How will global tech try to stop it . We will talk predictions for Tech Companies in the new year as well as what trends we will see in the next decade. The battle for tech privacy in 2020. Wednesday marks the official start of the California Consumer privacy act. This lot is meant to give users transparency on what Data Companies collect about them, as well as the right to Block Companies from selling that information. For a look at what to expect this year in the battle to gitalct consumers di lives, i talked to reese hirsch, a partner at morgan lewis. Newcomer,him, eric who covers the intersection of tech and government. You know, this is probably the most important privacy legislation in the United States today. Powerhouse. Nomic we dont have a federal privacy legislation so it is important for California Companies and users in california, but also all over the United States. It means that companies are going to have to disclose what data they collect to users, and then let users delete data that they dont Want Companies to keep. They are going to have to be much more mindful about the data they retain and disclosing the data that they are going to keep. Ccpor what is it about makes it one that of the most important data laws we have seen . We have never seen a lot this comprehensive regulating privacy in the u. S. Because california is such a huge market, it is going to have a large impact on National Companies and the data they collect, even outside of california. Privacy regulation in the u. S. Has been a pretty patchwork affair so far, but this is a very comprehensive, rigorous approach that creates a host of new privacy rights for consumers that they have never had before. Taylor if you take a look in your reporting, you are also looking at ccpa coming into effect but there could be differing Ballot Initiatives that post some changes to the laws. What potential changes could we be facing . Right. So there might be a referendum in california on the ballot in 2020, which was what sort of and in a lot of ccpa, expand its provisions, make it harder for california legislators to chip away at the bill. So thats one thing. You have illinois, new york, Washington State looking at those and then there is still this stream of federal that theon, the idea Senate Commerce committee could come up with a piece of compromised legislation that could solve this problem nationally. There is just a lot of moving pieces if you are a company trying to figure out, ok, is it just about complying with the current state of california privacy law . Am i watching other states . Is there a federal law . What changes if there is a referendum . What proposed changes do you see that could be big changes from what we currently have . Was created through a Ballot Initiative initially, so it is continuing to evolve and very possible that this new Ballot Initiative will be on the ballot in november. It will, if anything, strengthen the ccpa, and make a number of significant changes it like changing the enforcement agency. It will take jurisdiction away from the California Attorney general and give it to a new agency regulating privacy in california. Taylor do you see california as the beginning of a federal privacy law . Well, california has always been a trendsetter in privacy regulation. I think that is definitely proving to be the case already, because there are laws in new york, illinois, and washington and other states that seem to take their cue from the ccpa. Right now, the chances of a federal privacy legislation appear to be stalled. If you have states around the country adopting new laws that either are similar to the ccpa, or take the ccpa a step or two further, you could have an enormously complex regulatory landscape for businesses in very short order. I think if you reach that pain threshold where businesses are finding it very difficult to reconcile all these conflicting requirements, that could finally be the impetus for federal legislation. Taylor in your opinion, what do you see as the big driver for federal legislation . Is it the fact that businesses will be so confused by multiple different state laws that they really do need a federal law to lead the way . Right. I mean, i think there are these two different tension points. On the one side, there is this private right of action or the general push on sort of consumer advocates and more of the democrats to give strong enforcement on any privacy legislation that passes. That is a key piece of debate in the federal law. That is a sticking point. How much are the states funding the enforcement . That is part of the california referendum. Like we talked about earlier. The other side is whether we are going to have the federal law consume everything, basically, preemption. That takes over and kills all the state bills and makes the federal build a law of the land. That is what the republicans are fighting for in the businesses. You see the debate. Do we have federal preemption and the private right of action . Do we have neither. Thats where the debate remains. Its those big ideas, how we enforce it and whether the federal law is the ultimate sort of law on privacy. That is still up for debate and that is why congress is stuck. Taylor what are you