeaning greens. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. This is the Bloomberg Technology. I am brad stone. Competition in the Autonomous Vehicle industry heats up. When company is looking to Purchase Technology to the growing market. They develop self driving technologies and Just Announced 18 million series a funding round. Isning me now from boston the optimist ride ceo and john elton. Thank you for joining me. About optimus and what you bring to a crowded market. To provide safe, sustainable, equitable mobility. We develop fully Autonomous Vehicles and this investment allows us to scale and test and validate our product. Our goal is to get to a commercial product. Uber and waymo, you develop the entire solution. Level for autonomy where we look at not only the sensing, but do reception, control, planning and actuation of the vehicle. That allows us to coordinate with fleets of vehicles. We are focused on shared electronic Autonomous Vehicle. Boston been testing and in the self driving testing area , and we have been driving and theing and working with massachusetts dot and have approval to test on public roads in massachusetts. Elton, lots of big, Mean Companies in this space. Tell me why you back optimus ride . All the investments we make are in competitive spaces. Optimus we got excited about ride because they have a worldclass technical team. They have a number of engineers that came out of the urban challenge at m. I. T. The second thing is they really have the right approach by focusing on private land, they limit the problem parameter so they can get to full autonomy faster. Brad tell me what that means. I dont quite understand. What technology have they figured out that others have not . Ryan speak to the technology parameters, but by limiting the problem what you allow in any league of technology is you limit parameters and on private land ,ou can lower the speed limit add physical things to the environment, and so it makes things go a lot better and work and reallife conditions very fast. For example, in full economy without private land, if it starts raining, it just wont private land,with you can take steps to make sure it works. You see the Technology Gets deployed first in private residences or theme parks or golf courses . Area view is that any where you can constrain the problem allows you to test quickly and be able to move to a driverless solution quickly. Our view is that when you get to a completely driverless solution , then you get the User Feedback come which is needed. Once you have that, that feedback allows us to not only be able to test user interfaces, but to get to a level of autonomy where the vehicle can go from one point to another seamlessly. Get high data to velocity, which is necessary for driving towards a fully autonomous solution because you high density data in order to improve your driving algorithms. Brad this is a market where everybody appears to be choosing sides. Google invested in uber, then t, so who doy in lyf you see as Natural Partners . You need to partner with all different groups, vehicle manufacturers, insurance companies, partners to deploy and scale. All those are necessary. We have a lot of that in place. We will be making announcements of some of these partnerships and clients we are working within the next few weeks. Brad john elton, do you see optimus right as a potential acquisition target . There have been a number of acquisitions in the space, the beauty of optimus ride is a team bent on building the future. That would be fully autonomous cars. They will help design the communities of the future and be much more environmentally safer, much more accommodating to all people, blind people, lower income, more affordable, and the company and team are dedicated to this and in for the long haul. You, john, staying with let me ask you about tesla, at the forefront of the future of mobility. Tesla. Reat week for what does it mean for tesla and the future of this whole category and the future of autonomy . Teslas problems have been on the production line. There have been a number of articles about the challenges, the number of employees per car produced. I think tesla has a very bright future. They are investing in it. We are at the cusp of an incredible time where machine learning, Artificial Intelligence enables cars to drive themselves, and what that will unlock for the future is hard to picture today. There is so much that depends on transportation. About 50 of a citys landscape is dedicated to cars. What would that look like in the future . I think it will be very different and tesla plays a big part in that and we will eventually get through these production difficulties. Ryan, the traditional automakers ford, gm, toyota are all working on the solutions. Do they have the assets to be leaders in the future of mobility . My view is that there are only certain teams that can do this. The Car Manufacturers have a good start. To go back to the darpa challenge 2007, there were six teams that finished that race. Two of our cofounders were part of the m. I. T. Team that finished the race. The totalnk about Global Talent pool around the self driving, it is 1220 companies. That is probably 400 people that have pioneered this technology that have tested and worked on it for over a decade, so our view is there is a small talent pool that can do cloister driving vehicles. Companies orcar being acquired by them, we have seen that play out in the field. Our community is strong and it is important for not only growing the industry itself, but also establishing different markets within that. Brad fascinating. Ride and johnimus elton. Thank you for joining us. Twitter has implemented safeguards to prevent future account deactivation. This comes after President Trumps account was taken down for 11 minutes. Twitter attributed it to an exiting employee. The company tweeted, we will not be able to share all details about our internal investigation, but we take this seriously. Coming up, Silicon Valleys move from the capital to the courtroom, the legal battles for 2018. This is bloomberg. Brad lawyers from three of Silicon Valleys top tech terms spent a lot of time capitol hill this week. In 2018, they will be back in the court room. Globements across the will be looking to get legislation passed on a wide variety of topics, from ending tax loopholes to ending trafficking. Isning me to discuss this our next guest. Garrett, thank you for joining. There does seem to be so much noise about big tech, regulation, the election. Is this an anomaly . Will it be back to normal for 2018 where they get a free pass, or is the scrutiny here to stay . It seems we are in a new normal. Big tech has faced regulations in china and europe for years, but now that it is coming to the u. S. , still there largest market in terms of revenue and where they are based and where their leadership is emotionally centered, it looks like it will continue to heat up. The takeaway is the Tech Companies can no longer argue it is part of the neutral internet and do and say what ever they want. They will have responsibility for seeking out, policing, reporting, and dealing with bad behavior on their platforms. There is a great graphic illustrating this on bloomberg. Com that points to the legal challenges these companies are likely to face in 2018. If you have to pick