hearing from businesses just from a high level in terms of being compliant with ccpa and if that isnt a big deal because they are already compliant with a broader level of data privacy . Is a is true that gdpr major european privacy law that went into effect last year, or the year before last. Of ccpa does draw upon a lot the concepts in gdpr. That is a lot that applies to data of european residents law that applies to data of european residents. Countries who have implemented it have not necessarily done it for u. S. Operations. Ccpa has its own set of requirements and nuances. The fact that you have done gdpr does not necessarily mean that you are all the way there by any means with ccpa irsch, that was reece h partner at morgan lewis and bloombergs eric newcomer. Get ready for a whole new slew of cyberattacks in 2020. We will talk about what fastgrowing crowd strike is doing to address those threats next. And if you like bloomberg news, check us out on the radio on the bloomberg cap, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor new year, new threats. Cybersecurity trends in 2020 will include new mobile risks. In addition, hackers are expected to employ Machine Learning in attacks and the cloud will prove fertile ground. Cybersecurity tech firm crowd strike provides Threat Intelligence and cyberattack Response Service is meant to deal with such risks. The company is also the top security pick for Alex Henderson. Basically, there is two points i would make. The first is that we believe that the security is an area that absolutely has to see more spending. It is a primary focus, not just in terms of i. T. , but at the board level. To that extent, we think of that there is clearly going to be a very significant increase in spending, particularly as we get closer and closer to the election. It will become more of an issue. We particularly Like Companies that are in the cloud or direct segment of the marketplace that have a clouded native solution. I had heard your last guest talk about security in the cloud. We want to highlight that these are companies that are in the that are used to protect Companies Directly from the cloud, as opposed to microsoft etween , oreen aws, microsoft azure Something Like that, where it is a cloud connection but not necessarily secure. We think the growth of crowd strike will be well in excess of 50 of the over the course of the next year. The street has it slowing down to about 30 growth by the end of the year. I think that is too steep of a deceleration. Additionally, any upside you get in revenue demonstrates significant margin leverage. I think there is good side good upside to both the revenue and margin side of the equation. We believe crowd strike is one of the Key Solutions to Security Problems that enterprises are phasing. Taylor you pay phasing facing. Taylor what is crowd strike doing specifically that perhaps other companies are not to take advantage of that positive backdrop . Alex sure. Let me litigate between the winners and the losers here in the security space. We very strongly believe that the world of perimeter defense, where you basically put an i. T. Stack at the edge of your data center, is no longer a valid security solution. While you still need to do that, the world is a shifting to what i would call a clouded direct solution. Like mine cast and proof point are in the cloud and delivering cloud security. The companies that are in the perimeter side of it, like palo , theseheckpoint companies are trying to do a perimeter defense model where you are essentially trying to keep the bad guy out. You are just never going to win at that. There was a recent Security Survey where 76 of chief of Security Officers at enterprise expected that they would be hacked in the next 12 months. 60 of those it said that they did not think they would know it when it happened. That is a function of the failure of perimeter defense to work. All the bad guy do is get there once. You have to keep them out 100 of the time. It is pretty obvious. That is not working. We are moving to a world of zero trust or clouded direct security. These companies that are in the cloud that are delivering that i think ultimately are the winners and will be the next generation of Security Companies and will gain share. Taylor thanks to Alex Henderson of needham. As for those new Cyber Threats on the horizon, we got insight from one of the most Renowned Experts in the field, Tom Kellerman of vmware. He served on the commission of cybersecurity under president barack obama. It has become a functionality of conducting business in todays world. You have to appreciate that all the major organized crime syndicates in the world have created Business Models around hacking. You have a rogue nation states with a dedicated cyberattack divisions. Geopolitical tension continues to manifest in cyberspace. Taylor you know, tom, i wonder who is most at risk. I talked to cybersecurity experts and they say it is the. Mployees who, in your opinion, really poses the biggest risk in 2020 . Tom i think there is a shift in how hackers are hacking. They have moved away from a burglary to home invasion. They will take over and commandeer your Digital Transformation efforts and user infrastructure, website, mobile app and a network to attack your customers. Your brand will be used against your constituency and thats the awakening that needs to be had in corporate america. Taylor i want to forward in the election. As you look at 2020, are we more prepared than 2016 . I would say we are more prepared because we are aware of the antics that certain nationstates will implement. There is very few states that have taken up the free thestance provided by department of Homeland Security to better secure the electoral system. Are stuckany states with limited budgets and capabilities to do an effective job in awarding nationstates artingng thw nationstates. Christopher wray says he sees at least three nationstates. Taylor what are the ways in which you see hackers getting to us in 2020 . It is is it as simple as the voting machine or something much more enhanced . When it comes to the comes to the individual or the corporation, we need to be wary of our information supply chains, Cloud Service providers, outside general councils, outside marketing firms that we utilize. Those entities will be attacked. Their infrastructures will essentially be jacked to target us and our constituencies as a whole. What carbon black or vmware Carbon Black Research has shown is there is a dramatic uptick in destructive attacks where hackers are manipulating the integrity of data and changing the way a corporation operates or an individual thinks specific to their devices and digital environments. Taylor i love that you brought up the cloud, because we have grown up thinking that the cloud is secure and safe. As the cloud more at risk than we think it is . Not all clouds are created equal. Honestly, the whole purpose behind what we are focused on here at vmware is to build in intrinsic security into the environment across the entire stack. You cant try to retrofit security on cloud environments. You have to build it in from the beginning. An adversary will use that environment to attack your constituency so you have to have greater visibility in how you suppress that adversary in realtime. It really depends on the strategy and the amount of dedication of the organization to securing their cloud. That varies by industry and corporation. Taylor tom, you are saying that some of the biggest threats are coming from russia, iran, china. How are they differing in their approaches . You know, frankly, you have a 50 year plan espoused by china for information dominance. I do see that as the trade war is cooling, you will see lesser and lesser attacks by chinese hackers against american corporations, hopefully. But you see north korea and iran now having teams with cyberattack capabilities and they are willing to destroy data, and their infrastructure and leverage attacks against your constituencies. The cold where is alive and well cold war is alive and well. Russian techniques are very much focused on undermining the institutions of the west and the validity and integrity we place upon all sorts of things, from democracy to our own data. Taylor that was Tom Kellerman of vmware. Coming up, drumroll for tesla. The company delivered its first china made model three to customers in china before the end of 2019. Was it enough to help meet its delivery goal for the year . A conversation with the cofounders of grab. From ridesharing to food delivery, we look ahead to the future of the singaporebased tech company. This is bloomberg. Taylor this week marked a major milestone for tesla in the Worlds Largest market. The first 15 units of model three sedans assembled at hasletts new multibilliondollar shanghai plant at teslas new multibilliondollar shanghai plant were delivered on monday. I discussed this with bloomberg otto reporter craig trudell. That the red bars in chart signify just how much people are expecting china to sort of carry the water for the general ev market. Really the case for tesla as well and the reason why people have been so optimistic about this company. , it you look at the rally is a significant portion of the reason why investors are growing so bullish with this company. Obviously, people were willing to give elon musk a little more benefit of the doubt after the Third QuarterEarnings Release when they reported a surprise profit. The optimism that you have seen more recently that this is a company that will be able to unlock significantly more potential in the china market is a sort of a bet that is being made here. To answer your question, though, it is a little unclear at this point just how much this will have a significant effect on tesla, because we are not seeing the price of the model three drop significantly yet. What we may find is that the company will be able to bring the price down for the model three once it is able to localize more of the content of that car and the sedans that it is building in the shanghai gige factory are more sort of, you know, localized in that market. Taylor are those production targets for that shanghai factory realistic this time around . Kreg you know, its funny. We talk craig you know, its funny. We talk about how much of a heated debate there is over the stock. We talk about this execution shakiness of execution versus the promises musk tends to make. This is a ceo that