the biggest one, what are we going to be talking about next year . Up and tell may be today we thought the biggest would be a bill and the u. S. Congress that tries to limit sex trafficking on online platforms. It would end some of the orthodoxy around the internet which is says platforms are not responsible for the things people do on them. We saw today the Internet Association that represents Major Internet Companies saying they would support that legislation. We are not sure what it will look like in specific detail, but does show that may be what we thought would be one of the biggest legal battles, there may be some compromises they can work out. Brad does that mean we will see Tech Companies regulated like news organizations . Want to gowe dont that far. Some lawmakers see it that way. We saw the Prime Minister in the u. K. Saying she wants to do things that way, even some u. S. Ongress lawmakers the Tech Companies are pushing back, but that might be the next one. Brad what do you think we will see in the courts next year as a relates to h1b visas and daca and how might that impact Silicon Valley companies . Fight. Is a big immigration is an issue close to the heart of the Tech Companies. Say to theiro employees that they support them, they need to go out publicly. They said a lot of things in support of daca, those brought into the u. S. Undocumented when they were children grew up as americans and are working at these companies, and h1b visa program for people to come work at Tech Companies, we are not sure what will happen. The Trump Administration had a lot of angry words, but it is a place where we will see how strongly the Tech Companies will stand behind their word in terms of bringing legal action against the government and a trying to defend employees under these visa regimes. Brad as you look at the legal landscape of the big Tech Companies, how large does antitrust loom . What we have seen in the u. K. And europe, do you think wed see the needle move in the u. S. On antitrust enforcement . The needle has moved on the conversation. It is probably the noisiest of these conversations, but it really doesnt look like there will be a real change in u. S. Antitrust policy as we know it anytime soon. It is difficult to see conservative republican lawmakers really changing it to move from a standard of what is best for the consumers. Google,w products from facebook, low prices on amazon, consumers generally like those products. Brad ok, thank you. Chipmaker the second to launch an ipo in the u. S. This year despite an explosion of growth and semiconductors. We will hear from the companys ceo next. This is bloomberg. , chipshares of aquantia that control highspeed data cables, climbed after pricing its ipo below estimates. Our ipo reporter caught up with faraj aalaei, ceo aquantia, at the new york stock exchange. This process quite honestly is as much a process of getting a number for the price, but as well as picking the investors you want in your book. We basically went with quality than quantity. I think the quantity in the open market, the market will decide what this company is worth here i. I think the market will reward our performance. It is about longterm. , when i think about aquantia a lot of chipmakers out there. What do you provide to your clients in terms of semiconductors . Every which way you use the internet, it puts a lot of data into these networks. These networks now have bottlenecks. Our company very simply removes those bottlenecks, whether in data centers, the hyper scale guys come your corporate data center, at your workplace where you have mobility devices. Speeds are increasing to such a point that it makes the 15 Year Old Technology that was the backbone of these mobile networks useless. So what we provide is a and have capability the expertise to deliver what we do, and we lead this market. Is one billion parts of internet shipped every year with the speed that has been there for the last 1617 years. Our job is to convert every one of those to a multigig capability and a better expense when surfing the internet. Tel are twod in of your biggest customers. What is your Growth StrategyGoing Forward and had you maintain those two very important relationships . Very good question. If you are a networkingconnectivity company, the number one goal is to serve cisco and intewl because they have such huge market share. The flip side is you get some customer concentration, so you have to have a longterm strategy on how you diversify. We have been diversifying into computer industry, providing devices to the Service Provider market. Our businessof grows, that will naturally diversify the revenue from this company. We have tremendous growth ahead of us. This is an industry that grows 5 to 6 a year, and looking beyond that we want to be the Solution Provider for autonomous driving cars. We will provide the fundamental structure multigig come and that will make an autonomous driving car viable. That is our longterm goal and will double or triple the size of the market we address. Big chipmakers have been diversifying and doing it through acquisitions. One truism is that m a is here to stay. Why did you go public and said of potentially considering being gobbled up by one of these big chipmakers . Have investedrs 200 million in this company. The company is 13 years old. We have a history of battling and beating the guys at the game and being ahead of them, so that investment is now paying off. Our products and enterprise are starting to grow 30 a year. This market,into client computing and service market, that has started to wew, so our investors feel have multiyear growth ahead of this that will increase the value of this company. Right, m a is here to stay in the semiconductor industry. As we deliver on the promise of being a Standalone Company that can lead markets that are growing significantly, we think there will be our lot of interest in this company. My philosophy Building Companies is build it to stand on its own. It,omebody wants to acquire you can have a business conversation at that point. Therefitability not quite yet, but is that a concern for you . Had you feel about the bottom line so valued by investors . We want to be in the 25 to 30 range of operating income, but we think this time for us it it is important to invest in these new technology areas, hyperscale data centers, 100 gig per lane technology. We are probably the only company in the world that can provide that. We see the autonomous thriving cars doubling or tripling our opportunity. We have decided to invest in that. Brad that was faraj aalaei, ceo of aquantia speaking to bloomberg. That does it for this edition of Bloomberg Technology. We are Live Streaming on twitter. Check us out at bloombergtechtv. 5 00 p. M. In new york, 2 00 p. M. In san francisco. That is all for now. This is bloomberg. Announcer from our studios in new york city, this is charlie rose. Charlie two days after a vehicle attack in Lower Manhattan killed eight people and injured others, details are emerging about the history and possible motives of the suspect. Sayfullo saipov came to the United States from uzbekistan in 2010. He told authorities that he carried out the attack for isis. He had been planning the attack for up to one year. Federal authorities charged saipov with the terrorism. President trump twice tweete