has talked about early on being able to week of these cars a 1000 of these cars a week, at some point getting to 3000. Hes talked about the idea that sort of the long term demand picture for tesla in china could be around 5000 per week. Who welysts at cowen, have talked about earlier, who is a little more on the bearish side, is skeptical that the company will be able to hit those levels, especially with the Chinese Government pulling back. On subsidies. We have seen the ev market in china really struggle as a result of that pullback. Taylor we heard from the general manager of tesla in china on their goals. Take a listen to what he had to say. Our goal is to sell all vehicles manufactured at o ur shanghai factory. We are confident in achieving that. Taylor you heard it there, they want to sell all their vehicles in shanghai. What is the Downside Risk here . Craig that is a real question, because this is a company that has not paid a significant amount of money for the factory that they built so quickly. A sort of under the Radar Development last week was the company securing some financing from local banks for that factory. Onlyis a tab that they are sort of paying off Going Forward as opposed to something they have paid for already. Meanwhile, you have a company and in musk, a company ambitions. He has already moved on to the factory he wants to build in berlin. For this to be sustainable, musk will have to deliver some sustainable earnings, something they have not been able to do up to this point. Taylor that was bloombergs craig trudell. Coming up, a conversation with the cofounders of grab. How the singapore paste based tech company is entering the very competitive ridesharing and food deliverycoming business ne. This is bloomberg. Welcome back to the best of bloomberg technology. I am taylor riggs. Singaporeans have access to banking and financial services. Companies are looking to change that. Singapore telecommunications has teamed up to apply for a Digital Banking license this year. The Monetary Authority of singapore wants to grant as many as five personal bank licenses to boost competition. Several others have expressed interest including alibaba founders. Metony tan and pouille tan at harvard as mba students. They spoke to emily chang in an interview in may. We will hear how they have their sights set. It is not just softbank. Thes 3 billion was not raised by softbank. Toyota tosed by hyundai to booking microsoft. Were blessed with the global best names one can imagine. Why continue to raise money rather than going to the Public Market . Because of ambition, which requires a broader set of services for our customers. Investments identify and understand and we want you to do it. Yourll me about relationship with masa. He has said you can have unlimited capital. And yet, i dont think youre asking for that. He and i are extremely close. We are blessed to have a mentor and a friend and partner in this journey. Now needll not right that capital or want that capital today because we have enough capital to invest in what we need today. Told me you surpassed 1 billion in revenue and you are on track to double that this year. Where it will that revenue come from . The biggest trajectory in growth is indonesia. We are doubling and tripling down there as well. How far away is profitability . In certain markets, it is close and already profitable. For us, it is important that we build and create more value. Say chill, as there is lots of competitors. We need to make sure we deliver more value so that we earn the right of customers to keep keeping us as the single most popular app. When it willt say be proper and that profitable and that is a problem. Are you learning from that . It is different. Majority of its business is ridehailing today. Ft is ridehailing. As a super app. Will grab go public . Ipo. Have no plans to go choosing longterm strategics as part of our tech , working and conationbuilding. It is thefive months, next 5, 10, 15, 20 years. U. S. China trade tensions, does grab have a role, is that an opportunity for you . What i can share is that both regions are equally looking at Southeast Asia as huge future potential growth areas. It for everybody sees growth. It will be for the next few decades. We have seen many founding teams fall apart with blood on the floor. You guys seem to have a great working relationship. How do you maintain that . We have had an amazing relationship because we share that foundational value system. We share the passion and vision for what we can contribute back to the region. We know that it is unique. That is why we cherish and value it even more. We also know that there are many for us to for people to find the same passion. We are trying to do good and trying to find skill. Using our platform, we are trying to help them as well. Taylor that was anthony tan ling tan. Imagination Technologies Group says it struck a new license agreement with apple. In onurman filled me thursday on why it is so significant. Phonen you are building a or an appletv or a watch or an ipad, this is too simple fight it. There are two main types of chips that you want. You want a cpu, a main processor. A gpu, which is a graphics processor. They basically put that company into debt when they started to design their own gpus. The Stock Company plummeted to the point where they had to sell themselves. Apple oncems like Imagination Technologies to come back into the fold. Whether they own some patents for key technologies that apple is not able to design it self. They are striking a new deal with them. It remains to be seen how long this one lasts. I have to ask why. You said in 2014, apple went to its own ship and did not use this company chip. Now, they are going back. Is this a new vote of confidence in the company or worries about apples own ships chip . It is a mix of things. I dont think it has to do with apple worrying about its own components or leading the industry. What Imagination Technology likely has is key patents that apple will need royalties on anyways. It will be cheaper for them in the next few years if they struck a longer term royalty deal, rather than pay them on an individual basis or deal with and lawsuit. And in public spat and lawsuit. This is the latest in Computer Vision and ar, specifically. Imagination technology is pioneering in the u. K. Powerelps the processing that they can have. Technology specific to gpus and phones. They have a lot that apple could find useful. They just dont want to have to pay the big bucks that royalty fees would require. This is easier on their final line. Looking at next september for 5g phones or is this later on . I dont think this has anything to do with ig. This would be later off. It is possible that it is stuff that we will not notice is new. It is just that Imagination Technology will be threatening to take apple to court. This is not a Public Company anymore. A lot of this can happen under the table. It makes sense why apple would want to come to this agreement. I would be shocked if we saw any new big announcements, specifically related to this tech. Taylor that was bloombergs mark gurman. Google close the gap with Amazon Web Services . 2020. Ch predictions for that is next. This is bloomberg. Taylor from ipos to advertising, and antitrust. 20 t 2028 will offer big challenges for the sector. 2020 will offer big challenges for the sector. Supplye is a significant or aging effect amongst companies. They are larger on the fabric side. Get toy way they can liquidity is through ipos. That is one. We have a lot of those companies waiting on the sidelines. The stock market is at an alltime high. That makes the sentiment much more positive. I am not a macro guy. My crystal ball says if these factors hold, we should see go up. We have elections and uncertainty in the second half. That is my crystal ball. We will see how things go. You have been trying to round up the sentiment on the street. It is amazon. The top five. In why amazon for 2020 . Are twol that there overarching debates on amazon. It is as consensus, either amazon phase for googling , it is like choosing one of your best kids. Think the debate is twofold. One is enlisting a lot of money in shipping, what will the return look like . Maybe investors can give them a pass. The second debate is can amazon d its markets share market share on the cloud . I feel that over the next 18 months, what amazon has been with the mega workload that migrated the cloud, that is where amazon is doing better than microsoft and google. That is where i am willing to bet that amazon can separate. That is why i like amazon heading into 2020. Picking between facebook and google, i am showing where it is total ad revenue and not add revenue growth. Google and facebook are clearly number one and number two. Are those the best two points to benefit from a constructive add send market . Companiese the two that have a symmetric growth and asymmetric model share. Both areand google multiheaded monsters. They have a lot of active eyeballs. It is hard to bet against them. If i had to separate from either of them, i feel that among social media names, i like snapchat. Snapchat might be positioning itself as somebody who can take after theom twitter political advertising debates that are going on. Do you shrug it off because fundamentals are strong . I feel that the order in which we like it, amazon, facebook and google, there are elements that each of these companies face. That is the order. With the least, facebook somewhere in the middle and google with the most. Why we rank order that way. Also out with 2020 predictions was john freeman. They include google cloud offerings, oracle going a big reorganization and facebook entering the Cloud Business. Onaught up with freeman monday. It is crowded at the application layers. In terms of infrastructure as serviced, that is what amazon does. The eight of u. S. Service, there s service, there is only three. Google and facebook. The thing that distinguishes amazon wasis that first. Its scale. Facebook, amazon, google and have cloud infrastructures that are orders of magnitude larger than anybody else. From my point of view, why wouldnt they . It just makes total sense. And it would give them regulatory protection. They would be the last vendors into a market. Probably avoid a lot of regulatory scrutiny that they space. Et in the consumer it just seems like low hanging fruit that they could take right off the tree. Taylor you talked about the other three entries in the market. Another one of your top calls is that googles cloud will make significant roadway into that. How do they keep up with an amazon and a microsoft, which have dominated up until this point . Scale puts younk in the game. One of the things that google has done is they have differentiated on the analytics usein Getting Developers to their flow of framework, or Machine Learning for ai effectively. Microsoft and amazon are involved in that too. That is one of the things google can do. It is popular among developers and the Developer Community is always a great indicator of what is going to be successful and what is going to be adopted. You look at oracle, splitting up hardware and software. Yeah, i think it is time. Ofre have been a couple decades of acquisitions that at the old targeted Client Server sort of world where you wanted to give an enterprise customer, we will give you the database system, everything. That was effective. Cloud world where these enterprises are trying to outsource their infrastructure andoogle and amazon microsoft, that Value Proposition turns around. I think it hurts oracle. They are not able to do deals on the database side. Application side competitors get worried and vice versa. I think there is negative synergy that they can unlock a lot of value. Taylor that was john freeman of cfra research. Coming up, it is not as easy to see the future as Companies Make it seem. We will take a look at the decade of tech predictions for 2020. This is bloomberg. Mobile phone ownership. Elon musks hyperloop. Bitcoin. They were part of predictions of the last decade for 2020. Many did not come to fruition as i learned from mark milian on thursday. Put out an mobility report in 2014 that there would usinge out of 10 people phones. They overestimated how quickly cell phones would come down in price. I want to switch over to digital. Shareholders meeting, mark was talking about the website. It looks like they are losing money, not yet breaking even. Independent an entity before uber and airbnb created the age of the unicorn. There was all of this Silicon Valley money going up in smoke. In response to the criticism, mark came on this network and said by 2020, we will be breaking even. Walmart ended up buying them the next year. Walmart is losing a lot of money in their competition with amazon. Taylor google, alphabet, google, alphabet. They thought Business Revenue would eclipse advertising revenue but we are not quite there, yet . They were ambitious in saying that by 2020, they will have their Cloud Business out. It is still an advertising business. The end of last year, advertising made up about 85 of googles revenue. Isud has grown a lot but it a far cry from what they envision. They are bumping up against amazon which is dominant in that business. Taylor what may have been the bust was dyson saying they would sell an electric car. They could not get it off the ground. What happened with dyson . That was a production that was not that far out. A couple of years ago, they were like we are working on this electric car and we will have something ready by 2020. It did not take them long to figure out that the project was not commercially viable. It is a vacuum company that wanted to be something much larger and realized it is a complicated business. A very high prediction, a far off prediction that may not have ever come was uber deploying flying cars. No flying cars in our future. They still maintain that sometime in 2020, they expect to do demonstration of flying cars taking off and vertically landing vehicles. They have helicopters which are like a flying car but not really, which they are booking in new york. They hope to be able to show a live demonstration of a futuristic, jetsons like car. Taylor i want to end with toyota making self driving cars. There has been a lot of competition, not only in the easing space but also waymo. What do we know about toyota and their self driving cars . This was the closest to being right. 2015,ay this was back in toyota came out and said we have cars that expect to be able to drive themselves on the highway. You will not mean have a driver in the front seat. ,hey plan to do that this year have a car that will drive itself on the highway. Kind of like a tesla does. It was a way to cap the crazy cycle hype cycle. There were predictions about how we would be sitting in the backseat and have robots driving us around. We are nowhere near that day. Taylor that was mark milian. It for the best of bloomberg technology. We will bring you the best throughout the week. Day at 5 00h p. M. In new york and 2 00 p. M. In san francisco. Follow our global breaking news network at quick take, on twitter. This is bloomberg. Jonathan from new york for our viewers worldwide, im jonathan farro. Bloomberg real yield starts right now. Jonathan coming up, looking for the fed to remain on the sidelines in 2020, even if u. S. Manufacturing data is the weakest levels in a decade, and s p takes the most bearish stance on credit since 2009. We begin with the big issue, how hot is the bar to bring the fed back to the table. The fed is on hold. On hold. The fed goes to the sidelines. Markets are ok with that. The threshold is extremely high